<PAGE>
RULE NO. 424(b)(2)
REGISTRATION NO. 33-54267
PROSPECTUS SUPPLEMENT
TO PROSPECTUS DATED JULY 13, 1994
CRIIMI MAE INC.
625,000 COMMON SHARES
CRIIMI MAE Inc. ("CRIIMI MAE"), an infinite-life, actively managed real
estate investment trust ("REIT"), is the largest multifamily mortgage REIT.
CRIIMI MAE is offering hereby 625,000 shares of its common stock, par value
$.01 per share (the "Common Shares"). The offering price per Common Share is
$6.867. CRIIMI MAE's Common Shares are listed on the New York Stock Exchange
("NYSE") under the symbol "CMM." The last sale price of the Common Shares as
reported on the NYSE Composite Tape on January 11, 1995, was $7.00.
----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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<CAPTION>
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PRICE TO PLACEMENT PROCEEDS TO
PUBLIC(1) FEE(2) CRIIMI MAE(3)
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
Per Common Share, $.01 par value....... $6.867 $.103 $6.76
- --------------------------------------------------------------------------------
Total Shares........................... $4,291,875 $64,378 $4,227,497
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</TABLE>
(1) The offering price per Common Share is $6.867, which represents the
cumulative average (rounded to the nearest thousandth) of the daily low
price per Common Share, as reported for trades on the NYSE during the
fifteen consecutive trading days commencing on December 20, 1994.
(2) CRIIMI MAE will pay Yamaichi International (America), Inc. (the "Placement
Agent") an aggregate fee equal to 1.5% of the gross proceeds of the
offering. CRIIMI MAE has agreed to indemnify the Placement Agent against
certain liabilities under the Securities Act of 1933, as amended (the
"Securities Act"). See "Plan of Distribution."
(3) Before deducting expenses payable by CRIIMI MAE estimated at $10,000.00.
-----------------------------------
Yamaichi International (America), Inc. (the "Placement Agent") has agreed to
use its best efforts to sell, as agent, Common Shares offered by CRIIMI MAE
pursuant to CRIIMI MAE's shelf Registration Statement on Form S-3 (Registration
No. 33-54267) dated July 13, 1994. The Placement Agent will seek commitments to
purchase Common Shares from potential investors but will not accept deposits or
payments of any type prior to the pricing and sale of Common Shares. Therefore,
no arrangements have been made to place any proceeds in escrow or trust prior to
any sale of Common Shares. See "Plan of Distribution." The Common Shares are
offered hereby by CRIIMI MAE through the Placement Agent, as agent, subject to
the approval of certain conditions.
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YAMAICHI INTERNATIONAL (AMERICA), INC.
-as Placement Agent-
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The date of this Prospectus Supplement is January 12, 1995.
<PAGE>
CRIIMI MAE
CRIIMI MAE, an infinite-life, actively managed real estate investment trust
("REIT"), is the largest multifamily mortgage REIT. CRIIMI MAE invests
selectively, focusing primarily on high-quality multifamily mortgage
investments, including government insured or guaranteed mortgage investments
secured by multifamily housing complexes located throughout the United States
("Government Insured Multifamily Mortgages") and government-insured or
guaranteed multifamily construction loans. CRIIMI MAE's investment policies also
permit CRIIMI MAE to invest in multifamily mortgage investments which are not
federally insured or guaranteed. CRIIMI MAE's principal objectives are to
provide stable or growing quarterly cash distributions to its stockholders while
preserving and protecting its capital. CRIIMI MAE has sought to achieve these
objectives by investing primarily in Government Insured Multifamily Mortgages
using a combination of debt and equity financing.
RECENT DEVELOPMENTS
PROPOSED MERGER
CRIIMI MAE Inc. has agreed in principle to acquire the mortgage businesses
of CRI, Inc. ("CRI"), a private real estate investment firm which, through
affiliates, serves as the adviser to CRIIMI MAE and manages its mortgage
investments. As a result of this proposed transaction, CRIIMI MAE would become
a self-administered and self-managed REIT.
The proposal calls for CRIIMI MAE to acquire the CRI mortgage businesses,
including CRICO Mortgage Company and other CRI-affiliates, by:
. issuing Common Shares to CRI's owners, William B. Dockser and H. William
Willoughby, and certain officers of CRIIMI MAE, with the exact number of
shares determined by dividing $21.4 million by the aggregate average of the
high and low sales prices of Common Shares over the ten trading days
preceding the execution of a definitive merger agreement; provided that at
the closing of the proposed transaction the stock issued cannot total more
than $22.9 million or more than 2,761,290 shares. Messrs. Dockser and
Willoughby would receive 96% of the actual number of Common Shares issued
pursuant to the proposed transaction and officers of CRIIMI MAE would
receive the remainder;
. assuming $9.1 million of outstanding debt of CRI and its affiliates
related to CRI's mortgage businesses; and
. granting CRI's owners, Messrs. Dockser and Willoughby, options valued at
approximately $1.5 million to purchase an additional three million Common
Shares. (Options for two million Common Shares would become exercisable in
equal annual installments over a five-year period, with an exercise price
$1.50 per share greater than the aggregate average of the high and low sale
prices of Common Shares over the ten trading days preceding the date of the
closing of the proposed transaction. Options for one million Common Shares
would become exercisable in equal annual installments over a five-year
period, with an exercise price $4.00 per share greater than such aggregate
average price.)
In addition to being CRI's owners, Messrs. Dockser and Willoughby are also
officers and directors of CRIIMI MAE. In the proposed transaction, Mr. Dockser,
Mr. Willoughby, and certain other CRI executives and personnel, would become
employees of CRIIMI MAE. All shares received in the transaction would be
subject to restriction on transfer for three years.
A special committee of CRIIMI MAE's independent directors was formed to
consider the proposed transaction with CRI. These independent directors are not
members of management or employees of CRI or CRIIMI MAE. The special committee
engaged Duff & Phelps Capital Markets Co. ("Duff & Phelps") to render an opinion
as to whether the transaction is fair to CRIIMI MAE shareholders from a
financial point of view.
This transaction is subject to a number of conditions including negotiation
and execution of a definitive merger agreement and employment agreements, board
approval, issuance of a fairness opinion by Duff & Phelps, and shareholder
approval of the transaction.
S-2
<PAGE>
ACQUISITION OF MORTGAGE SECURITIES
As of December 31, 1994, CRIIMI MAE had purchased a total of five tranches
of subordinated securities issued by two different real estate mortgage
investment conduits ("REMICs") sponsored by Citibank N.A. The securities, which
were purchased for a total of approximately $38.8 million, have a face value of
approximately $54 million and are backed by two pools of uninsured multifamily
and commercial mortgages with a current aggregate face value of approximately
$292 million.
It is the policy of CRIIMI MAE to make investments of this type only when
satisfactory arrangements exist whereby CRIIMI MAE can closely monitor the
management of the pool. In this case, CRICO Mortgage Company, Inc. ("CRICO"),
an affiliate of CRI, will service the mortgage investments comprising the pool,
thereby enabling CRICO to continuously monitor the performance of the pool and
actively pursue resolution of any delinquencies that may develop and maintain
current records on the properties' operations and tax and insurance liabilities.
Additionally, CRICO is the special servicer for the entire portfolio which
places it directly in the position of asset manager in the event of a default.
Although investments in Government Insured Multifamily Mortgages and
government insured or guaranteed multifamily construction loans will continue to
comprise a substantial majority of CRIIMI MAE's total consolidated asset base,
investments similar to the REMIC tranches discussed above may represent a major
component of CRIIMI MAE's new business activity in the near future. These
investments will be made only after CRIIMI MAE has performed extensive due
diligence on the assets and has determined that certain underwriting criteria
have been met. CRIIMI MAE currently expects that investments of this type will
not exceed 10% of its total consolidated asset base during the next 12 months.
USE OF PROCEEDS
CRIIMI MAE intends to use the net proceeds from the sale of the Common
Shares offered hereby (i) to acquire mortgage investments, including Government
Insured Multifamily Mortgages, other insured mortgages and other multifamily
mortgage investments, (ii) to sponsor and/or participate in securitized mortgage
programs, (iii) to make other investments and/or acquisitions relating to CRIIMI
MAE's mortgage business and/or (iv) for other general corporate purposes,
including working capital.
PRICE RANGE OF COMMON SHARES AND DIVIDENDS
The Common Shares are traded on the NYSE under the symbol "CMM." The table
below sets forth the high and the low closing sales prices per Common Share as
reported on the NYSE Composite Tape and the amount of cash dividends paid per
Common Share during the periods indicated. As of January 2, 1995, there were
approximately 25,000 holders of record of Common Shares.
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Price Range of Dividends Paid
Common Shares per Share
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High Low
<S> <C> <C> <C>
Year Ended December 31, 1993:
1st Quarter $11 1/4 $ 9 3/4 $0.28
2nd Quarter 12 1/4 10 3/8 0.28
3rd Quarter 12 1/2 11 1/8 0.28
4th Quarter 12 3/4 10 3/4 0.28
Year Ended December 31, 1994:
1st Quarter $12 $ 9 3/8 $0.29
2nd Quarter 11 1/4 9 1/2 0.29
3rd Quarter 11 1/4 9 3/8 0.29
4th Quarter 9 5/8 6 5/8 0.29
Year Ended December 31, 1995:
1st Quarter (through
January 11, 1995) $ 7 1/8 $ 6 3/4 --
</TABLE>
The reported last sale price of the Common Shares as reported on the NYSE
Composite Tape on January 11, 1995 was $7.00.
S-3
<PAGE>
PLAN OF DISTRIBUTION
CRIIMI MAE has engaged the Placement Agent, Yamaichi International (America),
Inc., as its agent, pursuant to a letter agreement dated August 10, 1994, as
amended and supplemented (the "Engagement Letter"). The Placement Agent has
agreed to use its best efforts to sell, as agent, Common Shares offered by
CRIIMI MAE pursuant to CRIIMI MAE's shelf Registration Statement on Form S-3
(Registration No. 33-54267) dated July 13, 1994. CRIIMI MAE's engagement of the
Placement Agent is on a non-exclusive basis.
Pursuant to the Engagement Letter, the Placement Agent will seek commitments
to purchase Common Shares from potential investors, but will not accept deposits
or payments of any type prior to the pricing and sale of Common Shares.
Therefore, no arrangements have been made to place any proceeds in escrow or
trust prior to the sale of any Common Shares. The Placement Agent has made no
commitment to take down all or any part of the Common Shares offered hereby.
CRIIMI MAE will have the sole right to accept offers to purchase the Common
Shares and may reject any proposed purchase of Common Shares.
Subject to the terms of the Engagement Letter, CRIIMI MAE will pay the
Placement Agent a fee equal to 1.5% of the gross proceeds of the offering.
Pursuant to a consulting arrangement between the Placement Agent and Bouvet
Limited ("Bouvet"), Bouvet will receive, for advisory and other services
provided in connection with the offering, a portion of the fees received by the
Placement Agent. CRIIMI MAE has agreed to indemnify the Placement Agent and
Bouvet against certain losses, claims, damages and liabilities arising in
connection with the offering, including certain liabilities arising under the
Securities Act, and to reimburse the Placement Agent and/or Bouvet for expenses
reasonably incurred in connection with any such actions.
The foregoing does not purport to be a complete statement of the terms and
conditions of the Engagement Letter, copies of which are on file at the offices
of the Placement Agent and CRIIMI MAE.
S-4
<PAGE>
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NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED IN CONNECTION WITH ANY
OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER
THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SECURITIES OFFERED
HEREBY, NOR DO THEY CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER
TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN
WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER AND THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS NOT BEEN ANY CHANGE IN THE INFORMATION CONTAINED HEREIN OR
THEREIN OR IN THE AFFAIRS OF CRIIMI MAE SINCE THE DATE HEREOF.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
Page
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<S> <C>
CRIIMI MAE...................................... S-2
Recent Developments............................. S-2
Use of Proceeds................................. S-3
Price Range of Common Shares and Dividends...... S-3
Plan of Distribution............................ S-4
</TABLE>
PROSPECTUS
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Page
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<S> <C>
Available Information............................ 2
Incorporation of Certain Documents by Reference.. 2
Prospectus Summary............................... 4
CRIIMI MAE....................................... 6
Recent Developments.............................. 10
Use of Proceeds.................................. 10
Ratios of Earnings to Fixed Charges.............. 11
Description of Debt Securities................... 11
Description of Capital Stock..................... 21
Certain United States Tax Considerations......... 27
Plan of Distribution............................. 28
Legal Matters.................................... 29
Experts.......................................... 29
</TABLE>
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CRIIMI MAE INC.
625,000 COMMON SHARES
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PROSPECTUS SUPPLEMENT
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YAMAICHI INTERNATIONAL
(AMERICA), INC.
-as Placement Agent-
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