FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended: September 30, 1995 Commission File Number: 1-9646
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ASR Investments Corporation
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(Exact name of Registrant as specified in its Charter)
Maryland
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(State or other jurisdiction of incorporation or organization)
86-0587826
------------------------------------
(I.R.S. Employer Identification No.)
335 N. Wilmot, Suite 250, Tucson, AZ 85711
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(Address of principal executive offices)
(520) 748-2111
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(Registrant's telephone number, including area code)
(Not applicable)
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(Former Name, former address and former fiscal year,
if changed since last report)
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
---- ----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock (par value $.01) outstanding as of September 30, 1995 were
3,154,494 shares.
<PAGE>
ASR INVESTMENTS CORPORATION
Consolidated Balance Sheets
September 30, 1995 and December 31. 1994
(Dollars in Thousands)
1995 1994
---- ----
(Unaudited)
Assets
Real estate investments
Apartments, net of depreciation $72,317 $66,506
Investments in joint ventures 3,115 1,364
Land for development 3,879 --
Other real estate 1,591 5,186
------- -------
Total real estate investments 80,902 73,056
Mortgage assets 12,804 18,965
Cash 2,290 4,129
Other assets 455 595
------- -------
Total assets $96,451 $96,745
======= =======
Liabilities
Real estate notes
Secured $49,764 $45,825
Unsecured -- 4,868
------- -------
Total real estate notes 49,764 50,693
Notes payable secured by mortgage assets,
net offunds held by trustee of $21,583 -- 6,422
Reverse repurchase liability 4,495 --
Other liabilities 3,830 2,530
------- -------
Total liabilities 58,089 59,645
Stockholders' Equity
40,000,000 shares of $.01 common stock
authorized; 3,303,225 and 3,248,729
shares issued with 148,731 held
in treasury 38,362 37,100
------- -------
Total liabilities and stockholders'
equity $96,451 $96,745
======= =======
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
ASR INVESTMENTS CORPORATION
Consolidated Statements of Net Income
For the Quarters and Nine Months Ended September 30, 1995 and 1994
(In Thousands Except Per Share Amounts)
(Unaudited)
<CAPTION>
Quarters Nine Months
-------------------- --------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Real Estate Operations
Rental income and other income $ 3,419 $ 3,237 $ 10,493 $ 9,249
-------- -------- -------- --------
Operating and maintenance expenses 1,414 1,176 3,827 3,130
Real estate taxes and insurance 366 345 1,116 1,000
Depreciation and amortization 685 526 1,959 1,461
-------- -------- -------- --------
Total operating expenses 2,465 2,047 6,902 5,591
-------- -------- -------- --------
Income from real estate 954 1,190 3,591 3,658
-------- -------- -------- --------
Mortgage Assets
Interest income from mortgage assets 873 1,418 3,063 5,187
Gain on redemption of mortgage assets 473 1,366 4,927 3,920
-------- -------- -------- --------
Income from mortgage assets 1,346 2,784 7,990 9,107
-------- -------- -------- --------
Operating and administrative expenses (612) (425) (2,802) (2,017)
-------- -------- -------- --------
Total Operating Income 1,688 3,549 8,779 10,748
Interest expense and other income
Interest and other income 33 207 708 505
Interest on real estate notes (1,104) (1,129) (3,373) (3,238)
Interest on borrowings secured by mor (47) (553) (170) (2,024)
-------- -------- -------- --------
Net Income $ 570 $ 2,074 $ 5,944 $ 5,991
======== ======== ======== ========
Net Income Per Share of Common
and Common Stock Equivalents $ 0.18 $ 0.67 $ 1.90 $ 1.93
======== ======== ======== ========
Average Shares of Common Stock and
Common Stock Equivalents 3,151 3,100 3,137 3,100
======== ======== ======== ========
Dividends Declared Per Share $ 0.50 -- $ 1.50 --
======== ======== ======== ========
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
ASR INVESTMENTS CORPORATION
Consolidated Statements of Cash Flows
For the Quarters and Nine Months Ended September 30, 1995 and 1994
(In Thousands Except Per Share Amounts)
(Unaudited)
<CAPTION>
Quarters Nine Months
-------------------- --------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 570 $ 2,074 $ 5,944 $ 5,991
Principal noncash charges (credits)
Gain on redemption of mortgage assets -- -- (2,420) --
Depreciation and amortization 716 552 2,048 1,529
Increase in accrual -- -- 705 --
-------- -------- -------- --------
Cash Provided By Operations 1,286 2,626 6,277 7,520
-------- -------- -------- --------
INVESTING ACTIVITIES
Investment in apartments (855) (2,350) (7,858) (65,054)
Investment in joint ventures 52 -- (1,751) --
Purchase of land for development (524) -- (3,879) --
Sale of other real estate 1,252 -- 1,252 2,228
Other real estate assets (19) -- 2,343 --
Reduction in mortgage assets 1,930 3,116 6,161 17,516
Decrease in other assets 59 357 140 921
-------- -------- -------- --------
Cash (Used in) Provided By Investing
Activities 1,895 1,123 (3,592) (44,389)
-------- -------- -------- --------
FINANCING ACTIVITIES
Issuance of real estate notes payable 455 -- 6,895 52,178
Payment of loan costs -- -- -- (1,199)
Repayment of notes payable
Real estate notes (2,491) (331) (7,824) (885)
Notes secured by mortgage assets -- (3,315) (4,002) (15,913)
Reverse repurchase liability 1,487 -- 4,495 --
Exercise of stock options 22 -- 45 --
Payment of dividends (1,577) -- (4,727) --
Increase (decrease) in other liabilities 457 (36) 594 1,512
-------- -------- -------- --------
Cash (Used in) Provided By Financing
Activities (1,647) (3,682) (4,524) 35,693
-------- -------- -------- --------
Cash
Increase (decrease) during the period 1,534 67 (1,839) (1,176)
Balance - beginning of period 756 9,164 4,129 10,407
-------- -------- -------- --------
Balance - end of period $ 2,290 $ 9,231 $ 2,290 $ 9,231
======== ======== ======== ========
Supplemental Disclosure of Cash Flow Information
Cash paid for Company's interest expense $ 1,315 $ 1,984 $ 4,105 $ 5,625
======== ======== ======== ========
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
ASR INVESTMENTS CORPORATION
Consolidated Statement of Stockholders' Equity
For the Nine Months Ended September 30, 1995
(In Thousands)
(Unaudited)
<CAPTION>
Common
Additional Stock in
Number of Par Paid-In Notes Treasury -
Shares Value Capital Deficit Receivable at Cost Total
--------- --------- --------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1995 16,244 $ 162 $ 154,996 ($115,747) -- ($ 2,311) $ 37,100
Reverse stock split (12,995) (130) 130 -- -- -- 0
Stock issuance 54 1 696 -- ($ 652) -- 45
Net income -- -- -- 5,944 -- -- 5,944
Dividends declared -- -- -- (4,727) -- -- (4,727)
--------- --------- --------- -------- --------- --------- ---------
Balance, September 30, 1995 3,303 $ 33 $ 155,822 ($114,530) ($ 652) ($ 2,311) $ 38,362
========= ========= ========= ======== ========= ======== =========
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
ASR INVESTMENTS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Quarters and Nine Months Ended
September 30, 1995 and 1994
NOTE 1 - BASIS OF PRESENTATION
The accompanying interim consolidated financial statements do not include
all of the information and disclosures generally required for annual financial
statements. They include the accounts of the Company and its wholly owned
subsidiaries (collectively the "Company"). Investments in joint ventures in
which the Company does not own a controlling interest are accounted for under
the equity method. All significant inter-company balances and transactions have
been eliminated. In the opinion of management, all adjustments (consisting of
normal recurring adjustments) considered necessary for a fair presentation have
been included. These interim operating results are not necessarily indicative of
the results that may be expected for the entire year. These interim consolidated
financial statements should be read in conjunction with the December 31, 1994
audited consolidated financial statements and notes thereto.
Common Stock
On July 7, 1995, the Company effected a reverse stock split under which one
new share of common stock was issued in exchange for five shares of outstanding
stock. Accordingly, the consolidated financial statements reflect the reverse
stock split and the number of common stock issued and all the per share amounts
have been adjusted for the reverse stock split.
Reclassification
Certain reclassification has been made to conform the prior years with the
current year presentation.
NOTE 2 - REAL ESTATE INVESTMENTS
At September 30, 1995, the Company owned directly eighteen apartment
communities (2,683 units) located in Arizona, Texas, and New Mexico. In
addition, the Company owned six apartment communities (1,441 units) located in
Arizona through joint ventures with a pension plan affiliate of Citicorp.
In February 1995, the Company purchased a 222-unit community in Mesa,
Arizona for $6,356,000 ($28,631 per unit). The purchase was financed by a
$3,770,000 loan bearing a variable interest rate at 225 basis points over
three-month LIBOR.
In February 1995, the Company acquired a 163-unit community through a joint
venture with a pension plan affiliate of Citicorp. The property was purchased
for $6,858,000 ($42,074 per unit) using a $4,445,000 loan bearing a variable
interest rate at 225 basis points over three-month LIBOR.
In June 1995, the Company acquired a 350-unit luxury apartment community
through a joint venture with a pension plan affiliate of Citicorp for
$23,500,000 ($67,143 per unit). The purchase was financed with a $16,250,000
fixed rate loan at 7.56%. As with all its other joint ventures, the Company is a
15% equity partner and the managing member of the joint ventures. The Company
will receive between 15% and 51% of the total profits and cash flows depending
on the ultimate financial performance of the property.
Apartment communities owned directly by the Company as of September 30, 1995
and December 31, 1994 consisted of the following (in thousands):
1995 1994
-------- --------
Land $ 15,514 $ 13,681
Building and Improvements 56,833 50,583
Accumulated Depreciation (3,954) (1,995)
Restricted Cash and
Deferred Loan Fees 3,924 4,237
-------- --------
Apartments, net $ 72,317 $ 66,506
======== ========
The condensed combined financial statements for the Company's various joint
ventures are as follows (in thousands):
Condensed Combined Statement of Operations
For the Quarter and Nine Months Ended September 30, 1995
Quarter Nine Months
------- -----------
Revenues $ 2,060 $ 4,498
Operating expenses (1,007) (2,152)
Depreciation (463) (975)
Interest expenses (692) (1,547)
------- -------
Net Income (Loss) $ (102) $ 124
======= =======
Allocation of Net Income (Loss)
The Company $ (15) $ 19
Joint Venture Partner $ (87) $ 105
Condensed Combined Balance Sheet
As of September 30, 1995 and December 31, 1994
1995 1994
------- -------
Real estate, at cost net
of depreciation $54,408 $23,778
Cash and other assets 2,378 1,424
------- -------
Total Assets $56,786 $25,202
======= =======
Notes payable $35,166 $15,644
Other liabilities 846 424
------- -------
Total Liabilities 36,012 16,068
------- -------
Equity
The Company 3,115 1,364
Joint venture partner 17,659 7,770
------- -------
Total Equity 20,774 9,134
------- -------
Total Liabilities and Equity $56,786 $25,202
======= =======
NOTE 3 - MORTGAGE ASSETS
The mortgage interests entitle the Company to receive the excess of the cash
flow on pools of mortgage instruments over the required payments on a series of
structured financing which they secure. The Company also has the right to cause
the early redemption of the structured financing under specified conditions. In
such event, the mortgage instruments would be sold and the net proceeds after
the redemption of the structured financing would be remitted to the Company. At
September 30, 1995, the effective prospective yield of the mortgage assets based
on the estimated future cash flows was approximately 28%.
During the first quarter of 1995, the Company exercised the redemption
rights associated with one mortgage asset, sold the underlying mortgage
instruments at a gain of $738,000 and received net proceeds of approximately
$2,800,000. In the second quarter of 1995, the Company sold one of its mortgage
asset for a gain of $1,296,000 and net proceeds of $1,509,000. In the third
quarter 1995, the Company redeemed two mortgage assets that produced redemption
income and net proceeds of $472,755 and $1,500,000, respectively, in the second
half of 1995.
NOTE 4 - NOTES PAYABLE
In February 1995, as provided for by the terms of the loan agreement, the
Company prepaid the entire balance of the notes payable secured by mortgage
assets. The Company recorded a credit to income for the excess accrued
prepayment premium of $2,420,000; such credit has been included in the gain on
redemption of mortgage assets.
In April 1995, the Company prepaid the unsecured notes payable as provided
for by the terms of the note agreement at a discount of $311,000 which was
recorded as a credit to income in the quarter ending June 30, 1995. Also in
April 1995, The Company borrowed $3,000,000 under a reverse repurchase agreement
that was secured by certain mortgage assets with an aggregate book value of
$4,055,000 at June 30, 1995. At September 30, 1995 the book value of the
repurchase agreement and the underlying collateral was $2,170,000 and
$2,824,5635, respectively.
In April 1995, the Company acquired the other 50% interest in a joint
venture to develop a 356-unit apartment community in Tempe, Arizona. The Company
issued a $2,186,000 note secured by the land which was paid off in September
1995 using borrowing of $2,325,000 under a reverse repurchase agreement. The
reverse repurchase agreement is secured by a mortgage asset with an aggregate
book value of $3,336,592.
NOTE 5 - RELATED PARTY TRANSACTIONS
Subject to the supervision of the Company's Board of Directors, Pima
Mortgage Limited Partnership (the "Manager") manages the day-to-day operations
of the Company pursuant to a management agreement which has a current term
through December 31, 1995. The Management fees paid to the Manager for the
quarters and nine months ended September 31, 1995 and 1994 were as follows:
Quarter Nine Months
------------- --------------
1995 1994 1995 1994
---- ----- ----- -----
Base management fee $ 97 $ 142 $ 283 $ 423
Administration fee 52 60 167 189
The Company has a property management agreement with Pima Realty Advisors,
Inc. (the "Property Manager"), an affiliate of the Manager, for each of its
apartment communities. Under the property management agreements, the Property
Manager provides the customary property management services at its cost without
profit or distributions to its owners, subject to the limitation of the
prevailing management fee rates for similar properties in the market. The costs
are allocated to the Company monthly based on the ratio of the number of units
owned by the Company relative to the total apartment units managed by the
Property Manager. For the nine months ended September 30, 1995 and 1994, the
costs allocated to the Company were $304,200 and $95,000 respectively (net of an
allocated credit of $221,000 applicable only in 1994). The costs approximate
2.9% and 1% of rental income for the nine months ended September 30, 1995 and
1994, respectively.
<PAGE>
ASR INVESTMENTS CORPORATION
MANAGEMENT DISCUSSIONS AND ANALYSIS
FOR THE QUARTERS AND NINE MONTHS ENDED
SEPTEMBER 30, 1995 AND 1994
General
ASR Investments Corporation (the Company) is a real estate investment trust
engaged primarily in the acquisition and operation of apartment communities in
the Southwestern United States. In January 1994, the Company acquired its
initial portfolio of seventeen apartment communities (2,461) units located in
Arizona, Texas and New Mexico. In the second half of 1994, the Company acquired
four communities (928 units) in Arizona through joint ventures with a pension
plan affiliate of Citicorp. In February 1995, the Company acquired a 222-unit
community in Arizona directly and a 163-unit community in Arizona through a
joint venture with a pension plan affiliate of Citicorp. In June 1995, the
Company acquired a 350-unit luxury apartment community located in Arizona
through a joint venture with a pension plan affiliate of Citicorp. The Company
is a 15% equity partner and the managing member of the joint ventures. The
Company will receive between 15% and 51% of the net profits and cash flow
depending on the ultimate performance of the joint ventures.
The Company continues to own mortgage assets acquired prior to 1993 to
generate cash flows for apartment acquisition and other corporate purposes.
These mortgage assets entitle the Company to receive the excess of the cash flow
on pools of mortgage instruments over the required payments on a series of
structured financing which they secure. The Company also has the option to cause
the early redemption of the structured financing (generally at par) under
specified conditions. In such event, the mortgage instruments would be sold and
the net proceeds after the redemption of the structured financing would be
remitted to the Company. Those redemption transactions, however, occur from time
as the conditions are met rather than on a monthly or quarterly basis;
therefore, the amount of net proceeds and gain from the redemption transactions
fluctuate significantly from quarter to quarter.
On July 7, 1995, the Company effected a reverse stock split under which one
new share of common stock was issued in exchange for five shares of outstanding
stock. Accordingly, the consolidated financial statements reflect the reverse
stock split and the number of common stock issued and all the per share amounts
have been adjusted for the reverse stock split.
Results of Operations
Quarters Ended September 30, 1995 and 1994
- ------------------------------------------
The Company had net income of $570,000 ($0.18 per share) for the third
quarter of 1995 compared with $2,074,000 ($0.67 per share) for the same periods
in 1994. The decrease is primarily due to the decrease ($1,438,000) in income
from mortgage assets.
Income and expenses from real estate operations for the quarter ended
September 30, 1995 increased from the same period in 1994 due to the acquisition
of an apartment community in February, 1995. On the "same store" basis, rental
and other income decreased by $67,000 due to lower vacancy rates and to
concessions in the Tucson area. While the average rental rate for the quarter
ended September 30, 1995 increased by 6.57% over the same quarter in 1994, the
average occupancy rate decreased from 93.85% to 87.55%. The lower vacancy rate
also caused marketing and turnover expenses to increase. Depreciation expense
increased due to capital expenditures incurred on the properties in 1994 and
1995.
Income accrued on mortgage assets decreased due to lower balances as a
result of amortization and redemption of the assets. Gain on redemption of
mortgage assets was lower because in 1995, most of the redemption transactions
occurred in the first quarter while in 1994, most occurred in the second and
third quarters.
Operating expenses increased due to the dividend equivalent payments
($200,000) related to the stock options and stock appreciation rights granted in
December 1993.
Interest income and interest expenses were higher in 1994 due to the
restricted cash and the related notes payable secured by mortgage assets; the
notes were paid off in February 1995.
Nine Months Ended September 30, 1995 and 1994
- ---------------------------------------------
The Company had net income of $5,944,000 ($1.90 per share) for the nine
months ended September 30, 1995 compared with $5,991,000 ($1.93 per share) for
the same period in 1994.
Income and expenses from real estate operations for the nine months ended
September 30, 1995 increased from the same period in 1994 due to the acquisition
of an apartment community in February, 1995. Net operating income before
depreciation expense from the apartments increased by $431,000 in 1995 over
1994. On the "same store" basis, rental and other income increased by $587,000
(6.36%) due to a 10.42% increase in rental rates which was mitigated by a
decrease in occupancy rate from 94.83% 90.99%. The lower occupancy rate also
caused marketing and turnover expenses to increase. Depreciation expense
increased due to capital expenditures incurred on the properties in 1994 and
1995.
Income accrued on mortgage assets decreased due to lower balances as a
result of amortization and redemption of the assets. Gain on redemption of
mortgage assets was higher in 1995, consisting of $1,211,000 from the redemption
of three mortgage assets, $2,420,000 from the reversal of the excess prepayment
penalty accrued in 1993, and $1,296,000 from the sale of two mortgage assets.
The gains of $3,920,000 in 1994 resulted from the redemption of two mortgage
assets.
Operating expenses increased due to the dividend equivalent payments
($600,000) related to the stock options and stock appreciation rights granted in
December 1993.
Interest income increased due to a gain of $311,000 from the repayment of
the unsecured real estate note payable. Interest expenses were lower in 1995 due
to the repayment of the notes payable secured by mortgage assets in February
1995.
Liquidity, Capital Resources and Commitments
Cash provided by operations in the 1995 quarter was lower compared with the
1994 quarter due to a lower gain on redemption of mortgage assets. Operating
cash flow (net of interest expense) from the apartments was $605,000 for the
1995 quarter compared with $587,000 for the same period in 1994. The Company
used the proceeds ($1,200,000) from the sales of other real estate and reverse
repurchase borrowing to pay off the secured note associated with the land under
development for a 356-unit apartment community in Tempe, Arizona.
For the first nine months of 1995, operating cash flow (net of interest
expense) from the apartments was $2,323,000 compared with $1,881,000 for the
same period in 1994. In addition, the Company received cash flows from mortgage
assets of $11,561,000 (net of interest expense of $170,000) during the first
nine months of 1995. The Company invested cash equity of $2,577,000 to acquire
an apartment community in Mesa, Arizona, $1,580,000 to improve existing
communities, $1,751,000 to acquire two apartment communities in Mesa and
Scottsdale, Arizona, through joint ventures, and $3,879,000 to acquire the land
for development of a 356-unit community in Tempe, Arizona. The Company prepaid
the notes payable secured by mortgage assets in February 1995 and borrowed a
similar amount using short-term borrowings. The Company plans to pay off the
short-term borrowings with the proceeds from mortgage asset redemptions.
The Company currently depends primarily on the cash flows generated from its
existing mortgage assets to fund the acquisition of apartment communities.
During the first nine months ended September 30, 1995, the mortgage assets
generated cash flows of $11,731,000. Below are estimates of future cash flows
from the mortgage assets beginning with October 1995 using three interest rate
assumptions. Case 2 represents approximate interest rates and forecasts of
prepayment rates made by market participants at September 30, 1995. The assumed
mortgage prepayment rate represents the average of annual prepayment rate
assumed for the underlying mortgage instruments. These estimates assume that the
Company will hold the mortgage assets until the stated maturity. (Dollars are in
thousands):
Case 1 Case 2 Case 3
-------- -------- --------
Assumed one month LIBOR 3.88% 5.88% 7.88%
Assumed prepayment rate 26.26% 15.66% 10.46%
Estimated cash flows (No redemptions)
1995 $ 2,075 $ 1,95 $ 1,836
1996 6,519 5,574 4,602
1997 4,655 4,385 3,845
1998 3,209 3,452 3,293
1999 2,293 2,686 2,812
2000-2018 15,349 29,062 43,676
-------- -------- --------
Total $ 34,100 $ 47,114 $ 60,064
======== ======== ========
Estimated "prospective yield" 28%
========
The Company has the right, under certain conditions, to cause the early
redemption of the structured financing (generally at par) underlying a majority
of the mortgage assets and sell the mortgage instruments. Such early redemptions
and sales of the mortgage instruments increase as well as accelerate the cash
flows from the mortgage assets. Of the $11,731,000 generated by the mortgage
assets during the first nine months of 1995, $5,891,000 were generated by early
redemptions of mortgage assets. Should current conditions continue to prevail,
the Company could continue to exercise early redemptions of mortgage assets and
substantially accelerate the cash flow. The following estimated cash flow under
Case 4 have been prepared using the same interest and prepayment rate
assumptions as Case 2, with the modification that the mortgage assets would be
redeemed at the earliest available date and the underlying mortgage instruments
would be sold at the average (106.58%) of the prices as of October 26, 1995.
(Dollars are in thousands):
Case 4
--------
1995-4th quarter $ 1,955
1996 13,648
1997 8,824
1998 3,975
1999 2,895
2000-2018 28,139
--------
Total $ 59,436
========
Estimated "prospective yield" 79%
========
There can be no assurance that the actual interest and prepayment rates will
be as assumed or that the prices of the mortgage instruments will remain at the
assumed levels. Proceeds from redemptions are highly dependant on mortgage
prices as well as the then outstanding balance of the mortgage instruments. As
an example, if the average price assumed for mortgages sold under Case 4 were to
decrease by half (i.e., the mortgage prices decrease to 103.29%), the estimated
total cash flow would decline by $14,586,000 of which $2,003,000 relate to 1996,
and the estimated prospective yield would be 63%.
At September 30, 1995, the Company had cash of $2,290,000. The Company
intends to use such funds for acquisition of apartments, capital improvements on
existing properties and working capital.
Inflation
The apartment leases generally are for terms of six to twelve months.
Management believes that such short-term leases lessen the impact of inflation
as a result of the ability to adjust rental rates to market levels as leases
expire. To the extent that the inflation rate influences federal monetary policy
and results in rising short-term interest rates or declines in mortgage interest
rates, the income and cash flows from the mortgage assets would be adversely
affected.
<PAGE>
ASR INVESTMENTS CORPORATION
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1995
PART II
OTHER INFORMATION
Item 1. Legal Proceedings - None
-----------------
Item 2. Changes in Securities - Not applicable
---------------------
Item 3. Defaults Upon Senior Securities - Not applicable
-------------------------------
Item 4. Submission of Matters to a Vote of Security Holders - None
---------------------------------------------------
****************
SIGNATURES
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.
ASR INVESTMENTS CORPORATION
Mary C. Swanton Joseph C. Chan
- ------------------- -------------------------
Mary C. Swanton Joseph C. Chan
Controller Executive Vice President,
November 13, 1995 Chief Operating Officer,
Chief Financial and
Accounting Officer
November 13, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<EXCHANGE-RATE> 1
<CASH> 2,290
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,290
<PP&E> 76,271
<DEPRECIATION> 3,954
<TOTAL-ASSETS> 96,451
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 49,764
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 96,451
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</TABLE>
