KOGER EQUITIES INC, DEF 14A, 1994-04-08

KOGER EQUITIES INC
DEF 14A, 1994-04-08
REAL ESTATE INVESTMENT TRUSTS

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SCHEDULE 14A
Information Required in Proxy Statement

Reg. 240.14a-101

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934 (Amendment No. )

Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12

Koger Equity, Inc.

(Name of Registrant as Specified In Its Charter)

Koger Equity, Inc.

(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rules
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1

4) Proposed maximum aggregate value of transaction:

1Set forth the amount on which the filing fee is calculated and state how it
was determined.

[X] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid: $125.00

2) Form, Schedule or Registration Statement No.: Schedule 14A-Preliminary

3) Filing Party: Koger Equity, Inc.

<PAGE>

KOGER EQUITY, INC.
3986 Boulevard Center Drive
Jacksonville, Florida 32207
(904) 398-3403
________________

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
________________

The annual meeting of Shareholders of Koger Equity, Inc.
("KE") will be held on May 10, 1994, at 10:00 a.m., Eastern Daylight Saving
Time at the Omni Jacksonville Hotel, 245 W. Water Street, Jacksonville,
Florida, for the following purposes:

1. To elect a Board of ten (10) directors to serve for the ensuing
year and until their respective successors are elected and
qualified.

2. To amend Article V of KE's Articles of Incorporation to
authorize the issuance of up to 50,000,000 shares of preferred
stock, including convertible preferred stock in such series with
such preferences and rights as the KE Board of Directors may
determine and to remove the restriction which prohibits the
issuance of non-voting capital stock.

3. To transact such other business as may properly come before
the meeting or any adjournment or postponement thereof;

The close of business on March 2, 1994, has been fixed as the
record date for the determination of shareholders entitled to
notice of and vote at this meeting. All shareholders of record at
that time are entitled to vote at this meeting.

A copy of KE's Annual Report for the year ended December 31,
1993, which report contains consolidated financial statements
and other information of interest with respect to KE and its
subsidiaries, was previously mailed to shareholders on or about
March 23, 1994.

SHAREHOLDERS ARE REQUESTED TO DATE, SIGN AND RETURN THE ENCLOSED PROXY. AN
ENVELOPE IS ENCLOSED HEREWITH FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.

By order of the Board of Directors
W. Lawrence Jenkins, Secretary

April 8, 1994

<PAGE>

KOGER EQUITY, INC.
3986 Boulevard Center Drive
Jacksonville, Florida 32207
(904) 398-3403

April 8, 1994
PROXY STATEMENT

INTRODUCTION

The enclosed proxy is solicited on behalf of and by the Board of
Directors of Koger Equity, Inc. ("KE") for use at the KE Annual Meeting of
Shareholders to be held on May 10, 1994, and at any adjournment thereof. It
is expected that this Proxy Statement and the enclosed form of proxy will be
mailed or otherwise given to shareholders beginning on or about April 8,
1994. If the enclosed form of proxy is executed and returned, it will be
voted at the meeting, and where a choice has been specified thereon, will be
voted in accordance with such specifications, and where no choice has been
specified thereon, will be voted for the election of the directors named
herein, and for the approval of an amendment to the Articles of Incorporation
of KE to authorize the issuance of up to 50,000,000 shares of preferred
stock, including convertible preferred stock in such series with such
preferences and rights as the KE Board of Directors may determine and to
remove the restriction which prohibits the issuance of non-voting capital
stock. If any other matters properly come before the meeting or any
adjournment thereof, the holders of the proxies are expected to vote in
accordance with their judgement on such matters. A proxy may be revoked at
any time to the extent that it has not been exercised. A shareholder may
revoke his or her proxy by writing the Secretary of KE a letter of proxy
revocation, executing a subsequently dated proxy, or attending the
shareholders' meeting and voting his or her shares personally.

The close of business on March 2, 1994, has been fixed as the record date
for determination of the shareholders entitled to vote at the meeting.

The number of KE's shares of common stock, par value $.01 per share (the
"Shares"), outstanding at the close of business on March 2, 1994, was
17,597,177, of which State Street Bank holds 954 Shares which will not be
voted and which are pending distribution to creditors in accordance with the
terms of the Plan of Reorganization in the Koger Properties, Inc. Chapter 11
Case. There is no other class of voting securities of KE outstanding and each
Share is entitled to one (1) vote, except for the 954 shares held by State
Street Bank. A majority of the Shares issued and outstanding as of the record
date represented at the meeting, either in person or by proxy, shall
constitute a quorum. Irvin H. Davis, Victor A. Hughes, Jr. and S.D.
Stoneburner have, and each of them has, been designated as proxies to vote
the Shares solicited hereby. The Shares are not subject to cumulative voting.

MATTERS TO BE CONSIDERED

KE shareholders will consider and act upon a proposal to (i) elect ten
(10) directors for the following year, (ii) to approve an amendment to
Article V of KE's Articles of Incorporation to authorize the issuance of up
to 50,000,000 shares of preferred stock, including convertible preferred
stock in such series with such preferences and rights as the KE Board of
Directors may determine and to remove the restriction which prohibits the
issuance of non-voting capital stock, and (iii) such other business as may
properly come before the meeting.

ELECTION OF DIRECTORS

The ten (10) nominees listed in the table which follows are proposed for
election as directors for the ensuing year and until their successors have
been elected and qualified.

While management expects that all of the nominees will be able to serve as
directors, at the time of the Annual Meeting, or any adjournment or
postponement thereof, should a situation arise making it impossible for one
or more of the nominees to serve, the proxies will be voted in accordance
with the best judgement of its holders for another person recommended by the
present Board of Directors in lieu of any such nominee.

All nominees have served in the principal occupations indicated in the
table below or in other capacities with their respective employers for more
than five years prior to December 31, 1993. Information concerning the
nominees to the Board of Directors, based on information furnished by them,
is set forth below.

The Board of Directors recommends a vote "FOR" the election of each of
the following nominees.

<TABLE>
<CAPTION>
Beneficial Ownership
Principal Occupation of Shares at
Five-Year Employment Year First March 1, 1994
History and Other Became a (Percent of Class)
Name Directorships Director Age (1)

<S> <S> <C> <C> <C> <C>
D. Pike Aloian Managing Director of Rothschild 1993 38 0
(a) Realty, Inc. (a real estate investment (0%)
management and advisory service
firm); Director, Charter Oak Group,
Ltd. (a privately held retail properties
real estate management company);
former Vice President of The Harlan
Company, Inc. (a real estate development
and advisory service firm).

Benjamin C.
Bishop, Jr. Chairman of the Board of Allen C. Ewing 1991 61 10,000
(a) & Co. (an investment banking company); (.057%)
former Director of Grubb & Ellis Company
(a national commercial real estate brokerage
company); former Trustee of GMR Properties
(a real estate investment trust); former Director
of Cousins Properties, Inc. (a real estate
investment trust).

Charles E.
Commander, III Practicing attorney with the law firm of 1993 52 2,000
Foley & Lardner, successor to Commander, (.011%)
Legler & Sadler in Jacksonville, Florida;
former Director of Computer Power, Inc.
(a computer service firm).

Irvin H. Davis President and Chief Executive Officer 1991 64 69,018 (2)
of Koger Equity, Inc; former President (.391%)
and Chief Executive Officer of Koger
Advisors, Inc. (former investment advisor
to Koger Equity, Inc.); former Senior Vice
President/Asset Management of
Koger Equity, Inc.; former Senior Vice-
President of Koger Properties, Inc. (a
real estate development company)

David B. Hiley (3) Managing Director of Berkshire Capital 1993 55 0
(b) Corporation (an investment bank services (0%)
firm); Director and former Senior
Executive Vice President of Thomson
McKinnon Securities, Inc. (a securities
broker-dealer); consultant, Director and
former Executive Vice-President,
Thomson McKinnon, Inc. (a financial
services holding company); Director,
Newcity Communications, Inc. (a
communications firm)

</TABLE>

<PAGE>

Beneficial Ownership
Principal Occupation of Shares at
Five-Year Employment Year First March 1, 1994
History and Other Became a (Percent of Class)
Name Directorships Director Age (1)

<S> <S> <C> <C> <C> <C>
Victor A. Hughes, Jr. Senior Vice President and Chief 1992 58 72,307 (4)
Officer of Koger Equity, Inc.; former (.410%)
Vice President of Koger Equity, Inc.;
former President of Koger Securities, Inc.
(a securities broker-dealer); former Senior
Vice President and Chief Financial Officer
of Koger Advisors, Inc. (former investment
advisor to Koger Equity, Inc.)

G. Christian Lantzsch Director of Duquesne Light Company; 1988 69 2,047 (5)
(a) retired Vice Chairman of the Board of (.012%)
Directors and Treasurer of Mellon Bank
Corp.; retired Vice Chairman and Chief
Financial Officer, Mellon Bank, N.A.

Thomas K. Smith, Jr. Assistant Vice President of Trust 1993 29 3,312,009 (6)
(b) Company of the West (an investment
management company); Assistant Vice (18.821%)
President of TCW Asset Management
Company, a wholly owned subsidiary of
The TCW Group, Inc. and the managing
general partner of TCW Special Credits
(investment management companies),
for which Mr. Smith serves as an investment
analyst; former Management Associate at
Citicorp Mergers & Aquisitions; former
Merger Analyst at Dillon, Read & Co.,
Inc. (an investment bank).

George F. Staudter Managerial and financial consultant; 1993 62 1,000
(b) Director of Waterhouse Investor (.006%)
Services, Inc. (a securities broker
dealer); President and Director of
Family Steak Houses of Florida, Inc.
(a restaurant chain); former Principal
of Douglas Capital Management (a
registered investment advisor); former
Vice President and Treasurer of
Revlon, Inc. (a cosmetic manufacturer
and marketer)

S. D. Stoneburner Chairman of the Board of Directors 1988 75 44,536 (7)
of Koger Equity, Inc.; former President (.253%)
and Chief Financial Officer of Koger
Equity, Inc.; former President and
Chief Operating Officer of Koger
Advisors, Inc. (former investment
advisor to Koger Equity, Inc.)

All Executive
Officers 3,534,454 (6)(8)
and Director Nominees as (19.89%)
a Group
(11 persons)

(a) Member of the Audit Committee.
(b) Member of the Compensation Committee.

(1) Unless otherwise noted, all shares are owned directly, with sole voting
and dispositive power or voting and dispositive power shared with spouse.

(2) Includes 67,018 Shares which are subject to presently exercisable options
(See "Executive Compensation - Stock Option Plans").

(3) Mr. Hiley was a director and executive officer of Thomson McKinnon, Inc.,
a financial service holding company, and its subsidiary Thomson McKinnon
Securities, Inc. ("TMSI"), a broker-dealer, both of which filed for
protection under Chapter 11 of the Bankruptcy Act within the past five
years. In a proceeding instituted by the State of Alabama in 1989
claiming unregistered sales of securities by an Alabama branch of TMSI
and alleging a failure of supervision by him and other executives, Mr.
Hiley consented to an order barring him from registration as a securities
dealer in Alabama. In a related matter, TMSI admitted to a criminal
violation of the Alabama securities statute.

(4) Includes 49,807 Shares which are subject to presently exercisable options
(see "Executive Compensation - Stock Options Plans").

(5) Includes 47 shares which are subject to presently exercisable Warrants
to purchase Shares.

(6) The TCW Group, Inc. and its affiliates may be deemed to have voting and
dispositive powers over such Shares. TCW Special Credits, an affiliate of
The TCW Group, Inc., acts as general partner or investment manager of
certain separate accounts, trusts, and limited partnerships which hold
such Shares. To the extent Mr. Smith, as Assistant Vice President of
Trust Company of the West and TCW Asset Management Company (wholly-owned
subsidiaries of The TCW Group, Inc.) participates in the process of voting
or disposing of the Shares set forth herein, Mr. Smith may be deemed under
certain circumstances, for the purposes of Section 13 of the Securities
Exchange Act of 1934, to be the beneficial owner of such Shares. Mr.
Smith disclaims beneficial ownership of such Shares. The above described
separate accounts, trusts, and limited partnerships which own the
3,312,009 Shares may be entitled to receive additional Shares pursuant to
the Plan of Reorganization of Koger Properties, Inc. The number of
additional Shares was not known as of March 1, 1994.

(7) Includes 34,036 Shares which are subject to presently exercisable options,
and 7,000 shares which are held in a trust of which he is the beneficiary.

(8) Sole voting and dispositive power as to 220,418 Shares, shared voting and
dispositive power as to 3,314,036 Shares. Includes 172,261 shares which
are subject to presently exercisable options, or options which are
exercisable within 60 days. Includes 84 shares which are subject to
presently exercisable Warrants to purchase Shares.

In accordance with the Third Amended and Restated Plan of Reorganization
(the "Plan") of the Koger Properties, Inc. ("KPI") Chapter 11 Bankruptcy Case
(the "KPI Chapter 11 Case") at the effective date of the merger of KPI with
and into KE on December 21, 1993, pursuant to the Plan (the "Merger"), KE's
Board of Directors was increased to ten members which were selected as
follows: (i) seven members of the Board were designated by the members of the
Board of KE, and (ii) three members were designated by the KPI creditors'
committee in the KPI Chapter 11 Case. The KE designees were: Messrs. Bishop,
Davis, Hiley, Hughes, Lantzsch, Staudter and Stoneburner. The KPI creditors'
committee designees were Messrs. Aloian, Commander and Smith.

Corporate Governance

The Board of Directors of KE held eight meetings during the last fiscal
year. The Board of Directors maintains an Audit Committee and a Compensation
Committee, the members of which are elected by the Board of Directors. The
Board of Directors does not have a nominating committee.

The Audit Committee is composed exclusively of directors who are not
officers or employees of KE. It recommends to the Board of Directors the
selection of independent auditors, reviews the scope of the audit procedures
and the results of the audit, reviews the matter of independence of the
auditors, including non-audit services provided by the auditors and considers
and makes recommendations to the Board of Directors on matters referred to
it relating to the audit function, such as financial and accounting standards
and principals and internal accounting, auditing and financial controls. The
Audit Committee held one meeting during the last fiscal year and members of
the Audit Committee consulted with the officers of KE and the independent
auditors at various times throughout the year.

The Compensation Committee, none of the members of which are officers or
employees of KE, sets the salaries of KE's executives, reviews and recommends
the adoption of compensation plans and granting of benefits under such plans
and makes grants of options pursuant to KE's Stock Options Plans. The
Compensation Committee held one meeting during the last fiscal year.

Each of the directors attended at least 75% of the Board of Directors
meetings and meetings held by committees of the Board of which they were
members.

Executive Compensation

Directors of KE who are not officers receive a quarterly retainer of
$5,000, plus fees of $2,000 for each meeting of the Board of Directors
attended and $500 for each meeting of any committee of the Board of Directors
attended, together with expenses of attendance. The Chairman of the Board of
Directors receives an additional quarterly retainer of $5,000. Directors who
are officers of KE are not paid a director's fee. Amounts described herein
which are payable to Thomas K. Smith, Jr. are paid instead to Trust Company
of the West, Mr. Smith's employer. Directors who are not employees do not
participate in KE's stock option or retirement plans.

<PAGE>

Shown below is information concerning the annual and long-term
compensation of the Chief Executive Officer and the other executive officer
whose salary and bonus for the fiscal year ended December 31, 1993, exceeded
$100,000 (the "Officers"):

</TABLE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE

Annual Compensation (1) Long Term Compensation

Awards Pay
outs

(a) (b) (c) (d) (e) (f) (g) (h) (i)

Name and Principal Year Salary Bonus Other Annual Restricted Options/ LTIP All other
Position Compensation Stock SARs Payouts Compensation
Award(s)
(2) (3) (4) (5) (6)

<S> <C> <C> <C> <C> <C> <C> <C> <C>
A. 1993 $175,000 $3,365 $4,500 -0- -0- -0- $31,935
Irvin H.
Davis,
President & 1992 $175,000 $3,365 $3,978 -0- 125,000 -0- $35,586
Chief
Executive
Officer 1991 $153,125 $3,365 $4,064 -0- -0- -0- $ 5,980

B. 1993 $152,000 $2,923 $4,500 -0- -0- -0- $28,318
Victor A.
Hughes, Jr.,
Senior Vice 1992 $152,000 $2,923 $4,500 -0- 107,500 -0- $31,352
President &
Chief
Financial Officer 1991 $152,000 $2,923 $ 934 -0- -0- -0- $ 6,030

(1) KE paid no salaries for calendar year 1991. The salaries of its Officers
were paid by Koger Advisors, Inc. ("KA") for which KE reimbursed KA.
Therefore, the amounts reported herein for 1991 represent the salary and
benefits received by each officer from KA for its services to KE.

(2) Includes the CEO and the other executive whose salary and bonus exceed
$100,000.

(3) Includes an automobile allowance.

(4) These options were granted on February 5, 1992 and are exercisable in
cumulative annual increments of 20% commencing on February 5, 1993. The
options terminate seven years from date of grant. For information
concerning the number and market value of shares subject to the Company's
stock option plans as to the above Officers, reference is made to the
"Option/SAR Exercises and Year-End Value Table" and the notes thereto.

(5) KE has no other long-term incentive plans.

(6) Includes the funds contributed to an IRA for each executive under the
terms of the Simplified Employee Pension Plan (the "SEP Plan") adopted
by KE, together with the cost of certain life, health, hospitalization
and medical insurance plans (the "Insurance Plans"), provided by KE which
plans do not discriminate in scope, terms or operation in favor of
executive officers of KE and are available generally to all salaried
employees.

As to A: represents a contribution into a SEP IRA account in the
amount of $26,308, $28,300, and $0; and the cost of the
Insurance Plans in the amount of $5,627, $7,286 and $5,980 for
the years ended 1993, 1992 and 1991, respectively.

As to B: represents a contribution into a SEP IRA account in the
amount of $22,935, $24,462 and $0; and the cost of the
Insurance Plans in the amount of $5,383, $6,890 and $6,030 for
the years ended 1993, 1992 and 1991, respectively.

Option/Stock Appreciation Rights Grants. During the fiscal year ended
December 31, 1993, no grants were made to the Officers of KE with respect to
options/stock appreciation rights to purchase Shares.

Option/Stock Appreciation Rights Exercises and Year-End Values. Shown
below with respect to the Officers is the aggregate options/stock
appreciation rights exercised in the fiscal year ended December 31, 1993,
values realized, the number of unexercised and the value of the unexercised
options/stock appreciation rights at December 31, 1993.

</TABLE>
<TABLE>
<CAPTION>

Option/SAR Exercises and Year-End Value Table

Name Shares Value Realized Number of Value of Unexercised in-
acquired on ($) unexercised the-money options/SARs
exercise (#) options/SARs at FY- at
End (#) exercisable/ FY-end
unexercisable ($8.50)
exercisable/
unexercisable

(1) (2)

(a) (b) (c) (d) (e)

A.
Irvin H. Davis
President & Chief Executive
Officer
<S> <C> <C> <C> <C> <C> <C>
1988 KE Option -0- -0- 50,000/75,000 (1) $168,750/$253,125 (2)
1988 KA Option 17,018/-0- -0-/-0- (3)

B.
Victor A. Hughes, Jr.
Senior Vice President & Chief
Financial Officer
1988 KE Option -0- -0- 43,000/64,500 (1) $145,125/$217,687 (2)
1988 KA Option 6,807/-0- -0-/-0- (3)

</TABLE>

(1) The options are exercisable in cumulative annual increments
of 20% commencing on February 5, 1993. Currently the above
options are 40% exercisable.

(2) The closing price of the option stock on December 31, 1993,
as reported on the American Stock Exchange, was $8.50, which
price is greater than the exercise price of $5.125. The closing
price of the option stock at March 1, 1994, as reported on the
American Stock Exchange, was $7.375.

(3) The exercise price of these options is $20, which is greater
than the closing price of the option stock on December 31,
1993.

Long-Term Incentive Plan Awards. KE made no long-term incentive plan
awards to any officer, director, or employee during the fiscal year ended
December 31, 1993.

Compensation Committee Report on Executive Compensation. This Compensation
Committee Report shall not be deemed incorporated by reference by any general
statement incorporating by reference this Proxy Statement into any filing
under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent KE specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such Acts. Until
December 31, 1991, KE was administered by Koger Advisors, Inc. ("KA"), and,
accordingly, had no salaried employees. At January 1, 1992, KE became self-
administered and had six employees, including the Officers who performed the
functions of the Chief Executive Officer and Chief Financial Officer. The
cash compensation paid these Officers was comparable to the compensation they
had received as employees of KA.

A cash compensation study was sponsored by the National Association of
Real Estate Investment Trusts, Inc. ("NAREIT") for the purpose of obtaining
meaningful and reliable information on compensation levels and practices for
executive positions in the industry. The participants in the study were
generally self-advised Real Estate Investment Trusts ("REITs") that hold
and manage primarily equity assets, and have total assets ranging from $51
million to $1 billion; Koger Equity has assets in excess of $600 million. It
was felt by the Committee that the study group compared favorably with KE.
According to the NAREIT Executive Compensation Survey for 1993, the
self-advised REIT survey participants paid annual cash compensation as
described below to executives of REITs.

Position Description Base Salary Range Total Cash Compensation Range

<S> <C> <C>
Top REIT Executive $266,000 - $348,000 $384,000 - $544,000
Chief Financial Officer $148,000 - $177,000 $150,000 - $198,000

</TABLE>

The compensation paid the executive officers of KE during its
last fiscal year was not specifically related to corporate
performance. In reaching a conclusion concerning the annual
cash compensation paid its officers, the Compensation
Committee has considered the adverse circumstances which
have impacted KE, including the KPI Chapter 11 Case. The
Committee also considered the fact that KE has not paid a
dividend to its shareholders since October 23, 1991. Based on
the foregoing, the KE Compensation Committee made a
subjective determination in setting the compensation of its
executive officers.

In arriving at the compensation paid the KE President and Chief
Executive Officer, the Compensation Committee has considered
its President's long experience in the management of suburban
office parks and his proven ability to maintain high occupancy
rates as compared to those which obtained in other office parks
in markets in which KE competes. In addition to his leasing
experience, KE's President and Chief Executive Officer has been
involved with the development of suburban office parks. While
KE does not expect to begin development activities in the near
future, it plans to develop its vacant land when market
conditions for commercial real estate improve. Accordingly, KE
must obtain and keep persons with leasing, real estate
development and financing experience and talent. While the
salaries paid by KE to its Chief Executive Officer and its other
officers are at this time below the average paid officers in
similar sizes and types of business, KE has also granted stock
options in order to supplement their compensation. The
compensation paid the President and Chief Executive Officer of
KE during its last fiscal year was not specifically related to
corporate performance.

For the twelve-month period ended December 31, 1993, KE
paid annual cash compensation to its Chief Executive and Chief
Financial Officers at the rate of $175,000 and $152,000,
respectively. KE's Chief Executive Officer has been paid at the
rate of $175,000 per annum for the past three years. KE's Chief
Financial Officer was paid at the rate of $152,000 per annum for
the past three years. With the Merger, the size of the KE
organization has been considerably increased. The Merger
resulted in the property management functions of KE, former
KPI and The Koger Partnership, Ltd. being brought under the
administration of KE management. While the responsibilities of
the KE executive officers have increased, the Committee has set
these officers' annual compensation at the same rate for the
current fiscal year. The Committee may revisit this matter during
1994 and make some adjustments in the executive officers'
compensation either through additional salary, a supplemental
retirement program, additional options, cash bonuses or all of
the above.

The foregoing report has been furnished by the Compensation
Committee of the Company consisting of the following
individuals:

Thomas K. Smith, Jr., Chairman
David B. Hiley
George F. Staudter

Retirement Plan. During fiscal 1992, the Compensation
Committee adopted a Simplified Employee Pension Plan ("SEP
Plan") pursuant to which KE made a contribution with respect to
each eligible employee's compensation paid from January 1,
1993 through December 20, 1993, in an amount equal to 15% of
such compensation. The SEP Plan contribution was made to the
Individual Retirement Account of each such employee. With the
Merger of KPI with and into KE, the SEP Plan was terminated
and the KPI 401(k) Plan ("401(k) Plan") was adopted by KE
which will permit an employer contribution to each eligible
employee's account. KE has made no contribution pursuant to
this Plan.

Stock Option Grants. KE did not grant any options to purchase
Shares pursuant to its Stock Option Plans during fiscal year
1993.

Shareholder Return Performance Presentation. Set forth below
is a line graph comparing yearly percentage change in
cumulative total shareholder return on KE Common Stock
against the cumulative total return of the American Stock
Exchange Market Value Index and the National Association of
Real Estate Investment Trusts ("NAREIT") Total Return Index
for the period commencing December 31, 1988 and ending
December 31, 1993.

(Graph)

(Refer to copy for the Graph - Shareholders Return Performance
Presentation - below are the data points referred to in the graph)

1988 1989 1990 1991 1992 1993

KE 100 107.35 54.95 29.58 34.20 62.86
AMEX 100 123.53 100.69 129.10 130.46 155.93
NAREIT 100 98.19 81.16 110.11 123.52 146.43

<PAGE>

AMENDMENT TO ARTICLES OF INCORPORATION
TO AUTHORIZE ISSUANCE OF PREFERRED STOCK

Proxies are solicited from the shareholders of KE to authorize an
amendment to Article V of its Articles of Incorporation
providing for the authorization for the issuance of up to
50,000,000 shares of preferred stock, par value $.01 per share,
and removal of a restriction which prohibits the issuance of
non-voting capital stock. The Company is currently authorized
to issue 100,000,000 shares of common stock, par value $.01
per share (the "Shares"). Reference is made to Exhibit "A"
hereto for a complete statement of the present Article V and as it
is proposed to be amended. The description contained in this
Proxy Statement is modified by and subject to this amendment.
With the adoption of this proposed amendment to the KE
Articles of Incorporation, the Board of Directors of KE would
be authorized to issue preferred stock and determine without
further action by the holders of the outstanding Shares, except as
otherwise provided by law or the American Stock Exchange, the
conversion rights, the dividend rights, voting rights, rights in
terms of redemption, liquidation preferences, sinking fund terms
and other rights and terms of any series of preferred stock, the
number of shares constituting any such series, and the
designation thereof, and any other preferences or other terms
which the Board in its discretion may determine.

In connection with the Plan, which authorized the merger of KPI
with and into KE, Section 1123(a)(b) of the United States
Bankruptcy Code required that KE adopt an amendment to its
Articles of Incorporation prohibiting the issuance of non-voting
capital stock. As the then current Articles of Incorporation of
KE only permitted the issuance of Common Stock and required
that each Share of Common Stock be entitled to one vote, the
adoption of the amendment prohibiting the issuance of
non-voting capital stock had no effect upon KE and its
shareholders. As KE now desires to be permitted to issue
preferred stock and is seeking shareholder approval of an
amendment to its Articles of Incorporation to authorize such
issuance, it is the opinion of management of KE that it is in the
best interest of KE and its shareholders that KE have the
broadest flexibility possible and be permitted to issue not only
voting but also non-voting preferred shares. Accordingly, in
order to have such full flexibility in the issuance of such stock, it
is necessary to remove the prohibition against the issuance on
non-voting capital stock.

The Board of Directors believes that the amendment to the
Articles of Incorporation which authorizes the Board of
Directors, from time to time, to issue shares of preferred stock
and to determine the conversion, dividend, voting, redemption,
liquidation, sinking fund terms and any other preferences and
rights for any series of preferred stock without further action or
authorization by the shareholders (except as required by law or
by the American Stock Exchange) is in the best interest of KE
and its stockholders. The ability to issue such shares of preferred
stock without further action by KE shareholders would permit
the possible issuance in the future of shares of preferred stock
for corporate purposes. Such corporate purposes might include,
without limitation, additional public or private financings.

Should the Board of Directors of KE elect to exercise its
authority to issue shares of preferred stock, the rights,
preferences and privileges of the holders of the Shares of
Common Stock would be subject to the rights, preferences and
privileges of such preferred stock. Although KE has no present
specific plans or proposals to issue any such preferred stock, the
KE Board of Directors may consider the issuance of such stock
in connection with future financings which will be necessary in
order to reduce KE's debt.

Although KE has no intention at the present time of doing so, it
could authorize one or more series of preferred stock or rights
thereto that could, depending on the terms of such series, either
impede or facilitate the completion of a merger, tender offer or
other takeover attempt. Any series of preferred stock may, if so
determined by the Board of Directors, have full voting rights
with the KE Shares of Common Stock or superior or limited
voting rights, be convertible into Common Stock or another
security of KE, and have such other relative rights, preferences
and limitations as the KE's Board of Directors shall determine.
As a result, any class or series of preferred stock could have
rights which would adversely affect the rights of the holders of
the Common Stock. The shares of any class or series of
preferred stock need not be identical. The issuance of a new
series of preferred stock, while providing desirable flexibility in
connection with possible financings or other corporate purposes,
could have the effect of making it more difficult for a third party
to acquire, or discouraging a third party from acquiring, a
majority of the outstanding voting stock of KE. The KE Board
of Directors does not, at present, intend to seek shareholder
approval prior to any issuance of currently authorized KE
Common Stock, or any additional shareholder approval for
issuance of preferred stock should this proposed amendment be
adopted, unless otherwise required by law or the American
Stock Exchange. Frequently, opportunities arise that require
prompt action, and the KE Board of Directors believes that the
delay occasioned by seeking shareholder approval of a specific
issuance could be to the detriment of KE and its shareholders.

Reference is made to Exhibit "A" to this Proxy Statement which
contains a copy of Article V to the KE Articles of Incorporation
as it currently exists and as it is proposed to be amended.

The favorable vote of the holders of a majority of the
outstanding shares represented in person or by proxy at the KE
Annual Meeting of Shareholders is required for approval of this
proposal.

The Board of Directors of KE recommends a vote "FOR" the
adoption of the proposed amendment to Article V of its Articles
of Incorporation.

CERTAIN RELATIONSHIPS AND TRANSACTIONS

From its organization in 1988, KE's business consisted of the
acquisition from Koger Properties, Inc. ("KPI") and its affiliates
of completed and substantially leased commercial office
buildings and the holding of such properties for the production
of rents. As of December 31, 1993, KE owned 219 commercial
properties in 16 metropolitan areas in the Southeast and
Southwest. A total of 126 buildings were acquired from KPI or
its subsidiaries through 1990. During 1993, an additional 93
buildings were acquired from KPI as the result of the merger of
KPI with and into KE ("the Merger"), which was consummated
on December 21, 1993. As a result of the Merger, KE assumed
property management agreements to manage (i) the 20 office
buildings owned by Centoff Realty Company, Inc., a subsidiary
of Morgan Guaranty Trust Company of New York, and (ii) the
92 office buildings owned by The Koger Partnership, Ltd.
("TKP"), a Florida limited partnership.

Merger of KE and KPI; Resolution of KPI Chapter 11 Case

On September 25, 1991, KPI filed a petition under Chapter 11
of the United States Bankruptcy Code (the "Bankruptcy Code")
in the United State Bankruptcy Court for the Middle District of
Florida (the "Bankruptcy Court"). KE was the single largest
creditor of KPI in the KPI Chapter 11 Case (indebtedness to KE
of approximately $116 million). On April 30, 1993, KE and KPI
jointly proposed a plan of reorganization of KPI (the "Plan")
which provided for the Merger in exchange for the issuance of
shares of KE common stock (the "Shares") to certain creditors of
KPI and the issuance of warrants to purchase Shares (the
"Warrants") to shareholders of KPI and holders of certain
securities law claims against KPI and the settlement of KE's
claim against KPI. On August 11, 1993, the KE shareholders
approved the Merger and the issuance of the Shares and
Warrants pursuant thereto.

On December 8, 1993, the Plan was confirmed by the
Bankruptcy Court and the Merger became effective on
December 21, 1993. Pursuant to the Merger, 6,158,977 Shares,
or approximately 35% of the Shares outstanding after the
Merger, and Warrants to purchase an aggregate of 644,000
Shares (3.5% of currently outstanding shares on a fully diluted
basis) were issued under the Plan and Merger. The Warrants are
exercisable until June 30, 1999, at $8.00 per share, and are
subject to redemption at the option of KE at prices ranging from
$1.92 to $5.24 per Warrant.

With the Merger, KE succeeded to substantially all of the assets
of KPI, free and clear of all liens, claims and encumbrances,
except (i) encumbrances relating to certain secured indebtedness
of KPI (aggregating $182.6 million) which was restructured
under the Plan and (ii) an option and a right of first refusal held
by TKP on certain developed buildings and parcels of
undeveloped land which are located in TKP office centers. KPI
assets acquired by KE in the Merger included 93 buildings
containing 3,848,130 net rentable square feet, together with
approximately 295 acres of unimproved land suitable for
development, and 1,781,419 Shares held by KPI representing
13.47% of the outstanding Shares before the Merger. As a result
of the Merger, KE assumed all of the leasing and other
management responsibilities for its properties including those
acquired in the Merger. In addition, KPI transferred all of its
debt and equity interests in TKP to a newly formed
wholly-owned subsidiary of KE, Southeast Properties Holding
Corporation, Inc. ("Southeast"), which became the managing
general partner of TKP. These interests included (1) 39,918
Units of general partnership interest and 50,442 Units of limited
partnership interest in TKP, and (2) a restructured unsecured
note in the aggregate amount of $32,587,000, including accrued
interest as of December 31, 1993. This indebtedness is
subordinated to all of the other restructured debt of TKP. In
light of the terms of the TKP Plan of Reorganization in its
Chapter 11 Bankruptcy Case (the "TKP Plan") and its
restructured debt, KE has determined that these investments
have no value.

Agreements with The Koger Partnership, Ltd.

A Management Agreement (the "Management Agreement")
between TKP and Southeast, as successor to KPI, provides that
Southeast, in its capacity as Managing General Partner of TKP,
generally has responsibility for all aspects of TKP's operation.
Southeast receives as compensation for its services a
management fee, payable monthly, equal to nine percent of any
Gross Rental Income (as defined) derived from the real estate
properties and interests managed by Southeast. This fee
amounted to $89,000 for the period December 21, 1993 through
December 31, 1993. The Management Agreement is effective
for an initial term of five years, through May 31, 1998, subject
to automatic renewal for additional one year periods unless
terminated by either party thereto at least 90 days prior to the
expiration of the initial term or any extended term, unless sooner
terminated pursuant to certain provisions of the Management
Agreement. Total fees incurred under the previously existing
management agreements with KPI amounted to $2,007,000 for
the period from January 1, 1993 to December 21, 1993.

An Incentive Fee Agreement (the "Incentive Agreement")
between Southeast as successor to KPI and TKP provides that
reorganized TKP will pay Southeast a fee (the "Incentive Fee")
in respect of certain property dispositions and refinancings
effected following August 10, 1993 ("Covered Transactions").
The Incentive Fee will be equal to a percentage (the "Fee
Percentage") of the Net Proceeds (as defined) realized by
reorganized TKP from each Covered Transaction. Under the
Incentive Agreement, the Fee Percentage will be equal to, in
respect of (a) Covered Transactions consummated on or before
August 10, 1997, fifteen percent, (b) Covered Transactions
consummated after August 10, 1997, but on or before August
10, 1999, five percent, and (c) Covered Transactions
consummated after August 10, 1999, zero percent.

The first $5 million of Incentive Fees to be paid to Southeast
under the Incentive Agreement will be deposited in an account
as collateral for repayment of the obligations represented by
certain of the TKP Restructured Mortgage Notes (as defined). In
the event that the Incentive Agreement is terminated before an
aggregate of $5 million (the "Minimum Deposit Amount") is
accumulated in this account, TKP will covenant to continue to
pay amounts into such account as if the terms of the Incentive
Agreement has remained in effect until the Minimum Deposit
Amount has been achieved.

KE currently owns three developed office buildings and nine
parcels of undeveloped land located in office centers in which
TKP owns office buildings. Pursuant to the terms of an option
and purchase and sale agreement (the "TKP Option Agreement")
executed pursuant to the Merger, KE has granted reorganized
TKP a first option and right of first refusal in respect of certain
of these properties. The option generally has a seven year term
and will be exercisable at a price determined by reference to
then-current fair value.

Under a New Partnership Agreement between TKP and
Southeast, as successor to KPI, as Managing General Partner of
TKP, and Newleaf Services Corporation, as Alternate General
Partner of TKP, adopted pursuant to the TKP Plan, if the New
Mortgage Notes (as defined) and New TKP Secured Notes (as
defined) which at December 31, 1993, were $143,536,000 are
not incrementally reduced commencing the fourth year after
August 10, 1993, the effective date of the TKP Plan and fully
paid seven years after such effective date, the Alternate General
Partner shall automatically succeed Southeast as the Managing
General Partner of TKP and shall supervise the orderly
liquidation of TKP.

Agreements with TCW Special Credits

On August 9, 1993, KE entered into a Shareholder's Agreement
(the "Shareholder's Agreement") and a Registration Rights
Agreement (the "Registration Rights Agreement") with TCW
Special Credits, a California general partnership ("TCW Special
Credits"), as general partner or investment manager of certain
funds and accounts (the "TCW Shareholders"). Thomas K.
Smith, Jr., a Director of KE, is an Assistant Vice President of
Trust Company of the West and TCW Asset Management
Company ("TAMCO"), wholly-owned subsidiaries of The TCW
Group, Inc. TAMCO is the managing general partner of TCW
Special Credits.

The Shareholder's Agreement provides, among other things, that
as determined by the Board of Directors of KE pursuant to
Article V(D) of KE's Articles of Incorporation, the ownership by
the TCW Shareholders of up to the greater of (i) 4,047,350
Shares, as adjusted for recapitalizations and (ii) 23% of the then
outstanding Shares (the greater of (i) and (ii) being the
"Maximum Shares") is exempt from the operations of Article
V(D). Article V(D) of the KE Articles of Incorporation allows
its Board of Directors to limit holdings of the Shares by any
person to no more than 9.8% of the outstanding Shares if the
Board determines such limit is necessary in order for KE to
maintain its qualification as a real estate investment trust under
the Internal Revenue Code of 1986 (a "REIT"). The KE Board
of Directors determined that exempting the TCW Shareholders
from the aforesaid limitation would not jeopardize KE's
qualification as a REIT. Unless waived by TCW Special Credits,
this exemption will continue for a period of eight years
following the date of consummation of the Merger, December
21, 1993.

Pursuant to the terms of the Shareholder's Agreement, KE
amended its Common Stock Rights Agreement (the "Rights
Agreement"), which amendment was effective December 21,
1993. The amendment provides that the TCW Shareholders are
exempt persons under the Rights Agreement (the "Exempt
Persons") so long as the Exempt Persons do not collectively
own beneficially more than the Maximum Shares with certain
exceptions. Pursuant to the Rights Agreement, all Shares have
rights to purchase Shares (the "Rights") which become
exercisable if any person, except for Exempt Persons, acquires
15% or more of the outstanding Shares (the "Acquiring
Person"). Each Right gives the holder, except an Acquiring
Person, the right to acquire Shares with a market value of two
times the exercise price of the Rights. If the Exempt Persons
acquire Shares in excess of the number of shares for which they
are exempt, they would then be an Acquiring Person and could
not exercise their Rights. KE has also covenanted that following
the effective date of the Merger (December 21, 1993), for a
period of eight years KE will not amend, alter or otherwise
modify the Rights Agreement or take any action which would
limit or eliminate the rights of the TCW Shareholders under the
Rights Agreement without the prior consent of TCW Special
Credits. As of March 1, 1994, the TCW Shareholders owned
approximately 19% of the then outstanding Shares (see
"Principal Holders of Voting Securities").

The Registration Rights Agreement gives TCW Shareholders the
rights to, for a period of eight years following the effective date
of the Merger (December 21, 1993), (i) demand that KE register
any Shares owned by the TCW Shareholders pursuant to the
registration requirements of the Securities Act of 1933 in up to
four public offerings for the account of the TCW Shareholders
and (ii) have any Shares owned by the TCW Shareholders
included in an unlimited number of public offerings of KE's
securities which may be made on behalf of KE or others. All
expenses, except for brokerage discount, of any of these
offerings will be borne by KE.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires
that KE directors and executive officers file with the SEC and
the American Stock Exchange initial reports of ownership and
reports of changes in ownership of the KE Common Stock.
Executive officers and directors are required by the SEC
regulation to furnish KE with copies of all Section 16(a) forms
they file.

To KE's knowledge, based solely on review of the copies of
such reports furnished to KE and written representations that no
other reports not previously reported were required, during the
fiscal year ended December 31, 1993, all Section 16(a) filing
requirements applicable to its executive officers and directors
were complied with.

Legal Proceedings

An action in the U.S. District Court, Middle District of Florida
(the "District Court"), was filed on October 11, 1990 by Gerald
and Althea Best and Jerome Wilem, shareholders of KE, against
KPI, KE, two subsidiaries of KPI, Messrs. Allen R. Ransom (a
former director of KE), Ira M. Koger (a former director of KE),
S.D. Stoneburner, and W.F.E. Kienast (a former director of KE),
alleging that various press releases, shareholder reports, and/or
securities filings failed to disclose and/or misrepresented KE's
business policies and seeking damages therefor (the "Securities
Action"). William L. Coalson, a shareholder of KE, was
subsequently added as an additional plaintiff. KE believes that
the claims asserted in the complaint filed in the Securities
Action are without merit and intends to vigorously contest the
Securities Action.

A derivative action in the District Court was commenced on
October 29, 1990, by Howard Greenwald and Albert and Phyllis
Schlesinger, shareholders of KE, against KE, KPI, all of the
then current directors of KE including: Ira M. Koger, James B.
Holderman, Allen R. Ransom, Wallace F.E. Kienast, S.D.
Stoneburner, Yank D. Coble, Jr., G. Christian Lantzsch, A. Paul
Funkhouser and Stephen D. Lobrano, alleging breach of
fiduciary duty by favoring KPI over the interest of KE and
failing to disclose or intentionally misleading the public as to
KE's cash flow, dividend and financing policies and status, and
seeking damages therefor (the "Derivative Action"). During the
course of the Derivative Action, the Plaintiffs therein further
alleged that Mr. Lobrano was liable to KE for certain alleged
acts of legal malpractice. KE's Board of Directors Special
Litigation Committee, which was composed of outside
independent members of KE's Board of Directors, completed an
extensive investigation of the facts and circumstances
surrounding the Derivative Action including the allegation
against Mr. Lobrano. It was the conclusion of this Committee
that the ultimate best interest of KE and its shareholders would
not be served in prosecuting this litigation; subsequently, KE
moved that the Derivative Action be dismissed under the
provisions of Florida law. Thereafter, the plaintiffs filed a
Second Amended and Supplemental Complaint (the "Second
Complaint") which realleged the original cause of action
("Count I"), and realleged the cause of action against Stephen D.
Lobrano ("Count II") and a new cause of action against the
members of the KE Special Litigation Committee for alleged
violation of fiduciary duty in conducting their investigation
("Count III"). During 1993, KE filed motions seeking dismissal
of the Second Amended and Supplemental Complaint. On
January 27, 1994, the United States Magistrate issued its Report
and Recommendation, concerning this derivative suit, which
recommended that (1) Count I should be dismissed pursuant to
the Special Litigation Committee Report, (2) Count III against
the Special Litigation Committee members should be dismissed,
and (3) Count II should not be dismissed. The District Court
adopted the Report and Recommendations of the United States
Magistrate by order entered March 8, 1994. Subsequently, Mr.
Lobrano has filed his answer denying all of the material
allegations of the Second Complaint, and raising affirmative
defenses, including, without limitation, the defense that Mr.
Lobrano was at all times acting under the direction of the
officers and directors of KPI. Mr. Lobrano and his law firm have
also filed a cross claim against KE, asserting that, in connection
with the matters complained of in the Second Complaint, Mr
Lobrano and his law firm acted under the direction and control
of the officers and directors of KPI, that they have suffered
out-of-pocket expenses and reputation damage to their business
due to the directions of the officers and directors of KPI, and
that they are entitled to contribution or indemnity from KE, as
the successor of KPI under the merger consummated pursuant to
the KPI Plan, in respect of such damages. They have brought
similar cross claims against Ira M. Koger, Allen R. Ransom and
Wallace F. E. Kienast, former officers and directors of KPI. KE
has not yet responded to these claims, but believes that any such
claims against KPI were discharged in its Chapter 11 Case.

Pursuant to Florida Statutes Section 607.0850, the
Indemnification Committee of KE's Board of Directors has
made an initial determination that certain officers and directors
and former officers and directors of KE who are defendants in
each of the Securities Action and the Derivative Action are
entitled to the advancement of expenses in defending these
actions. This Committee will not make a final determination on
indemnification of these defendants until there is a final
resolution of these actions. The Committee has agreed to
indemnify these defendants to the extent permitted by law.
Should it be determined that any defendant was not entitled to
indemnification, such defendant will be obligated to reimburse
KE for any expenses it has incurred or which have been
reimbursed in the defense of that defendant. In accordance with
Florida law, each of the present and former directors and
officers, who are defendants in the suits described above, have
so agreed to reimburse KE. During the year ended December 31,
1993, KE paid $141,127 in attorney's fees and expenses
incurred on behalf of itself, certain directors and officers and
former directors and officers in connection with the above
litigation.

On March 23, 1993, the Securities and Exchange Commission
(the "Commission") entered an Order directing a private
investigation with respect to KPI's accounting practices,
including the accuracy of financial information included in
certain reports filed with the Commission, possible insider
trading in KPI's stock, and possible misleading statements
concerning the financial condition of KPI and its ability to pay
dividends to its shareholders. Prior to March 23, 1993, the
Commission had been engaged in a confidential investigation
without a formal order. As a result of the Merger, KE has
assumed responsibility for responding to the requests and
subpoenas of the Commission staff in connection with this
private investigation. Although the staff of the Commission had
subpoenaed KPI documents and former employees of KPI, who
are presently employees of KE, for testimony, on February 8,
1994, the Commission staff advised KE, through its counsel,
that the scheduled depositions of former KPI employees and the
review of KPI documents had been suspended. KE has received
no communication from the Commission staff since the above
notice of suspension. Based on the information currently
available to KE, it is unable to determine whether or not this
private investigation will lead to formal legal proceedings or
administrative actions or whether or not such legal proceedings
or adminstrative actions will involve KE.

PRINCIPAL HOLDERS OF VOTING SECURITIES

A beneficial owner of a security includes any person who
directly or indirectly has or shares voting power and/or
investment power with respect to such security. Voting power is
the power to vote or direct the voting of securities; investment
power is the power to dispose of or direct the disposition of
securities.

The table set forth below presents certain information regarding
the beneficial ownership of Shares by each shareholder known
to KE to own more than five percent of the outstanding Shares
as of March 1, 1994.

Name and Address of Number of Shares
Beneficial Owner Percent of Class Beneficially Owned

<S> <C> <C>
The TCW Group, Inc. and affiliates (1) 18.821% 3,312,009
865 South Figueroa Street
Suite 1800
Los Angeles, California 90017

</TABLE>

(1) Based upon information provided by TCW to KE as of
March 1, 1994. Represents Shares held by certain limited
partnerships, trusts, and separate accounts for which TCW
Special Credits, an affiliate of The TCW Group, Inc., acts as
general partner or investment manager. The TCW Group, Inc.
and its affiliates may be deemed to be the beneficial owners of
such shares for purposes of the reporting requirements of the
Securities Exchange Act of 1934; however, The TCW Group,
Inc. and its affiliates expressly disclaim beneficial ownership of
such Shares. The limited partnerships, trusts, and separate
accounts which own the 3,312,009 Shares may be entitled to
receive additional Shares pursuant to the Plan of Reorganization
of Koger Properties, Inc. The number of additional Shares was
not known as of March 1, 1994.

INDEPENDENT PUBLIC ACCOUNTANTS

During the year ended December 31, 1993, KE engaged Deloitte
& Touche to provide certain audit services. These services
included the audit of the annual financial statements, a review of
the quarterly data furnished to the Securities and Exchange
Commission ("SEC") for the quarters ended March 31, June 30,
and September 30, 1993, and March 31, 1994, services
performed in connections with filing this Proxy Statement and
the Annual Report on Form 10-K with the SEC, attending
meetings with the Audit Committee, and consultation on matters
relating to accounting, tax and financial reporting. The Audit
Committee approved all services performed by the auditors in
advance of their performance. Deloitte & Touche has acted as
independent public accountants for KE since its organization on
June 21, 1988. Neither the firm nor any of its associates has any
relationship to KE or any of its subsidiaries except in their
capacity as auditors.

It is expected that representatives of the independent public
accountants will attend the Annual Meeting and be available to
respond to appropriate questions and be permitted to make a
statement concerning KE should they desire.

As of the date hereof, the Board of Directors of KE had not
selected independent public accountants to audit the books and
accounts of KE for the fiscal year ending December 31, 1994. It
is anticipated that auditors will be selected later in the fiscal
year.

OTHER BUSINESS

It is not anticipated that there will be presented to the Annual
Meeting of Shareholders any business other than the election of
directors and the approval of the amendments to the KE Articles
of Incorporation. The Board of Directors was not aware, a
reasonable time before this solicitation of proxies, of any other
matters which might properly be presented for action at the
annual meeting or any adjournment thereof. If any other
business should come before the Annual Meeting of
Shareholders or any adjournment thereof, the persons named on
the enclosed proxy will have discretionary authority to vote such
proxy in accordance with their best judgment.

SHAREHOLDER PROPOSALS

Proposals of shareholders to be presented at the 1995 Annual
Meeting of Shareholders of KE must be received at KE's
executive offices by December 7, 1994, to be considered for
inclusion in KE's proxy materials relating to that meeting.
Proposals must comply with the SEC proxy rules relating to
shareholder proposals in order to be included in KE's proxy
material.

GENERAL

KE will bear the costs of solicitation of proxies. In addition to
the use of the mails, proxies may be solicited by personal
interview, telephone and telegram by directors and officers of
KE, and no additional compensation will be paid to such
individuals. KE also has retained Morrow & Co., Inc., 345
Hudson Street, New York, New York 10014, to solicit proxies
by mail, by telephone, telegraph, or personally, for which
service KE anticipates a cost not in excess of $7,000 plus
reasonable out-of-pocket expenses. Arrangements may also be
made with the stock transfer agent and with brokerage houses
and other custodians, nominees and fiduciaries who are record
holders of Shares for the forwarding of solicitation material to
the beneficial owners of the Shares. KE will, upon the request of
such entities, pay their reasonable expenses for completing the
mailing of such material to such beneficial owners.

Consistent with state law and under KE's by-laws, a majority of
the shares entitled to vote on a particular matter, present in
person or represented by a proxy, constitutes a quorum as to
such matter.

The ten nominees for election as directors at the KE Annual
Meeting of Shareholders who receive the greatest number of
votes properly cast for the election of directors shall be elected
directors. A majority of the votes properly cast on the matter is
necessary to approve the action proposed in Item 2 as well as
any other matter which comes before the Annual Meeting,
except where law or KE's Articles of Incorporation or By-laws
require otherwise.

KE will count the total number of votes cast "for" approval of
proposals, other than the election of directors, for purposes of
determining whether sufficient affirmative votes have been cast.
KE will count shares represented by proxies that withhold
authority to vote for a nominee for election as a director or that
reflect abstentions and "broker non-votes" (i.e., shares
represented at the annual meeting held by brokers or nominees
as to which (i) instructions have not been received from the
beneficial owners or persons entitled to vote and (ii) the broker
or nominee does not have the discretionary voting power on a
particular matter) only as Shares that are present and entitled to
vote on the matter for purposes of determining the presence of a
quorum, but neither abstentions nor broker non-votes will have
any effect on the outcome of voting on the matter.

The KE Annual Report to Shareholders for the fiscal year ended
December 31, 1993, which contains financial statements and
other information, was previously mailed to shareholders on or
about March 23, 1994, but is not to be regarded as proxy
soliciting material.

A COPY OF KE'S ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION MAY BE OBTAINED, WITHOUT CHARGE, BY ANY SHAREHOLDER
UPON WRITTEN REQUEST TO THE SECRETARY, KOGER EQUITY, INC., 3986 BOULEVARD
CENTER DRIVE, JACKSONVILLE, FLORIDA 32207. EXHIBITS TO THE FORM 10-K WILL
NOT BE SUPPLIED UNLESS SPECIFICALLY REQUESTED, FOR WHICH THERE MAY BE A
REASONABLE CHARGE.

EXHIBIT A

Set forth below is the entire text of ARTICLE V of the
Koger Equity, Inc. Articles of Incorporation showing the new
language to be added by the proposed amendment to the Articles
solicited in the proxy statement in bold face type and the
language to be deleted pursuant to such proposal indicated by a
line passing through such language.

ARTICLE V - CAPITAL STOCK

The aggregate number of shares of all classes which the
Company shall have the authority to issue is one hundred
million (100,000,000) shares, par value $ .01 per share, all of
which shall be non assessable and designated as common stock
(the "Common Stock").

The total number of shares of stock that this corporation
shall have authority to issue is 100,000,000 shares of Common
Stock, each of which shall have a par value of $ .01 per share
(the "Common Stock") and 50,000,000 shares of Preferred
Stock, each of which shall have a par value of $.01 per share
(the "Preferred Stock"). The board of directors is authorized to
issue the Preferred Stock from time to time in one or more
classes or series thereof, each such class or series to have such
voting powers (if any), conversion rights (if any), designations,
preferences and relative, participating, optional or other special
rights, and such qualifications, limitations or restrictions thereof,
as shall be determined by the board of directors and stated and
expressed in a resolution or resolutions thereof providing for the
issue of such Preferred Stock. Subject to the powers, preferences
and rights of any Preferred Stock, including any class or series
thereof, having any preference or priority over, or rights superior
to, the Common Stock and except as otherwise provided by law,
the holders of the Common Stock shall have and possess all
powers and voting and other rights pertaining to the stock of this
corporation and each share of Common Stock shall be entitled
to one vote.

Except as otherwise provided in the Articles of
Incorporation and subject to the rights of the holders of
Preferred Stock, the following is a description of the voting
rights, limitations as to dividends, preemptive rights,
restrictions, and terms and conditions of redemption of the
Common Stock of the Company:

(A) Voting Rights
1. Except as otherwise provided in these Articles of
Incorporation, at every annual or special meeting of
stockholders of the Company, every holder of Common Stock
shall be entitled to one vote, in person or by proxy, for each
share of Common Stock standing in the stockholders name on
the books of the Company in the election of directors and upon
all other matters submitted to a vote of the stockholders of the
Company.

2. The Company shall not issue any non voting capital stock.

(B) Dividends and Liquidation Rights
1. Dividends. The holders of shares of Common Stock shall
be entitled to receive, when and if declared by the Board of
Directors, out of the assets of the Company which are legally
available therefor, dividends payable either in cash, in property
or in shares of Common Stock.

2. Dissolution, Liquidation or Winding Up. In the event of
any dissolution, liquidation, or winding up of the affairs of the
Company after payment or provision for payment of the debts
and other liabilities of the Company, the holders of all
outstanding shares of Common Stock shall be entitled to share
ratably in the remaining net assets of the Company.

(C) Preemptive Rights. No stockholder of the Company shall
have any preemptive or other right to purchase or subscribe for
any shares of the Common Stock of the company which it may
issue or sell, whether now or hereafter authorized, other than
such right, if any, as the Board of Directors in its discretion from
time to time may determine.

(D) Restrictions on Transfer; Redemption.
1. The stockholders shall upon demand disclose to the
Board of Directors in writing such information with respect to
direct and indirect ownership of the Common stock of the
Company as the Board of Directors deems necessary to comply
with the provisions of the Internal Revenue Code of 1986, as
amended or as hereafter amended if such amendments are
applicable to the Company (the "Code"), pertaining to the
qualification of the Company as a real estate investment trust (a
"REIT") or to comply with the requirements of any taxing
authority or governmental entity or agency.

2. Whenever it is deemed by the Board of Directors to be
reasonably necessary to protect the tax status of the Company as
a REIT, the Board of Directors may require a statement or
affidavit from any stockholder or proposed transferee of shares
of Common Stock setting forth the number of shares of
Common Stock already owned by the stockholder and any
related Person (as hereinafter defined) specified in the form
prescribed by the Board of Directors for that purpose. If, in the
opinion of the Board of Directors, which opinion shall be
conclusive on the proposed transferor and transferee, the
proposed transfer may jeopardize the qualification of the
Company as a REIT, the Board of Directors has the right, but
not a duty, to refuse to transfer the shares of Common Stock to
the proposed transferee. All contracts for the sale or other
transfer of shares of Common Stock shall be subject to this
provision.

3. Notwithstanding any other provision of these Articles of
Incorporation to the contrary and subject to the provisions of
Section 6 of Paragraph (D) of this Article V, no person shall at
any time directly or indirectly acquire ownership in the
aggregate of more than 9.8% of the outstanding shares of
Common Stock of the Company (the "Limit"). Shares of
Common Stock owned by a Person in excess of the Limit at any
time shall be deemed excess shares ("Excess Shares"). For
purposes of this Article V a person shall be deemed to own
shares of Common Stock actually owned by such Person after
applying the rules of Section 544 of the Code as modified in the
case of a REIT by Section 856 (a) (6), Section 856 (d) (3), and
Section 856 (h) of the Code. All shares of Common Stock which
any Person has the right to acquire upon exercise of outstanding
rights, options, and warrants, and upon conversion of any
securities convertible into shares of Common Stock, if any, shall
be considered outstanding for purposes of the Limit if such
inclusion will cause such Person to own more than the Limit.

4. If at any time the Board of Directors shall in good faith
determine that direct or indirect ownership of shares of Common
Stock of the Company by any Person or Persons has or may
become concentrated to the extent which would cause the
Company to fail to qualify or to be disqualified as a REIT or that
any Person has acquired Excess shares (including shares of
Common Stock that remain or become Excess shares because of
the decrease in the outstanding shares of Common Stock
resulting from such redemption), the Board of Directors shall
have the power to call for the purchase from any stockholder of
the Company, by notice to such stockholder, of a number of
shares of Common Stock sufficient in the opinion of the Board
of Directors to maintain or to bring the direct or indirect
ownership of shares of Common Stock into conformity with the
provisions of the Code pertaining to the qualification of the
Company as a REIT and/or to redeem all shares of Common
Stock that are Excess Shares owned by such Person. From and
after the date fixed for redemption by the Board of Directors, the
holder of any shares of Common Stock so called for redemption
shall cease to be entitled to distributions, voting rights, and
other benefits with respect to such shares of Common Stock,
excepting only the right to payment by the Company of the
redemption price pursuant to this Article V as set forth in the
following paragraph.

The redemption price of each share of Common Stock
called for redemption shall be:

(a) the average daily per share composite closing sales price
if the shares of the Company are listed on a national securities
exchange, and if the shares are not so listed shall be the mean
between the average per share closing bid prices and the average
per share closing asked prices, in each case during the twenty
(20) trading day period ending on the business day prior to the
redemption date, or

(b) if there have been no sales on a national securities
exchange and no published bid quotations and no published
asked quotations with respect to shares of the Company during
such twenty (20) trading day period, the redemption price shall
be the price determined in good faith by the Board of Directors.

In order to assure further that ownership of the shares of
Common Stock of the Company does not become concentrated
so as to cause the Company to fail to qualify or to be
disqualified as a REIT, any transfer of shares that would prevent
the Company from continuing to be qualified as a REIT under
the Code, including any attempt to effect a transfer that was
prohibited by the Board of Directors, under Section 6 of
Paragraph (D) of this Article V, shall be void ab initio and the
intended transferee of such shares shall be deemed never to have
had any legal or equitable interest therein. If the foregoing
provision is determined to be void and invalid by virtue of any
legal decision, statute, rule, or regulation, then the transferee of
such shares of Common Stock shall be deemed, at the option of
the Company, to have acted as agent on behalf of the Company
in acquiring such shares of Common Stock and to hold such
shares of Common Stock on behalf of the Company. A
conspicuous legend noting the restrictions on transfer set forth
in these Articles of Incorporation shall be placed on each
certificate evidencing ownership of shares of Common Stock of
the Company.

5. Notwithstanding any other provision of these Articles of
Incorporation or the By-Laws to the contrary, any purported
acquisition of shares of Common Stock of the Company which
results in the disqualification of the Company as a REIT under
the Code shall be null and void. All contracts for the sale or
other transfer of shares of Common Stock shall be subject to this
provision.

6. The Limit set forth in Section 3 of this Article V shall
not apply to acquisitions of shares of Common Stock pursuant
to a cash tender offer made for all outstanding shares of
Common Stock of the Company (including securities
convertible into shares of Common Stock) in conformity with
applicable federal and state securities laws where two-thirds
(2/3) of the outstanding shares of Common Stock (not including
shares of Common Stock or securities convertible into shares of
Common Stock held by the tender offerer and/or any "affiliates"
or "associates" thereof within the meaning of the Securities
Exchange Act of 1934, as amended) are duly tendered and
accepted pursuant to the cash tender offer; nor shall the limit
apply to the acquisition of shares of Common Stock by an
underwriter in a public offering of shares of Common Stock, or
in any transaction involving the issuance of shares of Common
Stock by the Company in which the Board of Directors
determine that the underwriter or other person or party initially
acquiring such shares of Common Stock will make a timely
distribution of such shares of Common Stock to or among other
holders such that, following such distribution, none of such
shares of Common Stock will be Excess Shares. The Board of
Directors in their discretion may exempt from the Limit
ownership of certain designated shares of common stock while
owned by a person who has provided the Company with
evidence and assurances acceptable to the Board of Directors
that the qualification of the Company as a REIT would not be
jeopardized thereby.

7. As used in this Article V the word "Person" shall mean
and include individuals, corporations, limited partnerships,
general partnerships, joint stock companies or associations, joint
venturers, companies, trusts, banks, trust companies, land trusts,
business trusts, estates, or other entities and governments and
agencies and political subdivisions thereof and also includes a
group as that term is used for purposes of Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended.

8. Nothing contained in this Article V or in any other
provision of these Articles of Incorporation shall limit the
authority of the Board of Directors to take such other action as it
deems necessary or advisable to protect the Company and the
interests of the stockholders by preserving the Company's
qualification as a REIT under the Code.

9. If any provision of this Article V or any application of
any such provision is determined to be invalid by any court
having jurisdiction over the issues, the validity of the remaining
provisions shall not be affected and other applications of such
provision shall be affected only to the extent necessary to
comply with the determination of such court. To the extent this
Article V may be inconsistent with any other provision of these
Articles of Incorporation or the By-Laws, this Article V shall be
controlling.

KOGER EQUITY, INC.
ANNUAL MEETING OF STOCKHOLDERS, May 10, 1994
This Proxy is Solicited by the Board of Directors

This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder(s). If no direction is made, this
proxy will be voted for Proposals 1 and 2.

1. ELECTION OF DIRECTORS WITHHOLD AUTHORITY
FOR all nominee listed below to vote for all nominees
(except as marked to the contrary below) listed below

INSTRUCTION: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list below: Nominees: [D. Pike Aloian;
Banjamin C. Bishop, Jr.; Charles E. Commander, III; Irvin H. Davis; David B.
Hiley; Victor A. Hughes, Jr.; G. Christian Lantzsch; Thomas K. Smith, Jr.;
George F. Staudter; S. D. Stoneburner]

2. To amend Article V of Koger Equity, Inc. Articles of Incorporation to
authorize the issuance of up to 50,000,000 shares of preferred stock,
including convertible preferred stock in such series with such preferences
and rights as the Koger Equity, Inc. Board of Directors may determine, and
to remove the restriction which prohibits the issuance of non-voting capital
stock.

FOR AGAINST ABSTAIN

3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment thereof.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.

KOGER EQUITY, INC.
PROXY
This Proxy is Solicited by the Board of Directors

The undersigned hereby appoints Irvin H. Davis, Victor A. Hughes, Jr., and
S.D. Stoneburner, and each of them, his (their) true and lawful agents and
proxies with full power of substitution in each, and hereby authorizes them
to vote his (their) Koger Equity, Inc. Common Stock as designated herein and
to represent the undersigned at the Annual Meeting of Shareholders of Koger
Equity, Inc., a Florida corporation, to be held at the Omni Jacksonville
Hotel, 245 W. Water Street, Jacksonville, Florida, Tuesday, May 10, 1994, at
10:00 A.M., Eastern Daylight Saving Time, or any other adjournment thereof,
on all matters coming before said meeting or any adjourned meeting.

Dated: , 1994

(Signature)

(Signature if held jointly)
This Proxy Must be Signed Exactly
as the Name(s) Appears Hereon
Executors, administrators, trustees, etc. should give full title as such.
If the signer is a corporation, please sign full corporate name by duly
authorized officer. If shares are held jointly, signature should include
both names.