<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the quarterly period ended DECEMBER 31, 1997
or
[ ] TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 0-14551
CORPORATE PROPERTY ASSOCIATES 6, A CALIFORNIA LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
CALIFORNIA 13-3247122
<S> <C>
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
50 ROCKEFELLER PLAZA, NEW YORK, NEW YORK 10020
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code (212) 492-1100
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
<S> <C> <C>
NONE NONE
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
SUBSIDIARY PARTNERSHIP UNITS
(Title of Class)
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
[X] Yes [ ] No
Indicate by check mark if disclosure of deliquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]
Aggregate market value of the voting stock held by non-affiliates of
Registrant: There is no active market for Subsidiary Partnership Units.
<PAGE> 2
PART I
Item 1. Business.
Registrant is engaged in the business of investing in
commercial and industrial real estate properties which are net leased to
commercial and industrial entities. Registrant was organized as a California
limited partnership on July 23, 1984. Effective January 1, 1998, the General
Partner of Registrant is Carey Diversified LLC ("Carey Diversified"). Carey
Corporate Property, Inc., a Delaware corporation, and William Polk Carey were
formerly Corporate General Partner and Individual General Partner, respectively.
Carey Diversified is also the General Partner of Corporate Property Associates
("CPA(R):1"), Corporate Property Associates 2 ("CPA(R):2"), Corporate Property
Associates 3 ("CPA(R):3"), Corporate Property Associates 7 - a California
limited partnership ("CPA(R):7"), Corporate Property Associates 8, L.P., a
Delaware limited partnership ("CPA(R):8"), Corporate Property Associates 9,
L.P., a Delaware limited partnership ("CPA(R):9"). Registrant has entered into
an agreement with Carey Management LLC ("Carey Management") pursuant to which
Carey Management performs a variety of management services for Registrant.
The properties owned by Registrant are described in Item 2.
Registrant's entire net proceeds from the Public Offering, less a working
capital reserve, have been fully invested in net leased commercial and
industrial real estate since March 21, 1988, the date of Registrant's final real
estate acquisition.
Registrant has two industry segments consisting of the
investment in and the leasing of industrial and commercial real estate and the
operations of hotels which were assumed subsequent to the lease terminations. By
assuming the operations of the hotel businesses, Management intends to preserve
the value of the underlying investment for remarketing purposes and generate a
contribution to Registrant's operating cash flow. See Selected Financial Data in
Item 6 and Management's Discussion and Analysis in Item 7 for a summary of
Registrant's operations. Also see the material contained in the Prospectus under
the heading INVESTMENT OBJECTIVES AND POLICIES.
Other than the three hotel properties, all of Registrant's
real estate properties are leased to corporate tenants and are subject to
long-term net leases whereby the tenants are generally required to pay all
operating expenses relating to the leased properties including maintenance, real
estate taxes, insurance and utilities. Lessees are required to include
Registrant as an additional insured party on all insurance policies relating to
the leased properties. In addition, substantially all of the net leases include
indemnification provisions which are intended to limit recourse to Registrant
and the General Partner. Registrant believes that the insurance and indemnity
provided on its behalf by its lessees provides adequate coverage for property
damage and any liability claims which may arise against Registrant's ownership
interests. In addition to the insurance and indemnification provisions of the
leases, Registrant has contingent property and liability insurance on its leased
properties and primary property and liability coverages on its three hotel
properties. Management believes that its insurance is adequate. To the extent
that any lessees are not financially able to satisfy indemnification obligations
which exceed insurance reimbursements, Registrant may incur the costs necessary
to repair property and settle liabilities.
As described above, lessees retain the obligation for the
operating expenses of their leased properties so that, other than rental income,
there are no significant operating data reportable on Registrant's leased
properties. Current rental income is reported in Note 9 to the Financial
Statements in Item 8. Registrant's leases generally provide for periodic rent
increases which are either stated and negotiated at the inception of the lease
or based on formulas indexed to increases in the Consumer Price Index ("CPI").
The initial terms of Registrant's leases are scheduled to expire between 2000
and 2011 with the leases providing for
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<PAGE> 3
multiple renewal terms. In addition, several of the leases provide purchase
options. The purchase options generally provide for purchase prices at the
greater of (i) fair market value, as defined in the lease, or (ii) a stated
amount. The stated amount is generally the sum of Registrant's acquisition cost
of the properties and any prepayment charges which would occur as a result of
paying off mortgage loans on the properties being sold.
Since Registrant's objective is to invest in properties which
are occupied by a single corporate tenant and subject to net leases backed by
the credit of the corporate lessee, Registrant's properties have not been
generally subject to the competitive conditions of local and regional real
estate markets. The competitive conditions of local and regional real estate
markets may have a more material affect on Registrant as leases terminate in the
future. In selecting real estate for investment, Registrant seeks to lease
facilities which are material to the lessee's operations in order to increase
the likelihood that lease renewals will be exercised. Because Registrant may be
affected by the financial condition of its lessees rather than the competitive
conditions of the real estate marketplace, Registrant's strategy has been to
diversify its investments among tenants, property types and industries in
addition to achieving geographical diversification. To the extent that lessees
exercise purchase options which provide for purchase prices based on a market
value as encumbered by the existing lease, local market conditions may have
little impact.
Registrant's operation of hotel properties (all of which are
Holiday Inn franchises) are more greatly affected by both increasing competition
and economic conditions. Registrant's hotels in Alpena and Petoskey, Michigan
have experienced increased competition over the past several years as the result
of the opening of new hotels at both locations. The Alpena and Petoskey
businesses are seasonal in nature. Effective February 1998, Registrant has
entered into a lease with Livho, Inc., an affiliate, for the Livonia hotel. The
Livonia hotel operation represented approximately 62% of hotel revenues in 1997.
For the year ended December 31, 1997, revenues from properties
occupied by lessees which accounted for 10% or more of operating revenues of
Registrant were as follows: Thermadyne Holdings Corp. (from a lease assigned by
Stoody Deloro Stellite, Inc.), 19%; AP Parts International, Inc. ("A.P. Parts"),
15%; AutoZone, Inc. ("AutoZone"), 12%; and Peerless Chain Company, 14%. No other
property owned by Registrant accounted for 10% or more of its total operating
revenues during 1997. See Note 9 to the Consolidated Financial Statements in
Item 8. For the year ended December 31, 1997, gross revenues from the hotel
operations segment were approximately 29% of total revenues.
Registrant voluntarily performed initial environmental reviews
of all of its properties in 1993. Registrant believes, based on the results of
such reviews and Phase II environmental reviews of certain of its properties in
1994, that its properties are in substantial compliance with Federal and state
environmental statutes and regulations. Phase II reviews were only performed on
certain properties based on the recommendations of the Phase I reviews. Portions
of certain properties have been subject to a limited degree of contamination,
principally in connection with either leakage from underground storage tanks or
surface spills from facility activities. In many instances, tenants are actively
engaged in the remediation process and addressing identified conditions. For
those conditions which were identified, Registrant advised its tenants of such
findings and of their obligations to perform additional investigations and any
required remediation. Tenants are generally subject to environmental statutes
and regulations regarding the discharge of hazardous materials and any related
remediation obligations. In addition, Registrant's leases generally require
tenants to indemnify Registrant from all liabilities and losses related to the
leased properties. Accordingly, Management believes that the ultimate resolution
of the aforementioned environmental matters will not have a material adverse
effect on Registrant's financial condition, liquidity or results of operations.
On October 16, 1997, Registrant distributed a Consent
Solicitation Statement/Prospectus to the Limited Partners that described a
proposal to consolidate Registrant with the other CPA(R) Partnerships. Proposals
that each of the nine CPA(R) limited partnerships be merged with a corresponding
subsidiary partnership of Carey Diversified, of which Carey Diversified is the
general partner, were approved by the Limited Partners of all nine of the CPA(R)
limited partnerships. Each limited partner had the option of either exchanging
his or her limited partnership interest for an interest in Carey Diversified
("Listed Shares") or to retain a limited partnership interest in the subsidiary
partnership ("Subsidiary Partnership Units"). On January 1, 1998, 2,760 holders
representing 47,261 of the 47,930 limited partnership units exchanged such units
for
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<PAGE> 4
3,262,427 Listed Shares with 43 holders of the remaining 669 limited partnership
units exchanging such units for Subsidiary Partnership Units. The former General
Partners received 17,695 Listed Shares for their interest in their share of the
appreciation in Registrant properties.
The Listed Shares are listed on the New York Stock Exchange.
The Subsidiary Partnership Units provide substantially the same economic
interest and legal rights as those of a limited partnership unit in Registrant
prior to the Consolidation, but are not listed on a securities exchange. A
liquidating distribution to holders of Subsidiary Partnership Units will be made
after an appraisal of Registrant's properties. The date of such an appraisal is
to be no later than December 31, 2001.
Registrant does not have any employees. Carey Management, an
affiliate of the General Partner of Registrant performs accounting, secretarial
and transfer services for Registrant. Chase Mellon Shareholder Services, Inc.
also performs certain transfer services for Registrant and The Chase Manhattan
Bank performs certain banking services for Registrant. In addition, Registrant
has entered into an agreement with Carey Management pursuant to which Carey
Management provides certain management services to Registrant.
Registrant's Management company has responsibility for
maintaining the company's books and records. An affiliate of the management
company services the computer systems used in maintaining such books and
records. In its preliminary assessment of Year 2000 issues, the affiliate
believes that such issues will not have a material effect on the Registrant's
operations; however, such assessment has not been completed. The Registrant
relies on its bank and transfer agent for certain computer-related services and
has initiated discussions to determine whether they are addressing Year 2000
issues that might affect the Registrant.
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Item 2. Properties.
<TABLE>
<CAPTION>
LEASE TYPE OF OWNERSHIP
OBLIGOR TYPE OF PROPERTY LOCATION INTEREST
------- ---------------- -------- --------
<S> <C> <C> <C>
THERMADYNE Warehouse and Manu- Industry, Ownership of land
HOLDINGS facturing Facility California and building
CORP.
YALE SECURITY, Manufacturing Lemont, Ownership of land
INC. Facility Illinois and building (1)
MOTOROLA, INC. Computer and Urbana, Ownership of land
Telecommunication Facility Illinois and building (1)
LOCKHEED MARTIN Warehouse and Glen Burnie, Ownership of land
CORPORATION Manufacturing Facility Maryland and building
AUTOZONE, INC. Retail Stores - Charlotte, Lenoir, Ownership of land
-31 locations Gastonia, and and buildings (1)
Statesville, North
Carolina;
Austin, Corpus
Christi-2, Nederland,
San Antonio, Victoria,
Waco,
and West Orange, Texas;
Bessemer, Chickasaw,
Decatur, Mobile,
Montgomery
and Phenix City, Alabama;
Alton, Belleview,
Collinsville and
Wood River, Illinois;
Columbus, Georgia;
Baton Rouge, Ownership of land
Lake Charles-2 and buildings (1)
and West Monroe,
Louisiana;
Breckenridge, Maplewood,
Overland and St. Louis,
Missouri
(2) Hotel Petoskey and Ownership of 35% interest
- 2 locations Alpena, Michigan in land and buildings (1)
PEERLESS CHAIN Manufacturing Winona, Ownership of land
COMPANY Facility Minnesota and building
HARCOURT GENERAL Movie Theatre Burnsville, Ownership of land
CORPORATION Minnesota and building (1)
</TABLE>
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<TABLE>
<CAPTION>
LEASE TYPE OF OWNERSHIP
OBLIGOR TYPE OF PROPERTY LOCATION INTEREST
------- ---------------- -------- --------
<S> <C> <C> <C>
WAL-MART STORES, Retail/Warehouse West Mifflin, Ownership of land
INC. Facility Pennsylvania and building (1)
KINNEY SHOE Warehouse and Fort Lauderdale, Ownership of land
CORPORATION/ Office Facility Florida and building (1)
ARMEL, INC.
AP PARTS Manufacturing Toledo, Ohio; Ownership of land
INTERNATIONAL Facility - Pinconning, and buildings (1)
INC. 2 locations Michigan
ANTHONY'S Manufacturing/ San Fernando, Ownership of land
MANUFACTURING Warehouse and California and buildings
COMPANY, INC. Corporate
Headquarters
Facilities -
4 locations
LIVHO, INC. Hotel Livonia, Michigan Ownership of 34.4828%
interest in land
and building (1)
WINN DIXIE STORES, Supermarket Panama City, Ownership of land
INC. Florida and building
</TABLE>
(1) These properties are encumbered by mortgage notes payable.
(2) These properties are operated with affiliates.
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<PAGE> 7
The material terms of Registrant's leases with its significant
tenants are summarized in the following table:
<TABLE>
<CAPTION>
Partnership's
Share Current Lease
Lease of Current Square Rent Per Expiration Renewal Ownership Terms of
Obligor Annual Rents Footage Sq.Ft. (Mo/Year) Terms Interest Purchase Option
- ------- ------------ ------- ------ --------- ----- -------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Thermadyne $2,234,191 325,800 $6.86 02/10 YES 100% The greater of
Holdings fair market
Corp. value of the
property and
$11,700,000
AP Parts 1,836,534 1,380,588 1.33 12/07 YES 100 The greater of
International,- fair market value
Inc. (2) of the property
and $11,700,000
plus any mortgage
prepayment
premium.
AutoZone, 1,483,958 185,990 7.11 01/11 YES 100 N/A
Inc. (2) 02/11
Anthony's 876,000 182,845 4.79 02/02 YES 100 The greater of
Manufact- fair market
uring value and
Company, $11,500,000 plus
Inc. any mortgage
prepayment
premium.
Peerless 1,463,425 357,760 4.09 06/11 YES 100 The greater of
Chain fair market value
Company and $7,820,000 and
any mortgage
prepayment
premium.
Wal-Mart 891,129 118,125 7.54 01/07 YES 100 The greater of
Stores, Inc. fair market value
(2) plus 2% and $6,275,000
plus any mortgage
prepayment
premium.
Kinney Shoe 964,941 80,450 11.99 09/01 YES 100 The greater of
Corp./Armel, fair market value
Inc. and $5,260,350 plus
any mortgage
prepayment
premium.
Yale
Security, Inc. 399,000 130,000 3.07 03/11 100 N/A
</TABLE>
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<PAGE> 8
<TABLE>
<CAPTION>
Partnership's
Share Current Lease
Lease of Current Square Rent Per Expiration Renewal Ownership Terms of
Obligor Annual Rents Footage Sq.Ft. (Mo/Year) Terms Interest Purchase Option
- ------- ------------ ------- ------ --------- ----- -------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Motorola, $ 540,000 46,350 $11.65 12/00 YES 100% Fair market value
Inc. (2)
Harcourt 467,500 31,837 14.68 07/06 YES 100 N/A
General
Corporation (2)
Lockheed 310,000 45,804 6.77 04/01 YES 100 Fair market value
Martin
Corporation
Winn-Dixie 170,399 34,710 4.91 03/08 YES 100 N/A
Stores, Inc.
</TABLE>
(1) Includes original cost of investment and net increases or decreases to net
investment subsequent to purchase.
(2) These properties are encumbered by limited recourse mortgages.
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<PAGE> 9
Item 3. Legal Proceedings.
As of the date hereof, Registrant is not a party to any
material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
Information with respect to matters submitted to a vote of
security holders during the fourth quarter of the year ended December 31, 1997
is hereby incorporated by reference to Page 27 of Registrant's Annual Report
contained in Appendix A.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters.
Information with respect to Registrant's common equity is
hereby incorporated by reference to page 27 of Registrant's Annual Report
contained in Appendix A.
Item 6. Selected Financial Data.
Selected Financial Data are hereby incorporated by reference
to page 1 of Registrant's Annual Report contained in Appendix A.
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Management's Discussion and Analysis are hereby incorporated
by reference to pages 2 to 4 of Registrant's Annual Report contained in Appendix
A.
Item 8. Consolidated Financial Statements and Supplementary Data.
The following consolidated financial statements and
supplementary data are hereby incorporated by reference to pages 5 to 20 of
Registrant's Annual Report contained in Appendix A:
(i) Report of Independent Accountants.
(ii) Consolidated Balance Sheets as of December 31, 1996 and 1997.
(iii) Consolidated Statements of Income for the years ended December
31, 1995, 1996 and 1997.
(iv) Consolidated Statements of Partners' Capital for the years
ended December 31, 1995, 1996 and 1997.
(v) Consolidated Statements of Cash Flows for the years ended
December 31, 1995, 1996 and 1997.
(vi) Notes to Consolidated Financial Statements.
Item 9. Disagreements on Accounting and Financial Disclosure.
NONE
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<PAGE> 10
PART III
Item 10. Directors and Executive Officers of the Registrant.
Registrant has no officers or directors. The directors and
executive officers of the General Partner, Carey Diversified LLC, are as
follows:
<TABLE>
<CAPTION>
Has Served as a
Director and/or
Name Age Positions Held Officer Since (1)
---- --- -------------- -----------------
<S> <C> <C> <C>
Francis J. Carey 72 Chairman of the Board 1/98
Chief Executive Officer
Director
William Polk Carey 67 Chairman of the Executive Committee 1/98
Director
Steven M. Berzin 47 Vice Chairman 1/98
Chief Legal Officer
Director
Gordon F. DuGan 31 President 1/98
Chief Acquisitions Officer
Director
Donald E. Nickelson 64 Chairman of the Audit Committee 1/98
Director
Eberhard Faber, IV 61 Director 1/98
Barclay G. Jones III 37 Director 1/98
Lawrence R. Klein 77 Director 1/98
Charles C. Townsend, Jr. 69 Director 1/98
Reginald Winssinger 55 Director 1/98
Claude Fernandez 45 Executive Vice President 1/98
- Financial Operations
John J. Park 33 Executive Vice President 1/98
Chief Financial Officer
Treasurer
H. Augustus Carey 40 Senior Vice President 1/98
Secretary
Samantha K. Garbus 29 Vice President - Asset Management 1/98
Susan C. Hyde 29 Vice President - Shareholder Services 1/98
Robert C. Kehoe 37 Vice President - Accounting 1/98
Edward V. LaPuma 24 Vice President - Acquisitions 1/98
</TABLE>
William Polk Carey and Francis J. Carey are brothers. H.
Augustus Carey is the nephew of William Polk Carey and the son of Francis J.
Carey.
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<PAGE> 11
A description of the business experience of each officer and
director of the Corporate General Partner is set forth below:
Francis J. Carey, Chairman of the Board, Chief Executive
Officer and Director, was elected President and a Managing Director of W. P.
Carey & Co. ("W.P. Carey") in April 1987, having served as a Director since its
founding in 1973. Prior to joining the firm full-time, he was a senior partner
in Philadelphia, head of the Real Estate Department nationally and a member of
the executive committee of the Pittsburgh based firm of Reed Smith Shaw &
McClay, counsel for Registrant, the General Partners, the CPA(R) Partnerships,
W.P. Carey and some of its affiliates. He served as a member of the Executive
Committee and Board of Managers of the Western Savings Bank of Philadelphia from
1972 until its takeover by another bank in 1982 and is former chairman of the
Real Property, Probate and Trust Section of the Pennsylvania Bar Association.
Mr. Carey served as a member of the Board of Overseers of the School of Arts and
Sciences of the University of Pennsylvania from 1983 through 1990. He has also
served as a member of the Board of Trustees of the Investment Program
Association since 1990 and on the Business Advisory Council of the Business
Council for the United Nations since 1994. He holds A.B. and J.D.
degrees from the University of Pennsylvania.
Gordon F. DuGan, President, Chief Acquisitions Officer and
Director, was elected Executive Vice President and a Managing Director of W.P.
Carey in June 1997. Mr. Dugan rejoined W.P. Carey as Deputy Head of Acquisitions
in February 1997. Mr. Dugan was until September 1995 a Senior Vice President in
the Acquisitions Department of W.P. Carey. Mr. Dugan joined W.P. Carey as
Assistant to the Chairman in May 1988, after graduating from the Wharton School
at the University of Pennsylvania where he concentrated in Finance. From October
1995 until February 1997, Mr. Dugan was Chief Financial Officer of
Superconducting Core Technologies, Inc., a Colorado-based wireless
communications equipment manufacturer.
Steven M. Berzin, Vice Chairman, Chief Legal Officer and
Director, was elected Executive Vice President, Chief Financial Officer, Chief
Legal Officer and a Managing Director of W.P. Carey in July 1997. From 1993 to
1997, Mr. Berzin was Vice President - Business Development of General Electric
Capital Corporation in the office of the Executive Vice President and, more
recently, in the office of the President, where he was responsible for business
development activities and acquisitions. From 1985 to 1992, Mr. Berzin held
various positions with Financial Guaranty Insurance Company, the last two being
Managing Director, Corporate Development and Senior Vice President and Chief
Financial Officer. Mr. Berzin associated with the law firm of Cravath, Swaine &
Moore from 1978 to 1985 and from 1976 to 1977, he served as law clerk to the
Honorable Anthony M. Kennedy, then a United States Circuit Judge. Mr. Berzin
received a B.A. and M.A. in Applied Mathematics from Harvard University, a B.A.
in Jurisprudence and an M.A. from Oxford University and a J.D. from Harvard Law
School.
Donald E. Nickelson, Chairman of the Audit Committee and
Director, serves as Chairman of the Board and a Director of Greenfield
Industries, Inc. and a Director of Allied Healthcare Products, Inc. Mr.
Nickelson is Vice-Chairman and a Director of the Harbor Group, a leverage
buy-out firm. He is also a Director of Sugen Corporation and D.T.I. Industries,
Inc. and a Trustee of mainstay Mutual Fund Group. From 1986 to 1988, Mr.
Nickelson was President of PaineWebber Incorporated; from 1988 to 1990, he was
President of the PaineWebber Group; and from 1980 to 1993 a Director. Prior to
1986, Mr. Nickelson served in various capacities with affiliates of PaineWebber
Incorporated and its predecessor firm. From 1988 to 1989, Mr. Nickelson was a
Director of a diverse group of corporations in the manufacturing, service and
retail sectors, including Wyndham Baking Co., Inc., Hoover Group, Inc., Peebles,
Inc. and Motor Wheel Corporation. He is a former Chairman of National Car
Rentals, inc. Mr. Nickelson is also a former Director of the Chicago Board
Options Exchange and is the former Chairman of the Pacific Stock Exchange.
William Polk Carey, Chairman of the Executive Committee and
Director, has been active in lease financing since 1959 and a specialist in net
leasing of corporate real estate property since 1964. Before founding W.P. Carey
in 1973, he served as Chairman of the Executive Committee of Hubbard, Westervelt
& Mottelay (now Merrill Lynch Hubbard), head of Real Estate and Equipment
Financing at Loeb Rhoades & Co. (now Lehman Brothers), head of Real Estate and
Private Placements, Director of Corporate Finance and Vice Chairman of the
Investment Banking Board of duPont Glore Forgan Inc. A graduate of the
University of Pennsylvania's Wharton School of Finance and Commerce, Mr. Carey
is a Governor of the National Association of Real Estate Investment Trusts
(NAREIT). He also serves on the boards of The Johns Hopkins University, The
James A. Baker III Institute for Public Policy at Rice University, Templeton
College of
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<PAGE> 12
Oxford University and other educational and philanthropic institutions. He
founded the Visiting Committee to the Economics Department of the University of
Pennsylvania and co-founded with Dr. Lawrence R. Klein the Economics Research
Institute at that University. Mr. Carey is also a Director of CPA(R):10, CIP(TM)
and CPA(R):12.
Eberhard Faber IV, is currently a Director of PNC Bank, N.A.,
Chairman of the Board and Director of the newspaper Citizens Voice, a Director
of Ertley's Motorworld, Inc., Vice-Chairman of the Board of King's College and a
Director of Geisinger Wyoming Valley Hospital. Mr. Faber served as Chairman and
Chief Executive Officer of Eberhard Faber, Inc., from 1973 to 1987. Mr. Faber
also served as the Director of the Philadelphia Federal Reserve Bank, including
service as the Chairman of its Budget and Operations Committee from 1980 to
1986. Mr. Faber has served on the boards of several companies, including First
Eastern bank from 1980 to 1993.
Barclay G. Jones III, Executive Vice President, Managing
Director, and head of the Investment Department. Mr. Jones joined W.P. Carey as
Assistant to the President in July 1982 after his graduation from the Wharton
School of the University of Pennsylvania, where he majored in Finance and
Economics. He was elected to the Board of Directors of W.P. Carey in April 1992.
Mr. Jones is also a Director of the Wharton Business School Club of New York.
Lawrence R. Klein, Director, is Benjamin Franklin Professor of
Economics Emeritus at the University of Pennsylvania, having joined the faculty
of Economics and the Wharton School in 1958. He holds earned degrees from the
University of California at Berkeley and Massachusetts Institute of Technology
and has been awarded the Nobel Prize in Economics as well as over 20 honorary
degrees. Founder of Wharton Econometric Forecasting Associates, Inc., Dr. Klein
has been counselor to various corporations, governments, and government agencies
including the Federal Reserve Board and the President's Council of Economic
Advisers.
Charles C. Townsend, Jr., Director, currently is an Advisory
Director of Morgan Stanley & Co., having held such position since 1979. Mr.
Townsend was a Partner and a Managing Director of Morgan Stanley & Co. from 1963
to 1978 and served as Chairman of Morgan Stanley Realty Corporation from 1977 to
1982. Mr. Townsend holds a B.S.E.E. from Princeton University and an M.B.A. from
Harvard University. Mr. Townsend serves as Director of CIP(TM) and CPA(R)14.
Reginald Winssinger, Director, is currently Chairman of the
Board and Director of Horizon Real Estate Group, Inc. Mr. Winssinger has managed
portfolios of diversified real estate assets exceeding $500 million throughout
the United States for more than 20 years. Mr. Winssinger is active in the
planning and development of major land parcels and has developed 20 commercial
properties. Mr. Winssinger is a native of Belgium with more than 25 years of
real estate practice, including 10 years based in Brussels, overseeing
appraisals, construction and management. Mr. Winssinger holds a B.S. in
Geography from the University of California at berkeley and received a degree in
Appraisal and Survey in Belgium. Mr. Winssinger presently serves as Honorary
Belgium Consul to the State of Arizona, a position he has held since 1991.
Claude Fernandez, Executive Vice President - Financial
Operations, joined W.P. Carey in 1983. Previously associated with Coldwell
Banker, Inc. for two years and with Arthur Andersen & Co., he is a Certified
Public Accountant. Mr. Fernandez received a B.S. degree in accounting from New
York University in 1975 and his M.B.A. in Finance from Columbia University
Graduate School of Business in 1981.
John J. Park, Executive Vice President, Chief Financial
Officer and Treasurer, joined W.P. Carey as an Investment Analyst in December
1987. Mr. Park received his undergraduate degree from Massachusetts Institute of
Technology and his M.B.A. in Finance from New York University.
H. Augustus Carey, Senior Vice President and Secretary,
returned to W.P. Carey in 1988 and is President of W.P. Carey's broker-dealer
subsidiary. Mr. Carey previously worked for W.P. Carey from 1979 to 1981 as
Assistant to the President. Prior to rejoining W.P. Carey, Mr. Carey served as a
loan officer of the North American Department of Kleinwort Benson Limited in
London, England. He received an A.B. from Amherst College in 1979 and an M.Phil.
in Management Studies from Oxford University in 1984. Mr. Carey is a trustee of
the Oxford Management Centre Associates Council.
-11-
<PAGE> 13
Samantha K Garbus, Vice President - Director of Asset
Management, became a Second Vice President of W.P. Carey in April 1995 and a
Vice President in April 1997. Ms. Garbus joined W. P. Carey as a Property
Management Associate in January 1992. Ms. Garbus received a B.A. in History from
Brown University in May 1990 and an M.B.A. from the Stern School of New York
University in January 1997.
Susan C. Hyde, Vice President - Director of Shareholder
Services, joined W. P. Carey in 1990, became a Second Vice President in April
1995 and a Vice President in April 1997. Ms. Hyde graduated from Villanova
University in 1990 where she received a B.S. in Business Administration with a
concentration in Marketing and a B.A. in English.
Robert C. Kehoe, Vice President - Accounting, joined W.P.
Carey as a Senior Accountant in 1987. Mr. Kehoe became a Second Vice President
of W. P. Carey in April 1992 and a Vice President in July 1997. Prior to joining
the company, Mr. Kehoe was associated with Deloitte, Haskins & Sells for three
years and was Manager of Financial Controls at CBS Educational and Professional
Publishing for two years. Mr. Kehoe received a B.S. in Accounting from Manhattan
College in 1982 and an M.B.A. in Finance from Pace University in 1993.
Edward V. LaPuma, Vice President - Acquisitions, joined W. P.
Carey as an Assistant to the Chairman in July 1995, became a Second Vice
President in July 1996 and a Vice President in April 1997. A graduate of the
University of Pennsylvania, Mr. LaPuma received a B.A. in Global Economic
Strategies from The College of Arts and Sciences and a B.S. in Economics with a
Concentration in Finance from the Wharton School.
Item 11. Executive Compensation.
Until January 1, 1998, under the Amended Agreement of Limited
Partnership of Registrant (the "Agreement"), 5% of Distributable Cash From
Operations, as defined, was payable to the former Corporate General Partner and
1% of Distributable Cash From Operations was payable to the former Individual
General Partner. The former Corporate General Partner and the former Individual
General Partner received $232,633 and $49,522, respectively, from the Registrant
as their share of Distributable Cash From Operations during the year ended
December 31, 1997. As owner of 100 Limited Partnership Units, the former
Corporate General Partner received cash distributions of $14,021 ($140.21 per
Unit) during the year ended December 31, 1997. See Item 6 for the net income
allocated to the General Partners under the Agreement. Registrant is not
required to pay, and has not paid, any remuneration to the officers or directors
of the former Corporate General Partner, W.P. Carey or any other affiliate of
Registrant during the year ended December 31, 1997.
In the future, a special limited partner, Carey Management LLC
will receive 5% of Distributable Cash From Operations, William Polk Carey will
receive, as a special limited partner, 1% of Distributable Cash From Operations
and each General Partner will continue to be allocated the same percentage of
the profits and losses of Registrant as had been allocated in the past. For a
description of the subordinated interest of the former Corporate General Partner
and the former Individual General Partner in Cash From Sales and Cash From
Financings, reference is made to the materials contained in the Prospectus under
the heading MANAGEMENT COMPENSATION.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
As of December 31, 1997, no person owned of record, or was
known by Registrant to own beneficially more than 5% of Registrant.
The following table sets forth as of March 25, 1998 certain
information as to the ownership by directors and executive officers of
securities of Registrant:
-12-
<PAGE> 14
<TABLE>
<CAPTION>
Number of Listed
Name of Shares and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Class
- -------------- ---------------- -------------------- --------
<S> <C> <C> <C>
Listed Shares William Polk Carey
Francis J. Carey
Steven M. Berzin
Gordon F. DuGan
Donald E. Nickelson
Eberhard Faber IV
Barclay G. Jones III
Lawrence R. Klein
Charles C. Townsend, Jr.
Reginald Winssinger
John J. Park
Claude Fernandez
H. Augustus Carey
Samantha K. Garbus
Susan C. Hyde
Robert C. Kehoe
Edward V. LaPuma
All executive officers
and directors as a
group (17 persons)
</TABLE>
In connection with Consolidation of Registrant into Carey
Diversified LLC, effective January 1, 1998, no officer or director, other than
William Polk Carey, owns a direct interest in Registrant. William Polk Carey
owns a 1% interest in Registrant as a special limited partner and has a
controlling interest in Carey Management LLC which owns a 5% interest in
Registrant as a special limited partner. Effective January 1, 1998, Carey
Diversified owns an approximate 93% interest in Registrant.
There exists no arrangement, known to Registrant, the
operation of which may at a subsequent date result in a change of control of
Registrant.
Item 13. Certain Relationships and Related
Transactions.
For a description of transactions and business relationships
between Registrant and its affiliates and their directors and officers, see
Notes 2 and 3 to the Consolidated Financial Statements contained in Item 8.
Michael B. Pollack, Senior Vice President and Secretary, until July 1997, of the
Corporate General Partner, is a partner of Reed Smith Shaw & McClay which is
engaged to perform legal services for Registrant.
No officer or director of the Corporate General Partner, W.P.
Carey or any other affiliate of Registrant or any member of the immediate family
or associated organization of any such officer or director was indebted to
Registrant at any time since the beginning of Registrant's last fiscal year.
-13-
<PAGE> 15
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K.
(a) 1. Financial Statements:
The following financial statements are filed as a
part of this Report:
Report of Independent Accountants.
Consolidated Balance Sheets, December 31, 1996 and 1997.
Consolidated Statements of Income for the years ended December 31, 1995,
1996 and 1997.
Consolidated Statements of Partners' Capital for the years ended December
31, 1995, 1996 and 1997.
Consolidated Statements of Cash Flows for the years ended December 31, 1995,
1996 and 1997.
Notes to Consolidated Financial Statements.
The financial statements are hereby incorporated by reference to pages 5 to
20 of Registrant's Annual Report contained in Appendix A.
(a) 2. Financial Statement Schedule:
The following schedule is filed as a part of this
Report:
Schedule III -Real Estate and Accumulated Depreciation as of December 31,
1997.
Notes to Schedule III.
Schedule III and notes thereto are hereby incorporated by reference to pages
21 to 24 of Registrant's Annual Report contained in Appendix A.
Financial Statement Schedules other than those listed above
are omitted because the required information is given in the Consolidated
Financial Statements or the Notes thereto, or because the conditions requiring
their filing do not exist.
-14-
<PAGE> 16
(a) 3. Exhibits:
The following exhibits are filed as part of this Report.
Documents other than those designated as being filed herewith are incorporated
herein by reference.
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
3.1 Amended agreement of Limited Partnership Exhibit to Registration
of Registrant dated as of November 26, Statement (Form S-11)
1984. No. 2-92393
4.1 $7,000,000 Promissory Note Secured by Exhibit 4.1 to Form 8-K
Deed of Trust dated February 15, 1985 filed February 28, 1985
from Registrant to E. F. Hutton Life
Insurance Company("Hutton Life").
4.2 Deed of Trust, Assignment of Rents and Exhibit 4.2 to Form 8-K
Security Agreement dated February 14, filed February 28, 1985
1985 from Registrant to Hutton Life.
4.3 Collateral Assignment of Lease dated Exhibit 4.3 to Form 8-K
February 14, 1985 from Registrant to filed February 28, 1985
Hutton Life.
4.4 Seller's/Lessee's Certificate dated Filed as Exhibit 4.1
December 23, 1985 from Gould Inc. to to Registrant's
Registrant. Form 8-K dated
January 6, 1986
4.5 Assignment of Rights in Purchase Filed as Exhibit 4.2
Agreement dated November 21, 1985 to Registrant's
between JB Properties, as Assignor, Form 8-K dated
and Registrant as Assignee. January 6, 1986
4.6 Seller/Lessee's Certificate dated Filed as Exhibit 4.1
January 17, 1986 from Malone & Hyde to Registrant's
to Registrant. Form 8-K dated
January 30, 1986
4.9 Mortgage, Assignment of Leases and Filed as Exhibit 4.3
Security Agreement dated January 30, 1986 between to Registrant's
CPA(R):5, as Mortgagor, and Lloyds and Texas Form 8-K dated
Commerce, collectively as Mortgagee, on Broomall, March 13, 1986
PA property.
4.10 Modification Agreement dated March 1, 1986 in Filed as Exhibit 4.4
connection with the Mortgage, Assignment of to Registrant's
Leases and Security Agreement dated Form 8-K dated
January 30, 1986 on Broomall, PA property. March 13, 1986
4.11 Mortgage Assignment of Leases and Filed as Exhibit 4.5
Security Agreement dated January 30, 1986 between to Registrant's
CPA(R):5, as Mortgagor, and Lloyds and Texas Form 8-K dated
Commerce, collectively as Mortgagee, on Cuyahoga March 13, 1986
Falls, OH property.
</TABLE>
-15-
<PAGE> 17
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
4.12 Modification Agreement dated March 1, 1986 in Filed as Exhibit 4.6
connection with the Mortgage, Assignment of to Registrant's
Leases and Security Agreement dated on Form 8-K dated
January 30, 1986 on Cuyahoga Falls, OH property. March 13, 1986
4.13 Deed of Trust, Assignment of Leases and Filed as Exhibit 4.7
Security Agreement dated January 30, 1986, to Registrant's
between CPA(R):5, as Grantor, and Lawyers Form 8-K dated
Title Insurance, as Trustee on Duffield, VA property. March 13, 1986
4.14 Deed of Trust Modification Agreement dated March 1, Filed as Exhibit 4.8
1986 in connection with the Deed of Trust, to Registrant's
Assignment of Leases and Security Agreement dated Form 8-K dated
January 30, 1986 on Duffield, VA property. March 13, 1986
4.23 $3,700,000 Promissory Note dated January 30, 1986 Filed as Exhibit 4.17
from CPA(R):5, as Payee, to Registrant and to Registrant's Form 8-K
CPA(R):5, collectively 10.1 to 10.6 as Payor. dated March 13, 1986
4.24 $6,000,000 Note dated April 30, 1986 Filed as Exhibit 4.1
from First Southern Federal Savings to Registrant's Form
and Loan Association ("First Southern"), as 8-K dated May 15, 1986
Lender to the Registrant, as Borrower.
4.25 Mortgage and Security Agreement dated as Filed as Exhibit 4.2
of April 30, 1986 between Registrant, as to Registrant's Form
Mortgagor, and First Southern, as Mortgagee, 8-K dated May 15, 1986
(Bessemer and Birmingham, AL Properties).
4.26 Mortgage and Security Agreement dated as of Filed as Exhibit 4.3
April 30, 1986 between Registrant and First to Registrant's Form
Southern (Chickasaw and Mobile, AL Properties). 8-K dated May 15, 1986
4.27 Mortgage and Security Agreement dated as of Filed as Exhibit 4.4
April 30, 1986 between Registrant and First to Registrant's Form
Southern (Decatur, AL Property). 8-K dated May 15, 1986
4.28 Mortgage and Security Agreement dated as of Filed as Exhibit 4.5
April 30, 1986 between Registrant and First to Registrant's Form
Southern (Montgomery, AL Property). 8-K dated May 15, 1986
4.29 Mortgage and Security Agreement dated as of Filed as Exhibit 4.6
April 30, 1986 between Registrant and First to Registrant's Form
Southern (Phenix, AL Property). 8-K dated May 15, 1986
4.30 Deed to Secure Debt dated as of April 30, 1986 Filed as Exhibit 4.7
between Registrant, as Borrower, and First to Registrant's Form
Southern, as Lender (Columbus, GA Property). 8-K dated May 15, 1986
4.31 Deed to Secure Debt dated as of April 30, Filed as Exhibit 4.8
1986 between Registrant and First Southern to Registrant's Form
(Dalton, GA Property). 8-K dated May 15, 1986
</TABLE>
-16-
<PAGE> 18
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
4.32 Mortgage and Security Agreement dated as of Filed as Exhibit 4.9
April 30, 1986 between Registrant, as to Registrant's Form
Mortgagor, and First Southern, as Mortgagee 8-K dated May 15, 1986
(Alton, Collinsville, and Wood River, IL Properties).
4.33 Mortgage and Security Agreement dated as of Filed as Exhibit 4.10
April 30, 1986 between Registrant and First to Registrant's Form
Southern (Belleville, IL Property). 8-K dated May 15, 1986
4.34 Mortgage dated as of April 30, 1986 between Filed as Exhibit 4.11
Registrant, as Mortgagor, and First Southern, to Registrant's Form
as Mortgagee (Baton Rouge and West Monroe 8-K dated May 15, 1986
Properties).
4.35 Mortgage dated as of April 30, 1986 between Filed as Exhibit 4.12
Registrant and First Southern (two Lake to Registrant's Form
Charles Properties). 8-K dated May 15, 1986
4.36 Missouri Deed of Trust and Security Agreement Filed as Exhibit 4.13
dated as of April 30, 1986 by Registrant, as to Registrant's Form
Borrower, Michael G. O'Flaherty, as Trustee, 8-K dated May 15, 1986
and First Southern, as Lender (Breckenridge,
Maplewood and Overland, MO Properties).
4.37 Missouri Deed of Trust and Security Agreement Filed as Exhibit 4.14
dated as of April 30, 1986 by Registrant, to Registrant's Form
Michael G. O'Flaherty and First Southern 8-K dated May 15, 1986
(St. Louis, MO Property).
4.38 North Carolina Deed of Trust dated as of Filed as Exhibit 4.15
April 30, 1986 by Registrant, as Grantor, to Registrant's Form
Harold D. Parkman, as Trustee, and First 8-K dated May 15, 1986
Southern, as Note Holder (Charlotte, NC
Property).
4.39 North Carolina Deed of Trust dated as of April Filed as Exhibit 4.16
30, 1986 by Registrant, Harold D. Parkman, to Registrant's Form
and First Southern (Gastonia, NC Property). 8-K dated May 15, 1986
4.40 North Carolina Deed of Trust dated as of April Filed as Exhibit 4.17
30, 1986 by Registrant, Harold D. Parkman, to Registrant's Form
and First Southern (Lenoir, NC Property). 8-K dated May 15, 1986
4.41 North Carolina Deed of Trust dated as of April Filed as Exhibit 4.18
30, 1986 by Registrant, Harold D. Parkman to Registrant's Form
and First Southern (Statesville, NC Property). 8-K dated May 15, 1986
4.42 Deed of Trust, Security Agreement and Assignment Filed as Exhibit 4.19
of Rents dated as of April 30, 1986 by Registrant, to Registrant's Form
as Grantor, Charles Odom, as Trustee, and 8-K dated May 15, 1986
First Southern, as beneficiary (Austin, TX Property).
4.43 Deed of Trust, Security Agreement and Assignment of Rents Filed as Exhibit 4.20
dated as of April 30, 1986 by Registrant, Charles Odom to Registrant's Form
and First Southern (two Corpus Christi, TX Properties). 8-K dated May 15, 1986
</TABLE>
-17-
<PAGE> 19
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
4.44 Deed of Trust, Security Agreement and Assignment of Rents Filed as Exhibit 4.21
dated as of April 30, 1986 by Registrant, Charles Odom and to Registrant's Form
First Southern (McAllen and Weslaco, TX Properties). 8-K dated May 15, 1986
4.45 Deed of Trust, Security Agreement and Assignment of Rents Filed as Exhibit 4.22
dated as of April 30, 1986 by Registrant, Charles Odom and to Registrant's Form
First Southern (Nederland and Port Arthur, TX Properties). 8-K dated May 15, 1986
4.46 Deed of Trust, Security Agreement and Assignment of Rents Filed as Exhibit 4.23
dated as of April 30, 1986 by Registrant, Charles Odom to Registrant's Form
and First Southern (San Antonio, TX Property). 8-K dated May 15, 1986
4.47 Deed of Trust, Security Agreement and Assignment of Filed as Exhibit 4.24
Rents dated as of April 30, 1986 by Registrant, Charles to Registrant's Form
Odom and First Southern (Victoria, TX Property). 8-K dated May 15, 1986
4.48 Deed of Trust, Security Agreement and Assignment of Filed as Exhibit 4.25
Rents dated as of April 30, 1986 by Registrant, Charles to Registrant's Form
Odom and First Southern (Waco, TX Property). 8-K dated May 15, 1986
4.49 Deed of Trust, Security Agreement and Assignment of Rents Filed as Exhibit 4.26
dated as of April 30, 1986 by Registrant, Charles to Registrant's Form
Odom and First Southern (West Orange, TX Property). 8-K dated May 15, 1986
4.50 Assignment of Leases and Rents dated as of April 30, Filed as Exhibit 4.27
1986 from Registrant, as Assignor, to First Southern, to Registrant's Form
as Assignee (Bessemer and Birmingham, AL Properties). 8-K dated May 15, 1986
4.51 Assignment of Leases and Rents dated as of Filed as Exhibit 4.28
April 30, 1986 from Registrant to First to Registrant's Form
Southern (Chickasaw and Mobile, AL Properties). 8-K dated May 15, 1986
4.52 Assignment of Leases and Rents dated as of Filed as Exhibit 4.29
April 30, 1986 from Registrant to First to Registrant's Form
Southern (Decatur, AL Property). 8-K dated May 15, 1986
4.53 Assignment of Leases and Rents dated as of Filed as Exhibit 4.30
April 30, 1986 from Registrant to First to Registrant's Form
Southern (Montgomery, AL Property). 8-K dated May 15, 1986
4.54 Assignment of Leases and Rents dated as of Filed as Exhibit 4.31
April 30, 1986 from Registrant to First to Registrant's Form
Southern (Phenix, AL Property). 8-K dated May 15, 1986
4.55 Assignment of Leases and Rents dated as of Filed as Exhibit 4.32
April 30, 1986 from Registrant to First to Registrant's Form
Southern (Columbus, GA Property). 8-K dated May 15, 1986
4.56 Assignment of Leases and Rents dated as of Filed as Exhibit 4.33
April 30, 1986 from Registrant to First to Registrant's Form
Southern (Dalton, GA Property). 8-K dated May 15, 1986
4.57 Assignment of Leases and Rents dated as of April 30, 1986 Filed as Exhibit 4.34
from Registrant to First Southern (Alton, Collinsville to Registrant's Form
and Wood River, IL Properties). 8-K dated May 15, 1986
</TABLE>
-18-
<PAGE> 20
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
4.58 Assignment of Leases and Rents dated as of Filed as Exhibit 4.35
April 30, 1986 from Registrant to First to Registrant's Form
Southern (Belleville, IL Property). 8-K dated May 15, 1986
4.59 Notice of Assignment and Assignment of Leases Filed as Exhibit 4.36
and Rents dated as of April 30, 1986 from to Registrant's Form
Registrant to First Southern (Baton Rouge, 8-K dated May 15, 1986
LA Property).
4.60 Notice of Assignment and Assignment of Leases Filed as Exhibit 4.37
and Rents dated as of April 30, 1986 from to Registrant's Form
Registrant to First Southern (two Lake 8-K dated May 15, 1986
Charles, LA Properties).
4.61 Notice of Assignment and Assignment of Leases Filed as Exhibit 4.38
and Rents dated as of April 30, 1986 from to Registrant's Form
Registrant to First Southern (West Monroe, 8-K dated May 15, 1986
LA Property).
4.62 Assignment of Leases and Rents dated as of Filed as Exhibit 4.39
April 30, 1986 from Registrant to First to Registrant's Form
Southern (Breckenridge, Maplewood and 8-K dated May 15, 1986
Overland, MO Properties).
4.63 Assignment of Leases and Rents dated as of Filed as Exhibit 4.40
April 30. 1986 from Registrant to First to Registrant's Form
Southern (St. Louis, MO Property). 8-K dated May 15, 1986
4.64 Assignment of Leases and Rents dated as of Filed as Exhibit 4.41
April 30, 1986 from Registrant to First to Registrant's Form
Southern (Charlotte, NC Property). 8-K dated May 15, 1986
4.65 Assignment of Leases and Rents dated as of Filed as Exhibit 4.42
April 30, 1986 from Registrant to First to Registrant's Form
Southern (Gastonia, NC Property). 8-K dated May 15, 1986
4.66 Assignment of Leases and Rents dated as of Filed as Exhibit 4.43
April 30, 1986 from Registrant to First to Registrant's Form
Southern (Lenoir, NC Property). 8-K dated May 15, 1986
4.67 Assignment of Leases and Rents dated as of Filed as Exhibit 4.44
April 30, 1986 from Registrant to First to Registrant's Form
Southern (Statesville, NC Property). 8-K dated May 15, 1986
4.68 Assignment of Leases and Rents dated as of Filed as Exhibit 4.45
April 30, 1986 from Registrant to First to Registrant's Form
Southern (Austin, TX Property). 8-K dated May 15, 1986
4.69 Assignment of Leases and Rents dated as of Filed as Exhibit 4.46
April 30, 1986 from Registrant to First to Registrant's Form
Southern (two Corpus Christi Properties). 8-K dated May 15, 1986
</TABLE>
-19-
<PAGE> 21
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
4.70 Assignment of Leases and Rents dated as of Filed as Exhibit 4.47
April 30, 1986 from Registrant to First to Registrant's Form
Southern (McAllen and Weslaco, TX Properties). 8-K dated May 15, 1986
4.71 Assignment of Leases and Rents dated as of Filed as Exhibit 4.48
April 30, 1986 from Registrant to First Southern to Registrant's Form
(Nederland and Port Arthur, TX Properties). 8-K dated May 15, 1986
4.72 Assignment of Leases and Rents dated as of Filed as Exhibit 4.49
April 30, 1986 from Registrant to First to Registrant's Form
Southern (San Antonio, TX Property). 8-K dated May 15, 1986
4.73 Assignment of Leases and Rents dated as of Filed as Exhibit 4.50
April 30, 1986 from Registrant to First to Registrant's Form
Southern (Victoria, TX Property). 8-K dated May 15, 1986
4.74 Assignment of Leases and Rents dated as of Filed as Exhibit 4.51
April 30, 1986 from Registrant to First to Registrant's Form
Southern (Waco, TX Property). 8-K dated May 15, 1986
4.75 Assignment of Leases and Rents dated as of Filed as Exhibit 4.52
April 30, 1986 from Registrant to First to Registrant's Form
Southern (West Orange, TX Property). 8-K dated May 15, 1986
4.76 Security Agreement dated as of April 30, 1986 Filed as Exhibit 4.53
between Registrant, as Borrower, and First to Registrant's Form
Southern, as Lender. 8-K dated May 15, 1986
4.77 Master Loan Agreement dated as of April 30, Filed as Exhibit 4.54
1986 between Registrant and First Southern. to Registrant's Form
8-K dated May 15, 1986
4.78 Assignment of Lease from Jeffrey M. Browne Filed as Exhibit 4.1
and Anne M. Browne, dba JB Properties, as to Registrant's Form
Assignor to the Registrant, as Assignee. 8-K dated May 29, 1986
4.89 Mortgage Note dated as of August 7, 1986 Filed as Exhibit 4.6
from Registrant to Union National. to Registrant's Form 8-K
dated August 21, 1986
4.90 Assignment of Leases and Rents dated as of Filed as Exhibit 4.7
August 7, 1986 between Registrant, as to Registrant's Form 8-K
Assignor, and Union National, as Assignee. dated August 21, 1986
4.91 Assignment of Rights in Contract of Sale Filed as Exhibit 4.8
dated as of July 31, 1986 between American to Registrant's Form 8-K
Industrial Warehouse, Inc. and Registrant. dated August 21, 1986
4.92 Agreement to Assign Contract of Sale dated Filed as Exhibit 4.9
as of July 29, 1986 between American to Registrant's Form 8-K
Industrial Warehouses, Inc., as Vendor, dated August 21, 1986
and CPA(R):5, as Vendee.
</TABLE>
-20-
<PAGE> 22
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
4.93 Bond Purchase Agreement, dated as of Filed as Exhibit 4.1
December 20, 1984, among Broward County, as to Registrant's Form 8-K
Issuer, Armel, Inc. ("Armel"), as the dated October 1, 1986
Company, and NCNB National Bank of Florida ("NCNB"), as the
Purchaser, relating to the Industrial Development Revenue Bond
(the "Armel, Inc. Project").
4.94 Mortgage and Security Agreement, dated as of Filed as Exhibit 4.2
December 20, 1984, between Armel, as the to Registrant's Form 8-K
Mortgagor, and Broward County, as the dated October 1, 1986
Mortgagee.
4.95 Assignment of Rights, dated as of December Filed as Exhibit 4.3
20, 1984 between Broward County, as to Registrant's Form 8-K
Assignor, and NCNB, as Assignee. dated October 1, 1986
4.96 Installment Purchase Contract, dated as of Filed as Exhibit 4.4
December 20, 1984, between Broward County, to Registrant's Form 8-K
as Issuer, and Armel, as the Company, dated October 1, 1986
relating to the Armel, Inc. Project.
4.97 Corporate Guaranty Agreement, dated as of Filed as Exhibit 4.5
December 28, 1984 by Armel, as Guarantor, to Registrant's Form 8-K
and the subsidiaries of Armel, as dated October 1, 1986
additional Guarantors, to NCNB, as the Bank,
and any subsequent Bond owners, relating
to the Armel, Inc. Project.
4.98 Bond Put Agreement, dated as of December 20, Filed as Exhibit 4.6
1984 from Armel, as Option or, to NCNB, as to Registrant's Form 8-K
Optionee. dated October 1, 1986
4.99 Letter, dated September 2, 1986, from NCNB, Filed as Exhibit 4.7
as holder of the Mortgage and Security to Registrant's Form 8-K
Agreement dated as of December 20, 1984, to dated October 1, 1986
Registrant, granting its consent to the purchase of the Armel
Property by Registrant from Armel, and the leasing of the Armel
Property from Registrant to Armel.
4.100 Collateral Assignment of Leases, Rent and Filed as Exhibit 4.8
Profits, made as of September 5, 1986, by to Registrant's Form 8-K
and between Registrant, as Assignor, and dated October 1, 1986
NCNB, as Assignee.
4.101 Certificate of Purchaser, dated September 5, Filed as Exhibit 4.9
1986, from Registrant, as Purchaser, to to Registrant's Form 8-K
Armel, as Seller. dated October 1, 1986
</TABLE>
-21-
<PAGE> 23
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
4.102 Assumption and Consent Agreement, dated as Filed as Exhibit 4.10
of September 5, 1986 by and between to Registrant's Form 8-K
Registrant and Armel, collectively as the dated October 1, 1986
Guarantors, with NCNB, as the Bondholder, and Broward County, as
Issuer.
4.103 $2,700,000 Promissory Note dated October 1, Filed as Exhibit 4.1
1986 from the Registrant, as borrower, to to Registrant's Form 8-K
New England Mutual Life Insurance Company dated October 15, 1986
("New England Mutual Life"), as Lender.
4.104 Mortgage and Security Agreement dated as of Filed as Exhibit 4.2
October 1, 1986 between the Registrant, as to Registrant's Form 8-K
Borrower, and New England Mutual Life, as dated October 15, 1986
Lender and Secured Party.
4.105 Assignment of Leases and Rents dated as of Filed as Exhibit 4.3
October 1, 1986 from Registrant, as Borrower, to Registrant's Form 8-K
to New England Mutual Life, as Lender. dated October 15, 1986
4.106 $2,000,000 Promissory Note dated October 8, Filed as Exhibit 4.4
1986 from the Registrant, as Borrower, to to Registrant's Form 8-K
St. Paul Life Insurance Company ("St. Paul dated October 15, 1986
Life"), as Lender.
4.107 Mortgage, Security Agreement and Financing Filed as Exhibit 4.5
Statement dated as of October 8, 1986 between to Registrant's Form 8-K
the Registrant, as Mortgagor, and St. Paul dated October 15, 1986
Life, as Mortgagee and Secured Party.
4.108 Assignment of Rents and Leases dated as of Filed as Exhibit 4.6
October 8, 1986 from the Registrant, as to Registrant's Form 8-K
Assignor, to St. Paul Life, as Assignee. dated October 15, 1986
4.109 $7,000,000 Non-Recourse Cognovit Term Note Filed as Exhibit 4.1
dated December 23, 1986 from the Registrant, to Registrant's Form 8-K
as Borrower, to The Toledo Trust Company dated January 6, 1987
("Toledo Trust"), as Lender.
4.110 Mortgage dated December 23, 1986 between Filed as Exhibit 4.2
the Registrant, as Borrower, and Toledo to Registrant's Form 8-K
Trust, as Lender, for Pinconning, Michigan dated January 6, 1987
property.
4.111 Assignment of Leases and Rents dated Filed as Exhibit 4.3
December 23, 1986 from Registrant, as to Registrant's Form 8-K
Borrower, to Toledo Trust, as Lender for dated January 6, 1987
Pinconning, Michigan property.
4.112 Mortgage dated December 23, 1986 between Filed as Exhibit 4.4
the Registrant, as Borrower, and Toledo to Registrant's Form 8-K
Trust, as Lender, for Toledo, Ohio property. dated January 6, 1987
</TABLE>
-22-
<PAGE> 24
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
4.113 Assignment of Leases and Rents dated December 23, Filed as Exhibit 4.5
1986 from Registrant, as Borrower, to Toledo Trust, to Registrant's Form 8-K
as Lender for Toledo, Ohio property. dated January 6, 1987
4.118 Loan Agreement dated May 23, 1987 Filed as Exhibit 4.2
between Registrant, as Borrower, and to Registrant's Form 8-K
First Southern, as Lender. dated May 27, 1987
4.119 Deed of Trust, Assignment of Rents, dated May 13, 1987 Filed as Exhibit 4.3
by Registrant, as Trustor, Ticor Title Insurance Company dated May 27, 1987
of California, as Trustee, and First Southern as Beneficiary,
affecting properties located in Los Angeles County, California.
4.120 Security Agreement dated May 23, 1987 Filed as Exhibit 4.4
between Registrant, as Debtor, and to Registrant's Form 8-K
First Southern, as Secured Party. dated May 27, 1987
4.121 Assignment of Lessor's Interest in Leases dated May 13, Filed as Exhibit 4.5
1987, from Registrant to First Southern affecting to Registrant's Form 8-K
properties located in Los Angeles County, California. dated May 27, 1987
4.122 $7,250,000 Note dated May 13, 1987, from Filed as Exhibit 4.1
Registrant to First Southern Federal Savings to Registrant's Form 8-K
and Loan Association ("First Southern"). dated May 27, 1987
4.123 Loan Agreement dated May 13, 1987 between Filed as Exhibit 4.2
Registrant, as Borrower, and First Southern, to Registrant's Form 8-K
as Lender. dated May 27, 1987
4.124 Deed of Trust, Assignment of Rents, Security 1987 by Filed as Exhibit 4.3
Registrant, as Trustor, Ticor Title Insurance Company dated May 27, 1987
of California, as Trustee, and First Southern, as Beneficiary,
affecting properties located in Los Angeles County, California.
4.125 Security Agreement dated May 13, 1987 Filed as Exhibit 4.4
between Registrant, as Debtor, and First to Registrant's Form 8-K
Southern, as Secured Party. dated May 27, 1987
4.126 Assignment of Lessor's Interest in Leases dated May 13, Filed as Exhibit 4.5
1987, from Registrant to First Southern affecting to Registrant's Form 8-K
properties located in Los Angeles County, California. dated May 27, 1987
4.127 $12,000,000 Promissory Note dated November Filed as Exhibit 4.1
16, 1987 from Registrant and CPA(R):7, as to Registrant's Form 8-K
Borrower, to Ford, as Holder. dated February 8, 1988
4.128 Mortgage and Assignment of Leases and Rents and Security Filed as Exhibit 4.2
Agreement dated November 18, 1987 between Registrant to Registrant's Form 8-K
and CPA(R):7, as Mortgagor, and Ford, as Mortgagee. dated February 8, 1988
4.129 $2,000,000 Deed of Trust Note dated January Filed as Exhibit 4.3
21, 1988 from Registrant, as Borrower, to to Registrant's Form 8-K
Altus Bank, N.A., as Lender. dated February 8, 1988
</TABLE>
-23-
<PAGE> 25
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
4.130 Deed of Trust dated January 21, 1988 by and among Filed as Exhibit 4.4
Registrant, as Grantor, and Jerry M. Broughton and to Registrant's Form 8-K
Roland V. Lee, Jr., as Trustees. dated February 8, 1988
4.131 Security Agreement dated January 21, 1988 between Filed as Exhibit 4.5
Registrant, as Borrower, and Altus Bank, N.A., as to Registrant's Form 8-K
Lender. dated February 8, 1988
10.1 Agreement of Sale dated February 14, 1985 by and between Exhibit 10.1 to Form 8-K
Victor Equipment Company ("Victor") and Registrant. filed February 28, 1985
10.2 Lease Agreement dated February 15, 1985 between Registrant Exhibit 10.2 to Form 8-K
as landlord and Stoody Company ("Stoody") as tenant. filed February 28, 1985
10.3 Subordination, nondisturbance and Attornment Agreement Exhibit 10.3 to Form 8-K
dated February 15, 1985 among Hutton Life, Registrant filed February 28, 1985
and Stoody.
10.4 Lease Agreement dated August 13, 1985 between Registrant Filed as Exhibit 10.1
and Sunroc Corporation ("Sunroc"). to Registrant's Form 10-Q
dated November 14, 1985
10.5 Memorandum of Lease dated August 13, Filed as Exhibit 10.2
1985 between Registrant and Sunroc. to Registrant's Form 10-Q
dated November 14, 1985
10.6 Guaranty dated August 13, 1985 by Filed as Exhibit 10.3
SFA Acquisition Company to Registrant. to Registrant's Form 10-Q
dated November 14, 1985
10.7 Lease Agreement dated December 23, Filed as Exhibit 10.4
1985 between Registrant, as Lessor, to Registrant's Form 8-K
and Gould Inc., as Lessee. dated January 6, 1986
10.8 Memorandum of Lease dated December 23, Filed as Exhibit 10.5
1985, between Registrant, as Landlord, to Registrant's Form 8-K
and Gould Inc., as Tenant. dated January 6, 1986
10.9 Lease Agreement dated January 17, Filed as Exhibit 10.1
1986 by and between Registrant as to Registrant's Form 8-K
Landlord, and Malone & Hyde, as Tenant. dated January 30, 1986
10.10 Lease Amendment dated January 17, Filed as Exhibit 10.2
1986 between Registrant and Malone to Registrant's Form 8-K
& Hyde. dated January 30, 1986
10.11 Memorandum of Lease dated January 17, 1986 FiIed as Exhibit 10.3
between Registrant, as Landlord, and Malone to Registrant's Form 8-K
& Hyde, as Tenant, for Charlotte, NC property. dated January 30, 1986
10.12 Memorandum of Lease dated January 17, 1986 Filed as Exhibit 10.4
between Registrant, as Landlord, and Malone to Registrant's Form 8-K
& Hyde, as Tenant, for Gastonia, NC property. dated January 30, 1986
10.13 Memorandum of Lease dated January 17, 1986 Filed as Exhibit 10.5
between Registrant, as Landlord, and Malone to Registrant's Form 8-K
& Hyde, as Tenant, for Lenoir, NC property. dated January 30, 1986
</TABLE>
-24-
<PAGE> 26
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
10.14 Memorandum of Lease dated January 17, 1986 Filed as Exhibit 10.6
between Registrant, as Landlord, and Malone to Registrant's Form 8-K
& Hyde, as Tenant, for Statesville, NC property. dated January 30, 1986
10.15 Memorandum of Lease dated January 17, 1986 Filed as Exhibit 10.7
between Registrant, as Landlord, and Malone to Registrant's Form 8-K
& Hyde, as Tenant for Austin, TX property. dated January 30, 1986
10.16 Memorandum of Lease dated January 17, 1986 Filed as Exhibit 10.8
between Registrant, as Landlord, and Malone & to Registrant's Form 8-K
Hyde, as Tenant, for the two Corpus Christi, TX properties. dated January 30, 1986
10.17 Memorandum of Lease dated January 17, 1986 Filed as Exhibit 10.9
between Registrant, as Landlord, and Malone & to Registrant's Form 8-K
Hyde, as Tenant for McAllen and Weslaco, TX properties. dated January 30, 1986
10.18 Memorandum of Lease dated January 17, 1986 Filed as Exhibit 10.10
between Registrant, as Landlord, and Malone & Hyde, to Registrant's Form 8-K
as Tenant, for Nederland and Port Arthur, TX properties. dated January 30, 1986
10.19 Memorandum of Lease dated January 17, 1986 Filed as Exhibit 10.11
between Registrant, as Landlord, and Malone & to Registrant's Form 8-K
Hyde, as Tenant, for San Antonio, TX property. dated January 30, 1986
10.20 Memorandum of Lease dated January 17, 1986 Filed as Exhibit 10.12
between Registrant, as Landlord, and Malone & to Registrant's Form 8-K
Hyde, as Tenant for Victoria, TX properties. dated January 30, 1986
10.21 Memorandum of Lease dated January 17, 1986 Filed as Exhibit 10.13
between Registrant, as Landlord, and Malone & to Registrant's Form 8-K
Hyde, as Tenant for Waco, TX property. dated January 30, 1986
10.22 Memorandum of Lease dated January 17, 1986 Filed as Exhibit 10.14
between Registrant, as Landlord, and Malone & to Registrant's Form 8-K
Hyde, as Tenant, for West Orange, TX property. dated January 30, 1985
10.23 Joint Venture Agreement dated January Filed as Exhibit 10.1
30, 1986 between Registrant and CPA(R):5. to Registrant's Form 8-K
dated March 13, 1986
10.24 Lease Agreement dated as of January Filed as Exhibit 10.2
30, 1986 by and between Registrant and to Registrant's Form 8-K
CPA(R):5, collectively as Landlord, and dated March 13, 1986
Lakes Hotel Corporation ("Great Lakes"), March 13, 1986
as Tenant.
</TABLE>
-25-
<PAGE> 27
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
10.25 Lease Agreement dated as of March 6, Filed as Exhibit 10.3
1986 by and between Registrant and to Registrant's Form 8-K
CPA(R):5, collectively as Landlord, and dated March 13, 1986
Northwoods Hotel Corporation
("Northwoods"), as Tenant
10.26 Memorandum of Lease dated January 30, Filed as Exhibit 10.4
1986 between Registrant and CPA(R):5, to Registrant's Form 8-K
collectively, as Landlord, and Great dated March 13, 1986
Lakes, as Tenant.
10.27 Memorandum of Lease dated March 6, Filed as Exhibit 10.5
1986 between Registrant and CPA(R):5, to Registrant's Form 8-K
as Landlord, and Northwoods, as dated March 13, 1986
Tenant.
10.28 Lease Guaranty dated January 30, Filed as Exhibit 10.6
1986 from Landmark Hotel Corporation to Registrant's Form 8-K
("Landmark"), as Guarantor, to dated March 13, 1986
Registrant and CPA(R):5, collectively, as Landlord.
10.29 Lease Guaranty dated March 6, 1986 Filed as Exhibit 10.7
from Landmark, as Guarantor, to to Registrant's Form 8-K
Registrant and CPA(R):5, collectively as dated March 13, 1986
Landlord.
10.30 Lease Agreement dated April 30, 1986 between Filed as Exhibit 10.1
Registrant, as Landlord, and Malone & Hyde, to Registrant's Form
as Tenant. 8-K dated May 15, 1986
10.31 Memorandum of Lease dated as of April 30, Filed as Exhibit 10.2
1986 between Registrant and Malone & Hyde to Registrant's Form
(Bessemer and Birmingham, AL Properties). 8-K dated May 15, 1986
10.32 Memorandum of Lease dated as of April 30, Filed as Exhibit 10.3
1986 between Registrant and Malone & Hyde to Registrant's Form
(Chickasaw and Mobile, AL Properties). 8-K dated May 15, 1986
10.33 Memorandum of Lease dated as of April 30, Filed as Exhibit 10.4
1986 between Registrant and Malone & Hyde to Registrant's Form
(Decatur, AL Property). 8-K dated May 15, 1986
10.34 Memorandum of Lease dated as of April 30, Filed as Exhibit 10.5
1986 between Registrant and Malone & Hyde to Registrant's Form
(Montgomery, AL Property). 8-K dated May 15, 1986
10.35 Memorandum of Lease dated as of April 30, Filed as Exhibit 10.6
1986 between Registrant and Malone & Hyde to Registrant's Form
(Phenix, AL Property). 8-K dated May 15, 1986
10.36 Memorandum of Lease dated as of April 30, Filed as Exhibit 10.7
1986 between Registrant and Malone & Hyde to Registrant's Form
(Columbus, GA Property). 8-K dated May 15, 1986
</TABLE>
-26-
<PAGE> 28
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
10.37 Memorandum of Lease dated as of April 30, Filed as Exhibit 10.8
1986 between Registrant and Malone & Hyde to Registrant's Form
(Dalton, GA Property). 8-K dated May 15, 1986
10.38 Memorandum of Lease dated as of April 30, Filed as Exhibit 10.9
1986 between Registrant and Malone & Hyde to Registrant's Form
(Alton, Collinsville and Wood River, 8-K dated May 15, 1986
IL Properties).
10.39 Memorandum of Lease dated as of April 30, Filed as Exhibit 10.10
1986 between Registrant and Malone & Hyde to Registrant's Form
(Belleville, IL Property). 8-K dated May 15, 1986
10.40 Memorandum of Lease dated as of April 30, Filed as Exhibit 10.11
1986 between Registrant and Malone & Hyde to Registrant's Form
(Baton Rouge, LA Property). 8-K dated May 15, 1986
10.41 Memorandum of Lease dated as of April 30, Filed as Exhibit 10.12
1986 between Registrant and Malone & Hyde to Registrant's Form
(Two Lake Charles, LA Properties). 8-K dated May 15, 1986
10.42 Memorandum of Lease dated as of April 30, Filed as Exhibit 10.13
1986 between Registrant and Malone & Hyde to Registrant's Form
(West Monroe, LA Property). 8-K dated May 15, 1986
10.43 Memorandum of Lease dated as of April 30, Filed as Exhibit 10.14
1986 between Registrant and Malone & Hyde to Registrant's Form
(Breckenridge, Maplewood, Overland and 8-K dated May 15, 1986
St. Louis, MO Properties).
10.44 Lease Agreement between JB Properties, as Filed as Exhibit 10.1
Lessor, and Gould Inc. ("Gould"), as Lessee. to Registrant's Form
8-K dated May 29, 1986
10.45 Lease Agreement dated as of June 18, 1986 Filed as Exhibit 10.1
between Registrant, as Landlord, and to Registrant's Form
Peerless, as Tenant. 8-K dated July 2, 1986
10.46 Memorandum of Lease made as of June 18, 1986 Filed as Exhibit 10.2
between Registrant and Peerless. to Registrant's Form
8-K dated July 2, 1986
10.47 Lease Agreement dated as of August 7, 1986 Filed as Exhibit 10.1
between Registrant, as Landlord, and Pace, to Registrant's Form 8-K
as Tenant. dated August 21, 1986
10.48 Memorandum of Lease made as of August 7, 1986 Filed as Exhibit 10.2
between Registrant and Pace. to Registrant's Form 8-K
dated August 21, 1986
10.49 Lease Agreement dated as of July 29, 1986 Filed as Exhibit 10.3
between Registrant and GCC Minnesota. to Registrant's Form 8-K
dated August 21, 1986
</TABLE>
-27-
<PAGE> 29
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
10.50 Memorandum of Lease made as of July 29, 1986 Filed as Exhibit 10.4
between Registrant and GCC Minnesota. to Registrant's Form 8-K
dated August 21, 1986
10.51 Lease Guaranty dated as of July 29, 1986 Filed as Exhibit 10.5
from GCC as Guarantor to Registrant, as to Registrant's Form 8-K
Landlord. dated August 21, 1986
10.52 Lease Agreement dated as of September 5, 1986 Filed as Exhibit 10.1
by and between Registrant, as Landlord, and to Registrant's Form 8-K
Armel, as Tenant. dated October 1, 1986
10.53 Rider to Lease Agreement, dated as of Filed as Exhibit 10.2
September 5, 1986. to Registrant's Form 8-K
dated October 1, 1986
10.54 Memorandum of Lease, made as of September 5, Filed as Exhibit 10.3
1986, between Registrant and Armel. to Registrant's Form 8-K
dated October 1, 1986
10.55 Lease Agreement dated December 23, 1986 by Filed as Exhibit 10.1
and between Registrant, as Landlord, to Registrant's Form 8-K
and AP, as Tenant. dated January 6, 1987
10.56 Memorandum of Lease dated December 23, 1986 Filed as Exhibit 10.2
between Registrant, as Landlord, and AP, as to Registrant's Form 8-K
Tenant, for Pinconning, Michigan property. dated January 6, 1987
10.57 Memorandum of Lease dated December 23, 1986 Filed as Exhibit 10.3
between Registrant, as Landlord, and AP, as to Registrant's Form 8-K
Tenant, for Toledo, Ohio property. dated January 6, 1987
10.58 Lease Agreement dated February 24, 1987 Filed as Exhibit 10.1
by and between Registrant, as Landlord, and to Registrant's Form 8-K
Anthony's, as Tenant. dated March 10, 1987
10.59 Memorandum of Lease dated February 24, 1987 Filed as Exhibit 10.2
between Registrant, as Landlord, and to Registrant's Form 8-K
Anthony's, as Tenant. dated March 10, 1987
10.60 Lease Agreement dated November 16, 1987 by Filed as Exhibit 10.1
and between Registrant and CPA(R):7, as to Registrant's Form 8-K
Landlord, and Brock, as Tenant. dated February 8, 1988
10.61 Assignment of Leases and Rents dated January Filed as Exhibit 10.2
21, 1988 from Registrant, as Assignor, to to Registrant's Form 8-K
Altus Bank, N.A., as Assignee. dated February 8, 1988
10.62 Lease Agreement dated March 10, 1988 Filed as Exhibit 10.62
by and between Registrant and as to Registrant's Form 10-K
Landlord, and Winn-Dixie, as Tenant. dated March 30, 1988
</TABLE>
-28-
<PAGE> 30
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
10.63 Lease Guaranty dated March 10, 1988 Filed as Exhibit 10.63
from Winn-Dixie Stores, as Guarantor, to Registrant's Form 10-K
to Registrant, as Lessor. dated March 30, 1988
28.1 Bill of Sale dated February 14, 1985 Exhibit 28.1 to Form 8-K
from Stoody to Victor. filed February 28, 1985
28.2 Bill of Sale dated February 14, 1985 Exhibit 28.2 to Form 8-K
from Victor to Registrant. filed February 28, 1985
28.3 Corporation Grant Deed dated February Exhibit 28.3 to Form 8-K
14, 1985 from Stoody to Victor. filed February 28, 1985.
28.4 Corporation Grant Deed dated February Exhibit 28.4 to Form 8-K
14, 1985 from Victor to Registrant. filed February 28, 1985.
28.5 Deed dated July 12, 1985 between Filed as Exhibit 28.1
LasSalle National Bank (LaSalle") and to Registrant's Form 10-Q
Registrant. dated November 14, 1985
28.6 Bill of Sale dated August 16, 1985 by Filed as Exhibit 28.2
Telkee, Inc. ("Telkee") to Registrant. to Registrant's Form 10-Q
dated November 14, 1985
28.7 Seller's Certificate dated August 16, Filed as Exhibit 28.3
1985 by Telkee to Registrant. to Registrant's Form 10-Q
dated November 14, 1985
28.8 Lesee's Certificate dated August 16, Filed as Exhibit 28.4
1985 by Sunroc to Registrant. to Registrant's Form 10-Q
Form 10-Q dated
November 14, 1985
28.9 Deed dated December 19, 1985 from Filed as Exhibit 28.5
Gould Inc. to Registrant. to Registrant's Form 8-K
Form 8-K dated
January 6, 1986
28.10 Bill of Sale dated December 23, 1985 Filed as Exhibit 28.6
from Gould Inc. to Registrant. to Registrant's
Form 8-K dated
January 6, 1986
28.11 Purchase Agreement dated July 25, 1985 Filed as Exhibit 28.7
by Gould Inc., as Seller, with JB to Registrant's
Properties, as Buyer. Form 8-K dated
January 6, 1986
28.12 North Carolina General Warranty Deed Filed as Exhibit 28.1
dated January 17, 1986 by and between to Registrant's
Malone & Hyde, as Grantor and From 8-K dated
Registrant, as Grantee, for Charlotte, January 6, 1986
</TABLE>
-29-
<PAGE> 31
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
28.13 North Carolina General Warranty Deed Filed as Exhibit 28.2
dated January 17, 1986 by and between Malone & to Registrant's
Hyde, as Grantor, and Registrant, as Grantee, for Form 8-K dated
Gastonia, NC property. January 30, 1986
28.14 North Carolina General Warranty Deed Filed as Exhibit 28.3
dated January 17, 1986 by and between Malone & to Registrant's
Hyde, as Grantor, and Registrant, as Grantee, for Form 8-K dated
Lenoir, NC property. January 30, 1986
28.15 North Carolina General Warranty Deed Filed as Exhibit 28.4
dated January 17, 1986 by and between Malone & to Registrant's
Hyde, as Grantor, and Registrant, as Grantee, for Form 8-K dated
Austin, TX property. January 30, 1986
28.16 Warranty Deed dated January 17, 1986 Filed as Exhibit 28.5
between Malone & Hyde, as Grantor, to Registrant's
and Registrant, as Grantee, for Form 8-K dated
Austin, TX property. January 30, 1986
28.17 Warranty Deed dated January 17, 1986 Filed as Exhibit 28.6
between Malone & Hyde, as Grantor, to Registrant's
and Registrant, as Grantee, for Form 8-K dated
Corpus Christi (Unit No. 1328), TX January 30, 1986
property.
28.18 Warranty Deed dated January 17, 1986 Filed as Exhibit 28.7
between Malone & Hyde, as Grantor, to Registrant's
and Registrant, as Grantee, for Form 8-K dated
Corpus Christi (Unit No. 1344), TX January 30, 1986
property.
28.19 Warranty Deed dated January 17,1986 Filed as Exhibit 28.8
between Malone & Hyde, as Grantor, to Registrant's
and Registrant, as grantee, for Form 8-K dated
McAllen, TX property. January 30, 1986
28.20 Warranty Deed dated January 17, 1986 Filed as Exhibit 28.9
between Malone & Hyde, as Grantor, to Registrant's
and Registrant, as Grantee, for Form 8-K dated
McAllen TX property. January 30, 1986
28.21 Warranty Deed dated January 17, 1986 Filed as Exhibit 28.10
between Malone & Hyde, as Grantor, to Registrant's
and Registrant, as Grantee, for Form 8-K dated
Port Arthur, TX property. January 30, 1986
28.22 Warranty Deed dated January 17, 1986 Filed as Exhibit 28.11
between Malone & Hyde, as Grantor, to Registrant's
and Registrant, as Grantee, for Form 8-K dated
San Antonio, TX property. January 30, 1986
</TABLE>
-30-
<PAGE> 32
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
28.23 Warranty Deed dated January 17, 1986 Filed as Exhibit 28.12
between Malone & Hyde, as Grantor, to Registrant's
and Registrant, as Grantee, for Form 8-K dated
Victoria, TX property. January 30, 1986
28.24 Warranty Deed dated January 17, 1986 Filed as Exhibit 28.13
between Malone & Hyde, as Grantor, to Registrant's
and Registrant, as Grantee, for Form 8-K dated
Waco, TX property. January 30, 1986
28.25 Warranty Deed dated January 17, 1986 Filed as Exhibit 28.14
between Malone & Hyde, as Grantor, to Registrant's
and Registrant, as Grantee for Form 8-K dated
Weslaco, TX property. January 30, 1986
28.26 Warranty Deed dated January 17, 1986 Filed as Exhibit 28.15
between Malone & Hyde, as Grantor to Registrant's
and Registrant, as Grantee for Form 8-K dated
West Orange, TX property. January 30, 1986
28.27 Bill of Sale dated January 17, 1986 Filed as Exhibit 28.16
from Malone & Hyde to Registrant for to Registrant's
Charlotte, NC property. Form 8-K dated
January 30, 1986
28.28 Bill of Sale dated January 17, 1986 Filed as Exhibit 28.17
from Malone & Hyde to Registrant for to Registrant's
Gastonia, NC property. Form 8-K dated
January 30, 1986
28.29 Bill of Sale dated January 17, 1986 Filed as Exhibit 28.18
from Malone & Hyde to Registrant for to Registrant's
Lenoir, NC property. Form 8-K dated
January 30, 1986
28.30 Bill of Sale dated January 17, 1986 Filed as Exhibit 28.19
from Malone & Hyde to Registrant for to Registrant's
Statesville, NC property. Form 8-K dated
January 30, 1986
28.31 Bill of Sale dated January 17, 1986 Filed as Exhibit 28.20
from Malone & Hyde to Registrant for to Registrant's
Austin, TX property. Form 8-K dated
January 30, 1986
28.32 Bill of Sale dated January 17, 1986 Filed as Exhibit 28.21
from Malone & Hyde to Registrant for to Registrant's
Corpus Christi (Unit No. 1328, TX Form 8-K dated
property. January 30, 1986
28.33 Bill of Sale dated January 17, 1986 Filed as Exhibit 28.22
from Malone & Hyde to Registrant for to Registrant's
Corpus Christi (Unit No. 1344), TX From 8-K dated
property. January 30, 1986
</TABLE>
-31-
<PAGE> 33
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
28.34 Bill of Sale dated January 17, 1986 Filed as Exhibit 28.23
from Malone & Hyde to Registrant for to Registrant's
McAllen, TX property. Form 8-K dated
January 30, 1986
28.35 Bill of Sale dated January 17, 1986 Filed as Exhibit 28.24
from Malone & Hyde to Registrant for to Registrant's
Nederland, TX property. Form 8-K dated
January 30, 1986
28.36 Bill of Sale dated January 17, 1986 Filed as Exhibit 28.25
from Malone & Hyde to Registrant for to Registrant's
Port Arthur, TX property. From 8-K dated
January 30, 1986
28.37 Bill of Sale dated January 17, 1986 Filed as Exhibit 28.26
from Malone & Hyde to Registrant for to Registrant's
San Antonio, TX property. Form 8-K dated
January 30, 1986
28.38 Bill of Sale dated January 17, 1986 Filed as Exhibit 28.27
from Malone & Hyde to Registrant for to Registrant's
Victoria, TX property. Form 8-K dated
January 30, 1986
28.39 Bill of Sale dated January 17, 1986 Filed as Exhibit 28.28
from Malone & Hyde to Registrant for to Registrant's
Waco, TX property. Form 8-K dated
January 30, 1986
28.40 Bill of Sale dated January 17, 1986 Filed as Exhibit 28.29
from Malone & Hyde to Registrant for to Registrant's
Weslaco, TX property. Form 8-K dated
January 30, 1986
28.41 Bill of Sale dated January 17, 1986 Filed as Exhibit 28.30
from Malone & Hyde to Registrant for to Registrant's
West Orange, TX property. From 8-K dated
January 30, 1986
28.42 Waranty Deed dated January 30, 1986 Filed as Exhibit 28.1
among Adventure Restaurant Corporation to Registrant's
("Adventure"), Registrant and CPA(R):5. Form 8-K dated
March 13, 1986
28.43 Waranty Deed dated March 6, 1986 Filed as Exhibit 28.2
among Adventure, Registrant and CPA(R):5. to Registrant's
Form 8-K dated
March 13, 1986
28.44 Bill of Sale dated January 30, 1986 Filed as Exhibit 28.3
from Adventure to Registrant and CPA(R):5. to Registrant's
Form 8-K dated
March 13, 1986
</TABLE>
-32-
<PAGE> 34
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
28.45 Bill of Sale dated March 6, 1986 Filed as Exhibit 28.4
Adventure to Registrant and CPA(R):5. to Registrant's
Form 8-K dated
March 13, 1986
28.46 Seller/Lessee.s Certificate dated as of Filed as Exhibit 28.1
April 30, 1986 from Malone & Hyde to to Registrant's Form
Registrant. 8-K dated May 15, 1986
28.47 Bill of Sale dated as of April 30, 1986 Filed as Exhibit 28.2
from Malone & Hyde to Registrant (Bessemer, to Registrant's Form
AL Property). 8-K dated May 15, 1986
28.48 Bill of Sale dated as of April 30, 1986 from Filed as Exhibit 28.3
Malone & Hyde to Registrant (Birmingham, to Registrant's Form
AL Property). 8-K dated May 15, 1986
28.49 Bill of Sale dated as of April 30, 1986 from Filed as Exhibit 28.4
Malone & Hyde to Registrant (Chickasaw, to Registrant's Form
AL Property). 8-K dated May 15, 1986
28.50 Bill of Sale dated as of April 30, 1986 from Filed as Exhibit 28.5
Malone & Hyde to Registrant (Decatur, AL to Registrant's Form
Property). 8-K dated May 15, 1986
28.51 Bill of Sale dated as of April 30, 1986 from Filed as Exhibit 28.6
Malone & Hyde to Registrant (Mobile, AL to Registrant's Form
Property). 8-K dated May 15, 1986
28.52 Bill of Sale dated as of April 30, 1986 from Filed as Exhibit 28.7
Malone & Hyde to Registrant (Montgomery, to Registrant's Form
AL Property). 8-K dated May 15, 1986
28.53 Bill of Sale dated as of April 30, 1986 from Filed as Exhibit 28.8
Malone & Hyde to Registrant (Phenix, AL to Registrant's Form
Property). 8-K dated May 15, 1986
28.54 Bill of Sale dated as of April 30, 1986 from Filed as Exhibit 28.9
Malone & Hyde to Registrant (Columbus, GA to Registrant's Form
Property). 8-K dated May 15, 1986
28.55 Bill of Sale dated as of April 30, 1986 from Filed as Exhibit 28.10
Malone & Hyde to Registrant (Dalton, GA to Registrant's Form
Property). 8-K dated May 15, 1986
28.56 Bill of Sale dated as of April 30, 1986 from Filed as Exhibit 28.11
Malone & Hyde to Registrant (Alton, IL to Registrant's Form
Property). 8-K dated May 15, 1986
28.57 Bill of Sale dated as of April 30, 1986 from Filed as Exhibit 28.12
Malone & Hyde to Registrant (Belleville, IL to Registrant's Form
Property). 8-K dated May 15, 1986
</TABLE>
-33-
<PAGE> 35
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
28.58 Bill of Sale dated as of April 30, 1986 from Filed as Exhibit 28.13
Malone & Hyde to Registrant (Collinsville, IL to Registrant's Form
Property). 8-K dated May 15, 1986
28.59 Bill of Sale dated as of April 30, 1986 from Filed as Exhibit 28.14
Malone & Hyde to Registrant (Wood River, IL to Registrant's Form
Property). 8-K dated May 15, 1986
28.60 Bill of Sale dated as of April 30, 1986 from Filed as Exhibit 28.15
Malone & Hyde to Registrant (Baton Rouge, LA to Registrant's Form
Property). 8-K dated May 15, 1986
28.61 Bill of Sale dated as of April 30, 1986 from Filed as Exhibit 28.16
Malone & Hyde to Registrant (Medora St., to Registrant's Form
Lake Charles, LA Properties). 8-K dated May 15, 1986
28.62 Bill of Sale dated as of April 30, 1986 from Filed as Exhibit 28.17
Malone & Hyde to Registrant (Prien Lake Rd., to Registrant's Form
Lake Charles, LA Property). 8-K dated May 15, 1986
28.63 Bill of Sale dated as of April 30, 1986 from Filed as Exhibit 28.18
Malone & Hyde to Registrant (West Monroe, LA to Registrant's Form
Property). 8-K dated May 15, 1986
28.64 Bill of Sale dated as of April 30, 1986 from Filed as Exhibit 28.19
Malone & Hyde to Registrant (Breckenridge, to Registrant's Form
MO Property). 8-K dated May 15, 1986
28.65 Bill of Sale dated as of April 30, 1986 from Filed as Exhibit 28.20
Malone & Hyde to Registrant (Maplewood, MO to Registrant's Form
Property). 8-K dated May 15, 1986
28.66 Bill of Sale dated as of April 30, 1986 from Filed as Exhibit 28.21
Malone & Hyde to Registrant (Overland, MO to Registrant's Form
Property). 8-K dated May 15, 1986
28.67 Bill of Sale dated as of April 30, 1986 from Filed as Exhibit 28.22
Malone & Hyde to Registrant (St. Louis, MO to Registrant's Form
Property). 8-K dated May 15, 1986
28.68 Warranty Deed dated as of April 30, 1986 from Filed as Exhibit 28.23
Malone & Hyde, as Grantor, to Registrant, as to Registrant's Form
Grantee (Bessemer, AL Property). 8-K dated May 15, 1986
28.69 Warranty Deed dated as of April 30, 1986 from Filed as Exhibit 28.24
Malone & Hyde to Registrant (Birmingham, AL to Registrant's Form
Property). 8-K dated May 15, 1986
28.70 Warranty Deed dated as of April 30, 1986 from Filed as Exhibit 28.25
Malone & Hyde to Registrant (Chickasaw, AL to Registrant's Form
Property). 8-K dated May 15, 1986
</TABLE>
-34-
<PAGE> 36
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
28.71 Warranty Deed dated as of April 30, 1986 from Filed as Exhibit 28.26
Malone & Hyde to Registrant (Decatur, AL to Registrant's Form
Property). 8-K dated May 15, 1986
28.72 Warranty Deed dated as of April 30, 1986 from Filed as Exhibit 28.27
Malone & Hyde to Registrant (Mobile, AL to Registrant's Form
Property). 8-K dated May 15, 1986
28.73 Warranty Deed dated as of April 30, 1986 from Filed as Exhibit 28.28
Malone & Hyde to Registrant (Montgomery, AL to Registrant's Form
Property). 8-K dated May 15, 1986
28.74 Warranty Deed dated as of April 30, 1986 from Filed as Exhibit 28.29
Malone & Hyde to Registrant (Phenix, AL to Registrant's Form
Property). 8-K dated May 15, 1986
28.75 Warranty Deed dated as of April 30, 1986 from Filed as Exhibit 28.30
Malone & Hyde to Registrant (Columbus, GA to Registrant's Form
Property). 8-K dated May 15, 1986
28.76 Warranty Deed dated as of April 30, 1986 from Filed as Exhibit 28.31
Malone & Hyde to Registrant (Dalton. GA to Registrant's Form
Property). 8-K dated May 15, 1986
28.77 Warranty Deed dated as ot April 30, 1986 from Filed as Exhibit 28.32
Malone & Hyde to Registrant (Alton, IL to Registrant's Form
Property). 8-K dated May 15, 1986
28.78 Warranty Deed dated as of April 30, 1986 from Filed as Exhibit 28.33
Malone & Hyde to Registrant (Belleville, IL to Registrant's Form
Property). 8-K dated May 15, 1986
28.79 Warranty Deed dated as of April 30, 1986 from Filed as Exhibit 28.34
Malone & Hyde to Registrant (Collinsville, IL to Registrant's Form
Property). 8-K dated May 15, 1986
28.80 Warranty Deed dated as of April 30, 1986 from Filed as Exhibit 28.35
Malone & Hyde to Registrant (Wood River, IL to Registrant's Form
Property). 8-K dated May 15, 1986
28.81 Cash Sale Deed dated as of April 30, 1986 from Filed as Exhibit 28.36
Malone & Hyde to Registrant (Baton Rouge, LA to Registrant's Form
Property). 8-K dated May 15, 1986
28.82 Cash Sale Deed dated as of April 30, 1986 from Filed as Exhibit 28.37
Malone & Hyde to Registrant (Medora St., Lake to Registrant's Form
Charles, LA Property). 8-K dated May 15, 1986
28.83 Cash Sale Deed dated as of April 30, 1986 from Filed as Exhibit 28.38
Malone & Hyde to Registrant (Prien Lake Rd., to Registrant's Form
Lake Charles, LA Property). 8-K dated May 15, 1986
</TABLE>
-35-
<PAGE> 37
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
28.84 Cash Deed dated as of April 30, 1986 from Filed as Exhibit 28.39
Malone & Hyde to Registrant (West Monroe, to Registrant's Form
LA Property). 8-K dated May 15, 1986
28.85 Warranty Deed dated as of April 30, 1986 from Filed as Exhibit 28.40
Malone & Hyde to Registrant (Breckenridge, MO to Registrant's Form
Property). 8-K dated May 15, 1986
28.86 Warranty Deed dated as of April 30, 1986 from Filed as Exhibit 28.41
Malone & Hyde to Registrant (Maplewood, MO to Registrant's Form
Property). 8-K dated May 15, 1986
28.87 Warranty Deed dated as of April 30, 1986 from Filed as Exhibit 28.42
Malone & Hyde to Registrant (Overland, MO to Registrant's Form
Property). 8-K dated May 15, 1986
28.88 Warranty Deed dated as of April 30, 1986 from Filed as Exhibit 28.43
Malone & Hyde to Registrant (St. Louis, MO to Registrant's Form
Property). 8-K dated May 15, 1986
28.89 Letter dated April 30, 1986 from First Filed as Exhibit 28.44
Southern to Registrant regarding the to Registrant's Form
understanding that interest on the Note will 8-K dated May 15, 1986
begin accruing as of the date of the wiring0
of the funds.
28.90 Letter dated April 30, 1986 from Registrant Filed as Exhibit 28.45
to Malone & Hyde and agreed to by First to Registrant's Form
Southern regarding the understanding that the 8-K dated May 15, 1986
Lease will commence as of the date of the
wiring of the funds.
28.91 Seller's Certificate from Jeffrey M. Browne Filed as Exhibit 28.1
and Anne M. Browne, collectively as Seller, to Registrant's Form
to Registrant, as Purchaser. 8-K dated May 29, 1986
28.92 Lessee's Certificate from Gould, as Lessee, Filed as Exhibit 28.2
to Registrant, as Lessor. to Registrant's Form
8-K dated May 29, 1986
28.93 Deed between Jeffrey M. Browne and Anne M. Filed as Exhibit 28.3
Browne, as Transferor and Registrant, as to Registrant's Form
Transferee. 8-K dated May 29, 1986
28.94 Bill of Sale from Jeffrey M. Browne and Filed as Exhibit 28.4
Anne M. Browne to Registrant. to Registrant's Form
8-K dated May 29, 1986
28.95 Bill of Sale dated June 18, 1986 from Filed as Exhibit 28.1
Peerless to Registrant. to Registrant's Form
8-K dated July 2, 1986
</TABLE>
-36-
<PAGE> 38
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
28.96 Warranty Deed dated June 18, 1986 from Filed as Exhibit 28.2
Peerless to Registrant. to Registrant's Form
8-K dated July 2, 1986
28.97 Seller/Lessee's Certificate from Peerless to Filed as Exhibit 28.3
Registrant dated June 18, 1986. to Registrant's Form
8-K dated July 2, 1986
28.98 Certificate dated June 18, 1986 from Peerless Filed as Exhibit 28.4
to Northwestern and Western States. to Registrant's Form
8-K dated July 2, 1986
28.99 Certificate dated June 18, 1986 from Filed as Exhibit 28.5
Registrant to Northwestern and to Registrant's Form
Western States. 8-K dated July 2, 1986
28.100 Bill of Sale dated as of August 7, 1986 Filed as Exhibit 28.1
from Pace to Registrant. to Registrant's Form 8-K
dated August 21, 1986
28.101 Deed dated as of August 7, 1986 from Pace Filed as Exhibit 28.2
to Registrant. to Registrant's Form 8-K
dated August 21, 1986
28.102 Seller/Lessee s Certificate dated as of Filed as Exhibit 28.3
August 7, 1986 from Pace to Registrant. to Registrant's Form 8-K
dated August 21, 1986
28.103 Bill of Sale dated as of July 30, 1986 from Filed as Exhibit 28.4
GCC Minnesota to Registrant. to Registrant's Form 8-K
dated August 21, 1986
28.104 Warranty Deed dated as of July 29, 1986 from Filed as Exhibit 28.5
GCC Minnesota to Registrant. to Registrant's Form 8-K
dated August 21, 1986
28.105 Seller's Certificate dated as of July 29, Filed as Exhibit 28.6
1986 from GCC Minnesota to Registrant. to Registrant's Form 8-K
dated August 21, 1986
28.106 Indemnity Agreement dated as of Filed as Exhibit 28.7
July 30, 1986. to Registrant's Form 8-K
dated August 21, 1986
28.107 Registrant's Current Report on Form 8-K Filed as Exhibit 28.8
dated January 6, 1986. to Registrant's Form 8-K
dated August 21, 1986
28.108 Bill of Sale, dated September 5, 1986, from Filed as Exhibit 28.1
Armel to Registrant. to Registrant's Form 8-K
dated October 1, 1986
</TABLE>
-37-
<PAGE> 39
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
28.109 Warranty Deed, made as of September 5, 1986, Filed as Exhibit 28.2
by Armel, as Grantor, to Registrant, as to Registrant's Form 8-K
Grantee. dated October 1, 1986
28.110 Seller/Lessee's Certificate, dated September Filed as Exhibit 28.3
5, 1986, from Armel, as Seller, to Registrant to Registrant's Form 8-K
as Purchaser. dated October 1, 1986
28.111 Escrow Letter from Greenburg, Traurig, Askew, Filed as Exhibit 28.4
Hoffman, Lipoff, Rosen & Quentel, P.A., to Registrant's Form 8-K
acknowledged and consented to on September dated October 1, 1986
3, 1986, by Armel and Registrant.
28.112 Escrow Trust Instructions dated October, 1986 Filed as Exhibit 28.1
to Chicago Title and Trust Company, as Escrow to Registrant's Form 8-K
Trustee, from Registrant and Focus Real Estate dated October 15, 1986
Finance Company, on behalf of St. Paul Life.
28.113 Letter dated October 6, 1986 from Fidelity Filed as Exhibit 28.2
Bank to St. Paul Life confirming that Folger to Registrant's Form 8-K
Adam, as Tenant, is not in default under the dated October 15, 1986
Credit Agreement referred to in the Assignment of Tenant's
Interest in Leases.
28.114 Letter dated October 8, 1986 from St. Paul Filed as Exhibit 28.3
Life to Registrant in connection with the to Registrant's Form 8-K
mortgage loan. dated October 15, 1986
28.115 Bill of Sale dated December 23, 1986 from Filed as Exhibit 28.1
AP to Registrant. to Registrant's Form 8-K
dated January 6, 1987
28.116 Warranty Deed, made as of December 19, 1986 Filed as Exhibit 28.2
by AP, as Grantor, to Registrant, as Grantee, to Registrant's Form 8-K
for Pinconning, Michigan property. dated January 6, 1987
28.117 Warranty Deed, made as of December 19, 1986 Filed as Exhibit 28.3
by AP, as Grantor, to Registrant, as Grantee, to Registrant's Form 8-K
for Toledo, Ohio property. dated January 6, 1987
28.118 Seller/Tenant's Certificate dated December Filed as Exhibit 28.4
23, 1986, from AP, as Seller, to Registrant, to Registrant's Form 8-K
as Purchaser. dated January 6, 1987
28.119 Corporation Grant Deed, made as of February Filed as Exhibit 28.1
20, 1987, by Anthony's, as Grantor, to to Registrant's Form 8-K
Registrant, as Grantee. dated March 10, 1987
28.120 Seller's/Lessee's Certificate dated February Filed as Exhibit 28.2
24, 1987, from Anthony's, as Seller, to to Registrant's Form 8-K
Registrant, as Purchaser. dated March 10, 1987
</TABLE>
-38-
<PAGE> 40
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
28.121 Deed dated November 12, 1987 between Filed as Exhibit 28.1
Northwestern, as Transferor, to Registrant to Registrant's Form 8-K
and CPA(R):7, as Transferee. dated February 8, 1988
28.122 Bill of Sale dated November 12, 1987 from Filed as Exhibit 28.2
Northwestern, as Seller, to Registrant and to Registrant's Form 8-K
CPA(R):7, as Purchaser. dated February 8, 1988
28.123 Seller's Certificate dated November 16, 1987 Filed as Exhibit 28.3
from Northwestern, as seller, to Registrant to Registrant's Form 8-K
and CPA(R):7, as Purchaser. dated February 8, 1988
28.124 Lessee's Certificate dated November 16, 1987 Filed as Exhibit 28.4
from Brock, as Lessee, to Registrant and to Registrant's Form 8-K
CPA(R):7, as Lessor. dated February 8, 1988
28.125 Warranty Deed dated March 10, 1988 Filed as Exhibit 28.125
between Winn-Dixie, as Grantor, and to Registrant's Form 10-K
Registrant, as Grantee. dated March 30, 1988
28.126 Bill of Sale dated March 10, 1988 Filed as Exhibit 28.126
from Winn-Dixie, as Seller, to Registrant, to Registrant's Form 10-K
as Purchaser. dated March 30, 1988
28.127 Seller's Certificate date March 10, 1988 Filed as Exhibit 28.127
from Winn-Dixie, as Seller, to Registrant, to Registrant's Form 10-K
as Purchaser. dated March 30, 1988
28.128 Prospectus of Registrant Filed as Exhibit 28.128
dated November 30, 1984. to Registrant's Form 10-K/A
Amendment No. 1
28.129 Press release dated June 30, 1993 Filed as Exhibit 28.1 to
announcing the suspension of secondary Form 8-K dated July 12, 1993
market sales of Limited Partnership Units.
</TABLE>
(b) Reports on Form 8-K
The Registrant filed a report on Form 8-K dated January 1,
1998 pursuant to Item 5 -Other Events (EX-99.1 Press Release From W.P. Carey &
Co., Inc. (December 17, 1997)).
-39-
<PAGE> 41
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
CORPORATE PROPERTY ASSOCIATES 6
- a California limited partnership
and SUBSIDIARIES
BY: CAREY DIVERSIFIED LLC
03/25/98 BY: /s/ John J. Park
- --------------------- -----------------------------------
Date John J. Park
Executive Vice President, Chief
Financial Officer and Treasurer
(Principal Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C>
BY: CAREY DIVERSIFIED LLC
03/25/98 BY: /s/ Francis J. Carey
- ------------------------ ---------------------------------------------
Date Francis J. Carey
Chairman of the Board, Chief Executive
Officer and Director
(Principal Executive Officer)
03/25/98 BY: /s/ William P. Carey
- ------------------------ ---------------------------------------------
Date William P. Carey
Chairman of the Executive Committee
and Director
03/25/98 BY: /s/ Steven M. Berzin
- ------------------------ ---------------------------------------------
Date Steven M. Berzin
Vice Chairman, Chief Legal Officer and
Director
03/25/98 BY: /s/ Gordon F. DuGan
- ------------------------ ---------------------------------------------
Date Gordon F. DuGan
President, Chief Acquisitions Officer
and Director
03/25/98 BY: /s/ Donald E. Nickelson
- ------------------------ ---------------------------------------------
Date Donald E. Nickelson
Chairman of the Audit Committee and
Director
03/25/98 BY: /s/ Eberhard Faber IV
- ------------------------ ---------------------------------------------
Date Eberhard Faber IV
Director
03/25/98 BY: /s/ Barclay G. Jones, III
- ------------------------ ---------------------------------------------
Date Barclay G. Jones, III
Director
03/25/98 BY: /s/ Dr. Lawrence R. Klein
- ------------------------ ---------------------------------------------
Date Dr. Lawrence R. Klein
Director
03/25/98 BY: /s/ Charles C. Townsend, Jr.
- ------------------------ ---------------------------------------------
Date Charles C. Townsend, Jr.
Director
03/25/98 BY: /s/ Reginald Winssinger
- ------------------------ ---------------------------------------------
Date Reginald Winssinger
Director
03/25/98 BY: /s/ John J. Park
- ------------------------ ---------------------------------------------
Date John J. Park
Executive Vice President, Chief
Financial Officer and Treasurer
(Principal Financial Officer)
03/25/98 BY: /s/ Claude Fernandez
- ------------------------ ---------------------------------------------
Date Claude Fernandez
Executive Vice President - Financial
Operations
(Principal Accounting Officer)
</TABLE>
-40-
<PAGE> 42
APPENDIX A TO FORM 10-K
CORPORATE PROPERTY ASSOCIATES 6
- A CALIFORNIA LIMITED PARTNERSHIP
AND SUBSIDIARIES
1997 ANNUAL REPORT
<PAGE> 43
SELECTED FINANCIAL DATA
(In thousands except per unit amounts)
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenues $15,387 $15,694 $16,738 $16,537 $17,384
Income before
extraordinary gain (1) 3,920 3,099 5,771 6,025 6,840
Income before
extraordinary gain
allocated:
To General Partners 235 186 347 428 410
To Limited Partners 3,685 2,913 5,424 5,597 6,430
Per unit 76.85 60.76 113.16 116.78 134.14
Distributions attributable (2):
To General Partners 281 281 286 295 355
To Limited Partners 4,406 4,429 4,483 4,629 5,558
Per unit 91.88 92.26 93.53 96.58 115.96
Payment of mortgage
principal (3) 1,300 1,331 1,356 1,156 1,286
BALANCE SHEET DATA:
Total assets 92,570 90,186 88,422 88,154 84,650
Long-term
obligations (4) 51,362 36,603 36,298 34,279 14,868
</TABLE>
(1) Net income for 1995 includes an extraordinary gain on the extinguishment
of debt of $2,088,000.
(2) Includes distributions attributable to the fourth quarter of each fiscal
year payable in the following fiscal year less distributions in the first
fiscal quarter applicable to the prior year. The distribution
attributable to the fourth quarter of 1997 was paid to Limited Partners in
December 1997.
(3) Represents scheduled payment of mortgage principal paid.
(4) Represents mortgage and note payable obligations due after more than one
year.
-1-
<PAGE> 44
MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
Net income increased by $815,000 for the year ended December
31, 1997 as compared with the year ended December 31, 1996. The increase was due
to increases in lease revenues (rental income and interest income from direct
financing leases) and hotel earnings and a decrease in interest expense.
The increase in lease revenues was due to a rent increase in
January 1997 on the lease with AP Parts International, Inc., the full year's
effect of 1996 rent increases on leases with Wal-Mart Stores, Inc.; Peerless
Chain Company; Kinney Shoe Corporation/Armel, Inc. and increases in 1997 of
percentage rents on the AutoZone, Inc. leases. The decrease in interest expense
resulted from paying off mortgage loans collateralized by the Winn-Dixie Stores,
Inc. and Yale Security, Inc. properties in 1996 and 1997, respectively, the
refinancing at a lower rate of interest of the mortgage loan on the Wal-Mart
property in 1996 and the continuing amortization of the Partnership's limited
recourse mortgage loans. The increase in hotel earnings was due to increased
revenues from the three hotel properties. Hotel earnings increased by 13% in
1997, sustaining the rate of increase realized in 1996. The increase in hotel
earnings was due to a 3.5% increase in revenues while operating expenses were
stable. The occupancy rate of the Livonia, Michigan hotel remained stable at 75%
while the average room rate increased by 10%. The Petoskey hotel realized
increases in occupancy and average room rates of 3% and 4%, respectively, while
the average room rate increased by 7% at the Alpena Hotel offsetting a 2%
decrease in occupancy rates. As described below, the Partnership has entered
into a lease for the Livonia Hotel with an affiliate.
Net income for the year ended December 31, 1996 decreased by
$1,834,000 as compared with net income for the year ended December 31, 1995.
Excluding the effects of a nonrecurring other income item of $688,000 and an
extraordinary gain of $2,088,000, both in 1995, income would have increased by
$942,000. The increase in income, as adjusted was primarily due to decreases in
interest, property and general and administrative expenses and an increase in
lease revenues. This was partially offset by an increase in depreciation
expense.
The decrease in interest expense in 1996 was due to the
satisfaction of the mortgage loans on the Stoody Deloro Stellite, Inc.,
Anthony's Manufacturing, Inc. and the Peerless Chain properties in 1995 and the
refinancing of an existing mortgage loan on the property leased to Wal-Mart in
1996. The Stoody and Anthony's loans were paid off, in part, by obtaining
$10,000,000 of recourse financing; however, overall interest on this obligation
was lower than the interest incurred on the retired mortgage loans. The decrease
in property expenses was primarily due to the provision for uncollected rents
incurred on the lease with Folger Adam Company in 1995, which lease was
terminated in 1996, and the legal costs incurred in connection with the
settlement of the Anthony's dispute in 1995. The decrease in general and
administrative expenses was due to a decrease in legal costs, provisions for
state taxes and office occupancy costs. Lease revenues increased due to rent
increases on the Partnership's leases with Peerless, Wal-Mart and Armel in 1996
and leases with Motorola and Stoody in 1995. Lease revenues also benefited from
increased rent from the AP Parts lease in connection with the Partnership's
funding of improvements in January 1996 at one of the AP Parts properties. The
increase in depreciation expense was due to the classification of a new lease
with Yale Security, Inc. as an operating lease in March 1996. Depreciation also
increased due to the funding of $1,700,000 of improvements at AP Parts.
Earnings from the Partnership's hotel operations for 1996
increased by $120,000 to $1,154,000 as compared with 1995, an increase of
approximately 12%. Operating income from the Alpena and Petoskey hotels
increased 7% and 11%, respectively, for the year ended December 31, 1996. The
average room rate remained stable at the Alpena hotel with the occupancy rate
increasing by 6%. There was a 14% increase in the occupancy rate at the Petoskey
hotel; however, the average room rate decreased by 9%. Petoskey also benefited
from a decrease in operating expenses. The decrease in Petoskey room rates was
the result of increased competition from other resorts. The earnings of the
Livonia hotel increased by 13% as a result of a 6% increase in revenues and only
a 3% increase in expenses. The increase in revenues was due to an increase of
10% in overall average room rates, with increases sustained in each room rate
category. The ability to raise rates was due to favorable economic and business
conditions in the Detroit metropolitan area.
-2-
<PAGE> 45
In connection with the transaction with Carey Diversified LLC
which became effective in January 1, 1998, the operations of the Livonia hotel
and related licenses have been transferred to an affiliate, Livho, Inc. Based on
Management's analysis, retaining direct control of the hotel would have adverse
tax consequences on those Limited Partners who exchanged Limited Partnership
Units for interests in Carey Diversified. The lease with Livho will provide the
Partnership with annual rents of $810,000 in the first year of the lease. Cash
flow from the Livonia hotel in 1997, before debt service payments, was $930,000.
The Partnership will retain the obligation to fund replacements and improvements
to the property.
Because of the long-term nature of the Partnership's net
leases, inflation and changing prices should not unfavorably affect the
Partnership's revenues and net income or have an impact on the continuing
operations of the Partnership's properties. The Partnership's net leases have
rent increases based on the Consumer Price Index and may have caps on such CPI
increases, or sales overrides, which should increase operating revenues in the
future. The moderate increases in the CPI over the past several years will
affect the rate of such future rent increases. Management believes that hotel
operations will not be significantly impacted by changing prices. In addition,
Management believes that reasonable increases in hotel operating costs may be
partially or entirely offset by increases in room rates.
Financial Condition
The Partnership's cash balances of $1,389,000 decreased by
$1,949,000 from the previous year. Cash flows from operations of $8,076,000 were
sufficient to fund four quarterly distributions of approximately $4,937,000,
scheduled mortgage principal payments of $1,286,000 and a mortgage prepayments
of $1,872,000. In addition, the Partnership paid a distribution in December 1997
of $43.09 per Limited Partnership Unit ($2,065,000).
The distribution paid in December 1997 reflected an exchange
transaction which occurred on January 1, 1998. The majority of the Partnership's
Limited Partners and its General Partners approved a consolidation by merger
with a subsidiary limited partnership of Carey Diversified, as proposed in the
Consent Solicitation Statement/Prospectus of Carey Diversified dated October
16,1997. In connection with the merger, 2,760 Limited Partnership Unitholders
owning 47,261 Limited Partnership Units elected to exchange their limited
partnership units for interests in Carey Diversified. The December 1997
distribution intended to (a) distribute funds in order to adjust the net assets
of the Partnership with the estimate of Total Exchange values, as defined in the
Consent Solicitation Statement/Prospectus, of those assets and (b) pay the
January distribution.
Limited Partners owning 669 Limited Partnership Units elected
to retain a limited partnership interest in the Partnership as Subsidiary
Partnership Unitholders. Subsidiary Partnership Units have economic interests
and legal rights in the Partnership that are substantially similar to those of
Limited Partnership Units and represent a direct ownership interest in the
Partnership. The holders of Subsidiary Partnership Units will be paid a pro rata
share of any distribution paid by the Partnership to Carey Diversified. The
Partnership will continue to pay distributions on a quarterly basis until
liquidating distributions are made, as described in the Consent Solicitation
Statement/Prospectus. Although Carey Diversified will use quarterly
distributions from the Partnership to fund its distributions to its
shareholders, the Partnership must first pay its Subsidiary Partnership
Unitholders. The objective with respect to Subsidiary Partnership Units will be
to pay distributions as if the Consolidation never had occurred based upon the
net cash flows generated by the Partnership.
The Partnership's investing activities consisted of $43,000
for the replacement of furniture, fixtures, and equipment at the hotel
properties. Up to approximately $1,380,000 is budgeted for improvements to the
Livonia hotel in 1998 in order to comply with the Holiday Inn product
improvement plan.
The Partnership has a balloon payment scheduled of $8,618,000
on the AutoZone limited recourse mortgage loan in 1998. The Partnership has also
negotiated short-term extensions of the maturity of mortgage loans on the
Motorola and Livonia properties which had been scheduled to mature. The Motorola
loan of $2,052,000 and the Livonia loan of $2,568,000 are now scheduled to
mature in 1998. The Partnership does not currently have the cash necessary to
pay all of these loans. Management believes the prospects for refinancing the
properties servicing these loans are good as these properties will remain
subject to leases for a number of years. The Partnership currently has
sufficient capacity to borrow against several of its unleveraged properties
while still remaining in compliance with the covenants of the recourse loan. In
addition, Carey
-3-
<PAGE> 46
Diversified, the general partner, will have substantial cash resources, and
expects to have the capability to advance funds to the Partnership, if
necessary. In the case of limited recourse mortgage financing that does not
fully amortize over its term, the Partnership would be responsible for the
balloon payment required only to the extent of its interest in the encumbered
property because the holder of each such obligation has recourse only to the
property collateralizing such debt. In the event that balloon payments come due,
the Partnership's alternatives include seeking to refinance the loans,
restructuring the debt with the existing lenders, evaluating its ability to
satisfy the mortgages from existing cash reserves or selling the property and
using the sales proceeds to satisfy the mortgage debt.
Except for the three hotel properties, all of the properties
are currently leased to unaffiliated corporate tenants. All of the properties
are subject to environmental statutes and regulations regarding the discharge of
hazardous materials and any related remediation obligations. The Partnership
normally structures its leases to require tenants to comply with all laws. In
addition, substantially all of the Partnership's net leases include
indemnification provisions which require tenants to indemnify the Partnership
from all liabilities and losses related to their operations at the leased
properties. If the Partnership undertakes to clean up or remediate any of its
leased properties, the General Partner believes that in most cases the
Partnership will be entitled to full reimbursement from tenants for such costs.
In the event that the Partnership absorbs such costs, the General Partner
believes that the ultimate resolution of the aforementioned environmental
matters will not have a material adverse effect on the Partnership's financial
condition, liquidity or results of operations.
In June 1997, the FASB issued Statement of Financial
Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income" and SFAS
No. 131, "Disclosure about Segments of an Enterprise and Related Information."
SFAS No. 130 establishes standards for reporting and display of comprehensive
income and its components (revenues, expenses, gains and losses) in full set
general purpose financial statements. SFAS No. 131 establishes accounting
standards for the way that public business enterprises report selected
information about operating segments in interim financial reports issued to
shareholders. SFAS No. 130 and SFAS No. 131 are required to be adopted by 1998.
The Partnership is currently evaluating the impact, if any, of SFAS No. 130 and
SFAS 131.
The Partnership's management company has responsibility for
maintaining the Partnership's books and records and servicing the computer
systems used in maintaining such books and records. In its preliminary
assessment of Year 2000 issues, the management company believes that such issues
will not have a material effect on the Partnership's operations; however such
assessment has not been completed. The Partnership relies on its bank and
transfer agent for certain computer-related services and has initiated
discussions to determine whether they are addressing Year 2000 issues that might
affect the Partnership.
-4-
<PAGE> 47
REPORT of INDEPENDENT ACCOUNTANTS
To the Partners of
Corporate Property Associates 6
- a California limited partnership
and Subsidiaries:
We have audited the accompanying consolidated balance sheets
of Corporate Property Associates 6 - a California limited partnership and
Subsidiaries as of December 31, 1996 and 1997, and the related consolidated
statements of income, partners' capital and cash flows for each of the three
years in the period ended December 31, 1997. We have also audited the financial
statement schedule included on pages 21 to 24 of this Annual Report. These
financial statements and financial statement schedule are the responsibility of
the General Partners. Our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the General Partners, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Corporate Property Associates 6 - a California limited partnership and
Subsidiaries as of December 31, 1996 and 1997, and the consolidated results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1997, in conformity with generally accepted accounting
principles. In addition, in our opinion, the Schedule of Real Estate and
Accumulated Depreciation as of December 31, 1997, when considered in relation to
the basic financial statements taken as a whole, presents fairly, in all
material respects, the financial information required to be included therein
pursuant to Securities and Exchange Commission Regulation S-X Rule 12-28.
/s/Coopers & Lybrand L.L.P.
New York, New York
March 25, 1998
-5-
<PAGE> 48
CORPORATE PROPERTY ASSOCIATES 6
- a California limited partnership
and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 1996 and 1997
<TABLE>
<CAPTION>
1996 1997
---- ----
<S> <C> <C>
ASSETS:
Real estate leased to others:
Accounted for under the
operating method:
Land $ 11,502,589 $ 11,502,589
Buildings 40,059,299 40,059,299
------------ ------------
51,561,888 51,561,888
Accumulated depreciation 11,955,764 13,291,069
------------ ------------
39,606,124 38,270,819
Net investment in direct financing leases 32,887,655 32,887,655
------------ ------------
Real estate leased to others 72,493,779 71,158,474
Operating real estate, net of accumulated depreciation of
$4,639,138 in 1996 and $5,084,150 in 1997 8,362,428 7,960,203
Cash and cash equivalents 3,338,391 1,389,144
Note receivable from affiliate 1,151,000 1,151,000
Other assets, net of accumulated amortization
of $810,994 in 1996 and $1,070,882 in 1997
and net of reserve for uncollected rents of
$89,750 in 1997 2,807,973 2,991,508
------------ ------------
Total assets $ 88,153,571 $ 84,650,329
============ ============
LIABILITIES:
Mortgage notes payable $ 32,057,088 $ 28,898,623
Note payable 10,000,000 10,000,000
Accrued interest payable 439,078 458,317
Accounts payable and accrued expenses 372,012 369,947
Accounts payable to affiliates 131,275 387,382
Deferred rental income 3,544,624 3,299,462
Other liabilities 361,816 296,161
------------ ------------
Total liabilities 46,905,893 43,709,892
------------ ------------
Commitments and contingencies
PARTNERS' CAPITAL:
General Partners (4,515) (21,022)
Limited Partners (47,930 Limited
Partnership Units issued and outstanding) 41,252,193 40,961,459
------------ ------------
Total partners' capital 41,247,678 40,940,437
------------ ------------
Total liabilities and
partners' capital $ 88,153,571 $ 84,650,329
============ ============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
-6-
<PAGE> 49
CORPORATE PROPERTY ASSOCIATES 6
- a California limited partnership
and SUBSIDIARIES
CONSOLIDATED STATEMENTS of INCOME
For the years ended December 31, 1995, 1996 and 1997
<TABLE>
<CAPTION>
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Revenues:
Rental income $ 5,195,838 $ 5,675,049 $ 6,111,378
Interest income from
direct financing leases 5,814,312 5,613,415 5,831,086
Other interest income 332,480 307,947 278,338
Revenue of hotel operations 4,630,619 4,868,017 5,036,301
Other income 764,650 72,868 126,985
----------- ----------- -----------
16,737,899 16,537,296 17,384,088
----------- ----------- -----------
Expenses:
Interest expense 4,499,692 4,003,726 3,715,143
Depreciation 1,525,011 1,664,514 1,780,317
General and administrative 624,249 513,074 686,848
Operating expense of hotel
operations 3,596,408 3,714,173 3,736,178
Property expense 512,797 394,761 365,787
Amortization 209,074 292,530 259,888
----------- ----------- -----------
10,967,231 10,582,778 10,544,161
----------- ----------- -----------
Income before gain on sales and
extraordinary item 5,770,668 5,954,518 6,839,927
Gain on sales of real estate 70,878
----------- ----------- -----------
Income before extraordinary item 5,770,668 6,025,396 6,839,927
Extraordinary gain on extinguishment of debt 2,088,268
----------- ----------- -----------
Net income $ 7,858,936 $ 6,025,396 $ 6,839,927
=========== =========== ===========
Net income allocated to:
Individual General Partner $ 78,588 $ 71,357 $ 68,399
=========== =========== ===========
Corporate General Partner $ 392,948 $ 356,792 $ 341,997
=========== =========== ===========
Limited Partners $ 7,387,400 $ 5,597,247 $ 6,429,531
=========== =========== ===========
Net income per Unit:
(47,935 weighted average Limited
Partnership Units outstanding in 1995 and 47,930
Limited Partnership Units
outstanding in 1996 and 1997)
Income before extraordinary gain $ 113.16 $ 116.78 $ 134.14
Extraordinary gain 40.95
----------- ----------- -----------
$ 154.11 $ 116.78 $ 134.14
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
-7-
<PAGE> 50
CORPORATE PROPERTY ASSOCIATES 6
- a California limited partnership
and SUBSIDIARIES
CONSOLIDATED STATEMENTS of PARTNERS' CAPITAL
For the years ended December 31, 1995, 1996 and 1997
<TABLE>
<CAPTION>
Partners' Capital Accounts
-------------------------------------------------------------------
Limited
Partners'
General Limited Amount Per
Total Partners Partners Unit (a)
----- -------- -------- ---------
<S> <C> <C> <C> <C>
Balance, December 31, 1994 $37,000,616 $(345,685) $37,346,301 $778
Distributions (4,736,359) (282,718) (4,453,641) (93)
Purchase of Limited Partnership Units (20,000) (20,000)
Net income, 1995 7,858,936 471,536 7,387,400 154
----------- --------- ----------- ----
Balance, December 31, 1995 40,103,193 (156,867) 40,260,060 839
Distributions (4,880,911) (275,797) (4,605,114) (96)
Net income, 1996 6,025,396 428,149 5,597,247 117
----------- --------- ----------- ----
Balance, December 31, 1996 41,247,678 (4,515) 41,252,193 860
Distributions (7,129,069) (408,804) (6,720,265) (140)
Accrued preferred distribution (18,099) (18,099)
Net income, 1997 6,839,927 410,396 6,429,531 134
----------- --------- ----------- ----
Balance, December 31, 1997 $40,940,437 $ (21,022) $40,961,459 $854
=========== ========= =========== ====
</TABLE>
(a) Based on weighted average Units issued and outstanding.
The accompanying notes are an integral part of the consolidated financial
statements.
-8-
<PAGE> 51
CORPORATE PROPERTY ASSOCIATES 6
- a California limited partnership
and SUBSIDIARIES
CONSOLIDATED STATEMENTS of CASH FLOWS
For the years ended December 31, 1995, 1996 and 1997
<TABLE>
<CAPTION>
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 7,858,936 $ 6,025,396 $ 6,839,927
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 1,734,085 1,957,044 2,040,205
Extraordinary gain on extinguishment of debt (2,088,268)
Restructuring fees received 3,800,000
Amortization of deferred rental income
and straight-line rent adjustments (10,215) (286,620) (305,139)
Gain on sale of real estate (70,878)
Provision for uncollected rents 119,331 89,570
Net change in operating assets and liabilities (280,833) (9,416) (588,846)
------------ ------------ ------------
Net cash provided by operating activities 11,133,036 7,615,526 8,075,717
------------ ------------ ------------
Cash flows from investing activities:
Amounts received on partial prepayment of note
receivable from affiliate 144,000
Proceeds from sale of real estate 603,285
Additional capitalized costs (418,020) (1,897,022) (42,787)
------------ ------------ ------------
Net cash used in investing activities (274,020) (1,293,737) (42,787)
------------ ------------ ------------
Cash flows from financing activities:
Distributions to partners (4,736,359) (4,880,911) (7,002,505)
Purchase of Limited Partner Units (20,000)
Proceeds from issuance of note payable 10,000,000
Proceeds from mortgages 9,500,000
Prepayments of mortgage notes payable (15,400,020) (9,550,413) (1,872,107)
Payments of mortgage principal (1,356,271) (1,155,596) (1,286,358)
Deferred financing costs net of
amounts refunded by lender (282,320) (373,393) 178,793
------------ ------------ ------------
Net cash used in financing activities (11,794,970) (6,460,313) (9,982,177)
------------ ------------ ------------
Net decrease in cash and
cash equivalents (935,954) (138,524) (1,949,247)
Cash and cash equivalents, beginning of year 4,412,869 3,476,915 3,338,391
------------ ------------ ------------
Cash and cash equivalents, end of year $ 3,476,915 $ 3,338,391 $ 1,389,144
============ ============ ============
</TABLE>
(Continued)
-9-
<PAGE> 52
CORPORATE PROPERTY ASSOCIATES 6
- a California limited partnership
and SUBSIDIARIES
CONSOLIDATED STATEMENTS of CASH FLOWS, Continued
For the years ended December 31, 1995, 1996 and 1997
Supplemental disclosure of financing activities:
<TABLE>
<CAPTION>
<S> <C>
A. Accrued preferred distribution as of December 31, 1997 $ 18,099
===========
B. During the year ended December 31, 1995, the Partnership recognized an
extraordinary gain on the extinguishment of debt.
Cash payment made in connection with satisfaction
of debt obligation $(5,440,000)
Direct costs of transaction (31,085)
Mortgage note payable balance at extinguishment 6,853,966
Accrued interest on mortgage debt at extinguishment 705,387
-----------
Extraordinary gain on extinguishment of debt $ 2,088,268
===========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
-10-
<PAGE> 53
CORPORATE PROPERTY ASSOCIATES 6
- a California limited partnership
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies:
Basis of Consolidation:
The consolidated financial statements include the accounts of
Corporate Property Associates 6 and two 99% owned subsidiaries,
CPA(R) Burnhaven Limited Partnership and CPA(R) Peerless Limited
Partnership, (collectively, the "Partnership"). All material
inter-entity transactions have been eliminated
Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. The most significant estimates relate to the assessment
of recoverability of real estate assets. Actual results could
differ from those estimates
Real Estate Leased to Others:
Real estate is leased to others on a net lease basis, whereby the
tenant is generally responsible for all operating expenses
relating to the property, including property taxes, insurance,
maintenance, repairs, renewals and betterments.
The Partnership diversifies its real estate investments among
various corporate tenants engaged in different industries and by
property type throughout the United States.
The leases are accounted for under either the direct financing or
operating methods. Such methods are described below:
Direct financing method - Leases accounted for under the
direct financing method are recorded at their net
investment (Note 5). Unearned income is deferred and
amortized to income over the lease terms so as to produce
a constant periodic rate of return on the Partnership's
net investment in the lease.
Operating method - Real estate is recorded at cost, rental
revenue is recognized on a straight-line basis over the
term of the leases and expenses (including depreciation)
are charged to operations as incurred.
The Partnership assesses the recoverability of its real estate
assets, including residual interests, based on projections of
undiscounted cash flows over the life of such assets. In the
event that such cash flows are insufficient, the assets are
adjusted to their estimated fair value.
Substantially all of the Partnership's leases provide for either
scheduled rent increases, periodic rent increases based on
formulas indexed to increases in the Consumer Price Index or
sales overrides.
Operating Real Estate:
Land, buildings and personal property are carried at cost. Major
renewals and improvements are capitalized to the property
accounts, while replacements, maintenance and repairs which do
not improve or extend the lives of the respective assets are
expensed currently.
Continued
-11-
<PAGE> 54
CORPORATE PROPERTY ASSOCIATES 6
- a California limited partnership
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
Depreciation:
Depreciation is computed using the straight-line method over the
estimated useful lives of the components of the particular
properties, which range from 5 to 30 years.
Cash Equivalents:
The Partnership considers all short-term, highly liquid investments
that are both readily convertible to cash and have a maturity of
generally three months or less at the time of purchase to be cash
equivalents. Items classified as cash equivalents include
commercial paper and money market funds. Substantially all of the
Partnership's cash and cash equivalents at December 31, 1996 and
1997 were held in the custody of three and two financial
institutions, respectively.
Other Assets:
Included in the assets are deferred rental income, deferred charges
incurred in connection with mortgage note financings and
refinancings and deferred costs of Consolidation (see Note 15).
Deferred rental is the aggregate difference for operating leases
between scheduled rents which vary during the lease term and
income recognized on a straight-line basis. Deferred charges are
amortized over the terms of the mortgages. Deferred costs of
Consolidation represent certain costs related to a Consolidation
transaction which have been capitalized. Consolidation costs will
be included in the revaluation of assets subsequent to December
31, 1997.
Income Taxes:
A partnership is not liable for Federal income taxes as each
partner recognizes his proportionate share of the partnership
income or loss in his tax return. Accordingly, no provision for
income taxes is recognized for financial statement purposes.
Deferred Rental Income:
A lease amendment fee of $3,800,000 received in 1995 in connection
with the amendment of one of the Partnership's leases is being
amortized as deferred rental income from the date of the
amendment through the end of the initial term of the lease
(15-1/2 years).
Reclassifications:
Certain 1995 and 1996 amounts have been reclassified to conform to
the 1997 financial statement presentation.
2. Partnership Agreement:
The Partnership was organized on July 23, 1984 under the Revised
Uniform Limited Partnership Act of the State of California for
the purpose of engaging in the business of investing in and
leasing industrial and commercial real estate. The Partnership
will terminate on December 31, 2004, or sooner, in accordance
with the terms of the Amended Agreement of Limited Partnership
(the "Agreement").
Continued
-12-
<PAGE> 55
CORPORATE PROPERTY ASSOCIATES 6
- a California limited partnership
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
Through December 31, 1997, the Agreement provided that the General
Partners were allocated 6% (1% to the Individual General Partner,
William Polk Carey and 5% to the Corporate General Partner, Carey
Corporate Property, Inc. ("Carey Property")), and the Limited
Partners were allocated 94% of the profits and losses as well as
distributions of Distributable Cash From Operations, as defined.
The partners are also to receive net proceeds from the sale of
Partnership properties as defined in the Agreement. Effective
January 1, 1998, as a result of the merger (Note 15) of the
Partnership with a subsidiary partnership of Carey Diversified
LLC ("Carey Diversified"), Carey Diversified is the sole general
partner of the Partnership. Carey Diversified and the holders of
Subsidiary Partnership Units are allocated 94% of the profits and
losses and distributable cash, and two special limited partners,
Carey Management LLC ("Carey Management") and William Polk Carey,
are allocated 5% and 1% of the profits and losses and
distributable cash, respectively.
In connection with the merger with Carey Diversified and the listing
on the New York Stock Exchange, a division of W.P. Carey & Co.,
Inc. ("W.P. Carey ), an affiliate of the Corporate General
Partner, satisfied the provisions for receiving a subordinated
preferred return of $18,099, which was measured based upon the
cumulative proceeds arising from the sale of the Partnership's
assets. Such amount has been included in accounts payable to
affiliates as of December 31, 1997. The preferred return, paid in
January 1998, was subject to provisions that limited such payment
until a specified cumulative return to limited partners was
achieved.
3. Transactions with Related Parties:
The Partnership holds its 35% interest in hotel properties in Alpena
and Petoskey, Michigan and its 34.4828% ownership interest in a
hotel property in Livonia, Michigan as tenants-in-common with
affiliates who own the remaining interests. The Partnership's
undivided interests in the assets and liabilities of the hotel
properties are accounted for on a proportional basis.
The Partnership holds a $1,151,000 note receivable made by Corporate
Property Associates 5 ("CPA(R):5"), an affiliate. The note bears
interest at the rate of 13.48% through August 1, 1999, at which
time the interest rate will reset to the Applicable Federal Rate
(as defined in the Internal Revenue Code of 1986) at that date.
The note matures on May 1, 2012, at which time the entire
outstanding principal balance will be due. Under certain
circumstances, the principal balance on the note may be reduced.
Under the Agreement, W.P. Carey and other affiliates were entitled
to receive a property management fee and reimbursement of certain
expenses incurred in connection with the Partnership's
operations. General and administrative expense reimbursements
consist primarily of the actual cost of personnel needed in
providing administrative services necessary to the operation of
the Partnership. Effective January 1, 1998 the fees and
reimbursements are payable to Carey Management, an affiliate of
Carey Diversified. Property management fee and general and
administrative expense reimbursements are summarized as follows:
<TABLE>
<CAPTION>
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Property management fee $156,629 $111,048 $115,717
General and administrative
expense reimbursements 152,795 115,128 255,804
-------- -------- --------
$309,424 $226,176 $371,521
======== ======== ========
</TABLE>
Continued
-13-
<PAGE> 56
CORPORATE PROPERTY ASSOCIATES 6
- a California limited partnership
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
During 1995, 1996 and 1997, fees aggregating $102,893, $44,215 and
$27,781, respectively, were incurred for legal services performed
by a firm in which the Secretary, until July 1997, of W.P. Carey
and Carey Property and other affiliates is a partner.
The Partnership is a participant in an agreement with W.P. Carey and
other affiliates for the purpose of leasing office space used for
the administration of real estate entities and W.P. Carey and for
sharing the associated costs. Pursuant to the terms of the
agreement, the Partnership's share of rental, occupancy and
leasehold improvement costs is based on adjusted gross revenues
as defined. Expenses incurred in 1995, 1996 and 1997 were
$94,719, $108,362 and $89,748, respectively.
4. Real Estate Leased to Others Accounted for Under the Operating
Method and Operating Real Estate:
A. Real Estate Leased to Others:
Scheduled future minimum rents, exclusive of renewals, under
noncancellable operating leases amount to approximately
$5,700,000 in 1998; $5,783,000 in 1999; $5,794,000 in 2000;
$4,839,000 in 2001, $4,237,000 in 2002; and aggregate
approximately $49,803,000 through 2011.
Contingent rents were approximately $171,000, $378,000 and $352,000
in 1995, 1996 and 1997, respectively.
B. Operating Real Estate:
Operating real estate, at cost, is summarized as follows:
<TABLE>
<CAPTION>
December 31,
--------------------------
1996 1997
---- ----
<S> <C> <C>
Land $ 1,337,262 $ 1,337,262
Building 9,723,824 9,943,795
Personal property 1,940,480 1,763,296
----------- -----------
13,001,566 13,044,353
Less, Accumulated depreciation 4,639,138 5,084,150
----------- -----------
$ 8,362,428 $ 7,960,203
=========== ===========
</TABLE>
5. Net Investment in Direct Financing Leases:
Net investment in direct financing leases is summarized as follows:
<TABLE>
<CAPTION>
December 31,
-------------------------------
1996 1997
---- ----
<S> <C> <C>
Minimum lease payments receivable $ 55,194,360 $ 50,988,454
Unguaranteed residual value 32,887,655 32,887,655
------------ ------------
88,082,015 83,876,109
Less, Unearned income 55,194,360 50,988,454
------------ ------------
$ 32,887,655 $ 32,887,655
============ ============
</TABLE>
Continued
-14-
<PAGE> 57
CORPORATE PROPERTY ASSOCIATES 6
- a California limited partnership
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
Scheduled future minimum rents, exclusive of renewals, under
noncancellable financing leases amount to approximately
$4,206,000 in each of the years 1998 to 2002 and aggregate
approximately $50,988,000 through the year 2011.
Contingent rents were approximately $1,113,000, $1,138,000 and
$1,625,000 in 1995, 1996 and 1997, respectively.
6. Mortgage Notes Payable and Note Payable:
A. Mortgage notes payable, all of which are limited recourse
obligations, are collateralized by the assignment of various
leases and by real property with a gross amount of
approximately $57,823,000, before accumulated depreciation. As of
December 31, 1997, mortgage notes payable bear interest at rates
varying from 6.6% to 10.5% per annum and mature from 1998 to
2015.
. Scheduled principal payments, during each of the next five years
following December 31, 1997 and thereafter are as follows:
<TABLE>
<CAPTION>
Year Ending December 31,
------------------------
<S> <C> <C>
1998 $14,030,463
1999 841,942
2000 910,103
2001 9,142,001
2002 390,542
Thereafter 3,583,572
-----------
Total $28,898,623
===========
</TABLE>
B. The Partnership's $10,000,000 note payable requires quarterly
payments of interest only at the variable interest rate of the
three-month London Inter-Bank Offered Rate ("LIBOR") plus 4.25% per
annum and is subject to the following conditions: The Partnership
must offer as a prepayment to the lender the proceeds from the sale
of any Partnership properties; however, the lender may decline such
proceeds. The Partnership must maintain ratios of Free Operating
Cash Flow, as defined, to debt service on the loan ranging from
3.4:1 to 3:1 over the life of the agreement and maintain a
consolidated net worth and appraised property values of
$25,000,000, as adjusted. Under the terms of the credit agreement,
the Partnership also has agreed that it may obtain new limited
recourse debt on any of its properties only for the purpose of
refinancing existing mortgage debt. Total mortgage indebtedness may
not exceed $37,952,884, at the inception of the loan, as adjusted
for subsequent scheduled principal amortization on existing
mortgage loans plus closing costs on any new loans. At December 31,
1997, the Partnership is in compliance with such terms.
Continued
-15-
<PAGE> 58
CORPORATE PROPERTY ASSOCIATES 6
- a California limited partnership
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
The $10,000,000 credit agreement loan is a recourse obligation of
the Partnership and matures on July 1, 1999. Except for the
application of proceeds from the sale of properties and other
limited circumstances, no loan prepayments may be made until
January 1, 1999.
Interest paid on mortgage notes payable and note payable was
$4,894,003, $4,046,843 and $3,695,904 in 1995, 1996 and 1997,
respectively.
7. Distributions to Partners:
Distributions are declared and paid to partners quarterly and are
summarized as follows:
<TABLE>
<CAPTION>
Distributions Paid Limited
Year Ending and Payable to Distributions Paid Partners' Per
December 31, General Partners to Limited Partners Unit Amount
------------ ---------------- ------------------- -----------
<S> <C> <C> <C>
1995 $282,718 $4,453,641 $92.91
======== ========== ======
1996 $275,797 $4,605,114 $96.08
======== ========== ======
1997 $408,804 $6,720,265 $140.21
======== ========== =======
</TABLE>
Distributions for 1997 include distributions of $2,065,304 to Limited
Partners and $126,564 to General Partners declared and paid in December 1997.
8. Income for Federal Tax Purposes:
Income for financial statement purposes differs from income for
Federal income tax purposes because of the difference in the
treatment of certain items for income tax purposes and financial
statement purposes. A reconciliation of accounting differences is
as follows:
<TABLE>
<CAPTION>
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Net income per Statements of Income $ 7,858,936 $6,025,396 $ 6,839,927
Excess tax depreciation (2,289,920) (1,608,909) (1,617,727)
Difference in recognition of
lease amendment fee 3,101,971
Other (799,351) (723,429) (691,789)
----------- ---------- -----------
Income reported for Federal
income tax purposes $ 7,871,636 $3,693,058 $ 4,530,411
=========== ========== ===========
</TABLE>
Continued
-16-
<PAGE> 59
CORPORATE PROPERTY ASSOCIATES 6
- a California limited partnership
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
9. Industry Segment Information:
The Partnership's operations consist of the investment in and the
leasing of industrial and commercial real estate and its
participation in the operation of three hotels.
In 1995, 1996 and 1997, the Partnership earned its total leasing
revenues (rental income plus interest income from financing
leases) from the following lease obligors:
<TABLE>
<CAPTION>
1995 % 1996 % 1997 %
---- - ---- - ---- -
<S> <C> <C> <C> <C> <C> <C>
Thermadyne Holdings Corp.
(assigned by Stoody Deloro
Stellite, Inc.) $ 2,147,046 19% $ 2,234,191 20% $ 2,234,191 19%
AP Parts International, Inc. 1,526,387 14 1,728,527 15 1,836,533 15
Peerless Chain Company 1,279,668 12 1,611,600 14 1,708,586 14
AutoZone, Inc. 1,447,852 13 1,336,895 12 1,483,958 12
Kinney Shoe Corporation/Armel, Inc. 679,063 6 745,806 7 964,941 8
Wal-Mart Stores, Inc. 827,265 8 848,553 7 891,129 8
Anthony's Manufacturing
Company, Inc. 1,072,711 10 876,000 8 876,000 7
Motorola, Inc. 500,000 5 540,000 5 540,000 5
Harcourt General Corporation 467,500 4 467,500 4 467,500 4
Yale Security, Inc. 355,706 3 459,227 4
Lockheed Martin Corporation 293,000 3 304,333 3 310,000 3
Winn-Dixie Stores, Inc. 170,399 1 170,399 1 170,399 1
Folger Adam Company 599,259 5 68,954 1
----------- ---- ----------- --- ----------- ----
$11,010,150 100% $11,288,464 100% $11,942,464 100%
=========== ==== =========== ==== =========== ====
</TABLE>
Summarized operating results of the Partnership's share of the
operations of three hotels are:
<TABLE>
<CAPTION>
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Revenues $ 4,630,619 $ 4,868,017 $ 5,036,301
Fees paid to hotel management
company (94,948) (105,839) (127,438)
Other operating expenses (3,501,460) (3,608,334) (3,608,740)
----------- ----------- -----------
Hotel operating income $ 1,034,211 $ 1,153,844 $ 1,300,123
=========== =========== ===========
</TABLE>
10. Hotel Property in Livonia, Michigan:
In November 1987, the Partnership and Corporate Property Associates
7 ("CPA(R):7"), an affiliate, purchased a Holiday Inn in Livonia,
Michigan with 34.4828% and 65.5172% interests, respectively, as
tenants-in-common and entered into a net lease with Brock Hotel
Corporation which subsequently changed its name to Integra-A
Hotel and Restaurant Company ("Integra"). Integra subsequently
assigned its interest in the lease to a wholly-owned subsidiary,
Livonia Inn Management, Inc. while Integra remained the guarantor
of the lease.
Continued
-17-
<PAGE> 60
CORPORATE PROPERTY ASSOCIATES 6
- a California limited partnership
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
As a result of Integra's financial condition, the subsidiary stopped
paying rent in May 1992 with Integra subsequently filing a
voluntary bankruptcy petition in July 1992. Both of these events
were defaults under the lease as well as under the mortgage note
collateralized by the Livonia property. In August 1992, pursuant
to a letter of agreement, the Partnership and CPA(R):7 assumed
control of the hotel operations.
In March 1994, the Partnership and CPA(R):7, executed a settlement
agreement with the Hallwood Group, Inc. ("Hallwood Group"),
Integra's largest shareholder, under which the Partnership and
CPA(R):7 agreed to surrender a promissory note made by Hallwood
Group, which had been pledged by Integra to the Partnership and
CPA(R):7 as additional security to Integra's lease obligation, in
exchange for $150,000 in cash, a $500,000 promissory note from
Hallwood Group and an equity participation having a potential
value of up to $500,000 from the Hallwood Group. The $500,000
note which matured March 8, 1998 was collateralized by the
Hallwood Group's pledge of its limited partnership units of
Hallwood Realty Partners, L.P. ("Hallwood Realty"), a publicly
traded partnership. Under the settlement agreement, the Hallwood
Group had the obligation to pay to the Partnership and CPA:(R)7
an amount equal to 25% of the increase in value of the Hallwood
Realty units up to $500,000, from March 1994 to the note maturity
date. On the maturity date, Hallwood Group tendered approximately
$1,100,000 in an effort to redeem the collateral while reserving
its right to continue litigating over its underlying obligation
to the Partnership and CPA(R):7. The Partnership and CPA(R):7
have determined that it is not in their best interests to accept
on these terms and are considering other alternatives.
During 1996 and 1997, the Partnership and CPA(R):7 received
approximately $221,000 and $368,000 (of which the Partnership's
share was $77,000 and $127,000) from the bankruptcy trustee in
partial settlement of the Partnership's and CPA(R):7's claim
against Integra.
In January 1998, the Partnership and CPA(R):7 finalized an agreement
to lease the Livonia property to Livho, Inc. ("Livho"), an
affiliate. All of the licenses and franchise agreements of the
hotel operations were transferred to Livho in 1998. The lease
which has an initial term of 10 years and four five-year renewal
options initially provides for annual rent of $2,348,000 (of
which the Partnership's share is $810,000) increasing to
$2,923,000 in 1999 and stated increases every year thereafter.
The lease includes net lease provisions which requires Livho to
pay the costs of insurance, real estate taxes and repairs and
maintenance. The Partnership and CPA(R):7 will retain the
obligation to fund capital improvements. The security holder of
the common stock of Livho is an affiliate. If the Partnership and
CPA(R):7 continued to operate the hotel directly, there would
have been adverse tax consequences for those Limited Partnership
Unitholders who had exchanged their limited partnership units for
interests in Carey Diversified LLC ("Carey Diversified").
11. Extraordinary Gain on Extinguishment of Debt:
In May 1995, the Partnership and Anthony's Manufacturing Company,
Inc. ("Anthony's") entered into a settlement agreement at which
time the Partnership withdrew its eviction suit against
Anthony's. The Partnership had filed an eviction notice because
Anthony's had not paid a scheduled monthly rent increase of
$10,485 which had been effective since March 1992 and had made
only two monthly rental payments between February 1994 and April
1995. In connection with the
Continued
-18-
<PAGE> 61
CORPORATE PROPERTY ASSOCIATES 6
- a California limited partnership
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
settlement agreement, Anthony's made lump sum payments
aggregating $1,550,000 in settlement of a rent arrearage of
$1,712,098. Of the $1,550,000 received $561,710 was applied to
1995 rents receivable for the period from January 1, 1995 through
May 31, 1995 with the remaining $988,290 applied to prior period
rents. The amounts related to prior periods, had been included in
the Partnership's reserve for uncollected rents. Net of the legal
costs of the settlement of $300,476, the Partnership recognized
$687,814 on the settlement which was included as other income in
1995. Under the settlement, the Partnership and Anthony's agreed
to modify the existing lease. Anthony's monthly rental payment
was decreased from $112,342 to $73,000 and the expiration of the
initial term of the lease was extended to May 2007 from February
2002. The amended lease also provides for rental increases in
1998, 2001 and 2005.
In May 1995, the Partnership satisfied the mortgage loan
collateralized by the Anthony's properties. The lender accepted a
payment of $5,440,000 to satisfy an outstanding principal balance
of $6,853,966 and accrued interest thereon of $705,387. In
connection with the satisfaction of the debt, the Partnership
recognized an extraordinary gain on the extinguishment of debt of
$2,088,268, net of certain related legal costs in 1995.
12. Gain on Sales of Real Estate:
On January 26, 1996 and April 26, 1996, the Partnership sold
property in Dalton, Georgia and Birmingham Alabama, respectively,
leased to AutoZone, Inc. ("AutoZone"), at an aggregate price of
$603,285, net of selling costs, realizing a gain of $70,878 on
the sales. AutoZone's leases allow it to sever properties from
its leases and purchase such properties that it judges to be
unsuitable for its retail business. The Partnership was required
to assign the proceeds of the sales to its lender as a partial
prepayment on the mortgage loan collateralized by the AutoZone
property. In connection with the sales, annual rent of the
AutoZone lease was reduced by $67,635; however, cash flow
increased because annual debt service on the mortgage loan was
reduced by $98,197 as a result of a reamortization of the loan.
13 Environmental Matters:
All of the Partnership's properties, other than the hotel
properties, are currently leased to corporate tenants. All of the
properties are subject to environmental statutes and regulations
regarding the discharge of hazardous materials and related
remediation obligations. The Partnership generally structures a
lease to require the tenant to comply with all laws. In addition,
substantially all of the Partnership's net leases include
provisions which require tenants to indemnify the Partnership
from all liabilities and losses related to their operations at
the leased properties. In the event that the Partnership absorbs
a portion of any costs, the General Partner believes such
expenditures will not have a material adverse effect on the
Partnership's financial condition, liquidity or results of
operations.
In 1994, based on the results of Phase I environmental reviews
performed in 1993, the Partnership voluntarily conducted Phase II
environmental reviews on various of its properties. The
Partnership believes, based on the results of such Phase I and
Phase II reviews, that its properties are in substantial
compliance with Federal and state environmental statutes and
regulations. Portions of certain properties have been documented
as having a limited degree of contamination, principally in
connection with leakage from underground storage tanks or surface
spills. For those conditions which were identified, the
Partnership advised the affected tenant of the Phase II findings
and of its obligation to perform required remediation.
-19-
<PAGE> 62
CORPORATE PROPERTY ASSOCIATES 6
- a California limited partnership
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
14. Disclosures About Fair Value of Financial Instruments:
The carrying amounts of cash, receivables and accounts payable and
accrued expenses approximate fair value because of the short
maturity of these items.
The Partnership estimates that the fair value of mortgage notes
payable approximates the carrying amount of such mortgage notes
at December 31, 1996 and 1997. The fair value of debt instruments
was evaluated using a discounted cash flow with discount rates
which take into account the credit of the tenants and interest
rate risk. The Partnership note payable is a variable rate
obligation indexed to the three-month LIBOR. Accordingly, the
carrying amount of the note payable approximates fair value as of
December 31, 1996 and 1997. Management believes that it is not
practicable to estimate fair value for the note receivable from
affiliate.
15. Exchange of Limited Partnership Units:
In October 1997, Carey Diversified distributed a Consent
Solicitation Statement/Prospectus to the Limited Partners which
described a proposal to consolidate the Partnership with the
other CPA(R) Partnerships. The General Partners' proposals that
each of the nine CPA(R) limited partnerships be merged with a
corresponding subsidiary partnership of Carey Diversified, of
which Carey Diversified is the general partner, was approved by
the Limited Partners of all nine of the CPA(R) limited
partnerships. Each limited partner had the option of either
exchanging his or her limited partnership interest for an
interest in Carey Diversified ("Listed Shares") or to retain a
limited partnership interest in the subsidiary partnership
("Subsidiary Partnership Units"). On January 1, 1998, 2,760
holders representing 47,261 of the 47,930 limited partnership
units exchanged such units for 3,262,427 Listed Shares with 43
holders with the remaining 669 limited partnership units
exchanging such units for Subsidiary Partnership Units. The
General Partners received 17,695 Listed Shares for their interest
in their share of the appreciation in Partnership properties.
Listed shares commenced public trading on the New York Stock
Exchange on January 21, 1998. Subsidiary Partnership Units
provide substantially the same economic interest and legal rights
as those of a limited partnership unit in the Partnership, but
are not listed on a securities exchange. A liquidating
distribution to holders of Subsidiary Partnership Units will be
made is as soon as practicable after an appraisal of the
Partnership's properties which appraisal date is to be no later
than December 31, 2001.
16. Accounting Pronouncements:
In June 1997, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 130, "Reporting Comprehensive Income" and
SFAS No. 131, "Disclosure about Segments of an Enterprise and
Related Information." SFAS No. 130 establishes standards for
reporting and display of comprehensive income and its components
(revenues, expenses, gains and losses) in full set general
purpose financial statements. SFAS No. 131 establishes accounting
standards for the way that public business enterprises report
selected information about operating segments in interim
financial reports issued to shareholders. SFAS No. 130 and SFAS
No. 131 are required to be adopted by 1998. The Partnership is
currently evaluating the impact, if any, of SFAS No. 130 and SFAS
131.
-20-
<PAGE> 63
CORPORATE PROPERTY ASSOCIATES 6
- a California limited partnership
and SUBSIDIARIES
SCHEDULE of REAL ESTATE and ACCUMULATED DEPRECIATION
as of December 31, 1997
<TABLE>
<CAPTION>
Initial Cost to Costs
Partnership Capitalized
------------------------ Personal Decrease in Subsequent to
Description Encumbrances Land Buildings Property Net Investment(b) Acquisition(a)
----------- ------------ ---- --------- -------- ----------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Operating method:
Office facility leased
to Motorola, Inc. $ 2,051,702 $ 387,000 $ 3,981,000 $ 11,455
Land leased to
AutoZone, Inc. 3,221,466 4,189,757 $(200,744)
Warehouse and manufacturing
facility leased to
Lockheed Martin
Corporation 398,475 2,590,092 26,491
Motion picture theatre
leased to Harcourt General
Corporation 1,895,864 1,144,000 3,186,000 11,035
Warehouse and office
facility leased to
Kinney Shoe Corporation/
Armel, Inc. 11,058 1,360,935 3,899,415 8,000
Manufacturing facilities
leased to AP Parts
Manufacturing Company, Inc. 5,397,705 443,500 11,256,500 1,733,087
Manufacturing facilities
leased to Anthony's
Manufacturing Company, Inc. 3,200,000 8,300,000
Manufacturing and office
facility leased to
Yale Security, Inc. 300,000 3,400,000
Retail store leased to
Winn Dixie Stores, Inc. 276,600 1,631,560 27,730
----------- ----------- ----------- ---------- ----------
$12,577,795 $11,700,267 $38,244,567 $ (200,744) $1,817,798
=========== =========== =========== ========== ==========
Operating real estate (d):
Hotel properties located in
Alpena, Michigan $ 2,502,500 $ 73,500 $2,645,125 $ 259,875 $ 439,529
Petoskey, Michigan 2,502,500 184,450 2,526,125 267,925 325,636
Livonia, Michigan 2,567,939 1,079,312 4,279,315 779,311 184,250
----------- ----------- ----------- ---------- ----------
$ 7,572,939 $ 1,337,262 $ 9,450,565 $1,307,111 $ 949,415
=========== =========== =========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Gross Amount at which Carried
at Close of Period(a)(c) (d) (e)
--------------------------------------
Personal Accumulated
Description Land Buildings Property Total Depreciation (d)(e)
----------- ---- --------- -------- ----- -------------------
<S> <C> <C> <C> <C> <C>
Operating method:
Office facility leased
to Motorola, Inc. $ 387,000 $ 3,992,455 $ 4,379,455 $ 1,602,310
Land leased to
AutoZone, Inc. 3,989,013 3,989,013
Warehouse and manufacturing
facility leased to
Lockheed Martin
Corporation 401,541 2,613,517 3,015,058 1,012,127
Motion picture theatre
leased to Harcourt General
Corporation 1,144,000 3,197,035 4,341,035 1,216,700
Warehouse and office
facility leased to
Kinney Shoe Corporation/
Armel, Inc. 1,360,935 3,907,415 5,268,350 1,470,719
Manufacturing facilities
leased to AP Parts
Manufacturing Company, Inc. 443,500 12,989,587 13,433,087 4,248,706
Manufacturing facilities
leased to Anthony's
Manufacturing Company, Inc. 3,200,000 8,300,000 11,500,000 3,001,667
Manufacturing and office
facility leased to
Yale Security, Inc. 300,000 3,400,000 3,700,000 198,333
Retail store leased to
Winn Dixie Stores, Inc. 276,600 1,659,290 1,935,890 540,507
----------- ----------- ----------- -----------
$11,502,589 $40,059,299 $51,561,888 $13,291,069
=========== =========== =========== ==========
Operating real estate (d):
Hotel properties located in
Alpena, Michigan $ 73,500 $ 2,835,213 $ 509,316 $ 3,418,029 $ 1,392,091
Petoskey, Michigan 184,450 2,645,016 474,670 3,304,136 1,357,535
Livonia, Michigan 1,079,312 4,463,566 779,310 6,322,188 2,334,524
----------- ----------- ---------- ----------- -----------
$ 1,337,262 $ 9,943,795 $1,763,296 $13,044,353 $ 5,084,150
=========== =========== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Life on which
Depreciation in
Latest Income
Statement
Description Date Acquired is Computed
----------- ------------- -----------
<S> <C> <C>
Operating method:
Office facility leased
to Motorola, Inc. December 23, 1985 30 yrs.
Land leased to January 17, 1986 N/A
AutoZone, Inc. May 2, 1986
Warehouse and manufacturing
facility leased to
Lockheed Martin
Corporation May 15, 1986 30 yrs.
Motion picture theatre
leased to Harcourt General
Corporation July 31, 1986 30 yrs.
Warehouse and office
facility leased to
Kinney Shoe Corporation/
Armel, Inc. September 17, 1986 30 yrs.
Manufacturing facilities
leased to AP Parts
Manufacturing Company, Inc. December 23, 1986 30 yrs.
Manufacturing facilities
leased to Anthony's
Manufacturing Company, Inc. February 24, 1987 30 yrs.
Manufacturing and office
facility leased to
Yale Security, Inc. August 13, 1985 30 yrs.
Retail store leased to
Winn Dixie Stores, Inc. March 21, 1988 30 yrs.
Operating real estate (d):
Hotel properties located in
Alpena, Michigan October 28, 1991 5-30 yrs.
Petoskey, Michigan October 28, 1991 5-30 yrs.
Livonia, Michigan November 20, 1987 5-30 yrs.
</TABLE>
See accompanying notes to Schedule.
-21-
<PAGE> 64
CORPORATE PROPERTY ASSOCIATES 6
- a California limited partnership
and SUBSIDIARIES
SCHEDULE of REAL ESTATE and ACCUMULATED DEPRECIATION
as of December 31, 1997
<TABLE>
<CAPTION>
Initial Cost To Costs
Partnership Capitalized
-------------------- Decrease in Subsequent to
Description Encumbrances Land Buildings Net Investment(b) Acquisition(a)
----------- ------------ ---- --------- ----------------- --------------
<S> <C> <C> <C> <C> <C>
Financing method:
Manufacturing and
warehouse facility
leased to Thermodyne
Holdings Corporation $2,615,000 $ 9,085,000
Retail stores leased to
AutoZone, Inc. $5,396,609 7,004,305 $(321,900)
Manufacturing facility
leased to Peerless
Chain Company 829,000 6,991,000
Retail and warehouse
facility leased to
Wal-Mart Stores, Inc., 3,351,280 1,467,000 5,208,000 $10,250
----------- ---------- ----------- --------- -------
$8,747,889 $4,911,000 $28,288,305 $(321,900) $10,250
========== ========== =========== ========= =======
</TABLE>
<TABLE>
<CAPTION>
Gross Amount at Which Carried
at Close of Period (c)
-----------------------------
Description Total Date Acquired
----------- ----- -------------
<S> <C> <C>
Financing method:
Manufacturing and
warehouse facility
leased to Thermodyne
Holdings Corporation $11,700,000 February 14, 1985
Retail stores leased to
AutoZone, Inc. 6,682,405 January 17, 1986 and
May 2, 1986
Manufacturing facility
leased to Peerless
Chain Company 7,820,000 June 18, 1986
Retail and warehouse
facility leased to
Wal-Mart Stores, Inc., 6,685,250 August 7, 1986
-----------
$32,887,655
===========
</TABLE>
See accompanying notes to Schedule.
-22-
<PAGE> 65
CORPORATE PROPERTY ASSOCIATES 6
- a California limited partnership
and SUBSIDIARIES
NOTES TO SCHEDULE of REAL ESTATE
and ACCUMULATED DEPRECIATION
(a) Consists of acquisition costs including legal fees, appraisal fees,
title costs and other related professional fees and purchase of
furniture, fixtures, equipment and improvements at the hotel
properties.
(b) Decrease in net investment consists of decreases due to sale of
properties.
(c) At December 31, 1997, the aggregate cost of real estate owned for
Federal income tax purposes is $97,122,233.
(d)
<TABLE>
<CAPTION>
Reconciliation of Real Estate Accounted
for Under the Operating Method
December 31,
------------------------
1996 1997
---- ----
<S> <C> <C>
Balance at beginning
of year $46,333,108 $51,561,888
Sale of real estate (199,307)
Additions 1,728,087
Reclassification of direct financing
lease to operating lease 3,700,000
----------- -----------
Balance at close of year $51,561,888 $51,561,888
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
Reconciliation of Accumulated Depreciation
December 31,
------------------------
1996 1997
---- ----
<S> <C> <C>
Balance at beginning
of year $10,653,598 $11,955,764
Depreciation expense 1,302,166 1,335,305
----------- -----------
Balance at close of year $11,955,764 $13,291,069
=========== ===========
</TABLE>
-23-
<PAGE> 66
CORPORATE PROPERTY ASSOCIATES 6
- a California limited partnership
and SUBSIDIARIES
NOTES TO SCHEDULE of REAL ESTATE
and ACCUMULATED DEPRECIATION
<TABLE>
<CAPTION>
(e) Reconciliation of Operating Real Estate
December 31,
------------------------
1996 1997
---- ----
<S> <C> <C>
Balance at beginning
of year $12,832,631 $13,001,566
Additions 168,935 42,787
----------- -----------
Balance at close of year $13,001,566 $13,044,353
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
Reconciliation of Accumulated Depreciation
for Operating Real Estate
December 31,
------------------------
1996 1997
---- ----
<S> <C> <C>
Balance at beginning
of year $4,276,790 $4,639,138
Depreciation expense 362,348 445,012
---------- ----------
Balance at close of year $4,639,138 $5,084,150
========== ==========
</TABLE>
-24-
<PAGE> 67
PROPERTIES
<TABLE>
<CAPTION>
LEASE TYPE OF OWNERSHIP
OBLIGOR TYPE OF PROPERTY LOCATION INTEREST
------- ---------------- -------- --------
<S> <C> <C> <C>
THERMADYNE Warehouse and Manu- Industry, Ownership of land
HOLDINGS facturing Facility California and building
CORP.
(assigned by STOODY
DELORO STELLITE, INC.)
YALE SECURITY, INC. Manufacturing Lemont, Ownership of land
Facility Illinois and building (1)
MOTOROLA, INC. Computer and Urbana, Ownership of land
Telecommunication Facility Illinois and building (1)
LOCKHEED MARTIN Warehouse and Glen Burnie, Ownership of land
CORPORATION Manufacturing Facility Maryland and building
AUTOZONE, INC. Retail Stores - Charlotte, Lenoir, Ownership of land
32 locations Gastonia, and and buildings (1)
Statesville, North
Carolina;
Austin, Corpus
Christi-2,
Nederland,
San Antonio,
Victoria, Waco,
and West Orange, Texas;
Bessemer,
Chickasaw, Decatur,
Mobile, Montgomery and
Phenix City, Alabama;
Alton, Belleview,
Collinsville and
Wood River, Illinois;
Columbus,
Georgia
Baton Rouge, Lake
Charles-2 and West
Monroe, Louisiana; and
Breckenridge, Maplewood,
Overland and St. Louis,
Missouri
</TABLE>
-25-
<PAGE> 68
<TABLE>
<CAPTION>
LEASE TYPE OF OWNERSHIP
OBLIGOR TYPE OF PROPERTY LOCATION INTEREST
------- ---------------- -------- --------
<S> <C> <C> <C>
(2) Hotel Petoskey and Ownership of 35% interest
- 2 locations Alpena, Michigan in land and buildings (1)
PEERLESS CHAIN Manufacturing Winona, Ownership of land
COMPANY Facility Minnesota and building
HARCOURT GENERAL Movie Theatre Burnsville, Ownership of land
CORPORATION Minnesota and building (1)
WAL-MART STORES, Retail/Warehouse West Mifflin, Ownership of land
INC. Facility Pennsylvania and building (1)
KINNEY SHOE Warehouse and Fort Lauderdale, Ownership of land
CORPORATION/ Office Facility Florida and building (1)
ARMEL, INC.
AP PARTS Manufacturing Toledo, Ohio Ownership of land
INTERNATIONAL, Facility - Pinconning, and buildings (1)
INC. 2 locations Michigan
ANTHONY'S Manufacturing/ San Fernando, Ownership of land
MANUFACTURING Warehouse and California and buildings
COMPANY, INC. Corporate
Headquarters
Facilities -
4 locations
LIVHO, INC. Hotel Livonia, Michigan Ownership of 34.4828%
interest in land
and building (1)
WINN DIXIE STORES, Supermarket Panama City, Ownership of land
INC. Florida and building
</TABLE>
(1) These properties are encumbered by mortgage notes payable.
(2) These properties are operated with affiliates.
-26-
<PAGE> 69
MARKET FOR THE PARTNERSHIP'S EQUITY AND RELATED
UNITHOLDER MATTERS
As of December 31, 1997, there were 2,803 holders of record of
the Limited Partnership Units of the Partnership. On January 1, 1998, 2,760
holders of Limited Partnership Units exchanged such units for interests in Carey
Diversified LLC and 43 holders exchanged such units for Subsidiary Partnership
Units. There is no established public trading market for Subsidiary Partnership
Units.
In accordance with the requirements of the Partnership's
Amended Agreement of Limited Partnership (the "Agreement") contained as Exhibit
A to the Prospectus, the Corporate General Partner expects to make quarterly
distributions of Distributable Cash From Operations as defined in the Agreement.
The following table shows the frequency and amount of distributions paid per
Unit since 1994:
<TABLE>
<CAPTION>
Cash Distributions Paid Per Unit
-----------------------------------
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
First quarter $23.13 $23.75 $24.25
Second quarter 23.15 24.00 24.27
Third quarter 23.25 24.13 24.29
Fourth quarter 23.38 24.20 67.40(a)
------ ------ ------
$92.91 $96.08 $140.21
====== ====== =======
</TABLE>
(a) Includes distributions of $24.31 and $43.09 per Limited Partnership Unit
paid in October 1997 and December 1997, respectively.
On October 16, 1997, the Partnership began the solicitation of
consents from limited partners to approve the merger of the Partnership with all
of the CPA(R) Partnerships into Carey Diversified LLC, a Delaware limited
liability company. Limited Partners were offered the opportunity to vote to
approve or disapprove the merger and to choose either interests ("Listed
Shares") in the Carey Diversified LLC or interests ("Subsidiary Partnership
Units") in the partnership which survived the merger. The solicitation period
ended on December 16, 1997. The results of the voting were as follows:
<TABLE>
<CAPTION>
Units Voted Units Voted Units Voted Units Not
Yes No Abstaining Voting
--- -- ---------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Merger of Partnership
with Carey Diversified 34,130 71.21% 905 1.89% 212 .44% 12,683 26.45%
</TABLE>
<TABLE>
<CAPTION>
Subsidiary
Listed Shares Partnership Units
------------- -----------------
<S> <C> <C>
Number of Units
Electing 47,261 669
</TABLE>
-27-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 1,389,144
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,389,144
<PP&E> 97,048,884
<DEPRECIATION> 17,930,207
<TOTAL-ASSETS> 84,650,329
<CURRENT-LIABILITIES> 4,811,269
<BONDS> 38,898,623
0
0
<COMMON> 0
<OTHER-SE> 40,940,437
<TOTAL-LIABILITY-AND-EQUITY> 84,650,329
<SALES> 0
<TOTAL-REVENUES> 17,384,088
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,739,448
<LOSS-PROVISION> 89,570
<INTEREST-EXPENSE> 3,715,143
<INCOME-PRETAX> 6,839,927
<INCOME-TAX> 0
<INCOME-CONTINUING> 6,839,927
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,839,927
<EPS-PRIMARY> 134.14
<EPS-DILUTED> 134.14
</TABLE>
