As filed with the Securities and Exchange Commission on April 28, 1999
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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UNITED DOMINION REALTY TRUST, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
VIRGINIA 54-0857512
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
10 South 6th Street
Richmond, Virginia 23219-3802
(804) 780-2691
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Katheryn E. Surface
Senior Vice President and General Counsel
United Dominion Realty Trust, Inc.
10 South 6th Street
Richmond, Virginia 23219-3802
(804) 780-2691 (Name, address, including
zip code, and telephone number, including area code, of
agent for service)
Copy to:
Mr. Randall S. Parks Mr. James W. Featherstone, III
Hunton & Williams Hunton & Williams
Riverfront Plaza, East Tower Riverfront Plaza, East Tower
951 East Byrd Street 951 East Byrd Street
Richmond, Virginia 23219-4074 Richmond, Virginia 23219-4074
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement in light of market
conditions and other factors.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box: [ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434 under
the Securities Act, please check the following box: [ ]
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title of Each Class of Aggregate Maximum Maximum Amount of
Securities to be Amount Offering Aggregate Registration
Registered to be Price Per Offering Fee
Registered Unit(1) Price(1)
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Common Stock, $.01 par 481,251 $10.84375 $5,218,565.53 $1,450.76
value, per share shares
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Rights to Purchase
Series C 481,251 N/A N/A N/A
Junior Participating rights
Redeemable Preferred
Stock, no par value (2)
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(1) Calculated pursuant to Rule 457(c) under the Securities Act of 1933, as
amended, based upon the prices of the Common Shares on the New York Stock
Exchange on April 22, 1999.
(2) The rights will be attached to and trade with the common stock.
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The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until this registration statement shall
become effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 28, 1999
Prospectus
481,251 Shares
United Dominion Realty Trust, Inc.
Common Stock
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Our common stock trades on the New York Stock Exchange under the symbol "UDR."
United Dominion Realty Trust, Inc. ("We" or "United Dominion") are the
general partner of United Dominion Realty, L.P., a Delaware limited partnership.
In April 1998, United Dominion issued 481,251 shares of United Dominion common
stock to certain individuals and entities who sold 1,970 multi-family apartment
homes to United Dominion Realty, L.P. This prospectus relates to resales of
those shares.
The shares may be offered and sold by the selling shareholders or their
transferees from time to time in open-market or privately-negotiated
transactions which may involve underwriters or brokers.
We will not receive any of the proceeds from the sale of the shares
covered by this prospectus, and the registration of the shares does not
necessarily mean that any of them will be offered or sold by the selling
shareholders.
So that we can continue to qualify as a "real estate investment trust"
under the federal tax law, our charter does not permit anyone to own more than
9.8% of our outstanding common stock. This and other limits on who can own our
common stock are described in this prospectus under "Restrictions on Ownership
and Transfer."
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Neither the Securities and Exchange Commission nor any other state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful and complete. Any representation to the contrary is a
crime.
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The date of this Prospectus is April ____, 1999.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
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TABLE OF CONTENTS
Page
A WARNING ABOUT FORWARD-LOOKING STATEMENTS...................................1
UNITED DOMINION REALTY TRUST, INC............................................2
DESCRIPTION OF CAPITAL STOCK.................................................2
RESTRICTIONS ON TRANSFER OF CAPITAL STOCK....................................3
FEDERAL INCOME TAX CONSEQUENCES OF UNITED DOMINION'S STATUS AS A REIT........3
USE OF PROCEEDS.............................................................14
THE SELLING SHAREHOLDERS....................................................14
PLAN OF DISTRIBUTION........................................................15
EXPERTS.....................................................................15
LEGAL MATTERS...............................................................16
IF YOU WOULD LIKE ADDITIONAL INFORMATION....................................17
<PAGE>
A WARNING ABOUT FORWARD-LOOKING STATEMENTS
This prospectus, and the documents incorporated by reference, may contain
"forward-looking" statements. These forward looking statements usually include
words like "believes," "anticipates" and "expects" and describe our expectations
for the future. Of course, these expectations may not be met in important ways
for a variety of reasons. We have described these reasons in our most recent
Annual Report on Form 10-K and the other reports we file with the SEC, and you
should review them before you decide to buy our stock. We are not required to
update any forward-looking statements we make and we may not.
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UNITED DOMINION REALTY TRUST, INC.
United Dominion ("United Dominion"), a Virginia corporation headquartered
in Richmond, Virginia, is a self-administered real estate investment trust
("REIT"), whose business is the ownership and operation of apartment communities
located throughout the United States. United Dominion is a fully integrated real
estate company with acquisition, development and property management
capabilities. At December 31, 1998, United Dominion's portfolio consisted of 326
communities containing 86,893 apartment homes. United Dominion's apartment
portfolio also included eight communities with 2,292 apartment homes under
development (of which 662 were completed) and two additions to existing
communities with 316 apartment homes (none of which were completed). United
Dominion had approximately 2,800 employees as of December 31, 1998.
United Dominion operates as a REIT under the federal income tax laws. To
qualify as a REIT, United Dominion must meet certain tests which, among other
things, require that (1) its assets consist primarily of real estate, (2) its
income be derived primarily from real estate and (3) at least 95% of its taxable
income be distributed to its shareholders each year. Because United Dominion
qualifies as a REIT, it generally is not subject to federal income taxes.
DESCRIPTION OF CAPITAL STOCK
General
United Dominion is authorized to issue 150,000,000 shares of common stock,
$1.00 par value, and 25,000,000 shares of preferred stock, no par value. At
April 5, 1999, there were outstanding 104,051,172 shares of common stock and
18,200,000 shares of preferred stock, consisting of 4,200,000 shares of United
Dominion's 9.25% Series A Cumulative Redeemable Preferred Stock (the "Series A
Preferred"), 6,000,000 shares of United Dominion's 8.60 % Series B Cumulative
Redeemable Preferred Stock (the "Series B Preferred"), 0 shares of United
Dominion's Series C Junior Participating Cumulative Redeemable Preferred Stock
(the "Series C Preferred) and 8,000,000 shares of United Dominion's 7.5% Series
D Cumulative Convertible Redeemable Preferred Stock (the "Series D Preferred").
The following statements with respect to the capital stock of United Dominion
are subject to the detailed provisions of United Dominion's Restated Articles of
Incorporation, as amended (the "Articles"), and bylaws (the "Bylaws") as
currently in effect. These statements do not purport to be complete, or to give
full effect to the terms of the provisions of statutory or common law, and are
subject to, and are qualified in their entirety by reference to, the terms of
the Articles and Bylaws, which are filed as exhibits to the registration
statement of which this prospectus is a part.
Common Stock
Holders of common stock are entitled to receive dividends when and as
declared by the Board of Directors after payment of, or provision for, full
cumulative dividends on and any required redemptions of shares of preferred
stock then outstanding. Holders of common stock have one vote per share and
non-cumulative voting rights, which means that holders of more than 50% of the
shares voting can elect all of the directors if they choose to do so, and, in
such event, the holders of the remaining shares will not be able to elect any
directors. In the event of any voluntary or involuntary liquidation or
dissolution of United Dominion, holders of common stock are entitled to share
ratably in the distributable assets of United Dominion remaining after
satisfaction of the prior preferential rights of the preferred stock and the
satisfaction of all debts and liabilities of United Dominion. Holders of common
stock do not have preemptive rights. The dividend and liquidation rights of
holders of the common stock are specifically limited by the terms of the Series
A Preferred, the Series B Preferred, the Series C Preferred and the Series D
Preferred, as described in the description of United Dominion's preferred stock
contained in United Dominion's registration statements on Form 8-A, as amended,
filed pursuant to Section 12 of the Exchange Act on May 1, 1995, June 11, 1997
and February 4, 1998. The transfer agent for the common stock is Chase Mellon
Shareholder Services, L.L.C., Ridgefield Park, New Jersey.
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Rights to Purchase Series C Preferred Stock
Each share of common stock has attached to it one right to purchase from
the Company one one-thousandth of a share of Series C Junior Participating
Cumulative Redeemable Preferred Stock (the "Series C Preferred Stock"). Each one
one-thousandth of a share of Series C Preferred Stock is structured to be the
equivalent of one share of common stock. The exercise price of the rights is
$45.00, subject to adjustment.
The rights will separate from the common stock and a distribution of
certificates evidencing the rights will occur upon the earlier of (i) 10
business days following a public announcement that a person or group of related
persons has acquired, or obtained the right to acquire, beneficial ownership of
more than 15% of the outstanding shares of common stock, or (ii) 10 business
days following the commencement of a tender offer or exchange offer that would
result in a person or group beneficially owning more than 15% of the outstanding
shares of common stock.
The rights will expire at the close of business on February 4, 2008,
unless earlier redeemed or exchanged by the Company. A more complete description
of the rights and the Series C Preferred Stock is contained in United Dominion's
registration statement on Form 8-A, as amended, as filed on February 4, 1998.
Preferred Stock
The preferred stock is described in United Dominion's registration
statements on Form 8-A, as amended, filed pursuant to Section 12 of the Exchange
Act on May 1, 1995, June 11, 1997 and February 4, 1998.
RESTRICTIONS ON TRANSFER OF CAPITAL STOCK
For United Dominion to qualify as a REIT under federal income tax laws,
its shares of capital stock must be held by a minimum of 100 persons for at
least 335 days in each calendar year or during a proportionate part of a shorter
calendar year. In addition, at all times during the second half of each calendar
year, no more than 50% in value of the shares of capital stock of United
Dominion may be owned, directly or indirectly by five or fewer individuals (the
"5/50 Rule"). Because the Board of Directors believes it is essential for United
Dominion to continue to qualify as a REIT, the Articles permit the Board of
Directors to prevent an individual or individuals from directly or indirectly
owning shares to the extent that such ownership would disqualify United Dominion
as a REIT.
If the Board of Directors, in its good faith, determines that an
individual's or individuals' ownership of stock may disqualify United Dominion
as a REIT, the Board of Directors may call for a redemption (by lot or other
equitable means) to redeem a number of shares sufficient to maintain United
Dominion's REIT status. The redemption price per share shall be the closing sale
price on the NYSE as of the business day preceding the day on which notice of
redemption is given. In addition, United Dominion may stop any acquisition or
transfer of shares that would jeopardize United Dominion's REIT status.
FEDERAL INCOME TAX CONSEQUENCES OF UNITED DOMINION'S STATUS AS A REIT
The following sections summarize the federal income tax issues that you,
as a prospective shareholder of United Dominion, may consider relevant. Because
this section is a summary, it does not address all of the tax issues that may be
important to you. In addition, this section does not address the tax issues that
may be important to certain types of shareholders that are subject to special
treatment under the federal income tax laws, such as insurance companies,
tax-exempt organizations (except to the extent discussed in "--Taxation of
Tax-Exempt Stockholders" below), financial institutions or broker-dealers, and
non-U.S. individuals and foreign corporations (except to the extent discussed in
"--Taxation of Non-U.S. Stockholders" below).
The statements in this section are based on the current federal income tax
laws governing our qualification as a REIT. United Dominion cannot assure you
that new laws, interpretations thereof, or court decisions, any of which may
take effect retroactively, will not cause any statement in this section to be
inaccurate.
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United Dominion urges you to consult your own tax advisor regarding the
specific tax consequences to you of United Dominion's election to be taxed as a
REIT. Specifically, you should consult your own tax advisor regarding the
federal, state, local, foreign and other tax consequences of United Dominion's
election, and regarding potential changes in applicable tax laws.
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Taxation of United Dominion
United Dominion elected to be taxed as a REIT under the federal income tax
laws commencing with its taxable year ended December 31, 1972. United Dominion
believes that it has operated in a manner intended to qualify as a REIT since
its election to be a REIT and it intends to continue to so operate. This section
discusses the laws governing the federal income tax treatment of a REIT and its
shareholders. These laws are highly technical and complex.
United Dominion's qualification as a REIT depends on its ability to meet
on a continuing basis certain qualification tests set forth in the federal tax
laws. Those qualification tests involve the percentage of income that United
Dominion earns from specified sources, the percentage of its assets that fall
within certain categories, the diversity of its share ownership, and the
percentage of its earnings that it distributes. The REIT qualification tests are
described in more detail below. For a discussion of the tax treatment of United
Dominion and its shareholders if United Dominion fails to qualify as a REIT, see
"--Failure to Qualify."
If United Dominion qualifies as a REIT, it generally will not be subject
to federal income tax on the taxable income that it distributes to its
shareholders. The benefit of that tax treatment is that it avoids the "double
taxation" (i.e., at both the corporate and stockholder levels) that generally
results from owning stock in a corporation. However, United Dominion will be
subject to federal tax in the following circumstances:
o United Dominion will pay federal income tax on taxable income
(including net capital gain) that it does not distribute to its
shareholders during, or within a specified time period after, the
calendar year in which the income is earned.
o United Dominion may be subject to the "alternative minimum tax"
on any items of tax preference that it does not distribute or
allocate to its shareholders.
o United Dominion will pay income tax at the highest corporate rate
on (A) net income from the sale or other disposition of property
acquired through foreclosure ("foreclosure property") that it
holds primarily for sale to customers in the ordinary course of
business and (B) other non-qualifying income from foreclosure
property.
o United Dominion will pay a 100% tax on net income from certain
sales or other dispositions of property (other than foreclosure
property) that it holds primarily for sale to customers in the
ordinary course of business ("prohibited transactions").
o If United Dominion fails to satisfy the 75% gross income test or
the 95% gross income test (as described below under
"--Requirements for Qualification--Income Tests"), and
nonetheless continues to qualify as a REIT because it meets
certain other requirements, it will pay a 100% tax on (A) the
gross income attributable to the greater of the amounts by which
it fails the 75% and 95% gross income tests, multiplied by (B) a
fraction intended to reflect its profitability.
o If United Dominion fails to distribute during a calendar year at
least the sum of (A) 85% of its REIT ordinary income for such
year, (B) 95% of its REIT capital gain net income for such year,
and (C) any undistributed taxable income from prior periods, it
will pay a 4% excise tax on the excess of such required
distribution over the amount it actually distributed.
o United Dominion may elect to retain and pay income tax on its net
long-term capital gain.
o If United Dominion acquires any asset from a C corporation (i.e., a
corporation generally subject to full corporate-level tax) in a merger
or other transaction in which it acquires a basis in the asset that
is determined by reference to the C corporation's basis in the asset (or
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another asset), it will pay tax at the highest regular corporate rate
applicable if it recognizes gain on the sale or disposition of such
asset during the 10-year period after it acquires such asset. The
amount of gain on which it will pay tax is the lesser of (i) the
amount of gain that it recognizes at the time of the sale or
disposition and (ii) the amount of gain that it would have recognized
if it had sold the asset at the time it acquired the asset. The rule
described in this paragraph will apply assuming that United Dominion
makes an election under IRS Notice 88-19 upon its acquisition of an
asset from a C corporation.
Requirements for Qualification
A REIT is a corporation, trust, or association that meets the following
requirements:
1. it is managed by one or more trustees or directors;
2. its beneficial ownership is evidenced by transferable shares, or
by transferable certificates of beneficial interest;
3. it would be taxable as a domestic corporation, but for provisions
of federal income tax law defining a REIT;
4. it is neither a financial institution nor an insurance company
subject to certain provisions of the federal income tax law;
5. at least 100 persons are beneficial owners of its shares or ownership
certificates;
6. not more than 50% in value of its outstanding shares or ownership
certificates is owned, directly or indirectly, by five or fewer
individuals (as defined in the federal income tax laws to include
certain entities) during the last half of any taxable year (the
"5/50 Rule");
7. it elects to be a REIT (or has made such election for a previous
taxable year) and satisfies all relevant filing and other
administrative requirements established by the Service that must
be met to elect and maintain REIT status;
8. it uses a calendar year for federal income tax purposes and
complies with the recordkeeping requirements of the federal
income tax laws; and
9. it meets certain other qualification tests, described below,
regarding the nature of its income and assets.
United Dominion must meet requirements 1 through 4 during its entire
taxable year and must meet requirement 5 during at least 335 days of a taxable
year of 12 months, or during a proportionate part of a taxable year of less than
12 months. If United Dominion complies with all the requirements for
ascertaining the ownership of its outstanding shares in a taxable year and has
no reason to know that it violated the 5/50 Rule, it will be deemed to have
satisfied the 5/50 Rule for such taxable year. For purposes of determining share
ownership under the 5/50 Rule, an "individual" generally includes a supplemental
unemployment compensation benefits plan, a private foundation, or a portion of a
trust permanently set aside or used exclusively for charitable purposes. An
"individual," however, generally does not include a trust that is a qualified
employee pension or profit sharing trust under the federal income tax laws, and
beneficiaries of such a trust will be treated as holding shares of United
Dominion's capital stock in proportion to their actuarial interests in the trust
for purposes of the 5/50 Rule.
United Dominion believes it has issued sufficient common stock with
sufficient diversity of ownership to satisfy requirements 5 and 6 set forth
above. In addition, United Dominion's Articles restrict the ownership and
transfer of the common stock so that United Dominion should continue to satisfy
requirements 5 and 6. The provisions of the Articles restricting the ownership
and transfer of the common stock are described in "Restrictions on Transfer of
Capital Stock."
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United Dominion currently has several direct corporate subsidiaries and
may have additional corporate subsidiaries in the future. A corporation that is
a "qualified REIT subsidiary" is not treated as a corporation separate from its
parent REIT. All assets, liabilities, and items of income, deduction, and credit
of a "qualified REIT subsidiary" are treated as assets, liabilities, and items
of income, deduction, and credit of the REIT. A "qualified REIT subsidiary" is a
corporation, all of the capital stock of which is owned by the REIT. Thus, in
applying the requirements described herein, any "qualified REIT subsidiary" of
United Dominion will be ignored, and all assets, liabilities, and items of
income, deduction, and credit of such subsidiary will be treated as assets,
liabilities, and items of income, deduction, and credit of United Dominion.
United Dominion's corporate subsidiaries are qualified REIT subsidiaries.
Accordingly, they are not subject to federal corporate income taxation, though
they may be subject to state and local taxation.
In the case of a REIT that is a partner in a partnership, the REIT is
treated as owning its proportionate share of the assets of the partnership and
as earning its allocable share of the gross income of the partnership for
purposes of the applicable REIT qualification tests. Thus, United Dominion's
proportionate share of the assets, liabilities and items of income of United
Dominion Realty, L.P. and of any other partnership in which United Dominion has
acquired or will acquire an interest, directly or indirectly, are treated as
assets and gross income of United Dominion for purposes of applying the various
REIT qualification requirements.
Income Tests
United Dominion must satisfy two gross income tests annually to maintain
its qualification as a REIT. First, at least 75% of its gross income (excluding
gross income from prohibited transactions) for each taxable year must consist of
defined types of income that it derives, directly or indirectly, from
investments relating to real property or mortgages on real property or temporary
investment income (the "75% gross income test"). Qualifying income for purposes
of the 75% gross income test includes:
o "rents from real property,"
o interest on debt secured by mortgages on real property or on interests
in real property, and
o dividends or other distributions on and gain from the sale of shares in
other REITs.
Second, at least 95% of its gross income (excluding gross income from
prohibited transactions) for each taxable year must consist of income that is
qualifying income for purposes of the 75% gross income test, dividends, other
types of interest, gain from the sale or disposition of stock or securities, or
any combination of the foregoing (the "95% gross income test"). Gross income
from United Dominion's sale of property that it holds primarily for sale to
customers in the ordinary course of business is excluded from both income tests.
The following paragraphs discuss the specific application of these tests to
United Dominion.
Rents and Interest. Rent that United Dominion receives from real property
that it owns and leases to tenants will qualify as "rents from real property"
(which is qualifying income for purposes of the 75% and 95% gross income tests)
only if the following conditions are met.
o First, the rent must not be based, in whole or in part, on the income
or profits of any person. However, "rents from real property" generally
does not exclude an amount solely because it is based on a fixed
percentage or percentages of receipts or sales.
o Second, neither United Dominion nor a direct or indirect owner of 10%
or more of its stock may own, actually or constructively, 10% or more
of a tenant from whom it receives rent.
o Third, all of the rent received under a lease of real property will not
qualify as "rents from real property" unless the rent attributable to
the personal property leased in connection with such lease is no more
than 15% of the total rent received under the lease.
o Finally, United Dominion generally must not operate or manage its
real property or furnish or render services to its tenants, other
than through an "independent contractor" who is adequately compensated
and from whom United Dominion does not derive revenue. However, United
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Dominion need not provide services through an "independent contractor,"
but instead may provide services directly, if the services are
"usually or customarily rendered" in connection with the rental of
space for occupancy only and are not otherwise considered
"rendered to the occupant." In addition, United Dominion may render
a de minimis amount of "non-customary" services to the tenants of
a property, other than through an independent contractor, as long
as its income from the services does not exceed 1% of its income from
the related property.
United Dominion does not receive any rent that is based on the income or
profits of any person. In addition, United Dominion does not own, directly or
indirectly, 10% or more of any tenant. Furthermore, United Dominion believes
that any personal property rented in connection with our apartment facilities is
well within the 15% restriction. Finally, United Dominion does not provide
services (other than within the 1% de minimis exception described above) to its
tenants that are not customarily furnished or rendered in connection with the
rental of the apartment units, other than through an independent contractor.
United Dominion, through United Dominion Realty, L.P. (which is not an
independent contractor), provides certain services with respect to the
facilities and will provide certain services with respect to any newly acquired
apartment facilities. Such services include (1) common area services, such as
cleaning and maintaining public entrances, exits, stairways, walkways, lobbies
and rest rooms, removing snow and debris, collecting trash, and painting the
exteriors of the facilities and common areas, (2) providing general security for
the facilities, (3) cleaning and repairing units at the facilities as tenants
move in and out, (4) at the request of the tenant, and without additional
charge, accepting delivery of goods from carriers or unlocking a particular unit
when goods are delivered to a facility (however, United Dominion Realty, L.P.
does not otherwise assist tenants in the storage or removal of goods or
belongings from the units), (5) permitting tenants to use the fax machine at a
facility for occasional local faxes without additional charge and for occasional
long-distance faxes for a nominal charge, (6) maintaining underground utilities
and structural elements of the facilities, and (7) paying real and personal
property taxes or the cost of replacing or refurbishing personal property with
respect to real and personal property owned by United Dominion Realty, L.P. at a
facility. United Dominion believes that the services provided by United Dominion
Realty, L.P. are customarily furnished or rendered in connection with the rental
of space for occupancy only by apartment facilities in the geographic areas in
which its facilities are located.
United Dominion's investment, through United Dominion Realty, L.P., in the
facilities in major part gives rise to rental income that is qualifying income
for purposes of the 75% and 95% gross income tests. Gains on sales of the
facilities (other than from prohibited transactions, as described below) or of
United Dominion's interest in United Dominion Realty, L.P. generally will be
qualifying income for purposes of the 75% and 95% gross income tests. United
Dominion anticipates that income on its other investments will not result in
United Dominion's failing the 75% or 95% gross income test for any year.
Prohibited Transaction Rules. A REIT will incur a 100% tax on the net
income derived from any "prohibited transaction." A "prohibited transaction"
generally is a sale or other disposition of property (other than foreclosure
property) that the REIT holds primarily for sale to customers in the ordinary
course of a trade or business. United Dominion believes that none of its or
United Dominion Realty, L.P.'s assets is held for sale to customers and that a
sale of any such asset would not be in the ordinary course of its business.
Whether a REIT holds an asset "primarily for sale to customers in the ordinary
course of a trade or business" depends, however, on the facts and circumstances
in effect from time to time, including those related to a particular asset.
Nevertheless, United Dominion will attempt to comply with the terms of
safe-harbor provisions in the federal tax laws prescribing when an asset sale
will not be characterized as a prohibited transaction. United Dominion cannot
assure you, however, that United Dominion can comply with such safe-harbor
provisions or that United Dominion or United Dominion Realty, L.P. will avoid
owning property that may be characterized as property that it holds "primarily
for sale to customers in the ordinary course of a trade or business."
Hedging Transactions. From time to time, United Dominion or United
Dominion Realty, L.P. may enter into hedging transactions with respect to one or
more of its assets or liabilities. Its hedging activities may include entering
into interest rate swaps, caps and floors (or options to purchase such items),
and futures and forward contracts. To the extent that United Dominion or United
Dominion Realty, L.P. enters into an interest rate swap or cap contract, option,
futures contract, forward rate agreement or any similar financial instrument to
hedge its indebtedness incurred to acquire or carry "real estate assets," any
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periodic income or gain from the disposition of such contract should be
qualifying income for purposes of the 95% gross income test, but not the 75%
gross income test. To the extent that United Dominion or United Dominion Realty,
L.P. hedges with other types of financial instruments, or in other situations,
it is not entirely clear how the income from those transactions will be treated
for purposes of the gross income tests. United Dominion intends to structure any
hedging transactions in a manner that does not jeopardize its status as a REIT.
Failure to Qualify. If United Dominion fails to satisfy one or both of the
75% and 95% gross income tests for any taxable year, it nevertheless may qualify
as a REIT for such year if it qualifies for relief under certain provisions of
the federal tax laws. Those relief provisions generally will be available if its
failure to meet such tests is due to reasonable cause and not due to willful
neglect, United Dominion attaches a schedule of the sources of its income to its
tax return, and any incorrect information on the schedule was not due to fraud
with intent to evade tax. United Dominion cannot predict, however, whether in
all circumstances it would qualify for the relief provisions. In addition, as
discussed above in "--Taxation of United Dominion," even if the relief
provisions apply, United Dominion would incur a 100% tax on the gross income
attributable to the greater of the amounts by which it fails the 75% and 95%
gross income tests, multiplied by a fraction intended to reflect its
profitability.
Asset Tests
To maintain its qualification as a REIT, United Dominion also must satisfy
two asset tests at the close of each quarter of each taxable year. First, at
least 75% of the value of its total assets must consist of cash or cash items
(including certain receivables), government securities, "real estate assets," or
qualifying temporary investments (the "75% asset test"). The term "real estate
assets" includes interests in real property, interests in mortgages on real
property and stock in other REITs. For purposes of the 75% asset test, the term
"interest in real property" includes an interest in mortgage loans or land and
improvements thereon, a leasehold of real property, and an option to acquire
real property (or a leasehold of real property). Qualifying temporary
investments are investments in stock or debt instruments during the one-year
period following United Dominion's receipt of new capital that it raises through
equity or long-term (at least five-year) debt offerings.
The second asset test has two components. First, of United Dominion's
investments not included in the 75% asset class, the value of its interest in
any one issuer's securities (which does not include its interest in other REITs,
United Dominion Realty, L.P., or any qualified REIT subsidiary) may not exceed
5% of the value of its total assets (the "5% asset test"). Second, United
Dominion may not own more than 10% of any one issuer's outstanding voting
securities (which does not include its stock in other REITs, United Dominion
Realty, L.P., or any qualified REIT subsidiary) (the "10% asset test").
The Clinton Administration's budget proposal for fiscal year 2000 would
allow United Dominion to own up to 100% of the stock in two types of taxable
REIT subsidiaries: (1) qualified business subsidiaries, which could perform
activities unrelated to United Dominion's tenants, such as third-party
management, development, and other independent business activities, as well as
provide "customary" services to United Dominion's tenants, and (2) qualified
independent contractor subsidiaries, which could both perform activities that a
qualified business subsidiary could perform and provide "non-customary" services
to United Dominion's tenants. United Dominion would be subject to restrictions
on its stock ownership of those taxable subsidiaries. The taxable REIT
subsidiary provision would be effective after the date of enactment. There would
be a transition period during which United Dominion could convert its existing
taxable subsidiaries on a tax-free basis into qualified business subsidiaries or
qualified independent contractor subsidiaries. Existing taxable subsidiaries,
however, would not be grandfathered after the transition period.
For purposes of the asset tests, United Dominion is deemed to own its
proportionate share of the assets of United Dominion Realty, L.P., rather than
its interest in United Dominion Realty, L.P.. United Dominion has operated and
intends to continue to operate so that it has not acquired or disposed, and in
the future will not acquire or dispose, of assets in a way that would cause it
to violate either asset test.
If United Dominion should fail to satisfy the asset tests at the end of a
calendar quarter, it would not lose its REIT status if (A) it satisfied the
asset tests at the close of the preceding calendar quarter and (B) the
discrepancy between the value of its assets and the asset test requirements
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arose from changes in the market values of its assets and was not wholly or
partly caused by the acquisition of one or more non-qualifying assets. If United
Dominion did not satisfy the condition described in clause (B) of the preceding
sentence, it still could avoid disqualification as a REIT by eliminating any
discrepancy within 30 days after the close of the calendar quarter in which the
discrepancy arose.
Distribution Requirements
Each taxable year, United Dominion must distribute dividends (other than
capital gain dividends and deemed distributions of retained capital gain) to its
shareholders in an aggregate amount at least equal to:
o the sum of (A) 95% of its "REIT taxable income" (computed without
regard to the dividends paid deduction and its net capital gain or
loss) and (B) 95% of its net income (after tax), if any, from
foreclosure property,
o minus the sum of certain items of non-cash income.
United Dominion must pay such distributions in the taxable year to which
they relate, or in the following taxable year if it declares the distribution
before it timely files its federal income tax return for such year and pays the
distribution on or before the first regular dividend payment date after such
declaration.
United Dominion will pay federal income tax on taxable income (including
net capital gain) that it does not distribute to shareholders. Furthermore, if
it fails to distribute during a calendar year (or, in the case of distributions
with declaration and record dates falling in the last three months of the
calendar year, by the end of January following such calendar year) at least the
sum of:
o 85% of its REIT ordinary income for such year,
o 95% of its REIT capital gain income for such year, and
o any undistributed taxable income from prior periods,
it will incur a 4% nondeductible excise tax on the excess of such required
distribution over the amounts it actually distributed. United Dominion may elect
to retain and pay income tax on the net long-term capital gain it receives in a
taxable year. See "--Taxation of Taxable U.S. Stockholders." If it so elects, it
will be treated as having distributed any such retained amount for purposes of
the 4% excise tax described above. United Dominion has made, and intends to
continue to make, timely distributions sufficient to satisfy the annual
distribution requirements.
It is possible that, from time to time, United Dominion may experience
timing differences between (A) the actual receipt of income and actual payment
of deductible expenses and (B) the inclusion of that income and deduction of
such expenses in arriving at its REIT taxable income. For example, United
Dominion may not deduct recognized capital losses from its "REIT taxable
income." Further, it is possible that, from time to time, United Dominion may be
allocated a share of net capital gain attributable to the sale of depreciated
property that exceeds its allocable share of cash attributable to that sale. As
a result of the foregoing, United Dominion may have less cash than is necessary
to distribute all of its taxable income and thereby avoid corporate income tax
and the excise tax imposed on certain undistributed income. In such a situation,
it may need to borrow funds or issue preferred stock or additional common stock.
Under certain circumstances, United Dominion may be able to correct a
failure to meet the distribution requirement for a year by paying "deficiency
dividends" to its shareholders in a later year. United Dominion may include such
deficiency dividends in its deduction for dividends paid for the earlier year.
Although United Dominion may be able to avoid income tax on amounts distributed
as deficiency dividends, it will be required to pay interest to the Internal
Revenue Service based upon the amount of any deduction it takes for deficiency
dividends.
Recordkeeping Requirements
United Dominion must maintain certain records in order to qualify as a
REIT. In addition, to avoid a monetary penalty, it must request on an annual
basis certain information from its shareholders designed to disclose the actual
ownership of its outstanding stock. United Dominion has complied, and intends to
continue to comply, with such requirements.
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Failure to Qualify
If United Dominion failed to qualify as a REIT in any taxable year, and no
relief provision applied, it would be subject to federal income tax (including
any applicable alternative minimum tax) on its taxable income at regular
corporate rates. In calculating its taxable income in a year in which it failed
to qualify as a REIT, United Dominion would not be able to deduct amounts paid
out to shareholders. In fact, United Dominion would not be required to
distribute any amounts to shareholders in such year. In such event, to the
extent of its current and accumulated earnings and profits, all distributions to
shareholders would be taxable as ordinary income. Subject to certain limitations
of federal tax laws, corporate shareholders might be eligible for the dividends
received deduction. Unless United Dominion qualified for relief under specific
statutory provisions, it also would be disqualified from taxation as a REIT for
the four taxable years following the year during which it ceased to qualify as a
REIT. United Dominion cannot predict whether in all circumstances it would
qualify for such statutory relief.
Taxation of Taxable U.S. Stockholders
As long as United Dominion qualifies as a REIT, a taxable "U.S.
Stockholder" must take into account distributions out of United Dominion's
current or accumulated earnings and profits (and that it does not designate as
capital gain dividends or retained long-term capital gain) as ordinary income. A
U.S. Stockholder will not qualify for the dividends received deduction generally
available to corporations. As used herein, the term "U.S. Stockholder" means a
holder of United Dominion's common stock that for U.S. federal income tax
purposes is
o a citizen or resident of the United States,
o a corporation, partnership, or other entity created or organized
in or under the laws of the United States or of an political
subdivision thereof,
o an estate whose income from sources outside the United States is
includible in gross income for U.S. federal income tax purposes
regardless of its connection with the conduct of a trade or
business within the United States, or
o any trust with respect to which (A) a U.S. court is able to
exercise primary supervision over the administration of such
trust and (B) one or more U.S. persons have the authority to
control all substantial decisions of the trust.
A U.S. Stockholder will recognize distributions that United Dominion
designates as capital gain dividends as long-term capital gain (to the extent
they do not exceed United Dominion's actual net capital gain for the taxable
year) without regard to the period for which the U.S. Stockholder has held its
common stock. Subject to certain limitations, United Dominion will designate its
capital gain dividends as either 20% or 25% rate distributions. A corporate U.S.
Stockholder, however, may be required to treat up to 20% of certain capital gain
dividends as ordinary income.
United Dominion may elect to retain and pay income tax on the net
long-term capital gain that it receives in a taxable year. In that case, a U.S.
Stockholder would be taxed on its proportionate share of United Dominion's
undistributed long-term capital gain. The U.S. Stockholder would receive a
credit or refund for its proportionate share of the tax United Dominion paid.
The U.S. Stockholder would increase the basis in its stock by the amount of its
proportionate share of United Dominion's undistributed long-term capital gain,
minus its share of the tax United Dominion paid.
A U.S. Stockholder will not incur tax on a distribution in excess of
United Dominion's current and accumulated earnings and profits if such
distribution does not exceed the adjusted basis of the U.S. Stockholder's common
stock. Instead, such distribution will reduce the adjusted basis of such common
stock. A U.S. Stockholder will recognize a distribution in excess of both United
Dominion's current and accumulated earnings and profits and the U.S.
Stockholder's adjusted basis in its common stock as long-term capital gain (or
short-term capital gain if the common stock has been held for one year or less),
assuming the common stock is a capital asset in the hands of the U.S.
Stockholder. In addition, if United Dominion declares a distribution in October,
November, or December of any year that is payable to a U.S. Stockholder of
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record on a specified date in any such month, such distribution shall be treated
as both paid by United Dominion and received by the U.S. Stockholder on December
31 of such year, provided that United Dominion actually pays the distribution
during January of the following calendar year. United Dominion will notify U.S.
Stockholders after the close of its taxable year as to the portions of the
distributions attributable to that year that constitute ordinary income or
capital gain dividends.
Taxation of U.S. Stockholders on the Disposition of the Common Stock
In general, a U.S. Stockholder who is not a dealer in securities must
treat any gain or loss realized upon a taxable disposition of the common stock
as long-term capital gain or loss if the U.S. Stockholder has held the common
stock for more than one year and otherwise as short-term capital gain or loss.
However, a U.S. Stockholder must treat any loss upon a sale or exchange of
common stock held by such shareholder for six months or less (after applying
certain holding period rules) as a long-term capital loss to the extent of
capital gain dividends and other distributions from United Dominion that such
U.S. Stockholder treats as long-term capital gain. All or a portion of any loss
a U.S. Stockholder realizes upon a taxable disposition of the common stock may
be disallowed if the U.S. Stockholder purchases other shares of common stock
within 30 days before or after the disposition.
Capital Gains and Losses
A taxpayer generally must hold a capital asset for more than one year for
gain or loss derived from its sale or exchange to be treated as long-term
capital gain or loss. The highest marginal individual income tax rate is 39.6%.
The maximum tax rate on long-term capital gain applicable to non-corporate
taxpayers is 20% for sales and exchanges of assets held for more than one year.
The maximum tax rate on long-term capital gain from the sale or exchange of
"section 1250 property" (i.e., depreciable real property) is 25% to the extent
that such gain would have been treated as ordinary income if the property were
"section 1245 property." With respect to distributions that United Dominion
designates as capital gain dividends and any retained capital gain that it is
deemed to distribute, United Dominion may designate (subject to certain limits)
whether such a distribution is taxable to its non-corporate shareholders at a
20% or 25% rate. Thus, the tax rate differential between capital gain and
ordinary income for non-corporate taxpayers may be significant. In addition, the
characterization of income as capital gain or ordinary income may affect the
deductibility of capital losses. A non-corporate taxpayer may deduct capital
losses not offset by capital gains against its ordinary income only up to a
maximum annual amount of $3,000. A non-corporate taxpayer may carry forward
unused capital losses indefinitely. A corporate taxpayer must pay tax on its net
capital gain at ordinary corporate rates. A corporate taxpayer can deduct
capital losses only to the extent of capital gains, with unused losses being
carried back three years and forward five years.
Information Reporting Requirements and Backup Withholding
United Dominion will report to its shareholders and to the Internal
Revenue Service the amount of distributions it pays during each calendar year,
and the amount of tax it withholds, if any. Under the backup withholding rules,
a shareholder may be subject to backup withholding at the rate of 31% with
respect to distributions unless such holder (A) is a corporation or comes within
certain other exempt categories and, when required, demonstrates this fact or
(B) provides a taxpayer identification number, certifies as to no loss of
exemption from backup withholding, and otherwise complies with the applicable
requirements of the backup withholding rules. A shareholder who does not provide
United Dominion with its correct taxpayer identification number also may be
subject to penalties imposed by the Internal Revenue Service. Any amount paid as
backup withholding will be creditable against the shareholder's income tax
liability. In addition, United Dominion may be required to withhold a portion of
capital gain distributions to any shareholders who fail to certify their
non-foreign status to United Dominion. The Treasury Department has issued final
regulations regarding the backup withholding rules as applied to Non-U.S.
Stockholders. Those regulations alter the current system of backup withholding
compliance and are effective for distributions made after December 31, 1999. See
"--Taxation of Non-U.S. Stockholders."
Taxation of Tax-Exempt Stockholders
Tax-exempt entities, including qualified employee pension and profit
sharing trusts and individual retirement accounts and annuities ("Exempt
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Organizations"), generally are exempt from federal income taxation. However,
they are subject to taxation on their unrelated business taxable income
("UBTI"). While many investments in real estate generate UBTI, the Internal
Revenue Service has issued a published ruling that dividend distributions from a
REIT to an exempt employee pension trust do not constitute UBTI, provided that
the exempt employee pension trust does not otherwise use the shares of the REIT
in an unrelated trade or business of the pension trust. Based on that ruling,
amounts that United Dominion distributes to Exempt Organizations generally
should not constitute UBTI. However, if an Exempt Organization were to finance
its acquisition of the common stock with debt, a portion of the income that they
receive from United Dominion would constitute UBTI pursuant to the
"debt-financed property" rules. Furthermore, social clubs, voluntary employee
benefit associations, supplemental unemployment benefit trusts and qualified
group legal services plans that are exempt from taxation under certain
provisions of the federal income tax laws are subject to different UBTI rules,
which generally will require them to characterize distributions that they
receive from United Dominion as UBTI. Finally, in certain circumstances, a
qualified employee pension or profit sharing trust that owns more than 10% of
United Dominion's stock is required to treat a percentage of the dividends that
it receives from United Dominion as UBTI (the "UBTI Percentage"). The UBTI
Percentage is equal to the gross income United Dominion derives from an
unrelated trade or business (determined as if it were a pension trust) divided
by its total gross income for the year in which it pays the dividends. The UBTI
rule applies to a pension trust holding more than 10% of United Dominion's stock
only if:
o the UBTI Percentage is at least 5%;
o United Dominion qualifies as a REIT by reason of the modification
of the 5/50 Rule that allows the beneficiaries of the pension
trust to be treated as holding United Dominion's stock in
proportion to their actuarial interests in the pension trust; and
o United Dominion is a "pension-held REIT" (i.e., either (i) one
pension trust owns more than 25% of the value of its stock or
(ii) a group of pension trusts individually holding more than 10%
of the value of its stock collectively owns more than 50% of the
value of its stock).
Taxation of Non-U.S. Stockholders
The rules governing U.S. federal income taxation of nonresident alien
individuals, foreign corporations, foreign partnerships, and other foreign
shareholders (collectively, "Non-U.S. Stockholders") are complex. This section
is only a summary of such rules. United Dominion urges Non-U.S. Stockholders to
consult their own tax advisors to determine the impact of federal, state, and
local income tax laws on ownership of the common stock, including any reporting
requirements.
A Non-U.S. Stockholder that receives a distribution that is not
attributable to gain from United Dominion's sale or exchange of U.S. real
property interests (as defined below) and that United Dominion does not
designate as a capital gain dividend or retained capital gain will recognize
ordinary income to the extent that United Dominion pays such distribution out of
its current or accumulated earnings and profits. A withholding tax equal to 30%
of the gross amount of the distribution ordinarily will apply to such
distribution unless an applicable tax treaty reduces or eliminates the tax.
However, if a distribution is treated as effectively connected with the Non-U.S.
Stockholder's conduct of a U.S. trade or business, the Non-U.S. Stockholder
generally will be subject to federal income tax on the distribution at graduated
rates, in the same manner as U.S. Stockholders are taxed with respect to such
distributions (and also may be subject to the 30% branch profits tax in the case
of a Non-U.S. Stockholder that is a non-U.S. corporation). United Dominion plans
to withhold U.S. income tax at the rate of 30% on the gross amount of any such
distribution paid to a Non-U.S. Stockholder unless (i) a lower treaty rate
applies and the Non-U.S. Stockholder files the required form evidencing
eligibility for that reduced rate with United Dominion or (ii) the Non-U.S.
Stockholder files an IRS Form 4224 with United Dominion claiming that the
distribution is effectively connected income. The U.S. Treasury Department has
issued final regulations that modify the manner in which United Dominion will
comply with the withholding requirements. Those regulations are effective for
distributions made after December 31, 1999.
A Non-U.S. Stockholder will not incur tax on a distribution in excess of
United Dominion's current and accumulated earnings and profits if such
distribution does not exceed the adjusted basis of its common stock. Instead,
such a distribution will reduce the adjusted basis of such common stock. A
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Non-U.S. Stockholder will be subject to tax on a distribution that exceeds both
United Dominion's current and accumulated earnings and profits and the adjusted
basis of its common stock, if the Non-U.S. Stockholder otherwise would be
subject to tax on gain from the sale or disposition of its common stock, as
described below. Because United Dominion generally cannot determine at the time
it makes a distribution whether or not the distribution will exceed its current
and accumulated earnings and profits, it normally will withhold tax on the
entire amount of any distribution at the same rate as it would withhold on a
dividend. However, a Non-U.S. Stockholder may obtain a refund of amounts that
United Dominion withholds if it later determines that a distribution in fact
exceeded its current and accumulated earnings and profits.
United Dominion must withhold 10% of any distribution that exceeds its
current and accumulated earnings and profits. Consequently, although it intends
to withhold at a rate of 30% on the entire amount of any distribution, to the
extent that it does not do so, it will withhold at a rate of 10% on any portion
of a distribution not subject to withholding at a rate of 30%.
For any year in which United Dominion qualifies as a REIT, a Non-U.S.
Stockholder will incur tax on distributions that are attributable to gain from
its sale or exchange of "U.S. real property interests" under the provisions of
the Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA"). The term
"U.S. real property interests" includes certain interests in real property and
stock in corporations at least 50% of whose assets consists of interests in real
property, but excludes mortgage loans and mortgage-backed securities. Under
FIRPTA, a Non-U.S. Stockholder is taxed on distributions attributable to gain
from sales of U.S. real property interests as if such gain were effectively
connected with a U.S. business of the Non-U.S. Stockholder. A Non-U.S.
Stockholder thus would be taxed on such a distribution at the normal capital
gain rates applicable to U.S. Stockholders (subject to applicable alternative
minimum tax and a special alternative minimum tax in the case of a nonresident
alien individual). A non-U.S. corporate shareholder not entitled to treaty
relief or exemption also may be subject to the 30% branch profits tax on
distributions subject to FIRPTA. United Dominion must withhold 35% of any
distribution that it could designate as a capital gain dividend. A Non-U.S.
Stockholder may receive a credit against its FIRPTA tax liability for the amount
United Dominion withholds.
A Non-U.S. Stockholder generally will not incur tax under FIRPTA on gain
from the sale of its common stock as long as United Dominion is a "domestically
controlled REIT." A "domestically controlled REIT" is a REIT in which at all
times during a specified testing period non-U.S. persons held, directly or
indirectly, less than 50% in value of the stock. However, a Non-U.S. Stockholder
that owned, actually or constructively, 5% or less of the common stock at all
times during a specified testing period will not incur tax under FIRPTA if the
common stock is "regularly traded" on an established securities market. If the
gain on the sale of the common stock were taxed under FIRPTA, a Non-U.S.
Stockholder would be taxed in the same manner as U.S. Stockholders with respect
to such gain (subject to applicable alternative minimum tax, a special
alternative minimum tax in the case of nonresident alien individuals, and the
possible application of the 30% branch profits tax in the case of non-U.S.
corporations). However, a Non-U.S. Stockholder will incur tax on gain not
subject to FIRPTA if:
o the gain is effectively connected with the Non-U.S. Stockholder's U.S.
trade or business, in which case the Non-U.S. Stockholder will be
subject to the same treatment as U.S. Stockholders with respect to such
gain, or
o the Non-U.S. Stockholder is a nonresident alien individual who was
present in the U.S. for 183 days or more during the taxable year and
has a "tax home" in the United States, in which case the Non-U.S.
Stockholder will incur a 30% tax on his capital gains.
Other Tax Consequences
State and Local Taxes
United Dominion and/or you may be subject to state and local tax in
various states and localities, including those states and localities in which
United Dominion or you transact business, own property or reside. The state and
local tax treatment in such jurisdictions may differ from the federal income tax
treatment described above. Consequently, you should consult your own tax advisor
regarding the effect of state and local tax laws upon an investment in the
common stock.
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Taxable Subsidiaries
The Clinton Administration's budget proposal for fiscal year 2000 would
allow United Dominion to own up to 100% of the stock in two types of taxable
REIT subsidiaries: (1) qualified business subsidiaries, which could perform
activities unrelated to United Dominion's tenants, such as third-party
management, development, and other independent business activities, as well as
provide "customary" services to United Dominion's tenants, and (2) qualified
independent contractor subsidiaries, which could both perform activities that a
qualified business subsidiary could perform and provide "non-customary" services
to United Dominion's tenants. United Dominion would be subject to restrictions
on its stock ownership of those taxable subsidiaries. The taxable REIT
subsidiary provision would be effective after the date of enactment. There would
be a transition period during which United Dominion could convert its existing
taxable subsidiaries on a tax-free basis into qualified business subsidiaries or
qualified independent contractor subsidiaries. Existing taxable subsidiaries,
however, would not be grandfathered after the transition period.
USE OF PROCEEDS
United Dominion will not receive any proceeds from the sale of the common
stock.
THE SELLING SHAREHOLDERS
This prospectus relates to the offer and sale of up to 481,251 shares of
United Dominion common stock by Dale A. Schuparra, Helen James Schuparra, Robert
Wilbur and The Stone County Day School, the selling shareholders.
United Dominion issued the shares to the selling shareholders in April
1998 in connection with its acquisition of 1,970 multi-family apartment homes
from the selling shareholders. United Dominion agreed to register the common
stock and to keep the registration statement effective until the earlier of (a)
the date when all of the shares are sold thereunder, (b) the date on which the
selling shareholders agree to the withdrawal of the registration statement or
(c) the first date upon which, in the opinion of counsel for United Dominion,
all of the shares then remaining unsold could be sold by the selling
shareholders pursuant to paragraph (k) of Rule 144 under the Securities Act.
We do not know if, when or in what amounts any selling shareholder will
sell shares. Consequently, we cannot estimate how many shares will be held by
each selling shareholder after completion of the offering.
The selling shareholder and any broker or dealer through whom any of the
shares are sold may be deemed to be underwriters within the meaning of the
Securities Act with respect to the common stock offered hereby, and any profits
realized by the selling shareholders or such brokers or dealers may be deemed to
be underwriting commissions. Brokers' commissions and dealers' discounts, taxes
and other selling expenses to be borne by the selling shareholders are not
expected to exceed normal selling expenses for such sales. The registration of
the common stock offered hereby under the Securities Act shall not be deemed an
admission by the selling shareholders or United Dominion that the selling
shareholders are underwriters for purposes of the Securities Act of any common
shares offered under this Prospectus.
Common Stock Ownership
Prior to the Offering
Name of the Selling Shareholder Number
------------------------------- ------
Dale A. Schuparra 299,524
Helen James Schuparra 146,850
Robert Wilbur 22,231
The Stone County Day School 12,646
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PLAN OF DISTRIBUTION
The selling shareholders may sell the common stock in transactions on the
New York Stock Exchange or in privately negotiated transactions, including
transactions with exchange funds, through the writing of options on the shares
or a combination of such methods of sale, at fixed prices that may be changed,
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Alternatively, the shares may
be offered to or through underwriters, brokers or dealers who may act solely as
agents, or who may acquire shares as principals. The distribution of the shares
through such persons may be effected in one or more transactions that may take
place on the New York Stock Exchange, including block trades or ordinary
broker's transactions, or through privately negotiated transactions or sales to
one or more brokers or dealers for resale of such securities as principals, or
otherwise at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. Usual and customary or
specifically negotiated brokerage fees of commissions may be paid by the selling
shareholders in connection with such sales. In connection with such sales, the
selling shareholders and any participating brokers or dealers may be deemed
"underwriters" as such term is defined in the Securities Act and the commissions
paid or discounts allowed to any of such underwriters, brokers, dealers or
agents, in addition to any profits received on any resale of the shares, if any
such underwriters, brokers or dealer should purchase any shares as a principal,
may be deemed to be underwriting discounts or commissions under the Securities
Act.
Pursuant to their respective agreements, United Dominion has agreed to
indemnify each of the selling shareholders and controlling persons against
certain liabilities, including certain liabilities under the Securities Act.
Insofar as indemnification of the selling shareholders and controlling persons
for liabilities arising under the Securities Act may be permitted pursuant to
their respective agreements with United Dominion, United Dominion is aware that,
in the opinion of the SEC, such indemnification is against public policy as
expressed in the Securities Act and, therefore, may be unenforceable.
United Dominion has agreed to pay the expenses of registering all of the
common shares offered hereby under the Securities Act, including all
registration, filing and exchange listing fees, blue sky expenses, fees of its
own counsel and accountants, and underwriters fees customarily paid by issuers
(excluding underwriting discounts, commissions, and transfer taxes).
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule included in our Annual Report on Form 10-K for
the year ended December 31, 1998, as set forth in their report, which is
incorporated by reference in this prospectus and elsewhere in this Registration
Statement. Our consolidated financial statements and schedule are incorporated
by reference in reliance on Ernst and Young LLP's report, given on their
authority as experts in accounting and auditing.
The consolidated financial statements and schedule of ASR incorporated in
this Prospectus by reference from ASR's Annual Report on Form 10-K for the year
ended December 31, 1997 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report which is incorporated herein by reference,
and has been so incorporated in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.
The consolidated financial statements of American Apartment Communities
II, Inc. and American Apartment Communities II, L.P., for the year ended
December 31, 1997, included in United Dominion's Current Report on Form 8-K
filed with the Securities and Exchange Commission on October 23, 1998, as
amended, incorporated herein by reference, have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports.
The statement of rental operations of Dogwood Creek Apartments and the
combined statement of rental operations of Trails at Mount Moriah Apartments,
Trails at Kirby Parkway Apartments, Cinnamon Trails Apartments, Audubon
Apartments, Carmel Apartments, Cimarron City Apartments, Grand Cypress
15
<PAGE>
Apartments, Kenton Apartments, Peppermill Apartments, The Crest Apartments, and
Villages of Thousand Oaks Apartments, included in United Dominion's Current
Report on Form 8-K dated June 9, 1998, filed on June 24, 1998, as amended by
Amendment No. 1 on Form 8-K/A dated and filed on August 13, 1998, incorporated
by reference herein, has been incorporated herein in reliance upon the reports
dated May 1, 1998, May 8, 1998 and June 29, 1998 of L. P. Martin & Company,
P.C., independent auditors, also incorporated by reference herein, and upon the
authority of such firm as experts in accounting and auditing.
LEGAL MATTERS
The validity of the issuance of the shares of common stock offered
pursuant to this Prospectus will be passed upon for United Dominion by Hunton &
Williams, Richmond, Virginia.
16
<PAGE>
IF YOU WOULD LIKE ADDITIONAL INFORMATION
United Dominion files annual, quarterly and special reports, proxy
statements and other information with the U.S. Securities and Exchange
Commission ("SEC"). You may read and copy this information at the SEC's public
reference rooms, which are located in:
450 Fifth Street, NW 7 World Trade Center, Suite 1300
Washington, DC 20549 New York, NY 10048
500 West Madison Street, Suite 1400
Chicago, IL 60661-2511
Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. This information is also available on-line on the SEC's
web site at http://www.sec.gov.
United Dominion will provide you free of charge with any of these
documents filed with the SEC. To get your free copies, please call or write:
United Dominion Realty Trust, Inc.
10 South 6th Street
Richmond, Virginia 23219-3802
(804) 780-2691
The SEC allows United Dominion to "incorporate by reference" from other
documents that we file with them, which means that United Dominion can disclose
important information to you by referring you to other documents. The documents
that are incorporated by reference are legally considered to be a part of this
prospectus, and information that we file later with the SEC will automatically
update and supersede this information. The documents incorporated by reference
are:
o Annual Report on Form 10-K for the year ended December 31, 1998;
o Current Report on Form 8-K dated and filed on February 17, 1998; Current
Report dated March 27, 1998, filed on April 13, 1998, as amended by
Amendment No. 1 on Form 8-K/A dated and filed on June 12, 1998; Current
Report on Form 8-K dated June 9, 1998, filed on June 24, 1998, as amended
by Amendment No. 1 on Form 8-K/A dated and filed on August 13, 1998;
Current Report on Form 8-K dated May 28, 1998, filed on October 19, 1998;
Current Report on Form 8-K dated September 11, 1998, filed on October 23,
1998, as amended by Amendment No. 1 on Form 8-K/A dated and filed on
December 21, 1998; Current Report on Form 8-K dated November 2, 1998,
filed on November 6, 1998; Current Report on Form 8-K dated December 7,
1998, filed on December 21, 1998; Current Report on Form 8-K dated and
filed on January 20, 1999; Current Report on Form 8-K dated and filed
March 29, 1999;
o The description of the common stock and preferred stock contained in
United Dominion's Registration Statements on Form 8-A dated April 9,
1990, May 1, 1995, June 10, 1997 and February 4, 1998, filed under
the Exchange Act, including any amendments or reports filed for the
purpose of updating such descriptions;
o Any filings with the SEC pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act of 1934 between the date of this
prospectus and the termination of the offering of all of the common
stock registered in this registration statement.
As you read the above documents, you may find some inconsistencies in
information from one document to another. If you find inconsistencies between
the documents, or between a document and this prospectus, you should rely on the
statements made in the most recent document.
17
<PAGE>
You should rely only on the information in this prospectus or incorporated by
reference. United Dominion has not authorized anyone to provide you with any
different information. The selling shareholders will not make an offer of these
shares in any state where the offer is not permitted. You should not assume that
the information in this prospectus or any supplement is accurate as of any date
other than the date on the front of those documents.
Prospective investors may rely on the information contained in this
prospectus. United Dominion has not authorized anyone to provide prospective
investors with information different from that contained in this prospectus.
This prospectus is not an offer to sell nor is it seeking an offer to buy these
securities in any state where the offer or sale is not permitted. The
information contained in this prospectus is correct only as of the date of this
prospectus, regardless of the time of the delivery of this prospectus or any
sale of these securities.
UNITED DOMINION REALTY TRUST, INC.
481,251 SHARES
COMMON STOCK
---------------
PROSPECTUS
---------------
April , 1999
18
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses in connection with the offering are as follows:
Securities and Exchange Commission registration fee ... $1,450.76
Accounting fees and expenses........................... 5,000.00
Legal fees and expenses ............................... 2,500.00
Printing and postage expenses.......................... 500.00
Miscellaneous.......................................... 0.00
TOTAL ........................................... $9,450.76
Item 15. Indemnification of Officers and Directors
Directors and officers of United Dominion may be indemnified against
liabilities, fines, penalties, and claims imposed upon or asserted against them
as provided in the Virginia Stock Corporation Act and the Articles. Such
indemnification covers all costs and expenses reasonably incurred by a Director
or officer. The Board of Directors, by a majority vote of a quorum of
disinterested Directors or, under certain circumstances, independent counsel
appointed by the Board of Directors, must determine that the Director or officer
seeking indemnification was not guilty of willful misconduct or a knowing
violation of the criminal law. In addition, the Virginia Stock Corporation Act
and United Dominion's Articles may under certain circumstances eliminate the
liability of Directors and officers in a shareholder or derivative proceeding.
If the person involved is not a Director or officer of United Dominion,
the Board of Directors may cause United Dominion to indemnify to the same extent
allowed for Directors and officers of United Dominion such person who was or is
a party to a proceeding, by reason of the fact that he is or was an employee or
agent of United Dominion, or is or was serving at the request of United Dominion
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise.
Item 16. Exhibits
2(a) -- Agreement and Plan of Merger dated as of December 19, 1997,
between United Dominion, ASR Investments Corporation and ASR
Acquisition Sub, Inc. (filed as Exhibit 2(a) to United Dominion's
Form S-4 Registration Statement, filed with the Commission on
January 30, 1998 (File No. 333-45305), and incorporated by reference
herein)
2(b) -- Agreement and Plan of Merger dated as of October 1, 1996, between
United Dominion, United Sub, Inc. and South West Property Trust Inc.
(filed as Exhibit 2(a) to United Dominion's Form S-4 Registration
Statement, filed with the Commission on October 9, 1996 (File No.
333-13745), and incorporated by reference herein)
2(c) -- Agreement and Plan of Merger dated as of September 10, 1998, between
United Dominion and American Apartment Communities II, Inc.
including as exhibits thereto the proposed terms of the Series D
Preferred Stock and the proposed form of Investment Agreement
between United Dominion, United Dominion Realty, L.P., American
Apartment Communities II, Inc., American Apartment Communities
II, L.P., American Apartment Communities Operating Partnership,
L.P., Schnitzer Investment Corp., AAC Management LLC and LF
Strategic Realty Investors, L.P. (filed as Exhibit 2(c) to United
Dominion's Form S-3 Registration Statement, filed with the
Commission on September 25, 1998 (File No. 333-64281), and
incorporated by reference herein)
2(d) -- Partnership Interest Purchase and Exchange Agreement dated as of
September 10, 1998, between United Dominion, United Dominion Realty,
L.P., American Apartment Communities Operating Partnership, L.P.,
II-1
<PAGE>
AAC Management LLC, Schnitzer Investment Corp, Fox Point Ltd. and
James D. Klingbeil including as an exhibit thereto the proposed form
of the Third Amended and Restated limited partnership Agreement of
United Dominion Realty, L.P. (filed as Exhibit 2(d) to United
Dominion's Form S-3 Registration Statement, filed with the
Commission on September 25, 1998 (File No. 333-64281), and
incorporated by reference herein)
4(a) -- Restated Articles of Incorporation of United Dominion (filed as
Exhibit 4(b) to United Dominion's Form S-3 Registration Statement,
filed with the Commission on January 16, 1998 (File No. 333-44463),
and incorporated by reference herein)
4(a)(i) -- Amendment of Articles of Incorporation of United Dominion (filed
as Exhibit 3 to United Dominion's Form 8-A Registration Statement
dated February 4, 1998 (File No. 1-10524), and incorporated by
reference herein)
4(a)(ii)-- Restated Articles of Incorporation of United Dominion, dated
January 21, 1999 (previously filed)
4(b) -- Restated Bylaws of the Company (filed as Exhibit 3(b) to the
Company's Annual Report on Form 10-K for the year ended December 31,
1998 (File No. 1-10524), and incorporated by reference herein)
4(c) -- Specimen United Dominion common stock certificate (filed as
Exhibit 4(i) to United Dominion's Annual Report on Form 10-K for the
year ended December 31, 1993 (File No. 1-10524), and incorporated by
reference herein)
4(d) -- Note Purchase Agreement dated as of January 15, 1993, between United
Dominion and CIGNA Property and Casualty Insurance Company,
Connecticut General Life Insurance Company, Connecticut General Life
Insurance Company on behalf of one or more separate accounts,
Insurance Company of North America, Principal Mutual Life Insurance
Company, and Aid Association for Lutherans (filed as Exhibit 6(c)(5)
to United Dominion's Form 8-A Registration Statement dated April 19,
1990 (File No. 1-10524), and incorporated by reference herein)
4(e) -- Rights Agreement dated as of January 27, 1998, between United
Dominion and ChaseMellon Shareholder Services, L.L.C., as Rights
Agent (filed as Exhibit 1 to United Dominion's Form 8-A Registration
Statement dated February 4, 1998 (File No. 1-10524) and incorporated
by reference herein)
4(f) -- Form of Rights Certificate (included in Exhibit 4(e))
5 -- Opinion of Hunton & Williams
23(a) -- Consent of Ernst & Young LLP
23(b) -- Consent of Deloitte & Touch LLP
23(c) -- Consent of Arthur Andersen LLP
23(d) -- Consent of L.P. Martin & Company, P.C.
23(e) -- Consent of Hunton & Williams (included in Exhibit 5)
24 -- Power of Attorney (see signature page)
II-2
<PAGE>
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions of the Virginia Code, the Articles
of Incorporation or By-laws of the registrant or resolutions of the Board of
Directors of the registrant adopted pursuant thereto, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Richmond, Commonwealth of
Virginia on the 26th day of April, 1999.
UNITED DOMINION REALTY TRUST, INC.
By /s/ John P. McCann
------------------------------------------
John P. McCann
Chief Executive Officer
Power of Attorney
Know All Men and Women By These Presents that each individual whose
signature appears below constitutes and appoints John P. McCann and Katheryn E.
Surface, and each of them, such individual's true and lawful attorneys-in-fact
and agents with full power of substitution, for such individual and in his or
her name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this registration statement
and any registration statement related to the offering contemplated by this
registration statement that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or either of them, or their or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on April 26, 1999.
Signature Title & Capacity
--------- ----------------
/s/ John P. McCann Chairman, Chief Executive Officer
- ---------------------------- (Principal Executive Officer) and
John P. McCann Director
/s/ John S. Schneider President and Director
- -------------------------------
John S. Schneider
/s/ Kevin W. Walsh Vice President, Finance (Principal
- ------------------------------ Financial Officer)
Kevin W. Walsh
/s/ Robin R. Flanagan Principal Accounting Officer
- ------------------------------
Robin R. Flanagan
/s/ Jeff C. Bane Director
- ------------------------------
Jeff C. Bane
<PAGE>
/s/ R. Toms Dalton Director
- ------------------------------
R. Toms Dalton, Jr.
/s/ Robert P. Freeman Director
- ------------------------------
Robert P. Freeman
/s/ Jon A. Grove Director
- ------------------------------
Jon A. Grove
/s/ Barry M. Kornblau Director
- ------------------------------
Barry M. Kornblau
/s/ James D. Klingbeil Director
- ------------------------------
James D. Klingbeil
/s/ Lynne B. Sagalyn Director
- ------------------------------
Lynne B. Sagalyn
/s/ Mark J. Sandler Director
- -------------------------------
Mark J. Sandler
- ------------------------------- Director
Robert W. Scharar
/s/ C. Harmon Williams Director
- -------------------------------
C. Harmon Williams, Jr.
<PAGE>
EXHIBIT INDEX
Exhibit Document
- ------- --------
2(a) -- Agreement and Plan of Merger dated as of December 19, 1997,
between United Dominion, ASR Investments Corporation and ASR
Acquisition Sub, Inc. (incorporated by reference)
2(b) -- Agreement and Plan of Merger dated as of October 1, 1996, between
United Dominion, United Sub, Inc. and South West Property Trust Inc.
(incorporated by reference)
2(c) -- Agreement and Plan of Merger dated as of September 10, 1998, between
United Dominion and American Apartment Communities II, Inc.
including as exhibits thereto the proposed terms of the Series D
Preferred Stock and the proposed form of Investment Agreement
between United Dominion, United Dominion Realty, L.P., American
Apartment Communities II, Inc., American Apartment Communities II,
L.P., American Apartment Communities Operating Partnership, L.P.,
Schnitzer Investment Corp., AAC Management LLC and LF Strategic
Realty Investors, L.P. (incorporated by reference)
2(d) -- Partnership Interest Purchase and Exchange Agreement dated as of
September 10, 1998, between United Dominion, United Dominion Realty,
L.P., American Apartment Communities Operating Partnership, L.P.,
AAC Management LLC, Schnitzer Investment Corp, Fox Point Ltd. and
James D. Klingbeil including as an exhibit thereto the proposed form
of the Third Amended and Restated limited partnership Agreement of
United Dominion Realty, L.P. (incorporated by reference)
4(a) -- Restated Articles of Incorporation of United Dominion (incorporated
by reference)
4(a)(i) -- Amendment of Articles of Incorporation of United Dominion
(incorporated by reference)
4(a)(ii)-- Restated Articles of Incorporation of United Dominion, dated
January 21, 1999 (previously filed)
4(b) -- Restated Bylaws of United Dominion (incorporated by reference)
4(c) -- Specimen United Dominion common stock certificate (incorporated
by reference)
4(d) -- Note Purchase Agreement dated as of January 15, 1993, between
United Dominion and CIGNA Property and Casualty Insurance Company,
Connecticut General Life Insurance Company, Connecticut General Life
Insurance Company on behalf of one or more separate accounts,
Insurance Company of North America, Principal Mutual Life Insurance
Company, and Aid Association for Lutherans (incorporated by
reference)
4(e) -- Rights Agreement dated as of January 27, 1998, between United
Dominion and ChaseMellon Shareholder Services, L.L.C., as Rights
Agent (incorporated by reference)
4(f) -- Form of Rights Certificate (included in Exhibit 4(e))
5 -- Opinion of Hunton & Williams
23(a) -- Consent of Ernst & Young LLP
23(b) -- Consent of Deloitte & Touch LLP
<PAGE>
23(c) -- Consent of Arthur Andersen LLP
23(d).-- Consent of L.P. Martin & Company, P.C.
23(e) -- Consent of Hunton & Williams (included in Exhibit 5)
24 -- Power of Attorney
[Hunton & Williams Letterhead]
Direct Dial: (804) 788-8200
April 27, 1999
Board of Directors
United Dominion Realty Trust, Inc.
10 South Sixth Street
Richmond, Virginia 23219
Registration Statement on Form S-3
481,251 Shares of Common Stock
Gentlemen:
We are acting as counsel for United Dominion Realty Trust, Inc. (the
"Company") in connection with the registration under the Securities Act of 1933,
as amended, of 481,251 shares of Common Stock, $1.00 par value, of the Company
(the "Shares") and 481,251 rights to purchase shares of Series C Junior
Participating Redeemable Preferred Stock, no par value (the "Rights"). The
Shares and Rights are described in the Registration Statement on Form S-3 of the
Company (the "Registration Statement") to be filed with the Securities and
Exchange Commission (the "Commission") on April 27, 1999. In connection with the
filing of the Registration Statement, you have requested our opinion concerning
certain corporate matters.
We are of the opinion that:
1. The Company is a corporation duly organized and validly existing under
the laws of the Commonwealth of Virginia.
2. The Shares have been duly authorized and legally issued and are fully
paid and nonassessable.
We consent to the filing of this opinion with the Commission as an exhibit
to the Registration Statement and to the references to us in the Prospectus
included therein.
Very truly yours,
/s/ Hunton & Williams
08357/00337/07667
Exhibit 23(a)
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 333-00000) and related Prospectus of United
Dominion Realty Trust, Inc. for the registration of 481,251 shares of its common
stock and rights to purchase series C junior participating redeemable preferred
stock and to the incorporation by reference therein of our report dated January
27, 1999, with respect to the consolidated financial statements and schedule of
United Dominion Realty Trust, Inc. included in its Annual Report (Form 10-K) for
the year ended December 31, 1998, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Richmond, Virginia
April 23, 1999
Exhibit 23(b)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
United Dominion Realty Trust, Inc. on Form S-3 of our report dated February 25,
1998 (March 27, 1998 as to Note 12) appearing in the Annual Report on Form 10-K
of ASR Investments Corporation for the year ended December 31, 1997.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Phoenix, Arizona
April 23, 1999
Exhibit 23(c)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report on American Apartment
Communities II, Inc., dated February 27, 1998, and our report on American
Apartment Communities II, L.P., dated February 12, 1998, included in the
Company's Current Report on Form 8-K, filed with the SEC on October 23, 1998,
and to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
San Francisco, California
April 23, 1999
Exhibit 23(d)
Letterhead of L.P. Martin & Company
CONSENT OF L.P. MARTIN & COMPANY, P.C., INDEPENDENT AUDITORS
We consent to the reference to our firm under "Experts" in the
Registration Statement (Form S-3) of United Dominion Realty Trust, Inc. for the
registration of 481,251 shares of its Common Stock and to the incorporation by
reference therein of (a) our report dated May 1,1998, with respect to the
statement of rental operations of Dogwood Creek Apartments for the year ended
December 31, 1997, included in the Current Report of United Dominion Realty
Trust, Inc. on Form 8-K, dated June 9, 1998, filed with the Securities and
Exchange Commission, (b) our report dated May 8, 1998, with respect to the
combined statement of rental operations of Trails at Mount Moriah Apartments,
Trails at Kirby Parkway Apartments, and Cinnamon Trails Apartments for the year
ended December 31, 1997, included in the Current Report of United Dominion
Realty Trust, Inc. on Form 8-K, dated June 9, 1998, filed with the Securities
and Exchange Commission and (c) our report dated June 29,1998, with respect to
the combined statement of rental operations of Audubon Apartments, Carmel
Apartments, Cimarron City Apartments, Grand Cypress Apartments, Kenton
Apartments, Peppermill Apartments, The Crest Apartments, and Village of Thousand
Oaks Apartments for the year ended December 31, 1997,included in the Current
Report of United Dominion Realty Trust, Inc. on Form 8-K, dated June 9, 1998,
filed the Securities and Exchange Commission.
/s/ L.P. Martin & Company, P.C.
L.P. Martin & Company, P.C.
Certified Public Accountants
Richmond, Virginia
April 23, 1999
<<<POWER OF ATTORNEY>>>>>>
