UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-23954
CORNERSTONE REALTY INCOME TRUST, INC.
(Exact name of registrant as specified in its charter)
VIRGINIA 54-1589139
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
306 EAST MAIN STREET
RICHMOND, VIRGINIA 23219
(Address of principal executive offices) (Zip Code)
(804) 643-1761
(Registrant's telephone number, including area code)
Not Applicable
(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 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. Yes X No
At May 1, 1997, there were outstanding 29,020,794 shares of common
stock, no par value, of the registrant.
<PAGE>
CORNERSTONE REALTY INCOME TRUST, INC.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page Number
PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements (Unaudited)
Balance Sheets - March 31, 1997 3
and December 31, 1996
Statements of Operations 4
Three months ended March 31, 1997
and March 31, 1996
Statements of Shareholders' Equity- 5
Three months ended March 31, 1997
Statements of Cash Flows - 6
Three months ended March 31, 1997
and March 31, 1996
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis 11
of Financial Condition and Results of
Operations
PART II. OTHER INFORMATION:
Item 1. Legal Proceedings (not applicable).
Item 2. Changes in Securities (not applicable).
Item 3. Defaults Upon Senior Securities
(not applicable).
Item 4. Submission of Matters to a Vote of
Security Holders (not applicable).
Item 5. Other Information (not applicable)
Item 6. Exhibits and Reports on Form 8-K 14
</TABLE>
2
<PAGE>
CORNERSTONE REALTY INCOME TRUST, INC.
BALANCE SHEET (UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
------------ -----------
<S> <C>
ASSETS
Investment in Rental Property
Land $52,926,166 $46,980,280
Building 279,951,281 250,705,667
Property improvements 30,901,524 26,640,085
Furniture and fixtures 7,048,084 5,389,821
------------ ------------
370,827,055 329,715,853
Less accumulated depreciation (15,523,819) (12,323,037)
------------ ------------
355,303,236 317,392,816
Cash and cash equivalents 4,005,142 3,182,651
Prepaid expenses 385,529 557,544
Other assets 3,591,208 1,737,563
------------ ------------
7,981,879 5,477,758
------------ ------------
$363,285,115 $322,870,574
============ ============
LIABILITIES and SHAREHOLDERS' EQUITY
Liabilities
Notes payable $93,395,949 $55,403,000
Accrued payable-related party 7,433,092 7,297,093
Accounts payable 712,192 2,087,673
Accrued expenses 2,558,234 1,366,853
Rents received in advance 193,312 491,928
Tenant security deposits 1,737,330 1,654,322
------------ -----------
106,030,109 68,300,869
Shareholders' equity
Common stock, no par value, authorized 50,000,000
shares; issued and outstanding 28,661,414 shares
and 28,141,509 shares, respectively 281,961,091 276,269,539
Deferred compensation (49,501) (55,000)
Distributions greater than net income (24,656,584) (21,644,834)
------------ -----------
257,255,006 254,569,705
------------ -----------
$363,285,115 $322,870,574
============ ============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
CORNERSTONE REALTY INCOME TRUST, INC.
STATEMENT OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months End Three Months Ended
March 31, March 31,
1997 1996
------------ -----------
<S> <C>
REVENUE:
Rental income $15,023,222 $6,552,688
EXPENSES:
Utilities 1,316,722 610,146
Repairs and maintenance 1,475,859 720,876
Taxes and insurance 1,396,859 580,250
Property management fee - 349,665
Property management 264,810 75,732
Advertising 440,422 144,819
General and administrative 412,835 217,912
Amortization expense and other depreciation 7,641 7,641
Depreciation of real estate 3,184,003 1,238,249
Other operating expenses 1,093,652 427,320
Other 81,648 37,649
Management contract termination 135,999 -
------------ -----------
Total expenses 9,810,450 4,410,259
------------ -----------
Income before interest and other income (expense) 5,212,772 2,142,429
Interest and other income 383,170 76,338
Interest expense (1,316,464) (46,880)
Other expense (277,738) -
------------ -----------
Net income $4,001,740 $2,171,887
============ ============
Net income per share $0.14 $0.16
============ ============
Weighted average number of shares outstanding 28,424,683 13,944,419
============ ============
Distributions per share $0.249 $0.248
============ ============
</TABLE>
See accompanying notes to financial statements.
4
CORNERSTONE REALTY INCOME TRUST, INC.
STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)
<TABLE>
<CAPTION>
Distributions
(Greater) Total
Number Deferred Less than Shareholders'
of Shares Amount Compensation Net Income Equity
-------------------------------------------------------------------------
<S> <C>
Balance at December 31, 1996 28,141,509 $276,269,539 ($55,000) ($21,644,834) $254,569,705
Net income - - - 4,001,740 4,001,740
Cash distributions paid to shareholders ($.249 per share) - - - (7,013,490) (7,013,490)
Shares issued to Apple Realty Group, Inc. 150,000 1,650,000 - - 1,650,000
Amortization of deferred compensation - - 5,499 - 5,499
Shares issued through Dividend Reinvestment Plan 369,905 4,041,552 - - 4,041,552
-------------------------------------------------------------------------
28,661,414 $281,961,091 ($49,501) ($24,656,584) $257,255,006
=========================================================================
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
CORNERSTONE REALTY INCOME TRUST, INC.
STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1997 1996
<S> <C>
Cash flow from operating activities:
Net income $4,001,740 $2,171,887
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 3,191,644 1,245,890
Management Contract Termination 135,999 -
Amortization of deferred compensation 5,499 9,167
Changes in operating assets and liabilities:
Prepaid expenses 172,015 (215,069)
Other assets (1,846,004) (131,931)
Accounts payable (1,375,481) (152,619)
Accrued expenses 1,192,868 (194,205)
Rent received in advance (298,616) (30,989)
Tenant security deposits 83,008 72,752
------------ -----------
Net cash provided by operating activities 5,262,672 2,774,883
Cash flow from investing activities:
Acquisitions of rental property (35,191,500) (27,405,000)
Capital improvements (5,919,702) (2,769,660)
------------ -----------
Net cash used in investing activities (41,111,202) (30,174,660)
Cash flow from financing activities:
Proceeds from short-term borrowings 120,427,606 17,505,000
Repayments of short-term borrowings (82,434,647) (13,600,000)
Net proceeds from issuance of shares 5,691,552 27,844,244
Increase in commissions payable to underwriters - -
Cash distributions paid to shareholders (7,013,490) (2,728,443)
------------ -----------
Net cash provided by financing activities 36,671,021 29,020,801
Increase in cash and cash equivalents 822,491 1,621,024
Cash and cash equivalents, beginning of year 3,182,651 7,073,147
------------ -----------
Cash and cash equivalents,
end of period $4,005,142 $8,694,171
============ ============
</TABLE>
See accompanying notes to financial statements
6
<PAGE>
CORNERSTONE REALTY INCOME TRUST, INC
Notes to Financial Statements (Unaudited)
March 31, 1997
(1) Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with the instructions for Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information
required by generally accepted accounting principles. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
Operating results for the three months ended March 31, 1997 are not
necessarily indicative of the results that may be expected for the year
ended December 31, 1997. These financial statements should be read in
conjunction with the Company's December 31, 1996 Form 10-K.
During the first quarter of 1997, the Financial Accounting Standards
Board issued a new statement on the calculation of earnings per share
which is effective beginning in the 4th quarter of 1997 and early
adoption is prohibited. Under the new statement, primary and fully
dilutive earnings per share are replaced with basic and diluted
earnings per share. The Company's basic earnings per share for the
three month period ended March 31, 1997, according to the new
statement, would not change from the reported amounts.
(2) Notes Payable
In January 1997, the Company increased its unsecured line of credit to
$85 million. In February 1997, the Company obtained a $100 million
unsecured line of credit from a consortium of three banks to fund
property acquisitions. The unsecured line of credit was used to repay
the outstanding balance on the $85 million unsecured line of credit
previously obtained which was approximately $75 million. The new line
of credit bears interest at the one-month LIBOR plus 160 basis points.
In addition, the Company is obligated to pay the lenders a quarterly
commitment fee equal to .25% per annum of the unused portion of the
line. The entire balance is due on March 31, 1998. The Company obtained
a $7.5 million unsecured line of credit for general corporate purposes.
This line of credit also bears interest at LIBOR plus 160 basis points
and is due on March 31, 1998.
The Company borrowed approximately $45 million in conjunction with
property acquisitions and improvements and operating purposes
(exclusive of the pay-off of the original $85 million line of credit)
against the line of credit and repaid approximately $7 million during
the quarter ended March 31, 1997. As of March 31, 1997, the interest
rate on the $100 million unsecured line of credit was 7.09% and the
outstanding balance was approximately $87.5 million. The outstanding
balances on the $7.5 million unsecured line of credit was approximately
$422,000.
7
<PAGE>
On June 25, 1996, in conjunction with the acquisition of rental
property, an unsecured note was executed by the Company in the amount
of $5,500,000. The note bears an effective interest rate of 6.65% per
annum. Annual interest payments are due on January 1, 1997, 1998, and
1999 and the principal balance is due on June 1, 1999 if not prepaid.
The note is prepayable at any time, without penalty.
(3) Common Stock
During the quarter ended March 31, 1997, the Company has paid
distributions of $7,013,490 (.249 cents per share) to shareholders. The
Company provides a plan which allows shareholders to reinvest
distributions in the purchase of additional shares of the Company.
During the quarter ended March 31, 1997, approximately $4,041,552 was
invested in additional shares of the Company.
(4) Related Parties
Prior to September 30, 1996, the Company operated as an "externally
advised" and "externally-managed" REIT. Cornerstone Advisors, Inc.,
served as the advisor, Cornerstone Management Group, Inc. served as
the Property manager, and Property acquisition services were
provided by Cornerstone Realty Group, Inc. Glade M. Knight, Chairman
and Chief Executive Officer of the Company, held all of the
stock of Cornerstone Advisors, Inc., Cornerstone Management Group,
Inc. and Cornerstone Realty Group, Inc. (collectively, the
"External Companies"). By agreement Mr. Knight held part of the
stock of the External Companies for the account and interest of each
of Mr. Olander and Ms. Jones.
As of October 1, 1996, the Company entered into a series of related
party transactions with the External Companies, the effect of which
would be to convert the Company into a "self-administered" and
"self-managed" REIT. The transactions were unanimously approved by the
independent members of the Board of Directors.
The Company during the three months ended March 31, 1996 paid
Cornerstone Management Group $ 368,931, Cornerstone Realty Group, Inc,
$392,082, and Cornerstone Advisors, Inc. $93,616. Due to the Company's
conversion from "externally advised" and "externally managed" REIT,
these expenses do not exist for the quarter ended March 31, 1997. As a
result of this conversion, officers are now employees of the Company
and their salaries are included in property management and general and
administrative expenses.
In August 1996, Mr. Knight organized Apple Residential Income Trust,
Inc. ("Apple") for the purpose of acquiring apartment communities in
Texas. On March 1, 1997, the Company, with Apple's approval, entered
into subcontract agreements with the entities that provide advisory and
property management services whereby the Company will provide advisory
and property management services to Apple in exchange for fees and
expense reimbursement. The Company is entitled to a property management
fee of 5% of the monthly gross revenues of the Apple properties and an
advisory fee equal to .1% to .25% of total contributions received by
Apple.
8
<PAGE>
During March 1997, the Company acquired all the assets of Apple Realty
Group, Inc. which provided the service of acquiring and disposing of
real estate assets held by Apple. The sole asset of the company was
the acquisition\disposition agreement with Apple. In April 1997, the
Company paid $350,000 in cash and issued 150,000 common shares valued
at $1,650,000 or $11 per share. The Company is entitled to a real
estate commission equal to 2% of the gross purchase price of Apple's
properties.
As of March 31, 1997, the Company had earned approximately $102,242
(net of expenses) for all of the subcontracted and acquisition related
services.
Apple granted the Company a continuing right to own up to 9.8% of the
common shares of Apple at the market price, net of selling commissions.
The Company committed to an initial purchase of 417,778 shares of Apple
which represented approximately 9.5% of the total common shares of
Apple outstanding as of March 1, 1997. In April 1997, the Company
purchased these common shares of Apple for approximately $3.8 million.
The Company intends with the approval of the board of directors, to
purchase additional common shares of Apple as of the end of each
calendar quarter in order to maintain its ownership of approximately
9.5% of the outstanding common shares of Apple. The Board has
tentatively resolved to evaluate the feasibility of offering to
purchase Apple by the year-end of 1997.
(5) Subsequent Events
In April, 1997, the Company declared and distributed to its
shareholders approximately $7,127,854 (25 cents per share) of which
approximately $3,953,172 was reinvested in the purchase of additional
shares of the Company.
During April 1997, the Company purchased Ashley Run Apartments, a
348-unit apartment community located in Norcross, Georgia for
$18,000,000 and The Carlyle Apartments, a 243-unit apartment community
located in Lawrence, Georgia for $11,580,000.
In April 1997, the Company issued 4,500,000 shares in a public market
offering which resulted in net proceeds to the Company after
underwriting discounts and commissions of $43,942,500. The Company
repaid approximately $44 million on its line of credit from proceeds
from the offering.
(6) Acquisitions
The following unaudited pro forma information for the three months
ended March 31, 1997 and 1996 assumes the properties were acquired by
the Company on January 1, 1996, and is presented as if (a) the Company
had qualified as a REIT, distributed all of its taxable income and,
therefore incurred no federal income tax expense during the period, and
(b) the Company had used proceeds from its best efforts offering for
properties acquired before the completion of the offering. Properties
acquired after the completion of the offering were assumed to be
acquired using the Company's line of credit. The pro forma information
does not purport to represent what the Company's results of operations
would actually have been if such transactions, in fact, had occurred on
January 1, 1996 nor does it purport to represent the results of
operations for future periods.
9
<PAGE>
Three Months Three Months
Ended Ended
3/31/97 3/31/96
Rental Income $15,106,550 $13,282,814
Net Income $ 5,034,804 $ 3,528,612
Net Income Per Share $ .14 $ .15
The pro forma information reflects adjustments for the actual rental
income and rental expenses of 19 of the 21 1996 acquisitions and
Westchase Apartments, a 1997 acquisition, for the respective periods in
1997 and 1996 prior to acquisition by the Company. Net income has been
adjusted as follows: (1) property management expenses equal to 5% of
rental income plus $2.50 per apartment per unit per month have been
adjusted based on the Company's contractual arrangements until such
arrangements were terminated; (2) advisory fee equal to .25% of
accumulated capital contributions has been adjusted based on
contractual arrangements until such time the arrangement was
terminated; (3) depreciation expense has been adjusted based on the
Company's basis in depreciable assets for the period not owned by the
Company using a 27.5 year useful life. Interest expense has been
adjusted based on market rates at the time of acquisition available to
the Company for properties purchased after completion after August 1,
1996 for the periods not owned by the Company.
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
GENERAL There was a significant change in the Company's liquidity
during the quarter ended March 31, 1997 as the Company continued to
acquire properties. Using the proceeds from its line of credit, the
Company acquired 798 apartment units in four residential rental
communities during the quarter ended March 31, 1997. These acquisitions
brought the total number of residential communities to 44 and the total
apartment units owned at March 31, 1997 to 9,831.
The following is a summary of the properties acquired during the
quarter:
<TABLE>
<CAPTION>
Property Name Date Acquired Units Purchase Price Location
<S> <C>
The Arbors at January 1997 228 $10,875,000 Columbia, SC
Windsor Apartments
Westchase Apartments January 1997 352 $11,000,000 Charleston, SC
Paces Arbor Apartments March 1997 101 $5,588,219 Raleigh, NC
Paces Forest Apartments March 1997 117 $6,473,481 Raleigh, NC
</TABLE>
NOTES PAYABLE The Company continued to acquire property and finance
improvements during the quarter using its unsecured lines of credit
with First Union Bank. The balance on the line of credit as of December
31, 1996 was $49,903,000. During the quarter ended March 31, 1997 the
Company borrowed an additional $45 million against the lines of credit
in conjunction with property acquisitions and improvements and
operating purposes (exclusive of the pay-off of the original $85
million line of credit) and repaid $7 million of the balance. As of
March 31, 1997, the outstanding debt balance included approximately
$87.9 million on the lines of credit and the $5,500,000 unsecured note
as discussed in Note 2 to the financial statements.
CAPITAL REQUIREMENTS The Company has an ongoing commitment to fund it's
renovation program for recently acquired property. In addition, the
Company is always assessing potential acquisitions and intends to
acquire additional properties during 1997. However, no material
commitments existed on May 1, 1997 for the purchase of additional
properties. The source to fund the improvements and acquisitions is
from a variety of sources including additional equity generated from
the reinvestment of shareholder dividends, cash reserves and debt
provided by its line of credit.
The Company capitalized $5,919,702 of improvements to its various
properties during the quarter. It is anticipated that approximately $10
million of additional capital improvements will be completed during the
next year on the current portfolio.
Cash and cash equivalents totaled $4,005,142 at March 31, 1997. During
11
<PAGE>
January 1997, the Company declared and distributed $7,013,490 (24.9
cents per share) to its shareholders of which $4,041,552 was reinvested
in additional shares per the terms of the Company's dividend
reinvestment plan.
In April 1997, the Company issued 4,500,000 shares in a public market
offering which represented net proceeds to the Company after
underwriting discounts and commissions of $43,942,500. Concurrent with
the offering, the Company became listed on the New York Stock Exchange.
The Company has short-term cash flow needs in order to conduct the
operation of its properties. The rental income generated from the
properties supplies sufficient cash to provide for the payment of these
operating expenses and distributions.
Capital resources are expected to grow with the future sale of its
shares and from cash flow from operations. In general, the company's
liquidity and capital resources are expected to be more than adequate
to meet it's cash requirements in 1997.
Results of Operations
INCOME AND OCCCUPANCY The Company's property operations for the three
months ended March 31, 1997 reflect the operations from the 40
properties acquired before 1997 and from the 4 properties acquired in
1997 from their respective acquisition dates. The increase in rental
income and operating expenses from first quarter 1996 to first quarter
1997 is primarily due to a full quarter of operation of the 1996
acquisitions as well as the incremental effect of the 1997
acquisitions.
Substantially all of the Company's income is from the rental operation
of apartment communities. Rental income for the first three months
increased to $15,023,222 in 1997 from $6,552,688 in 1996. The increase
is due to a combination of rental increases and property acquisitions
with the latter having the most significant impact. Rental income is
expected to increase further as a result of planned improvements,
higher occupancies and increased rental rates. The Company's other
source of income is the investment of its cash and cash reserves.
Interest income for the three months ended March 31, 1997 and 1996 was
$3,199 and $76,338, respectively.
The economic occupancy levels for the Company's properties averaged 92%
and 91% at the end of the three months ended March 31, 1997 and 1996,
respectively. Overall, average rental rates for the portfolio increased
from $504 to $549 per month.
COMPARABLE PROPERTY OPERATIONS
On a comparative basis, the nineteen properties acquired prior to 1996
provided rental and operating income of $6,600,542 and $4,009,675,
respectively, during the quarter ended March 31, 1997 and $6,084,871
and $3,393,069 in 1996 for the same period. This represents an increase
from the quarter ended March 31, 1996 to the quarter ended March 31,
1997 of 8.5% and 18.2%, respectively. The conversion to
"self-management" took place in October 1996. Therefore, the actual
results for property operations contained a full quarter of management
expense in 1996. In order to make a meaningful comparison of operating
income for these properties between the quarter ended March 31, 1997
and 1996 property management expenses need to be eliminated from 1996.
This adjustment allows for a comparison on a "self-administered" and
"self-managed" basis. As adjusted, the properties provided operating
income of $4,009,675 and $3,728,635 for the quarter ended March 31,
1997 and 1996. This represents an operating increase of 7.5 %. The
eliminated expenses included property management fees of $335,566 for
the quarter ended March 31, 1996.
12
<PAGE>
EXPENSES Total expenses for the first three months increased to
$9,810,450 in 1997 from $4,410,259 in 1996 for the same period due
largely to the acquisition of properties. The operating expense ratio
(the ratio of rental expenses, excluding general and administrative,
amortization and depreciation expense, to rental income) was 40% and
45% for the three months ended March 31, 1997 and 1996. This decrease
is due to the conversion of the Company to a "self-administered" and
"self-managed" REIT. In addition, the Company incurred interest expense
of $1,316,464 and $46,880 during the first three months of 1997 and
1996, respectively, which related to borrowings for property
acquisitions and improvements.
Depreciation expense for the first three months has increased to
$3,184,003 in 1997 from $1,238,249 in 1996. The increase is due to the
1997 acquisitions and a full three months of depreciation for 1996
acquisitions.
General and administrative expenses totaled 3% of the total rental
income for the quarter ended March 31, 1997 and 4% for the same period
in 1996. This percentage is expected to further decrease as the
Company's asset base and rental income grow. These expenses represent
the administrative expenses of the Company as distinguished from the
operations of the Company's properties
INFLATION The Company does not believe that inflation had any
significant impact on the operation of the Company during the three
months ended March 31, 1997. Future inflation, if any, would likely
cause increased operating expenses, but the Company believes that
increases in expenses would be offset by increases in rental income.
Inflation may also cause capital appreciation of the Company's
properties over time, as rental rates and replacement costs increase.
13
<PAGE>
Part II, Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K
The following table lists the reports on Form 8-K filed by the Company
during the quarter ended March 31, 1997, the items reported and the financial
statements included in such filings.
<TABLE>
<CAPTION>
Type and Date
of Reports Items Reported Financial Statements Filed
<S> <C>
Form 8-k dated 2, 7(a), (b), (d) Historical Statement of Income and Direct
October 31, 1996 Operating Expenses of Greenbrier Apartments
for the twelve months ended September 31, 1996.
Historical Statement of Income and Direct
Operating Expenses of Deerfield Apartments for
the twelve months ended October 31, 1996.
Form 8-K/A (date of 7(c), (e), (f) Historical Statement of Income and Direct
Original Report: Operating Expenses of Franklin Towers
October 31, 1996) Apartments for the twelve months ended
December 31, 1996.
Historical Statement of Income and Direct
Operating Expenses of Westchase Apartments
for the twelve months ended December 31, 1996.
</TABLE>
14
<PAGE>
SIGNATURES
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.
Cornerstone Realty Income Trust, Inc.
(Registrant)
DATE: 5-15-97 BY: /s/ Stanley J. Olander
-----------------------------------
Stanley J. Olander
Vice President and Treasurer
15
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 4,005,142
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 370,827,055
<DEPRECIATION> 15,523,819
<TOTAL-ASSETS> 363,285,115<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 281,961,091
<OTHER-SE> (24,706,085)
<TOTAL-LIABILITY-AND-EQUITY> 363,285,115<F1>
<SALES> 0
<TOTAL-REVENUES> 15,023,222<F2>
<CGS> 0
<TOTAL-COSTS> 10,088,188
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,316,464
<INCOME-PRETAX> 4,001,740
<INCOME-TAX> 0
<INCOME-CONTINUING> 4,001,740
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,001,740
<EPS-PRIMARY> 0.14
<EPS-DILUTED> 0
<FN>
<F1>Current Assets and Current Liabilities are not separated to conform
with industry standards.
<F2>Income is from rental income. There are no Sales or Cost of Goods Sold.
</FN>
</TABLE>
