<PAGE>
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
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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
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Commission file number 0-18750
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CORPORATE PROPERTY ASSOCIATES 9, L.P., A DELAWARE LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its charter)
DELAWARE 13-3489133
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
50 ROCKEFELLER PLAZA, NEW YORK, NEW YORK 10020
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 492-1100
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
NONE NONE
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Securities registered pursuant to Section 12(g) of the Act:
LIMITED PARTNERSHIP UNITS
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(Title of Class)
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(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
[X] Yes [ ] No
Indicate by check mark if disclosure of deliquent filers pursuant to Item 405
of Regulation S-K (ss. 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>
PART I
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Item 1. Business.
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Registrant is engaged in the business of investing in commercial
and industrial properties which are net leased to commercial and industrial
entities. Registrant was organized as a Delaware limited partnership on October
17, 1988. The General Partners of Registrant are Ninth 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 8, L.P., a Delaware limited partnership ("CPA(R):8") and the advisor
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 entered into an
agreement with Fifth Rock L.P., an affiliate, for the purpose of leasing office
space. 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. Reference is made to the
Prospectus of Registrant dated March 21, 1989 filed pursuant to Rule 424(b), as
supplemented by Supplements dated June 27, 1989, October 23, 1989, January 22,
1990 and March 9, 1990 and as amended on September 27, 1989 and December 27,
1989 under the Securities Act of 1933 and such Prospectus and such Supplements
are incorporated herein by reference (said Prospectus, as so supplemented and
amended, is hereinafter called the "Prospectus").
Commencing on March 21, 1989, 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. 33-26399). Reference is made to the Prospectus of Registrant.
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. A total of 59,918 Units were ultimately
issued, including 100 Units to the Corporate General Partner for $100,000. On
July 12, 1990, Registrant filed Post-Effective Amendment No. 5 to its
Registration Statement with the Securities and Exchange Commission to withdraw
the balance of the Units from registration.
Registrant has only one industry segment which consists of the
investment in and the leasing of industrial and commercial real estate. See
Selected Financial Data and Management's Discussion and Analysis in Item 6 and
Item 7, respectively, for a summary of Registrant's operations. Also see the
material contained in the Prospectus under the heading INVESTMENT OBJECTIVES AND
POLICIES.
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 July 9, 1991, the date of Registrant's final real estate
acquisition.
For the year ended December 31, 1996, revenues from properties
occupied by Detroit Diesel Corporation ("Detroit Diesel"), Dr Pepper Bottling
Company of Texas ("Dr Pepper"), Furon Company ("Furon"), Information Resources,
Inc., and Red Bank Distribution, Inc. ("Red Bank") amounted to 20%, 14%, 12%,
10%, and 10% respectively, of the total operating revenues of Registrant. No
other property owned by Registrant accounted for 10% or more of its total
operating revenue during 1996. See Note 9 to the Financial Statements in Item 8.
Audited financial statements for Detroit Diesel, a publicly-traded company, for
the year ended December 31, 1995 and the unaudited financial statements for the
nine month period ended September 30, 1996, reported revenues of $2,087,100,000
and $1,457,700,000, respectively, net income (loss) of $40,100,000 and
$(800,000), respectively, total assets of $1,045,100,000 and $1,126,800,000,
respectively, and total shareholders' equity of $310,400,000 and $316,000,000,
respectively.
All of Registrant's present real estate 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
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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 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 secured contingent property and liability insurance on the
properties owned. 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 reportable on 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 or
Producer Price Index. Registrant's leases with Dr Pepper, NVRyan, L.P., and Red
Bank include purchase options which are exercisable between 1999 and 2000 and
provide for exercise prices which are the greater of fair market value, as
defined in the lease, or a stated purchase 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 are not generally subject to the competitive conditions of local and
regional real estate markets. In selecting its real estate investments,
Registrant's strategy has been to identify properties which included operations
of material importance to the lessee so that the lessee may be more likely to
extend its lease beyond the initial term. Competitive conditions of local and
regional real estate markets may have a more material affect on Registrant as
leases terminate in the future; however, Registrant believes that its strategy
may reduce its exposure to such competitive conditions. Most of Registrant's
leases do not expire until after the year 2000. Accordingly, Registrant believes
it is currently more affected by the financial conditions 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.
In December 1996, the Boards of Directors of the Corporate
General Partner of Registrant and CPA(R):10 approved a transaction which
resulted in CPA(R):10 transferring its interests in Hope Street to Registrant
(with Hope St., Inc., a wholly-owned subsidiary formed for the purpose of owning
a 1% general partner interest in Hope Street). The lender has advised Registrant
of its intention to foreclose on the property. Registrant has not been able to
restructure the lease and Registrant has agreed with the lender to transfer the
property to the property lender in return for a $10,000 payment by the lender.
In September 1996, Registrant and CPA(R):8 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 $928,310, of
which $604,184 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 $116,000 and $81,600, 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.
Registrant does not have any employees. An affiliate of the
Corporate General Partner of Registrant employs 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.
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<PAGE>
Item 2. Properties.
Registrant's properties are as follows:
<TABLE>
<CAPTION>
LEASE TYPE OF OWNERSHIP
OBLIGOR TYPE OF PROPERTY LOCATION INTEREST
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<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)
NVRYAN, L.P. Office Pittsburgh, Ownership of land
Buildings Pennsylvania and buildings (1)
FEDERAL EXPRESS Distribution Facility Corpus Christi, Ownership of land
CORPORATION Texas and buildings
DR PEPPER BOTTLING Bottling/ Irving and Ownership of a 50%
COMPANY OF TEXAS Distribution/ Houston, interest in land
Office Facilities Texas and buildings (1)
ORBITAL SCIENCES Engineering & Chandler, Ownership of a 58%
CORPORATION Fabrication Arizona interest in land
Facility and buildings (1)
PEPSICO, INC. Distribution Houston, Ownership of land
Facility Texas and buildings
AMERISIG, INC. Office/ Dekalb County, Ownership of a 73.57%
Manufacturing Georgia interest in land
Facility and buildings (1)
FURON Manufacturing, New Haven, Ownership of a 67.72%
COMPANY Office and Connecticut; interest in land
Warehouse Mickelton, and buildings (1)
Facilities New Jersey;
Aurora and Mantua, Ohio;
Bristol, Rhode Island;
Mt. Pleasant, Texas;
and Milwaukee, Wisconsin
DETROIT DIESEL Office, Warehouse, Detroit, Ownership of a 80%
CORPORATION Manufacturing, Truck Michigan interest in land
Repair and Waste and buildings (1)
Treatment Plant
RED BANK Warehouse Fairfax, Ohio Ownership of land
DISTRIBUTION, INC. and buildings (1)
INFORMATION Office Buildings Chicago, Ownership of a 33.33%
RESOURCES INC. Illinois limited partnership interest
in a limited partnership
owning land and buildings (1)
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
LEASE TYPE OF OWNERSHIP
OBLIGOR TYPE OF PROPERTY LOCATION INTEREST
- ------------------- ---------------- -------- -----------------
<S> <C> <C> <C>
CHILDTIME Child Daycare Westland (2) and Ownership of a 33.93%
CHILDCARE, INC. Centers Sterling Heights, interest in land and
- 12 locations Michigan; Chandler buildings (1)
and Tuscon, Arizona;
Duncanville, Carrollton
and Lewisville, Texas;
Alhambra, Chino,
Garden Grove and
Tustin/Santa Ana,
California
TITAN Office Building San Diego, Ownership of a 18.54%
CORPORATION California limited partnership interest
in a limited partnership
owning land and buildings (1)
</TABLE>
(1) These properties are encumbered by mortgage notes payable.
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<PAGE>
The material terms of Registrant's leases with its significant
tenants are summarized in the following table:
<TABLE>
<CAPTION>
Registrant's
Share Current Lease
Lease of Current Square Rent Per Expiration Renewal Ownership Terms of Gross
Obligor Annual Rents Footage Sq.Ft.(1) (Mo/Year) Terms Interest Purchase Option Costs (2)
- ------- ------------ ---------- --------- ---------- ------- --------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Detroit $ 2,926,447 2,730,750 $1.34 06/10 YES 80% interest; N/A $25,206,746
Diesel remaining
Corporation interest owned
by Corporate
Property Associates
8 ("CPA(R):8")
Dr Pepper 1,999,000 721,947 5.54 06/14 YES 50% interest; The greater of 14,164,967
Bottling remaining fair market value
Co. of Texas interest ownedof the property
by CPA(R):8 or $14,100,000
Furon 1,636,149 699,870 3.45 07/07 YES 67.72% interest; N/A 14,810,088
Company remaining
interest owned
by CPA(R):8
Red Bank 1,400,567 589,150 2.29 07/15 YES 100% The greater of 10,649,302
Distribution, fair market value
Inc. of the property
or $10,638,000 and
any prepayment
penalty.
NVRyan, 938,046 78,000 12.03 05/14 YES 100% The greater of 12,241,054
L.P. fair market value
of the property
or $11,700,000 and
any prepayment
penalty.
Orbital 1,249,169 280,000 7.95 09/09 YES 58% interest; N/A 9,367,376
Sciences remaining
Corporation interest owned
by CPA(R):8
Amerisig, Inc. 1,169,008 432,559 3.64 12/09 YES 73.57% interest; N/A 9,009,674
remaining
interest owned
by CPA(R):8
Childtime 381,287 83,694 13.43 01/16 YES 33.93% interest; N/A 2,857,264
Childcare remaining
Inc. interest owned
by Corporate
Property Associates
10 Incorporated
("CPA(R):10")
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Registrant's
Share Current Lease
Lease of Current Square Rent Per Expiration Renewal Ownership Terms of Gross
Obligor Annual Rents Footage Sq.Ft.(1) (Mo/Year) Terms Interest Purchase Option Costs (2)
- ------- ------------ ---------- --------- ---------- ------- --------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Information $ 1,457,788 252,000 $17.36 09/05 YES 33.33% limited N/A $11,879,827
Resources, partner interest;
Inc. remaining interest
owned by CPA(R):10
Titan 459,525 166,403 14.89 7/07 YES 18.54% limited N/A 3,672,394
Corporation partner interest;
remaining interest
owned by CPA(R):10
General 467,093 88,578 10.55 7/98 YES 50% joint venture N/A 3,886,703
Electric interest; remaining
Corporation interest owned
by CPA(R):8
</TABLE>
(1) Represents rate for 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.
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>
Detroit
Diesel
Corporation 7.16% $18,996,302 $2,206,723 06/15/10 (3)
Dr Pepper
Bottling Co. of Texas 11.85 7,821,034 1,060,108 07/01/99 7,435,000 May be prepaid at any time.
Furon
Company 10.40 8,493,472 248,873 04/01/97 8,465,185
Red Bank
Distribution, Inc. 10.00 2,681,322 360,588 08/02/10 (3)
10.25(1) 2,759,580 462,488 (5) 2,927,000
</TABLE>
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<PAGE>
<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>
NVRyan, L.P. 8.50% $6,700,000 $ 569,500(2) 12/31/02 $6,080,000 Prepayment premium will be the
greater of 1% of the outstanding
principal or the present value for
the period between prepayment and
maturity of the difference between
the note's interest and the yield to
maturity of the US treasury note.
Orbital Sciences
Corporation 10.00 4,293,713 473,892 09/01/02 (3) 5% of loan balance in the 6th year
and decreasing to .5% per year
following.
Amerisig, Inc. 9.25(1) 4,635,213 525,320(2) 04/30/01 4,176,211 The loan may be prepaid in whole
or inpart with a 1% premium
Childtime
Childcare, Inc. 9.55 1,289,340 144,729 12/01/06 934,644 The loan may be prepaid in full with
a 5% premium, in the first five loan
years and decreasing 1/2% in each
loan year thereafter.
Information
Resources, Inc. 10.70 7,522,037 873,854 10/01/00 7,205,000 A prepayment premium of the greater
of 3% of the loan balance or the
present value of the monthly income
loss between prepayment and maturity.
Titan
Corporation 9.75 1,975,594 246,900 07/01/03 1,486,000 Prepayment allowed after January 1,
1998. Premium will be the greater of
2% of the loan or the difference
between the remaining principal
balance and the present value of the
remaining payments.
General Electric
Corporation 10.50 1,693,462 215,558 05/01/98 1,636,000 No prepayment permitted.
</TABLE>
(1) Variable rate based on lender's prime rate.
(2) Estimate based on current interest rates.
(3) This loan fully amortizes.
(4) Includes amount applicable to interest in properties owned by joint
venture and limited partnerships.
(5) The loan has matured and is due on demand of the lender. Registrant
continues to pay monthly debt service installments; however, no demand has
been made.
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<PAGE>
Item 3. Legal Proceedings.
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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.
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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.
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Information with respect to Registrant's common equity is hereby
incorporated by reference to page 24 of Registrant's Annual Report contained in
Appendix A.
Item 6. Selected Financial Data.
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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.
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Management's Discussion and Analysis are hereby incorporated by
reference to pages 2 to 4 of Registrant's Annual Report contained in Appendix A.
Item 8. Financial Statements and Supplementary Data.
-------------------------------------------
The following financial statements and supplementary data are
hereby incorporated by reference to pages 5 to 18 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.
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NONE
-8-
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PART III
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Item 10. Directors and Executive Officers of the Registrant.
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Registrant has no directors or officers. The directors and senior
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 10/88
Director
Francis J. Carey 71 President 10/88
Director
George E. Stoddard 80 Chairman of the Investment Committee 10/88
Director
Madelon DeVoe Talley 65 Vice Chairman of the Board 10/88
Director
Stephen H. Hamrick 45 Director 10/88
Barclay G. Jones III 36 Executive Vice President 10/88
Director
Lawrence R. Klein 76 Chairman of the Economic Policy 10/88
Director
Claude Fernandez 44 Executive Vice President 10/88
Chief Administrative Officer
H. Augustus Carey 39 Senior Vice President 10/88
Anthony S. Mohl 34 Senior Vice President 10/88
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:
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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, 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.
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<PAGE>
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.
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 $508,557 and $56,506,
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
$8,476 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.
-11-
<PAGE>
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>
Limited Partnership
Units of Registrant William Polk Carey (1) 108 units .18%
Francis J. Carey 15 .03
George E. Stoddard
Madelon DeVoe Talley
Stephen H. Hamrick
Barclay G. Jones III
Lawrence R. Klein
Claude Fernandez
H. 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 .24%
=== ====
</TABLE>
(1) As of March 15, 1997, the Corporate General Partner, Ninth Carey Corporate
Property, Inc. ("Ninth Carey"), owned 100 Limited Partnership Units of
Registrant. William Polk Carey, the sole shareholder of Ninth Carey, 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, 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.
-12-
<PAGE>
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 5 to
18 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
19 to 21 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.
-13-
<PAGE>
(a) 3. Exhibits:
--------
The following exhibits are filed as part of this Report.
Documents other than those designated as being filed herewith are incorporated
herein by reference.
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
3.1 Amended agreement of Limited Partnership of Exhibit 3B to Registration
Registrant dated as of February 12, 1988 Statement (Form S-11)
No. 33-26399
4.1 Promissory Note dated February 3, 1989 from Exhibit 28 (B)(7) to
CPA(R):8 - CPA(R):9 Joint Venture I in favor of Registration Statement
New England Mutual Life Insurance Company (Form S-11) No. 33-26399
("New England") in the original principal
sum of $2,250,000
4.2 Mortgage Note "A" dated May 15, 1989 from Files as Exhibit 28 (D)(12)
Registrant, as Maker, to Nationwide Life to Registrant's Post
Insurance Company, as Holder Effective Amendment No. 1
to Form S-11
4.3 Mortgage Note "B" dated May 15, 1989 from Files as Exhibit 28 (D)(13)
Registrant, as Maker, to Financial Horizons to Registrant's Post
Life Insurance Company, as Holder Effective Ammendment No. 1
to Form S-11
4.4 Mortgage and Security Agreement dated May 15, Files as Exhibit 28 (D)(14)
1988 from Registrant, as Mortgagor, to to Registrant's Post
Nationwide Life Insurance Company and Financial Effective Amendment No. 1
Horizons Life Insurance Company, as Mortgagee to Form S-11
4.5 Assignment of Leases, Rents and Profits dated Files as Exhibit 28 (D)(15)
May 15, 1989 from Registrant, as Assignor, to to Registrant's Post
Nationwide Life Insurance Company and Financial Effective Amendment No. 1
Horizons Life Insurance Company, as Assignee to Form S-11
4.6 Tri-Party Agreement dated May 15, 1989 by and Files as Exhibit 28 (D)(16)
among Nationwide Life Insurance Company, to Registrant's Post
Financial Horizons Life Insurance Company, Effective Amendment No. 1
Registrant, NVHomes, L.P., Ryan Operations G.P., to Form S-11
and Ryan Homes, Inc.
4.7 Note Agreement dated June 28, 1989 among New Files as Exhibit 28 (E)(1)
England, Registrant, and CPA(R):8 to Registrant's Post
Effective Amendment No. 1
to Form S-11
4.8 Deed of Trust and Security Agreement dated Files as Exhibit 28 (E)(2)
June 28, 1989 between Registrant and CPA(R):8, to Registrant's Post
as Trustor, and New England, as Beneficiary Effective Amendment No. 1
to Form S-11
</TABLE>
-14-
<PAGE>
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
4.9 Assignment of Leases, Rents and Guaranty Files as Exhibit 28 (E)(3)
dated June 28, 1989 from Registrant and CPA(R):8, to Registrant's Post
as Assignor, to New England, as Assignee Effective Amendment No. 1
to Form S-11
4.10 $16,200,000 Promissory Note dated June 28, Files as Exhibit 28 (E)(4)
1989 from Registrant and CPA(R):8, as Borrower, to Registrant's Post
to New England, as Lender Effective Amendment No. 1
to Form S-11
4.11 Assumption and Modification Agreement dated Files as Exhibit 28 (F)(12)
September 29, 1989 among First Interstate Bank to Registrant's Post
of Arizona, N.A. ("First Interstate") as Lender, Effective Amendment No. 2
Registrant, CPA(R):8, Space Data Corporation to Form S-11
("SDC") and Orbital Sciences Corporation II
4.12 $9,000,000 Replacement Promissory Note dated Files as Exhibit 28 (F)(13)
September 29, 1989 from Registrant and CPA(R):8, to Registrant's Post
as Maker, to First Interstate Effective Amendment No. 2
to Form S-11
4.13 Assignment of Rents, Lease and Guaranty dated Files as Exhibit 28 (F)(14)
September 29, 1989 from Registrant and CPA(R):8, as to Registrant's Post
Assignor, to First Interstate, as Assignee Effective Amendment No. 2
to Form S-11
4.14 Loan Agreement dated May 17, 1989 between SDC, Files as Exhibit 28 (F)(15)
as Borrower, and First Interstate, as Lender to Registrant's Post
Effective Amendment No. 2
to Form S-11
4.15 Deed of Trust, Assignment of Rents, Security Files as Exhibit 28 (F)(16)
by and among SDC, as Trustor, First Interstate, Effective Amendment No. 2
as Trustee, and First Interstate, as Beneficiary. to Form S-11
4.16 Agreement dated December 29, 1989 between Filed as Exhibit 28(H)(11)
Heller Financial, Inc. Registrant and to Registrant's Post
CPA:(R)8. Effective Amendment
No. 3 to Form S-11
4.17 $6,750,000 Real Estate Note dated January Filed as Exhibit 28(H)(12)
30, 1990 from Registrant and CPA:(R)8, as Maker, to Registrant's Post
to Creditanstalt-Bankverein (the "Bank"), Effective Amendment
as Holder. No. 3 to Form S-11
4.18 Deed to Secure Debt and Security Agreement Filed as Exhibit 28(H)(13)
dated January 30, 1990 between Registrant to Registrant's Post
and CPA:(R)8, as Borrower, and the Bank, as Effective Amendment
Lender. No. 3 to Form S-11
4.19 Assignment of Rentals and Leases dated Filed as Exhibit 28(H)(14)
January 30, 1990 from Registrant and CPA:(R)8, to Registrant's Post
as Assignor, to the Bank, as Assignee. Effective Amendment
No. 3 to Form S-11
</TABLE>
-15-
<PAGE>
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
4.20 $1,000,000 Extendible Secured Note dated Filed as Exhibit 28(I)(25)
January 29, 1990 from Registrant and CPA:(R)8 to Registrant's Post
to Commercial Union Life Insurance Company Effective Amendment
of America ("Commercial"). No. 3 to Form S-11
4.21 $1,000,000 Extendible Secured Note dated Filed as Exhibit 28(I)(26)
January 29, 1990 from Registrant and CPA:(R)8 to Registrant's Post
to Ministers Life - A Mutual Life Insurance Effective Amendment
Company ("Ministers"). No. 3 to Form S-11
4.22 $1,500,000 Extendible Secured Note dated Filed as Exhibit 28(I)(27)
January 29, 1990 from Registrant and CPA:(R)8 to Registrant's Post
to The North Atlantic Life Insurance Company Effective Amendment
of America ("North Atlantic"). No. 3 to Form S-11
4.23 $5,000,000 Extendible Secured Note dated Filed as Exhibit 28(I)(28)
January 29, 1990 from Registrant and CPA:(R)8 to Registrant's Post
to Northern Life Insurance Company Effective Amendment
("Northern"). No. 3 to Form S-11
4.24 $5,000,000 Extendible Secured Note dated Filed as Exhibit 28(I)(29)
January 29, 1990 from Registrant and CPA:(R)8 to Registrant's Post
to Northwestern National Life Insurance Effective Amendment
Company ("Northwestern"). No. 3 to Form S-11
4.25 $500,000 Extendible Secured Note dated Filed as Exhibit 28(I)(30)
January 29, 1990 from Registrant and CPA:(R)8 to Registrant's Post
to TNB Stock Company, FAO Texas Life Effective Amendment
Insurance Custody Account. No. 3 to Form S-11
4.26 Note Purchase Agreement dated as of Filed as Exhibit 28(I)(31)
January 1, 1990 between Registrant and to Registrant's Post
CPA:(R)8, as Sellers, and Commercial, Effective Amendment
Ministers, North Atlantic, Northern, No. 3 to Form S-11
Northwestern and Texas Life Insurance
Company (collectively, the "Lenders"), as Purchasers.
4.27 Combination Open-end Mortgage Deed, Security Filed as Exhibit 28(I)(32)
Agreement and Fixture Financing Statement to Registrant's Post
dated January 29, 1990 between Registrant Effective Amendment
and CPA:(R)8, as Mortgagors, and the Lenders, No. 3 to Form S-11
as Mortgagees (New Haven Premises).
4.28 Combination Open-end Mortgage Deed, Security Filed as Exhibit 28(I)(33)
Agreement and Fixture Financing Statement to Registrant's Post
dated January 29, 1990 between Registrant Effective Amendment
and CPA:(R)8, as Mortgagors, and the Lenders, No. 3 to Form S-11
as Mortgagees (Mickleton Premises).
</TABLE>
-16-
<PAGE>
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
4.29 Combination Open-end Mortgage Deed, Security Filed as Exhibit 28(I)(34)
Agreement and Fixture Financing Statement to Registrant's Post
dated January 29, 1990 between Registrant Effective Amendment
and CPA:(R)8, as Mortgagors, and the Lenders, No. 3 to Form S-11
as Mortgagees (Aurora and Mantua Premises).
4.30 Combination Open-end Mortgage Deed, Security Filed as Exhibit 28(I)(35)
Agreement and Fixture Financing Statement to Registrant's Post
dated January 29, 1990 between Registrant Effective Amendment
and CPA:(R)8, as Mortgagors, and the Lenders, No. 3 to Form S-11
as Mortgagees (Twinsburg Premises).
4.33 Combination Deed of Trust, Security Agreement and Filed as Exhibit 28(I)(38)
Fixture Financing Statement dated January 29, 1990 to Registrant's Post
between Registrant and CPA:(R)8, as Mortgagors, and Effective Amendment
the Lenders, as Mortgagees (Mt. Pleasant Premises). No. 3 to Form S-11
4.34 Combination Mortgage, Security Agreement and Filed as Exhibit 28(I)(39)
Fixture Financing Statement dated January 29, 1990 to Registrant's Post
between Registrant and CPA:(R)8, as Mortgagors, and Effective Amendment
the Lenders, as Mortgagees (Milwaukee Premises). No. 3 to Form S-11
4.35 Agreement and Assignment of Lessors' Filed as Exhibit 28(I)(40)
Interest in Leases dated January 29, 1990 to Registrant's Post
by Registrant and CPA:(R)8, as Lessors, and Effective Amendment
the Lenders (New Haven Premises). No. 3 to Form S-11
4.36 Agreement and Assignment of Lessors' Filed as Exhibit 28(I)(41)
Interest in Leases dated January 29, 1990 to Registrant's Post
by Registrant and CPA:(R)8, as Lessors, and Effective Amendment
the Lenders (Mickleton Premises). No. 3 to Form S-11
4.37 Agreement and Assignment of Lessors' Filed as Exhibit 28(I)(42)
Interest in Leases dated January 29, 1990 to Registrant's Post
by Registrant and CPA:(R)8, as Lessors, and Effective Amendment
the Lenders (Aurora, Mantua and Twinsburg Premises). No. 3 to Form S-11
4.39 Agreement and Assignment of Lessors' Interest in Leases Filed as Exhibit 28(I)(44)
dated January 29, 1990 by Registrant and CPA:(R)8, as to Registrant's Post
Lessors, and the Lenders (Bristol Premises). Effective Amendment
No. 3 to Form S-11
4.40 Agreement and Assignment of Lessors' Filed as Exhibit 28(I)(45)
Interest in Leases dated January 29, 1990 to Registrant's Post
by Registrant and CPA:(R)8, as Lessors, and Effective Amendment
the Lenders (Mt. Pleasant Premises). No. 3 to Form S-11
4.41 Agreement and Assignment of Lessors' Filed as Exhibit 28(I)(46)
Interest in Leases dated January 29, 1990 to Registrant's Post
by Registrant and CPA:(R)8, as Lessors, and Effective Amendment
the Lenders (Milwaukee Premises). No. 3 to Form S-11
</TABLE>
-17-
<PAGE>
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
4.42 Agreement between Furon Company ("Furon"), Filed as Exhibit 28(I)(47)
Lenders, Registrant and CPA:(R)8 regarding the to Registrant's Post
condition of title to Mantua Premises. Effective Amendment
No. 3 to Form S-11
4.48 $3,886,181.16 Mortgage Note dated July 20, 1990 Filed as Exhibit 4.1
from Registrant, as Borrower, to Red Bank to Registrant's Form 8-K
Distribution, Inc. ("Red Bank"), as Lender. dated August 10, 1990
4.49 Open End Mortgage, Security Agreement and Assignment Filed as Exhibit 4.2
of Rents, Income and Proceeds dated July 20, 1990 to Registrant's Form 8-K
from Registrant, as Mortgagor, to Red Bank, as Mortgagee. dated August 10, 1990
4.50 First Amendment to Open End Mortgage, Security Filed as Exhibit 4.3
Agreement and Assignment of Rents, Income and to Registrant's Form
8-K Proceeds dated July 20, 1990 by and between Registrant, dated August 10, 1990
as Mortgagor, and Red Bank, as Mortgagee.
4.51 $3,113,818.54 Purchase Money Mortgage Filed as Exhibit 4.4
Note dated July 20, 1990 from Registrant, to Registrant's Form 8-K
as Maker, to Red Bank, as Payee. dated August 10, 1990
4.52 Open End Mortgage Deed and Security Agreement dated Filed as Exhibit 4.5
July 20, 1990 from Registrant, as Grantor, to Red Bank, to Registrant's Form 8-K
as Grantee, with Subordination. dated August 10, 1990
4.53 Amendment to Open End Mortgage, Security Agreement Filed as Exhibit 4.6
and Assignment of Rents, Income and Proceeds dated to Registrant's Form 8-K
July 20, 1990 by and between Red Bank, as Mortgagor, dated August 10, 1990
and Hunter Savings Association, as Mortgagee.
4.54 $23,500,000 Note Secured by First Real Estate Lien dated Filed as Exhibit 4.1
September 27, 1990 from Randolph/Clinton Limited to Registrant's Form 8-K
Partnership ("Randolph/Clinton"), as Maker, to The Mutual dated October 30, 1990
Life Insurance Company of New York ("MONY"), as Payee.
4.55 Mortgage and Security Agreement dated Filed as Exhibit 4.2
September 27, 1990 from Randolph/Clinton, to Registrant's Form 8-K
as Mortgagor, to MONY, as Mortgagee. dated October 30, 1990
4.56 Assignment of Lessor's Interest in Filed as Exhibit 4.3
Leases dated September 27, 1990 from to Registrant's Form 8-K
Randolph/Clinton, as Assignor, to MONY, as Assignee. dated October 30, 1990
4.57 $11,700,000.00 Promissory Note dated July 9, 1991 Filed as Exhibit 10.2
from Torrey Pines Limited Partnership ("Torrey Pines"), to Registrant's Form 8-K
as Borrower to The Northwestern Mutual Life Insurance dated September 12, 1991
Company ("Northwestern"), as Lender.
4.58 Deed of Trust and Security Agreement, dated July 9, Filed as Exhibit 10.3
1991 between Torrey Pines and Northwestern. to Registrant's Form 8-K
dated September 12, 1991
4.59 Absolute Assignment of Leases and Rents, Filed as Exhibit 10.4
dated July 9, 1991 from Torrey Pines, as to Registrant's Form 8-K
Assignor to Northwestern, as Assignee. dated September 12, 1991
</TABLE>
-18-
<PAGE>
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.1 Joint Venture Agreement dated December 8, 1988 Exhibit 28 (B)(1) to
between Registrant and CPA(R):8 as joint ventures Registration Statement
(collectively, "Joint Venture") (Form S-11) No. 33-26399
10.2 Parcel "C" Lease dated July 28, 1988 between Exhibit 28 (B)(2) to
SDC-GESCO Associates, a Pennsylvania limited Registration Statement
partnership ("SDC-GESCO"), as lessor and General (Form S-11) No. 33-26399
Electric Company, a New York corporation, as
lessee.
10.3 Assignment of Lease and Assumption Agreement Exhibit 28 (B)(3) to
dated December 21, 1988 between SDC-GESCO as, Registration Statement
assignor, and Joint Venture, as assignee (Form S-11) No. 33-26399
10.4 Lease Agreement dated August 3, 1988 between D/S Exhibit 28 (C)(2) to
Corpus Christi Joint Venture and Federal Express Registration Statement
Corporation (Form S-11) No. 33-26399
10.5 Assignment of Lease dated June 23, 1989 from Filed as Exhibit 28 (C)(6)
Seller, as Assignor, to Registrant, as Assignee to Registrant's Post
Effective Amendment No. 2
to Form S-11
10.6 Lease Agreement dated May 15, 1989 by and Filed as Exhibit 28 (D)(7)
between Registrant, as Landlord, and NVHomes to Registrant's Post
L.P., Ryan Operations G.P., and Ryan Homes, Effective Amendment No. 1
Inc., as Tenant to Form S-11
10.7 Mortgage and Security Agreement dated May 15, Filed as Exhibit 28 (D)(8)
1989 by and between NVHomes L.P., Ryan to Registrant's Post
Operations G.P. and Ryan Homes, Inc., as Effective Amendment No. 1
Mortgagor, and Registrant, as Mortgagee to Form S-11
10.8 Lessee's Certificate dated May 15, 1989 from Filed as Exhibit 28 (D)(9)
Ryan Operations G.P., as Lessee, to Registrant, to Registrant's Post
as Lessor Effective Amendment No. 1
to Form S-11
10.9 Guaranty dated May 15, 1989 from NVR L.P., as Filed as Exhibit 28 (D)(10)
Guarantor, to Registrant, as Landlord to Registrant's Post
Effective Amendment No. 1
to Form S-11
10.10 Guarantor's Certificate dated May 15, 1989 Filed as Exhibit 28 (D)(11)
from NVR L.P., as Guarantor, to Registrant, to Registrant's Post
as Purchaser Effective Amendment No. 1
to Form S-11
10.11 Lease Agreement dated June 28, 1989 by and Filed as Exhibit 28 (E)(5)
between Registrant and CPA(R):8, as landlord, to Registrant's Post
and Dr Pepper Bottling Company of Texas Effective Amendment No. 1
("Dr Pepper"), as Tenant to Form S-11
</TABLE>
-19-
<PAGE>
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.12 Guaranty and Suretyship Agreement dated June 28, Filed as Exhibit 28 (E)(6)
1989 from Dr Pepper Bottling Holdings, Inc. to Registrant's Post
("Holdings"), as Guarantor, to Registrant and Effective Amendment No. 1
CPA(R):8, as Landlord to Form S-11
10.13 Guarantor's Certificate dated June 28, 1989 from Filed as Exhibit 28 (E)(7)
Holdings, as Guarantor, to Registrant and CPA(R):8, to Registrant's Post
as Purchaser Effective Amendment No. 1
to Form S-11
10.14 Co-Tenancy Agreement dated June 28, 1989 between Filed as Exhibit 28 (E)(8)
Registrant and CPA(R):8 to Registrant's Post
Effective Amendment No. 1
to Form S-11
10.15 Lease Agreement dated September 24, 1989 Filed as Exhibit 28 (F)(2)
by and between Registrant and CPA(R):8, as To Registrant's Post
Landlord, and SDC, as Tenant Effective Ammendment
No. 2 to Form S-11
10.16 Special Warranty Deed dated September 29, Filed as Exhibit 28 (F)(3)
1989 from SDC, as Grantor, to Registrant To Registrant's Post
and CPA(R):8, as Grantees Effective Ammendment
No. 2 to Form S-11
10.17 Co-Tenancy Agreement dated September 29, 1989 Filed as Exhibit 28 (F)(5)
between Registrant and CPA(R):8 to Registrant's Post
Effective Amendment No. 2
to Form S-11
10.18 Guaranty and Suretyship Agreement dated Filed as Exhibit 28 (F)(7)
September 29, 1989 from Orbital Sciences to Registrant's Post
Corporation II, as Guarantor, to Registrant Effective Amendment No. 2
and CPA(R):8, as Landlord. to Form S-11
10.19 Amendment No. 1 to Lease Agreement dated Filed as Exhibit 28 (G)(5)
November 15, 1989 between Davis/DeBlanc to Registrant's Post
("DDC"), as Landlord, and Pepsi Cola Company Effective Amendment No. 2
South, a division of PepsiCo, Inc., as Tenant to Form S-11
10.20 Assignment of Tenant Lease dated November 16, Filed as Exhibit 28 (G)(6)
1989 from DDC, as Assignor, to Registrant, to Registrant's Post
as Assignee Effective Amendment No. 2
to Form S-11
10.21 Co-Tenancy Agreement dated December 29, 1989 Filed as Exhibit 28(H)(1)
between Registrant and Corporate Property to Registrant's Post
Associates 8, L.P., a Delaware limited Effective Amendment
partnership ("CPA(R):8"). No. 3 to Form S-11
10.22 Lease Agreement dated December 29, 1989 by Filed as Exhibit 28(H)(5)
and between Registrant and CPA(R):8, as Landlord, to Registrant's Post
and Foote & Davies, Inc. ("F&D"), as Tenant. Effective Amendment
No. 3 to Form S-11
</TABLE>
-20-
<PAGE>
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.23 First Ammendment to Lease Agreement dated as Filed as Exhibit 28(H)(6)
of January 30, 1990 between F&D, as Tenant, to Registrant's Post
and Registrant and CPA(R):8, as Landlord. Effective Amendment
No. 3 to Form S-11
10.24 Lessee's Certificate dated December 29, 1989 Filed as Exhibit 28(H)(7)
from F&D, as Tenant, to Registrant and to Registrant's Post
CPA(R):8 as landlord. Effective Amendment
No. 3 to Form S-11
10.25 Guaranty and Suretyship Agreement dated Filed as Exhibit 28(H)(8)
December 29, 1989 by ASG Acquisition Corp. to Registrant's Post
("ASG"), as Guarantor, to Registrant and CPA(R):8, Effective Amendment
as Landlord. No. 3 to Form S-11
10.26 Amendment to Guaranty and Suretyship Agreement Filed as Exhibit 28(H)(9)
dated as of January 30, 1990 made by ASG, as to Registrant's Post
Guarantor, to Registrant and CPA(R):8, as Landlord. Effective Amendment
No. 3 to Form S-11
10.27 Guarantor's Certificate dated December 29, 1989 Filed as Exhibit 28(H)(10)
from ASG, as Guarantor, to Registrant and to Registrant's Post
CPA(R):8, as Purchaser. Effective Amendment
No. 3 to Form S-11
10.28 Co-Tenancy Agreement dated as of January 29, Filed as Exhibit 28(I)(1)
1990 by and between Registrant and CPA(R):8. to Registrant's Post
Effective Amendment
No. 3 to Form S-11
10.29 Lease Agreement dated as of January 29, 1990 Filed as Exhibit 28(I)(20)
by and between Registrant and CPA(R):8, as to Registrant's Post
Landlord, and Furon, as Tenant. Effective Amendment
No. 3 to Form S-11
10.30 Sublease dated January 29, 1990 by and Filed as Exhibit 28(I)(21)
between Furon, as Sublandlord and CHR to Registrant's Post
Industries, Inc., as Subtenant and consented Effective Amendment
to by Registrant and CPA(R):8, as Landlord. No. 3 to Form S-11
10.31 Sublease dated January 29, 1990 by and between Filed as Exhibit 28(I)(22)
Furon, as Sublandlord and Bunnell Plastics, to Registrant's Post
Inc., as Subtenant and consented to by Effective Amendment
Registrant and CPA(R):8, as Landlord. No. 3 to Form S-11
10.32 Sublease dated January 29, 1990 by and between Filed as Exhibit 28(I)(23)
Furon, as Sublandlord and Dixon Industries to Registrant's Post
Corporation, as Subtenant and consented to Effective Amendment
by Registrant and CPA(R):8, as Landlord. No. 3 to Form S-11
10.33 Assignment of Lease Agreement dated January 29, Filed as Exhibit 28(I)(24)
1990 by and between Furon, as Assignor, and to Registrant's Post
Registrant and CPA(R):8, as Assignee. Effective Amendment
No. 3 to Form S-11
</TABLE>
-21-
<PAGE>
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.34 Lease Agreement between Registrant and Filed as Exhibit 10.1
CPA(R):8, as Landlord, and DDC, as Tenant. to Registrant's Form 8-K
dated July 16, 1990
10.35 Lease Agreement dated July 20, 1990 by and Filed as Exhibit 10.1
between Registrant, as Landlord, and to Registrant's Form 8-K
Red Bank, as Tenant. dated August 10, 1990
10.36 Lease Agreement dated September 27, 1990 Filed as Exhibit 10.1
between Randolph/Clinton, as Landlord, and to Registrant's Form 8-K
Information Resources, Inc. ("IRI"), as Tenant. dated October 30, 1990
10.37 Assignment of Subleases and Rents dated Filed as Exhibit 10.2
September 27, 1990 from IRI, as Assignor, to Registrant's Form 8-K
and Randolph/Clinton, as Assignee. dated October 30, 1990
10.38 Lease Agreement dated July 9, 1991 by and Filed as Exhibit 10.1
between Torrey Pines, as Landlord and The to Registrant's Form 8-K
Titan Corporation, as Tenant. dated September 12, 1991
10.39 Indemnity Agreement dated July 9, 1991 of Torrey Pines, Filed as Exhibit 10.5
Corporate Property Associates 10 Incorporated, a to Registrant's Form 8-K
Maryland corporation, ("CPA(R):10") and Registrant. dated September 12, 1991
28.1 Seller's Certificate dated December 21, 1988 Exhibit 28 (B)(4) to
from SDC-GESCO, as seller, to Joint Venture, Registration Statement
as purchaser (Form S-11) No. 33-26399
28.2 Purchaser's Certificate dated December 21, Exhibit 28 (B)(5) to
1988 from Joint Venture, as purchaser to Registration Statement
SDC-GESCO, as seller (Form S-11) No. 33-26399
28.3 Deed dated December 21, 1988 from SDC-GESCO, Exhibit 28 (B)(6) to
as grantor, to Joint Venture, as grantee Registration Statement
(Form S-11) No. 33-26399
28.4 Letter of Intent dated February 9, 1989 Exhibit 28 (C)(1) to
relating to the purchase of property in Registration Statement
Corpus Christi, Texas. (Form S-11) No. 33-26399
28.6 Letter of Intent dated September 28, 1988 Exhibit 28 (D) to
Relating to the Purchase by Registrant of Registration Statement
Property in Pittsburgh, Pennsylvania (Form S-11) No. 33-26399
28.7 Seller's Certificate dated May 15, 1989 from Filed as Exhibit 28 (D)(2)
Ryan Homes, Inc., as Seller, to Registrant, To Registrant's Post
as Purchaser Effective Amendment
No. 1 to Form S-11
28.8 Deed dated May 15, 1989 from Ryan Homes, Inc., Filed as Exhibit 28 (D)(3)
as Grantor, to Registrant, as Grantee To Registrant's Post
Effective Amendment
No. 1 to Form S-11
</TABLE>
-22-
<PAGE>
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
28.9 Deed dated May 15, 1989 from Allegheny County Filed as Exhibit 28 (D)(4)
Industrial Development Authority, as Grantor, To Registrant's Post
to Registrant, as Grantee Effective Amendment
No. 1 to Form S-11
28.10 Bill of Sale dated May 15, 1989 from Ryan Filed as Exhibit 28 (D)(5)
Homes, Inc., as Seller, to Registrant, To Registrant's Post
as Purchaser Effective Amendment
No. 1 to Form S-11
28.11 Bill of Sale dated May 15, 1989 from Filed as Exhibit 28 (D)(6)
Allegheny County Industrial Development To Registrant's Post
Authority, as Seller, to Registrant, as Effective Amendment
Purchaser No. 1 to Form S-11
28.12 Seller's/Lessee's Certificate dated June 28, Filed as Exhibit 28 (E)(9)
1989 from Dr Pepper, as Seller, to Registrant To Registrant's Post
and CPA(R):8 , as Purchaser Effective Amendment
No. 1 to Form S-11
28.13 Warranty Deed dated June 28, 1989 from Filed as Exhibit 28 (E)(10)
Dr Pepper, as Grantor, to Registrant and To Registrant's Post
CPA(R):8, as Grantee, for Irving, Texas property Effective Amendment
No. 1 to Form S-11
28.14 Warranty Deed dated June 28, 1989 from Filed as Exhibit 28 (E)(11)
Dr Pepper, as Grantor, to Registrant and To Registrant's Post
CPA(R):8, as Grantee, for Houston, Texas property Effective Amendment
No. 1 to Form S-11
28.15 Bill of Sale dated June 28, 1989 from Filed as Exhibit 28 (E)(12)
Dr Pepper, as Seller, to Registrant and To Registrant's Post
CPA(R):8, as Purchaser, for Irving, Texas Effective Amendment
property. No. 1 to Form S-11
28.16 Bill of Sale dated June 28, 1989 from Filed as Exhibit 28 (E)(13)
Dr Pepper, as Seller, to Registrant and To Registrant's Post
CPA(R):8, as Purchaser, for Houston, Texas Effective Amendment
property. No. 1 to Form S-11
28.17 General Warranty Deed dated June 23, 1989 from Filed as Exhibit 28 (C)(3)
D/S Corpus Christi Joint Venture ("D/S Corpus To Registrant's Post
Christi"), as Grantor, to Registrant, as Grantee Effective Amendment
No. 2 to Form S-11
28.18 Seller's Certificate dated June 23, 1989 from Filed as Exhibit 28 (C)(4)
D/S Corpus Christi to Registrant To Registrant's Post
Effective Amendment
No. 2 to Form S-11
28.19 Bill of Sale dated June 23, 1989 from D/S Filed as Exhibit 28 (C)(5)
Corpus Christi to Registrant. To Registrant's Post
Effective Amendment
No. 2 to Form S-11
</TABLE>
-23-
<PAGE>
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
28.20 Letter of Intent dated May 24, 1989 from Filed as Exhibit 28 (F)(1)
Registrant to Orbital Sciences Corporation II. To Registrant's Post
Effective Amendment
No. 2 to Form S-11
28.21 Bill of Sale dated September 29, 1989 from Filed as Exhibit 28 (F)(4)
SDC, as Seller, to Registrant and CPA(R):8, To Registrant's Post
as Purchaser. Effective Amendment
No. 2 to Form S-11
28.22 Seller's/Lessee's Certificate dated September 29, Filed as Exhibit 28 (F)(6)
1989 from SDC, as Seller, to Registrant and To Registrant's Post
CPA(R):8 as Purchaser. Effective Amendment
No. 2 to Form S-11
28.23 Guarantor's Certificate dated September 29, 1989 Filed as Exhibit 28 (F)(8)
from Orbital Sciences Corporation II, as to Registrant's Post
Guarantor, to Registrant and CPA(R):8 as Purchaser Effective Amendment
No. 2 to Form S-11
28.24 Construction Management Agreement dated Filed as Exhibit 28 (F)(9)
September 29, 1989 between Registrant and To Registrant's Post
CPA(R):8, as Owner, and SDC. Effective Amendment
No. 2 to Form S-11
28.25 Assignment of Rights Under Construction Filed as Exhibit 28 (F)(10)
Contract dated September 29, 1989 from SDC, To Registrant's Post
as Assignor, to Registrant and CPA(R):8, as Assignee Effective Amendment
No. 2 to Form S-11
28.26 Assignment of Rights Under Agreement dated Filed as Exhibit 28 (F)(11)
September 29, 1989 from SDC, as Assignor, to To Registrant's Post
Registrant and CPA(R):8, as Assignee Effective Amendment
No. 2 to Form S-11
28.27 Agreement of Purchase and Sale dated Filed as Exhibit 28 (G)(1)
June 6, 1989 between DDC, as Seller, and To Registrant's Post
Registrant, as Purchaser Effective Amendment
No. 2 to Form S-11
28.28 Special Warranty Deed dated November 16, 1989 Filed as Exhibit 28 (G)(2)
for DDC, as Grantor, to Registrant, as Grantee To Registrant's Post
Effective Amendment
No. 2 to Form S-11
28.29 Bill of Sale and Assignment of Incidental Filed as Exhibit 28 (G)(3)
Rights dated November 16, 1989 from DDC, To Registrant's Post
as Seller, to Registrant, as Purchaser Effective Amendment
No. 2 to Form S-11
28.30 Special Warranty Deed dated December 29, 1989 Filed as Exhibit 28(H)(2)
from Footland Corporation ("Footland"), as to Registrant's Post
Grantor, to Registrant and CPA(R):8, as Grantee. Effective Amendment
No. 3 to Form S-11
</TABLE>
-24-
<PAGE>
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
28.31 Bill of Sale dated December 29, 1989 from Filed as Exhibit 28(H)(3)
Footland, as Seller, to Registrant and CPA(R):8, to Registrant's Post
as Grantee. Effective Amendment
No. 3 to Form S-11
28.32 Seller's Certificate dated December 29, 1989 Filed as Exhibit 28(H)(4)
from Footland, as Seller, to Registrant and to Registrant's Post
CPA(R):8, as Purchaser. Effective Amendment
No. 3 to Form S-11
28.33 Estoppel Certificate date November 14, 1989 Filed as Exhibit 28 (G)(4)
from Pepsi Cola Company South, a division of To Registrant's Post
PepsiCo, Inc., as Tenant, to Registrant and DDC Effective Amendment
No. 2 to Form S-11
28.34 Deed dated January 29, 1990 from CHR Filed as Exhibit 28(I)(2)
Industries, as Grantor, to Registrant and to Registrant's Post
CPA(R):8, as Grantees (New Haven Premises). Effective Amendment
No. 3 to Form S-11
28.35 Bill of Sale date January 29, 1990 from CHR Filed as Exhibit 28(I)(3)
Industries, Inc. to Registrant and CPA(R):8 to Registrant's Post
concerning the New Haven Premises. Effective Amendment
No. 3 to Form S-11
28.36 Deed dated January 29, 1990 between Bunnell Filed as Exhibit 28(I)(4)
Plastics, Inc., as Grantor, and Registrant to Registrant's Post
and CPA(R):8, as Grantee (Mickleton Premises). Effective Amendment
No. 3 to Form S-11
28.37 Bill of Sale dated January 29, 1990 from Filed as Exhibit 28(I)(5)
Bunnell Plastics, Inc. to Registrant and to Registrant's Post
CPA(R):8 concerning the Mickleton Premises. Effective Amendment
No. 3 to Form S-11
28.38 Deed dated January 29, 1990 from the Filed as Exhibit 28(I)(6)
Fluorocarbon Company, which changed to Registrant's Post
its name to Furon, as Grantor, and Effective Amendment
and Registrant and CPA(R):8, as Grantees No. 3 to Form S-11
(Mantua Premises).
28.40 Deed dated January 29, 1990 from Furon, Filed as Exhibit 28(I)(8)
as Grantor, to Registrant and CPA(R):8, to Registrant's Post
as Grantees (Aurora Premises). Effective Amendment
No. 3 to Form S-11
28.42 Quitclaim Deed dated January 29, 1990 from Filed as Exhibit 28(I)(10)
Dixon Industries Corporation, as Grantor, to Registrant's Post
to Registrants and CPA(R):8, as Grantees Effective Amendment
(Bristol Premises). No. 3 to Form S-11
28.43 Bill of Sale dated January 29, 1990 from Filed as Exhibit 28(I)(11)
Dixon Industries Corporation to Registrant to Registrant's Post
and CPA(R):8 concerning the Bristol Premises. Effective Amendment
No. 3 to Form S-11
</TABLE>
-25-
<PAGE>
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
28.44 Special Warranty Deed dated January 29, Filed as Exhibit 28(I)(12)
1990 from Furon, as Grantor, to Registrant to Registrant's Post
and CPA(R):8, as Grantees (Mt. Pleasant Premises). Effective Amendment
No. 3 to Form S-11
28.45 Bill of Sale dated January 29, 1990 from Furon Filed as Exhibit 28(I)(13)
to Registrant and CPA(R):8 concerning the to Registrant's Post
Mt. Pleasant Premises. Effective Amendment
No. 3 to Form S-11
28.46 Warranty Deed dated January 29, 1990 from Furon, Filed as Exhibit 28(I)(14)
as Grantor, to Registrant and CPA(R):8 as Grantee to Registrant's Post
(Milwaukee Premises). Effective Amendment
No. 3 to Form S-11
28.47 Bill of Sale dated January 29, 1990 from Furon Filed as Exhibit 28(I)(15)
to Registrant and CPA(R):8 concerning the Mantua to Registrant's Post
Premises, the Twinsburg Premises, the Aurora Effective Amendment
Premises, the Liverpool Premises and the No. 3 to Form S-11
Milwaukee Premises.
28.48 Seller's/Lessee's Certificate dated January 29, Filed as Exhibit 28(I)(16)
1990 from Furon, as Seller, to Registrant and to Registrant's Post
CPA(R):8, as Purchaser, and Commercial Union, Effective Amendment
Ministers, North Atlantic, Northern, Northwestern, No. 3 to Form S-11
and Texas Life (collectively referred to as Lenders)
concerning the Aurora, Mantua, Twinsburg, Liverpool,
Mt. Pleasant and Milwaukee Premises.
28.49 Seller's Certificate dated January 29, 1990 from Filed as Exhibit 28(I)(17)
CHR Industries, Inc., as Seller, to Registrant to Registrant's Post
and CPA(R):8, as Purchaser and Lenders (New Haven Effective Amendment
Premises). No. 3 to Form S-11
28.50 Seller's Certificate dated January 29, 1990 from Filed as Exhibit 28(I)(18)
Bunnell Plastics, Inc., as Seller, to Registrant to Registrant's Post
and CPA(R):8, as Purchaser and Lenders (Mickleton Effective Amendment
Premises). No. 3 to Form S-11
28.51 Seller's Certificate dated January 29, 1990 from Filed as Exhibit 28(I)(19)
Dixon Industries Corporation, as Seller, to to Registrant's Post
Registrant and CPA(R):8, as Purchaser and Lenders Effective Amendment
(Bristol Premises). No. 3 to Form S-11
28.52 General Warranty Deed from DDC to Registrant Filed as Exhibit 28.1
and CPA(R):8. to Registrant's Form 8-K
dated July 16, 1990
28.53 Bill of Sale from DDC to Registrant and Filed as Exhibit 28.2
CPA(R):8. to Registrant's Form 8-K
dated July 16, 1990
28.54 Assignment of Leases and Agreements Filed as Exhibit 28.3
from DDC to Registrant and CPA(R):8. to Registrant's Form 8-K
dated July 16, 1990
</TABLE>
-26-
<PAGE>
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
28.55 Co-Tenancy Agreement between Registrant Filed as Exhibit 28.4
and CPA(R):8. to Registrant's Form 8-K
dated July 16, 1990
28.56 Guaranty and Suretyship Agreement dated July 20, 1990 Filed as Exhibit 28.1
from Morley P. Thompson ("Thompson"), as Guarantor, to Registrant's Form 8-K
to Registrant, as Landlord. dated August 10, 1990
28.57 Sublease dated July 20, 1990 by and between Red Filed as Exhibit 28.2
Bank, as Landlord, and Stearns Technical Textiles to Registrant's Form 8-K
("Stearns"), as Tenant. dated August 10, 1990
28.58 Equipment Lease dated July 20, 1990 by Filed as Exhibit 28.3
and between Red Bank, as Lessor , and to Registrant's Form 8-K
Stearns, as Lessee. dated August 10, 1990
28.59 Assignment of Equipment Lease and Security Filed as Exhibit 28.4
Agreement dated July 20, 1990 from Red to Registrant's Form 8-K
Bank, as Tenant, to Registrant, as Landlord. dated August 10, 1990
28.60 Sublease Agreement dated July 20, 1990 by and Filed as Exhibit 28.5
between Red Bank, as Landlord, and M-West to Registrant's Form 8-K
Mortgage Corporation ("M-West"), as Tenant. dated August 10, 1990
28.61 Assignment of Subleases, Rents and Guaranties Filed as Exhibit 28.6
dated July 20, 1990 from Red Bank, as to Registrant's Form 8-K
Tenant, to Registrant, as Landlord. dated August 10, 1990
28.62 Guaranty and Suretyship Agreement dated July 20, 1990 Filed as Exhibit 28.7
from The Thompson Trust (the "Trust"), Patricia S. to Registrant's Form 8-K
Thompson, beneficiary of Trust, and dated August 10, 1990
Thompson, beneficiary of Trust, (collectively
"Grantor") to Red Bank, as Sublandlord.
28.63 Guaranty and Suretyship Agreement dated Filed as Exhibit 28.8
July 20, 1990 from M-West, as Guarantor, to Registrant's Form 8-K
to Red Bank, as Sublandlord. dated August 10, 1990
28.64 Stock Pledge Agreement dated July 20, 1990 Filed as Exhibit 28.9
by and between Thompson, as Pledgor, and to Registrant's Form 8-K
the Registrant, as Pledgee. dated August 10, 1990
28.65 Agreement of Limited Partnership dated September 21, Filed as Exhibit 28.1
1990 between 564 Randolph Co. #2 ("564 Randolph") to Registrant's Form 8-K
and North Clinton Corporation ("NCC"). dated October 30, 1990
28.66 Assignment of Partnership Interests dated September 27, Filed as Exhibit 28.2
1990 from 564 Randolph and NCC, as Assignors, to to Registrant's Form 8-K
Registrant and QRS 10-1 (ILL), Inc. ("QRS 10-1"), as dated October 30, 1990
Assignees.
28.67 Amended and Restated Agreement of Limited Partnership Filed as Exhibit 28.3
dated September 27, 1990 between Registrant and to Registrant's Form 8-K
QRS 10-1, joined by 564 Randolph and NCC. dated October 30, 1990
</TABLE>
-27-
<PAGE>
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
28.68 Warranty Deed dated September 27, 1990 from 564 Randolph Filed as Exhibit 28.4
to Randolph/Clinton; Trustee's Deed dated September 20, to Registrant's Form 8-K
1990 from American National Bank and Trust Company of dated October 30, 1990
Chicago, to Randolph/Clinton, Trustee's Deed dated September
20, 1990 from LaSalle National Trust, N.A., as Successor
Trustee to LaSalle National Bank, Trustee, to 564 Randolph.
28.69 Bill of Sale dated September 25, 1990 from 564 Randolph to Filed as Exhibit 28.5
Randolph/Clinton; Bill of Sale dated September 25, 1990 to Registrant's Form 8-K
from NCC to Randolph/Clinton; Bill of Sale dated October 30, 1990
dated September 25, 1990 from IRI to 564
Randolph.
28.70 General Warranty Deed dated July 9, 1991 from Filed as Exhibit 28.1
Titan Linkabit Corporation to Torrey Pines. to Registrant's Form 8-K
dated September 12, 1991
28.71 Bill of Sale dated July 9, 1991 from Titan Filed as Exhibit 28.2
Linkabit Corporation to Torrey Pines. to Registrant's Form 8-K
dated September 12, 1991
28.72 Prospectus of Registrant Filed as Exhibit 28.72
dated March 21, 1989. to Registrant's Form 10-K/A
dated September 27, 1993
28.73 Supplement dated June 27, 1989 Filed as Exhibit 28.73
to Prospectus dated March 21, 1989. to Registrant's Form 10-K/A
dated September 27, 1993
28.74 Supplement dated October 23, 1989 Filed as Exhibit 28.74
to Prospectus dated March 21, 1989. to Registrant's Form 10-K/A
dated September 27, 1993
28.75 Supplement dated January 22, 1990 Filed as Exhibit 28.75
to Prospectus dated March 21, 1989. to Registrant's Form 10-K/A
dated September 27, 1993
28.76 Supplement dated March 9, 1990 Filed as Exhibit 28.76
to Prospectus dated March 21, 1989. to Registrant's Form 10-K/A
dated September 27, 1993
</TABLE>
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the fourth quarter of
the year ended December 31, 1996.
-28-
<PAGE>
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 9, L.P.,
a Delaware limited partnership
BY: NINTH CAREY CORPORATE PROPERTY, INC.
4/3/97 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.
<TABLE>
<S> <C>
BY: NINTH 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 George E. Stoddard
Committee and Director Attorney in fact
April 3, 1997
Dr. Lawrence R. Klein
Chairman of the Economic Policy
Committee and Director
Madelon DeVoe Talley
Vice Chairman of the Board of
Directors and Director
4/3/97 BY: /s/ Claude Fernandez
- ----------- ----------------------------------
Date Claude Fernandez
Executive Vice President and
Chief Administrative Officer
(Principal Financial Officer)
4/3/97 BY: /s/ Michael D. Roberts
- ----------- ----------------------------------
Date Michael D. Roberts
First Vice President and Controller
(Principal Accounting Officer)
</TABLE>
-29-
<PAGE>
APPENDIX A TO FORM 10-K
CORPORATE PROPERTY ASSOCIATES 9, L.P.
- A DELAWARE LIMITED PARTNERSHIP
1996 ANNUAL REPORT
<PAGE>
SELECTED FINANCIAL DATA
- --------------------------------------------------------------------------------
(In thousands except per unit amounts)
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenues $ 11,920 $ 12,217 $ 11,612 $ 11,947 $ 12,075
Income before
extraordinary item 2,849 3,866 3,908 3,189 5,175
Income before
extraordinary item
allocated:
To General Partners 285 387 391 319 517
To Limited Partners 2,564 3,479 3,517 2,870 4,658
Per unit 42.79 58.07 58.69 47.91 77.73
Distributions attributable (1):
To General Partners 554 557 560 562 566
To Limited Partners 4,984 5,013 5,037 5,060 5,084
Per unit 83.19 83.66 84.06 84.46 84.85
Payment of mortgage
principal (2) 299 465 530 766 1,465
BALANCE SHEET DATA:
Total assets 108,418 105,608 104,024 101,072 98,518
Long-term obligations (3) 53,501 56,626 56,799 55,503 45,134
</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 obligations due after more than one year.
-1-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
- --------------------------------------------------------------------------------
Results of Operations
- ---------------------
Net income for the year ended December 31, 1996 increased by
$1,986,000 as compared with net income for 1995. Excluding the effects of the
nonrecurring charge of $1,173,000 in 1995 for the writedown of a real estate
investment and the $45,000 gain on sale of real estate in 1996, income would
have reflected an increase of $768,000. The increase in income, as adjusted, was
primarily due to a decrease in property expenses and, to a lesser extent, a
decrease in interest expense and an increase in lease revenues.
The decrease in property expenses was due to the successful
resolution of the Partnership's dispute with Amerisig, Inc. ("Amerisig") and, to
a lesser extent, the end of the five-year period for charging property leasing
fees. In 1992, the assets of the predecessor company of Amerisig were
transferred to a creditor. In connection with the transfer, a newly-formed
subsidiary of the creditor entered into a short-term sublease for the property.
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 sublease was terminated and a new lease, with rental terms equivalent to the
prior lease with the predecessor company, was executed. The Amended Agreement of
Limited Partnership provides that the Partnership incur a leasing fee payable to
the Corporate General Partner of 3% of all pro rata cash basis rents
attributable to the first five years of each lease. Such five-year period
expired on all of the Partnership's leases between 1994 and 1996. As discussed
below, the full amount of the leasing fees has not yet been paid. The decrease
in interest expense was due to the commencement of principal payments in
December 1995 on the $20,000,000 mortgage loan on the Detroit Diesel Corporation
("Detroit Diesel") properties. The loan, which represents approximately 30% of
the Partnership's mortgage indebtedness at December 31, 1996, will fully
amortize over 14 1/2 years. As the principal balance on this loan decreased by
$810,000 in 1996, the interest incurred decreased accordingly. Interest expense
also decreased due to the continuing amortization of principal on certain other
of the Partnership's mortgage loans. Lease revenues increased as a result of
rent increases in the third quarter of 1995 on the Partnership's leases with
Detroit Diesel and Red Bank Distribution, Inc. ("Red Bank"), and, in the first
quarter of 1996, on the Partnership's lease with Furon Company ("Furon").
Net income for the year ended December 31, 1995 decreased by
$238,000 as compared with net income for the year ended December 31, 1994 due to
a nonrecurring charge of $1,173,000 in 1995 for the writedown of a real estate
investment. The Partnership wrote off its investment in a limited partnership
("Hope St.") which owns property in Stamford, Connecticut formerly leased to
Xerox Corporation ("Xerox"). Net income for the year ended December 31, 1994
also included a extraordinary charge of $480,000 on the extinguishment of debt.
Excluding the effects of these nonrecurring items, income would have reflected
an increase of $455,000 in 1995. This increase, as adjusted, was due to an
increase in lease revenues, a decrease in interest expense and was partially
offset by an increase in general and administrative expenses and a decrease in
equity income. Lease revenues were higher due to rent increases on the
Partnership's leases with Amerisig in January 1995 and the aforementioned rent
increases with Red Bank and Detroit Diesel. The decrease in interest expense
reflects the refinancing at a lower rate of interest of the mortgage loan
collateralized by the Detroit Diesel property in May 1994, and to a lesser
extent, the continuing amortization of the Partnership's other mortgage loans.
General and administrative expenses increased due to higher partnership level
franchise taxes incurred by the Partnership and an increase in office occupancy
costs. Based on the taxes paid in 1995, the Partnership substantially increased
its accrual for such taxes at December 31, 1995. The increase in office costs
was due, in part, to certain nonrecurring costs related to the relocation of the
Partnership's offices during the year. The decrease in equity income was due to
the termination of the Xerox lease.
Cash flow from the NVRyan L.P. ("NVRyan") property will remain
stable as a scheduled interest rate reset on the mortgage loan collateralized by
the NVRyan property which will increase annual debt service by $67,000 has been
offset by a scheduled rent increase of $73,000 which became effective in the
fourth quarter of 1996. Cash flow from Childtime Childcare, Inc. ("Childtime")
properties will increase as the result of the December 1996 refinancing of the
mortgage loan on the Childtime properties which will reduce annual debt service
by $18,000 and a rent increase, effective February 1, 1997, which will increase
annual rent by $32,000. Cash flow will also benefit from a rent increase on the
Titan Corporation lease in 1997 and
-2-
<PAGE>
another scheduled rent increase on the NVRyan lease in 1998. As a result of the
sale of two properties in 1996 which had been leased to Furon, annual rents on
that lease were reduced by $116,000. A portion of the sales proceeds were used
to partially prepay the mortgage loan and annual debt service decreased by
$82,000. The Partnership 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 Partnership has not received any
indication as to whether General Electric will renew the lease. The
Partnership's share of net cash flow from the General Electric property is
$252,000.
Because of the long-term nature of the Partnership's net leases,
inflation and changes in prices have not unfavorably affected the Partnership's
net income or had an impact on the continuing operations of the Partnership's
properties. All of the Partnership's net leases have either periodic mandated
rent increases, sales overrides or periodic rent increases based on formulas
indexed to increases in the Consumer Price Index ("CPI"), and may have caps on
such CPI increases. Although increases in the CPI have been relatively moderate
over the past several years, the Partnership should not be significantly
impacted as several of its leases provide for stated rent increases rather than
increases based on CPI formulas. Although there are indicatons that there may be
legislation which considers changes to the CPI methodology, the Partnership
cannot predict the outcome of any proposal relating to the CPI formula.
Financial Condition:
- -------------------
Except for a property in Stamford, Connecticut, all of the
Partnership's properties are leased to corporate tenants under net leases which
generally require the tenants to pay all operating expenses relating to the
leased properties. The Partnership depends on relatively stable cash flow from
its net leases to meet operating expenses, service its debt and fund quarterly
distributions to partners. The Partnership's cash balance decreased by $221,000
in 1996 to $1,437,000.
Cash provided from operating activities combined with
distributions received from equity investments aggregated $6,551,000 and was
used to pay quarterly distributions to partners of $5,644,000 and mortgage
principal payment installments. A portion of the $1,465,000 of scheduled
mortgage principal installments were paid from cash reserves. The Partnership's
cash position benefited from the Corporate General Partner's continuing its
voluntary deferral of the collection of approximately $1,510,000 of leasing
fees. Although the Corporate General Partner has continued to defer such
collection, it has no obligation to do so. The Partnership's ability to sustain
the current rate of distributions is contingent upon this continued deferral and
timely collection of all annual rental amounts. Future cash flow will be
negatively affected if the General Electric lease is not extended.
The Partnership's investing activities during 1996 consisted
primarily of selling two properties for $928,000 in connection with the exercise
of a purchase option. In accordance with generally accepted accounting
principles, ("GAAP"), cash flow from equity investments in excess of equity
income is classified as an investing cash flow. The ability of the investee to
distribute cash in excess of earnings is due to noncash charges such as
depreciation and amortization. Management considers the cash flow from its
equity investments as a source for paying distributions and meeting other cash
requirements regardless of GAAP classification.
The Partnership's financing activities in 1996 included paying
quarterly distributions to partners of $5,644,000 and scheduled mortgage
principal installments of $1,465,000. In addition, the Partnership obtained
$1,289,000 in connection with refinancing the mortgage loan on the Childtime
properties at which time it paid off an existing loan on the properties of
$1,276,000 and used $604,000 from the sale of two Furon properties to pay a
mandatory prepayment on that mortgage loan. The Partnership currently does not
have sufficient cash to pay approximately $11,253,000 of mortgage debt on two
loans which have currently matured or will mature in 1997. The limited recourse
mortgage loan of $8,493,000 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 property. It
is anticipated that the potential lender's due diligence will not be completed
by April 1, 1997, so that a further extension will be requested. Although there
is no assurance that the refinancing will occur, Furon has more than 10 years
remaining on its initial lease term
-3-
<PAGE>
so that the prospects for completing a refinancing of the loan are favorable. A
limited recourse loan on the Red Bank property of $2,760,000 has been extended
on a short-term basis a number of times over the last several years. There is no
assurance that extensions of the Red Bank loan will continue; however, there has
been no significant change in the status of the loan. In the case of mortgage
financing which does not fully amortize over its term, the Partnership would be
responsible for the balloon payment required only to the extent of its interest
in the encumbered property because the holder of each such obligation has
recourse only to the property collateralizing such debt. The Partnership has
various alternatives including but not limited to, seeking to restructure the
debt with existing lender, refinancing the loan, selling the properties and
using sales proceeds to satisfy the mortgage debt or structuring recourse
financing at the Partnership level.
The Partnership is not currently paying any debt service on the
$6,300,000 limited recourse loan on the Stamford property. As more fully
described in Note 12 to the Financial Statements, the Partnership wrote off its
equity interest in the limited partnership which owns the property in 1995. In
December 1996, the Boards of Directors of the Corporate General Partner and
Corporate Property Associates 10 Incorporated ("CPA(R):10"), an affiliate,
approved the transfer of CPA(R):10's interest in the Stamford property limited
partnership to the Partnership. The lender has advised the Partnership of its
intent to foreclose on the Stamford property. The Partnership has not been able
to restructure the loan on the property and has agreed with the lender to
cooperate in the foreclosure of the property, in return for a $10,000 payment by
the lender. The transfer of the property to the lender would not have any impact
on the Partnerships' cash flow as no income has been received from the Stamford
property nor debt service paid on the limited recourse loan since September
1995,
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 some spills from facility
activities or historical on-site 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, 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 are continuing to investigate ways to
provide liquidity for limited partners on a tax-effective basis.
-4-
<PAGE>
REPORT of INDEPENDENT ACCOUNTANTS
To the Partners of
Corporate Property Associates 9, L.P.:
We have audited the accompanying balance sheets of Corporate
Property Associates 9, 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 19 to 21 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 9, 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
-5-
<PAGE>
CORPORATE PROPERTY ASSOCIATES 9, 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 $ 19,676,126 $19,439,437
Buildings 50,927,963 50,114,235
------------ -----------
70,604,089 69,553,672
Accumulated depreciation 9,659,357 11,169,434
------------ -----------
60,944,732 58,384,238
Net investment in direct financing leases 31,538,834 31,682,628
------------ -----------
Real estate leased to others 92,483,566 90,066,866
Equity investments 5,849,154 5,460,825
Cash and cash equivalents 1,657,504 1,436,555
Accrued interest and rents receivable 333,285 556,685
Other assets, net of accumulated
amortization of $128,393 in 1995 and
$166,706 in 1996 748,056 997,054
------------ -----------
Total assets $101,071,565 $98,517,985
============ ===========
LIABILITIES:
Mortgage notes payable $ 59,726,129 $57,669,975
Accrued interest payable 376,498 347,772
Accounts payable and accrued expenses 117,890 78,500
Accounts payable to affiliates 1,584,863 1,648,110
Prepaid rental income 34,477 10,514
------------ -----------
Total liabilities 61,839,857 59,754,871
------------ -----------
Commitments and contingencies
PARTNERS' CAPITAL:
General Partners (1,225,950) (1,273,499)
Limited Partners (59,918
Limited Partnership Units issued
and outstanding) 40,457,658 40,036,613
------------ -----------
Total partners' capital 39,231,708 38,763,114
------------ -----------
Total liabilities and
partners' capital $101,071,565 $98,517,985
============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-6-
<PAGE>
CORPORATE PROPERTY ASSOCIATES 9, 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 $ 8,010,687 $ 8,278,481 $ 8,345,949
Interest income from direct
financing leases 3,555,659 3,604,478 3,665,739
Other interest income 46,014 63,651 62,890
----------- ----------- -----------
11,612,360 11,946,610 12,074,578
----------- ----------- -----------
Expenses:
Interest on mortgages 5,726,296 5,525,604 5,360,760
Depreciation 1,697,599 1,697,599 1,677,253
General and administrative 404,911 500,879 457,511
Property expense 496,599 459,569 69,081
Amortization 48,415 38,314 38,313
----------- ----------- -----------
8,373,820 8,221,965 7,602,918
----------- ----------- -----------
Income before income from equity
investments, gain on sale of real estate
and extraordinary item 3,238,540 3,724,645 4,471,660
Income from equity investments 669,020 637,806 658,416
Write-off of investment in limited partnership (1,173,143)
----------- ----------- -----------
Income before gain on sale of real estate
and extraordinary item 3,907,560 3,189,308 5,130,076
Gain on sale of real estate 45,066
----------- ----------- -----------
Income before extraordinary item 3,907,560 3,189,308 5,175,142
Extraordinary charge on extinguishment
of debt 480,000
----------- ----------- -----------
Net income $ 3,427,560 $ 3,189,308 $ 5,175,142
=========== =========== ===========
Net income allocated to:
Individual General Partner $ 34,276 $ 31,893 $ 51,751
=========== =========== ===========
Corporate General Partner $ 308,480 $ 287,038 $ 465,763
=========== =========== ===========
Limited Partners $ 3,084,804 $ 2,870,377 $ 4,657,628
=========== =========== ===========
Net income per Unit
(59,918 Limited Partnership
Units outstanding)
Income before extraordinary item $58.69 $47.91 $77.73
Extraordinary item (7.21)
------ ------ ------
$51.48 $47.91 $77.73
====== ====== ======
</TABLE>
The accompanying notes are an integral part of the financial statements.
-7-
<PAGE>
CORPORATE PROPERTY ASSOCIATES 9, 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 $43,820,871 $ (767,050) $44,587,921 $ 744
Distributions (5,589,709) (558,971) (5,030,738) (84)
Net income, 1994 3,427,560 342,756 3,084,804 52
----------- ----------- ----------- ------
Balance, December 31, 1994 41,658,722 (983,265) 42,641,987 712
Distributions (5,616,322) (561,616) (5,054,706) (84)
Net income, 1995 3,189,308 318,931 2,870,377 48
----------- ----------- ----------- ------
Balance, December 31, 1995 39,231,708 (1,225,950) 40,457,658 676
Distributions (5,643,736) (565,063) (5,078,673) (85)
Net income, 1996 5,175,142 517,514 4,657,628 78
----------- ----------- ----------- ------
Balance, December 31, 1996 $38,763,114 $(1,273,499) $40,036,613 $ 669
=========== ============ =========== ======
</TABLE>
(a) Based on 59,918 Units issued and outstanding.
The accompanying notes are an integral part of the financial statements.
-8-
<PAGE>
CORPORATE PROPERTY ASSOCIATES 9, 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 $ 3,427,560 $ 3,189,308 $ 5,175,142
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 1,746,014 1,735,913 1,715,566
Cash receipts on operating and direct financing leases
less than straight-line adjustments and
amortization of unearned income (246,633) (209,275) (121,806)
Extraordinary charge on extinguishment of debt 480,000
Write-off of investment in limited partnership 1,173,143
Gain on sale of real estate (45,066)
Net change in operating assets and liabilities 400,536 32,471 (561,534)
------------ ----------- -----------
Net cash provided by operating activities 5,807,477 5,921,560 6,162,302
------------- ----------- -----------
Cash flows from investing activities:
Cash distributions in excess of income from
equity investments 484,044 463,274 388,329
Proceeds from sale of real estate 928,310
------------ ----------- -----------
Net cash provided by investing activities 484,044 463,274 1,316,639
------------ ----------- -----------
Cash flows from financing activities:
Distributions to partners (5,589,709) (5,616,322) (5,643,736)
Proceeds from mortgages 20,000,000 1,289,340
Prepayment of mortgage payable (19,200,000) (1,880,341)
Deferred financing costs (194,252)
Payment of mortgage principal (530,369) (766,462) (1,465,153)
Payment on extinguishment of debt (480,000)
------------ ----------- -----------
Net cash used in financing activities (5,994,330) (6,382,784) (7,699,890)
------------ ----------- -----------
Net increase (decrease) in cash
and cash equivalents 297,191 2,050 (220,949)
Cash and cash equivalents, beginning of year 1,358,263 1,655,454 1,657,504
------------ ----------- -----------
Cash and cash equivalents, end of year $ 1,655,454 $ 1,657,504 $ 1,436,555
============ =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-9-
<PAGE>
CORPORATE PROPERTY ASSOCIATES 9, 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 9, 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.
Depreciation:
------------
Depreciation is computed using the straight-line method over the
estimated useful lives of the properties - 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
-10-
<PAGE>
CORPORATE PROPERTY ASSOCIATES 9, L.P.,
a Delaware limited partnership
NOTES to FINANCIAL STATEMENTS, Continued
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.
Equity Investments:
------------------
The Partnership's interests in a joint venture and two limited
partnerships are accounted for under the equity method; i.e. at
cost, increased or decreased by the Partnership's share of earnings
or loss and reduced by distributions.
Other Assets:
------------
Included in other assets are deferred rental income and deferred
charges. Deferred rental income is the aggregate difference for
operating method leases between scheduled rents which vary during
the lease term and rents 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.
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. Therefore, no provision for income taxes is
made in the financial statements of the Partnership.
2. Partnership Agreement:
---------------------
The Partnership was organized on October 17, 1988 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. In connection with the Partnership's public
offering, the Corporate General Partner purchased 100 Limited
Partnership Units. The Partnership will terminate on December 31,
2050, 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, Ninth Carey Corporate Property, Inc.
("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 $29,773 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 provisions of the Agreement may not be determinable
until liquidation of a substantial portion of the Partnership's
assets has been made.
-11-
<PAGE>
CORPORATE PROPERTY ASSOCIATES 9, 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, generally based on rents received during the first
five years of each lease, 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 to provide administrative services
necessary to the operation of the Partnership. Property leasing fee
and general and administrative expense reimbursements incurred are
summarized as follows:
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Property leasing fee $346,802 $131,703 $ 7,354
General and administrative
expense reimbursements 90,304 93,245 109,085
-------- -------- --------
$437,106 $224,948 $116,439
======== ======== ========
</TABLE>
In 1994, 1995 and 1996 fees aggregating $44,537, $49,645 and $64,543,
respectively, were incurred for legal services performed by a firm
in which the Secretary of W.P. Carey, the Corporate General Partner
and other affiliates, is a partner of such firm.
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 $73,126, $119,379 and $95,490, respectively. The increase
in 1995 is due, in part, to certain nonrecurring costs incurred in
connection with the relocation of the Partnership's offices.
The Partnership's ownership interests in certain properties are
jointly held with affiliated entities. The interests are held as
tenants-in-common or joint ventures and limited partner interests
with such interests in jointly held properties ranging from 18.54%
to 80%. 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:
---------------------------------------------------------------------
Scheduled future minimum rents, exclusive of renewals, under
noncancellable operating leases amount to approximately $7,841,000
in both 1997 and 1998; $7,732,000 in 1999; $7,665,000 in both 2000
and 2001; and aggregate approximately $101,986,000 through 2016.
Contingent rents were approximately $52,000 in 1994, $482,000 in 1995
and $527,000 in 1996.
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 $ 78,423,503 $ 74,904,918
Unguaranteed residual value 22,808,279 22,808,279
------------ ------------
101,231,782 97,713,197
Less, Unearned income 69,692,948 66,030,569
------------ ------------
$ 31,538,834 $ 31,682,628
============ ============
</TABLE>
Continued
-12-
<PAGE>
CORPORATE PROPERTY ASSOCIATES 9, L.P.,
a Delaware limited partnership
NOTES to FINANCIAL STATEMENTS, Continued
Scheduled future minimum rents, exclusive of renewals, under
noncancellable direct financing leases amount to approximately
$3,574,000 in 1997; $3,589,000 in 1998; $3,634,000 in both 1999 and
2000; $3,653,000 in 2001; and aggregate approximately $74,905,000
through 2016.
Contingent rents were approximately $3,000 in 1996.
6. Mortgage Notes Payable:
----------------------
Mortgage notes payable, all of which are limited recourse obligations,
are collateralized by the assignment of various leases and by real
property with a carrying amount of approximately $98,306,000,
before accumulated depreciation. As of December 31, 1996, mortgage
notes payable bear interest at rates ranging from 7.16% to 11.85%
per annum and mature from 1997 to 2020.
Scheduled principal payments during each of the next five years
following December 31, 1996 and thereafter are as follows:
Year Ending December 31,
-----------------------
1997 $12,535,478
1998 1,403,181
1999 8,961,499
2000 1,546,376
2001 5,757,007
Thereafter 27,466,434
-----------
Total $57,669,975
===========
Interest paid was $5,744,139, $5,530,133 and $5,389,486 in 1994, 1995
and 1996 , respectively.
In addition, the Partnership's proportionate share of limited recourse
mortgage notes payable at December 31, 1996 on properties leased to
General Electric Company, Information Resources, Inc. and Titan
Corporation and accounted for under the equity method was
approximately $11,191,000 (see Note 10).
7. Distributions to Partners:
-------------------------
Distributions are declared and paid to partners quarterly and are
summarized as follows:
<TABLE>
<CAPTION>
Year Ending Distributions Paid to Distributions Paid to Limited Partners'
December 31, General Partners Limited Partners Per Unit Amount
-------------- --------------------- --------------------- -----------------
<S> <C> <C> <C>
1994 $558,971 $5,030,738 $83.96
======== ========== ======
1995 $561,616 $5,054,706 $84.36
======== ========== ======
1996 $565,063 $5,078,673 $84.76
======== ========== ======
</TABLE>
Distributions of $141,407 to the General Partners and $1,272,664 to
the Limited Partners for the quarter ended December 31, 1996 were
declared and paid in January 1997.
Continued
-13-
<PAGE>
CORPORATE PROPERTY ASSOCIATES 9, L.P.,
a Delaware limited partnership
NOTES to FINANCIAL STATEMENTS, Continued
8. Income for Federal Tax Purposes:
-------------------------------
Income for financial statement purposes differs from income for
Federal income tax purposes because of the difference in the
treatment of certain items for income tax purposes and financial
statement purposes. A reconciliation of accounting differences is
as follows:
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Net income per Statements of Income $3,427,560 $3,189,308 $5,175,142
Excess tax depreciation (695,277) (695,277) (702,705)
Other 297,914 138,040 65,021
Write-off of investment in limited partnership 1,173,143
---------- ---------- -----------
Income reported for Federal income
tax purposes $3,030,197 $3,805,214 $4,537,458
========== ========== ==========
</TABLE>
9. Industry Segment Information:
----------------------------
The Partnership's operations consist of the investment in and the
leasing of industrial and commercial real estate. The financial
reporting sources of the leasing revenues are as follows:
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Per Statements of Income:
Rental income from operating leases $ 8,010,687 $ 8,278,481 $ 8,345,949
Interest income from direct financing leases 3,555,659 3,604,478 3,665,739
Adjustments:
Share of rental income from equity
investees' operating leases 2,596,420 2,494,339 2,282,594
----------- ----------- -----------
$14,162,766 $14,377,298 $14,294,282
=========== =========== ===========
</TABLE>
Continued
-14-
<PAGE>
CORPORATE PROPERTY ASSOCIATES 9, L.P.,
a Delaware limited partnership
NOTES to FINANCIAL STATEMENTS, Continued
In 1994, 1995 and 1996, the Partnership earned its share of net
leasing revenues from its direct and indirect ownership of real
estate from the following lease obligors:
<TABLE>
<CAPTION>
1994 % 1995 % 1996 %
---- ---- ---- ---- ---- --
<S> <C> <C> <C> <C> <C> <C>
Detroit Diesel Corporation $ 2,802,733 20% $ 2,796,455 19% $ 2,916,308 20%
Dr Pepper Bottling
Company of Texas 1,999,000 14 1,999,000 14 1,999,000 14
Furon Company 1,719,105 12 1,719,105 12 1,712,336 12
Information Resources, Inc. (a) 1,371,320 10 1,392,937 10 1,457,788 10
Red Bank Distribution, Inc. 1,313,475 9 1,349,761 9 1,400,567 10
Orbital Sciences
Corporation 1,091,442 8 1,176,361 8 1,176,361 8
Amerisig, Inc. 979,855 7 1,169,008 8 1,123,392 8
NVRyan L.P. 1,006,341 7 1,016,279 7 1,026,734 7
The Titan Corporation (a) 444,926 3 459,525 3 459,525 3
Childtime Childcare, Inc. 378,692 3 381,287 3 381,287 3
General Electric Company (a) 365,279 2 365,281 3 365,281 3
Federal Express Corporation 177,491 1 177,491 1 177,491 1
PepsiCo, Inc. 98,212 1 98,212 1 98,212 1
Xerox Corporation (a) 414,895 3 276,596 2
----------- --- ----------- --- ----------- ----
$14,162,766 100% $14,377,298 100% $14,294,282 100%
=========== ==== =========== ==== =========== ====
</TABLE>
(a) Represents the Partnership's proportionate share of rental revenue from an
equity investment in which the above named company is the lease obligor
(see Note 10).
10. Equity Investments:
------------------
The Partnership owns equity interests in a joint venture and two
limited partnerships as limited partner with affiliates which own
the remaining interests. An investment in a third limited
partnership was written off in September 1995 (see Note 12). The
joint venture and limited partnerships own land and buildings which
are net leased to corporate tenants.
Summarized financial information for the joint venture and the limited
partnerships is as follows:
(In thousands)
<TABLE>
<CAPTION>
General Electric Titan Information
Lease Obligor: Company Corporation Resources, Inc. Total
- ------------- ---------------- ----------- --------------- -----
<S> <C> <C> <C> <C>
Ownership interest: 50% 18.54% 33.33%
December 31, 1996:
Assets (a) $6,354 $17,639 $31,080 $55,073
Liabilities 3,417 10,745 22,770 36,932
Capital 2,937 6,894 8,310 18,141
December 31, 1995:
Assets (a) 6,777 18,036 31,846 56,659
Liabilities 3,487 11,022 22,967 37,476
Capital 3,290 7,014 8,879 19,183
</TABLE>
Continued
-15-
<PAGE>
CORPORATE PROPERTY ASSOCIATES 9, L.P.,
a Delaware limited partnership
NOTES to FINANCIAL STATEMENTS, Continued
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------
<S> <C> <C> <C>
1994 1995(b) 1996
------ ---------- ------
Revenue $8,545 $ 8,255 7,583
Expenses 6,190 13,487 5,228
------ ------- -------
Net income (loss) $2,355 $ (5,232) $ 2,355
====== ======== =======
</TABLE>
(a) Net of accumulated depreciation and amortization.
(b) Included in the operating results is a writedown of a property to net
realizable value. At that time the Partnership wrote off its investment in
the limited partnership owning the property (see Note 12).
The Partnership's share of the scheduled future minimum rents of the
limited partnerships and joint venture, exclusive of renewals under
its noncancellable operating leases, amount to approximately
$2,273,000 in 1997; $2,078,000 in 1998; $1,806,000 each of the
years 1999 through 2001 and aggregate approximately $17,338,000
through 2007.
The Partnership's share of scheduled principal payments on the
mortgage notes payable of the limited partnerships and joint
venture for the five years following December 31, 1996 and
thereafter amount to approximately $169,000 in 1997; $1,797,000 in
1998; $159,000 in 1999; $7,355,000 in 2000; $84,000 in 2001 and
$1,627,000 thereafter. The mortgage notes have interest rates
ranging from 9.75% to 10.70% per annum.
11. Extraordinary Charge on Extinguishment of Debt:
----------------------------------------------
In June 1990, the Partnership and Corporate Property Associates 8,
L.P. ("CPA(R):8"), an affiliate, purchased, as tenants-in-common
with 80% and 20% 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 principal payments which
commenced on December 15, 1995.
In May 1994, the Partnership and CPA(R):8 prepaid the existing
$24,000,000 mortgage loan and obtained $25,000,000 of new limited
recourse mortgage financing. The new 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
$358,000) through December 15, 1995 at which time quarterly
interest and principal payments of $689,601 (of which the
Partnership's share is $551,681) 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
$480,000 on its $19,200,000 share of such debt.
Continued
-16-
<PAGE>
CORPORATE PROPERTY ASSOCIATES 9, L.P.,
a Delaware limited partnership
NOTES to FINANCIAL STATEMENTS, Continued
12. Property in Stamford, Connecticut:
---------------------------------
In January 1991, the Partnership and Corporate Property Associates 10
Incorporated ("CPA(R):10"), an affiliate, formed a limited
partnership, Hope Street Connecticut Limited Partnership ("Hope
Street"), for the purpose of purchasing land and an office building
in Stamford, Connecticut for $11,000,000. The Partnership
contributed $1,500,000 to Hope Street for a 31.915% limited
partnership interest and CPA(R):10 contributed $3,200,000 for a
68.085% general partnership interest. Hope Street used this equity
and assumed an existing limited recourse mortgage loan of
$6,300,000 collateralized by the property and also assumed an
existing net lease, as lessor, with Xerox Corporation ("Xerox"), as
lessee. The Xerox lease provided for annual rent of $1,300,000 with
an initial term through August 31, 1995 and two five-year renewal
terms at Xerox's option. The mortgage loan was an interest only
obligation with annual debt service of $639,450 and was scheduled
to mature on September 1, 1995 with a balloon payment of $6,300,000
due at that time. Based on its 31.915% interest, the Partnership
accounted for its investment in the limited partnership under the
equity method.
In August 1995, Xerox vacated the property at the end of the initial
term. Hope Street was unsuccessful in its efforts to remarket the
property and find a new lessee even at a substantially lower annual
rental. Given the conditions of the Stamford market in 1995, the
general partner concluded that the net realizable value of the
property was less than the outstanding balance of the mortgage
loan. Under these circumstances, the general partner considered
various alternatives, including negotiating with the lender to
extend the maturity, restructure the loan or satisfy the balloon
payment obligation at a substantial discount or selling the
property back to the lender for $10,000 in excess of the mortgage
balance; however, the lender did not agree to any of these
proposals. Since the Partnership did not anticipate receiving any
further cash distributions from Hope Street and the Partnership did
not have any obligation to Hope Street, the Partnership wrote off
its remaining equity investment in Hope Street and recognized a
charge of $1,173,143 in 1995 even though the limited partnership
had not been dissolved.
In December 1996, the Boards of Directors of the Corporate General
Partner of the Partnership and CPA(R):10 approved a transaction
which resulted in CPA(R):10 transferring its interests in Hope
Street to the Partnership (with Hope St., Inc., a wholly-owned
subsidiary formed for the purpose of owning a 1% general partner
interest in Hope Street). The lender has advised the Partnership of
its intention to foreclose on the property. The Partnership has not
been able to restructure the loan on the property and has agreed
with the lender to cooperate in the foreclosure of the property, in
return for a $10,000 payment by the lender. As the Partnership's
control over the property is temporary, Hope Street continues to be
reflected on the equity method and no adjustment has been made to
the Partnership's carrying value of its investment in Hope Street.
13. Gain on Sale of Real Estate:
---------------------------
In January 1990, the Partnership and CPA(R):8 purchased nine
properties as tenants-in-common with 67.72% and 32.28% ownership
interests, respectively, and entered into a master lease with Furon
Company ("Furon"). In August 1993, the Partnership and CPA(R):8
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):8 that
it was exercising a purchase option which had been granted at the
time the sublease was agreed to.
Continued
-17-
<PAGE>
CORPORATE PROPERTY ASSOCIATES 9, L.P.,
a Delaware limited partnership
NOTES to FINANCIAL STATEMENTS, Continued
On September 9, 1996, the Partnership and CPA(R):8 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 $50,790 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 $928,310 of
which $604,184 was used to pay a mandatory prepayment on the
mortgage loan. In connection with the sale, the Partnership
recognized a gain of $45,066. As a result of the sale and a
reamortization of the mortgage loan, annual rent from Furon and
debt service on the Furon mortgage loan has decreased by
approximately $116,000 and $81,600, respectively.
14. Debt Refinancing:
----------------
The Partnership and CPA(R):10 own 12 properties as tenants-in-common,
with 33.93% and 66.07% ownership interests, respectively, leased,
pursuant to a master lease, to Childtime Childcare, Inc.
("Childtime"). On December 13, 1996, the Partnership and CPA(R):10
refinanced, at a lower rate of interest, an existing mortgage loan.
The new limited recourse mortgage loan of $3,800,000 (of which the
Partnership's share is $1,289,000) provides for monthly
installments of principal and interest of $35,546 (of which the
Partnership's share is $12,061) at an annual interest rate of 9.55%
based on a 20-year amortization schedule. The loan may be prepaid
at any time subject to a prepayment charge and matures in December
2006 at which time a balloon payment for the entire outstanding
principal balance of approximately $2,768,000 (of which the
Partnership's share is $939,000) is scheduled.
The retired loan provided for monthly payments of principal and
interest, of which the Partnership's share was $13,548, at an
annual interest rate of 11.25% based on a 25-year amortization
schedule. The loan had been scheduled to mature in February 1998 at
which time a balloon payment was scheduled. Solely as a result of
the refinancing, the Partnership's annual debt service will
decrease by $17,844.
15. 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 was $56,505,000 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 holds warrants to purchase 18,540 common shares of The
Titan Corporation ("Titan") at an exercise price of $5.30 per
common share with such exercise period ending July 11, 1998. The
quoted price of Titan's common stock, as of December 31, 1996, was
$3.25. The warrants are carried on the books at a nominal cost.
Continued
-18-
<PAGE>
CORPORATE PROPERTY ASSOCIATES 9, L.P.,
a Delaware limited partnership
SCHEDULE OF REAL ESTATE and ACCUMULATED DEPRECIATION
as of December 31, 1996
<TABLE>
<CAPTION>
Cost
Capitalized
Initial Cost to Subsequent Decrease In Gross Amount at which Carried
Partnership to Net Carried at Close of Period (d)(e)
---------------------- Acquisition Investment ------------------------------------
Description Encumbrances Land Buildings (a) (b) Land Buildings Total
- --------------------------- ------------ ---------- ----------- ----------- ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operating Method:
Land leased to
NVRyan L.P. $ 2,377,669 $ 3,342,854 $ 23,850 $ 3,366,704 $ 3,366,704
Land leased to
Dr Pepper Bottling
Company of Texas 2,547,763 3,675,870 16,937 3,692,807 3,692,807
Land and engineering
fabrication facility
leased to Orbital
Sciences Corporation 4,293,713 1,837,983 $ 3,878,540 3,650,853 1,838,246 $ 7,529,130 9,367,376
Land and distribution
facility leased to
PepsiCo, Inc. 156,327 829,488 15,075 158,717 842,173 1,000,890
Land and manufacturing
facility leased to
Amerisig, Inc. 4,635,213 2,250,000 6,750,000 9,674 2,252,419 6,757,255 9,009,674
Distribution facility
leased to Federal
Express Corporation 347,544 1,551,456 29,939 353,022 1,575,917 1,928,939
Land and industrial/
warehouse/office
facilities leased to
Furon Company 8,493,472 2,835,955 12,937,761 86,955 $(1,050,583) 2,616,846 12,193,242 14,810,088
Land and manufacturing
facility leased to
Detroit Diesel
Corporation 18,996,302 3,989,160 21,210,840 6,746 3,990,228 21,216,518 25,206,746
Land leased to Childtime
Childcare, Inc. 528,164 1,170,448 1,170,448 1,170,448
----------- ----------- ----------- ---------- ----------- ----------- ----------- -----------
$41,872,296 $19,606,141 $47,158,085 $3,840,029 $(1,050,583) $19,439,437 $50,114,235 $69,553,672
=========== =========== =========== ========== =========== =========== =========== ===========
<CAPTION>
Life On which
Depreciation
in Latest
Statement of
Accumulated Income
Description Depreciation (e) Date Acquired is computed
- --------------------------- ---------------- ------------- -------------
<S> <C> <C> <C>
Operating Method:
Land leased to
NVRyan L.P. May 16, 1989 N/A
Land leased to
Dr Pepper Bottling
Company of Texas June 30,1989 N/A
Land and engineering
fabrication facility
leased to Orbital
Sciences Corporation $ 1,557,527 September 29, 1989 30 yrs.
Land and distribution
facility leased to
PepsiCo, Inc. 200,045 November 16, 1989 30 yrs.
Land and manufacturing
facility leased to
Amerisig, Inc. 1,577,805 December 29, 1989 30 yrs.
Distribution facility
leased to Federal
Express Corporation 394,077 June 30, 1989 30 yrs.
Land and industrial/
warehouse/office
facilities leased to
Furon Company 2,813,685 January 29, 1990 30 yrs.
Land and manufacturing
facility leased to
Detroit Diesel
Corporation 4,626,295 June 15, 1990 30 yrs.
Land leased to Childtime
Childcare, Inc. January 4, 1991 N/A
-----------
$11,169,434
===========
</TABLE>
See accompanying notes to Schedule.
-19-
<PAGE>
CORPORATE PROPERTY ASSOCIATES 9, L.P.,
a Delaware limited partnership
SCHEDULE OF REAL ESTATE and ACCUMULATED DEPRECIATION
as of December 31, 1996
<TABLE>
<CAPTION>
Cost
Initial Cost to Capitalized Gross Amount at which Carried
Partnership Subsequent to Increase In at Close of Period (c)
------------------------- Acquisition Net -----------------------------
Description Encumbrances Land Buildings (a) Investment (b) Total
- -------------------------- ------------ ---------- ------------- ------------- --------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Direct Financing method:
Office facility leased
to NVRyan L.P. $ 4,322,331 $ 8,357,146 $ 59,625 $457,579 $ 8,874,350
Office/bottling/
distribution facility
leased to Dr Pepper
Bottling Company
of Texas 5,273,270 10,424,130 48,030 10,472,160
Land and office/ware-
house facility leased
to Red Bank
Distribution, Inc. 5,440,902 $1,572,296 9,065,704 11,302 10,649,302
Day care facilities
leased to Childtime
Childcare, Inc. 761,176 1,686,816 1,686,816
----------- ---------- ----------- -------- -------- -----------
$15,797,679 $1,572,296 $29,533,796 $118,957 $457,579 $31,682,628
=========== ========== =========== ======== ======== ===========
<CAPTION>
Description Date Acquired
- -------------------------- -------------
<S> <C>
Direct Financing method:
Office facility leased
to NVRyan L.P. May 16, 1989
Office/bottling/
distribution facility
leased to Dr Pepper
Bottling Company
of Texas June 30, 1989
Land and office/ware-
house facility leased
to Red Bank
Distribution, Inc. July 20, 1989
Day care facilities
leased to Childtime
Childcare, Inc. January 4, 1991
</TABLE>
See accompanying notes to Schedule.
-20-
<PAGE>
CORPORATE PROPERTY ASSOCIATES 9, 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 as well as capital expenditures
for improvements on the building leased to Orbital Sciences Corporation.
(b) The increase in net investment in direct financing leases is due to the
amortization of unearned income producing a periodic rate of return which is
more than the lease payments received. 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 $92,826,026.
(d)
<TABLE>
<CAPTION>
Reconciliation of Real Estate Accounted
---------------------------------------
for Under the Operating Method
------------------------------
December 31,
-----------
1995 1996
---- ----
<S> <C> <C>
Balance at beginning of year $70,604,089 $70,604,089
Sale of land and buildings (1,050,417)
----------- -----------
Balance at close of year $70,604,089 $69,553,672
=========== ===========
<CAPTION>
Reconciliation of Accumulated Depreciation
------------------------------------------
December 31,
-----------
1995 1996
---- ----
<S> <C> <C>
Balance at beginning
of year $7,961,758 $9,659,357
Disposition (167,176)
Depreciation expense 1,697,599 1,677,253
---------- -----------
Balance at close of
year $9,659,357 $11,169,434
========== ===========
</TABLE>
-21-
<PAGE>
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)
NVRYAN L.P. Office Pittsburgh, Ownership of land
Buildings Pennsylvania and buildings (1)
FEDERAL EXPRESS Distribution Corpus Christi, Ownership of land
CORPORATION Facility Texas and buildings
DR PEPPER BOTTLING Bottling/ Irving and Ownership of a 50%
COMPANY OF TEXAS Distribution/ Houston, interest in land
Office Texas and buildings (1)
Facilities
ORBITAL SCIENCES Engineering & Chandler, Ownership of a 58%
CORPORATION Fabrication Arizona interest in land
Facility and buildings (1)
PEPSICO, INC. Distribution Houston, Ownership of land
Facility Texas and buildings
AMERISIG, INC. Office/ Dekalb County, Ownership of a 73.57%
Manufacturing Georgia interest in land
Facility and buildings (1)
</TABLE>
-22-
<PAGE>
<TABLE>
<CAPTION>
NAME OF LEASE TYPE OF OWNERSHIP
OBLIGOR TYPE OF PROPERTY LOCATION INTEREST
- --------------- ---------------- -------- -----------------
<S> <C> <C> <C>
FURON Manufacturing, New Haven, Ownership of a 67.72%
COMPANY Office and Connecticut; interest in land
Warehouse Mickelton, and buildings (1)
Facilities New Jersey;
Aurora and Mantua,
Ohio; Bristol, Rhode
Island; Mt. Pleasant,
Texas; and Milwaukee,
Wisconsin
DETROIT DIESEL Office, Warehouse, Detroit, Ownership of a 80%
CORPORATION Manufacturing, Truck Michigan interest in land
Repair and Waste and buildings (1)
Treatment Plant
RED BANK Warehouse Fairfax, Ohio Ownership of land
DISTRIBUTION, INC. and buildings (1)
INFORMATION Office Buildings Chicago, Ownership of a 33.33%
RESOURCES INC. Illinois interest in a limited
partnership owning land
and buildings (1)
CHILDTIME Childcare Westland (2) and Ownership of a 33.93%
CHILDCARE, INC. Centers Sterling Heights, interest in land and
- 12 locations Michigan; Chandler buildings (1)
and Tuscon, Arizona;
Duncanville, Carrollton
and Lewisville, Texas;
Alhambra, Chino,
Garden Grove and
Tustin/Santa Ana,
California
TITAN Office Building San Diego, Ownership of a 18.54%
CORPORATION California interest in a limited
partnership owning land
and a building (1)
</TABLE>
(1) These properties are encumbered by mortgage notes payable.
-23-
<PAGE>
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 3,353 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 $20.95 $21.05 $21.15
Second quarter 20.98 21.08 21.18
Third quarter 21.00 21.10 21.20
Fourth quarter 21.03 21.13 21.23
------ ------ ------
$83.96 $84.36 $84.76
====== ====== ======
</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.
-24-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 10K FOR
THE YEAR ENDED DECEMBER 31, 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> 1,436,555
<SECURITIES> 0
<RECEIVABLES> 556,685
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,993,240
<PP&E> 101,236,300
<DEPRECIATION> 11,169,434
<TOTAL-ASSETS> 98,517,985
<CURRENT-LIABILITIES> 2,084,896
<BONDS> 57,669,975
0
0
<COMMON> 0
<OTHER-SE> 38,763,114
<TOTAL-LIABILITY-AND-EQUITY> 98,517,985
<SALES> 0
<TOTAL-REVENUES> 12,074,578
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,203,845
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,360,760
<INCOME-PRETAX> 5,175,142
<INCOME-TAX> 0
<INCOME-CONTINUING> 5,175,142
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,175,142
<EPS-PRIMARY> 77.73
<EPS-DILUTED> 77.73
</TABLE>
