<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTIONS 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended: Commission File Number:
SEPTEMBER 30, 1995 0-18678
---------------------- -----------------------
EXCEL REALTY TRUST, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
MARYLAND 33-0160389
- -------------------------------- -----------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
16955 VIA DEL CAMPO, SUITE 110 SAN DIEGO, CALIFORNIA 92127
- --------------------------------------------------------------------------------
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (619) 485-9400
--------------
Securities registered pursuant to Section 12(b) of the Act: NONE
----
Indicated 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.
(1) Yes X No
----- -----
(2) Yes X No
----- -----
Indicated the number of shares outstanding of each of the issuer's classes
of common stock, as of the close of the period cover by this report.
<TABLE>
<CAPTION>
Class Outstanding at September 30, 1995
---------------------------- ---------------------------------
<S> <C>
Common stock, $.01 par value 13,114,892
</TABLE>
<PAGE> 2
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
INDEX
FORM 10-Q
----------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
Consolidated Balance Sheets
September 30, 1995 (Unaudited)
December 31, 1994 ............................................................................. 3
Consolidated Statements of Income
Three Months Ended September 30, 1995 (Unaudited)
Three Months Ended September 30, 1994 (Unaudited)
Nine Months Ended September 30, 1995 (Unaudited)
Nine Months Ended September 30, 1994 (Unaudited)............................................... 4
Consolidated Statements of Changes in Stockholders' Equity
Nine Months Ended September 30, 1995 (Unaudited)
Nine Months Ended September 30, 1994 (Unaudited)............................................... 5
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1995 (Unaudited)
Nine Months Ended September 30, 1994 (Unaudited)............................................... 6
Notes to Consolidated Financial Statements (Unaudited)............................................ 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................................................... 15
PART II. OTHER INFORMATION ................................................................................. 21
</TABLE>
2
<PAGE> 3
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
----------
<TABLE>
<CAPTION>
SEPTEMBER 30,
1995 DECEMBER 31,
(UNAUDITED) 1994
------------- ------------
<S> <C> <C>
ASSETS
Real estate:
Land $ 125,819 $ 115,614
Buildings 263,745 243,869
Less accumulated depreciation (14,986) (10,228)
--------- ---------
Net real estate 374,578 349,255
Cash 4,395 4,131
Accounts receivable, less allowance for bad debts of
$548 and $180 in 1995 and 1994, respectively 2,365 1,443
Notes receivable:
Affiliates 15,355 -
Other 8,947 9,099
Escrow deposits 4,505 2,494
Loan acquisition costs 4,216 5,060
Interest rate protection agreements 1,652 2,106
Other assets 2,838 1,512
--------- --------
$ 418,851 $ 375,100
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgages payable $ 198,158 $ 201,157
Notes payable 3,184 15
Accounts payable and accrued liabilities:
Affiliates 55 86
Other 3,426 2,597
Dividends payable - 4,685
Other liabilities 5,411 2,662
--------- ----------
Total liabilities 210,234 211,202
--------- ---------
Commitments and contingencies - -
Stockholders' equity:
Preferred stock, $.01 par value, 10,000,000 shares authorized - -
Common stock, $.01 par value, 100,000,000 shares authorized,
13,114,892 and 10,883,570 shares issued and outstanding
in 1995 and 1994, respectively 131 109
Additional paid-in capital 217,682 175,702
Accumulated dividends in excess of net income (9,196) (11,913)
--------- ---------
Total stockholders' equity 208,617 163,898
--------- ---------
$ 418,851 $ 375,100
========= =========
</TABLE>
The accompanying notes are an integral
part of the financial statements.
3
<PAGE> 4
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
----------
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------- -----------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenue:
Base rent $ 12,369 $ 9,980 $ 37,120 $ 28,228
Percentage rent 147 78 239 187
Expense reimbursements 1,005 591 2,569 1,504
-------- -------- -------- --------
Total revenue 13,521 10,649 39,928 29,919
-------- -------- -------- --------
Operating expenses:
Master lease 948 - 3,834 -
Property taxes 832 515 2,083 1,303
Repairs and maintenance 494 253 1,286 686
Utilities 233 250 523 558
Other property expenses 604 294 1,473 634
General and administrative expenses 428 473 1,470 1,939
-------- -------- -------- --------
Total operating expenses 3,539 1,785 10,669 5,120
-------- -------- -------- --------
Operating income 9,982 8,864 29,259 24,799
Other income (expense):
Interest expense (4,604) (3,779) (14,038) (10,144)
Depreciation and amortization (1,764) (1,849) (5,103) (5,215)
Interest and other income 1,838 294 3,075 889
======== ======== ======== ========
Income before real estate sales 5,452 3,530 13,193 10,329
Gain (loss) on sale of real estate 82 7 (49) (34)
-------- -------- -------- --------
Net income $ 5,534 $ 3,537 $ 13,144 $ 10,295
======== ======== ======== ========
Net income per common share $ 0.43 $ 0.33 $ 1.12 $ 0.95
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral
part of the financial statements.
4
<PAGE> 5
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - UNAUDITED
(IN THOUSANDS, EXCEPT NUMBER OF SHARE AMOUNTS)
----------
<TABLE>
<CAPTION>
ACCUMULATED
COMMON STOCK ADDITIONAL DIVIDENDS TOTAL
----------------------- PAID-IN IN EXCESS OF STOCKHOLDERS'
NUMBER AMOUNT CAPITAL NET INCOME EQUITY
------ ------ ---------- ------------ -------------
<S> <C> <C> <C> <C> <C>
NINE MONTHS ENDED SEPTEMBER 30, 1995:
Balance at January 1, 1995 10,883,570 $ 109 $ 175,702 $ (11,913) $ 163,898
Issuance of new shares of
common stock 2,231,322 22 44,603 - 44,625
Selling expenses - - (2,623) - (2,623)
Net income - - - 13,144 13,144
Dividends declared - - - (10,427) (10,427)
---------- ----- --------- --------- ----------
Balance at September 30, 1995 13,114,892 $ 131 $ 217,682 $ (9,196) $ 208,617
========== ===== ========= ========= ==========
NINE MONTHS ENDED SEPTEMBER 30, 1994:
Balance at January 1, 1994 10,465,643 $ 105 $ 168,962 $ (7,105) $ 161,962
Issuance of new shares of
common stock 462,414 4 7,505 - 7,509
Selling expenses - - (36) - (36)
Net income - - - 10,295 10,295
Dividends declared - - - (13,919) (13,919)
---------- ----- --------- --------- ----------
Balance at September 30, 1994 10,928,057 $ 109 $ 176,431 $ (10,729) $ 165,811
========== ===== ========= ========= ==========
</TABLE>
The accompanying notes are an integral
part of the financial statements.
5
<PAGE> 6
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(IN THOUSANDS)
----------
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------------
1995 1994
----------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 13,144 $ 10,295
Adjustments to reconcile net income to net cash
provided by operations:
Depreciation 5,101 4,447
Amortization 3 768
Amortized loan costs and leasing commissions 2,230 768
Loss on sale of real estate 49 34
Provision for bad debts, net of accounts written off 230 (61)
Changes in operating assets and liabilities:
(Increase) decrease in assets:
Accounts receivable (1,152) 1,878
Other assets (1,249) (228)
Increase (decrease) in liabilities:
Accounts payable 798 (104)
Other liabilities 2,749 38
-------- ---------
Net cash provided by operating activities 21,903 17,835
-------- ---------
Cash flows from investing activities:
Real estate acquisitions and building improvements (21,387) (54,142)
Advances for notes receivable (29,409) (8,953)
Principal payments on notes receivable 14,206 5,990
Escrow deposits paid (6,736) (6,445)
Escrow deposits collected 4,725 5,569
Proceeds from real estate sales 9,672 1,689
Other (315) (255)
-------- ---------
Net cash used in investing activities (29,244) (56,547)
-------- ---------
Cash flows from financing activities:
Issuance of common stock 43,707 883
Selling and offering costs (2,623) (36)
Dividends paid (15,112) (13,542)
Proceeds from notes payable 21,409 109,574
Payments of mortgages and notes payable (39,027) (49,665)
Loan costs paid (749) (5,684)
-------- ---------
Net cash provided by financing activities 7,605 41,530
-------- ---------
Net increase in cash 264 2,818
Cash at January 1 4,131 5,376
-------- ---------
Cash at September 30 $ 4,395 $ 8,194
======== =========
</TABLE>
The accompanying notes are an integral
part of the financial statements.
6
<PAGE> 7
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
----------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The financial statements reflect all adjustments of a recurring nature
which are, in the opinion of management, necessary for a fair presentation
of the financial statements. No adjustments were necessary which were not
of a normal recurring nature. Certain reclassifications have been made to
the consolidated financial statements for the periods ended September 30,
1994 and at December 31, 1994 in order to conform with the current period
presentation. These financial statements should be read in conjunction
with the consolidated financial statements and accompanying footnotes
included in the Company's December 31, 1994 Annual Report on Form 10-K.
ORGANIZATION
Excel Realty Trust, Inc. (the "Company") was formed in 1985 and is a
Maryland corporation. The Company is in the business of purchasing and
operating commercial real estate. The Company is operated as a
self-administered, self-managed real estate investment trust (REIT).
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries, Excel Mortgage Funding Corporation
("EMFC") and Excel Credit Corporation ("ECC"). Intercompany accounts and
transactions have been eliminated.
EMFC and ECC were created to facilitate separate financing for a group of
properties as described in Note 7. Of total assets at September 30, 1995,
approximately $160,396,000 were in these subsidiaries.
REAL ESTATE
Land, buildings and building improvements are recorded at cost.
Depreciation is computed using the straight-line method over estimated
useful lives of 40 years for buildings and 2 to 40 years for building
improvements.
Expenditures for maintenance and repairs are charged to expense as
incurred. Significant renovations are capitalized. The cost and related
accumulated depreciation of real estate are removed from the accounts upon
disposition. Gains and losses arising from dispositions are reported as
income or expense.
DEFERRED LEASING AND LOAN ACQUISITION COSTS
Costs incurred in obtaining tenant leases and long-term financing are
amortized to leasing commission expense and interest expense,
respectively, on the straight-line method over the terms of the related
leases or debt agreements.
7
<PAGE> 8
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED, CONTINUED
----------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
INTEREST RATE PROTECTION AGREEMENTS
The Company has entered into two interest rate protection agreements with
an interest rate cap provider for the REMIC loans (see Note 7). The
Company paid approximately $2,114,000 for the agreements which limit the
Company's maximum all inclusive interest rate exposure to 8.5%. The cost
of the agreements is being amortized over the 84 month term of the loans.
REVENUE RECOGNITION
Base rental income attributable to leases is recorded when due from
tenants. Certain of the leases provide for additional rental revenue by
way of percentage rents to be paid based upon the level of sales achieved
by the lessee. These percentage rents are recorded on the accrual basis.
The leases also typically provide for tenant reimbursement of common area
maintenance and other operating expenses which are included in the
accompanying Consolidated Statements of Income as expense reimbursements.
LEASE TERMINATION FEES
Revenue recognition of fees received for lease terminations are deferred
and amortized using the straight-line method over the estimated time to
obtain a new lease on the related property, or until the property is sold,
whichever comes first.
INCOME TAXES
The Company has elected to be treated as a real estate investment trust
under Sections 856 through 860 of the Internal Revenue Code of 1986, as
amended. Under these provisions, the Company and its subsidiaries will not
be subject to federal income tax if 95% of its real estate investment
trust taxable income (before dividends paid deduction) is distributed to
shareholders and certain gross income, asset diversification, share
ownership and disclosure requirements are met.
To date the Company has distributed over 95% of its real estate investment
trust taxable income. Accordingly, no provision for federal income taxes
is included in the accompanying consolidated financial statements.
8
<PAGE> 9
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED, CONTINUED
----------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
NET INCOME PER COMMON SHARE
Net income per common share is based upon the weighted average number of
common shares and common share equivalents outstanding during each period.
Common share equivalents included in the computation represent shares
issuable upon assumed exercise of common stock options and warrants which
would have a dilutive effect. The weighted average shares outstanding for
the nine months ended September 30, 1995 and 1994 were 11,684,018 and
10,875,696 respectively.
2. REGISTRATION STATEMENT:
In May 1995, the Company filed with the Securities and Exchange Commission
a $250,000,000 shelf registration statement. This registration statement
was filed for the purpose of issuing debt securities, preferred stock,
depositary shares, common stock or warrants for general corporate
purposes.
The Company issued from the shelf 2,140,000 shares of common stock in a
publicly underwritten offering at a price of $20.125 per share. Net
proceeds of approximately $40,500,000 from the offering were used to pay
off debt, purchase properties, and to make loans to facilitate the
development of certain properties (see Note 13).
3. REAL ESTATE ACQUISITIONS AND SALES:
In the nine months ended September 30, 1995, the Company acquired, in
separate transactions, seven shopping centers in North Carolina. The total
cost of the seven properties was approximately $37,977,000 of which the
Company assumed $17,800,000 in debt. In October 1995, the Company
purchased a property in South Carolina for approximately $3,300,000 and
assumed $2,500,000 of debt as part of the purchase. Also in October 1995,
four properties were contributed to Excel Realty Partners, L.P. (see Note
9).
The Company sold six single tenant properties in the nine month period
ended September 30, 1995 for a total net sales price of $9,672,000. A net
loss of $49,000 was recognized on these sales.
9
<PAGE> 10
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED, CONTINUED
----------
4. MASTER LEASE AND OPTION AGREEMENT:
In January 1995, the Company entered into master lease and option
agreements to purchase eleven shopping centers in North Carolina. The
master leases require the payment equal to eight percent of the
lessor/sellers equity in the properties and give the Company all
management and operating responsibilities for the shopping centers. Under
the master leases, the Company receives all cash flow, if any, in excess
of the master lease payments. Each master lease has a term of five years.
The option agreements give the Company the option to purchase the
properties through February 1, 1996. Through September 1995, the Company
has purchased seven of the properties (see Note 3) and anticipates
acquiring three of the remaining four properties. The estimated purchase
price on these three properties is approximately $33,000,000. These
properties have existing mortgages of approximately $22,000,000. Upon
exercise of the option agreements, the Company receives the benefit of all
principal amortization occurring from January 1, 1995 until the time of
purchase which reduces the purchase price of the properties. Principal
amortization of $375,000 was credited to the Company on the seven
properties purchased.
At September 30, 1995, the Company has on deposit in an escrow account
$3,026,000 related to the above option agreements. These funds will be
returned as the remaining three properties are purchased. Deposits of
$2,000,000 may be forfeited if certain properties are not purchased within
the time specified by the option agreements.
5. STATEMENTS OF CASH FLOWS - SUPPLEMENTAL DISCLOSURE (IN THOUSANDS):
The amounts paid for interest during the nine months ended September 30,
1995 and 1994 were $12,301 and $9,549, respectively. No income taxes were
paid in either period.
The Company acquired real estate properties and interests in partnerships,
without the use of cash, for the nine months ended September 30, 1995 and
1994 as summarized below:
<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Mortgage notes payable and other liabilities assumed $17,788 $21,943
Common stock issued 918 6,626
------- -------
Net real estate purchased without cash $18,706 $28,569
======= =======
</TABLE>
10
<PAGE> 11
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED, CONTINUED
----------
6. NOTES RECEIVABLE (IN THOUSANDS):
The Company had the following notes receivable at September 30, 1995 and
December 31, 1994:
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Notes from affiliates, interest at 14% per annum, collateralized
by real estate. Due upon demand (see Note 13). $ 15,355 $ -
Notes from development companies, interest from 10% to 14%
per annum. Maturity dates vary from the completion of
certain properties or earlier, to January 1996. 8,164 8,306
Other 783 793
-------- -------
Total notes receivable $ 24,302 $ 9,099
======== =======
</TABLE>
7. MORTGAGES PAYABLE (IN THOUSANDS):
The Company had the following mortgages payable at September 30, 1995 and
December 31, 1994:
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Mortgage notes at 6.6615% to 10%, payable in installments through 2018
(monthly payments at September 30, 1995 of $1,772):
Pass through certificates/bonds:
Public (see below) $ 78,667 $ 96,486
Private 30,235 31,187
Insurance companies 70,942 68,622
Banks 15,366 1,914
Other 2,948 2,948
-------- --------
Total mortgages payable $198,158 $201,157
======== ========
</TABLE>
11
<PAGE> 12
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED, CONTINUED
----------
7. MORTGAGES PAYABLE (IN THOUSANDS), CONTINUED:
In March 1994, EMFC and ECC completed a securitized mortgage financing
known as a Real Estate Mortgage Investment Conduit (a "REMIC"). Pursuant
to this transaction, ECC issued and sold publicly, in an underwritten
offering, $100,000 aggregate principal amount of its Commercial Mortgage
Pass-Through Certificates. The Class A certificates ($45,667 at September
30, 1995) were rated AAA and the Class B certificates ($33,000 at
September 30, 1995) were rated AA by Fitch Investors Services, Inc. and
Duff and Phelps Credit Rating Co. The Certificates bear interest at a
variable rate equal to one-month LIBOR plus 60 basis points (6.6615% at
September 30, 1995 for the Class A Certificates) and one-month LIBOR plus
80 basis points (6.8615% at September 30, 1995 for the Class B
Certificates), and mature on February 27, 2001. To protect against future
increases in interest rates, ECC entered into interest rate protection
agreements with an interest rate cap provider which limits ECC's maximum
all-inclusive interest rate exposure to 8.5%. The Certificates are fully
prepayable at any time without penalty. At September 30, 1995, the
Certificates were collateralized by 52 retail and commercial properties
which are owned by EMFC.
The principal payments required to be made on mortgages payable over the
next five years are as follows:
<TABLE>
<CAPTION>
YEAR
----
<S> <C>
1995, remaining three months $ 1,462
1996 8,997
1997 6,248
1998 9,091
1999 26,694
Thereafter 145,666
---------
$ 198,158
=========
</TABLE>
Mortgages of $60,801 are fully amortizing with no balloon payments with
the final monthly payments coming between the years 2004 and 2018.
12
<PAGE> 13
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED, CONTINUED
----------
8. NOTES PAYABLE (IN THOUSANDS):
The Company had the following notes payable at September 30, 1995 and
December 31, 1994:
<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
$4,000 line of credit payable to a financial institution,
interest at the lender's base rate plus 1.25% (8.91% at
September 30, 1995), Collateralized by certain notes
receivable. Due September 1996. $ 3,179 $ -
Other 5 15
------- ----
Total notes payable $ 3,184 $ 15
======= ====
</TABLE>
The Company has a loan agreement whereby a bank has committed to provide a
revolving credit facility of up to $25,000 at a rate of LIBOR plus 2% (the
actual amount available is dependent on compliance with certain
covenants). In October 1995, the Company borrowed $10,040 related to Excel
Realty Partners, L.P. (see Note 9) and to fund other operating costs. The
Company also has a $1,000 unsecured revolving bank line of credit, all of
which is available at September 30, 1995.
9. COMMITMENTS AND CONTINGENCIES:
In April 1995, the Company formed a Delaware Limited partnership, Excel
Realty Partners, L.P. ("ERP") to own and manage certain real estate
properties. The Company is a 1% partner and the sole general partner of
ERP. In May 1995, ERP entered into an agreement for certain unaffiliated
entities to contribute to the partnership up to 25 shopping centers in the
southeastern United States. The Company anticipates that a minimum of 14
of these properties will be contributed to ERP. In October, four real
estate properties with a value of approximately $22,600,000, net of
outstanding mortgages payable of $15,700,000, were contributed to ERP for
limited partnership units of approximately $4,000,000 and cash of
approximately $2,900,000. ERP also repaid $1,700,000 of the mortgages
payable upon closing. The cash used in the transactions was funded by the
Company in exchange for notes from ERP and general partnership
contributions to ERP.
10. DIVIDENDS:
In April 1995, the Company adopted a policy of declaring dividends to
stockholders of record on the first day of the succeeding quarter, instead
of the last day of the current quarter. The payment date of 15 days
following each quarter remained unchanged. As such, in 1995, dividends of
$0.43 per share were declared on March 31 and paid on April 15; dividends
of $0.445 per share were declared on July 1 and paid on July 15; and
dividends of $0.445 per share were declared on October 1 and paid on
October 15 . Total dividends of $5,836,000 were paid in October 1995.
Dividends of $0.415, $0.43, and $0.43 per share were declared for each
quarter for the nine months ended September 30, 1994, respectively.
13
<PAGE> 14
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED, CONTINUED
----------
11. MINIMUM FUTURE RENTALS (IN THOUSANDS):
The Company leases its shopping centers and single-tenant buildings to
tenants under noncancelable operating leases generally requiring the
tenant to pay a minimum rent adjusted by either (i) fixed increases, (ii)
a percentage of gross sales, or (iii) a CPI index. The leases either (i)
require the tenant to reimburse the Company for the tenant's share of real
estate taxes and other common area maintenance expenses, or (ii) require
the tenant to pay all expenses of operating the property such as insurance
and property taxes, including structural repairs and maintenance.
Minimum future rental revenue for the next five years for the commercial
real estate currently owned at September 30, 1995 (not including
properties that are being master leased) and subject to noncancelable
operating leases is as follows:
<TABLE>
<CAPTION>
YEAR
----
<S> <C>
1995, remaining three months $ 10,560
1996 41,069
1997 39,422
1998 37,046
1999 34,754
Thereafter 314,443
</TABLE>
12. LEASE TERMINATION FEES
In July 1995, the Company received $3,535,000 in lease termination fees
related to three single tenant properties. The Company is presently
negotiating the sale of these properties. For the nine months ended
September 30, 1995, the Company recognized approximately $1,041,000 in
rental revenue from lease termination fees, including single amounts of
$300,000 in March 1995 and $242,000 in September 1995 related to two
properties that were leased to new tenants. The Company has $3,565,000 of
deferred income remaining related to lease termination fees at September
30, 1995.
13. RELATED PARTY TRANSACTIONS:
In April 1995, ERT Development Corporation ("EDV"), a Delaware
Corporation, was organized. The Company owns 100% of the outstanding
preferred shares of EDV. The preferred shares receive 95% of the after-tax
profits, if any, from EDV. EDV was formed to acquire, develop, hold, and
sell real estate in the short-term for capital gains and/or receive fee
income. At September 30, 1995, the Company had $15,355,000 in notes
receivable outstanding from EDV with interest at 14%. Total interest
income for the nine months ended September 30, 1995 recognized from EDV
was approximately $1,109,000. In the third quarter of 1995, the Company
also recognized as income $344,000 in development fees from EDV.
14
<PAGE> 15
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS
NATURE OF BUSINESS
Excel Realty Trust, Inc. (the "Company") is a self-administered, self-managed
equity real estate investment trust ("REIT") which owns and manages commercial
retail income-producing properties primarily leased on a long-term basis. The
terms of such leases typically provide that the tenant is responsible for all
costs and expenses associated with the ongoing maintenance of the property,
including but not limited to property taxes, insurance and common area
maintenance. The majority of the single tenant property leases also require that
tenants pay for roof and structure repairs and maintenance. The properties are
generally either (i) neighborhood or community shopping centers, anchored by a
major retail discount department store and a major grocery chain store, or (ii)
single tenant properties leased to a major retail tenant.
The Company has operated and intends to operate in a manner to qualify as a REIT
under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended.
As a REIT, the Company is not subject to federal income tax with respect to that
portion of its income which meets certain criteria and is distributed annually
to the stockholders.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow from operations has been the principal source of capital to fund the
Company's on-going operations. The Company's issuance of common shares, use of
the Company's existing credit facilities, and long-term mortgage financing have
been the principal sources of capital required to fund its property
acquisitions. In order to continue to expand and develop its portfolio of
properties, the Company may seek to obtain funds through additional equity
offerings or debt financing in a manner consistent with its intention to operate
with what it believes to be an appropriate debt level with respect to prudent
interest coverage ratios. In April 1995, the Company increased its quarterly
dividends from $0.43 per share to $0.445 per share. The Company anticipates that
adequate cash will be available to fund its operating and administrative
expenses, continuing debt service obligations and the payment of dividends in
accordance with REIT requirements in both the short and long-term.
In May 1995, the Company filed with the Securities and Exchange Commission a
$250,000,000 shelf registration statement. This registration statement was filed
for the purpose of issuing debt securities, preferred stock, depositary shares,
common stock or warrants for general corporate purposes. In 1995, the Company
issued from the shelf 2,140,000 shares of common stock in a publicly
underwritten offering at a price of $20.125 per share. Net proceeds of
$40,500,000 from the offering were used to repay an existing loan agreement,
purchase properties, and make loans to ERT Development Company (see below) and
other development companies for the purpose of taking advantage of short-term
development opportunities.
The Company has a loan agreement whereby a bank has committed to loan the
Company up to $25,000,000 at a rate of LIBOR plus 2% in a secured revolving
credit facility. The actual amount available to the Company is dependent on
certain covenants such as the aggregate value of unencumbered properties and
meeting certain debt service ratios. In October 1995, the Company borrowed
$10,040,000 under this agreement, primarily to loan money to Excel Realty
Partners, L.P. (as described below) and to fund other operating costs. The
Company has received a letter of intent from the bank to convert the credit
facility to an unsecured line of $150,000,000, although there can be no
assurance that this change will occur. Additionally, the Company has a line of
credit of $4,000,000 collateralized by certain notes receivables, of which
$821,000 was available at November 7, 1995. Finally, the Company has a unsecured
revolving $1,000,000 line of credit, all of which is available as of November 7,
1995.
In January 1995, The Company entered into master lease and option agreements to
purchase eleven shopping centers in North Carolina. The master leases require
payment equal to eight percent of the lessor/seller's equity in the properties
and give the Company all management and operating responsibilities for the
shopping centers. Under the master leases, the Company receives all cash flow,
if any, in excess
15
<PAGE> 16
of the payments required to be made to the lessor/seller. Each master lease has
a term of five years. The option agreements give the Company the option to
purchase each property through February 1, 1996. Through September 30, 1995, the
Company has purchased seven of the properties and anticipates acquiring three of
the remaining four properties. The estimated purchase price on the three
properties is approximately $33,000,000. At September 30, 1995, the Company has
on deposit in an escrow account $3,026,000 related to the option agreements.
These funds will be returned as the properties are purchased. Deposits of
$2,000,000 may be forfeited if certain of the properties are not purchased
within the time specified by the option agreement.
In April 1995, the Company formed a Delaware Limited partnership, Excel Realty
Partners, L.P. ("ERP") to own and manage certain real estate properties. The
Company is a 1% partner and the sole general partner of ERP. In May 1995, ERP
entered into an agreement with a developer unaffiliated with the Company,
whereby the developer will contribute up to 25 shopping centers (see below) in
the southeastern United States. The agreement calls for the developer to
contribute the properties to ERP for limited partnership units and cash. The
units will be exchangeable into common shares of the Company at prices of $21.50
and $20.70 per share. The partnership units priced at $21.50 will be
exchangeable anytime after one year from closing and adjust to the existing
market price of the common shares of the Company at the time of the exchange.
The partnership units priced at $20.70 are exchangeable anytime after two years
and do not adjust to the then existing market price, but exchange on a basis of
one partnership unit for one common share of the Company. As part of the
agreement, after the unit holders receive annual per unit distributions of $1.72
for the $21.50 units and $1.78 for the $20.70 units, the Company will be
entitled to receive 99% of all income and gains, if any. ERP will assume the
existing mortgages on the centers. In addition to its 99% share of profits, the
Company will initially contribute cash for a 1% equity position in the limited
partnership. All transactions are subject to the completion of property due
diligence and one or more properties may be eliminated as result of such due
diligence. In October 1995, four real estate properties were contributed to ERP
by various unrelated limited partners. The value of the four properties was
approximately $22,600,000. The partnership assumed approximately $15,700,000 in
debt, issued limited partnership units of approximately $4,000,000, and paid
approximately $2,900,000 in cash. ERP paid off $1,700,000 of indebtedness after
properties were contributed to the partnership. ERP borrowed approximately
$4,554,000 from the Company in notes payable to facilitate the cash requirements
of the transactions. The Company anticipates that a minimum of ten additional
properties will be contributed to ERP. The value of these ten properties is
approximately $64,000,000 of which ERP would assume approximately $54,000,000 of
existing indebtedness and pay $10,000,000 in a combination of cash and limited
partnership units. It is anticipated that the cash requirements would be
principally loaned to ERP by the Company. There is no assurance that all or any
of such properties would be contributed.
In April 1995, ERT Development Corporation ("EDV"), a Delaware Corporation, was
organized. The Company owns 100% of the outstanding preferred shares of EDV. EDV
was formed to acquire, develop, hold, and sell real estate in the short-term for
capital gains and/or receive fee income. The Company is to receive 95% of EDV's
net income after income taxes are paid, if any, in the form of dividends.
Additionally in 1995, EDV paid approximately $50,000 per month of the Company's
general and administrative expenses that are now being shared by EDV. At
September 30, 1995, the Company had $15,355,000 outstanding in notes receivable
from EDV with interest at 14%. Total interest income for the nine months ended
September 30, 1995 recognized from EDV was approximately $1,109,000. In the
third quarter of 1995, the Company also recognized $344,000 in development fees
from EDV.
In July 1995, the Company received $3,535,000 in lease termination fees related
to three single tenant properties which are presently held for sale. In the nine
months ended September 30, 1995, the Company recognized approximately $1,041,000
in rental revenue from lease termination fees, including single amounts of
$300,000 in March 1995 and $242,000 in September 1995 when two properties were
re-leased. The Company has $3,565,000 of deferred rental income remaining
related to lease termination fees at September 30, 1995. The Company will
recognize this amount as revenue over the estimated time to obtain new leases on
each property, or until each property is sold, whichever comes first.
With the cash balance of $4,395,000, net accounts receivable of $2,365,000, and
the available borrowing
16
<PAGE> 17
capacity from existing loan commitments mentioned above, at September 30, 1995
the Company had sufficient funds available to pay current obligations including
accounts payable of $1,034,700, interest payable of $836,000, and the October
1995 dividend payment of $5,836,000.
The cash position of the Company at September 30, 1995 increased by a net
$264,000 when compared to December 31, 1994. The change in cash was principally
from the following which is not meant to be an all inclusive statement of cash
flows:
Cash provided by financing activities amounted to $7,605,000. The net increase
is primarily due to the Company's offering of common stock described above.
Total cash received from stock issued was $43,707,000 less stock selling and
offering costs of $2,623,000. Additionally, the Company received $21,409,000
from notes payable. Netted against these amounts are payments of mortgages and
notes payable of $39,027,000 and dividends paid of $15,112,000.
Cash provided by operations amounted to $21,903,000, primarily related to net
income of $13,144,000 and non-cash adjustments to net income of depreciation and
amortization of $7,334,000. Additionally, other liabilities accounted for
$2,749,000, primarily relating to deferred income from lease termination fees.
Increases in accounts receivable of $1,152,000 and other assets of $1,249,000
are netted against the cash provided from operations.
Net cash decreased by $29,244,000 from investing activities. Of this amount,
$29,409,000 was used to make loans to EDV and other development companies,
$21,387,000 was used for real estate acquisitions and building improvements and
$6,736,000 was paid in escrow deposits of which $4,000,000 related to the master
lease and purchase option agreement described above. Netted against the cash
used for investing activities are $14,206,000 received from payments on notes
receivable, $9,672,000 obtained from the sale of six properties, and $4,725,000
in escrow deposits collected.
The Company has elected REIT status for federal income tax purposes and must
distribute at least 95% of its taxable income to its stockholders in order to
avoid federal income taxes. Although the Company receives most of its rental
revenue on a monthly basis, it intends to make quarterly dividend payments.
Amounts accumulated for dividends will be invested by the Company in short-term
marketable instruments including deposits at commercial banks, money market
accounts, certificates of deposit, U.S. government securities, commercial paper
or other liquid investments (including GNMA, FNMA, and FHLMC mortgage-backed
securities) as the Board of Directors deems appropriate.
RESULTS OF OPERATIONS
Comparison of the three months ended September 30, 1995 to the three months
ended September 30, 1994.
Net income increased $1,997,000, or 56% to $5,534,000, $0.43 per share, for the
three months ended September 30, 1995 from $3,538,000, $0.33 per share, for the
same period in 1994. Dividends per share were $0.445 for the three months ended
September 30, 1995 and $0.43 for the same period in 1994.
Almost all revenue and expense amounts have increased in the three months ended
September 30, 1995 from the three months ended September 30, 1994 primarily due
to the growth of the Company's real estate portfolio. As of January 1, 1995, the
Company entered into master lease and option agreements to manage and/or
purchase eleven shopping centers in North Carolina (the "North Carolina
Properties") (see Liquidity and Capital Resources).
Total revenue increased $2,872,000 or 29%, to $13,521,000 for the three months
ended September 30, 1995 from $10,649,000 for the three months ended September
30, 1994. The North Carolina Properties accounted for revenue of $2,270,000.
Total expense reimbursements from tenants increased $414,000, due to increased
property expenses. Additionally in 1995, the Company recognized $242,000 in
rental revenue from a lease termination fee for a property that was subsequently
re-leased. Netted against the increase in revenue were rents related to the
termination of the master lease of the Galleria in Scottsdale,
17
<PAGE> 18
Arizona which is currently held for sale. Prior to its termination on August 1,
1995, the master lease accounted for $80,000 in monthly rental revenue.
Total operating expenses increased $1,754,000 or 98%. Of this amount, master
lease expense accounted for $948,000 and other expenses related to the North
Carolina Properties accounted for $410,000. Increased expenses incurred by the
Company related to the Galleria terminated master lease agreement amounted to
$138,000. General and administrative expenses decreased by $45,000 in the 1995
third quarter despite the Company's additional properties. This is primarily due
to the payment of expenses in the amount of approximately $50,000 per month by
EDV.
Interest expense increased $825,000 or 22% from 1994 to $4,604,000 in 1995. In
July 1995, the Company wrote off $195,000 of loan costs to interest expense
related to a partial pay-off of the REMIC debt. Also, during the third quarter
of 1995, the Company had $3,179,000 of outstanding debt from a line of credit.
The remaining increase in interest expense is a change in the Company's debt
type and the related higher interest rates. Although overall mortgage debt has
not changed significantly from the prior year, the REMIC debt, which carries
interest rates of 6.6615% to 6.6815% at September 30, 1995, is approximately
$19,779,000 lower at September 30, 1995 than at September 30, 1994. The decrease
in REMIC debt has been offset by an increase in other mortgage debt which
carries interest rates between 8% to 10%.
Interest and other income increased $1,493,000 or 508% from 1994 primarily
related to additional cash invested and additional loans made to EDV and other
development companies. The Company had $24,302,000 in notes receivable at
September 30, 1995 compared to $9,099,000 at September 30, 1994. Additionally,
in September 30, 1995, the Company received fees of $360,000 for the development
of two real estate projects.
Comparison of the nine months ended September 30, 1995 to the nine months ended
September 30, 1994.
Net income increased $2,849,000, or 28% to $13,144,000, $1.12 per share, for the
nine months ended September 30, 1995 from $10,295,000, $0.95 per share, for the
same period a year ago. Dividends per share decreased to $0.88 for the nine
months ended September 30, 1995 from $1.28 for the same period in 1994. The
decrease in dividends related to a change in the Company's dividend policy. In
April 1995, the Company changed its record date from the last day of each
quarter, to the first day of the following quarter. As such, dividends of $0.445
per share, were declared on July 1 and October 1, 1995 instead of June 30 and
September 30, 1995. Had the Company not changed its record date, dividends per
share for the nine months ended September 30, 1995 would have been $1.32.
Almost all revenue and expense amounts have increased in the nine months ended
September 30, 1995 from the nine months ended September 30, 1994 primarily due
to the growth of the Company's real estate portfolio. As previously noted, on
January 1, 1995, the Company entered into master lease and option agreements to
manage and/or purchase the North Carolina Properties. Additionally, the Company
acquired nineteen properties in 1994 for which a full year's operations were
incurred in 1995. Twelve of the properties were shopping centers that on
average, have greater rents than the six single tenant properties sold in 1995
and the six single tenant properties sold in 1994.
Total revenue increased $10,009,000 or 33%, to $39,928,000 for the nine months
ended September 30, 1995 from $29,919,000 for the nine months ended September
30, 1994. The North Carolina Properties accounted for revenue of $6,569,000.
Also, expense reimbursements from tenants increased $1,065,000 due to an overall
increase in property related expenses.
Total operating expenses increased $5,549,000 or 108%. Of this amount, the
master lease expense accounted for $3,834,000 and other expenses related to the
North Carolina Properties accounted for $988,000. General and administrative
expenses decreased by $469,000 in the first three quarters of 1995. This was
primarily due to the payment of bonuses by the Board of Directors to the
executive officers of the Company in the amount of $328,000 in the first quarter
of 1994. A similar expense was not incurred
18
<PAGE> 19
in the first quarter of 1995 as bonuses were accrued for at December 31, 1994.
Additionally, expenses of approximately $450,000 were paid by EDV for the first
nine months of 1995. Overall, the other operating expenses increases were due to
the growth of the Company.
Depreciation expense for the nine months ended September 30, 1995 was $5,101,000
compared to $4,447,000 for the nine months ended September 30, 1994, a $654,000
or 15% increase. The increase is primarily due to a full period of depreciation
in 1995 on properties acquired in the first three quarters of 1994 and the seven
North Carolina properties purchased in 1995. Amortization expense of $768,000 in
1994 was primarily due to a management contract which was fully amortized in
1994. Amortization expense in 1995 was $3,000.
Interest expense increased $3,894,000 or 38% from 1994 to $14,038,000 in 1995.
The increase is primarily attributable to additional outstanding debt during the
period. During 1995, the Company paid interest on a bank loan of which
$18,230,000 was outstanding before being repaid in June. Also, in March 1994,
the Company received $100 million in a securitized mortgage financing known as a
Real Estate Mortgage Investment Conduit (a "REMIC"). The REMIC financing
replaced approximately $42,000,000 of higher interest rate debt. The remaining
proceeds were mostly used to purchase additional properties. As such, in
addition to the increased debt during 1995, interest expense for the first nine
months of 1995 was incurred on the REMIC debt for the full period compared to
six and half months in the first three quarters of 1994.
ECONOMIC CONDITIONS
The majority of the Company's leases contain provisions designed to mitigate the
adverse impact of inflation. Such provisions include clauses enabling the
Company to receive percentage rents which generally increase as prices rise,
and/or escalation clauses which are typically related to increases in the
consumer price index or similar inflation indices. In addition, the Company
believes that many of its existing lease rates are below current market levels
for comparable space and that upon renewal or re-rental such rates may be
increased to current market rates. This belief is based upon an analysis of
relevant market conditions, including a comparison of comparable market rental
rates, and upon the fact that many of such leases have been in place for a
number of years and may not contain escalation clauses sufficient to match the
increases in market rental rates over such time. Most of the Company's leases
require the tenant to pay its share of operating expenses, including common area
maintenance, real estate taxes and insurance, thereby reducing the Company's
exposure to increases in costs and operating expenses resulting from inflation.
In addition, the Company periodically evaluates its exposure to interest rate
fluctuations, and may enter into interest rate protection agreements which
mitigate, but do not eliminate, the effect of changes in interest rates on its
variable rate loans.
Many regions of the United States, including regions in which the Company owns
property, may experience an economic recession. Such recessions, or other
adverse changes in general or local economic conditions, could result in the
inability of some existing tenants of the Company to meet their lease
obligations and could otherwise adversely effect the Company's ability to
attract or retain tenants. The Company's shopping centers are typically anchored
by discount department stores, supermarkets and drug stores which usually offer
day-to-day necessities rather than high priced luxury items. These types of
tenants, in the experience of the Company generally continue to maintain their
volume of sales despite a slowdown in economic conditions.
Kmart Corporation ("Kmart") is the Company's largest tenant in terms of base
rental revenues with 19 properties comprising approximately 14% of the Company's
annualized base rental income. The Company has nine Kmart stores that are
anchors in shopping centers where the Company owns the entire center. Rental
income from stores in these shopping centers comprise approximately 8.6% of the
total annualized base rent that is received by the Company. Kmart is one of the
largest retailers in the world based on sales volume. Kmart has experienced flat
or declining earnings in recent periods and has from time to time announced
plans to close some of its existing stores. The Company owns six stores that
have been closed by Kmart, one of which was immediately subleased by
19
<PAGE> 20
Kmart. In July 1995, the Company received $3,535,000 in lease termination fees
from Kmart related to three closed stores. Additionally, negotiations are in
process for termination fees on the two other stores for which Kmart is
continuing to make lease payments. All six of these stores are single tenant
properties and do not anchor a Company owned shopping center. The Company is
currently in negotiations to sell or re-lease five stores. Because of the lease
termination fees received and the continued lease payments from Kmart, the
Company did not experience any lost rental income in 1995. Should Kmart in the
future announce additional store closures, the Company believes Kmart would
continue to pay rent for the term of the leases unless a lease termination fee
is paid. The Company believes that the properties could be sold or re-leased if
needed.
FUNDS FROM OPERATIONS
The Company calculates funds from operations ("FFO") as net income plus
depreciation, amortization, amortized loan and leasing commission costs and loan
costs written off, less gains on sales of real estate. The Company believes that
to facilitate a clear understanding of its operating results, FFO should be
examined in conjunction with its net income as reductions for certain items are
not meaningful in evaluating income-producing real estate, which historically
has not depreciated. The Company generated FFO of $7,797,000 or $0.60 per share
for the three months ended September 30, 1995 which compared to FFO of
$5,675,000 or $0.52 per share for the three month period ended September 30,
1994. The following information is included to show the items included in the
Company's funds from operations for the three months ended September 30, 1995
and 1994 (in thousands except per share amounts):
<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Net income $ 5,537 $ 3,538
Depreciation:
Buildings 1,612 1,502
Tenant improvements 131 71
Amortization (1):
Management contract -- 255
Organization costs 1 1
Leasing commissions 71 41
Loan costs written off 195 --
Gain on sale of buildings (81) (7)
------- -------
Funds from operations - revised definition (2) 7,466 5,401
Loan cost amortization (1) 310 255
Depreciation on furniture,
equipment, and vehicles 21 19
------- -------
Funds from operations $ 7,797 $ 5,675
======= =======
Funds from operations per share $ 0.60 $ 0.52
======= =======
Other Information:
Leasing commissions paid $ 22 $ 75
Tenant improvements paid 93 261
Building improvements paid (Parking lots, roofs, etc.) 350 137
</TABLE>
(1) Only amortization of the management contract and organization costs are
shown as amortization expense in the Consolidated Statements of Income. The
management contract was fully amortized in 1994. Loan cost amortization and loan
costs written off are classified as interest expense and leasing commission
amortization is classified as other operating expenses in the Consolidated
Statements of Income.
(2) Beginning in 1996, the Company will revise its definition of FFO to exclude
the amortization of loan costs and depreciation of furniture, equipment and
vehicles as add-back items. Under this revised definition of FFO, the per share
amounts would have been $0.57 and $0.50 for the three months ended September 30,
1995 and 1994, respectively.
20
<PAGE> 21
PART II. OTHER INFORMATION
Items 1 through 4 have been omitted since no events occurred with respect to
these items.
Item 5. Other Information.
The Company is the 1% general partner of Excel Realty Partners, L.P. ("ERP"). In
October 1995, four properties were contributed to ERP by unaffiliated limited
partners for cash and limited partner units. This transaction is described in
the Management's Discussion and Analysis of Financial Conditions and Results of
Operations. Also in October 1995, the Company acquired one shopping center, and
in the three months ended September 1995, the Company sold one single tenant
property in addition to receiving $3,535,000 in lease termination fees on three
properties. These transactions are described in Notes 3 and 12 to the financial
statements.
Item 6 has been omitted since no events occurred with respect to this item.
21
<PAGE> 22
SIGNATURE
Pursuant to the requirements 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.
Dated: November 7, 1995
EXCEL REALTY TRUST, INC.
- ------------------------
(Registrant)
By:/s/ Gary B. Sabin
-----------------------------------------------
Gary B. Sabin, President
By:/s/ David A. Lund
-----------------------------------------------
David A. Lund, Principal Financial Officer
22
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 4,395,000
<SECURITIES> 0
<RECEIVABLES> 2,365,000
<ALLOWANCES> (548,000)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 374,578,000
<DEPRECIATION> (17,986,000)
<TOTAL-ASSETS> 418,851,000
<CURRENT-LIABILITIES> 8,892,000
<BONDS> 201,342,000
<COMMON> 208,617,000
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 418,510,000
<SALES> 0
<TOTAL-REVENUES> 13,521,000
<CGS> 0
<TOTAL-COSTS> 3,539,000
<OTHER-EXPENSES> 1,764,000
<LOSS-PROVISION> 49,000
<INTEREST-EXPENSE> 4,604,000
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 13,144,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,144,000
<EPS-PRIMARY> 1.12
<EPS-DILUTED> 1.12
</TABLE>
