<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, 1996
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 0-17620
CORPORATE PROPERTY ASSOCIATES 8, L.P., A DELAWARE LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
DELAWARE 13-3469700
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
50 ROCKEFELLER PLAZA, NEW YORK, NEW YORK 10020
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 492-1100
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
NONE NONE
Securities registered pursuant to Section 12(g) of the Act:
LIMITED 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 delinquent 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 Limited 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 Delaware
limited partnership on October 20, 1987. The General Partners of Registrant are
Eighth Carey Corporate Property, Inc. (the "Corporate General Partner"), a
Delaware corporation, and William Polk Carey (the "Individual General Partner").
The Corporate General Partner is wholly owned by the Individual General Partner.
Affiliates of the Corporate General Partner and the Individual General Partner
are also the General Partners of affiliates of Registrant, Corporate Property
Associates ("CPA(R):1"), Corporate Property Associates 2 ("CPA(R):2"), Corporate
Property Associates 3 ("CPA(R):3"), Corporate Property Associates 4, a
California limited partnership ("CPA(R):4"), Corporate Property Associates 5
("CPA(R):5"), Corporate Property Associates 6 - a California limited partnership
("CPA(R):6"), Corporate Property Associates 7 - a California limited partnership
("CPA(R):7"), Corporate Property Associates 9, L.P., a Delaware limited
partnership ("CPA(R):9"), and the advisors of Corporate Property Associates 10
Incorporated ("CPA(R):10"), Carey Institutional Properties Incorporated
("CIP(TM)") and Corporate Property Associates 12 Incorporated ("CPA(R):12").
Registrant has a management agreement with the Corporate General Partner.
According to the terms of this agreement, the Corporate General Partner performs
a variety of management services for Registrant. Registrant has entered into an
agreement with Fifth Rock L.P., an affiliate, for the purpose of leasing office
space. Reference is made to the Prospectus of Registrant dated February 17, 1988
filed pursuant to Rule 424(b), as supplemented by Supplements dated June 22,
1988, August 31, 1988 and November 22, 1988 and as amended on September 22,
1988, January 5, 1989 and March 15, 1989 under the Securities Act of 1933 and
incorporated herein by reference (said Prospectus, as so supplemented and
amended, is hereinafter called the "Prospectus").
Commencing on February 17, 1988, Registrant offered to the
public (the "Public Offering") 49,900 Limited Partnership Units (the "Units")
through Carey Financial Corporation ("Carey Financial"), as Sales Agent, at a
price of $1,000 per Unit. The Units were registered under the Securities Act of
1933 (Registration No. 33-18478). Under the terms of the Public Offering, as the
Registrant received subscriptions for more than 49,900 Units, the Sales Agent
exercised its right to sell a maximum of an additional 50,000 Units. Registrant
issued a total of 67,649.316 Units during the offering and on March 15, 1989
Registrant filed Post Effective Amendment No. 4 with the Securities and Exchange
Commission withdrawing from registration the balance of the Units.
The properties owned by Registrant are described in Item 2.
Registrant's net proceeds from the public offering, less a working capital
reserve, have been fully invested in net leased commercial and industrial real
estate since October 26, 1990, the date of Registrant's final real estate
acquisition.
Registrant has one industry segment consisting of the
investment in and the leasing of industrial and commercial real estate. In 1996,
Registrant transferred ownership of a hotel property in Kenner, Louisiana for an
interest in the operating partnership of a real estate investment trust. See
Selected Financial Data in Item 6 for a summary of Registrant's operations. Also
see the material contained in the Prospectus under the heading INVESTMENT
OBJECTIVES AND POLICIES.
Other than a property formerly leased to NVRyan L.P.
("NVRyan") which is vacant, all of Registrant's properties are leased to
corporate tenants under long-term net leases. A net lease generally requires
tenants to pay all operating expenses relating to the leased properties
including maintenance, real estate taxes, insurance and utilities which under
other forms of leases are often paid by the lessor. 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 require the lessees to indemnify
Registrant and the General Partners for liabilities on all matters related to
the leased properties. Registrant believes that the insurance and indemnity
provided on its behalf by its lessees provides
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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 the leased properties and primary property and liability
coverages on its vacant property. 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 liability or
environmental claims. Currently, there are no claims pending for property
damages or liability claims.
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 (i.e. expenses) reportable with respect
to Registrant's leased properties. Current rental income is reported in Note 9
to the Financial Statements in Item 8. As discussed in Registrant's Management's
Discussion and Analysis in Item 7, 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. Registrant's leases generally provide for multiple renewal terms with the
initial term on its significant leases scheduled to expire between 1998 and
2014. Several of the leases include purchase options, with such options
generally at an exercise price based on the greater of fair market value, as
defined in the lease, or a stated amount.
As Registrant's objective has been to invest in long-term net
leases for properties which are occupied by a single corporate tenant with such
lease obligation backed by the credit of the corporate lessee, Registrant's
properties generally have not been subject to competitive conditions of local
and regional real estate markets. Competitive conditions of local and regional
real estate markets may have a more material affect on Registrant as leases
terminate in the future. No significant leases are scheduled to terminate until
1998. 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.
For the year ended December 31, 1996, revenues from properties
occupied by lessees which accounted for 10% or more of the total operating
revenues of Registrant were as follows: Advanced System Applications, Inc.
("ASA"), 20%; Sybron Acquisition Company, 16% and Dr Pepper Bottling Company of
Texas ("Dr Pepper"), 13%. No other property owned by Registrant accounted for
10% or more of its total operating revenue during 1996. Net of rentals received
from a subtenant at the ASA property, revenues from ASA would have accounted for
18% of the total operating revenues of Registrant. See Note 9 to the Financial
Statements in Item 8.
In September 1996, Registrant and CPA(R):9 sold the two
properties leased to Furon Company ("Furon") to the subtenant for $1,465,495.
Net of its share of an option payment received in 1993, prepayment charges and
other costs, Registrant's share of net proceeds from the sale was $442,496 of
which $287,996 was used to pay a mandatory prepayment on the mortgage. As a
result of the sale and the related mortgage prepayment, annual rent from Furon
and debt service on the Furon properties mortgage loan will decrease by
approximately $55,000 and $38,400, respectively.
The Registrant has a 50% equity interest in a property leased
to General Electric Company ("General Electric"). The initial term of the
General Electric lease ends in July 1998 and the Registrant has not received any
indication as to whether General Electric will renew the lease. The Registrant
share of net flow from the General Electric property is $252,000.
In July 1996, Registrant exchanged its ownership interests in
its hotel property in Kenner Louisiana for 493,664 limited partnership units in
American General Hospitality Operating Partnership L.P., which is majority-owned
by American General Hospitality Corporation ("AGH"), a publicly traded real
estate investment trust. Registrant has the right, after a one-year period, to
exchange the units in the operating partnership on a one-for-one basis for
shares of AGH. Registrant realized cash flow of $1,184,000 in 1995, the last
full year the hotel was operated by Registrant; however, Registrant funded
improvements of $867,000 in 1994. Registrant expects that the exchange will
eliminate the uncertainty and fluctuation in cash flow related to operating a
single hotel as the operating partnership owns a diversified portfolio of hotel
properties. As a real estate investment trust, AGH has an obligation to
distribute 95% of its taxable income in order to retain its Federal income tax
status. Since AGH owns a majority of the operating partnership limited
partnership units, the operating partnership may be expected to distribute a
significant portion of ifs cash flow
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so that AGH can meet its tax objectives. Based on the current distribution rate,
Registrant's annual cash flow from this investment should approximate $805,000.
In July 1994, Registrant and CPA(R):7 entered into a lease
modification agreement with ASA which consented to ASA's termination of its
lease for a portion of the ASA property in Bloomingdale, Illinois in June 1997
instead of June 2003. Registrant and CPA(R):7 own the ASA property as
tenants-in-common with 66.36% and 33.64% ownership interests, respectively.
Under the modification agreement, annual rent was increased to $5,200,000 (of
which the Partnership's share was $3,450,720) from $1,850,000 (of which
Registrant's share was $1,227,660). In consenting to the modification, the
mortgage lender required that the mortgage loan payments be substantially
increased so that the loan fully amortized on March 1, 1996.
Although ASA is obligated to make its lease payments through
June 1997, it is in the process of vacating the property. The ASA lease was
further modified in 1996. Under the 1996 modification, annual rent was reduced
by $833,333 (of which Registrant's share was $553,000) and Registrant released
ASA from certain obligations of its lease relating to paying the costs of
property, insurance, maintenance and repairs and real estate taxes. In exchange
for these concessions, Registrant and CPA(R):7 were assigned the rents from an
ASA subtenant and did not have to share one-third of rents on any new tenants
through the end of the ASA lease term as would have been required under the
initial modification agreement. The ASA subtenant is expected to vacate the
property in 1997. In January 1996, Registrant and CPA(R):7 entered into a lease
agreement with the Postal Service. The Postal Service lease for portion of the
property in Bloomingdale, Illinois, has a 10-year term which commenced May 1,
1996 with annual rentals of $722,800 (of which Registrant's share is $479,650),
increasing to $822,800 after 5 years. Registrant and CPA(R):7 retain the
obligation to provide maintenance and support services to the lessee. The lease
provides for rent escalations beginning in 1998 based on increases in certain
operating costs incurred by Registrant and CPA(R):7. In addition, the Postal
Service will reimburse Registrant and CPA(R):7 for a portion of real estate
taxes on the property based on the area it occupies. The lease also provides the
Postal Service an option to terminate the lease after five years. As more space
is vacated by ASA, the Postal Service has a right of first refusal for such
space. Registrant and CPA(R):7 funded improvements in 1996 at the ASA property
including a tenant improvement allowance of $600,000 (of which Registrant's
share was approximately $553,000). The ASA subtenant is expected to vacate the
property in 1997.
In connection with the purchase of its properties, Registrant
required sellers of such properties to perform environmental reviews. Management
believes, based on the results of such reviews, that Registrant's properties
were in substantial compliance with Federal and state environmental statutes at
the time the properties were acquired. However, 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 most instances where contamination has been
identified, tenants are actively engaged in the remediation process and
addressing identified conditions. 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 with provisions of such indemnification specifically
addressing environmental matters. Accordingly, Management believes that the
ultimate resolution of environmental matters will not have a material adverse
effect on Registrant's financial condition, liquidity or results of operations.
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<PAGE> 5
Registrant does not have any employees. The Corporate General
Partner of Registrant or its affiliates employ twelve individuals who perform
accounting, secretarial and transfer services for Registrant. Gemisys Inc.
performs certain transfer services for Registrant and The Bank of New York
performs certain banking services for Registrant. In addition, Registrant has an
agreement with the Corporate General Partner pursuant to which the Corporate
General Partner provides certain management services for Registrant.
Item 2. Properties.
<TABLE>
<CAPTION>
LEASE TYPE OF OWNERSHIP
OBLIGOR TYPE OF PROPERTY LOCATION INTEREST
------- ---------------- -------- --------
<S> <C> <C> <C>
GENERAL ELECTRIC Office/Research King of Prussia, Ownership of a 50%
COMPANY Facility Pennsylvania interest in a joint venture
which owns land and
building (1)
AMERISIG, INC. Industrial Olive Branch, Ownership of land
and Office Mississippi and building (1)
Buildings
AMERISIG, INC. Industrial Building Dekalb County, Ownership of a 26.43%
and Office Facility Georgia interest in land and
buildings
AUTOZONE, INC. Retail Stores Jacksonville, Ownership of land
Florida - 2; and buildings
Albany, Augusta,
Brunswick and
Macon, Georgia;
Columbia, South Carolina;
Houston and San Antonio,
Texas; Albuquerque and
Farmington, New Mexico
ADVANCE SYSTEM Office Building Bloomingdale, Ownership of a
APPLICATIONS, INC. Illinois 66.36% interest in
and UNITED STATES land and building
POSTAL SERVICE
HIGH VOLTAGE Manufacturing Sterling, Ownership of land
ENGINEERING and Office Massachusetts; and buildings (1)
CORPORATION Buildings East Hempfield
Township, Pennsylvania
MAYFAIR MOLDED Manufacturing Schiller Park, Ownership of land
PRODUCTS Facility Illinois and building
CORPORATION
SYBRON Manufacturing and Penfield, Ownership of a
ACQUISITION Office Buildings New York; 75.26% interest in
COMPANY Portsmouth, land and buildings
New Hampshire; (1)
Dubuque, Iowa;
Glendora, California;
Romulus, Michigan
</TABLE>
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<PAGE> 6
<TABLE>
<CAPTION>
LEASE TYPE OF OWNERSHIP
OBLIGOR TYPE OF PROPERTY LOCATION INTEREST
------- ---------------- -------- --------
<S> <C> <C> <C>
UNITED STATIONERS Office/Warehouse San Antonio, Texas; Ownership of land
SUPPLY CO. Facility Memphis, Tennessee; and buildings (1)
New Orleans, Louisiana
FEDERAL EXPRESS Office/Warehouse College Ownership of land
CORPORATION Facility Station, Texas and building
NV RYAN L.P. Manufacturing Thurmont, Ownership of a
Facility Maryland and 62.963% interest
Farmington, New York in land and buildings
DR PEPPER BOTTLING Bottling/ Irvine and Ownership of a 50%
COMPANY OF TEXAS Distribution Houston, Texas interest in land and
Office Facility and buildings (1)
ORBITAL SCIENCES Engineering & Chandler, Ownership of a 42%
CORPORATION Fabrication Arizona interest in land and
Facility buildings (1)
FURON COMPANY Manufacturing, Office New Haven, Ownership of a 32.28%
and Warehouse Connecticut; interest in land and
Facilities Mickleton, New Jersey; buildings (1)
Aurora and Mantua, Ohio;
Bristol, Rhode Island;
Mt. Pleasant, Texas;
Milwaukee, Wisconsin.
DETROIT DIESEL Office, Warehouse, Detroit, Ownership of a 20%
CORPORATION Manufacturing, Truck Michigan interest in land and
Repair Facilities and buildings (1)
Waste Treatment Plant
WINN-DIXIE Supermarket Brewton, Alabama Ownership of building (2)
MONTGOMERY, INC.
ALLIED PLYWOOD, Manufacturing/ Manassas, Virginia Ownership of a 62.963%
INC. Office building interest in land and building
(3) Manufacturing/ Fredricksburg, Ownership of a
Office building Virginia 62.963% interest
in land and building
HOTEL CORPORATION Hotel Topeka, Kansas 50% ownership of a limited
OF AMERICA partnership which owns
land and building (1)
</TABLE>
(1) These properties are encumbered by mortgage notes payable.
(2) This property is subject to a ground lease.
(3) Property is currently vacant.
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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 of Current Lease
Lease Current Square Rent Per Expiration Renewal Ownership Terms of Gross
Obligor Annual Rent Footage Sq.Ft.(1) (Mo/Year) Terms Interest Purchase Option Costs (2)
- ------- ----------- ------- --------- --------- ----- -------- --------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sybron $2,491,920 705,900 $ 4.69 12/13 YES 75.26% interest; The greater of $19,006,229
Acquisition remaining interest fair market value or
Corp. (2) owned by $18,897,786 and any
Corporate Property prepayment premium.
Associates 7
("CPA(R):7")
Dr Pepper 1,999,000 721,947 5.54 06/14 YES 50% interest; The greater of 14,166,870
Bottling remaining interest fair market value
Company owned by of the property
of Texas Corporate Property or $14,100,000
Associates 9
("CPA(R):9")
Advanced 1,671,830 76,000 33.15 06/97 NO 66.36% interest; N/A 11,273,101
System remaining
Applications, interest owned
Inc. by CPA(R):7
U.S. Postal 479,640 40,000 18.07 04/06 NO 66.36% interest; N/A (4)
Service remaining
interest owned
by CPA(R):7
Orbital 977,378 280,000 7.95 09/09 YES 42% interest; N/A 8,042,376
Sciences remaining
Corporation interest owned
by CPA(R):9
Amerisig, Inc. 1,005,927 270,500 3.72 06/08 YES 100% The greater of fair 7,685,497
market value or
$7,685,000 (less
other amounts
stated in lease)
Dekalb 403,773 (3) 432,559 3.64 12/09 YES 26.43% interest; N/A 3,237,611
County, remaining interest
Georgia owned by CPA(R):9
NVRyan, 459,072 179,741 4.06 03/14 YES 62.963% interest; N/A 3,387,605
L.P. remaining interest
owned by CPA(R):7
High Voltage
Engineering
Corporation:
Sterling, 578,757 (3) 70,000 8.27 11/13 YES 100% The greater of fair 4,053,778
MA market value or
$4,050,000 and
any prepayment
premium.
Lancaster, 600,262 (3) 70,712 8.49 11/13 YES 100% The greater of fair 5,605,217
PA market value or
$5,600,000 and
any prepayment
penalty.
Furon 779,901 699,870 3.45 07/07 YES 32.28% interest; For the Twinsburg, 7,058,380
Company remaining Ohio and Liverpool,
interest owned Pennsylvania
by CPA(R):9 properties only;
a sublessee has
an option to purchase
the properties for
the greater of
fair market value
or $468,060 and
any prepayment
premium.
</TABLE>
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<PAGE> 8
<TABLE>
<CAPTION>
Partnership's
Share of Current Lease
Lease Current Square Rent Per Expiration Renewal Ownership Terms of Gross
Obligor Annual Rent Footage Sq.Ft.(1) (Mo/Year) Terms Interest Purchase Option Costs (2)
- ------- ----------- ------- --------- --------- ----- -------- --------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Detroit $ 729,078 2,730,750 $1.34 06/10 YES 20% interest; N/A $ 6,301,384
Diesel remaining
Corporation interest owned
by CPA(R):9
AutoZone, 525,003 54,000 9.72 08/13 YES 100% N/A 4,649,805
Inc.
United
Stationers 812,708 197,321 4.12 03/10 YES 100% N/A 3,898,038
Supply
Company, Inc.
Mayfair 460,755 84,197 5.47 12/03 YES 100% The greater of 3,254,356
Molded fair market value or
Products $3,250,000 and any
Corporation prepayment premium.
</TABLE>
(1) Represents rent per square foot when combined with rents applicable to
tenants-in-common.
(2) Includes original cost of investment and net increases or decreases to net
investment subsequent to purchase.
(3) A portion of the rent is variable, based on changes in monthly mortgage debt
service requirements on the properties.
(4) Included in gross cost of Advance System Applications, Inc. property
The material terms on the mortgage debt of Registrant's
properties are summarized in the following table:
<TABLE>
<CAPTION>
Mortgage
Annual Interest Balance Annual Debt Maturity Estimated Payment
Lease Obligor Rate 12/31/96 Service Date Due at Maturity Prepayment Provisions
------------- ---- -------- ------- ---- --------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Sybron
Acquisition
Company 11.25% $10,770,776 $1,420,954 01/01/99 $10,282,000 Loan may be prepaid in full or
in part (in multiples of
$100,000) with a prepayment
premium based on a formula based
on the rate for U.S. Treasury
notes.
Dr Pepper Bottling
Company of Texas 11.85 7,821,034 1,060,108 07/01/99 7,420,395 Loan may be prepaid in full or
in part (in multiples of
$100,000) with a prepayment
premium based on a formula based
on the rate for U.S. Treasury
notes.
</TABLE>
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<PAGE> 9
The material terms on the mortgage debt of Registrant's
properties is summarized in the following table:
<TABLE>
<CAPTION>
Mortgage
Annual Interest Balance Annual Debt Maturity Estimated Payment
Lease Obligor Rate 12/31/96 Service Date Due at Maturity Prepayment Provisions
------------- ---- -------- ------- ---- --------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
ASG Acquisition
Corp./American
Signature:
Olive Branch, MS 9.25 $3,947,300 405,799 04/01/01 $3,563,000 The lease may be paid in whole
Dekalb County, GA 9.20(1) 1,665,627 188,733 04/01/01 1,500,000 or in part with a 1% premium
High Voltage
Engineering
Corporation:
Sterling, MA 7.34 1,676,433 163,279 12/01/98 2,453,000 Loan may be prepaid in full at
any time with no prepayment
premium if paid within 30 days
of an interest adjustment
date, June 1st or December
1st.
Lancaster, PA 7.491 2,622,770 255,441 12/01/98 1,561,000 Loan may be prepaid in full at
any time with no prepayment
premium if paid within 30 days
of an interest adjustment
date, June 1st or December
1st.
Orbital Sciences
Corporation 10.00 4,293,718 473,892 09/01/20 Fully amortizing Loan may be prepaid with a
prepayment premium of 5% in
the 6th loan year and
decreasing .5% thereafter to
1%.
Furon Company 10.40 4,048,571 118,630 04/01/97 4,035,000
Detroit Diesel
Corporation 7.16 4,749,076 551,681 06/15/10 Fully amortizing Loan may be prepaid with a
prepayment premium ranging
from 5% to .75% from 1995 to
2005, respectively, with no
premium thereafter.
United
Stationers
Supply
Company, Inc. 7.34 2,348,134 211,438 12/01/99 2,224,000 Loan may be prepaid with a
prepayment premium based on 180
days of interest at the current
interest rate if paid thereafter.
</TABLE>
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<PAGE> 10
<TABLE>
<CAPTION>
Mortgage
Annual Interest Balance Annual Debt Maturity Estimated Payment
Lease Obligor Rate 12/31/96 Service Date Due at Maturity Prepayment Provisions
------------- ---- -------- ------- ---- --------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
General Electric
Company 10.50% $ 1,693,462 (3) $215,558 (3) 05/01/98 $1,636,000(3) Loan may not be prepaid.
</TABLE>
(1) Variable rate based on the higher of lender's prime rate or the Federal
Funds Rate.
(2) Variable rate equal to the lesser of 10% or the rate necessary to sell
the bonds in a secondary market.
(3) Represents proportional amount from 50% interest in joint
venture/limited partnership holding such mortgage debts.
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<PAGE> 11
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.
No matter was submitted during the fourth quarter of the year
ended December 31, 1996 to a vote of security holders, through the solicitation
of proxies or otherwise.
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 29 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 5 of Registrant's Annual Report contained in Appendix
A.
Item 8. Financial Statements and Supplementary Data.
The following financial statements and supplementary data are
hereby incorporated by reference to pages 6 to 22 of Registrant's Annual Report
contained in Appendix A:
(i) Report of Independent Accountants.
(ii) Balance Sheets as of December 31, 1995 and 1996.
(iii) Statements of Income for the years ended December 31, 1994,
1995 and 1996.
(iv) Statements of Partners' Capital for the years ended December
31, 1994, 1995 and 1996.
(v) Statements of Cash Flows for the years ended December 31,
1994, 1995 and 1996.
(vi) Notes to Financial Statements.
Item 9. Disagreements on Accounting and Financial Disclosure.
NONE
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<PAGE> 12
PART III
Item 10. Directors and Executive Officers of the Registrant.
Registrant has no directors or officers. The directors and
executive officers of the Corporate General Partner are as follows:
<TABLE>
<CAPTION>
Has Served as a
Director and/or
Name Age Positions Held Officer Since (1)
---- --- -------------- -----------------
<S> <C> <C> <C>
William Polk Carey 66 Chairman of the Board 10/87
Director
Francis J. Carey 71 President 10/87
Director
George E. Stoddard 80 Chairman of the Investment Committee 10/87
Director
Madelon DeVoe Talley 65 Vice Chairman of the Board 10/87
Director
Stephen H. Hamrick 45 Director 10/87
Lawrence R. Klein 76 Chairman of the Economic Policy 10/87
Committee
Director
Barclay G. Jones III 36 Executive Vice President 10/87
Director
Claude Fernandez 44 Executive Vice President 10/87
Chief Administrative Officer
H. Augustus Carey 39 Senior Vice President 8/88
Anthony S. Mohl 34 Senior Vice President 10/87
John J. Park 32 Senior Vice President 7/91
Treasurer
Michael D. Roberts 45 First Vice President 4/89
Controller
</TABLE>
(1) Each officer and director of the Corporate General Partner will hold
office until the next annual meeting of the Board of Directors and
thereafter until his successor shall have been elected and shall have
qualified or until his prior death, resignation or removal.
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.
A description of the business experience of each officer and
director of the Corporate General Partner is set forth below:
William Polk Carey, Chairman and Chief Executive Officer, 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 & Co.,
Inc. ("W.P. Carey") in 1973, he served as Chairman of the Executive Committee of
Hubbard,
- 11 -
<PAGE> 13
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 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.
Francis J. Carey was elected President and a Managing Director
of 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. Mr. Carey is also a Director of CPA(R):10 and
CIP(TM).
George E. Stoddard, Chief Investment Officer, was until 1979
head of the bond department of The Equitable Life Assurance Society of the
United States, with responsibility for all activities related to Equitable's
portfolio of corporate investments acquired through direct negotiation. Mr.
Stoddard was associated with Equitable for over 30 years. He holds an A.B.
degree from Brigham Young University, an M.B.A. from Harvard Business School and
an LL.B. from Fordham University Law School.
Madelon DeVoe Talley, Vice Chairman, is a member of the New
York State Controller's Investment Committee, a Commissioner of the Port
Authority of New York and New Jersey, former CIO of New York State Common
Retirement Fund and a Trustee of the New York State Teachers Retirement System.
She also served as a managing director of Rothschild, Inc. and as the President
of its asset management division. Mrs. Talley was also a former Governor of the
N.A.S.D. and a director of Biocraft Laboratories, a New York Stock Exchange
company. She is an alumna of Sarah Lawrence College and the graduate school of
International and Public Affairs at Columbia University.
Stephen H. Hamrick is the former Managing Director of Wall
Street Investor Services, where he completed the turnaround and sale of a bank
based brokerage business. Previously, he was for six years the Director of
Private Investments for PaineWebber Incorporated. From 1975 until joining
PaineWebber in 1988, Mr. Hamrick was associated with E.F. Hutton & Company (and
the successor firm Shearson Lehman Hutton Inc.), where he held the position of
First Vice President and National Director of Private Placements. Mr. Hamrick is
a former Chairman of the Securities Industry Association's Direct Investment
Committee and a former Chairman of the Investment Program Association. He is a
Certified Financial Planner and was graduated with degrees in English and
Economics from Duke University.
Lawrence R. Klein, Chairman of the Economic Policy Committee
since 1984, 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.
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.
- 12 -
<PAGE> 14
Claude Fernandez, Chief Administrative Officer, Managing
Director, and Executive Vice President, 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 his 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.
H. Augustus Carey, Senior Vice President, 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.
Anthony S. Mohl, Senior Vice President and Director of
Portfolio Management, joined W.P. Carey & Co., in 1987 as Assistant to the
President after receiving his M.B.A. from the Columbia University Graduate
School of Business. Mr. Mohl was employed as an analyst in the strategic
planning group at Kurt Salmon Associates after receiving an undergraduate degree
from Wesleyan University.
John J. Park, Senior Vice President, Treasurer and Director of
Research, 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.
Michael D. Roberts joined W. P. Carey as a Second Vice
President and Assistant Controller in April 1989 and is currently First Vice
President and Controller. Prior to joining W.P. Carey, Mr. Roberts was employed
by Coopers & Lybrand for over 8 years, where he attained the title of audit
manager. A certified public accountant, Mr. Roberts received a B.A. in sociology
from Brandeis University and an M.B.A. from Northeastern University.
The officers and directors of W.P. Carey are substantially the
same as above.
Item 11. Executive Compensation.
Under the Amended Agreement of Limited Partnership of
Registrant (the "Agreement"), 9% of Distributable Cash From Operations, as
defined, is payable to the Corporate General Partner and 1% of Distributable
Cash From Operations is payable to the Individual General Partner. The Corporate
General Partner and the Individual General Partner received $65,487 and
$589,382, respectively, from Registrant as their share of Distributable Cash
From Operations during the year ended December 31, 1996. As owner of 100 Limited
Partnership Units, the Corporate General Partner received cash distributions of
$8,721 ($87.21 Unit) during the year ended December 31, 1996. 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 Corporate General Partner, W.P. Carey or any other affiliate of
Registrant during the year ended December 31, 1996.
In the future, the Corporate General Partner will continue to
receive 9% of Distributable Cash From Operations, the Individual General Partner
will continue to receive 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. For a description of the subordinated interest of the
Corporate General Partner and the 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.
- 13 -
<PAGE> 15
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
As of December 31, 1996, no person owned of record, or was
known by Registrant to own beneficially more than 5% of the Limited Partnership
Units of Registrant.
The following table sets forth as of March 15, 1997 certain
information as to the ownership by directors and executive officers of
securities of Registrant:
<TABLE>
<CAPTION>
Number of Units
Name of and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Class
- -------------- ---------------- -------------------- --------
<S> <C> <C> <C> <C>
Limited Partnership
Units of Registrant William Polk Carey (1) 108 units .16
Francis J. Carey 15 .02
George E. Stoddard
Madelon DeVoe Talley
Stephen H. Hamrick
Barclay G. Jones III
Lawrence R. Klein
Claude Fernandez
Augustus Carey 20 .03
Anthony S. Mohl
John J. Park
Michael D. Roberts
--- ---
All executive officers
and directors as a
group (12 persons) 143 units .21%
=== ===
</TABLE>
(1) As of March 15, 1997, the Corporate General Partner, Eighth Carey
Corporate Property, Inc., owned 100 Limited Partnership Units of
Registrant. William Polk Carey, the majority shareholder of the
Corporate General Partner, is the beneficial owner of these Units.
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 Financial Statements in Item 8. Michael B. Pollack, Senior
Vice President and Secretary 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.
- 14 -
<PAGE> 16
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.
Balance Sheets, December 31, 1995 and 1996
Statements of Income for the years ended December 31, 1994, 1995 and 1996
Statements of Partners' Capital for the years ended December 31, 1994, 1995
and 1996
Statements of Cash Flows for the years ended December 31, 1994, 1995 and
1996
Notes to Financial Statements.
The financial statements are hereby incorporated by reference to pages 6 to
22 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,
1996.
Notes to Schedule III.
Schedule III and notes thereto are hereby incorporated by reference to pages
23 to 25 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 Financial
Statements or the Notes thereto, or because the conditions requiring their
filing do not exist.
- 15 -
<PAGE> 17
(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>
3.1 Amended agreement of Limited Partnership of Exhibit 3B to Registration
Registrant dated as of February 12, 1988. Statement (Form S-11)
No. 33-18478
4.3 Deed of Trust Note dated June 23, 1988 from Filed as Exhibit 28(G)(5)
Registrant, as maker, to Sovran Bank/Central to Registrant's Post-
South ("Sovran"), as payee. Effective Amendment No. 1
to Form S-11
4.4 Deed of Trust and Security Agreement dated Filed as Exhibit 28(G)(6)
June 23, 1988 between Registrant, as grantor, to Registrant's Post-
and James E. Woods, Trustee, as trustee. Effective Amendment No. 1
to Form S-11
4.5 Real Estate Note dated August 24, 1988 Filed as Exhibit 28(H)(4)
from Registrant, as maker, to Pan American to Registrant's Post-
Life Insurance Company, as payee. Effective Amendment No. 1
to Form S-11
4.6 Master Mortgage, Deed of Trust, Deed to Secure Debt, Filed as Exhibit 28(H)(5)
with Uniform Commercial Code Security Agreement and to Registrant's Post-
with Assignment of Leases, Rents and Profits among Effective Amendment No. 1
Registrant, Theodore Tumminello and Pan American Life to Form S-11
Insurance Company.
4.7 Loan Modification Agreement dated September Filed as Exhibit 28(L)(1)
29, 1988 among Prudential Insurance Company to Registrant's Post-
of America, American National Bank and Trust Effective Amendment No. 2
Company of Chicago, Registrant and CPA(R):7. to Form S-11
4.8 Promissory Note dated November 10, 1988 Filed as Exhibit 28(M)(1)
between Registrant, as Borrower, and Far to Registrant's Post-
West Federal Bank, S.B. ("Far West"), Effective Amendment No. 2
as Lender (Pennsylvania property). to Form S-11
4.9 Promissory Note dated November 10, 1988 Filed as Exhibit 28(M)(2)
between Registrant, as Borrower, and Far to Registrant's Post-
West, as Lender (Massachusetts properties). Effective Amendment No. 2
to Form S-11
4.10 Commercial Mortgage with Assignment of Filed as Exhibit 28(M)(3)
Rents and Leases dated November 10, 1988 to Registrant's Post-
between Registrant, as Mortgagor, and Far Effective Amendment No. 2
West, as Mortgagee (Pennsylvania property). to Form S-11
4.11 Commercial Mortgage with Assignment of Filed as Exhibit 28(M)(4)
Rents and Leases dated November 10, 1988 to Registrant's Post-
between Registrant, as Mortgagor, and Far Effective Amendment No. 2
West, as Mortgagee (Massachusetts properties). to Form S-11
</TABLE>
- 16 -
<PAGE> 18
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C>
4.12 Security Agreement dated November 10, 1988 Filed as Exhibit 28(M)(5)
between Registrant as Debtor, and Far West, to Registrant's Post-
as Secured Party (Pennsylvania property). Effective Amendment No. 2
to Form S-11
4.13 Security Agreement dated November 10, 1988 Filed as Exhibit 28(M)(6)
between Registrant as Debtor, and Far West, to Registrant's Post-
as Secured Party (Massachusetts properties). Effective Amendment No. 2
to Form S-11
4.14 Note Agreement dated December 21, 1988 Filed as Exhibit 4.1
among New England Mutual Life Insurance to Registrant's Form 8-K
Company ("New England"), Registrant and CPA(R):7. dated May 18, 1989
4.15 $15,000,000 Secured Note from Registrant Filed as Exhibit 4.2
and CPA(R):7 to New England dated to Registrant's Form 8-K
December 22, 1988. dated May 18, 1989
4.16 Deed of Trust and Security Agreement dated December 21, Filed as Exhibit 4.3
1988 between Registrant and CPA(R):7, as Trustor, and New to Registrant's Form 8-K
England, as Beneficiary, covering the California Property. dated May 18, 1989
4.17 Mortgage and Security Agreement dated December 21, 1988 Filed as Exhibit 4.4
between Registrant and CPA(R):7, as Mortgagor, and New to Registrant's Form 8-K
England, as Mortgagee, covering the Iowa Property. dated May 18, 1989
4.18 Mortgage and Security Agreement dated December 21, 1988 Filed as Exhibit 4.5
between Registrant and CPA(R):7, as Mortgagor, and New to Registrant's Form 8-K
England, as Mortgagee, covering the Michigan Property. dated May 18, 1989
4.19 Mortgage and Security Agreement dated December 21, 1988 Filed as Exhibit 4.6
between Registrant and CPA(R):7, as Mortgagor, and New to Registrant's Form 8-K
England, as Mortgagee, covering the New Hampshire Property. dated May 18, 1989
4.20 Mortgage and Security Agreement dated December 21, 1988 Filed as Exhibit 4.7
between Registrant and CPA(R):7, as Mortgagor, and New to Registrant's Form 8-K
England, as Mortgagee, covering the New York Property. dated May 18, 1989
4.21 Assignment of Leases, Rents and Guaranty dated December Filed as Exhibit 4.8
21, 1988 between Registrant and CPA(R):7, as Assignor, to to Registrant's Form 8-K
New England, as Assignee, covering the California Property. dated May 18, 1989
4.22 Assignment of Leases, Rents and Guaranty dated December Filed as Exhibit 4.9
21, 1988 between Registrant and CPA(R):7, as Assignor, to to Registrant's Form 8-K
New England, as Assignee, covering the Iowa Property. dated May 18, 1989
4.23 Assignment of Leases, Rents and Guaranty dated December Filed as Exhibit 4.10
21, 1988 between Registrant and CPA(R):7, as Assignor, to to Registrant's Form 8-K
New England, as Assignee, covering the Michigan Property. dated May 18, 1989
4.24 Assignment of Leases, Rents and Guaranty dated December Filed as Exhibit 4.11
21, 1988 between Registrant and CPA(R):7, as Assignor, to New to Registrant's Form 8-K
England, as Assignee, covering the New Hampshire Property. dated May 18, 1989
</TABLE>
- 17 -
<PAGE> 19
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C>
4.25 Assignment of Leases, Rents and Guaranty dated December Filed as Exhibit 4.12
21, 1988 between Registrant and CPA(R):7, as Assignor, to to Registrant's Form 8-K
New England, as Assignee, covering the New York Property. dated May 18, 1989
4.26 $2,250,000 Promissory Note dated February 3, 1989 Filed as Exhibit 4.13
between Registrant and CPA(R):9, as Borrower, to Registrant's Form 8-K
and New England, as Lender. dated May 18, 1989
4.27 Mortgage and Security Agreement dated February 3, 1989 Filed as Exhibit 4.14
between Registrant and CPA(R):9, as Borrower, to Registrant's Form 8-K
and New England, as Lender. dated May 18, 1989
4.28 Assignment of Leases and Rents dated February 3, 1989 Filed as Exhibit 4.15
between Registrant and CPA(R):9, as Borrower, to Registrant's Form 8-K
and New England, as Lender. dated May 18, 1989
4.41 Note Agreement dated June 28, 1989 among Filed as Exhibit 4.1
New England, Registrant and CPA(R):9. to Registrant's Form 8-K
dated September 28, 1989
4.42 Deed of Trust and Security Agreement dated Filed as Exhibit 4.2
June 28, 1989 between Registrant and CPA(R):9, to Registrant's Form 8-K
as Trustor, and New England, as Beneficiary. dated September 28, 1989
4.43 Assignment of Leases, Rents and Guaranty Filed as Exhibit 4.3
dated June 28, 1989 from Registrant and CPA(R):9, to Registrant's Form 8-K
as Assignor, to New England, as Assignee. dated September 28, 1989
4.44 $16,200,000 Promissory Note dated June 28, Filed as Exhibit 4.4
1989 from Registrant and CPA(R):9, as Borrower, to Registrant's Form 8-K
to New England, as Lender. dated September 28, 1989
4.45 $9,000,000 Replacement Promissory Note dated Filed as Exhibit 4.1
September 29, 1989 from Registrant and CPA(R):9, to Registrant's Form 8-K
as Maker, to First Interstate Bank of Arizona dated November 16, 1989
("First Interstate").
4.46 Loan Agreement dated May 17, 1989 between Filed as Exhibit 4.2
Space Data Corporation ("SDC"), as Borrower, to Registrant's Form 8-K
and First Interstate, as Lender. dated November 16, 1989
4.47 Deed of Trust, Assignment of Rents, Security Filed as Exhibit 4.3
1989 by and among SDC, as Trustor, and First dated November 16, 1989
Interstate, as Trustee and Beneficiary.
4.48 Assumption and Modification Agreement dated Filed as Exhibit 4.4
September 29, 1989 by and among First Interstate, as to Registrant's Form 8-K
Lender, SDC, as Original Borrower, Orbital Sciences dated November 16, 1989
Corporation ("OSC"), as Guarantor, and Registrant
and CPA(R):9, as Assuming Borrower.
4.49 Assignment of Rents, Leases and Guaranty dated Filed as Exhibit 4.5
September 29, 1989 from Registrant and CPA(R):9, to Registrant's Form 8-K
as Assignor, to First Interstate, as Assignee. dated November 16, 1989
</TABLE>
- 18 -
<PAGE> 20
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C>
4.50 $885,500 Promissory Note dated November 13, Filed as Exhibit 4.1
1989 from Registrant, as Maker, to Far to Registrant's Form 8-K
West. dated January 25, 1990
4.51 Act of Mortgage, Chattel Mortgage and Filed as Exhibit 4.2
Assignment of Leases by Registrant in to Registrant's Form 8-K
favor of Far West, dated November 13, 1989. dated January 25, 1990
4.52 Assignment of Rents dated November 13, 1989 Filed as Exhibit 4.3
from Registrant, as Maker, to Far to Registrant's Form 8-K
West. dated January 25, 1990
4.53 $766,700 Promissory Note dated November 13, Filed as Exhibit 4.4
1989 from Registrant, as Maker, to Far to Registrant's Form 8-K
West. dated January 25, 1990
4.54 Deed of Trust dated November 13, 1989 by and Filed as Exhibit 4.5
among Registrant, as Trustor, William Earthman to Registrant's Form 8-K
III, as Trustee and Far West, as Beneficiary. dated January 25, 1990
4.55 Assignment of Rents dated November 13, 1989 Filed as Exhibit 4.6
from Registrant, as Assignor, to to Registrant's Form 8-K
Far West, as Assignee. dated January 25, 1990
4.56 Security Agreement dated November 13, 1989 Filed as Exhibit 4.7
between Registrant, as Debtor, and Far to Registrant's Form 8-K
West, as Secured Party. dated January 25, 1990
4.57 $847,800 Promissory Note dated November 13, Filed as Exhibit 4.8
1989 from Registrant, as Maker, to Far to Registrant's Form 8-K
West. dated January 25, 1990
4.58 Deed of Trust dated November 13, 1989 by and Filed as Exhibit 4.9
among Registrant, as Trustor, Charles R. Snakard, to Registrant's Form 8-K
as Trustee and Far West, as Beneficiary. dated January 25, 1990
4.59 Assignment of Rents dated November 13, 1989 Filed as Exhibit 4.10
from Registrant, as Assignor, to to Registrant's Form 8-K
Far West, as Assignee. dated January 25, 1990
4.60 Security Agreement dated November 13, 1989 Filed as Exhibit 4.11
between Registrant, as Debtor, and Far to Registrant's Form 8-K
West, as Secured Party. dated January 25, 1990
4.61 $1,000,000 Extendable Secured Note dated January 29, Filed as Exhibit 4.1
1990 from Registrant and CPA(R):9 to Commercial Union to Registrant's Form 8-K
Life Insurance Company of America ("Commercial"). dated March 12, 1990
4.62 $1,000,000 Extendable Secured Note dated January 29, Filed as Exhibit 4.2
1990 from Registrant and CPA(R):9 to Ministers Life - A to Registrant's Form 8-K
Mutual Life Insurance Company ("Ministers"). dated March 12, 1990
4.63 $1,500,000 Extendable Secured Note dated January 29, Filed as Exhibit 4.3
1990 from Registrant and CPA(R):9 to The North Atlantic to Registrant's Form 8-K
Life Insurance Company of America ("North Atlantic"). dated March 12, 1990
</TABLE>
- 19 -
<PAGE> 21
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C>
4.64 $5,000,000 Extendable Secured Note dated Filed as Exhibit 4.4
January 29, 1990 from Registrant and CPA(R):9 to Registrant's Form 8-K
to Northern Life Insurance Company ("Northern"). dated March 12, 1990
4.65 $5,000,000 Extendable Secured Note dated January 29, Filed as Exhibit 4.5
1990 from Registrant and CPA(R):9 to Northwestern to Registrant's Form 8-K
National Life Insurance Company ("Northwestern"). dated March 12, 1990
4.66 $500,000 Extendable Secured Note dated January 29, Filed as Exhibit 4.6
1990 from Registrant and CPA(R):9 to TNB Stock to Registrant's Form 8-K
Company, FAO Texas Life Insurance Custody Account. dated March 12, 1990
4.67 Note Purchase Agreement dated as of January 1, 1990 between Filed as Exhibit 4.7
Registrant and CPA(R):9, as Sellers, and Commercial, Ministers, to Registrant's Form 8-K
North Atlantic, Northern, Northwestern and Texas Life dated March 12, 1990
Insurance Company (collectively, the "Lenders"), as Purchasers.
4.68 Combination Open-end Mortgage Deed, Security Filed as Exhibit 4.8
Agreement and Fixture Financing Statement dated January to Registrant's Form 8-K
29, 1990 between Registrant and CPA(R):9, as Mortgagors, dated March 12, 1990
and the Lenders, as Mortgagees (New Haven Premises).
4.69 Combination Open-end Mortgage Deed, Security Filed as Exhibit 4.9
Agreement and Fixture Financing Statement dated January to Registrant's Form 8-K
29, 1990 between Registrant and CPA(R):9, as Mortgagors, dated March 12, 1990
and the Lenders, as Mortgagees (Mickleton Premises).
4.70 Combination Open-end Mortgage Deed, Security Filed as Exhibit 4.10
Agreement and Fixture Financing Statement dated January to Registrant's Form 8-K
29, 1990 between Registrant and CPA(R):9, as Mortgagors, dated March 12, 1990
and the Lenders, as Mortgagees (Aurora and Mantua Premises).
4.73 Combination Mortgage Deed, Security Agreement and Filed as Exhibit 4.13
Fixture Financing Statement dated January 29, 1990 to Registrant's Form 8-K
between Registrant and CPA(R):9, as Mortgagors, dated March 12, 1990
and the Lenders, as Mortgagees (Bristol Premises).
4.74 Combination Deed of Trust, Security Agreement and Filed as Exhibit 4.14
Fixture Financing Statement dated January 29, 1990 to Registrant's Form 8-K
between Registrant and CPA(R):9, as Mortgagors, and dated March 12, 1990
the Lenders, as Mortgagees (Mt. Pleasant Premises).
4.75 Combination Mortgage, Security Agreement and Filed as Exhibit 4.15
Fixture Financing Statement dated January 29, 1990 to Registrant's Form 8-K
between Registrant and CPA(R):9, as Mortgagors, and dated March 12, 1990
the Lenders, as Mortgagees (Milwaukee Premises).
4.76 Agreement and Assignment of Lessors' Interest in Leases Filed as Exhibit 4.16
dated January 29, 1990 by Registrant and CPA(R):9, to Registrant's Form 8-K
as Lessors, and the Lenders (New Haven Premises). dated March 12, 1990
4.77 Agreement and Assignment of Lessors' Interest in Leases Filed as Exhibit 4.17
dated January 29, 1990 by Registrant and CPA(R):9, as to Registrant's Form 8-K
Lessors, and the Lenders (Mickleton Premises). dated March 12, 1990
</TABLE>
- 20 -
<PAGE> 22
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C>
4.78 Agreement and Assignment of Lessors' Interest in Leases Filed as Exhibit 4.18
dated January 29, 1990 by Registrant and CPA(R):9, as to Registrant's Form 8-K
Lessors, and the Lenders (Aurora, Mantua and Twinsburg dated March 12, 1990
Premises).
4.80 Agreement and Assignment of Lessors' Interest in Leases Filed as Exhibit 4.20
dated January 29, 1990 by Registrant and CPA(R):9, to Registrant's Form 8-K
as Lessors, and the Lenders (Bristol Premises). dated March 12, 1990
4.81 Agreement and Assignment of Lessors' Interest in Leases Filed as Exhibit 4.21
dated January 29, 1990 by Registrant and CPA(R):9, to Registrant's Form 8-K
as Lessors, and the Lenders (Mt. Pleasant Premises). dated March 12, 1990
4.82 Agreement and Assignment of Lessors' Interest in Leases Filed as Exhibit 4.22
dated January 29, 1990 by Registrant and CPA(R):9, to Registrant's Form 8-K
as Lessors, and the Lenders (Milwaukee Premises). dated March 12, 1990
4.83 $6,750,000 Real Estate Note dated January 30, 1990 Filed as Exhibit 4.23
from Registrant and CPA(R):9, as Maker, to Creditanstalt- to Registrant's Form 8-K
Bankverein (the "Bank"), as Holder. dated March 12, 1990
4.84 Deed to Secure Debt and Security Agreement dated Filed as Exhibit 4.24
January 30, 1990 between Registrant and CPA(R):9, as to Registrant's Form 8-K
Borrower, and the Bank, as Lender. dated March 12, 1990
4.85 Assignment of Rentals and Leases dated Filed as Exhibit 4.25
January 30, 1990 from Registrant and CPA(R):9, to Registrant's Form 8-K
as Assignor, to the Bank, as Assignee. dated March 12, 1990
10.3 Lease Agreement dated June 23, 1988 between Filed as Exhibit 28(G)(4)
Registrant, as landlord, and ASG, as tenant. to Registrant's Post-
Effective Amendment No. 1
to Form S-11
10.4 Lease Agreement dated August 24, 1988 Filed as Exhibit 28(H)(3)
between Registrant, as landlord, and to Registrant's Post-
AutoZone, Inc. ("AutoZone"), as tenant. Effective Amendment No. 1
to Form S-11
10.5 Lease Agreement dated September 29, 1988 Filed as Exhibit 28(L)(2)
between Registrant, and CPA(R):7 as landlord, to Registrant's Post-
and ASA, Inc. as tenant. Effective Amendment No. 2
to Form S-11
10.6 Co-Tenancy Agreement dated September 29, Filed as Exhibit 28(L)(3)
1988 between Registrant and CPA(R):7. to Registrant's Post-
Effective Amendment No. 2
to Form S-11
10.7 Lease Agreement dated November 10, 1988 Filed as Exhibit 28(M)(7)
between Registrant, as landlord, and High to Registrant's Post-
Voltage Engineering Corporation, as tenant. Effective Amendment No. 2
to Form S-11
</TABLE>
- 21 -
<PAGE> 23
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C>
10.8 Lease Agreement dated November 10, 1988 Filed as Exhibit 28(M)(8)
between Registrant, as landlord, and Datcon to Registrant's Post-
Instrument Company, as tenant. Effective Amendment No. 2
to Form S-11
10.9 Guaranty and Suretyship Agreement dated Filed as Exhibit 28(M)(9)
November 10, 1988 between Registrant and to Registrant's Post-
High Voltage Engineering Corporation. Effective Amendment No. 2
to Form S-11
10.10 Lease Agreement dated December 20, 1988 Filed as Exhibit 10.1
by and between Registrant, as Landlord, to Registrant's Form 8-K
and Stationers, as Tenant. dated May 18, 1989
10.11 Guaranty and Suretyship Agreement dated Filed as Exhibit 10.2
December 20, 1988 from SDC Distributing to Registrant's Form 8-K
as Guarantor, to Registrant, as dated May 18, 1989
Purchaser.
10.12 Guarantor's Certificate dated December 20, Filed as Exhibit 10.3
1988 from SDC Distributing, as Guarantor, to Registrant's Form 8-K
to Registrant, as Purchaser. dated May 18, 1989
10.13 Lease Agreement dated July 28, 1988 between Filed as Exhibit 10.4
SDC-GESCO Associates, as Landlord, and to Registrant's Form 8-K
General Electric, as Tenant. dated May 18, 1989
10.14 Assignment of Lease and Assumption of Agreement dated Filed as Exhibit 10.5
December 21, 1988 between SDC-GESCO Associates, to Registrant's Form 8-K
as Assignor, and Registrant and CPA(R):9, as Assignee. dated May 18, 1989
10.15 Lease Agreement dated December 21, 1988 Filed as Exhibit 10.6
between Registrant and CPA(R):7, as Landlord, to Registrant's Form 8-K
and Ormco Corporation, as Tenant. dated May 18, 1989
10.16 Lease Agreement dated December 21, 1988 between Filed as Exhibit 10.7
Registrant and CPA(R):7, as Landlord, and Barnstead to Registrant's Form 8-K
Thermolyne Corporation, as Tenant. dated May 18, 1989
10.17 Lease Agreement dated December 21, 1988 Filed as Exhibit 10.8
between Registrant and CPA(R):7, as Landlord, to Registrant's Form 8-K
and Kerr Manufacturing Company, as Tenant. dated May 18, 1989
10.18 Lease Agreement dated December 21, 1988 Filed as Exhibit 10.9
between Registrant and CPA(R):7, as Landlord, to Registrant's Form 8-K
and Erie Scientific Company, as Tenant. dated May 18, 1989
10.19 Lease Agreement dated December 21, 1988 Filed as Exhibit 10.10
between Registrant and CPA(R):7, as Landlord, to Registrant's Form 8-K
and Nalge Company, as Tenant. dated May 18, 1989
10.20 Guaranty and Suretyship Agreement dated Filed as Exhibit 10.11
December 21, 1988 from Sybron Acquisition to Registrant's Form 8-K
Company to Registrant and CPA(R):7. dated May 18, 1989
</TABLE>
- 22 -
<PAGE> 24
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C>
10.21 Co-Tenancy Agreement dated December 21, 1988 Filed as Exhibit 10.12
between Registrant and CPA(R):7. to Registrant's Form 8-K
dated May 18, 1989
10.22 Lease Agreement dated October 25, 1988 Filed as Exhibit 10.13
between D/S College Station Joint Venture to Registrant's Form 8-K
("D/S College Station"), as Lessor, and dated May 18, 1989
Federal Express, as Lessee.
10.23 Assignment of Lease dated March 21, 1988 Filed as Exhibit 10.14
from D/S College Station, as Assignor, to Registrant's Form 8-K
to Registrant, as Assignee. dated May 18, 1989
10.24 Lease Agreement dated as of March 31, 1989 Filed as Exhibit 10.15
by and between Registrant and CPA(R):7, as to Registrant's Form 8-K
Landlord, and the Ryan Tenants, as Tenant. dated May 18, 1989
10.25 Guaranty dated March 31, 1989 from NVR, Filed as Exhibit 10.16
as Guarantor, to Registrant and CPA(R):7, to Registrant's Form 8-K
as Landlord. dated May 18, 1989
10.26 Guarantor's Certificate dated March 31, 1989 Filed as Exhibit 10.17
from NVR, as Guarantor, to Registrant and to Registrant's Form 8-K
CPA(R):7, as Purchaser. dated May 18, 1989
10.27 Lease Agreement dated June 28, 1989 by and Filed as Exhibit 10.1
between Registrant and CPA(R):9, as Landlord, to Registrant's Form 8-K
and Dr. Pepper, as Tenant. dated September 28, 1989
10.28 Guaranty and Suretyship Agreement dated Filed as Exhibit 10.2
June 28, 1989 from Holdings, as Guarantor, to Registrant's Form 8-K
to Registrant and CPA(R):9, as Landlord. dated September 28, 1989
10.29 Guarantor's Certificate dated June 28, 1989 Filed as Exhibit 10.3
from Holdings, as Guarantor, to Registrant to Registrant's Form 8-K
and CPA(R):9, as Landlord. dated September 28, 1989
10.30 Co-Tenancy Agreement dated June 28, 1989 Filed as Exhibit 10.4
between Registrant and CPA(R):9. to Registrant's Form 8-K
dated September 28, 1989
10.31 Lease Agreement dated September 29, 1989 Filed as Exhibit 10.1
by and between Registrant and CPA(R):9, to Registrant's Form 8-K
as Landlord, and SDC, as Tenant. dated November 16, 1989
10.32 Guaranty and Suretyship Agreement dated Filed as Exhibit 10.2
September 29, 1989 from Holdings, as Guarantor, to Registrant's Form 8-K
to Registrant and CPA(R):9, as Landlord. dated November 16, 1989
10.33 Construction Management Agreement dated Filed as Exhibit 10.3
September 29, 1989 between SDC, as Tenant, to Registrant's Form 8-K
and Registrant and CPA(R):9, as Owner. dated November 16, 1989
</TABLE>
- 23 -
<PAGE> 25
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C>
10.34 Assignment of Rights Under Construction Contract Filed as Exhibit 10.4
dated September 29, 1989 between SDC, as Assignor, to Registrant's Form 8-K
and Registrant and CPA(R):9, as Assignee. dated November 16, 1989
10.35 Lease Agreement dated December 29, 1989 Filed as Exhibit 10.1
by and between Registrant and CPA(R):9, as to Registrant's Form 8-K
Landlord, and Foote & Davies ("F&D"), as Tenant. dated January 25, 1990
10.36 Guaranty and Suretyship Agreement dated December 29, Filed as Exhibit 10.2
1989 by ASG Acquisition Corporation ("ASG"), as to Registrant's Form 8-K
Guarantor, to Registrant and CPA(R):9, as Landlord. dated January 25, 1990
10.37 Lease Agreement dated as of January 29, 1990 Filed as Exhibit 10.1
by and between Registrant and CPA(R):9, as to Registrant's Form 8-K
Landlord, and Furon, as Tenant. dated March 12, 1990
10.38 Sublease dated January 29, 1990 by and between Furon, Filed as Exhibit 10.2
as Sublandlord, and CHR Industries, Inc., as Subtenant, to Registrant's Form 8-K
and consented to by Registrant and CPA(R):9, as Landlord. dated March 12, 1990
10.39 Sublease dated January 29, 1990 by and between Furon, as Filed as Exhibit 10.3
Sublandlord, and Bunnell Plastics, Inc., as Subtenant, and to Registrant's Form 8-K
consented to by Registrant and CPA(R):9, as Landlord. dated March 12, 1990
10.40 Sublease dated January 29, 1990 by and between Furon, as Filed as Exhibit 10.4
Sublandlord, and Dixon Industries Corporation, as Subtenant, to Registrant's Form 8-K
and consented to by Registrant and CPA(R):9, as Landlord. dated March 12, 1990
10.41 Assignment of Lease Agreement dated January 29, Filed as Exhibit 10.5
1990 by and between Furon, as Assignor, to Registrant's Form 8-K
and Registrant and CPA(R):9, as Assignee. dated March 12, 1990
10.42 Lessee's and Guarantor's Certificate dated Filed as Exhibit 10.6
December 29, 1989 between F&D, as Lessee, to Registrant's Form 8-K
and Registrant and CPA(R):9, as Lessor. dated March 12, 1990
10.43 First Amendment to Lease Agreement dated as of Filed as Exhibit 10.7
January 30, 1990 between F&D, as Tenant, to Registrant's Form 8-K
and Registrant and CPA(R):9, as Landlord. dated March 12, 1990
10.44 Agreement to Guaranty and Suretyship Agreement dated Filed as Exhibit 10.8
as of January 30, 1990 made by ASG, as Guarantor, to Registrant's Form 8-K
to Registrant and CPA(R):9, as Landlord. dated March 12, 1990
10.45 Lease Agreement between Registrant and Filed as Exhibit 10.1
CPA(R):9, as Landlord, and DDC, as Tenant. to Registrant's Form 8-K
dated July 13, 1990
28.1 Cash Sale Deed dated June 14, 1988 from Filed as Exhibit 28(F)(4)
Integra, as Grantor, to Registrant, as to Registrant's Post-
Grantee. Effective Amendment No. 1
to Form S-11
</TABLE>
- 24 -
<PAGE> 26
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C>
28.2 Bill of Sale dated June 14, 1988 from Filed as Exhibit 28(F)(5)
Integra, as Seller, to Registrant and CPA(R):4, to Registrant's Post-
together, as Purchaser. Effective Amendment No. 1
to Form S-11
28.3 Seller's/Lessee's Certificate dated June 14, Filed as Exhibit 28(F)(6)
1988 from Integra, as Seller, to Registrant to Registrant's Post-
and CPA(R):4, together, as Purchaser. Effective Amendment No. 1
to Form S-11
28.4 Sale and Purchase Agreement dated June 23, Filed as Exhibit 28(G)(1)
1988 between ASG, as Seller, and Registrant, to Registrant's Post-
as Purchaser. Effective Amendment No. 1
to Form S-11
28.5 Special Warranty Deed dated June 23, 1988 Filed as Exhibit 28(G)(2)
from ASG, as Grantor, to Registrant, as to Registrant's Post-
Grantee. Effective Amendment No. 1
to Form S-11
28.6 Bill of Sale dated June 23, 1988 from ASG, Filed as Exhibit 28(G)(3)
as Seller, to Registrant, as Purchaser. to Registrant's Post-
Effective Amendment No. 1
to Form S-11
28.7 Seller's/Lessee's Certificate dated August Filed as Exhibit 28(H)(1)
24, 1988 from AutoZone, to Registrant. to Registrant's Post-
Effective Amendment No. 1
to Form S-11
28.8 Deeds dated August 24, 1988 from AutoZone, Filed as Exhibit 28(H)(2)
as Grantor, to Registrant, as Grantee, to Registrant's Post-
conveying properties located in the following Effective Amendment No. 1
locations: to Form S-11
(a) Duval County, Florida (Atlantic Boulevard)
(b) Duval County, Florida (Beach Boulevard)
(c) Dougherty County, Georgia
(d) Richmond County, Georgia
(e) Glynn County, Georgia
(f) Bibb County, Georgia
(g) Bernalillo County, New Mexico
(h) San Juan County, New Mexico
(i) Lexington County, South Carolina
(j) Harris County, Texas
(k) Bexar County, Texas
28.9 Letter of Intent dated May 24, 1988 from Filed as Exhibit 28(I)
Registrant to Michael I. Mil of Wozniak to Registrant's Post-
Industrial, regarding purchase of property Effective Amendment No. 1
from Mayfair Molded Products Corporation in Illinois. to Form S-11
</TABLE>
- 25 -
<PAGE> 27
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C>
28.10 Letter of Intent dated August 9, 1988 from Filed as Exhibit 28(J)
Registrant and CPA(R):7 to ASA Plaza Venture II to Registrant's Post-
and Advanced System Applications, Inc., Effective Amendment No. 1
regarding purchase of property located in Illinois. to Form S-11
28.11 Letter of Intent dated June 22, 1988 from Registrant to Clifford Filed as Exhibit 28(K)
Press of Hyde Park Holdings, Inc., regarding purchase of to Registrant's Post-
property from High Voltage Engineering Corporation in Effective Amendment No. 1
Lancaster County, Pennsylvania and Sterling, Massachusetts. to Form S-11
28.12 Trustee's Deed dated September 23, 1988 Filed as Exhibit 28(L)(4)
from American National Bank & Trust Company to Registrant's Post-
of Chicago, as Grantor to Registrant and Effective Amendment No. 2
CPA(R):7, as Grantee. to Form S-11
28.13 Bill of Sale dated September 29, 1988 among Filed as Exhibit 28(L)(5)
ASA Plaza Venture II, Registrant and CPA(R):7. to Registrant's Post-
Effective Amendment No. 2
to Form S-11
28.14 Seller's Certificate dated September 29, Filed as Exhibit 28(L)(6)
1988 among ASA, Inc. Registrant and CPA(R):7. to Registrant's Post-
Effective Amendment No. 2
to Form S-11
28.15 Lessee's Certificate dated September 29, Filed as Exhibit 28(L)(7)
1988 among Registrant, ASA, Inc. and CPA(R):7. to Registrant's Post-
Effective Amendment No. 2
to Form S-11
28.16 Lessor's Certificate dated September 29, Filed as Exhibit 28(L)(8)
1988 among Registrant, CPA(R):7 and ASA, Inc. to Registrant's Post-
Effective Amendment No. 2
to Form S-11
28.17 Bill of Sale dated November 10, 1988 from Filed as Exhibit 28(M)(10)
High Voltage Engineering Corporation as to Registrant's Post-
Seller to Registrant, as Purchaser. Effective Amendment No. 2
to Form S-11
28.18 Bill of Sale dated November 10, 1988 from Filed as Exhibit 28(M)(11)
Datcon Instrument Company, as Seller, to Registrant's Post-
Registrant, as Purchaser. Effective Amendment No. 2
to Form S-11
28.19 Seller's/Lessee's Certificate dated November Filed as Exhibit 28(M)(12)
10, 1988 between Registrant and High Voltage to Registrant's Post-
Engineering Corporation. Effective Amendment No. 2
to Form S-11
28.20 Seller's/Lessee's Certificate dated November Filed as Exhibit 28(M)(13)
10, 1988 from Datcon Instrument Company, to Registrant's Post-
Seller to Registrant, Purchaser. Effective Amendment No. 2
to Form S-11
</TABLE>
- 26 -
<PAGE> 28
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C>
28.21 Deed dated November 10, 1988 from Datcon Filed as Exhibit 28(M)(14)
Instrument Company, as Grantor, to Registrant, to Registrant's Post-
as Grantee, conveying property located in Effective Amendment No. 2
East Hempfield Township, PA. to Form S-11
28.22 Quitclaim Deed dated November 10, 1988 from Filed as Exhibit 28(M)(15)
High Voltage Engineering Corporation, as to Registrant's Post-
Grantor, and Registrant, as Grantee, conveying Effective Amendment No. 2
two parcels of land located in Sterling and to Form S-11
Leominster, MA.
28.23 Seller's/Lessee's Certificate dated Filed as Exhibit 28.1
December 20, 1988 from Stationers, as Lessee, to Registrant's Form 8-K
to Registrant, as Purchaser. dated May 18, 1989
28.24 Warranty Deed dated December 20, 1988 Filed as Exhibit 28.2
from SDC Distributing, as Grantor, to to Registrant's Form 8-K
Registrant, as Grantee. dated May 18, 1989
28.25 Special Warranty Deed dated December 20, Filed as Exhibit 28.3
1988 from SDC Distributing, as Grantor, to Registrant's Form 8-K
to Registrant, as Grantee. dated May 18, 1989
28.26 Bill of Sale dated December 20, 1988 Filed as Exhibit 28.4
from SDC Distributing, as Seller, to Registrant's Form 8-K
to Registrant, as Purchaser. dated May 18, 1989
28.27 Seller's Certificate dated December 21, Filed as Exhibit 28.5
1988 from SDC-GESCO Associates, as Seller, to Registrant's Form 8-K
to Registrant and CPA(R):9, as Purchaser. dated May 18, 1989
28.28 Corporation Deed dated December 21, Filed as Exhibit 28.6
1988 from SDC-GESCO Associates, as Grantor, to Registrant's Form 8-K
to Registrant and CPA(R):9, as Grantee. dated May 18, 1989
28.29 Seller's/Lessee's Certificate dated Filed as Exhibit 28.7
December 21, 1988 from Ormco, as Lessee, to Registrant's Form 8-K
to Registrant and CPA(R):7, as Purchaser. dated May 18, 1989
28.30 Seller's/Lessee's Certificate dated Filed as Exhibit 28.8
December 21, 1988 from Barnstead, as Lessee, to Registrant's Form 8-K
to Registrant and CPA(R):7, as Purchaser. dated May 18, 1989
28.31 Seller's/Lessee's Certificate dated Filed as Exhibit 28.9
December 21, 1988 from Kerr, as Seller, to Registrant's Form 8-K
to Registrant and CPA(R):7, as Purchaser. dated May 18, 1989
28.32 Seller's/Lessee's Certificate dated Filed as Exhibit 28.10
December 21, 1988 from Erie, as Lessee, to Registrant's Form 8-K
to Registrant and CPA(R):7, as Purchaser. dated May 18, 1989
</TABLE>
- 27 -
<PAGE> 29
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C>
28.33 Seller's Lessee's Certificate dated Filed as Exhibit 28.11
December 20, 1988 from Nalge, as Lessee, to Registrant's Form 8-K
to Registrant and CPA(R):7, as Purchaser. dated May 18, 1989
28.34 Grant Deed dated December 21, 1988 Filed as Exhibit 28.12
from Ormco, as Grantor, to Registrant to Registrant's Form 8-K
and CPA(R):7, as Grantee. dated May 18, 1989
28.35 Warranty Deed dated December 21, 1988 Filed as Exhibit 28.13
from Barnstead Thermolyne, as Grantor, to Registrant's Form 8-K
to Registrant and CPA(R):7, as Grantee. dated May 18, 1989
28.36 Deed dated December 21, 1988 from Kerr, Filed as Exhibit 28.14
as Grantor, to Registrant and CPA(R):7, to Registrant's Form 8-K
as Grantee. dated May 18, 1989
28.37 Warranty Deed dated December 21, 1988 Filed as Exhibit 28.15
from Erie, as Grantor, to Registrant and to Registrant's Form 8-K
CPA(R):7, as Grantee. dated May 18, 1989
28.38 Indenture dated December 21, 1988 Filed as Exhibit 28.16
from Nalge, as Grantor, to Registrant to Registrant's Form 8-K
and CPA(R):7, as Grantee. dated May 18, 1989
28.39 Bill of Sale dated December 21, 1988 Filed as Exhibit 28.17
from Ormco Corporation to Registrant to Registrant's Form 8-K
and CPA(R):7. dated May 18, 1989
28.40 Bill of Sale dated December 21, 1988 Filed as Exhibit 28.18
from Barnstead, as Seller, to Registrant to Registrant's Form 8-K
and CPA(R):7, as Purchaser. dated May 18, 1989
28.41 Bill of Sale dated December 21, 1988 Filed as Exhibit 28.19
from Kerr, as Seller, to Registrant to Registrant's Form 8-K
and CPA(R):7, as Purchaser. dated May 18, 1989
28.42 Bill of Sale dated December 21, 1988 Filed as Exhibit 28.20
from Erie, as Seller, to Registrant to Registrant's Form 8-K
and CPA(R):7, as Purchaser. dated May 18, 1989
28.43 Bill of Sale dated December 21, 1988 Filed as Exhibit 28.21
from Nalge, as Seller, to Registrant to Registrant's Form 8-K
and CPA(R):7, as Purchaser. dated May 18, 1989
28.44 Seller's/Lessee's Certificate dated Filed as Exhibit 28.22
March 21, 1989 from D/S College Station, to Registrant's Form 8-K
as Seller, to Registrant, as Purchaser. dated May 18, 1989
28.45 General Warranty Certificate dated Filed as Exhibit 28.23
March 21, 1989 from D/S College Station, to Registrant's Form 8-K
as Lessee, to Registrant, as Purchaser. dated May 18, 1989
</TABLE>
- 28 -
<PAGE> 30
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C>
28.46 Bill of Sale dated March 21, 1989 from Filed as Exhibit 28.24
D/S College Station, as Seller, to to Registrant's Form 8-K
Registrant and CPA(R):7, as Purchaser. dated May 18, 1989
28.47 Warranty Deed dated March 31, 1989 from Ryan, Filed as Exhibit 28.25
as Grantor, to Registrant and CPA(R):7, as to Registrant's Form 8-K
Grantee, for the Plant City, Florida Property. dated May 18, 1989
28.48 Deed dated March 31, 1989 from Ryan, as Filed as Exhibit 28.26
Grantor, to Registrant and CPA(R):7, as Grantee, to Registrant's Form 8-K
for the Frederick County, Maryland Property. dated May 18, 1989
28.49 Deed dated March 31, 1989 from Ryan, as Filed as Exhibit 28.27
Grantor, to Registrant and CPA(R):7, as Grantee, to Registrant's Form 8-K
for the Farmington, New York Property. dated May 18, 1989
28.50 Deed dated March 31, 1989 from Ryan, as Filed as Exhibit 28.28
Grantor, to Registrant and CPA(R):7, as Grantee, to Registrant's Form 8-K
for the Fredericksburg, Virginia Property. dated May 18, 1989
28.51 Deed dated March 31, 1989 from Ryan, as Filed as Exhibit 28.29
Grantor, to Registrant and CPA(R):7, as Grantee to Registrant's Form 8-K
for the Manassas, Virginia Property. dated May 18, 1989
28.53 Bill of Sale dated March 31, 1989 from Ryan, as Filed as Exhibit 28.31
Seller, to Registrant and CPA(R):7, as Purchaser, to Registrant's Form 8-K
for the Frederick County, Maryland Property. dated May 18, 1989
28.54 Bill of Sale dated March 31, 1989 from Ryan, as Filed as Exhibit 28.32
Seller, to Registrant and CPA(R):7, as Purchaser, to Registrant's Form 8-K
for the Fredericksburg, Virginia Property. dated May 18, 1989
28.55 Bill of Sale dated March 31, 1989 from Ryan, Filed as Exhibit 28.33
as Seller, to Registrant and CPA(R):7, as to Registrant's Form 8-K
Purchaser, for the Manassas, Virginia Property. dated May 18, 1989
28.56 Seller's Certificate dated March 31, 1989 Filed as Exhibit 28.34
from NV Homes, L.P., as Seller, to to Registrant's Form 8-K
Registrant, and CPA(R):7, as Purchaser. dated May 18, 1989
28.57 Seller's Certificate dated March 31, 1989 Filed as Exhibit 28.35
from Ryan as Seller, to Registrant, to Registrant's Form 8-K
and CPA(R):7, as Purchaser. dated May 18, 1989
28.58 Lessee's Certificate dated March 31, 1989 Filed as Exhibit 28.36
from NV Homes, L.P., as Lessee, to to Registrant's Form 8-K
Registrant, and CPA(R):7, as Lessor. dated May 18, 1989
28.59 Lessee's Certificate dated March 31, 1989 Filed as Exhibit 28.37
from Ryan, as Lessee, to Registrant, to Registrant's Form 8-K
and CPA(R):7, as Lessor. dated May 18, 1989
</TABLE>
- 29 -
<PAGE> 31
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C>
28.60 Lessee's Certificate dated March 31, 1989 Filed as Exhibit 28.38
from Ryan Operations, G.P., as Lessee, to to Registrant's Form 8-K
Registrant, and CPA(R):7, as Lessor. dated May 18, 1989
28.61 Co-Tenancy Agreement dated March 31, 1989 Filed as Exhibit 28.39
between Registrant and CPA(R):7 as tenants to Registrant's Form 8-K
in common. dated May 18, 1989
28.62 Seller's/Lessee's Certificate dated Filed as Exhibit 28.1
June 28, 1989 from Dr. Pepper, as Seller, to Registrant's Form 8-K
to Registrant and CPA(R):9, as Purchaser. dated September 28, 1989
28.63 Warranty Deed dated June 28, 1989 from Filed as Exhibit 28.2
Dr. Pepper, as Grantor, to Registrant and to Registrant's Form 8-K
CPA(R):9, as Grantee, for the Irving Property. dated September 28, 1989
28.64 Warranty Deed dated June 28, 1989 from Filed as Exhibit 28.3
Dr. Pepper, as Grantor, to Registrant and to Registrant's Form 8-K
CPA(R):9, as Grantee, for the Houston Property. dated September 28, 1989
28.65 Bill of Sale dated June 28, 1989 from Filed as Exhibit 28.4
Dr. Pepper, as Seller, to Registrant and to Registrant's Form 8-K
CPA(R):9, as Purchaser, for the Irving Property. dated September 28, 1989
28.66 Bill of Sale dated June 28, 1989 from Filed as Exhibit 28.5
Dr. Pepper, as Seller, to Registrant and to Registrant's Form 8-K
CPA(R):9, as Purchaser, for the Houston Property. dated September 28, 1989
28.67 Joint Venture Agreement made as of December 8, Filed as Exhibit 28.6
1988 between Registrant and CPA(R):9. to Registrant's Form 8-K
dated September 28, 1989
28.68 Special Warranty Deed dated September 29, 1989 Filed as Exhibit 28.1
from SDC, as Grantor, to Registrant and CPA(R):9, to Registrant's Form 8-K
as Grantee. dated November 16, 1989
28.69 Bill of Sale dated September 29, 1989 Filed as Exhibit 28.2
from SDC, as Seller, to Registrant and CPA(R):9, to Registrant's Form 8-K
as Purchaser. dated November 16, 1989
28.70 Seller's/Lessee's Certificate dated Filed as Exhibit 28.3
September 29, 1989 from SDC, as Seller, to Registrant's Form 8-K
to Registrant and CPA(R):9, as Purchaser. dated November 16, 1989
28.71 Guarantor's Certificate dated Filed as Exhibit 28.4
September 29, 1989 from SDC, as Guarantor, to Registrant's Form 8-K
to Registrant and CPA(R):9, as Purchaser. dated November 16, 1989
28.72 Co-Tenancy Agreement dated September 29, 1989 Filed as Exhibit 28.5
between Registrant and CPA(R):9. to Registrant's Form 8-K
dated November 16, 1989
</TABLE>
- 30 -
<PAGE> 32
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C>
28.73 Assignment of Rights Under Agreement dated Filed as Exhibit 28.6
September 29, 1989 from SDC, as Assignor, to Registrant's Form 8-K
to Registrant and CPA(R):9, as Assignee. dated November 16, 1989
28.74 Co-Tenancy Agreement dated December 29, 1989 Filed as Exhibit 28.1
between Registrant and CPA(R):9. to Registrant's Form 8-K
dated January 25, 1990
28.75 Special Warranty Deed dated December 29, 1989 Filed as Exhibit 28.2
from Footland, as Grantor, to Registrant and to Registrant's Form 8-K
CPA(R):9, as Grantee. dated January 25, 1990
28.76 Bill of Sale dated December 29, 1989 from Filed as Exhibit 28.3
Footland, as Seller, to Registrant and to Registrant's Form 8-K
CPA(R):9, as Purchaser. dated January 25, 1990
28.77 Seller's Certificate dated December 29, 1989 Filed as Exhibit 28.4
from Footland, as Seller, to Registrant to Registrant's Form 8-K
and CPA(R):9, as Purchaser. dated January 25, 1990
28.78 Lessee's Certificate dated December 29, 1989 Filed as Exhibit 28.5
from F&D, as Tenant, to Registrant and to Registrant's Form 8-K
CPA(R):9, as Landlord. dated January 25, 1990
28.79 Guarantor's Certificate dated December 29, 1989 Filed as Exhibit 28.6
from ASG, as Guarantor, to Registrant and to Registrant's Form 8-K
CPA(R):9, as Purchaser. dated January 25, 1990
28.80 Agreement dated December 29, 1989 between Filed as Exhibit 28.7
Heller Financial, Inc., Registrant and to Registrant's Form 8-K
CPA(R):9. dated January 25, 1990
28.81 Deed dated January 29, 1990 from CHR Filed as Exhibit 28.1
Industries, Inc. as Grantor, to Registrant to Registrant's Form 8-K
and CPA(R):9, as Grantees (New Haven Premises). dated March 12, 1990
28.82 Deed dated January 29, 1990 from Bunnell Filed as Exhibit 28.2
Plastics, Inc. as Grantor, to Registrant to Registrant's Form 8-K
and CPA(R):9, as Grantees (Mickleton Premises). dated March 12, 1990
28.83 Deed dated January 29, 1990 from Furon, Filed as Exhibit 28.3
as Grantor, to Registrant and CPA(R):9, to Registrant's Form 8-K
as Grantees (Mantua Premises). dated March 12, 1990
28.85 Deed dated January 29, 1990 from Furon, Filed as Exhibit 28.5
as Grantor, to Registrant and CPA(R):9, to Registrant's Form 8-K
as Grantees (Aurora Premises). dated March 12, 1990
28.87 Quitclaim Deed dated January 29, 1990 from Filed as Exhibit 28.7
Furon, as Grantor, to Registrant and to Registrant's Form 8-K
CPA(R):9, as Grantees (Bristol Premises). dated March 12, 1990
</TABLE>
- 31 -
<PAGE> 33
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C>
28.88 Special Warranty Deed dated January 29, 1990 Filed as Exhibit 28.8
from Furon, as Grantor, to Registrant and to Registrant's Form 8-K
CPA(R):9, as Grantees (Mt. Pleasant Premises). dated March 12, 1990
28.89 Warranty Deed dated January 29, 1990 from Filed as Exhibit 28.9
Furon, as Grantor, to Registrant and to Registrant's Form 8-K
CPA(R):9, as Grantees (Milwaukee Premises). dated March 12, 1990
28.90 Seller's Certificate dated January 29, 1990 Filed as Exhibit 28.10
from CHR Industries, Inc., as Seller, to to Registrant's Form 8-K
Registrant and CPA(R):9, as Purchaser and dated March 12, 1990
Lenders (New Haven Premises).
28.91 Seller's Certificate dated January 29, 1990 Filed as Exhibit 28.11
from Bunnell Plastics, Inc., as Seller, to to Registrant's Form 8-K
Registrant and CPA(R):9, as Purchaser and dated March 12, 1990
Lenders (Mickleton Premises).
28.92 Seller's Certificate dated January 29, 1990 Filed as Exhibit 28.12
from Dixon Industries Corporation, as Seller, to Registrant's Form 8-K
to Registrant and CPA(R):9, as Purchaser and dated March 12, 1990
Lenders (Bristol Premises).
28.93 Seller's/Lessee's Certificate dated January 29, Filed as Exhibit 28.13
1990 from Furon, as Seller, to Registrant and to Registrant's Form 8-K
CPA(R):9, as Purchaser and Lenders (Aurora, dated March 12, 1990
Mantua, Twinsburg, Liverpool, Mt. Pleasant,
and Milwaukee Premises).
28.94 Co-Tenancy Agreement dated as of January 29, Filed as Exhibit 28.14
1990 by and between Registrant and CPA(R):9. to Registrant's Form 8-K
dated March 12, 1990
28.95 General Warranty Deed dated from DDC Filed as Exhibit 28.1
to Registrant and CPA(R):9. to Registrant's Form 8-K
dated July 13, 1990
28.96 Bill of Sale from DDC to Registrant Filed as Exhibit 28.2
and CPA(R):9. to Registrant's Form 8-K
dated July 13, 1990
28.97 Assignment of Leases and Agreements from Filed as Exhibit 28.3
DDC to Registrant and CPA(R):9. to Registrant's Form 8-K
dated July 13, 1990
28.98 Co-tenancy Agreement between Registrant Filed as Exhibit 28.4
and CPA(R):9. to Registrant's Form 8-K
dated July 13, 1990
28.99 Prospectus of Registrant Filed as Exhibit 28.99
dated February 17, 1988 to Form 10-K/A dated
September 24, 1993
</TABLE>
- 32 -
<PAGE> 34
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- ------
<S> <C> <C>
28.100 Supplement dated June 22, 1988 Filed as Exhibit 28.100
to Prospectus dated February 17, 1988. to Form 10-K/A dated
September 24, 1993
28.101 Supplement dated August 31, 1988 Filed as Exhibit 28.101
to Prospectus dated February 17, 1988. to Form 10-K/A dated
September 24, 1993
28.102 Supplement dated November 22, 1988 Filed as Exhibit 28.102
to Prospectus dated February 17, 1988. to Form 10-K/A dated
September 24, 1993
</TABLE>
(b) Reports on Form 8-K
During the year ended December 31, 1996 Registrant was not required
to file any reports on Form 8-K.
-33-
<PAGE> 35
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 8, L.P.,
a Delaware limited partnership
BY: EIGHTH CAREY CORPORATE PROPERTY, INC.
04/03/97 BY: /s/ Claude Fernandez
- ---------------- ------------------------------------
Date Claude Fernandez
Executive Vice President and
Chief Administrative Officer
(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.
BY: EIGHTH CAREY CORPORATE PROPERTY, INC.
William P. Carey
Chairman of the Board
and Director
(Principal Executive Officer)
Francis J. Carey
President and Director
George E. Stoddard BY: /s/ George E. Stoddard
Chairman of the Investment ----------------------
Committee and Director George E. Stoddard
Attorney in fact
Dr. Lawrence R. Klein April 3, 1997
Chairman of the Economic Policy
Committee and Director
Madelon DeVoe Talley
Vice Chairman of the Board of
Directors and Director
04/03/97 BY: /s/ Claude Fernandez
- -------------- -------------------------------------
Date Claude Fernandez
Executive Vice President and
Chief Administrative Officer
(Principal Financial Officer)
04/03/97 BY: /s/ Michael D. Roberts
- -------------- -------------------------------------
Date Michael D. Roberts
First Vice President and Controller
(Principal Accounting Officer)
-34-
<PAGE> 36
APPENDIX A TO FORM 10-K
CORPORATE PROPERTY ASSOCIATES 8, L.P.
- A DELAWARE LIMITED PARTNERSHIP
1996 ANNUAL REPORT
<PAGE> 37
SELECTED FINANCIAL DATA
- --------------------------------------------------------------------------------
(In thousands except per unit amounts)
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996
-------- ------- -------- -------- --------
OPERATING DATA:
<S> <C> <C> <C> <C> <C>
Revenues ...................... $ 13,660 14,364 $ 15,189 $ 15,454 $ 16,207
Income before
extraordinary item ............ 4,312 5,258 6,012 8,338 9,453
Income before
extraordinary item
allocated:
To General Partners ........... 431 526 601 834 965
To Limited Partners ........... 3,881 4,732 5,411 7,504 8,488
Per unit ..................... 57.29 69.84 79.86 110.93 125.60
Distributions attributable (1):
To General Partners .... 630 634 637 644 658
To Limited Partners .... 5,669 5,702 5,729 5,799 5,919
Per unit ................... 83.68 84.16 84.56 85.76 87.58
Payment of mortgage
principal (2) ... 303 457 969 3,358 1,769
BALANCE SHEET DATA:
Total assets .................. 120,971 120,670 116,323 114,890 108,629
Long-term
obligations (3) ............. 49,526 62,098 57,908 52,324 39,084
</TABLE>
(1) Includes distributions attributable to the fourth quarter of each fiscal
year payable in the following fiscal year less distributions in the first
fiscal quarter attributable to the prior year.
(2) Represents scheduled mortgage principal amortization paid.
(3) Represents mortgage and note payable obligations due after more than
one year.
-1-
<PAGE> 38
MANAGEMENT'S DISCUSSION AND ANALYSIS
- --------------------------------------------------------------------------------
Results of Operations
Net income increased by $1,115,000 as compared with the prior year.
Current year income included the benefit of nonrecurring other income of
$353,000. The increase in income was due to increases in lease revenues and
income from equity investments and decreases in depreciation and interest
expenses. This was partially offset by an increase in property expenses and a
decrease in hotel operating income.
The increase in lease revenues was primarily due to the commencement
of the lease with the United States Postal Service (the "Postal Service") in May
1996, and, to a lesser extent, rent increases on the Detroit Diesel Corporation
("Detroit Diesel") and United Stationers Supply Co. ("Stationers") leases in
1995. The increase in equity income was due to the Partnership's share of income
from its new investment in limited partnership units of American General
Hospitality Operating Partnership L.P. (the "Operating Partnership") which it
acquired on July 30, 1996 in exchange for its interest in the Holiday Inn New
Orleans Airport in Kenner, Louisiana. The decrease in hotel earnings is
attributable to the exchange as the operations were assumed by the Operating
Partnership. The decrease in interest expense was due to the satisfaction of the
mortgage loan on the Advanced System Application, Inc. ("ASA") property which
fully amortized in March 1996, the satisfaction of the mortgage loan on the
hotel property which obligation was assumed by the Operating Partnership in
connection with the exchange of the hotel and the continuing principal
amortization of other limited recourse mortgage loans. Depreciation decreased
due to the disposition of the hotel property. The increase in property expenses
was due to the Partnership's assuming the contractual responsibility for the
operating costs including insurance, maintenance and real estate taxes at the
ASA property, as described below, as required by a modification to the ASA lease
in 1996 and the new lease with the Postal Service for a portion of the ASA
property. Property expenses relating to the Amerisig, Inc. ("Amerisig")
properties decreased as the Partnership's reached a settlement regarding the
Amerisig leases. In connection with the settlement, the Partnership recognized
other income of $224,000 as a result of being released from a security deposit
obligation on the prior lease on one of the Amerisig properties. The Partnership
also received $129,000 from its bankruptcy claim against the former lessee of
the Kenner hotel property.
Income before extraordinary items for the year ended December 31,
1995 increased by $2,326,000 as compared with the prior year. As adjusted for
certain nonrecurring items including a writedown of properties by $1,104,000 to
their estimated net realizable value, the increase in income would have been
$2,096,000. The increase was due to increases in lease revenues and hotel
operating income and decreases in interest and property expenses. Lease revenues
increased due to the ASA lease modification in July 1994, a lease modification
with Stationers in March 1995 and rent increases on the Partnership's lease with
Orbital Sciences Corporation and the lease at one of the Amerisig properties in
1994. Hotel operating income reflects an increase in occupancy rates. Due to the
renovation work performed in 1994, there were fewer rooms available. As
described below, new leases with Amerisig were executed in 1996. The decrease in
interest expense was primarily due to the accelerated amortization of the
principal payments on the ASA mortgage loan. Property expense decreased due to
lower leasing fees and lower costs incurred in the legal dispute relating to the
enforcement of the lessees' obligations under the Amerisig leases.
As more fully described in Note 14 to the Financial Statements, the
Partnership entered into a lease modification agreement with ASA in 1994 which
was structured so that the Partnership would receive above-market rents for a
three-year period in exchange for consenting to the acceleration of the
expiration of the lease terms. The Partnership's share of ASA's annual rent
increased from $1,228,000 to $3,451,000 in exchange for releasing ASA from its
lease obligations in June 1997 instead of June 2003. The modification required
the consent of the mortgage lender on the ASA property and the Partnership was
required to accelerate principal payments on the mortgage loan in order to fully
amortize the loan in March 1996. Annual debt service increased by $2,126,000
during this period. The lease was further amended in 1996 and provided that the
Partnership's share of ASA annual rent be decreased by $553,000 and that the
Partnership pay the costs of maintenance, insurance and real state taxes. In
exchange, the Partnership received all rents from an ASA subtenant and did not
have to relinquish one-third of the rents from the Postal Service lease, which
would have been required under the 1994 agreement. Operating results and cash
flow from operations for 1996
-2-
<PAGE> 39
reflect the full benefit of the ASA agreement. The benefit to operating results
and cash flow for 1994 and 1995 was not as significant as in 1996 as the
Partnership was also required to pay its share of the annual debt service of
$2,655,000 on the ASA loan while debt service was eliminated after the first
quarter of 1996. Accordingly, rental revenues and cash flow will decrease as any
new leases are not expected to sustain the level reached on the ASA lease. Prior
to the modifications, the Partnership's annual cash flow (rents, net of mortgage
debt service) was $698,000. The Partnership is currently receiving annual rent
of $480,000 from the Postal Service lease before operating costs. The
Partnership has entered into preliminary discussions with the Postal Service
regarding occupying additional space when ASA fully vacates the property. There
is no assurance that the Postal Service will lease additional space. To the
extent that either the Postal Service or other new lessees occupy available
space at the ASA property, the Partnership will probably be required to fund
additional improvements. It is expected that the ASA subtenant will vacate the
facility at the end of the ASA lease term in June 1997.
In July 1996, the Partnership exchanged its ownership interests in
the hotel property in exchange for 493,664 units in the Operating Partnership,
at which time the Partnership transferred the hotel operation to the Operating
Partnership. Although hotel operating income represented approximately 18% and
20% of earnings in 1994 and 1995, as adjusted, Management believes that the
Partnership would have had to continue to invest significant resources to fund
the capital improvements needed to keep the operation competitive. The
Partnership realized cash flow after debt service in 1995 of $1,184,000;
however, the Partnership funded improvements of $798,000 in 1994. Management
expects that the exchange will eliminate the uncertainty and fluctuation in cash
flow related to operating a single hotel as the Operating Partnership owns a
diversified portfolio of hotel properties. For the five-month period since the
exchange, the Partnership has received approximately $337,000 in distributions
(including a distribution in January 1997 for the quarter ended December 31,
1996). On an annualized basis, distributions from this investment, at current
distribution rates, approximate $805,000. In July 1997, the Partnership will
have the right to exchange its 493,664 units on a one-for-one basis for shares
of common stock of American General Hospitality Corporation ("AGH"). AGH is a
publicly-traded real estate investment trust. The quoted market value of a share
of AGH common stock at March 15, 1997 was $28 resulting in an aggregate value of
$13,823,000. The carrying value of this investment as of December 31, 1996 was
$5,612,000.
In 1992, the assets of the predecessor company of Amerisig were
transferred to a creditor. In connection with the transfer, newly-formed
subsidiaries of the creditor entered into short-term leases for the properties.
The Partnership opposed such action asserting that it was contrary to the lease,
and, therefore, not permissible. In May 1996, the Partnership reached a
settlement with the creditor and Amerisig in which all litigation was withdrawn,
the subleases were terminated and new leases with rental terms equivalent to the
prior leases with the predecessor, were executed.
Cash flow should benefit from rent increases scheduled on leases
with Amerisig and High Voltage Engineering Corporation ("High Voltage") in 1998
and leases with Stationers and Mayfair Molded Products Corporation ("Mayfair")
in 1999. Future cash flow may be affected by changes in interest rates as the
Partnership's note payable of $5,102,000 is a variable rate obligation. Cash
flow will not be significantly affected by the sale of two properties leased to
Furon Company ("Furon") as a reduction in debt service offset a substantial
portion of the reduction in Furon's rental obligation. The Partnership has a 50%
equity interest in a property leased to General Electric Company, which lease
ends in July 1998 and the Partnership has not received any indication as to
whether the lessee will elect to renew the lease. The Partnership's share of
cash flow from this equity investment in 1996 was $252,000.
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. Most of the Partnership's net leases have rent
increases based on formulas indexed to increases in the Consumer Price Index
("CPI") or other periodic mandated increases which should increase revenues from
these leases in the future. Future rent increases may be affected by changes in
the method of the calculation of the CPI. Although there are indications that
there may be legislation which considers changes to the method for calculating
CPI, the Partnership cannot predict the outcome of any proposed changes relating
to the CPI formula.
-3-
<PAGE> 40
Financial Condition
Except for the ASA property and one vacant property, substantially
all of the Partnership's properties are leased to corporate tenants under
long-term net leases which generally require tenants to pay all operating
expenses relating to the leased properties. The Partnership depends on cash flow
from its leases to meet operating expenses, service its debt, fund distributions
and maintain adequate cash reserves. In addition, the Partnership maintains a
cash reserve for major outlays such as capital improvements and balloon debt
payments. The Partnership's cash and cash equivalents were $4,850,145 at
December 31, 1996.
The Partnership's cash flow from operating activities of $10,948,000
in 1996 was sufficient to fund distributions to partners of $6,550,000 and
$1,769,000 of scheduled principal payment installments on the Partnership's
mortgage debt.
The Partnership's investing activities in 1996 consisted of
receiving $442,000 in connection with the sale of two properties and funding
$414,000 of improvements at the ASA property in connection with paying for
tenant improvements. In addition, the Partnership converted its interest in a
hotel property in Kenner, Louisiana to units in the operating partnership of a
publicly traded real estate investment trust. With this exchange the
Partnership's need to commit funds for capital improvements has been
substantially reduced. The Partnership should be able to fund any improvements
relating to new leases at the ASA property from cash reserves. The Partnership
is committed to fund up to $3,500,000 for an expansion of the Amerisig property
in Olive Branch, Mississippi by no later than March 1998. The mortgage lender on
the Olive Branch property has a commitment to supply $2,400,000 of financing for
the expansion. The Partnership currently projects that it will fund the
$1,100,000 of equity for the expansion project from cash reserves.
As a real estate investment trust, AGH has an obligation to
distribute 95% of its taxable income in order to retain its special Federal
income tax status. Since AGH owns a majority of the Operating Partnership
limited partnership units, the Operating Partnership may be expected to
distribute a significant portion of its cash flow so that AGH can meet the tax
distribution objective. Accordingly, with the exchange, the Partnership should
achieve less fluctuation in cash flow than it did with direct ownership of a
hotel. Further, with the option to exchange Operating Partnership units for AGH
shares, the Partnership will have the opportunity to sell its interests at a
readily determinable market value.
The Partnership's financing activities in 1996 consisted primarily
of using cash flow from operations to pay distributions and meet scheduled
principal payment installment obligations. The Partnership refinanced the
mortgage loan on the Olive Branch property at which time it paid off an existing
loan on the property of $3,901,000. The existing loan had been a recourse
obligation. A limited recourse loan on another Amerisig property, which had been
scheduled to mature in January 1997, was extended. The ability to refinance and
extend the Amerisig loans was based on the Partnership's ability to execute new
long-term lease agreements. The Partnership also used cash reserves to retire an
existing loan of $2,671,000 on properties leased to AutoZone, Inc. which had
been scheduled to mature in August 1998. A mandatory prepayment of $288,000 was
made in connection with the sale of the Furon properties. The retired loan had
an annual interest rate of 10.5%. The limited recourse mortgage loan of
$4,048,000 on the Furon properties which was originally scheduled to mature on
January 1, 1997 has been extended until April 1, 1997. The Partnership is
currently negotiating a refinancing of the Furon mortgage loan, and as it
anticipates that the potential lender's due diligence will not be completed by
April 1, 1997, a further extension will be requested. Although there is no
assurance that the refinancing will occur, Management believes that since Furon
has more than 10 years remaining on its initial lease term, the prospects for
completing a refinancing of the loan are favorable.
In the case of limited recourse mortgage financing which does not
fully amortize over its term, the Partnership would be responsible for the
balloon payment, but only to the extent of its interest in the encumbered
property since the holder of each such obligation has recourse only to the
property collateralizing such debt. The Partnership could refinance the loans,
restructure the debt with existing lenders, evaluate its ability to satisfy the
loan from existing cash reserves or sell the property and use the proceeds to
satisfy the mortgage debt. In 1999, balloon payments of approximately
$20,095,000 are scheduled on the mortgage loans collateralized by Sybron
Acquisition Company ("Sybron"), Dr Pepper Bottling Company of Texas and High
Voltage properties. Based on the existing long-term leases with these lessees,
the Partnership believes that the loans can be refinanced. The Partnership's
note payable of $5,102,000 is scheduled to mature in 1999.
-4-
<PAGE> 41
The Partnership is currently considering whether to seek an extension of the
loan. The Partnership is in compliance with the financial covenants of the loan
agreement at December 31, 1996.
A number of the Partnership's leases provide purchase options,
generally at the greater of fair market value as encumbered by the lease or the
Partnership's cost of acquiring the property. The purchase options on the
properties leased to Sybron, Mayfair and High Voltage will be exercisable by the
lessees in 1998 at the greater of (i) fair market value as encumbered by the
lease or (ii) the Partnership's acquisition cost. In the event that these
options are exercised, the Partnership would receive no less than $19,900,000
(based on the minimum purchase option price, net of amounts needed to pay the
mortgage loans). If all the options are exercised, annual cash flow would
decrease by $2,588,000. The Partnership has not received any indication from any
of these lessees as to whether they intend to exercise their options. The lessee
of a hotel property in Topeka, Kansas may exercise a purchase option at any time
during its lease term. The option price would be based on the cash flow of the
operations of the hotel.
In connection with the purchase of its properties, the Partnership
required sellers of such properties to perform environmental reviews. Management
believes, based on the results of such reviews, that the Partnership's
properties were in substantial compliance with Federal and state environmental
statutes at the time the properties were acquired. However, portions of certain
properties have been subject to a limited degree of contamination, principally
in connection with leakage from underground storage tanks or surface spills. In
most instances where contamination has been identified, tenants are actively
engaged in the remediation process and addressing identified conditions. Tenants
are generally subject to environmental statutes and regulations regarding the
discharge of hazardous materials and any related remediation obligations. In
addition, the Partnership's leases generally require tenants to indemnify the
Partnership from all liabilities and losses related to the leased properties
with provisions of such indemnification specifically addressing environmental
matters. Accordingly, Management believes that the ultimate resolution of
environmental matters will not have a material adverse effect on the
Partnership's financial condition, liquidity or results of operations.
The General Partners care continuing to investigate ways to provide
liquidity for limited partners on a tax effective basis.
-5-
<PAGE> 42
REPORT of INDEPENDENT ACCOUNTANTS
To the Partners of
Corporate Property Associates 8, L.P.:
We have audited the accompanying balance sheets of Corporate
Property Associates 8, L.P., a Delaware limited partnership, as of December 31,
1995 and 1996, and the related statements of income, partners' capital, and cash
flows for each of the three years in the period ended December 31, 1996. We have
also audited the financial statement schedule included on pages 23 to 25 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 audits
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 financial position of Corporate Property
Associates 8, L.P., a Delaware limited partnership, as of December 31, 1995 and
1996, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1996, in conformity with generally
accepted accounting principles. In addition, in our opinion, the Schedule of
Real Estate and Accumulated Depreciation as of December 31, 1996, 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 21, 1997
-6-
<PAGE> 43
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
BALANCE SHEETS
December 31, 1995 and 1996
<TABLE>
<CAPTION>
1995 1996
------------- -------------
<S> <C> <C>
ASSETS:
Real estate leased to others:
Accounted for under the
operating method:
Land $ 16,215,476 $ 16,102,755
Buildings 42,873,222 42,890,140
------------- -------------
59,088,698 58,992,895
Accumulated depreciation 8,945,959 10,293,440
------------- -------------
50,142,739 48,699,455
Net investment in direct financing leases 47,095,414 47,095,414
------------- -------------
Real estate leased to others 97,238,153 95,794,869
Equity investments 1,234,480 6,513,068
Operating real estate, net of accumulated
depreciation of $1,440,459 in 1995 9,219,763
Cash and cash equivalents 5,119,385 4,850,145
Accrued interest and rents receivable 378,096 370,648
Other assets, net of accumulated amortization
of $118,651 in 1995 and $155,759 in 1996 1,699,830 1,100,473
------------- -------------
Total assets $ 114,889,707 $ 108,629,203
============= =============
LIABILITIES:
Mortgage notes payable $ 52,685,656 $ 44,139,958
Note payable 5,102,144 5,102,144
Accrued interest payable 610,754 473,317
Accounts payable and accrued expenses 522,575 274,822
Accounts payable to affiliates 127,994 209,112
Security deposits 264,312 8,488
Prepaid and deferred rental income 751,634 689,955
------------- -------------
Total liabilities 60,065,069 50,897,796
------------- -------------
Commitments and contingencies
PARTNERS' CAPITAL:
General Partners (412,915) (103,774)
Limited Partners (67,582 Limited Partnership
Units issued and outstanding) 55,237,553 57,835,181
------------- -------------
Total partners' capital 54,824,638 57,731,407
------------- -------------
Total liabilities and
partners' capital $ 114,889,707 $ 108,629,203
============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
-7-
<PAGE> 44
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
STATEMENTS of INCOME
For the years ended December 31, 1994, 1995 and 1996
<TABLE>
<CAPTION>
1994 1995 1996
------------ ------------ -----------
<S> <C> <C> <C>
Revenues:
Rental income $ 8,495,117 $ 8,979,476 $ 9,108,093
Interest income from direct financing leases 5,635,602 6,244,145 6,452,577
Other interest income 184,936 229,928 293,329
Other income 873,387 353,401
------------ ------------ -----------
15,189,042 15,453,549 16,207,400
------------ ------------ -----------
Expenses:
Interest 6,266,275 5,799,127 5,232,928
Depreciation 1,997,946 1,912,503 1,539,737
General and administrative 488,110 576,717 626,400
Property expenses 461,623 381,606 579,147
Amortization 35,555 37,108 37,108
Writedown to net realizable value 1,104,219
------------ ------------ -----------
10,353,728 8,707,061 8,015,320
------------ ------------ -----------
Income before (loss) income from equity
investments, gain on sale
and extraordinary item 4,835,314 6,746,488 8,192,080
Hotel operating income 1,260,151 1,653,696 986,339
(Loss) income from equity investments (83,436) (62,359) 253,061
------------ ------------ -----------
Income before gain on sale,
and extraordinary item 6,012,029 8,337,825 9,431,480
Gain on sale of real estate 21,697
------------ ------------ -----------
Income before extraordinary item 6,012,029 8,337,825 9,453,177
Extraordinary charge on extinguishment
of debt 120,000
------------ ------------ -----------
Net income $ 5,892,029 $ 8,337,825 $ 9,453,177
============ ============ ===========
Net income allocated to:
Individual General Partner $ 58,920 $ 83,378 $ 96,484
============ ============ ===========
Corporate General Partner $ 530,283 $ 750,405 $ 868,361
============ ============ ===========
Limited Partners $ 5,302,826 $ 7,504,042 $ 8,488,332
============ ============ ===========
Net income per weighted average Limited
Partnership Units):
Income before extraordinary item $ 79.86 $ 110.93 $ 125.60
Extraordinary item (1.59)
------------ ------------ -----------
$ 78.27 $ 110.93 $ 125.60
============ ============ ===========
Weighted average units 67,749 67,645 67,582
============ ============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-8-
<PAGE> 45
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
STATEMENTS of PARTNERS' CAPITAL
For the years ended December 31, 1994, 1995 and 1996
<TABLE>
<CAPTION>
Partners' Capital Accounts
----------------------------------------------------------------
Limited
Partners'
General Limited Amount Per
Total Partners Partners Unit (a)
------------ --------- ------------ --------
<S> <C> <C> <C> <C>
Balance, December 31, 1993 $ 53,546,280 $(558,716) $ 54,104,996 $ 799
Distributions (6,357,899) (635,791) (5,722,108) (84)
Net income, 1994 5,892,029 589,203 5,302,826 78
------------ --------- ------------ -----
Balance, December 31, 1994 53,080,410 (605,304) 53,685,714 793
Purchase of Limited Partnership Units (179,670) (179,670) (3)
Distributions (6,413,927) (641,394) (5,772,533) (85)
Net income, 1995 8,337,825 833,783 7,504,042 111
------------ --------- ------------ -----
Balance, December 31, 1995 54,824,638 (412,915) 55,237,553 816
Distributions (6,549,558) (655,704) (5,893,854) (87)
Adjustment to purchase of Limited
Partnership Units 3,150 3,150
Net income, 1996 9,453,177 964,845 8,488,332 126
------------ --------- ------------ -----
Balance, December 31, 1996 $ 57,731,407 $(103,774) $ 57,835,181 $ 855
============ ========= ============ =====
</TABLE>
(a) Based on weighted average Units issued and outstanding.
The accompanying notes are an integral part of the financial statements.
-9-
<PAGE> 46
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
STATEMENTS of CASH FLOWS
For the years ended December 31, 1994, 1995 and 1996
<TABLE>
<CAPTION>
1994 1995 1996
----------- ------------ ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 5,892,029 $ 8,337,825 $ 9,453,177
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 2,033,501 1,949,611 1,576,845
Cash receipts on operating leases (less than)
greater than straight-line adjustments (30,116) 274,471 244,698
Loss from equity investments 83,436 62,359
Restructuring fees received 1,227,779
Amortization of deferred income (59,892) (36,446) (36,446)
Deferred rental income recognized on
disposition of properties (835,636)
Writedown to net realizable value 1,104,219
Extraordinary charge on extinguishment of debt 120,000
Gain on sale (21,697)
Net change in operating assets and liabilities (907,884) (316,586) (268,906)
----------- ------------ ------------
Net cash provided by operating activities 8,627,436 10,271,234 10,947,671
----------- ------------ ------------
Cash flows from investing activities:
Distributions from equity investments in excess
of equity (loss) income 289,805 282,992 161,795
Additional capitalized costs (977,868) (163,752) (414,256)
Proceeds from sales of real estate 1,287,454 442,495
Purchase of interest in operating partnership and
related costs (230,278)
----------- ------------ ------------
Net cash provided by (used in) investing activities 599,391 119,240 (40,244)
----------- ------------ ------------
Cash flows from financing activities:
Distributions to partners (6,357,899) (6,413,927) (6,549,558)
Purchase of Limited Partnership Units (179,670) 3,150
Proceeds from mortgages 5,000,000 4,000,000
Prepayment of mortgage payable (5,771,250) (6,860,859)
Deferred financing costs (28,997)
Payment of mortgage principal (969,439) (3,358,177) (1,769,400)
Payment made on extinguishment of debt (120,000)
----------- ------------ ------------
Net cash used in financing activities (8,247,585) (9,951,774) (11,176,667)
----------- ------------ ------------
Net increase (decrease) in cash
and cash equivalents 979,242 438,700 (269,240)
Cash and cash equivalents, beginning of year 3,701,443 4,680,685 5,119,385
----------- ------------ ------------
Cash and cash equivalents, end of year $ 4,680,685 $ 5,119,385 $ 4,850,145
=========== ============ ============
</TABLE>
(Continued)
-10-
<PAGE> 47
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
STATEMENTS of CASH FLOWS, Continued
Supplemental Schedule of noncash investing and financing activity:
In July 1996, the Partnership exchanged its interest in a hotel property and
related assets and liabilities for 493,664 units in the operating partnership of
a publicly-traded real estate investment trust. The assets and liabilities
transferred are as follows:
<TABLE>
<CAPTION>
<S> <C>
Real estate, net of accumulated depreciation $ 9,116,767
Mortgage note payable (3,915,439)
Other assets and liabilities transferred, net 8,777
-----------
Equity investment $ 5,210,105
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-11-
<PAGE> 48
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
NOTES to FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies:
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. 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 improvements.
Corporate Property Associates 8, L.P. (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, revenue is
recognized as rentals are earned and expenses (including
depreciation) are charged to operations as incurred. When
scheduled rentals vary during the lease term, income is
recognized on a straight-line basis so as to produce a constant
periodic rent.
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
net realizable value.
Substantially all of the Partnership's leases provide for either
scheduled rent increases, increases based on increases to the
Consumer Price Index or Producer Price Index or sales overrides.
Operating Real Estate:
Land, building 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. As more
fully described in Note 16, the Partnership transferred its operating
real estate in 1996 in connection with an exchange transaction.
Depreciation:
Depreciation is computed using the straight-line method over the
estimated useful lives of the properties - 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, 1995 and 1996 were held in the
custody of three financial institutions.
-12-
<PAGE> 49
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
NOTES to FINANCIAL STATEMENTS, Continued
Equity Investments:
The Partnership's 50% interests in a joint venture and a limited
partnership and its ownership interest in the operating partnership
of a real estate investment trust are accounted for under the equity
method, i.e. at cost, increased or decreased by the Partnership's
share of earnings or losses, less distributions.
Other Assets:
Included in other assets are deferred rental income, deferred charges
and a furniture, fixture and equipment reserve for the hotel
property. Deferred rental income is the aggregate difference for
operating method leases between scheduled rents which vary during the
lease term and income recognized on a straight-line basis. Deferred
charges are costs incurred in connection with mortgage note
financings and refinancings and are deferred and amortized on a
straight-line basis over the terms of the mortgages.
Deferred Rental Income:
Deferred rental income recognized in connection with the amendment of
one of the Partnership's leases is being amortized on a straight-line
basis from the date of the amendment through the end of the initial
term of the lease (20.5 years).
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.
2. Partnership Agreement:
The Partnership was organized on October 20, 1987 under the Delaware
Revised Uniform Limited Partnership Act for the purpose of engaging
in the business of investing in and owning industrial and commercial
real estate. The Corporate General Partner purchased 100 Limited
Partnership Units in connection with the Partnership's public
offering. The Partnership will terminate on December 31, 2011, or
sooner, in accordance with the terms of the Amended Agreement of
Limited Partnership (the "Agreement").
The Agreement provides that the General Partners are allocated 10% (1%
to the Individual General Partner, William P. Carey, and 9% to the
Corporate General Partner, Eighth Carey Corporate Property ("Carey
Property")) and the Limited Partners are allocated 90% of the profits
and losses as well as distributions of Distributable Cash From
Operations, as defined. The partners are also entitled to receive net
proceeds from the sale of the Partnership properties as defined in
the Agreement. The General Partners may be entitled to receive a
subordinated preferred return, measured based upon the cumulative
proceeds arising from the sale of Partnership assets. Pursuant to the
subordination provisions of the Agreement, the preferred return may
be paid only after the limited partners receive 100% of their initial
investment from the proceeds of asset sales and a cumulative annual
return of 8% since the inception of the Partnership. The General
Partners interest in such preferred return amounts to $53,055 based
upon the cumulative proceeds from the sale of assets since the
inception of the Partnership through December 31, 1996. The
Partnership's ability to satisfy the subordination of the Agreement
may not be determinable until liquidation of a substantial portion of
the Partnership's assets has been made.
-13-
<PAGE> 50
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
NOTES to FINANCIAL STATEMENTS, Continued
3. Transactions with Related Parties:
Under the Agreement, Carey Property is entitled to receive a property
leasing 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. Property leasing fee
and general and administrative expense reimbursements are summarized
as follows:
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Property leasing fee $199,664 $ 26,777 $ 22,037
General and administrative
expense reimbursements 101,761 87,856 135,221
-------- -------- --------
$301,425 $114,633 $157,258
======== ======== ========
</TABLE>
In 1994, 1995 and 1996, fees aggregating $86,196, $69,691 and $79,385,
respectively, were incurred for legal services performed by a law
firm in which the Secretary of the Corporate General Partner and
other affiliates is a partner.
The Partnership is a participant in an agreement with W.P. Carey & Co.,
Inc. ("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. Net expenses incurred in 1994, 1995 and 1996 were
$88,753, $145,341 and $143,404, respectively.
The Partnership's ownership interests in certain properties are jointly
held with affiliated entities. The interests are held as
tenants-in-common and joint venture interests with such interests
ranging from 20% to 75.26%. The Partnership accounts for its assets
and liabilities relating to tenants-in-common interests on a
proportional basis.
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 $7,340,000 in
1997, $5,586,000 in 1998, $5,580,000 in 1999, $5,575,000 in 2000,
$5,255,000 in 2001 and aggregate approximately $68,722,000 through
2014.
Contingent rent was approximately $222,000 in 1994, $497,000 in 1995 and
$417,000 in 1996.
-14-
<PAGE> 51
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
NOTES to FINANCIAL STATEMENTS, Continued
B. Operating Real Estate:
Operating real estate, at cost, as of December 31, 1995 is summarized as
follows:
<TABLE>
<S> <C>
Land $ 1,717,967
Building 7,520,834
Personal property 1,421,421
-----------
10,660,222
Less: Accumulated depreciation 1,440,459
-----------
$ 9,219,763
===========
</TABLE>
The Partnership disposed of its operating real estate in 1996 (see Note
15).
5. Net Investment in Direct Financing Leases:
Net investment in direct financing leases is summarized as follows:
<TABLE>
<CAPTION>
December 31,
1995 1996
---- ----
<S> <C> <C>
Minimum lease payments
receivable $105,522,285 $ 99,526,391
Unguaranteed residual value 47,095,414 47,095,414
------------ ------------
152,617,699 146,621,805
Less: Unearned income 105,522,285 99,526,391
------------ ------------
$ 47,095,414 $ 47,095,414
============ ============
</TABLE>
Scheduled future minimum rents, exclusive of renewals, under
noncancellable direct financing leases amount to approximately
$5,996,000 in each of the years 1997 to 2001 and aggregate
approximately $99,526,000 through 2014.
Contingent rent was approximately $415,000 in 1995 and $457,000 in 1996.
There was no contingent rent in 1994.
6. Mortgage Notes Payable and Note Payable:
A. Mortgage Notes Payable:
Mortgage notes payable are collateralized by the lease assignments and
by real property with a carrying amount of approximately $79,055,000
before accumulated depreciation. The mortgage loans are limited
recourse obligations of the Partnership. As of December 31, 1996,
mortgage notes payable bear interest at rates varying from 7.16% to
11.85% per annum and mature from 1997 to 2010.
Scheduled principal payments during each of the next five years
following December 31, 1996 are as follows:
<TABLE>
<CAPTION>
Year Ending December 31,
------------------------
<S> <C>
1997 $ 4,978,050
1998 1,006,998
1999 20,686,934
2000 627,592
2001 5,633,578
Thereafter 11,206,806
-----------
Total $44,139,958
===========
</TABLE>
-15-
<PAGE> 52
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
NOTES to FINANCIAL STATEMENTS, Continued
B. Note Payable:
The $5,102,144 note payable is a recourse obligation of the Partnership
and provides for quarterly payments of interest at an annual interest
rate equivalent to the London Inter-Bank Offered Rate ("LIBOR") plus
4.25% (9.81% at December 31, 1996). The note payable matures in July
1999, at which time a balloon payment for the entire outstanding
principal balance will be due.
Covenants under the note payable restrict the Partnership from incurring
additional debt; however, new limited recourse mortgage financing may
be obtained for the purpose of replacing existing mortgage debt. The
Partnership must maintain a net worth of $20,000,000, aggregate
appraised property value of $15,000,000 and a ratio of operating cash
flow to debt service on the note payable of from 3:1 to 3.4:1 over
the term of the loan. The Partnership is in compliance with such
terms. In addition, the Partnership must offer the lender the
proceeds of any asset disposition as a loan prepayment. Under limited
circumstances, the Partnership may prepay the loan in whole or in
part.
Interest paid on the mortgage note payable and the note payable was
$6,189,016, $5,798,935 and $5,370,365 in 1994, 1995 and 1996,
respectively.
7. Distributions to Partners:
Distributions are declared and paid to partners quarterly and are
summarized as follows:
<TABLE>
<CAPTION>
Limited
Year Ending Distributions Paid to Distributions Paid to Partners' Per
December 31, General Partners Limited Partners Unit Amount
------------ ---------------- ---------------- -----------
<S> <C> <C> <C>
1994 $635,791 $5,722,108 $84.46
======== ========== ======
1995 $641,394 $5,772,533 $85.31
======== ========== ======
1996 $655,704 $5,893,854 $87.21
======== ========== ======
</TABLE>
Distributions of $165,200 to the General Partners and $1,486,804 to the
Limited Partners for the quarter ended December 31, 1996 were
declared and paid in January 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 the accounting differences is as
follows:
<TABLE>
<CAPTION>
1994 1995 1996
----------- ----------- ------------
<S> <C> <C> <C>
Net income per Statements of Income $ 5,892,029 $ 8,337,825 $ 9,453,177
Writedown to net realizable value 1,104,219
Excess tax depreciation (906,755) (1,335,846) (1,518,852)
Other (1,524,377) 473,199 (91,589)
----------- ----------- ------------
Income for Federal
income tax purposes $ 4,565,116 $ 7,475,178 $ 7,842,736
=========== =========== ===========
</TABLE>
-16-
<PAGE> 53
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
NOTES to 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.
In 1994, 1995 and 1996, the Partnership earned its total leasing
revenues (rental income plus interest income from financing leases)
from the following lease obligors:
<TABLE>
<CAPTION>
1994 % 1995 % 1996 %
----------- --- ----------- --- ----------- ---
<S> <C> <C> <C> <C> <C> <C>
Advanced System Applications, Inc. $ 2,258,692 16% $ 3,114,091 21% $ 3,042,597 20%
Sybron Acquisition Company 2,491,920 18 2,491,920 17 2,491,920 16
Dr Pepper Bottling Company
of Texas 1,999,000 14 1,999,000 13 1,999,000 13
Amersig, Inc. 1,332,653 9 1,400,166 9 1,409,700 9
High Voltage Engineering
Corporation 1,140,100 8 1,167,744 8 1,179,019 8
Orbital Sciences Corporation 916,484 6 977,378 6 977,378 6
Furon Company 819,443 6 819,443 5 816,217 5
United Stationers Supply, Inc. 635,283 5 769,625 5 812,708 5
Detroit Diesel Corporation 699,024 5 699,114 5 729,078 5
AutoZone, Inc. 526,781 4 529,748 3 525,003 3
NVRyan L.P. 528,391 4 495,518 3 495,518 3
Mayfair Molded Products Corporation 460,755 3 460,755 3 460,755 3
U.S. Postal Service 319,423 2
Winn-Dixie Stores, Inc. 134,500 1 134,500 1 134,500 1
Other lease obligors 131,218 1 107,919 1 111,154 1
Federal Express Corporation 56,475 56,700 56,700
----------- --- ----------- --- ----------- ---
$14,130,719 100% $15,223,621 100% $15,560,670 100%
=========== === =========== === =========== ===
</TABLE>
-17-
<PAGE> 54
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
NOTES to FINANCIAL STATEMENTS, Continued
10. Equity Investments:
The Partnership owns a 50% equity interest in CPA(R):8-CPA(R):9 Joint
Venture I ("GE") with Corporate Property Associates 9, L.P.
("CPA(R):9"), an affiliate, and a 50% interest in Carey Topeka
Associates, L.P. ("HCA") with Corporate Property Associates 7
("CPA(R):7"), an affiliate. GE owns land and a building located in
King of Prussia, Pennsylvania, leased to General Electric Company.
HCA owns a leasehold interest in a hotel property in Topeka, Kansas
subleased to the Hotel Corporation of America. Summarized combined
financial information of GE and HCA is as follows:
(In thousands)
<TABLE>
<CAPTION>
December 31,
1995 1996
---- ----
<S> <C> <C>
Assets, net of accumulated depreciation
and amortization $14,682 $13,790
Liabilities 12,211 11,989
Capital 2,471 1,801
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Revenues $1,575 $1,597 1,597
Expenses 1,740 1,721 1,707
Net loss (165) (124) (110)
</TABLE>
The Partnership's share of GE and HCA scheduled future minimum rentals,
exclusive of renewals, under its noncancellable operating lease are
approximately $905,000 in 1997, $692,000 in 1998, $421,000 in 1999,
$540,000 in 2000, $412,000 in 2001 and aggregate approximately
$3,722,000 through 2003.
The Partnership's share of scheduled principal payments on the GE and
HCA mortgage loans for the five years following December 31, 1996 are
approximately $117,000 in 1997, $1,739,000 in 1998, $93,000 in 1999,
$100,000 in 2000, $109,000 in 2001 and $3,753,000, thereafter.
The Partnership owns an equity interest in the operating partnership of
a real estate investment trust (see Note 15).
-18-
<PAGE> 55
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
NOTES to FINANCIAL STATEMENTS, Continued
11. Writedown to Net Realizable Value:
In August 1994, the Partnership and CPA(R):7 sold a vacant property in
Jefferson, Georgia for $844,778 (of which the Partnership's share was
$531,898), net of costs. No gain or loss was recognized on the sale
of the Jefferson property as the value of the property was written
down to the sales price prior to the sale resulting in a charge of
$823,447 in 1994.
In June 1994, the Partnership and CPA(R):7 entered into a contract to
sell a vacant property in Fredricksburg, Virginia for $728,500 (of
which the Partnership's share was $458,686), net of costs.
Subsequently, the potential buyer withdrew its offer to buy the
property. Although the transaction was not consummated, the net
realizable value of the Partnership's interest in the property was
written down to the anticipated net sales price of $458,686,
resulting in a charge of $280,772.
Both properties had been leased to NVRyan L.P. ("NVRyan") until
September 1993, at which time the lease was restructured. In agreeing
to sever four properties from the NVRyan lease, including the
Jefferson and Fredricksburg properties, the Partnership received
$1,637,038 of which $1,227,779 was received in 1994.
12. Extraordinary Charge on Extinguishment of Debt:
On June 15, 1990, the Partnership and CPA(R):9 purchased, as
tenants-in-common with 20% and 80% interests, respectively, 129 acres
of land and six industrial buildings in Detroit and Redford, Michigan
and entered into a net lease with Detroit Diesel Corporation
("Detroit Diesel"). The mortgage loan provided for quarterly interest
only payments at an annual rate of 11.28% with payments of principal
commencing on December 15, 1995.
On May 25, 1994, the Partnership and CPA(R):9 prepaid the existing
$24,000,000 mortgage loan and obtained $25,000,000 of new mortgage
financing. The refinanced mortgage loan bears interest at the rate of
7.16% per annum and provided for quarterly interest only payments of
$447,500 (of which the Partnership's share is $89,500) through
December 15, 1995 at which time quarterly interest and principal
payments of $689,601 (of which the Partnership's share is $137,920)
commenced and which are payable through June 15, 2010 at which time
the loan will be fully amortized. In connection with paying off the
original mortgage loan, the Partnership incurred an extraordinary
charge on the extinguishment of debt as a result of paying a
prepayment charge of $120,000 on its $4,800,000 share of such debt.
-19-
<PAGE> 56
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
13. Gain on Sale of Real Estate:
In January 1990, the Partnership and CPA(R):9 purchased nine properties
as tenants-in-common with 32.28% and 67.72% ownership interests,
respectively, and entered into a master lease with Furon Company
("Furon"). In August 1993, the Partnership and CPA(R):9 consented to
Furon's sublease of properties in Liverpool, Pennsylvania and
Twinsburg, Ohio to IER Industries, Inc. ("IER") through July 2007,
the end of Furon's initial lease term. On February 15, 1996, IER
notified the Partnership and CPA(R):9 that it was exercising a
purchase option which had been granted at the time the sublease was
agreed to.
On September 9, 1996, the Partnership and CPA(R):9 sold the two
properties to IER for $1,465,495, a purchase price determined
pursuant to an appraisal process provided for in the lease. Net of
its share of $24,210 of consideration received in 1993 in granting
the purchase option and other costs of the transaction, the
Partnership's share of net proceeds from the sale was $442,495 of
which $287,996 was used to pay a mandatory prepayment on the mortgage
loan. In connection with the sale, the Partnership recognized a gain
of $21,697. As a result of the sale and the reamortization of the
mortgage loan, annual rent from Furon and debt service on the Furon
properties mortgage loan have decreased by approximately $55,000 and
$34,000, respectively.
14. Properties Leased to Advanced System Applications, Inc.:
The Partnership and CPA(R):7 own property in Bloomingdale, Illinois, as
tenants-in-common with 66.36% and 33.64% ownership interests,
respectively, which is leased to Advanced System Applications, Inc.
("ASA"). In July 1994 the Partnership and CPA(R):7 agreed to a lease
modification agreement. Under the modification agreement, the
scheduled expiration of the lease was changed to June 1997 from June
2003 in exchange for an increase in the commercial rent to $5,200,000
from $1,850,000. As this modification required the mortgage lender's
consent, the mortgage loan payments were substantially increased so
that the loan fully amortized on March 1, 1996. Although ASA is
obligated to make its lease payments through June 1997, it is in the
process of vacating the property. ASA had been entitled to one-third
of all rentals received for any new leases on space ASA had vacated;
however, under a subsequent agreement, the Partnership and CPA(R):7
agreed to reduce ASA's annual rent by $833,333 in exchange for
assigning the rents of a subtenant to the Partnership and CPA(R):7
and relinquishing its rights to any of the rents on the United State
Postal Service (the "Postal Service") lease. ASA was also released
from bearing the costs of insurance, maintenance and real estate
taxes on the property.
The Postal Service lease has a 10-year term which commenced May 1, 1996
at an annual rent of $722,800 (of which the Partnership's share is
$479,650), increasing to $822,800 after five years. The Partnership
and CPA(R):7 bear the obligation to provide maintenance and support
services to the lessee. The lease also provides for rent escalations
in 1998 based on increases in certain operating costs incurred by the
Partnership and CPA(R):7. In addition, the Postal Service will
reimburse the Partnership and CPA(R):7 for its pro rata share of real
estate taxes. The Postal Service has an option to terminate the lease
after five years and right of first refusal on space vacated by ASA.
As provided for under the lease, the Partnership and CPA(R):7 funded
$600,000 (of which the Partnership's share is $398,160) of
improvements to the space occupied by the Postal Service.
-20-
<PAGE> 57
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
NOTES to FINANCIAL STATEMENTS, Continued
15. Hotel Property in Kenner, Louisiana:
The Partnership and Corporate Property Associates 4 ("CPA(R):4"), an
affiliate, purchased a hotel property in Kenner, Louisiana, in June
1988 as tenants-in-common with 53.617% and 46.383% interests,
respectively. The Partnership and CPA(R):8 assumed operating control
of the hotel in 1992 after evicting the lessee due to its financial
difficulties. On July 30, 1996, the Partnership and CPA(R):4
completed a transaction with American General Hospitality Operating
Partnership L.P. (the "Operating Partnership"), the operating
partnership of a newly-formed real estate investment trust, American
General Hospitality Corporation, ("AGH"), in which the Partnership
and CPA(R):4 received 920,672 limited partnership units (of which the
Partnership's share was 493,664 units) in exchange for the hotel
property and its operations. In connection with the exchange, the
Partnership and CPA(R):4 paid a cash contribution of $391,221 (of
which the Partnership's share was $209,761) and the Operating
Partnership assumed the mortgage loan obligation collateralized by
the hotel property (of which the Partnership's share was $3,915,439).
AGH owns an 81.3% equity interest in the Operating Partnership.
The exchange of the hotel property for limited partnership units was
treated as a nonmonetary exchange for tax and financial reporting
purposes. The Partnership's interest in the limited partnership is
being accounted for under the equity method. After one year, the
Partnership will have the right to convert its equity interest in the
Operating Partnership to shares of common stock in AGH on a
one-for-one basis. AGH completed an initial public offering during
1996. The Partnership's carrying value for the limited partnership
units at the time of the exchange of $5,440,110 was based on the
historical basis of assets transferred, net of liabilities assumed by
the Operating Partnership; cash contributed and costs incurred to
complete the exchange.
As of September 30, 1996, the audited consolidated financial statements
of AGH reported total assets of $187,870,000 and shareholders' equity
of $127,408,000 and for the period from inception (July 31, 1996)
through September 30, 1996 revenues of $5,251,000, income before
minority interest of $2,850,000 and net income of $2,302,000. As of
March 15, 1997, AGH's quoted per share market value was $28 resulting
in an aggregate value of approximately $13,823,000. The carrying
value of the equity interest in the Operating Partnership as of
December 31, 1996 was approximately $5,612,000. For the period from
July 31, 1996 to December 31, 1996, the Partnership's share of the
Operating Partnership's earnings was $306,807.
Between January 1995 and July 1996, the Partnership and CPA(R):4 had
engaged an affiliate of AGH to manage the operations of Kenner on
their behalf.
Summarized operating results of the Partnership's share of the hotel
operation through the date of disposal (July 30, 1996) were as
follows:
<TABLE>
<CAPTION>
1994 1995 1996
----------- ----------- -----------
<S> <C> <C> <C>
Revenues $ 3,615,727 $ 4,432,735 $ 2,675,555
Fees paid to hotel management company (101,154) (130,293) (96,017)
Other operating expenses (2,254,422) (2,648,746) (1,593,199)
----------- ----------- -----------
Hotel operating income $ 1,260,151 $ 1,653,696 $ 986,339
=========== =========== ===========
</TABLE>
-21-
<PAGE> 58
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
NOTES to FINANCIAL STATEMENTS, Continued
16. 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 value of such mortgage notes at December
31, 1996. The fair value of debt instruments was evaluated using a
discounted cash flow model with discount rates which take into
account the credit of the tenants and interest rate risk.
The Partnership's note payable is a variable rate obligation indexed to
the LIBOR. Accordingly, the carrying amount of the note payable
approximates fair value as of December 31, 1996.
-22-
<PAGE> 59
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
SCHEDULE of REAL ESTATE and ACCUMULATED DEPRECIATION
as of December 31, 1996
<TABLE>
<CAPTION>
Costs Increase
Initial Cost to Partnership Capitalized (Decrease) In
--------------------------- Subsequent to Net
Description Encumbrances Land Buildings Acquisition(a) Investment(b)
----------- -------------- ---- --------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Operating method:
Manufacturing facility
leased to
Amerisig, Inc. $3,947,300 $ 899,145 $ 6,785,855 $ 497
Land leased to
AutoZone, Inc. 2,014,722 46,846 $ (6,176)
Office facility
leased to
Advanced System
Applications, Inc. 196,524 984,786 9,845,253 38,266 404,796
Land leased to High
Voltage Engineering
Corporation 805,487 1,720,000 1,601
Manufacturing facility
leased to
Mayfair Molded
Products Corporation 793,325 2,456,675 4,356
Land leased to Sybron
Acquisition Company 318,385 558,614 3,218
Manufacturing and office
facility leased to
Federal Express
Corporation 47,000 551,000 19,102
Land leased to Dr Pepper
Bottling Company
of Texas 2,038,943 3,675,870 17,433
Manufacturing facility
leased to Amerisig, Inc. 1,665,627 808,500 2,425,500 3,611
Manufacturing facility
leased to
Furon Company 4,048,571 1,351,811 6,167,025 40,222 (500,678)
</TABLE>
<TABLE>
<CAPTION>
Life on which
Depreciation
Gross Amount at which Carried in Latest
at Close of Period (c)(d) Statement of
------------------------------------ Accumulated Income
Description Land Building Total Depreciation(d) Date Acquired is Computed
----------- ---- -------- ----- --------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Operating method:
Manufacturing facility
leased to
Amerisig, Inc. $ 899,203 $ 6,786,294 $ 7,685,497 $ 1,927,727 June 24, 1988 30 yrs.
Land leased to
AutoZone, Inc. 2,055,392 2,055,392 N/A August 24, 1988 N/A
Office facility
leased to
Advanced System September 29,
Applications, Inc. 985,521 10,287,580 11,273,101 2,726,986 1988 30 yrs.
Land leased to High
Voltage Engineering November 10,
Corporation 1,721,601 1,721,601 N/A 1988 N/A
Manufacturing facility
leased to
Mayfair Molded December 8,
Products Corporation 794,388 2,459,968 3,254,356 661,365 1988 30 yrs.
Land leased to Sybron December 21,
Acquisition Company 561,832 561,832 N/A 1988 N/A
Manufacturing and office
facility leased to
Federal Express
Corporation 48,504 568,598 617,102 147,299 March 24, 1989 30 yrs.
Land leased to Dr Pepper
Bottling Company
of Texas 3,693,303 3,693,303 N/A June 30, 1989 N/A
Manufacturing facility December 29, 30 yrs.
leased to Amerisig, Inc. 809,403 2,428,208 3,237,611 566,982 1989
Manufacturing facility
leased to January 29, 30 yrs.
Furon Company 1,246,243 5,812,137 7,058,380 1,341,083 1990
</TABLE>
(Continued)
See accompanying notes to Schedule.
-23-
<PAGE> 60
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
SCHEDULE of REAL ESTATE and ACCUMULATED DEPRECIATION
as of December 31, 1996
<TABLE>
<CAPTION>
Initial Cost to Partnership Costs
--------------------------------- Capitalized Decrease In
Personal Subsequent to Net
Description Encumbrances Land Buildings Property Acquisition(a) Investment(b)
----------- ------------ ---- --------- -------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Operating method (continued):
Manufacturing facility
leased to Detroit Diesel
Corporation $ 4,749,076 $ 997,290 $ 5,302,710 $ 1,384
Supermarket leased to
Winn-Dixie Stores, Inc. 1,345,000 26,855
Engineering and
Fabrication Facility
leased to Orbital
Sciences Corporation 4,293,713 1,837,983 3,878,541 2,325,852
Manufacturing and office
facility leased to
Allied Plywood, Inc. 416,309 1,217,073 9,499
Manufacturing and office
facilities in Fredricksburg,
Virginia 55,322 700,009 1,665 $ (280,772)
----------- ----------- ----------- ---------- -----------
$22,063,626 $16,160,677 $40,674,641 $2,540,407 $ (382,830)
=========== =========== =========== ========== ===========
Direct financing method:
Retail stores leased
to AutoZone, Inc. $ 2,887,278 $ 67,135
Manufacturing and
generating facilities
leased to High
Voltage Engineering
Corporation $ 3,493,716 $ 688,000 7,242,000 7,394
Office/warehouse
facilities leased to
United Stationers
Supply Co. 2,348,134 1,120,000 3,510,000 293 $ (732,255)
Manufacturing facility
leased to Sybron
Acquisition Company 10,452,391 1,493,464 16,845,708 105,225
Manufacturing facility
leased to NVRyan L.P. 359,347 2,863,431 164,827
Bottling and Distribution
facilities lease to
Dr Pepper Bottling
Company of Texas 5,782,091 10,424,130 49,437
----------- ----------- ----------- ---------- -----------
$22,076,332 $ 3,660,811 $43,772,547 $ 394,311 $ (732,255)
=========== =========== =========== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
Life on which
Depreciation
Gross Amount at which Carried in Latest
at Close of Period(c)(d) Statement of
------------------------------------ Accumulated Income
Description Land Building Total Depreciation(c)(d)(e) Date Acquired is Computed
----------- ---- -------- ----- --------------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Operating method (continued):
Manufacturing facility
leased to Detroit Diesel
Corporation $ 997,509 $ 5,303,875 $ 6,301,384 $ 1,156,518 June 15, 1990 30 yrs
Supermarket leased to
Winn-Dixie Stores, Inc. 1,371,855 1,371,855 285,803 October 26, 1990 30 yrs
Engineering and
Fabrication Facility
leased to Orbital September 29,
Sciences Corporation 1,838,246 6,204,130 8,042,376 1,292,527 1989 30 yrs
Manufacturing and office
facility leased to
Allied Plywood, Inc. 416,740 1,226,141 1,642,881 132,832 March 31, 1989 30 yrs
Manufacturing and office
facilities in Fredricksburg,
Virginia 34,870 441,354 476,224 54,318 March 31, 1989 30 yrs
----------- ----------- ----------- -----------
$16,102,755 $42,890,140 $58,992,895 $10,293,440
=========== =========== =========== ===========
Direct financing method:
Retail stores leased
to AutoZone, Inc. $ 2,954,413 August 24, 1988
Manufacturing and
generating facilities
leased to High
Voltage Engineering
Corporation 7,937,394 November 10, 1988
Office/warehouse
facilities leased to
United Stationers December 29,
Supply Co. 3,898,038 1988
Manufacturing facility
leased to Sybron December 22,
Acquisition Company 18,444,397 1988
Manufacturing facility
leased to NVRyan L.P. 3,387,605 March 31, 1989
Bottling and Distribution
facilities lease to
Dr Pepper Bottling
Company of Texas 10,473,567 June 30, 1989
-----------
$47,095,414
===========
</TABLE>
See accompanying notes to Schedule.
-24-
<PAGE> 61
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
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 capital
expenditures for improvements on the building leased to Orbital
Sciences Corporation.
(b) The decrease in net investment is due to sales of excess parcels of
land and a writedown to net realizable value of a property and the
effect of accumulated depreciation on carrying amount in connection
with the reclassification of a property from real estate accounted
for under the operating method to net investment in direct financing
leases. The decrease in net investment in operating leases is due to
the sale of properties.
(c) At December 31, 1996, the aggregate cost of real estate owned for
Federal income tax purposes is $110,988,041.
(d)
Reconciliation of Real Estate Accounted
for Under the Operating Method
<TABLE>
<CAPTION>
December 31,
--------------------------
1995 1996
----------- -----------
<S> <C> <C>
Balance at beginning of year $63,718,991 $59,088,698
Sale of real estate (500,599)
Additions 404,796
Reclassification of operating lease
to direct financing lease (4,630,293)
----------- -----------
Balance at close of year $59,088,698 $58,992,895
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
Reconciliation of Accumulated Depreciation
------------------------------------------
December 31,
-------------------------
1995 1996
---------- -----------
<S> <C> <C>
Balance at beginning of year $8,219,855 $8,945,959
---------- -----------
Depreciation expense 1,458,359 1,427,282
Reclassification of operating lease
to direct financing lease (732,255)
Write-off resulting from sale of property (79,801)
---------- -----------
Balance at close of year $8,945,959 $10,293,440
========== ===========
</TABLE>
-25-
<PAGE> 62
PROPERTIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME OF LEASE TYPE OF OWNERSHIP
OBLIGOR TYPE OF PROPERTY LOCATION INTEREST
-------------- ---------------- -------- ------------------
<S> <C> <C> <C>
GENERAL ELECTRIC Office/Research King of Prussia, Ownership of a 50%
COMPANY Facility Pennsylvania interest in a joint
venture which owns
land and building (1)
AMERISIG, INC. Industrial Olive Branch, Ownership of land
and Office Mississippi and building
Buildings
AUTOZONE, INC. Retail Stores Jacksonville, Ownership of land
Florida - 2; and buildings (1)
Albany, Augusta,
Brunswick and
Macon, Georgia;
Columbia,
South Carolina;
Houston and
San Antonio,
Texas;
Albuquerque and
Farmington,
New Mexico
ADVANCE SYSTEM Office Building Bloomingdale, Ownership of a
APPLICATIONS, INC. Illinois 66.36% interest in
and UNITED STATES land and building (1)
POSTAL SERVICE
HIGH VOLTAGE Manufacturing Sterling, Ownership of land
ENGINEERING and Office Massachusetts; and buildings (1)
CORPORATION Buildings East Hempfield
Township,
Pennsylvania
MAYFAIR MOLDED Manufacturing Schiller Park, Ownership of land
PRODUCTS Facility Illinois and building
CORPORATION
</TABLE>
-26-
<PAGE> 63
<TABLE>
<CAPTION>
NAME OF LEASE TYPE OF OWNERSHIP
OBLIGOR TYPE OF PROPERTY LOCATION INTEREST
-------------- ---------------- -------- ------------------
<S> <C> <C> <C>
SYBRON Manufacturing and Penfield, Ownership of a
ACQUISITION Office Buildings New York; 75.26% interest in
COMPANY Portsmouth, land and buildings (1)
New Hampshire;
Dubuque, Iowa;
Glendora,
California;
Romulus,
Michigan
UNITED STATIONERS Office/Warehouse San Antonio, Ownership of land
SUPPLY CO. Facility Texas; and buildings (1)
Memphis,
Tennessee;
New Orleans,
Louisiana
FEDERAL EXPRESS Office/Warehouse College Ownership of land
CORPORATION Facility Station, Texas and building
NV RYAN L.P. Manufacturing/Office Thurmont, Ownership of a
Buildings Maryland and 62.963% interest
Farmington, in land and
New York buildings
DR PEPPER BOTTLING Bottling/ Irvine and Ownership of a 50%
COMPANY OF TEXAS Distribution Houston, Texas interest in land and
Office Facility and buildings (1)
ORBITAL SCIENCES Engineering & Chandler, Ownership of a 42%
CORPORATION Fabrication Arizona interest in land and
Facility buildings (1)
AMERISIG, INC. Industrial Building Dekalb County, Ownership of a 26.43%
and Office Facility Georgia interest in land and
buildings (1)
</TABLE>
-27-
<PAGE> 64
<TABLE>
<CAPTION>
NAME OF LEASE TYPE OF OWNERSHIP
OBLIGOR TYPE OF PROPERTY LOCATION INTEREST
-------------- ---------------- -------- ------------------
<S> <C> <C> <C>
FURON COMPANY Manufacturing, Office New Haven, Ownership of a 32.28%
and Warehouse Connecticut; interest in land and
Facilities Mickleton, buildings (1)
New Jersey;
Aurora and Mantua,
Ohio; Bristol,
Rhode Island;
Mt. Pleasant,
Texas; Milwaukee,
Wisconsin;
DETROIT DIESEL Office, Warehouse, Detroit, Ownership of a 20%
CORPORATION Manufacturing, Truck Michigan interest in land and
Repair Facilities and buildings (1)
Waste Treatment Plant
WINN-DIXIE Supermarket Brewton, Alabama Ownership of building (2)
STORES, INC.
ALLIED PLYWOOD, Manufacturing/ Manassas, Ownership of a
INC. Office buildings Virginia 62.963% interest
in land and
buildings
(3) Manufacturing/ Fredricksburg, Ownership of a
Office buildings Virginia 62.963% interest
in land and
building
HOTEL CORPORATION Hotel Topeka, Kansas 50% ownership interest
OF AMERICA in a limited partnership
which owns land and
building (1)
</TABLE>
(1) These properties are encumbered by mortgage notes payable.
(2) This property is subject to a ground lease.
(3) This property is vacant.
-28-
<PAGE> 65
MARKET FOR THE PARTNERSHIP'S EQUITY AND RELATED
UNITHOLDER MATTERS
- --------------------------------------------------------------------------------
Except for limited or sporadic transactions, there is no established
public trading market for the Limited Partnership Units of the Partnership. As
of December 31, 1996, there were 3,624 holders of record of the Limited
Partnership Units of the Partnership.
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 1993:
<TABLE>
<CAPTION>
Cash Distributions Paid Per Unit
--------------------------------
1994 1995 1996
------ ------ ------
<S> <C> <C> <C>
First quarter $21.08 $21.18 $21.63
Second quarter 21.10 21.25 21.75
Third quarter 21.13 21.38 21.88
Fourth quarter 21.15 21.50 21.95
------ ------ ------
$84.46 $85.31 $87.21
====== ====== ======
</TABLE>
REPORT ON FORM 10-K
- --------------------------------------------------------------------------------
The Corporate General Partner will supply to any owner of Limited
Partnership Units, upon written request and without charge, a copy of the Annual
Report on Form 10-K for the year ended December 31, 1996 as filed with the
Securities and Exchange Commission.
-29-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-K
FOR THE YEAR ENDED DECEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 4,850,145
<SECURITIES> 0
<RECEIVABLES> 370,648
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,220,793
<PP&E> 106,088,309
<DEPRECIATION> 10,293,440
<TOTAL-ASSETS> 108,629,203
<CURRENT-LIABILITIES> 1,655,694
<BONDS> 49,242,102
0
0
<COMMON> 0
<OTHER-SE> 57,731,407
<TOTAL-LIABILITY-AND-EQUITY> 108,629,303
<SALES> 0
<TOTAL-REVENUES> 16,207,400
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,745,284
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,232,928
<INCOME-PRETAX> 9,453,177
<INCOME-TAX> 0
<INCOME-CONTINUING> 9,453,177
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,453,177
<EPS-PRIMARY> 125.60
<EPS-DILUTED> 125.60
</TABLE>
