SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1996
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OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-12708
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FRANKLIN SELECT REALTY TRUST
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(Exact name of registrant as specified in its charter)
CALIFORNIA 94-3095938
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. BOX 7777, SAN MATEO, CALIFORNIA 94403-7777
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (415) 312-2000
-----------------------------
N/A
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Former name, former address and former fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or 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. Yes X No
--- ---
Common Stock Shares Outstanding as of September 30, 1996, Series A: 13,328,001
Common Stock Shares Outstanding as of September 30, 1996, Series B: 745,584
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FRANKLIN SELECT REALTY TRUST
BALANCE SHEETS
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Restated
(Shares and dollars in thousands,
except per share amounts) 1996 1995
- -------------------------------------------------------------------------- -------------------- --------------------
ASSETS:
Rental property:
<S> <C> <C>
Land $ 30,949 $30,949
Buildings and improvements 83,464 83,121
- -------------------------------------------------------------------------- -------------------- --------------------
114,413 114,070
Less: accumulated depreciation 16,716 14,416
- -------------------------------------------------------------------------- -------------------- --------------------
97,697 99,654
Cash and cash equivalents 7,139 6,186
Mortgage-backed securities,
available for sale 6,194 7,135
Deferred rent receivable 1,928 1,970
Other assets 1,532 1,512
- -------------------------------------------------------------------------- -------------------- --------------------
Total assets $114,490 $116,457
========================================================================== ==================== ====================
LIABILITIES AND STOCKHOLDERS' EQUITY:
Notes and bonds payable $6,611 $7,145
Tenants' deposits and other liabilities 953 741
Advance rents 37 64
Distributions payable 1,466 1,521
- -------------------------------------------------------------------------- -------------------- --------------------
Total liabilities 9,067 9,471
- -------------------------------------------------------------------------- -------------------- --------------------
Dissenting shareholders' interest: 8,400 -
- -------------------------------------------------------------------------- -------------------- --------------------
Stockholders' equity:
Common stock, Series A, without par value. Stated value $10 per share; 110,000
shares authorized; 13,328 and 14,145 shares issued
and outstanding in 1996 and 1995 103,161 111,569
Common stock, Series B, without par value. Stated value $10 per share; 2,500
shares authorized; 746 shares issued and
outstanding in 1996 and 1995 6,294 6,294
Unrealized loss on mortgage-backed
securities (227) (164)
Accumulated distributions
in excess of net income (12,205) (10,713)
- -------------------------------------------------------------------------- -------------------- --------------------
Total stockholders' equity 97,023 106,986
- -------------------------------------------------------------------------- -------------------- --------------------
Total liabilities, dissenting
shareholders' interest and
stockholders' equity $114,490 $116,457
========================================================================== ==================== ====================
The accompanying notes are an integral part of these financial statements.
FRANKLIN SELECT REALTY TRUST
STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
RESTATED RESTATED
SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER
30 30 30 30
(Amounts in thousands,
except per share amounts) 1996 1995 1996 1995
- ----------------------------------------------------------- --------------- --------------- ---------------- ---------------
REVENUE:
<S> <C> <C> <C> <C>
Rent $3,412 $3,408 $10,144 $10,087
Interest 164 181 508 508
Dividends 21 6 32 13
Other - 2 - 10
- ----------------------------------------------------------- --------------- --------------- ---------------- ---------------
Total revenue 3,597 3,597 10,684 10,618
- ----------------------------------------------------------- --------------- --------------- ---------------- ---------------
EXPENSES:
Interest 153 187 467 509
Depreciation and amortization 836 833 2,491 2,507
Operating 1,006 1,127 2,690 2,811
Related party 304 260 864 772
Consolidation expense (26) 173 680 173
General and administrative 137 124 474 356
- ----------------------------------------------------------- --------------- --------------- ---------------- ---------------
Total expenses 2,410 2,704 7,666 7,128
- ----------------------------------------------------------- --------------- --------------- ---------------- ---------------
NET INCOME $1,187 $893 $3,018 $3,490
=========================================================== =============== =============== ================ ===============
Net income per share, based on the
weighted average shares outstanding of Series
A common stock of 14,145for the nine month
periods ended September 30, 1996 and
1995; and for the three month periods
ended September 30, 1996
and 1995. $ .08 $ .06 $ .21 $ .25
=========================================================== =============== =============== ================ ===============
Distributions per share, based on
the weighted average shares outstanding of
Series A common stock of 13,710 and
14,145 for the nine month periods ended
September 30, 1996 and 1995; and 13,328
and 14,145 for the three month periods
ended September
30, 1996 and 1995, respectively $.11 $ .11 $ .33 $ .33
=========================================================== =============== =============== ================ ===============
The accompanying notes are an integral part of these financial statements.
FRANKLIN SELECT REALTY TRUST
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 1996
(Unaudited)
Common Stock
------------------------------------------------
Series A Series B
---------------------------- -----------------
Unrealized
Loss on Accumulated
Mortgage- Distributions
(Amounts in backed in Excess of
thousands) Shares Amount Shares Amount Securities Net Income Total
- ------------------- ------------- -------------- ----------- ----------- ---------------- -------------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance,
beginning of
period 14,145 $111,569 746 $6,294 $ (164) $(10,713) $106,986
Dissenting
shareholders'
interest (817) (8,408) - - - - (8,408)
Unrealized
loss on
mortgage-
backed
securities - - - - (63) - (63)
Net income - - - - - 3,018 3,018
Distributions
declared - - - - - (4,510) (4,510)
- ------------------- ------------- -------------- ---------- ---------- ------------------ -------------------- --------------
Balance,
end of
period 13,328 $103,161 746 $6,294 $(227) $(12,205) $97,023
=================== ============= ============== ========== ========== ================== ==================== ==============
The accompanying notes are an integral part of these financial statements.
FRANKLIN SELECT REALTY TRUST
STATEMENT OF CASH FLOWS
FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
(Dollars in thousands) 1996 1995
- ------------------------------------------------------------------------------------ -------------- ----------------
Cash flows from operating activities:
Net income $3,018 $3,490
- ------------------------------------------------------------------------------------ -------------- ----------------
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 2,491 2,507
(Increase) decrease in deferred rent receivable 42 (69)
Increase in other assets (211) (102)
Increase in tenants' deposits and
other liabilities 212 321
Decrease in advance rents (27) (29)
Loss on disposition of rental property - 100
- ------------------------------------------------------------------------------------ -------------- ----------------
2,507 2,728
- ------------------------------------------------------------------------------------ -------------- ----------------
Net cash provided by operating activities 5,525 6,218
- ------------------------------------------------------------------------------------ -------------- ----------------
Cash flow from investing activities:
Improvements to rental property (343) (213)
Disposition of mortgage-backed securities 878 532
- ------------------------------------------------------------------------------------ -------------- ----------------
Net cash provided by investing activities 535 319
- ------------------------------------------------------------------------------------ -------------- ----------------
Cash flow from financing activities:
Distributions paid (4,565) (4,746)
Dissenting shareholders' interest paid (8) -
Payoff of note payable (480) -
Principal payment on notes and bonds payable (54) (52)
Redemption of Series A common stock - (3)
- ------------------------------------------------------------------------------------ -------------- ----------------
Net cash used in financing activities (5,107) (4,801)
- ------------------------------------------------------------------------------------ -------------- ----------------
Net increase in cash and cash equivalents 953 1,736
Cash and cash equivalents,
beginning of period 6,186 4,200
- ------------------------------------------------------------------------------------ -------------- ----------------
Cash and cash equivalents,
end of period $7,139 $5,936
==================================================================================== ============== ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
FRANKLIN SELECT REALTY TRUST
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
NOTE 1 - ORGANIZATION
Franklin Select Realty Trust (the "Company") is a California corporation formed
on January 5, 1989 for the purpose of investing in income-producing real
property. The Company is a real estate investment trust ("REIT") having elected
to qualify as a REIT under the applicable provisions of the Internal Revenue
Code since 1989. Under the Internal Revenue Code and applicable state income tax
law, a qualified REIT is not subject to income tax if at least 95% of its
taxable income is currently distributed to its stockholders and other REIT tests
are met. The Company has distributed at least 95% of its taxable income and
intends to distribute substantially all of its taxable income in the future.
Accordingly, no provision is made for income taxes in these financial
statements.
On May 7, 1996, Franklin Real Estate Income Fund ("FREIF") and Franklin
Advantage Real Estate Income Fund ("Advantage") merged into the Company. In
connection with the merger of the three companies (the "Merger"), the Company
issued approximately 7,945,000 shares of Series A common stock and 559,718
shares of Series B common stock in exchange for 3,363,877 and 3,013,713 shares
of Series A common stock and 319,308 and 124,240 shares of Series B common stock
of FREIF and Advantage, respectively, in each case excluding dissenting shares.
Shareholders representing approximately 635,638 shares of FREIF Series A common
stock and 1,077,667 shares of Company Series A common stock elected to exercise
dissenter's rights pursuant to Chapter 13 of the California General Corporation
Law. The Company, as the surviving corporation after the merger, is required to
pay the fair market value for such dissenting shares. The Company has offered
the dissenting shareholders approximately $8.4 million for their shares. The
"dissenting shares" were subsequently repurchased by the company as described
under Note 6 - Subsequent Events.
As of September 30, 1996, the Company's real estate portfolio consisted of fee
interests in the Shores Office Complex, a three-building office complex located
in Redwood City, California; the Data General Building located in Manhattan
Beach, California; the Mira Loma Shopping Center, a shopping center located in
Reno, Nevada; three separate research and development buildings in the Northport
Business Park, located in Fremont, California; the Glen Cove Shopping Center
located in Vallejo, California; the Fairway Center, a two story office building
located in Brea, California; and the Carmel Mountain Gateway Plaza, a retail
center located in San Diego, California.
NOTE 2 - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been presented as a
reorganization of entities under common control due to the common management of
the Company, FREIF and Advantage by the Advisor and are reflected in the
financial statements at their historical bases. Prior periods have been restated
to give effect to the merger.
The accompanying unaudited financial statements contain all adjustments
(consisting of normal recurring accruals) which are necessary, in the opinion of
management, for a fair presentation. The statements, which do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements, should be read in conjunction with
the Company's, FREIF's and Advantage's financial statements for the year ended
December 31, 1995.
FRANKLIN SELECT REALTY TRUST
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
NOTE 3 - RELATED PARTY TRANSACTIONS
The Company has an agreement with Franklin Properties, Inc. (The "Advisor") to
administer the day-to-day operations of the Company. Under the terms of the
amended agreement, which is renewable annually, the Advisor will receive
quarterly an annualized fee equal to .5% of the Company's gross real estate
assets, defined generally as the book value of the assets before depreciation.
The fee will be reduced to .4% for gross real estate assets exceeding $200
million.
At September 30, 1996, cash equivalents included $2,822,000 invested in Franklin
Money Fund, an investment company managed by an affiliate of the Advisor.
Distributions earned from the Franklin Money Fund totaled $32,000 for the nine
month period ended September 30, 1996.
The agreements between the Company and the Advisor, or affiliates, provide for
certain types of compensation and payments including but not limited to the
following for those services rendered for the nine month period ended September
30, 1996:
Advisory fee expense,
charged to related party expense $374,000
Reimbursement for data processing,
accounting and certain other expenses,
charged to related party expense $47,000
Property management fee,
charged to related party expense $443,000
Leasing commission, capitalized and amortized
over the term of the related lease $86,000
Construction supervision fee,
capitalized and amortized over the
life of the related investment or the
term of the related lease $1,000
NOTE 4 - COMMON STOCK
In 1994, the Company issued to the Advisor an exchange right to exchange the
Series B common stock held by the Advisor for Series A common stock. In
connection with the Merger, the Company issued an additional exchange right to
the Advisor in respect to the shares of Series B common stock held by Advisor in
FREIF and Advantage which were exchanged in the merger for Series B shares of
the Company. The exchange rights are exercisable only when the Series A common
stock achieves certain trading prices for 20 consecutive trading days. The
number of shares of Series B common stock that will exchange for Series A common
stock, and the related trading prices are as follows: 149,088 Series B shares
will be exchanged for 149,088 Series A shares at $8.42, 185,866 Series B shares
will be exchanged for 185,866 Series A shares at $10.35, and 410,630 Series B
shares will be exchanged for 287,441 Series A shares at $11.33. The rates of
exchange and trading prices will be subject to change under certain
circumstances as provided in the Exchange Right Agreement.
No distributions may be paid on the Series B shares prior to exercise of the
exchange rights. After exercise of the exchange right, the Advisor, like any
other shareholder, will receive distributions on its Series A shares.
FRANKLIN SELECT REALTY TRUST
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
Series A and Series B common stock have the same voting rights. Distributions on
Series A common stock are declared at the discretion of the Board of Directors.
For purposes of calculating net income per share, the weighted average shares
outstanding of Series A common stock has been calculated assuming the shares
attributable to remaining dissenting shareholders (equivalent to approximately
1.9 million shares of the Company's common stock) were outstanding for the
periods reported.
NOTE 5 - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
For the nine month period ended September 30, 1996 interest paid amounted to
$467,000.
NOTE 6 - SUBSEQUENT EVENTS
On October 31, 1996, the Company acquired two research and development buildings
("the Properties") under a newly formed limited partnership, FSRT, L.P.("FSRT"),
in which the Company is the sole general partner. Upon formation of FSRT, the
Company contributed the Data General Building to the partnership and the limited
partners contributed the Properties. The Properties were acquired for
approximately $25.5 million with the assumption of $16.2 million of existing
non-recourse financing on the Properties and the issuance of 1,625,000 limited
partnership units representing an approximately 30% interest in FSRT. The
limited partnership units are convertible into Series A shares of the Company's
common stock on a one-for-one basis after one year. The Company expects to
refinance the debt during the fourth quarter with new non-recourse fixed-rate
debt. In connection with the acquisition and refinancing, the Company estimates
that total transaction costs will be approximately $1.3 million including
prepayment penalties on the existing loans.
REPURCHASE OF DISSENTING SHARES
On November 1, 1996, the Company purchased all of the remaining "dissenting
shares" of Class A common stock arising from the Merger for an aggregate price
of $8.4 million. After giving effect to the transaction, the total number of
shares of Series A common stock of the Company outstanding is approximately
12.25 million. Cash for the purchase price was provided by the sale of a portion
of the Company's mortgage-backed securities. The Company incurred a loss on the
sale of the securities of approximately $80,000.
FRANKLIN SELECT REALTY TRUST
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
INTRODUCTION
Management's discussion and analysis of financial condition and results of
operations should be read in conjunction with the Financial Statements and Notes
thereto.
As described under Note 1 to the accompanying financial statements, on May 7,
1996, Franklin Real Estate Income Fund and Franklin Advantage Real Estate Income
Fund merged into the Company. The financial statements of the Company have been
presented as a reorganization of entities under common control and therefore,
the financial statements, discussions of operations and liquidity and capital
are reflected at their historical bases.
RESULTS OF OPERATIONS
COMPARISON OF THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1996 AND 1995
Net income for the nine month period ended September 30, 1996 decreased
$472,000, or 14%, compared to 1995 primarily due to an increase in non-recurring
consolidation expenses of $507,000 in 1996.
Total revenue for the nine month period ended September 30, 1996 increased
$66,000, or 1%, compared to the same period in 1995. The increase is primarily
attributable to an increase in rental revenue at the Northport Businesss Park
due to an increase in the average rental rate. The average portfolio occupancy
rate at September 30, 1996 was 97.5% compared to 97.0% in the prior year.
Total expenses for the nine month period ended September 30, 1996, increased
$538,000, or 8% from $7,128,000 in 1995 to $7,666,000 in 1996. The increase in
total expenses primarily resulted from non-recurring expenses of the merger.
Related party expense for the nine month period ended September 30, 1996
increased $92,000 primarily as a result of an increase in advisory fees of
$111,000.
General and administrative expense for the nine month period ended September 30,
1996, increased $118,000 primarily due to increases in non-recurring legal fees
of $51,000, and merger related expenses of $54,000.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal source of capital for the acquisition and major
renovation of properties has been the proceeds from the initial public offering
of its stock. The Company's cash flow has been its principal source of capital
for minor property improvements, leasing costs and the payment of quarterly
distributions. At September 30, 1996, the cash reserves and marketable
securities of the Company totaled approximately $13.3 million. The Company's
investment in mortgage-backed securities consists of GNMA, FNMA and FMLMC
adjustable rate pass-through certificates in which payments of principal and
interest are guaranteed by the respective agencies. However, changes in market
interest rates cause the security's market value to fluctuate, which could
result in a realized gain or loss to the Company if the securities are sold
before maturity.
FRANKLIN SELECT REALTY TRUST
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
Management continues to evaluate other properties for acquisition by the
Company. The source of capital for future acquisitions is expected to be
provided by the issuance of additional limited partnership units in FSRT, and
from debt financing. In the short-term and in the long term, management believes
that the Company's current sources of capital will continue to be adequate to
meet both its operating requirements and the payment of dividends.
Net cash provided by operating activities for the nine month period ended
September 30, 1996 was $5,525,000, or $693,000 less than the same period in
1995. The decrease in cash flow provided by operating activities is primarily
attributable to the decrease in net income as described under "Results of
Operations".
Net cash provided by investing activities for the nine month period ended
September 30, 1996, increased $216,000 when compared to the same period in 1995.
The increase was due to an increase in principal payments received from
mortgage-backed securities which was partially offset by an increase in
improvements to rental property.
Net cash used in financing activities increased $306,000 reflecting the payoff
of the Fairway Center note payable in the amount of $480,000 in March, 1996,
which was partially offset by a decrease in cash distributions related to
dissenting shares.
On October 31, 1996, the Company acquired two research and development buildings
("the Properties") under a newly formed limited partnership, FSRT, L.P.("FSRT"),
in which the Company is the sole general partner. Upon formation of FSRT, the
Company contributed the Data General Building to the partnership and the limited
partners contributed the Properties. The Properties were acquired for
approximately $25.5 million with the assumption of $16.2 million of existing
non-recourse financing on the Properties and the issuance of 1,625,000 limited
partnership units representing an approximately 30% interest in FSRT. The
limited partnership units are convertible into Series A shares of the Company's
common stock on a one-for-one basis after one year. The Company expects to
refinance the debt during the fourth quarter with new non-recourse fixed-rate
debt. In connection with the acquisition and refinancing, the Company estimates
that total transaction costs will be approximately $1.3 million including
prepayment penalties on the existing loans.
On November 1, 1996, the Company purchased all of the remaining "dissenting
shares" of Class A common stock arising from the Merger for an aggregate price
of $8.4 million. After giving effect to the transaction, the total number of
shares of Series A common stock of the Company outstanding is approximately
12.25 million. Cash for the purchase price was provided by the sale of a portion
of the Company's mortgage-backed securities.
Funds from Operations for the nine month period ended September 30, 1996
decreased $488,000, or 8%, to $5,509,000 compared to the same period in 1995.
The decrease is primarily due to an increase in merger expenses incurred in
1996. The Company believes that Funds from Operations is helpful in
understanding a property portfolio in that such calculation reflects income from
operating activities and the properties' ability to support general operating
expenses and interest expense before the impact of certain activities, such as
gains and losses from property sales and changes in the accounts receivable and
accounts payable. However, it does not measure whether income is sufficient to
fund all of the Company's cash needs including principal amortization, capital
improvements and distributions to shareholders. Funds from Operations should not
be considered an alternative to net income or any other GAAP measurement of
performance or as an alternative to cash flows from operating,
FRANKLIN SELECT REALTY TRUST
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
investing, or financing activities as a measure of liquidity. As defined by the
National Association of Real Estate Investment Trusts, Funds from Operations is
net income ( computed in accordance with GAAP ), excluding gains or losses from
debt restructuring and sales of property, plus depreciation and amortization,
and after adjustment for unconsolidated joint ventures. The Company reports
Funds from Operations in accordance with the NAREIT definition. For the periods
presented, Funds from Operations represents net income plus depreciation and
amortization. The measure of Funds from Operations as reported by the Company
may not be comparable to similarly titled measures of other companies that
follow different definitions.
IMPACT OF INFLATION
The Company's management believes that inflation may have a positive effect on
the Company's property portfolio, but this effect generally will not be fully
realized until such properties are sold or exchanged. The Company's policy of
negotiating leases which incorporate operating expense "pass-through" provisions
is intended to protect the Company against increased operating costs resulting
from inflation.
DISTRIBUTIONS
Distributions are declared quarterly at the discretion of the Board of
Directors. The Company's present distribution policy is to at least annually
evaluate the current distribution rate in light of anticipated tenant turnover
over the next two or three years, the estimated level of associated improvements
and leasing commissions, planned capital expenditures, any debt service
requirements and the Company's other working capital requirements. After
balancing these considerations, and considering the Company's earnings and cash
flow, the level of its liquid reserves and other relevant factors, the Company
seeks to establish a distribution rate which:
i) provides a stable distribution which is sustainable despite short term
fluctuations in property cash flows;
ii) maximizes the amount of cash flow paid out as distributions consistent
with the above listed objective; and
iii) complies with the Internal Revenue Code requirement that a REIT
annually pay out as distributions not less than 95% of its taxable
income.
During the nine-month period ended September 30, 1996, the Company declared
distributions totaling $4,510,000.
FRANKLIN SELECT REALTY TRUST
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Not applicable
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant during the quarter
ended September 30, 1996.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FRANKLIN SELECT REALTY TRUST
By: /S/ DAVID P. GOSS
David P. Goss
Chief Executive Officer
Date: NOVEMBER 13, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM REGISTRANT'S
FINANCIAL STATEMENTS FOR THE QUARTER ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 7,139
<SECURITIES> 6,194
<RECEIVABLES> 1,928
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 114,413
<DEPRECIATION> 16,716
<TOTAL-ASSETS> 114,490
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 109,455
<OTHER-SE> (12,432)
<TOTAL-LIABILITY-AND-EQUITY> 114,490
<SALES> 0
<TOTAL-REVENUES> 10,684
<CGS> 0
<TOTAL-COSTS> 7,199
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 467
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,018
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
