<PAGE> 1
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
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
Commission file number 0-20016
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
MARYLAND 13-3602400
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
50 ROCKEFELLER PLAZA, NEW YORK, NEW YORK 10020
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code (212) 492-1100
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
NONE NONE
Securities registered pursuant to Section 12(g) of the Act:
SHARES OF COMMON STOCK
- --------------------------------------------------------------------------------
(Title of Class)
- --------------------------------------------------------------------------------
(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 delinquent filers pursuant to
Item 405 of Regulation S-K (Section 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 common stock of Registrant at March
26, 1997. Non-affiliates held 16,592,080 shares of common stock, $.001 Par Value
outstanding at March 26, 1997.
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PART I
Item 1. Business.
Registrant is engaged in the business of investing in commercial
and industrial real estate properties which are not leased to commercial and
industrial entities. Registrant was organized as a Maryland corporation on
February 15, 1991 and qualified as a real estate investment trust ("REIT") for
Federal income tax purposes for the year ended December 31, 1996. Registrant's
day to day operations are managed by Carey Property Advisors (the "Advisor"), a
Pennsylvania limited partnership, in accordance with an advisory agreement
between Registrant and the Advisor. The sole general partner of the Advisor is
Carey Fiduciary Advisors, Inc., a Pennsylvania corporation ("CFA"). Affiliates
of the Advisor and CFA are the general partners of 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 Corporate Property Associates 9, L.P., a Delaware limited
partnership ("CPA(R):9"). The Advisor is also the advisor of Corporate Property
Associates 10 Incorporated ("CPA(R):10") and Corporate Property Associates 12
Incorporated ("CPA(R):12"). Registrant has an advisory agreement with the
Advisor. According to the terms pursuant to which the Advisor performs a variety
of management services for Registrant. Reference is made to the Prospectus of
Registrant dated January 21, 1993 (the "Prospectus") filed pursuant to Rule
424(b) under the Securities Act of 1933, which updates the initial Prospectus
dated August 1, 1991 as supplemented by supplements dated November 22, 1991,
February 6, 1992, June 17, 1992, September 16, 1992 and October 26, 1992, and to
Supplement No. 1 to such Prospectus dated March 17, 1993, Supplement No. 2 dated
June 15, 1993 and Supplement No. 3 dated August 11, 1993.
A minimum of 1,500,000 and a maximum of 20,000,000 Shares were
offered to the public on a "best efforts" basis by Carey Financial Corporation
("Carey Financial") and other selected dealers at a price of $10 per Share. The
Offering concluded in August 1993, at which time an aggregate 14,147,581 Shares
had been issued. Additionally, the Advisor purchased 20,000 Shares for $200,000
prior to the commencement of the Offering. Registrant filed a post-effective
amendment on November 5, 1993 withdrawing from registration the balance of the
unsold Shares. In 1995, Registrant established a dividend reinvestment plan. As
of December 31, 1995, 12,956 shares had been issued pursuant to the dividend
reinvestment plan.
In 1995, Registrant's Board of Directors authorized an offering
of 10,000,000 Shares through a private placement offering to a limited number of
institutional investors. As of December 31, 1996, Registrant had issued
2,430,436 Shares ($26,000,000) pursuant to this private placement.
Registrant has only one industry segment which consists of the
investment in and the leasing of industrial and commercial real estate. See
Management's Discussion and Analysis in Item 7 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 Properties in Item 2. A substantial amount of the net offering
proceeds less a working capital reserve representing 1% of offering proceeds
have been invested in net leased commercial and industrial real estate.
A portion of Registrant's property acquisitions have been made in
conjunction with acquisitions, recapitalizations and other financial
restructurings. In some of these transactions, an acquiring entity may have
purchased all or substantially all of the stock or assets of a company and the
acquired company or its successor in interest thereby may have become obligated
on the substantial loans necessary to finance the acquisition. In such
instances, Registrant may act as one of several sources of financing by
purchasing real property from the seller of the subject company and net leasing
it to such company or its successor. This type of lessee typically will have
substantially greater debt and substantially lower net worth than that
attributable to Registrant prior to the transaction. Consequently, such lessees
may be particularly vulnerable to adverse conditions in the lessee's business or
industry, adverse economic conditions generally and increases in interest rates,
which increases directly or indirectly may result in higher payments under the
debt portion of the lessee's lease with Registrant. In addition, the lessee's
payment of lease rentals and debt
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service may prevent the lessee from investing in new equipment and from devoting
resources to research and development or making other expenditures which are
necessary to keep the lessee competitive in its industry. Furthermore, if the
lessee plans to replace existing management, it will be more difficult for the
Advisor to determine the likelihood of the lessee's being successful in its
business and of being able to pay rentals throughout the term of a lease with
Registrant. Registrant has not been adversely affected as a result of such
property acquisitions.
For the year ended December 31, 1996, Registrant's share of
revenues from properties occupied by Marriott International, Inc. amounted to
12% of the total net leasing revenues of Registrant. No other property owned
directly or indirectly by Registrant accounted for 10% or more of its net
leasing revenues. See Note 8 to the Consolidated Financial Statements in Item 8.
Except for certain of the Harvest Foods, Inc. ("Harvest")
properties vacated in March 1997, 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 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 indemnification provisions which require the
lessees to indemnify Registrant, its directors and officers and the Advisors for
liabilities on all matters related to the leased properties. Accordingly,
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
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 liabilities. Presently, there are
no property damage claims pending.
As Registrant's objective is to execute 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 is not
generally subject to the competitive conditions of local and regional real
estate markets. Competitive conditions of local and regional real estate markets
may have a more significant impact on Registrant as leases expire or otherwise
terminate in the future. Except for the Harvest lease which was terminated in
March 1997, no lease has an initial term expiring until 1999. Because Registrant
may be affected by the financial condition of its lessees rather than the
competitive conditions of the real estate marketplace, Registrant seeks to
diversify its investment among tenants, property types and industries in
addition to achieving geographical diversification. Registrant faces competition
for acquisition of commercial and industrial properties net leased to corporate
tenants from financial institutions and other REITs. Registrant also faces
competition from institutions that provide or arrange for other types of
commercial financing through private or public offerings of equity or debt or
traditional bank financings. Registrant believes that its expertise in credit
underwriting and transaction structuring will allow Registrant to compete
effectively. In underwriting a net lease transaction, Registrant undertakes an
analysis of the subject real estate and a credit analysis of the prospective
lessee. Registrant evaluates the prospective lessee's business and financial
outlook to determine the prospective lessee's ability to meet its ongoing
obligations. In performing this analysis, Registrant evaluates a number of
factors, including, but not limited to, the position of the prospective lessee
in its industry, prospective lessee's business franchise and the importance of
the property to the prospective lessee's business.
During 1996, Registrant executed a series of transactions as
described below:
On January 4, 1996, Registrant and CPA(R):12, through their 50%
ownership interests in Cards LLC ("Cards"), purchased land and two office
buildings in Carlsbad, California for $25,654,450 and entered into a net lease
with The Upper Deck Company ("Upper Deck"). Cards financed $15,000,000 of the
purchase price with a limited recourse mortgage loan collateralized by the Upper
Deck properties. In connection with the purchase, both Registrant and CPA(R):12
made equity contributions of $5,327,225 to Cards.
The Upper Deck lease provides for an initial term of 25 years
followed by four five-year renewal terms at an annual rent of $2,639,750. The
lease provides for rent increases every five years based on a formula indexed to
increases in the Consumer Price Index ("CPI") with such increases capped at 5%
for
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any one year. Between the twelfth and thirteenth lease year, Upper Deck has an
option to purchase the property at fair market value as determined by an
independent appraisal process provided for in the lease.
The $15,000,000 limited recourse note is collateralized by a deed
of trust and lease assignment on the Upper Deck properties and provides for
monthly payments of principal and interest of $120,077 at an annual interest
rate of 8.43% and is based on a 25-year amortization schedule. After the seventh
year, the loan may be prepaid in whole, but not in part, subject to a prepayment
charge. The loan matures on February 1, 2011, at which time a balloon payment
will be due.
Registrant and CPA(R):10, each with 50% interests as
tenants-in-common, sold supermarkets in Glendale, Arizona and in Escondido,
California, both of which were formerly leased to Safeway Stores Incorporated
("Safeway"). On January 26, 1996, the Glendale, Arizona property was sold for
$1,950,000, and on February 15, 1996, the Escondido, California property was
sold for $3,450,000. Net of the costs of sale, Registrant's share of net
proceeds from the sales was $2,605,010, including a promissory note for
$560,750. The final installment on the promissory note was received in January
1997. Annual rentals from the two properties were $252,000.
On February 6, 1996, Registrant purchased land and a newly
constructed health club facility in Bedford, Texas for $5,236,000 in cash and
entered into a net lease with Sports & Fitness Clubs of America, Inc. An
unconditional guarantee of the obligations of the lease has been provided by the
lessee's parent company, Q Clubs, Inc. The lease provides for an initial term of
20 years followed by four five-year renewal terms at the option of the lessee at
an annual rent of $577,500. The lease provides for rent increases every five
years based on a formula indexed to increases in the CPI.
On February 12, 1996, Registrant purchased land and a newly
constructed warehouse/office facility in Birmingham, Alabama for $4,700,000 and
entered into a net lease with Sports Wholesaling, Inc. An unconditional
guarantee of the obligations of the lease has been provided by the lessee's
parent company, Hibbett Sporting Goods, Inc. ("Hibbett").
The Hibbett lease provides for an initial term of 15 years
followed by three five-year renewal terms at the option of the lessee at an
annual rent of $475,784. The lease provides for rent increases every three years
based on a formula indexed to increases in the CPI. The lessee has an option
which is exercisable at any time prior to December 31, 1997 to convert the lease
to a financing lease for income tax purposes whereby the lessee would be
entitled to all depreciation deductions under the Internal Revenue Code. If this
option is exercised, annual rent would be increased by $47,578; however, such
increase in base rent resulting from exercising such option would not be subject
to the rent increase formula.
Registrant obtained $2,900,000 of limited recourse mortgage
financing collateralized by the Hibbett property and an assignment of the lease,
in August 1996. The loan will initially bear interest at 8.125% with monthly
payments of principal and interest of $24,483 based on a twenty-year
amortization schedule. On September 1, 2006 and every year thereafter until the
loan's maturity date, the interest rate will be adjusted to a rate equal to
Moody's A Corporate Bond Index Daily Rate plus .375%. The loan is scheduled to
fully amortize on September 1, 2016 but is subject to the lender's option to
call the loan during the tenth loan year. The loan may be prepaid in whole or in
part subject to a prepayment premium.
In 1995, in connection with entering to a lease transaction, with
Garden Ridge Corporation ("Garden Ridge Corp."), Registrant was granted warrants
to purchase 67,500 shares of common stock, exercisable at $10 per common share.
On April 30, 1996, Registrant exercised warrants for 22,500 shares realizing net
proceeds of $835,243. Garden Ridge stock subsequently split on a two-for-one
basis. In addition, Registrant retained warrants for 90,000 shares of Garden
Ridge Corp. common stock which were exercisable at $5 per share.
On July 11, 1996, Registrant purchased a 10,380 square foot
expansion to the Owingsville, Kentucky property leased to Custom Food Products,
Inc. ("CFP") for $1,570,681 and amended the existing lease. CFP's annual rent
will increase by $187,506.
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In 1995, Registrant and CPA(R):12, each with 50% interests as
tenants-in-common, purchased land in Illinois, Wisconsin and Washington and
subsequently constructed three warehouses and a special purpose facility at a
total cost of $21,990,000 pursuant to construction agency and lease agreements
with Del Monte Corporation ("Del Monte"). In July 1996, Registrant and CPA(R):12
each made a final payment of $2,145,000 to complete the construction project.
Del Monte annual rent is $2,572,500.
After completion of construction, Registrant and CPA(R):12
obtained $12,500,000 of limited recourse financing which had been committed to
Registrant and CPA(R):12 by the lender when the transaction with Del Monte was
structured. The loan is collateralized by mortgages on the Del Monte properties
and a lease assignment. The loan provides for a fixed interest rate of 10% per
annum on $11,000,000 of the initial loan balance with a variable interest rate
of either the lender's prime rate plus 2% or the London Inter-Bank Offering Rate
plus 4% (10% at inception) on the remaining initial loan balance of $1,500,000.
Debt service is paid in quarterly installments of $344,472 based on a 20-year
amortization schedule. The loan is scheduled to mature on November 30, 2000 at
which time a balloon payment of $10,942,000 will be due.
On July 18, 1996, Registrant obtained $8,000,000 of limited
recourse mortgage financing collateralized by Registrant's properties in
Oklahoma City, Oklahoma and Round Rock, Texas leased to Garden Ridge Corp. The
loan provides for monthly payments of principal and interest of $68,166 based on
a 20-year amortization schedule at an annual interest rate of 8.25%. The loan is
scheduled to mature in August 2006, at which time a balloon payment of
$5,532,962 will be due. A portion of the mortgage proceeds was used to pay off
an existing mortgage loan obligation of $2,553,312 on the Round Rock property
and $3,472,000 was used to pay off the outstanding balance under Registrant's
revolving credit agreement which was used to fund the construction of the
Oklahoma City property.
In connection with the financing, the Round Rock lease was
amended with annual rent reduced by approximately $19,000 to $591,000. As
required under the Oklahoma City lease, annual rents were to be determined at
the end of the construction period. The initial annual rental is $770,000 for
the Oklahoma property.
In November 1996, Registrant reached an agreement with a former
lender and settled a dispute for $275,000. The dispute began in October 1995
when Registrant refinanced two limited recourse mortgage loans with annual
interest rates of 9.25% and 10% and combined balances of $8,910,000,
collateralized by the property leased to Ominicom Group, Inc. In connection with
the prepayment of one of the loans, Registrant incurred a prepayment charge of
$401,000 in 1995.
On December 17, 1996, Registrant purchased land and two buildings
in Orlando, and Hollywood, Florida for $9,325,000 and entered into a master net
lease agreement for both properties with Detroit Diesel Realty, Inc. ("Detroit
Diesel"), with Detroit Diesel's parent company, Detroit Diesel Corporation as
lease guarantor.
The Detroit Diesel lease provides for an initial lease term of 23
years with two ten-year renewal options. Annual rentals under the lease are
$845,000, with rent increases during each of the first five years and every
three years thereafter, based on a formula indexed to increases in the Producer
Price Index.
In March 1997, the Bankruptcy court approved a motion filed by
Harvest, a lessee of Registrant and CPA(R):10, to terminate its master lease. In
February 1992, Registrant and CPA(R):10, which own the 13 supermarkets and two
office buildings, as tenants-in-common each with 50% ownership interests,
entered into the master lease with Harvest, as lessee, for these properties. In
June 1996, Harvest had filed a voluntary bankruptcy petition under Chapter 11 of
the United States Bankruptcy Code. Subsequent to Harvest's bankruptcy filing,
Harvest filed a motion to sever the master lease into 15 separate leases.
Registrant and CPA(R):10 vigorously opposed the motion which Harvest
subsequently
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withdrew. Registrant has agreements-in-principle to sell one of the properties
and lease two of the supermarkets. As final agreements have not been completed
for sale or lease of properties, there is no assurance that the proposed sale or
lease of properties will occur. Registrant's share of annual rent under the
Harvest lease was the sum of (i) $607,806 and (ii) an amount equal to debt
service on the two loans.
The two limited recourse mortgage loans, collateralized by the
Harvest properties, and with a combined balance of $5,782,000 at December 31,
1996, are in default and are subject to acceleration by the lenders as a result
of the filing of the bankruptcy petition. A portion of the debt service for the
period subsequent to December 31, 1996 was not paid in a timely manner. As the
lender's sole recourse is to the Harvest properties, Registrant and CPA(R):10
are evaluating their options including proposing a restructuring of the loan.
In connection with the purchase of its properties, Registrant
requires sellers of such properties to perform environmental reviews. Management
believes, based on the results of such reviews, that Registrant'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 degree of contamination, principally in connection
with either leakage from underground storage tanks, surface 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,
Registrant's leases generally require tenants to indemnify Registrant from all
liabilities and losses related to the leased properties with provisions of such
indemnification specifically addressing environmental matters. The leases
generally include provisions which allow for periodic environmental assessments,
paid for by the tenant, and allow Registrant to extend leases until such time as
a tenant has satisfied its environmental obligations. Certain of the leases
allow Registrant to require financial assurances from tenants such as
performance bonds or letters of credit if the costs of remediating environmental
conditions, in the estimation of Registrant, are in excess of specified amounts.
Accordingly, Management believes that the ultimate resolution of environmental
matters will not have a material adverse effect on Registrant's financial
condition, liquidity or results of operations.
Registrant leases land and a warehouse in Jacksonville, Florida
to GATX Logistics, Inc. ("GATX Logistics"). Three areas of ground water and soil
contamination were identified at the GATX property and have been subject to
varying degrees of remediation. The remediation of two of the contaminated areas
is the responsibility of a former owner of the property, Sears Roebuck & Co.,
which has a contractual obligation to GATX Logistics to complete remediation
procedures at those sites. GATX Corporation, an affiliate of GATX Logistics, has
agreed to further indemnify Registrant with respect to any costs of remediation
at the three sites. Under the GATX Logistics indemnification, if thirty days
prior to termination of the GATX Logistics lease, remediation requirements under
the indemnification agreement are not fulfilled, GATX Logistics will have been
deemed to have made a rejectable offer to purchase the GATX Logistics property
from Registrant for $5,000,000, Registrant's purchase price for the property in
December 1992.
Registrant does not have any employees. An affiliate of the
Advisor employs twelve individuals who perform accounting, secretarial and
transfer services for Registrant. Service Data Corporation 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 Advisor pursuant to which the Advisor provides certain management services
for Registrant.
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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>
WAL-MART STORES, INC. Retail Stores Center, Groves, Ownership of a 50%
- 6 locations Silsbee and Vidor, interest in land
Texas; and buildings (1)
Weatherford,
Oklahoma;
Fort Smith,
Arkansas;
SAFEWAY STORES Supermarket Broken Arrow, Ownership of a 50%
INCORPORATED Oklahoma interest in land
and building
MARRIOTT Hotels Irvine, Sacramento, Ownership of a 23.69%
INTERNATIONAL, - 13 locations and San Diego, interest in a company
INC. California; owning land
Orlando - 2, and buildings (1)
Florida;
Des Plains, Illinois;
Indianapolis, Indiana;
Louisville, Kentucky;
Linthicum, Maryland;
Las Vegas, Nevada;
Newark, New Jersey;
Albuquerque, New Mexico;
Spokane, Washington
Properties formerly
leased to HARVEST Supermarkets and Little Rock - 7, Hope, Ownership of a 50%
FOODS, INC. Office Buildings North Little Rock, interest in land
- 15 locations Conway, Hot Springs, and buildings
Texarkana and (1)(2)
Jonesboro, Arkansas;
Ruston, Louisiana;
Clarksdale,
Mississippi
CALCOMP TECH- Office/Manufacturing Austin, Ownership of a 50%
NOLOGY, INC. (formerly Facilities Texas interest in land and
SUMMAGRAPHICS buildings (1)
CORPORATION)
NEODATA Manufacturing/ Boulder, Ownership of a 80%
CORPORATION Distribution Colorado interest in land and
Facility building (1)
BELL SPORTS, INC. Warehouse/ Rantoul, Ownership of land
Manufacturing Illinois and building (1)
Facility
OSHMAN SPORTING Retail Store Plano, Ownership of land
GOODS, INC. Texas and building
</TABLE>
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<TABLE>
<CAPTION>
LEASE TYPE OF OWNERSHIP
OBLIGOR TYPE OF PROPERTY LOCATION INTEREST
------- ---------------- -------- -----------------
<S> <C> <C> <C>
MICHIGAN MUTUAL Office Complex Charleston, Ownership of land
INSURANCE COMPANY South Carolina and building (1)
GATX LOGISTICS, INC. Warehouse Jacksonville, Ownership of land
Florida and building (1)
BIG V HOLDING CORP. Supermarkets Greenport, Ownership of land
Ellenville and and buildings in Greenport
Warwick, and ownership of a 55%
New York interest in land and buildings
in Ellenville and Warwick,
New York (1)
LUCENT Warehouse Charlotte, Ownership of land
TECHNOLOGIES, INC. North Carolina and building (1)
BARNES & NOBLE, INC. Retail Stores Farmington, Ownership of land
Connecticut; and buildings (1)
Braintree,
Massachusetts
BEST BUY CO., INC. Retail Stores Denver and Ownership of a 63%
- 17 locations Fort Collins, general partnership
Colorado; Aurora, interest which owns
Bedford Park, land and buildings (1)
Bloomingdale,
Matteson and
Schaumburg, Illinois;
Omaha, Nebraska;
Albuquerque, New Mexico;
Arlington, Beaumont,
Dallas, El Paso,
Fort Worth, Houston,
Plano, Texas and
Madison, Wisconsin
LINCOLN TECHNICAL Technical Training Glendale Heights, Ownership of land
INSTITUTE OF Institute Illinois and buildings (1)
ARIZONA, INC.
MERIT MEDICAL Office/Warehouse South Jordan, Utah Ownership of land
SYSTEMS, INC. and building (1)
WABAN, INC. Retail Facility Farmingdale, Ownership of land
New York and building (1)
Q CLUBS, INC. Health Clubs Memphis, Ownership of land
Tennessee; and buildings
Bedford, Texas (1-Memphis)
PETSMART, INC. Warehouse Ennis, Texas Ownership of land
and building (1)
GARDEN RIDGE Retail Store Round Rock, Ownership of land
CORPORATION Texas and and building (1)
Oklahoma City,
Oklahoma
</TABLE>
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<TABLE>
<CAPTION>
LEASE TYPE OF OWNERSHIP
OBLIGOR TYPE OF PROPERTY LOCATION INTEREST
------- ---------------- -------- -----------------
<S> <C> <C> <C>
NICHOLSON Warehouse Maple Heights, Ownership of land
WAREHOUSE, L.P. Ohio and building (1)
SUPERIOR TELE-. Manufacturing Brownwood, Ownership of land
COMMUNICATIONS, INC. Texas and building (1)
GENSIA, INC. Office/Research and San Diego, Ownership of 50%
Development facility California general partnership
(under construction) interest which owns
land and buildings (1)
CHILDTIME Childcare Centers Newport News, Ownership of land
CHILDCARE, INC. (under construction) Centreville, Manassas, and buildings
and Century Oaks, VA;
Napeville, IL
PLEXUS CORP. Manufacturing Neenah, WI Ownership of land
and building (1)
CFP GROUP, INC. Food Processing/ Owingsville, KY Ownership of land
Warehouse Facility and building (1)
(under construction)
OMNICOM GROUP, Office Building Venice, CA Ownership of land
INC. and building (1)
DEL MONTE Warehouse and a Mendota, Illinois; Ownership of a 50%
CORPORATION Special Purpose Facility Plover, Wisconsin; interest in land and
Toppemish and buildings (1)
Yakima, Washington
(all under construction)
THE UPPER DECK Office Buildings Carlsbad, Ownership of a 50%
COMPANY California interest in a limited
liability company owning
land and buildings (1)
HIBBETT SPORTING Warehouse/Office Birmingham, Ownership of land and
GOODS, INC. Facility Alabama building (1)
DETROIT DIESEL Distribution/Warehouse Orlando and Ownership of land and
CORPORATION Facilities Hollywood, Florida buildings (1)
</TABLE>
(1) These properties are encumbered by mortgage notes payable.
(2) Ownership of buildings with ground leases of land for one property in
Little Rock, Arkansas and properties in Hot Springs, North Little Rock and
Jonesboro, Arkansas.
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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>
Wal-Mart
Stores,
Inc. $ 758,886 454,251 $3.34 1/08 YES 50% interest; N/A $ 7,759,971
remaining interest
owned by Corporate
Property Associates
10 Incorporated
("CPA(R):10")
Neodata 2,350,911 403,871 5.82 6/13 YES 80% interest; The greater of 17,144,802
Corporation remaining fair market value
interest owned or the sum of
by CPA(R):10 Landlord's share of
project costs
($17,064,946) less the
outstanding principal
balance of tenant's
purchase money
mortgage plus any .
mortgage prepayment
premium.
Bell
Sports,
Inc. 1,038,545 307,397 3.38 11/12 YES 100% N/A 8,672,270
Michigan 1,332,252 137,729 9.67 12/07 YES 100% $3,850,000 plus a 13,947,814
Mutual final rental payment
Insurance of $10,000,000.
GATX
Logistics,
Inc. 804,720 240,000 3.35 12/02 YES 100% N/A 5,985,677
Big V
Holding 636,515 59,772 10.65 12/17 YES 100% N/A 5,962,942
Corp. 847,688 133,554 11.54 10/18 YES 55% interest; N/A 8,785,184
remaining interest
owned by Corporate
Property Associates
12 Incorporated
("CPA(R):12")
Lucent
Tech-
nologies,
Inc. 1,852,829 568,670 3.26 3/02 YES 100% N/A 17,411,803
Best Buy 3,124,483 558,695 8.88 4/18 YES 63% general N/A 28,815,596
Co.,Inc. partnership interest;
remaining interest
owned by CPA(R):12
</TABLE>
-9-
<PAGE> 11
<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>
Lincoln
Technical
Institute
of Arizona,
Inc. $1,082,400 74,410 $14.55 11/10 YES 100% N/A $ 8,602,380
Merit 1,303,291 172,925 7.54 01/99 YES 100% The greater of 10,885,349
Medical fair market value
Systems, or all project costs
Inc. plus $1,033,000.
Waban, 1,023,155 114,680 8.92 01/02 YES 100% N/A 9,980,327
Inc.
Garden 591,000 152,500 3.88 12/13 YES 100% The greater of 5,243,281
Ridge (a) the fair market
Corporation value or (b) the
acquisition
cost,
including
post-purchase
improvements,
plus any
prepayment
premium.
Garden 770,004 141,284 5.45 12/15 YES 100% The greater of 6,121,132
Ridge fair market value or
Corporation $6,471,899 plus any
prepayment premium.
Nicholson 804,837 341,282 2.36 12/18 YES 100% The greater of the 6,888,135
Warehouse, fair market value or
L.P. $6,915,000, plus any
prepayment premium.
Superior 636,384 307,850 2.07 12/13 YES 100% The greater of 4,840,091
Telecommuni- the fair market
cations, value or $5,000.000
Inc. plus any prepayment
premium.
Gensia, 1,309,000 144,311 18.14 07/09 YES 50% N/A 11,464,537
Inc. general partnership
interest; remaining
interest owned
by CPA(R):12
Plexus
Corp. 1,091,500 179,000 6.10 08/14 YES 100% N/A 9,255,745
Omnicom
Group, Inc. 1,867,500 77,719 24.03 10/14 YES 100% N/A 16,057,172
</TABLE>
- 10 -
<PAGE> 12
<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>
The Upper The greater of
Deck fair market value or
Company 1,319,875 294,779 8.96 12/21 YES 50% interest; acquisition cost plus 12,915,408
remaining any prepayment premium.
interest owned
by CPA(R):12
Del Monte
Corporation 1,286,250 748,000 3.44 6/16 YES 50% interest; The greater of 10,228,161
remaining Fair Market Value or
interest owned $10,995,000 plus any
by CPA(R):12 prepayment premium
Detroit
Diesel 845,000 80,310 10.52 12/19 YES 100% N/A 9,325,000
Corporation
</TABLE>
(1) Represents rate per square foot when combined with rents applicable to
tenants-in-common.
(2) Net of increases or decreases to net investment on direct financing
leases.
- 11 -
<PAGE> 13
The material terms of Registrant's mortgage debt on properties
with its significant tenants are 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>
Wal-Mart
Stores, Inc. 9.42% $ 7,147,211 $ 781,326 01/01/99 $ 6,910,000 Prepayment premium based on
a formula based on Treasury
bond yields.
Formerly leased to
Harvest Foods, Inc. 9.75(1) 4,281,854(5) 532,000(2) 01/31/02 3,752,000 Loan may be prepaid in full
or in part without a
prepayment premium.
13.0 1,500,000(5) 195,000 12/31/02 1,420,000 Loan may be prepaid in full
or in part without a
prepayment premium.
CalComp
Technology, Inc. 10.25(3) 1,712,100 224,709(2) 08/05/99 1,573,000 Loan may be prepaid in full
or in part without a
prepayment premium.
Oshman Sporting
Goods, Inc. 8.75 1,592,290 180,277 12/01/03 1,205,000 Loan may be prepaid after
the 6th loan year in full
or in part with a
prepayment premium.
Neodata Corporation 10.00 10,441,076 1,250,668 12/12/04 7,924,000 After December 13, 1999
loan may be prepaid in
whole or in part with a
prepayment premium.
10.0 507,348 50,735 07/01/13 227,463 Loan may be prepaid in full
or in part without a
prepayment premium.
Michigan Mutual
Insurance Company 8.8 9,500,000 836,000 12/01/07 9,500,000 Loan may be prepaid after
the 10th loan year with a
prepayment premium.
GATX
Logistics, Inc. 9.0 3,918,528 431,880 11/01/05 2,840,850 Loan may be prepaid in full
or in part with a premium
of 5% in year 1, 41/2% in
year 2, 4% in year 3, 31/2%
in year 4, 3% in year 5, 2
1/2% in year 6, and 2% in
year 7 and thereafter.
Big V Holding
Corp. 8.5625(3) 3,200,000 273,000 04/26/98 3,200,000 Loan may be prepaid in
full.
9.0 4,062,698 415,404 08/01/20 Fully amortizing Loan may be prepaid in full
or in part with a premium
of 5% in years 1-5, 41/2% in
year 6, 4% in year 7, 31/2%
in year 8, 3% in year 9, 2
1/2% in year 10, and 2% in
year 11 and thereafter.
Lucent
Technologies, Inc. 7.45(3) 10,300,000 1,364,127(2) 04/01/02 7,100,000 Prepayment premium of 1%
through 3/1/97 and 1/2%
through 3/1/98. After March 1, 1998
there is no prepayment premium.
</TABLE>
- 12 -
<PAGE> 14
<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>
Best Buy Co., Inc. 9.01% $19,230,906 $ 2,202,153 05/01/08 $10,030,860 After May 1, 2003,
principal balance may be
paid in full with a
prepayment premium.
Lincoln
Technical
Institute of
Arizona, Inc. 10.50 5,675,807 714,292 01/01/99 5,415,000 Prepayment premium of 5% in
the first loan year
decreasing thereafter to 1%
in the last year.
Merit Medical Fully
Systems, Inc. 8.58(3) 6,259,608 712,129 02/01/05 amortizing
Waban, Inc. 9.125 6,707,101 712,129 08/01/03 5,808,000
Q Clubs, Inc. 9.00 2,599,628 302,308 07/20/98 2,490,000 Prepayment premium of 4% in
years through 1996 and 2%
thereafter.
Petsmart, Inc. 9.25(1) 2,310,780 271,306 11/01/98 2,232,000 Prepayment premium of 1%
through 3/1/97 and 1/2%
through 3/1/98. After
March 1, 1998 there is no
prepayment premium.
Garden Ridge 8.25 7,946,790 817,992 08/01/06 5,587,000 Loan may be prepaid in full
Corporation after 5th loan year with
a prepayment premium.
Superior Tele-
communications, 10.25(1) 2,519,750 317,581(2) 12/17/00 2,203,000
Inc.
Nicholson
Warehouse, L.P. 8.125 3,764,210 405,233 01/01/04 2,851,000 Loan may be prepaid at any
time in full or in part
with a premium of 1% in
years 1, 4, 7 and 10, .5%
in years 2, 5 and 8 and no
premium in years 3, 6 or 9
if 50% of the outstanding
balance is paid.
Gensia, Inc. 8.125 5,848,034 760,890 01/01/09 Fully Loan may be prepaid in full
amortizing after 2/1/04 with a
prepayment premium.
Plexus Corp. 8.625(3) 4,739,600 527,864(2) 08/10/01 4,081,225
Omnicom
Group, Inc. 7.65 9,185,583 945,600 10/10/14(4) Fully amortizing Loan may be
prepaid in whole or in part with
a prepayment premium. Loan
may be prepaid in full on
September 10, 2005 without
a prepayment premium.
</TABLE>
- 13 -
<PAGE> 15
<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>
The Upper Deck
Company 8.43 7,424,121 720,464 02/01/11 4,883,000 Loan may be prepaid in
whole but not in part after
the 7th year with a
prepayment premium.
Del Monte
Corporation 10.00 5,933,629 688,944 11/30/00 5,470,852 Loan may be prepaid in full
or in part with a
prepayment premium if paid
before 7/1/99 and with no
prepayment premium
thereafter.
</TABLE>
(1) Variable rate based on lender's prime rate.
(2) Estimate based on current interest rates.
(3) Variable rate based on London Interbank Offered Rate.
(4) Holders of the notes may require Registrant to pay the notes in whole,
but not in part, on September 10, 2005.
(5) Loan is in default and subject to acceleration.
- 14 -
<PAGE> 16
Item 3. Legal Proceedings.
As of the date here of, Registrant is not a party of to any material
pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
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.
Information with respect to Registrant's common equity is hereby
incorporated by reference to page 26 of Registrant's Annual Report contained in
Appendix A.
Item 6. Selected Financial Data.
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.
Management's Discussion and Analysis are hereby incorporated by
reference to pages 2 to 5 of Registrant's Annual Report contained in Appendix A.
Item 8. Consolidated Financial Statements and Supplementary Data.
The following consolidated financial statements and supplementary data
are hereby incorporated by reference to pages 6 to 22 of Registrant's Annual
Report contained in Appendix A:
(i) Report of Independent Accountants.
(ii) Consolidated Balance Sheets as of December 31, 1994, 1995 and 1996.
(iii) Consolidated Statements of Income for the years ended December 31, 1994,
1995 and 1996.
(iv) Consolidated Statements of Shareholders' Equity for the years ended
December 31, 1994, 1995 and 1996.
(v) Consolidated Statements of Cash Flows for the years ended December 31,
1994, 1995 and 1996.
(vi) Notes to Consolidated Financial Statements.
Item 9. Disagreements on Accounting and Financial Disclosure.
NONE
- 15 -
<PAGE> 17
PART III
Item 10. Directors and Executive Officers of the Registrant.
The directors and executive officers of Registrant and members of the
Investment Committee of the Board of Directors of the Advisor are as follows:
<TABLE>
<CAPTION>
Has Served as a
Director and/or
Name Age Positions Held Officer Since
---- --- -------------- ---------------
<S> <C> <C> <C>
William P. Carey 66 Chairman of the Board 2/91
Director
Francis J. Carey 71 President 2/91
Director
Charles C. Townsend, Jr. (1) 69 Vice Chairman of the Board 2/91
Director
Ralph G. Coburn (1) 87 Director 2/91
H. Cabot Lodge III 41 Director 2/91
Donald E. Nickelson (1) 64 Director 2/91
William Ruder (1) 75 Director 2/91
George E. Stoddard 80 Chairman of Investment Committee and 2/91
Senior Executive Vice President
Warren G. Wintrub (1) 62 Director 10/92
Barclay G. Jones III 36 Executive Vice President 2/91
Claude Fernandez 44 Executive Vice President 2/91
Chief Administrative Officer
H. Augustus Carey 39 Senior Vice President 2/91
Anthony S. Mohl 34 Senior Vice President 2/91
John J. Park 32 Senior Vice President 2/91
Treasurer
Michael D. Roberts 45 First Vice President 2/91
Controller
</TABLE>
(1) Independent Director of Registrant.
William Polk Carey and Francis J. Carey are brothers and Raymond S.
Clark is their brother-in-law. H. Augustus Carey is the nephew of William Polk
Carey and Raymond S. Clark and the son of Francis J. Carey.
A description of the business experience of each director of Registrant
is set forth below:
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
- 16 -
<PAGE> 18
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 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.
Charles C. Townsend, Jr., Independent Director of CPA(R):10 and
CIP(TM), was formerly Managing Director in charge of the Corporate Finance
Department at Morgan Stanley & Co. and Chairman of Morgan Stanley Realty
Corporation. Mr. Townsend holds a B.S.E.E. from Princeton University and an MBA
from Harvard University.
Ralph G. Coburn, Rear Admiral USNR (Ret.), is former President and
Chief Executive Officer of Hubbard Real Estate Investments (now HRE Properties),
a $100,000,000 NYSE equity REIT, sponsored by Merrill Lynch. Admiral Coburn had
been engaged in a variety of real estate activities for over 30 years. A
graduate of Harvard College, Harvard Law School and the Naval War College,
Admiral Coburn previously served as Chief Executive Officer of the National
Association of Real Estate Investment Trusts (NAREIT), representing the
multi-billion dollar REIT industry.
H. Cabot Lodge III, Director, is the Chairman of Superconducting Core
Technologies, a position he has held since March, 1995. Mr. Lodge joined W.P.
Carey as Assistant to the Chairman in August 1983 and served as Executive Vice
President and Managing Director through September 1995. Mr. Lodge received his
B.A. degree from Harvard University in 1978 and his M.B.A. from Harvard Business
School in 1983. Prior to attending business school he served as a research
consultant and regional director of Harbridge House Inc. from June 1978 to July
1981. Mr. Lodge is also a Director of CPA(R):12,
Donald E. Nickelson, Independent Director of CIP(TM), is currently
Chairman of the Board and Director of Greenfield Industries, Inc. and Vice
Chairman and Director of Harbour Group, a leveraged buy-out firm. He is also a
Director of Sugen Corporation, D.T. Industries, Inc. and Allied Healthcare
Products, Inc. and a Trustee of Mainstay Mutual Fund Group. He is currently a
member of the Advisory Panel of Sedgwick James of New York, Inc. From 1986 to
1987 Mr. Nickelson was President of PaineWebber, Inc., from 1988 to 1990 he was
President of the PaineWebber Group and Director from 1980 to 1993. Prior to
1986, Mr. Nickelson served in various capacities with affiliates of PaineWebber
Inc. and its predecessor firm. From 1988 to 1989, Mr. Nickelson was a Director
of a diverse group of corporations in the manufacturing, service and retail
sectors including Wyndon Foods, Hoover Group, Inc., Peebles, Inc. and Motor
Wheel Corporation. He is a former Chairman of National Car Rentals, Inc. Mr.
Nickelson is also a former Director of the Chicago Board Options Exchange and is
a former Chairman of the Pacific Stock Exchange.
- 17 -
<PAGE> 19
William Ruder, Independent Director of CPA(R):10 and CPA(R):12, is
Chairman of the Board of William Ruder Incorporated, a consulting firm founded
in 1981. From 1948 to 1981, Mr. Ruder was in chairman of Ruder & Finn, an
international public relations company which he co-founded. He is a former
Assistant Secretary of Commerce of the United States and is on the Board of
Directors of the United Nations Association of the United States of America,
Junior Achievement and the Council on Economic Priorities. A member of the Board
of Overseers of the Wharton School at the University of Pennsylvania for a
number years, he has also served as a consultant to the Communications Advisory
Board to the White House Press Secretary, the Committee for Economic Development
and the Office of Overseas Schools for the U.S. State Department. Mr. Ruder is a
lecturer at Harvard Graduate School of Business and is associated with several
other business, civic and cultural organizations.
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.
Warren G. Wintrub, Independent Director of CPA(R):10 and CPA(R):12,
became a partner at Coopers & Lybrand in 1963, specializing in taxation. He
served on Coopers & Lybrand's Executive Committee from 1976 to 1988 and as
Chairman of the Retirement Committee from 1979 until his retirement from the
firm in 1992. Mr. Wintrub serves as a director of Chromcraft Revington, Inc. and
Getty Petroleum Corp. He received a B.S. degree from Ohio State University and
an LL.B. degree from Harvard Law School.
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.
- 18 -
<PAGE> 20
Item 11. Executive Compensation.
This information will be contained in Registrant's definitive Proxy
Statement with respect to the Company's 1997 Annual Meeting of Shareholders, to
be filed with the Securities and Exchange Commission within 120 days following
the end of the Company's fiscal year, and is hereby incorporated by reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
This information will be contained in Registrant's definitive Proxy
Statement with respect to the Company's 1997 Annual Meeting of Shareholders, to
be filed with the Securities and Exchange Commission within 120 days following
the end of the Company's fiscal year, and is hereby incorporated by reference.
Item 13. Certain Relationships and Related Transactions.
This information will be contained in Registrant's definitive Proxy
Statement with respect to the Company's 1997 Annual Meeting of Shareholders, to
be filed with the Securities and Exchange Commission within 120 days following
the end of the Company's fiscal year, and is hereby incorporated by reference.
- 19 -
<PAGE> 21
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
(a) 1. Consolidated Financial Statements:
The following consolidated financial statements are filed as a
part of this Report:
Report of Independent Accountants.
Consolidated Balance Sheets, December 31, 1994, 1995 and 1996.
Consolidated Statements of Income for the years ended December 31, 1994, 1995
and 1996.
Consolidated Statements of Shareholders' Equity for the years ended December
31, 1994, 1995 and 1996.
Consolidated Statements of Cash Flows for the years ended December 31, 1994,
1995 and 1996.
Notes to Consolidated Financial Statements.
The consolidated financial statements are hereby incorporated by reference to
pages 6 to 22 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:
Report of Independent Accountants.
Schedule III -Real Estate and Accumulated Depreciation as of December 31,
1996.
Notes to Schedule III.
Schedule III and notes thereto are contained herein on pages 42 to 46 of this
Form 10-K.
Financial Statement Schedules other than those listed above are
omitted because the required information is given in the Consolidated Financial
Statements, including the Notes thereto, or because the conditions requiring
their filing do not exist.
- 20 -
<PAGE> 22
(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 Articles of Amendment and Restatement. Exhibit 3(A) to Regis-
tration Statement (Form
S-11) No. 33-39409
3.2 Amended Bylaws of Registrant. Exhibit 3(B) to Regis-
tration Statement (Form
S-11) No. 33-39409
10.1 Amended Advisory Agreement . Exhibit 10(A)(2) to
Registration Statement
(Form S-11) No. 33-39409
10.2 Lease between Marcourt Investments Filed as Exhibit 10(D)(1)
Incorporated ("Marcourt") and CTYD to Registrant's Post
III Corporation ("CTYD"). Effective Amendment No. 1
to Form S-11
10.3 Series A-2 9.94% Secured Note from Filed as Exhibit 10(D)(2)
Marcourt to the registered owner of to Registrant's Post
note (Various Series A-1 9.94% Notes Effective Amendment No. 1
in an aggregate amount of 38,750,000 to Form S-11
substantially in the form of the Series
A-1 9.94% Note attached , were issued by
Marcourt in connection with the Financing).
10.4 Series A-2 11.18% Secured Note from Filed as Exhibit 10(D)(3)
Marcourt to the registered owner of to Registrant's Post
note (Various notes in an aggregate Effective Amendment No. 1
amount of 70,250,000 substantially to Form S-11
in the form of the Series A-2 11.18%
Note attached , were issued by Marcourt
in connection with the Financing.
10.5 Indenture between Marcourt, as Filed as Exhibit 10(D)(4)
borrower, to First Fidelity Bank, to Registrant's Post
National Association, New Jersey, as Effective Amendment No. 1
trustee ("Trustee"). to Form S-11
</TABLE>
- 21 -
<PAGE> 23
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.6 Real Estate Deed of Trust from Filed as Exhibit 10(D)(5)
Marcourt to Albuquerque Title Company, to Registrant's Post
as trustee for benefit of the Trustee Effective Amendment No. 1
filed in New Mexico, securing Series to Form S-11
A-1 9.94% Notes and Series A-2 ll.18%
notes allocated to Albuquerque, New
Mexico Marriott property (Deeds of Trust
or Mortgages substantially similar to
this Deed of Trust were filed in all other
jurisdictions in which Marriott Properties
are located. Such other deeds of trust or
mortgages secure the principal amount of
Series A-1 9.94% Notes and Series A-2 11.18%
Notes allocated to the Marriott Properties
located in such other jurisdictions)
10.7 Second Real Estate Deed of Trust from Filed as Exhibit 10(D)(6)
Marcourt to Albuquerque Title Company as to Registrant's Post
trustee for the benefit of the Trustee, filed Effective Amendment No. 1
in New Mexico, securing all Series A-1 9.94% to Form S-11
Notes and Series A-2 11.18% Notes other than
those notes allocated to the Albuquerque, New
Mexico Marriott property (Deeds of trust or
mortgages substantially similar to this
Second Real Estate Deed of Trust were filed
in all other jurisdictions in which the
remaining Marriott Properties are located.
Such other deeds of trust or mortgages
secure the principal amount of Series A-1 9.94%
Notes and Series A-2 11.18% Notes allocated
to all Marriott Properties not located in the
jurisdiction in which such other deeds of trust
were filed for recording).
10.8 Guaranty from the Registrant, Corporate Filed as Exhibit 10(D)(7)
Property Associates 10 Incorporated, Trammell to Registrant's Post
Crow Equity Partners II, Ltd. ("TCEP II") and Effective Amendment No. 1
PA/First Plaza Limited Partnership ("First to Form S-11
Plaza") as guarantors, to the Trustee.
10.9 Shareholders Agreement between the Filed as Exhibit 10(D)(8)
Registrant, Corporate Property Associates to Registrant's Post
10 Incorporated ("CPA(R):10"), TCEP II and Effective Amendment No. 1
First Plaza. to Form S-11
10.10 Assignment and Assumptions of Lease Agreement Filed as Exhibit 10(E)(1)(a)
for property located in Glendale, Arizona to Registrant's Post
Effective Amendment No. 1
to Form S-11
</TABLE>
- 22 -
<PAGE> 24
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.11 Assignment and Assumptions of Lease Agreement Filed as Exhibit 10(E)(1)(b)
for property located in Ft. Smith, Arkansas to Registrant's Post
Effective Amendment No. 1
to Form S-11
10.12 Assignment and Assumptions of Lease Agreement Filed as Exhibit 10(E)(1)(c)
for property located in Escondido, California. to Registrant's Post
Effective Amendment No. 1
to Form S-11
10.13 Assignment and Assumptions of Lease Agreement Filed as Exhibit 10(E)(1)(d)
for property located in Broken Arrow, Oklahoma. to Registrant's Post
Effective Amendment No. 1
to Form S-11
10.14 Assignment and Assumptions of Lease Agreement Filed as Exhibit 10(E)(1)(e)
for property located in Weatherford, Oklahoma. to Registrant's Post
Effective Amendment No. 1
to Form S-11
10.15 Assignment and Assumptions of Lease Agreement Filed as Exhibit 10(E)(1)(f)
for property located in Center, Texas. to Registrant's Post
Effective Amendment No. 1
to Form S-11
10.16 Assignment and Assumptions of Lease Agreement Filed as Exhibit 10(E)(1)(g)
for property located in Groves, Texas. to Registrant's Post
Effective Amendment No. 1
to Form S-11
10.17 Assignment and Assumptions of Lease Agreement Filed as Exhibit 10(E)(1)(h)
for property located in Silsbee, Texas. to Registrant's Post
Effective Amendment No. 1
to Form S-11
10.18 Assignment and Assumptions of Lease Agreement Filed as Exhibit 10(E)(1)(i)
for property located in Vidor, Texas. to Registrant's Post
Effective Amendment No. 1
to Form S-11
10.19 Lease Amendments for the Ft. Smith, Arkansas Filed as Exhibit 10(E)(2)
and Weatherford, Oklahoma properties. to Registrant's Post
Effective Amendment No. 1
to Form S-11
10.20 Promissory Note from subsidiaries of the Filed as Exhibit 10(E)(3)
Registrant and CPA(R):10 to The New England to Registrant's Post
Mutual Life Insurance Company ("New England"). Effective Amendment No. 1
to Form S-11
</TABLE>
- 23 -
<PAGE> 25
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.21 Mortgage/Deed of Trust from subsidiaries Filed as Exhibit 10(E)(4)(a)
of the Registrant and CPA(R):10 to to Registrant's Post
New England encumbering the property Effective Amendment No. 1
in Ft. Smith, Arkansas to Form S-11
10.22 Mortgage/Deed of Trust from subsidiaries Filed as Exhibit 10(E)(4)(b)
of the Registrant and CPA(R):10 to to Registrant's Post
New England encumbering the property Effective Amendment No. 1
in Weatherford, Oklahoma to Form S-11
10.23 Mortgage/Deed of Trust from Filed as Exhibit 10(E)(4)(c)
subsidiaries of the Registrant and to Registrant's Post
CPA(R):10 to New England encumbering Effective Amendment No. 1
the properties in Center, Groves, to Form S-11
Silsbee, and Vidor, Texas.
10.24 Lease Agreement between QRS 10-9 (AR), Filed as Exhibit 10(F)(1)
Inc. ("QRS 10-9") and QRS 11-2(AR), Inc. to Registrant's Post
("QRS 11-2") as landlord and Acadia Effective Amendment No. 3
Stores 63, Inc. ("Tenant") as tenant. to Form S-11
10.25 Co-Tenancy Agreement between QRS 10-9 Filed as Exhibit 10(F)(2)
and QRS 11-2. to Registrant's Post
Effective Amendment No. 3
to Form S-11
10.26 Term Loan Agreement among The First Filed as Exhibit 10(F)(3)
National Bank of Boston ("First to Registrant's Post
Lender"), QRS 10-9 and QRS 11-2. Effective Amendment No. 3
to Form S-11
10.27 Note of QRS 10-9 and QRS 11-2 to First Filed as Exhibit 10(F)(4)
Lender. to Registrant's Post
Effective Amendment No. 3
to Form S-11
10.28 Fee and Leasehold Mortgages from QRS Filed as Exhibit 10(F)(5)
10-9 and QRS 11-2 to First Lender to Registrant's Post
for the following jurisdictions: Effective Amendment No. 3
to Form S-11
a. Arkansas (one representative fee
mortgage and leasehold mortgage
included)
b. Louisiana
c. Mississippi
10.29 Term Loan Agreement among Acadia Filed as Exhibit 10(F)(6)
Partners , L.P. ("Second Lender"), to Registrant's Post
QRS 10-9 and QRS 11-2. Effective Amendment No. 3
to Form S-11
</TABLE>
- 24 -
<PAGE> 26
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.30 Note of QRS 10-9 and QRS 11-2 to Filed as Exhibit 10(F)(7)
Second Lender. to Registrant's Post
Effective Amendment No. 3
to Form S-11
10.31 Fee Mortgages and Leasehold Mortgages Filed as Exhibit 10(F)(8)
from QRS 10-9 and QRS 11 -2 to Second to Registrant's Post
Lender for the following jurisdictions: Effective Amendment No. 3
to Form S-11
a. Arkansas (one representative fee
mortgage and leasehold mortgage
included)
b. Louisiana
c. Mississippi
10.32 Guaranty from Harvest Foods, Inc., a Filed as Exhibit 10(F)(9)
Delaware corporation, to QRS 10-9 and to Registrant's Post
QRS 11-2. Effective Amendment No. 3
to Form S-11
10.33 Guaranty from Harvest Foods, Inc., an Filed as Exhibit 10(F)(10)
Arkansas corporation, to QRS 10-9 and to Registrant's Post
QRS 11-2. Effective Amendment No. 3
to Form S-11
10.34 Lease between QRS 10-12 (TX), Inc. Filed as Exhibit 10(G)(1)
("QRS 10-12"), QRS 11-5 (TX), Inc. to Registrant's Post
("QRS 11-5") and Summagraphics. Effective Amendment No. 3
to Form S-11
10.35 Co-Tenancy Agreement between QRS 10-12, Filed as Exhibit 10(G)(2)
and QRS 11-5. to Registrant's Post
Effective Amendment No. 3
to Form S-11
10.36 $3,700,000 Promissory Note from QRS Filed as Exhibit 10(H)(1)
10-12 (TX), Inc, ("QRS 10-12"), to Registrant's Post
and QRS 11-5 (TX) Inc. ("QRS 11-5"), Effective Amendment No. 4
to Creditanstalt-Bankverein ("Lender"). to Form S-11
10.37 Deed of Trust and Security Agreement Filed as Exhibit 10(H)(2)
from QRS 10- 12 and QRS 11-5 to John O. to Registrant's Post
Langdon, Trustee, for benefit of Lender. Effective Amendment No. 4
to Form S-11
10.38 Guaranty Agreement between Registrant Filed as Exhibit 10(H)(3)
and Corporate Property Associates 10 to Registrant's Post
Incorporated as guarantor and Lender. Effective Amendment No. 4
to Form S-11
10.39 Real Estate Purchase and Sale Contract Filed as Exhibit 10(I)(1)
between Belmet (IL) QRS 11-9, Inc. to Registrant's Post
("QRS 11-9") as purchaser and Mission Effective Amendment No. 4
Leasing and Bank of Rantoul (collectively,
to Form S-11 "Seller").
</TABLE>
- 25 -
<PAGE> 27
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.40 Assignment and Assumption of Lease Filed as Exhibit 10(I)(2)
between QRS 11-9 and Seller. to Registrant's Post
Effective Amendment No. 4
to Form S-11
10.41 Assignment of Permits and Warranties Filed as Exhibit 10(I)(3)
from Seller to QRS 11-9. to Registrant's Post
Effective Amendment No. 4
to Form S-11
10.42 Industrial Building Lease ("Lease") Filed as Exhibit 10(I)(4)
dated November 16, 1989 between Seller to Registrant's Post
and Bell, together with First Amendment Effective Amendment No. 4
to Lease, dated September 19, 1991. to Form S-11
10.43 Second Amendment to Lease. Filed as Exhibit 10(I)(5)
to Registrant's Post
Effective Amendment No. 4
to Form S-11
10.44 Land Purchase Agreement between MMI Filed as Exhibit 10(J)(1)
(SC) QRS 11-11 Inc. ("QRS 11-11") and to Registrant's Post
Amerisure, Inc. regarding three acre Effective Amendment No. 5
parcel. to Form S-11
10.45 Mortgage from Amerisure, Inc. to QRS Filed as Exhibit 10(J)(2)
11-11 regarding three acre parcel. to Registrant's Post
Effective Amendment No. 5
to Form S-11
10.46 Lease Agreement between QRS 11-11, Filed as Exhibit 10(J)(3)
as Landlord. and MMI, as tenant. to Registrant's Post
Effective Amendment No. 5
to Form S-11
10.47 Assignment, Reassignment and Assumption Filed as Exhibit 10(J)(4)
of Lease among Amerisure, Inc., QRS to Registrant's Post
11-11 and UIC. Effective Amendment No. 5
to Form S-11
10.48 Loan Agreement between The Penn Mutual Filed as Exhibit 10(J)(5)
Life Insurance Company ("Penn Mutual") to Registrant's Post
and QRS 11-11. Effective Amendment No. 5
to Form S-11
10.49 $9,500,000 Promissory Note from QRS Filed as Exhibit 10(J)(6)
11-11 to Penn Mutual. to Registrant's Post
Effective Amendment No. 5
to Form S-11
</TABLE>
- 26 -
<PAGE> 28
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.50 Mortgage and Security Agreement from Filed as Exhibit 10(J)(7)
QRS 11-11 to Penn Mutual. to Registrant's Post
Effective Amendment No. 5
to Form S-11
10.51 Lease Agreement between BVS (NY) QRS Filed as Exhibit 10(K)(1)
11-10, Inc. ("QRS 11-10") as landlord, to Registrant's Post
and BVS, as tenant. Effective Amendment No. 5
to Form S-11
10.52 Reciprocal Easement and Operation Filed as Exhibit 10(K)(2)
Agreement between QRS 11-10 and Fairview to Registrant's Post
Plaza Corporation ("FPC"). Effective Amendment No. 5
to Form S-11
10.53 Lease Agreement between QRS 11-12, (FL), Filed as Exhibit 10(L)(2)
Inc, ("QRS 11-12"), as Landlord, and to Registrant's Post
Unit, as tenant. Effective Amendment No. 5
to Form S-11
10.54 Guaranty and Suretyship Agreement Filed as Exhibit 10(L)(4)
from Unit to QRS 11-12. to Registrant's Post
Effective Amendment No. 5
to Form S-11
10.55 Indemnity Agreement between GATX Filed as Exhibit 10(L)(5)
Corporation and QRS 11-12. to Registrant's Post
Effective Amendment No. 5
to Form S-11
10.56 Assignment and Assumption of Lease by Filed as Exhibit 10(M)(1)
Charlotte Telephone Associates Limited to Registrant's Post
Partnership ("CTA") to QRS 11-14 (NC), Effective Amendment No. 5
Inc. ("QRS 11-14"). to Form S-11
10.57 Purchase and Sale Agreement between Filed as Exhibit 10.1 to
Neoserv (CO) QRS 10-13, Inc. ("QRS:10") Registrant's Form 8-K dated
d Neoserv (CO) QRS 11-8, Inc. ("QRS:11") October 29, 1992
as purchasers and Homart Development Co.
("Homart").
10.58 Promissory Note of QRS:10 and QRS:11 to Filed as Exhibit 10.2 to
Homart. Registrant's Form 8-K dated
October 29, 1992
10.59 Deed of Trust from QRS:10 and QRS:11 for Filed as Exhibit 10.3 to
benefit of Homart. Registrant's Form 8-K dated
October 29, 1992
10.60 Option Agreement between QRS:10 and Filed as Exhibit 10.4 to
QRS:11 as option grantee and Homart as Registrant's Form 8-K dated
option grantor. October 29, 1992
</TABLE>
- 27 -
<PAGE> 29
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.61 Co-Tenancy Agreement between QRS:10 and Filed as Exhibit 10.5 to
QRS:11. Registrant's Form 8-K dated
October 29, 1992
10.62 Lease from QRS:10 and QRS:11 as lessor Filed as Exhibit 10.6 to
and Neodata Services, Inc. ("Neodata") Registrant's Form 8-K dated
as lessee. October 29, 1992
10.63 Guaranty Agreement from Neodata Filed as Exhibit 10.7 to
Corporation as guarantor to QRS:10 and Registrant's Form 8-K dated
QRS:11. October 29, 1992
10.64 Promissory Note of QRS:10 and QRS:11 to Filed as Exhibit 10.8 to
Neodata. Registrant's Form 8-K dated
October 29, 1992
10.65 Deed of Trust from QRS:10 and QRS:11 for Filed as Exhibit 10.9 to
benefit of Neodata. Registrant's Form 8-K dated
October 29, 1992
10.66 Construction Contract between QRS:10 and Filed as Exhibit 10.10 to
QRS:11 as owners and Austin Commercial, Registrant's Form 8-K dated
Inc. ("Austin") as contractor. October 29, 1992
10.67 Guaranty from Austin to QRS:10 and Filed as Exhibit 10.11 to
QRS:11. Registrant's Form 8-K dated
October 29, 1992
10.68 Construction Agency Agreement between Filed as Exhibit 10.12 to
QRS:10 and QRS:11 as owners and Neodata Registrant's Form 8-K dated
as agent. October 29, 1992
10.69 Land Purchase Agreement between MMI (SC) Filed as Exhibit 10.1 to
QRS 11-11, Inc. ("QRS 11-11") and Registrant's Form 8-K dated
Amerisure, Inc. ("Amerisure") regarding January 5, 1993
three acre parcel.
10.70 Mortgage from Amerisure to QRS 11-11 Filed as Exhibit 10.2 to
regarding three acre parcel. Registrant's Form 8-K dated
January 5, 1993
10.71 Lease Agreement between QRS 11-11, as Filed as Exhibit 10.3 to
Landlord, and MMI as tenant. Registrant's Form 8-K dated
January 5, 1993
10.72 Assignment, Reassignment and Assumption Filed as Exhibit 10.4 to
of Lease among Amerisure, Inc., QRS 11-11 Registrant's Form 8-K dated
and UIC. January 5, 1993
10.73 Loan Agreement between The Penn Mutual Filed as Exhibit 10.5 to
Life Insurance Company ("Penn Mutual") Registrant's Form 8-K dated
and QRS 11-11. January 5, 1993
</TABLE>
- 28 -
<PAGE> 30
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.74 $9,500,000 Promissory Note from QRS Filed as Exhibit 10.6 to
11-11 to Penn Mutual. Registrant's Form 8-K dated
January 5, 1993
10.75 Mortgage and Security Agreement from Filed as Exhibit 10.7 to
QRS 11-11 to Penn Mutual. Registrant's Form 8-K dated
January 5, 1993
10.76 Lease Agreement between BVS (NY) QRS Filed as Exhibit 10.8 to
11-10, Inc. ("QRS 11-10"), as landlord, Registrant's Form 8-K dated
and BVS, as tenant. January 5, 1993
10.77 Reciprocal Easement and Operation Filed as Exhibit 10.9 to
Agreement between QRS 11-10 and Fairview Registrant's Form 8-K dated
Plaza, Inc. January 5, 1993
10.78 Lease Agreement between QRS 11-12 Filed as Exhibit 10.10 to
(FL), Inc. ("QRS 11-12"), as landlord, Registrant's Form 8-K dated
and Unit, as tenant. January 5, 1993
10.79 Guaranty and Suretyship Agreement from Filed as Exhibit 10.11 to
Unit to QRS 11-12. Registrant's Form 8-K dated
January 5, 1993
10.80 Indemnity Agreement between GATX Filed as Exhibit 10.12 to
Corporation and QRS 11-12. Registrant's Form 8-K dated
January 5, 1993
10.81 Assignment and Assumption of Lease Filed as Exhibit 10.1 to
and Lease Guaranty from Oakbrook Registrant's Form 8-K dated
Development Corp. ("Oakbrook") to April 5, 1993
Books CT QRS 11-15, Inc. ("QRS 11-15").
10.82 Co-Tenancy Agreement between DDI (NE) Filed as Exhibit 10.2 to
QRS 10-15, Inc. ("QRS 10-15") and DDI Registrant's Form 8-K dated
(NE) QRS 11-13, Inc. ("QRS 11-13"). April 5, 1993
10.83 Cross Indemnity Agreement between Filed as Exhibit 10.3 to
QRS 10-15 and QRS 11-13. Registrant's Form 8-K dated
April 5, 1993
10.84 Lease Agreement between QRS 10-15 Filed as Exhibit 10.4 to
and QRS 11-13, as landlord, and Registrant's Form 8-K dated
Data Documents, Inc. ("DDI"), April 5, 1993
as tenant.
10.85 Loan Agreement between QRS 10-15 Filed as Exhibit 10.5 to
and QRS 11-13, as borrower, and Registrant's Form 8-K dated
U S West Financial Services, Inc. April 5, 1993
("US West"), as lender.
</TABLE>
- 29 -
<PAGE> 31
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.86 $8,000,000 Promissory Note from Filed as Exhibit 10.6 to
QRS 10-15 and QRS 11-13 to Registrant's Form 8-K dated
US West. April 5, 1993
10.87 Deed of Trust from QRS 10-15 and Filed as Exhibit 10.7 to
QRS 11-13 to US West (for filing Registrant's Form 8-K dated
in the states of Colorado, Nebraska April 5, 1993
and Texas).
10.88 Mortgage from QRS 10-15 and QRS 11-13 Filed as Exhibit 10.8 to
to US West (for filing in the state of Registrant's Form 8-K dated
Kansas). April 5, 1993
10.89 Assignment of Parent Guaranty from Filed as Exhibit 10.9 to
QRS 10-15 and QRS 11-13. Registrant's Form 8-K dated
April 5, 1993
10.90 Deed of Trust Note from QRS 11-14 (NC), Filed as Exhibit 10.1 to
Inc. ("QRS 11-14") to Kredietbank N.V. Registrant's Form 8-K dated
("Kredietbank"). April 13, 1993
10.91 Deed of Trust from QRS 11-14 for the Filed as Exhibit 10.2 to
benefit of Kredietbank. Registrant's Form 8-K dated
April 13, 1993
10.92 Assignment of Leases and Rents from Filed as Exhibit 10.3 to
QRS 11-14 to Kredietbank. Registrant's Form 8-K dated
April 13, 1993
10.93 Escrow Agreement between Filed as Exhibit 10.4 to
QRS 11-14 and Kredietbank. Registrant's Form 8-K dated
April 13, 1993
10.94 Lease Agreement between BB Property Filed as Exhibit 10.1 to
Company, as lessor, and Best Buy, Registrant's Form 8-K dated
as lessee. May 6, 1993
10.95 Note Purchase Agreement among BB Filed as Exhibit 10.2 to
Property Company, Best Buy, and Registrant's Form 8-K dated
TIAA. May 6, 1993
10.96 $32,800,000 Note from BB Property Filed as Exhibit 10.3 to
Property Company to TIAA. Registrant's Form 8-K dated
May 6, 1993
10.97 Deed of Trust and Security Agreement Filed as Exhibit 10.4 to
from BB Property Company for the benefit Registrant's Form 8-K dated
of TIAA. May 6, 1993
10.98 $3,200,000 Promissory Note from BVS (NY) Filed as Exhibit 10.5 to
QRS 11-10, Inc. ("BVS") to Orix. Registrant's Form 8-K dated
May 6, 1993
</TABLE>
- 30 -
<PAGE> 32
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.99 Mortgage, Assignment of Leases and Rents, Filed as Exhibit 10.6 to
Security Agreement and Fixture Filing Registrant's Form 8-K dated
from BVS to Orix. May 6, 1993
10.100 Purchase Agreement between QRS 11-19, Filed as Exhibit 10.2 to
as owner, and Lincoln Technical Registrant's Form 8-K dated
Institute, as buyer. August 13, 1993
10.101 Lease Agreement between Unitech (IL) Filed as Exhibit 10(P)(1) to
QRS 11-19, Inc. ("QRS 11-19"), as Registrant's Post Effective
landlord, and UTI. Amendment No. 6 to Form S-11
10.102 Guaranty and Suretyship Agreement Filed as Exhibit 10(P)(2) to
from Lincoln Technical Institute Registrant's Post Effective
of Arizona, Inc. to QRS 11-19. Amendment No. 6 to Form S-11
10.103 Modification of Loan Documents and Filed as Exhibit 10(P)(3) to
Assumption Agreement among Chicago Registrant's Post Effective
Investment Properties Limited Partnership, Amendment No. 6 to Form S-11
the Guarantors QRS 11-19 and the
Fidelity Mutual Life
Insurance Company.
10.104 Rate Cap Transaction letter Agreement Filed as Exhibit 10(Q)(4) to
between BVS and Chemical Bank Registrant's Post Effective
("Chemical"). Amendment No. 6 to Form S-11
10.105 Consent and Agreement Filed as Exhibit 10(Q)(5) to
between Chemical, Orix and BVS. Registrant's Post Effective
Amendment No. 6 to Form S-11
10.106 Assignment of Interest Rate Filed as Exhibit 10(Q)(6) to
Protection Agreement from BVS Registrant's Post Effective
to Orix. Amendment No. 6 to Form S-11
10.107 Warrant issued by Merit to Filed as Exhibit 10(S)(1) to
the Registrant. Registrant's Post Effective
Amendment No. 6 to Form S-11
10.108 Lease Agreement between QRS 11-20 (UT), Filed as Exhibit 10(S)(2) to
Inc. ("QRS 11-20"), as landlord, and Registrant's Post Effective
Merit, as tenant. Amendment No. 6 to Form S-11
10.109 Guaranty Agreement from the Filed as Exhibit 10(S)(3) to
Registrant to Merit. Registrant's Post Effective
Amendment No. 6 to Form S-11
10.110 Construction Management Agreement Filed as Exhibit 10(S)(4) to
Merit and the Koll Company. Registrant's Post Effective
Amendment No. 6 to Form S-11
</TABLE>
- 31 -
<PAGE> 33
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.111 Construction Agreement between Merit Filed as Exhibit 10(S)(5) to
and Camco Construction Company, Inc. Registrant's Post Effective
Amendment No. 6 to Form S-11
10.112 Construction Agency Agreement between Filed as Exhibit 10(S)(6) to
Merit and QRS 11-20. Registrant's Post Effective
Amendment No. 6 to Form S-11
10.113 $8,250,000 Promissory Note from QRS 11-20 Filed as Exhibit 10(S)(7) to
to First Interstate Bank of Utah, N.A. Registrant's Post Effective
("Lender"). Amendment No. 6 to Form S-11
10.114 Deed of Trust, Assignment of Rents, Security Filed as Exhibit 10(S)(8) to
Agreement and Financing Statement from Registrant's Post Effective
QRS 11-20 for the benefit of Lender. Amendment No. 6 to Form S-11
10.115 Assignment of Leases and Rents made by Filed as Exhibit 10(S)(9) to
QRS 11-20 in favor of Lender. Registrant's Post Effective
Amendment No. 6 to Form S-11
10.116 Loan Agreement between QRS 11-20 and Filed as Exhibit 10(S)(10) to
Lender. Registrant's Post Effective
Amendment No. 6 to Form S-11
10.117 Assignment and Assumption of Bid dated Filed as Exhibit 10(T)(1) to
as of April 14, 1993 among QRS 11-17 (NY), Registrant's Post Effective
Inc. ("QRS 11-17"), E.B. Properties, Inc. Amendment No. 7 to Form S-11
("EB") and The Dime Savings Bank of New York,
FSB ("Dime"), as amended and supplemented by
the First Supplement dated April 15, 1993 and
by the Second Supplement dated April 22, 1993
and by letters dated May 12, June 9 and June
18, 1993.
10.118 Assignment and Assumption Agreement, dated Filed as Exhibit 10(T)(2)
to March 4, 1993, as amended , between Registrant's Post Effective
Dime and EB, as assigned by Assignment Amendment No. 7 to Form S-11
dated April 14, 1993.
10.119 Lease dated as of August 1, 1986 between Filed as Exhibit 10(T)(3) to
D. Grossman and Mormax Corporation (as Registrant's Post Effective
assumed by QRS 11-21, Inc. ("QRS 11-21") Amendment No. 7 to Form S-11
by virtue of documents listed at (10)(T)(1)).
10.120 Promissory Note from QRS 11-17 to Dime Filed as Exhibit 10(T)(4) to
in the amount of $7,000,000. Registrant's Post Effective
Amendment No. 7 to Form S-11
10.121 Mortgage from QRS 11-17 to Dime. Filed as Exhibit 10(T)(5) to
Registrant's Post Effective
Amendment No. 7 to Form S-11
</TABLE>
- 32 -
<PAGE> 34
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.122 Collateral Assignment of Leases and Rents Filed as Exhibit 10(T)(6) to
by QRS 11-17 in favor of Dime. Registrant's Post Effective
Amendment No. 7 to Form S-11
10.123 Agreement of Indemnity Filed as Exhibit 10(T)(7) to
by QRS 11-17 in favor of Dime. Registrant's Post Effective
Amendment No. 7 to Form S-11
10.124 Lease Agreement between SCF (TN) Filed as Exhibit 10(U)(1) to
QRS 11-21, as landlord, and SCM, Registrant's Post Effective
as tenant. Amendment No. 7 to Form S-11
10.125 Warrant issued by Sports & Fitness Filed as Exhibit 10(U)(2) to
Clubs Inc. ("SFC") to QRS 11-21. Registrant's Post Effective
Amendment No. 7 to Form S-11
10.126 Guaranty and Suretyship Agreement by Filed as Exhibit 10(U)(3) to
SFC and Sports and Fitness Clubs of Registrant's Post Effective
America, Inc. ("SFCA") to QRS 11-21. Amendment No. 7 to Form S-11
10.127 Purchase Agreement between QRS 11-21, Filed as Exhibit 10(U)(4) to
as owner, and SFC, as buyer. Registrant's Post Effective
Amendment No. 7 to Form S-11
10.128 Term Loan Agreement between QRS 11-21, Filed as Exhibit 10(U)(5) to
as borrower, and Union Planters National Registrant's Post Effective
Bank, as lender ("Union Planters"). Amendment No. 7 to Form S-11
10.129 Note in the amount of $2,800,000 dated Filed as Exhibit 10(U)(6) to
July 20, 1993 from QRS 11-21 for the Registrant's Post Effective
benefit of Union Planters. Amendment No. 7 to Form S-11
10.130 Deed of Trust, Assignment of Rents and Filed as Exhibit 10(U)(7) to
Security Agreement from QRS 11-21 for the Registrant's Post Effective
benefit of Union Planters. Amendment No. 7 to Form S-11
10.131 Acknowledgment of Assignment of Lease, Filed as Exhibit 10(U)(8) to
Guaranty and Purchase Agreements between Registrant's Post Effective
SCM, SFC, SFCA, QRS 11-21 and Union Planters. Amendment No. 7 to Form S-11
10.132 Real Estate Contract of Sale between Filed as Exhibit 10(V)(1) to
Abacus Capital Corporation, as seller, Registrant's Post Effective
and Registrant, or its assigns, as Buyer. Amendment No. 7 to Form S-11
10.133 Real Estate Contract of Sale between Filed as Exhibit 10.1 to
Abacus Capital Corporation ("Abacus"), as Registrant's Form 8-K
seller, and Registrant, as buyer. dated February 24, 1994
10.134 Assignment of Real Estate Contract of Filed as Exhibit 10.2 to
Sale from Registrant to the PETsMART Registrant's Form 8-K
Subsidiary. dated February 24, 1994
</TABLE>
- 33 -
<PAGE> 35
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.135 Assignment and Assumption of Lease Filed as Exhibit 10.3 to
between Abacus and the PETsMART Registrant's Form 8-K
Subsidiary. dated February 24, 1994
10.136 Loan Agreement between NationsBank and Filed as Exhibit 10.4 to
the PETsMART Subsidiary. Registrant's Form 8-K
dated February 24, 1994
10.137 $2,500,000 Promissory Note made by the Filed as Exhibit 10.5 to
PETsMART Subsidiary to NationsBank. Registrant's Form 8-K
dated February 24, 1994
10.138 Deed of Trust, Assignment, Security Filed as Exhibit 10.6 to
Agreement and Financing Statement from Registrant's Form 8-K
the PETsMART Subsidiary to NationsBank. dated February 24, 1994
10.139 Lease Agreement between the Braintree Filed as Exhibit 10.7 to
Subsidiary, as landlord, and Barnes Registrant's Form 8-K
& Noble, as tenant. dated February 24, 1994
10.140 Real Estate Purchase and Sale Contract Filed as Exhibit 10.8 to
between the ELWA Subsidiary, as buyer, Registrant's Form 8-K
and Big V, as seller. dated February 24, 1994
10.141 Lease Agreement between the ELWA Filed as Exhibit 10.9 to
Subsidiary, as landlord, and Registrant's Form 8-K
Big V as tenant. dated February 24, 1994
10.142 Guaranty and Suretyship Agreement Filed as Exhibit 10.10 to
executed by Big V Holding. Registrant's Form 8-K
dated February 24, 1994
10.143 Amended, Restated and Consolidated Bonds Filed as Exhibit 10.11 to
to Key Bank, as lender, from the ELWA Registrant's Form 8-K
Subsidiary, as borrower. dated February 24, 1994
10.144 Amended and Restated Mortgage and Filed as Exhibit 10.12 to
Security Agreement from the ELWA Registrant's Form 8-K
Subsidiary, to Key Bank. dated February 24, 1994
10.145 Limited Guaranty of Payment from the Filed as Exhibit 10.13 to
Company to Key Bank. Registrant's Form 8-K
dated February 24, 1994
10.146 Lease Agreement between the Brownwood Filed as Exhibit 10.14 to
Subsidiary, as landlord, and Superior, Registrant's Form 8-K
as tenant. dated February 24, 1994
10.147 Guaranty and Suretyship Agreement from Filed as Exhibit 10.15 to
Alpine to Registrant. Registrant's Form 8-K
dated February 24, 1994
</TABLE>
- 34 -
<PAGE> 36
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.148 $2,700,000 Real Estate Note from the Filed as Exhibit 10.16 to
Brownwood Subsidiary, as maker, to Registrant's Form 8-K
Creditanstalt, as holder. dated February 24, 1994
10.149 Deed of Trust and Security Agreement by Filed as Exhibit 10.17 to
the Brownwood Subsidiary, as guarantor Registrant's Form 8-K
to Hazen H. Dempster, as trustee. dated February 24, 1994
10.150 Guaranty and Agreement between the Filed as Exhibit 10.18 to
Company and Creditanstalt. Registrant's Form 8-K
dated February 24, 1994
10.151 Assignment of Contract from Hyde Park Filed as Exhibit 10.19 to
Holdings, Inc. to the Cleveland Registrant's Form 8-K
Subsidiary. dated February 24, 1994
10.152 Lease Agreement between the Cleveland Filed as Exhibit 10.20 to
Subsidiary, as landlord, and Nicholson, Registrant's Form 8-K
as tenant. dated February 24, 1994
10.153 $4,000,000 Cognovit Promissory Note Filed as Exhibit 10.21 to
from the Cleveland Subsidiary to Bank Registrant's Form 8-K
One. dated February 24, 1994
10.154 Mortgage Deed, Security Agreement and Filed as Exhibit 10.22 to
Assignment of Rents and Leases from the Registrant's Form 8-K
Cleveland Subsidiary to Bank One. dated February 24, 1994
10.155 Business Loan Agreement between the Filed as Exhibit 10.23 to
Cleveland Subsidiary, and Bank One. Registrant's Form 8-K
dated February 24, 1994
10.156 Guaranty from Registrant to Bank One. Filed as Exhibit 10.24 to
Registrant's Form 8-K
dated February 24, 1994
10.157 Lease Agreement between the Gensia Filed as Exhibit 10.25 to
Partnership, as landlord, and Gensia, Registrant's Form 8-K
as tenant. dated February 24, 1994
10.158 $13,000,000 Promissory Note from the Filed as Exhibit 10.26 to
Gensia Partnership to Northwestern. Registrant's Form 8-K
dated February 24, 1994
10.159 Deed of Trust, Security Agreement and Filed as Exhibit 10.27 to
Financing Statement from the Gensia Registrant's Form 8-K
Partnership to Northwestern. dated February 24, 1994
10.160 Guarantee of Recourse Obligations from Filed as Exhibit 10.28 to
Registrant and CPA(R):12 to Northwestern. Registrant's Form 8-K
dated February 24, 1994
</TABLE>
- 35 -
<PAGE> 37
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.161 Assignment of Earnest Money Contract Filed as Exhibit 10.29 to
from Garden Ridge to the Round Rock Registrant's Form 8-K
Subsidiary. dated February 24, 1994
10.162 Lease Agreement between the Round Rock Filed as Exhibit 10.30 to
Subsidiary, as landlord, and Garden Registrant's Form 8-K
Ridge, as tenant. dated February 24, 1994
10.163 $3,465,000 Note from the Round Rock Filed as Exhibit 10.31 to
Subsidiary to Garden Ridge. Registrant's Form 8-K
dated February 24, 1994
10.164 Deed of Trust and Security Agreement Filed as Exhibit 10.32 to
from the Round Rock Subsidiary to Garden Registrant's Form 8-K
Ridge. dated February 24, 1994
10.165 $1,700,000 Promissory Note from the Filed as Exhibit 10.33 to
Plano Subsidiary to National Western. Registrant's Form 8-K
dated February 24, 1994
10.166 Deed of Trust, Security Agreement and Filed as Exhibit 10.34 to
Financing Statement from the Plano Registrant's Form 8-K
Subsidiary to National Western. dated February 24, 1994
10.167 Lease Agreement dated June 15, 1994 between Filed as Exhibit 10.167 to
CTC (VA) QRS 11-32, Inc., as Landlord, and Registrant's Form 10-K for the
Childtime Childcare, Inc., as Tenant. year ended December 31, 1994
dated March 31, 1995
10.168 Construction Agency Agreement dated June 15, Filed as Exhibit 10.168 to
1994 between Childtime Childcare, Inc. and Registrant's Form 10-K for the
CTC (VA) QRS 11-32, Inc. year ended December 31, 1994
dated March 31, 1995
10.169 Lease Agreement dated August 11, 1994 by and Filed as Exhibit 10.169
to between Neenah (WI) QRS 11-31, Inc., as Registrant's Form 10-K for the
Landlord, and Exide Electronic Assembly year ended December 31, 1994
Corporation, as Tenant. dated March 31, 1995
10.170 $5,000,000 Real Estate Note dated August 11, Filed as Exhibit 10.170 to
1994 from Neenah (WI) QRS 11-31, Inc., as Registrant's Form 10-K for the
Maker, and Creditanstalt Corporate Finance, year ended December 31, 1994
Inc., as Holder. dated March 31, 1995
10.171 Lease Agreement dated September 30, 1994 by Filed as Exhibit 10.171 to
and between CFP Associates, as Landlord, and Registrant's Form 10-K for the
Custom Foods Products, Inc., as Tenant. year ended December 31, 1994
dated March 31, 1995
10.172 Loan Agreement dated September 30, 1994 Filed as Exhibit 10.172 to
between CFP Associates, as Borrower, and Registrant's Form 10-K for the
Greyrock Capital Group Inc., as Lender. year ended December 31, 1994
dated March 31, 1995
</TABLE>
- 36 -
<PAGE> 38
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.173 $2,000,000 Note dated September 30, 1994 Filed as Exhibit 10.173 to
from CFP Associates, as Maker, and Registrant's Form 10-K for the
Greyrock Capital Group Inc., as Payee. year ended December 31, 1994
dated March 31, 1995
10.174 $200,000 Maximum Amount Promissory Note Filed as Exhibit 10.174 to
dated September 30, 1994 from CFP Associates, Registrant's Form 10-K for the
as Maker, to Custom Foods Products, Inc., as year ended December 31, 1994
Payee. dated March 31, 1995
10.175 Lease Agreement dated October 14, 1994 by and Filed as Exhibit 10.175 to
between ADS (CA) QRS 11-34, Inc., as Landlord, Registrant's Form 10-K for the
and Chiat/Day Inc. Advertising, as Tenant. year ended December 31, 1994
dated March 31, 1995
10.176 $6,000,000 Promissory Note dated October 14, Filed as Exhibit 10.176 to
1994 from ADS (CA) QRS 11-34, Inc., as Registrant's Form 10-K for the
Borrower, to Kearneys Street Real Estate year ended December 31, 1994
Company, L.P., as Lender. dated March 31, 1995
10.177 $3,000,000 Purchase Money Promissory Note Filed as Exhibit 10.177 to
secured by Deed of Trust dated October 14, Registrant's Form 10-K for the
1994 from ADS (CA) QRS 11-34, Inc., as Maker, year ended December 31, 1994
to Venice Operating Corp., as Holder. dated March 31, 1995
10.178 Lease Agreement dated October 31, 1995 by and Filed as Exhibit 10.33 to
between DELMO (PA) QRS 11-36 and DELMO (PA) Registrant's Form 8-K
QRS 12-10 together as Landlord and Del Monte dated March 21, 1996
Corporation, as Tenant.
10.179 Lease Agreement dated December 26, 1995 by and Filed as Exhibit 2.1 to
between Cards Limited Liability Company, as Registrant's Form 8-K
Landlord, and The Upper Deck Company, as Tenant. dated March 21, 1996
10.180 $15,000,000 Promissory Note dated January 3, Filed as Exhibit 2.2 to
1996 from Cards Limited Liability Company to Registrant's Form 8-K
Column Financial, Inc. dated March 21, 1996
21.1 Subsidiaries of Registrant as of Filed as Exhibit 22.1 to
March 31, 1993. Registrant's Form 10-K for the
year ended December 31, 1992
dated March 31, 1993
21.2 Subsidiaries of Registrant. Filed as Exhibit 22 to
Registrant's Post Effective
Amendment No. 6 to Form S-11
21.3 Subsidiaries of Registrant. Filed as Exhibit 22 to
Registrant's Post Effective
Amendment No. 7 to Form S-11
21.4 Subsidiaries of Registrant. Filed as Exhibit 22.4 to
Registrant's Form 10-K for the
year ended December 31, 1993
</TABLE>
- 37 -
<PAGE> 39
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
21.5 Subsidiaries of Registrant as of March 31, 1995. Filed as Exhibit 22.5 to
Registrant's Form 10-K for the
year ended December 31, 1994
dated March 31, 1995
21.6 Subsidiaries of Registrant as of March 31, 1996. Filed as Exhibit 22.6 to
Registrant's Form 10-K for the
year ended December 31, 1995
dated March 28, 1996
21.7 Subsidiaries of Registrant as of March 31, 1997 Filed herewith
23.1 Consent of Coopers & Lybrand dated Filed as Exhibit 24(B)(6) to
June 15, 1993. Registrant's Post Effective
Amendment No. 6 to Form S-11
23.2 Consent of Coopers & Lybrand dated Filed as Exhibit 24(B)(7) to
August 9, 1993. Registrant's Post Effective
Amendment No. 7 to Form S-11
23.3 Consent of Coopers & Lybrand dated Filed as Exhibit 24.3 to
March 28, 1996 Registrant's Form 10-K for the
year ended December 31, 1995
dated March 28, 1996
23.4 Consent of Coopers & Lybrand dated Filed here with
March 27, 1997
28.1 General Warranty Deed from Filed as Exhibit 28(C)(1)
Amerisure, Inc. to (SC) QRS 11-11 to Registrant's Post
Effective Amendment No. 5
to Form S-11
28.2 Amended and Restated Sublease Agreement Filed as Exhibit 28(C)(2)
between MMI, as sublandlord, and Unisun to Registrant's Post Effective
Insurance Company ("UIC"). Amendment No. 5 to Form S-11
28.3 General warranty Deed from FPC to QRS Filed as Exhibit 28(D)(1) to
11-10. Registrant's Post Effective
Amendment No. 5 to Form S-11
28.4 Deed from Unit to QRS 11-12. Filed as Exhibit 28(E)(1)
to Registrant's Post
Effective Amendment No. 5
to Form S-11
28.5 Lease between Unit, as landlord, and Filed as Exhibit 28(E)(2)
SLS, as tenant, as amended. to Registrant's Post
Effective Amendment No. 5
to Form S-11
28.6 Special warranty Deed from CTA, as Filed as Exhibit 28(F)(1)
Grantor to QRS 11-14, as Grantee. to Registrant's Post
Effective Amendment No. 5
to Form S-11
</TABLE>
- 38 -
<PAGE> 40
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
28.7 Lease Agreement between CTA and AT&T. Filed as Exhibit 28(F)(2)
to Registrant's Post
Effective Amendment No. 5
to Form S-11
28.8 Leasehold Deed of Trust from Neodata for Filed as Exhibit 28.1 to
benefit of General Electric Capital Registrant's Form 8-K dated
Corporation. October 29, 1992
28.9 General Warranty Deed from Amerisure Filed as Exhibit 28.1 to
QRS 11-11. Registrant's Form 8-K dated
January 5, 1993
28.10 Amended and Restated Sublease Agreement Filed as Exhibit 28.2 to
between MMI, as sublandlord, and Unisun Registrant's Form 8-K dated
Insurance Company. January 5, 1993
28.11 General Warranty Deed from Fairview Plaza Filed as Exhibit 28.3 to
Corporation to QRS 11-10. Registrant's Form 8-K dated
January 5, 1993
28.12 Deed from Unit to QRS 11-12. Filed as Exhibit 28.4 to
Registrant's Form 8-K dated
January 5, 1993
28.13 Lease between Unit, as landlord, and Filed as Exhibit 28.5 to
SLS, as tenant, as amended. Registrant's Form 8-K dated
January 5, 1993
28.14 Prospectus dated January 21, 1993 of Filed pursuant to Rule
Registrant. 424(b)(s) on January 26, 1993
(Registration No. 33-39409)
28.15 Supplement No. 1 dated March 17, 1993 Filed pursuant to Rule
to Prospectus dated January 21, 1993. 424(b)(s) on March 17, 1993
(Registration No. 33-39409)
28.16 Quit Claim Deed from Oakbrook to Filed as Exhibit 28.1 to Registrant's
QRS 11-15. Form 8-K dated April 5, 1993
28.17 Lease Agreement between Oakbrook and Filed as Exhibit 28.2 to Registrant's
B. Dalton Bookseller, Inc. ("B. Dalton"). Form 8-K dated April 5, 1993
28.18 First Amendment between Oakbrook and Filed as Exhibit 28.3 to Registrant's
B. Dalton Bookseller, Inc. Form 8-K dated April 5, 1993
28.19 Lease Guaranty to Oakbrook from Barnes Filed as Exhibit 28.4 to Registrant's
& Noble, Inc. Form 8-K dated April 5, 1993
28.20 Guaranty and Suretyship Agreement from Filed as Exhibit 28.5 to
Data Documents Holdings, Inc. to QRS Registrant's Form 8-K dated
10-15 and QRS 11-13. April 5, 1993
28.21 Guaranty from Corporate Property Filed as Exhibit 28.6 to
Associates 10 Incorporated and Registrant's Form 8-K dated
Registrant to US West. April 5, 1993
</TABLE>
- 39 -
<PAGE> 41
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
28.22 Guaranty from Registrant to Orix. Filed as Exhibit 28.1 to Registrant's
Form 8-K dated May 6, 1993
28.23 Special Warranty Deed from Merit Filed as Exhibit 28(G)(1) to
to QRS 11-20. Registrant's Post Effective
Amendment No. 6 to Form S-11
28.24 Table VI: Acquisitions of Properties Filed as Exhibit 28(H) to
by Prior Programs. Registrant's Post Effective
Amendment No. 6 to Form S-11
28.25 Limited Warranty Deed from Filed as Exhibit 28.1 to
the David F. Bolger Revocable Trust Registrant's Form 8-K
to the Braintree Subsidiary. dated February 24, 1994
28.26 Special Warranty Deed from Superior to Filed as Exhibit 28.2 to
the Brownwood Subsidiary. Registrant's Form 8-K
dated February 24, 1994
28.27 Corporation Grant Deed from Gensia to Filed as Exhibit 28.3 to
the Gensia Partnership. Registrant's Form 8-K
dated February 24, 1994
28.28 Supplement No. 2 dated June 15, 1993 Filed as Exhibit 28.28 to
to Prospectus dated January 21, 1993. Registrant's Form 10-K for the
year ended December 31, 1993
28.29 Supplement No. 3 dated August 11, 1993 Filed as Exhibit 28.29 to
to Prospectus dated January 21, 1993. Registrant's Form 10-K for the
year ended December 31, 1993
</TABLE>
(b) Reports on Form 8-K
During the quarter ended December 31, 1996 the Registrant was not
required to file any reports on Form 8-K.
- 40 -
<PAGE> 42
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.
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
a Maryland corporation
4/3/97 /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.
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
William P. Carey
Chairman of the Board
and Director
(Principal Executive Officer)
Francis J. Carey
President and Director
BY: /s/ George E. Stoddard
-----------------------
Ralph G. Coburn George E. Stoddard
Director Attorney in fact
April 3, 1997
Charles C. Townsend, Jr.
Director
William Ruder
Director
Warren G. Wintrub
Director
4/3/97 /s/ Claude Fernandez
- -------------- -----------------------------------
Date Claude Fernandez
Executive Vice President and
Chief Administrative Officer
(Principal Financial Officer)
4/3/97 /s/ Michael D. Roberts
- -------------- -----------------------------------
Date Michael D. Roberts
First Vice President and Controller
(Principal Accounting Officer)
- 41 -
<PAGE> 43
REPORT of INDEPENDENT ACCOUNTANTS
To the Board of Directors of
CAREY INSTITUTIONAL PROPERTIES Incorporated
and Subsidiaries:
Our report on the consolidated financial statements of CAREY
INSTITUTIONAL PROPERTIES Incorporated and Subsidiaries has been incorporated by
reference in this Form 10-K from page 5 of the 1996 Annual Report to
Shareholders of CAREY INSTITUTIONAL PROPERTIES Incorporated and Subsidiaries. In
connection with our audits of such financial statements, we have also audited
the related financial statement schedule on pages 43 to 46 of this Form 10-K.
In our opinion, the financial statement schedule referred to
above, when considered in relation to the basic financial statements taken as a
whole, presents fairly, in all material respects, the information required to be
included therein.
/s/Coopers & Lybrand L.L.P.
New York, New York
March 24, 1997
- 42 -
<PAGE> 44
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
and SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1996
<TABLE>
<CAPTION>
Initial Cost to Costs
Company Capitalized
--------------------- Subsequent to
Description Encumbrances Land Buildings Acquisition (a)
----------- ------------ ---- --------- ---------------
<S> <C> <C> <C> <C>
Operating Method:
Retail stores leased to
Wal-Mart Stores, Inc. $ 7,147,211 $ 807,423 $ 6,864,802 $ 87,746
Supermarket leased
to Safeway Stores
Incorporated 336,426 941,959 14,621
Office/Manufacturing
facility leased to
CalComp Technology, Inc.
(formerly Summagraphics
Corporation) 1,712,100 751,453 2,536,047 841
Manufacturing/Distributing
facility leased to
Neodata Corporation 10,948,424 1,515,879 503,734 15,125,189
Warehouse/Manufacturing
facility leased to
Bell Sports, Inc. 4,620,500 283,726 5,066,274 3,322,270
Warehouse leased to GATX
Logistics, Inc. 3,918,528 1,350,444 4,574,557 60,676
Warehouse leased to
Lucent Technologies, Inc. 10,300,000 1,290,631 15,937,369 183,803
Land leased to
Barnes & Noble, Inc. 2,660,753 4,759,017 47,962
Land leased to
Best Buy Co., Inc. 12,266,760 18,579,019 646
Land leased to Lincoln
Technical Institute
of Arizona, Inc. 1,660,946 2,516,671 696
Office/warehouse leased to
Merit Medical Systems, Inc. 6,259,608 380,000 10,505,349
Retail store leased
to Waban, Inc. 6,707,101 6,119,530 3,630,470 230,327
Land leased to
Q Clubs, Inc. (formerly
Sports & Fitness
Clubs of America, Inc.) 965,180 2,073,578 1,026
<CAPTION>
Life on which
Depreciation
Gross Amount at which Carried in Latest
at Close of Period (b)(d) Statement of
------------------------------------- Accumulated Income
Description Land Buildings Total Depreciation (d) Date Acquired is Computed
----------- ---- --------- ----- ---------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Operating Method:
Retail stores leased to December 19,
Wal-Mart Stores, Inc. $ 816,658 $ 6,943,313 $ 7,759,971 $ 875,114 1991 40 yrs.
Supermarket leased
to Safeway Stores December 19,
Incorporated 340,274 952,732 1,293,006 120,079 1991 40 yrs.
Office/Manufacturing
facility leased to
CalComp Technology, Inc.
(formerly Summagraphics
Corporation) 751,645 2,536,696 3,288,341 293,300 May 28, 1992 40 yrs.
Manufacturing/Distributing
facility leased to October 1,
Neodata Corporation 1,519,885 15,624,917 17,144,802 781,246 1992 40 yrs.
Warehouse/Manufacturing
facility leased to November 6,
Bell Sports, Inc. 283,793 8,388,477 8,672,270 754,358 1992 40 yrs.
Warehouse leased to GATX December 23,
Logistics, Inc. 1,364,272 4,621,405 5,985,677 466,931 1992 40 yrs.
Warehouse leased to
Lucent Technologies, Inc. 1,295,387 16,116,416 17,411,803 1,624,835 December 30, 1992 40 yrs.
Land leased to February 23, 1993
Barnes & Noble, Inc. 4,806,979 4,806,979 and October 1, 1993 N/A
Land leased to
Best Buy Co., Inc. 18,579,665 18,579,665 April 15, 1993 N/A
Land leased to Lincoln
Technical Institute
of Arizona, Inc. 2,517,367 2,517,367 May 3, 1993 N/A
Office/warehouse leased to
Merit Medical Systems, Inc. 380,000 10,505,349 10,885,349 503,381 June 3, 1993 40 yrs.
Retail store leased
to Waban, Inc. 6,263,907 3,716,420 9,980,327 328,448 June 29, 1993 40 yrs.
Land leased to
Q Clubs, Inc. (formerly
Sports & Fitness
Clubs of America, Inc.) 2,074,604 2,074,604 July 16, 1993 N/A
</TABLE>
- 43 -
<PAGE> 45
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
and SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1996
<TABLE>
<CAPTION>
Initial Cost to Costs
Company Capitalized
--------------------- Subsequent to
Description Encumbrances Land Buildings Acquisition (a)
----------- ------------ ---- --------- ---------------
<S> <C> <C> <C> <C>
Operating Method:
(Continued):
Warehouse facility leased
to Petsmart, Inc. 2,310,780 106,603 4,444,397 42,817
Manufacturing facility
leased to Plexus Corp. 4,739,600 125,340 9,124,660 5,745
Childcare centers leased to
Childtime Childcare, Inc. 2,500,000 1,198,750 3,422,172
Office building leased to
Omnicom Group, Inc. 9,185,583 2,566,880 13,476,120 14,172
Retail stores leased to
Garden Ridge Corporation 7,946,790 2,197,500 4,112,500 5,054,413
Warehouses and special
purpose facility leased to
Del Monte Corporation 5,933,629 304,073 9,924,088
Health club leased to
Q Clubs, Inc. (formerly
Sports & Fitness Clubs
of America, Inc.) 912,855 4,323,145
Warehouse/office leased
to Hibbett Sporting
Goods, Inc. 2,885,359 660,000 4,040,000
Distribution/warehouse
leased to Detroit
Diesel Corporation 2,782,860 6,542,140
------------ ----------- ------------ ------------
$104,668,852 $51,618,658 $ 86,118,174 $ 48,044,559
============ =========== ============ ============
<CAPTION>
Life on which
Depreciation
Gross Amount at which Carried in Latest
at Close of Period (b)(d) Statement of
------------------------------------- Accumulated Income
Description Land Buildings Total Depreciation (d) Date Acquired is Computed
----------- ---- --------- ----- ---------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Operating Method:
(Continued):
Warehouse facility leased
to Petsmart, Inc. 107,606 4,486,211 4,593,817 359,832 October 26, 1993 40 yrs.
Manufacturing facility
leased to Plexus Corp. 125,418 9,130,327 9,255,745 542,113 August 11, 1994 40 yrs.
Childcare centers leased to June 15, 1994 through
Childtime Childcare, Inc. 1,198,750 3,422,172 4,620,922 110,508 November 18, 1994 40 yrs.
Office building leased to
Omnicom Group, Inc. 2,569,147 13,488,025 16,057,172 744,651 October 14, 1994 40 yrs.
Retail stores leased to
Garden Ridge Corporation 2,197,998 9,166,415 11,364,413 160,432 May 29, 1995 N/A
Warehouses and special
purpose facility leased to
Del Monte Corporation 374,698 9,853,463 10,228,161 116,284 November 9, 1995 N/A
Health club leased to
Q Clubs, Inc. (formerly
Sports & Fitness Clubs
of America, Inc.) 912,855 4,323,145 5,236,000 94,569 February 6, 1996 N/A
Warehouse/office leased
to Hibbett Sporting
Goods, Inc. 660,000 4,040,000 4,700,000 88,375 February 12, 1996 N/A
Distribution/warehouse
leased to Detroit
Diesel Corporation 2,782,860 6,542,140 9,325,000 6,815 December 17, 1996 N/A
----------- ------------ ------------ -----------
$51,923,768 $133,857,623 $185,781,391 $ 7,971,271
=========== ============ ============ ===========
</TABLE>
See accompanying notes to Schedule.
- 44 -
<PAGE> 46
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
and SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1996
<TABLE>
<CAPTION>
Initial Cost to Costs Increase
Company Capitalized (Decrease) In
--------------------- Subsequent to Net
Description Encumbrances Land Buildings Acquisition (a) Investment (c)(d)
----------- ------------ ---- --------- --------------- -----------------
<S> <C> <C> <C> <C> <C>
Direct Financing Method:
Office buildings and
supermarkets formerly leased
to Harvest Foods, Inc. $ 5,781,854 $ 1,606,249 $ 8,476,251 $ 1,917 $ (1,834,417)
Retail store leased to
Oshman Sporting
Goods, Inc. 1,592,290 700,356 2,494,843 37,695 191,475
Office buildings leased
to Michigan Mutual
Insurance Company 9,500,000 1,965,093 11,884,907 5,919 91,895
Supermarkets leased
to Big V Holding Corp. 7,262,698 3,724,889 16,399,261 89,555 (5,465,579)
Retail stores leased to
Barnes & Noble, Inc. 3,089,562 5,525,983 49,806 539,924
Retail stores leased to
Best Buy Co., Inc. 18,258,487 27,653,981 962 (495,567)
Technical training institute
leased to Lincoln Technical
Institute of Arizona, Inc. 4,014,861 6,083,329 1,684
Health club leased to Q Clubs,
Inc. (formerly Sports &
Fitness Clubs of America) 1,634,448 3,511,422 1,737
Warehouse/distribution
facility leased to Nich-
olson Warehouse, Inc. 3,764,210 598,544 6,316,456 1,370 (28,235)
Manufacturing facility leased
to Superior Telecomm-
unications 2,519,750 295,032 4,704,968 1,885 (161,794)
Food processing/warehouse
facility leased to Custom
Food Products, Inc. 197,094 27,000 5,536,384
----------- ----------- ------------ ----------- ------------
$57,615,254 $ 8,917,163 $ 93,051,401 $ 5,728,914 $ (7,162,298)
=========== =========== ============ =========== ============
<CAPTION>
Gross Amount at which Carried
at Close of Period (b)(d)
------------------------------------- Accumulated
Description Land Buildings Total Depreciation (d) Date Acquired
----------- ---- --------- ----- ---------------- -------------
<S> <C> <C> <C> <C> <C>
Direct Financing Method:
Office buildings and
supermarkets formerly leased
to Harvest Foods, Inc. $ 8,250,000 February 21, 1992
Retail store leased to
Oshman Sporting
Goods, Inc. 3,424,369 December 10, 1992
Office buildings leased
to Michigan Mutual
Insurance Company 13,947,814 December 21, 1993
Supermarkets leased
to Big V Holding Corp. 14,748,126 December 23, 1993 and
Retail stores leased to October 8, 1993
Barnes & Noble, Inc. 6,115,713 February 23, 1993 and
Retail stores leased to October 1, 1993
Best Buy Co., Inc. 27,159,376 April 15, 1993
Technical training institute
leased to Lincoln Technical
Institute of Arizona, Inc. 6,085,013 May 3, 1993
Health club leased to Q Clubs,
Inc. (formerly Sports &
Fitness Clubs of America) 3,513,159 July 16, 1993
Warehouse/distribution
facility leased to Nich-
olson Warehouse, Inc. 6,888,135 December 13, 1993
Manufacturing facility leased
to Superior Telecomm-
unications 4,840,091 December 16, 1993
Food processing/warehouse
facility leased to Custom
Food Products, Inc. 5,563,384 September 30, 1994
------------
$100,535,180
============
</TABLE>
See accompanying notes to Schedule.
- 45 -
<PAGE> 47
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
and SUBSIDIARIES
NOTES to SCHEDULE SCHEDULE III - REAL ESTATE
and ACCUMULATED DEPRECIATION
(a) Consists of the costs of improvements subsequent to purchase and
acquisition costs including legal fees, appraisal fees, title costs and
other related professional fees.
(b) At December 31, 1996, the aggregate cost of real estate owned by
Registrant and its subsidiaries for Federal income tax purposes is
$235,467,712.
(c) The increase (decrease) in net investment is due to the amortization of
unearned income producing a constant periodic rate of return on the net
investment which is more (less) than lease payments received, the sale
of a tenancy-in-common interest to an affiliate in a prior year and a
writedown to net realizable value.
(d)
Reconciliation of Real Estate Accounted
for Under the Operating Method
<TABLE>
<CAPTION>
December 31, December 31,
1995 1996
------------- ------------
<S> <C> <C>
Balance at beginning
of year $ 131,426,969 $152,719,747
Reclassification to investment
in direct financing lease (5,001,886) 5,252,298
Reclassification from investment
in direct financing lease 17,120,854
Reclassification to real estate
held for sale (2,770,895)
Additions 11,944,705 27,809,346
------------- ------------
Balance at close of
year $ 152,719,747 $185,781,391
============= ============
</TABLE>
Reconciliation of Accumulated Depreciation
<TABLE>
<CAPTION>
December 31, December 31,
1995 1996
----------- -----------
<S> <C> <C>
Balance at beginning
of year $ 2,829,777 $ 5,006,484
Depreciation expense 2,493,366 2,968,173
Reclassification to investment
in direct financing lease (161,795)
Reclassification to real estate
held for sale (154,864) (3,386)
----------- -----------
Balance at close of
$ 5,006,484 $ 7,971,271
=========== ===========
</TABLE>
- 46 -
<PAGE> 48
APPENDIX A TO FORM 10-K
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
AND SUBSIDIARIES
1996 ANNUAL REPORT
<PAGE> 49
SELECTED FINANCIAL DATA
(In thousands except per share amounts)
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenues $ 5,306 $ 17,637 $ 25,958 $ 29,238 $ 32,547
Income before
extraordinary item 2,017 7,991 11,615 9,629 10,421
Income per share before
extraordinary item .31 .65 .82 .68 .66
Cash flow from operations 2,913 10,718 12,087 13,009 15,346
Dividends paid 2,916 8,122 11,359 11,453 12,488
Dividends per share (1) .71 .76 .80 .81 .82
Payments of mortgage
principal (2) 55 1,061 2,489 2,905 3,353
BALANCE SHEET DATA:
Total assets 119,051 254,304 276,266 299,434 320,510
Long-term obligations (3) 27,995 124,555 141,123 150,829 145,836
</TABLE>
- ----------
(1) Includes distributions attributable to the fourth quarter paid 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 limited recourse mortgage and note payable obligations due after
more than one year.
-1-
<PAGE> 50
MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
The Company's primary objectives are to provide rising cash
flow and property values, protecting its investors from the effects of inflation
through rent escalation provisions, property appreciation, tenant credit
improvement and regular paydown of limited recourse mortgage debt. In addition,
the Company has successfully negotiated grants of common stock warrants from
selected tenants and expects to realize the benefits of appreciation from those
grants. While the Company cannot guarantee that its objectives will be
ultimately realized, cash flow from operations has increased each year since
inception and the first independent valuation of its assets (as of December 31,
1995) reflected significant appreciation in property values.
Net income for the year ended December 31, 1996 increased by
$918,000 as compared with the prior year. Excluding the effect of gains from the
sale of assets in both 1995 and 1996, extraordinary charges of $401,000 and
$275,000 in 1995 and 1996, respectively and a noncash charge of $1,753,000 on
the writedown of properties to net realizable value, income, as adjusted, would
have reflected an increase of $2,516,000. Such increase was due to increases in
lease revenues and income from equity investments and were partially offset by
increases in interest, depreciation and property expenses.
Lease revenues increased as the result of the completion of
construction on build-to-suit projects in 1995 and 1996 and the acquisitions of
additional properties in 1996. Build-to-suit projects under leases with Custom
Food Products, Inc. ("Custom Food"), Childtime Childcare, Inc. ("Childtime") and
Garden Ridge Corporation ("Garden Ridge") were completed in 1995 and the Del
Monte Corporation ("Del Monte") build-to-suit project was completed in 1996. The
Company also acquired properties leased to Q Clubs, Inc. ("Q Clubs"), Hibbett
Sporting Goods, Inc. ("Hibbett") and Detroit Diesel Corporation ("Detroit
Diesel") and funded an expansion of the Custom Food facility. The increase in
income from equity investments was due to the purchase, in January 1996, of an
interest in a limited liability company which entered into a net lease with The
Upper Deck Company ("Upper Deck"). Equity income from the Company's investment
in a real estate investment trust which net leases 13 Courtyard by Marriott
hotels to Marriott International, Inc. ("Marriott") increased due to increasing
amortization of principal on a limited recourse mortgage loan which is
amortizing over 16 3/4 years and an increase in rentals received pursuant to a
sales override provision in the Marriott lease. Interest expense increased as a
result of the Company's obtaining limited recourse mortgage financing on
previously unleveraged and newly acquired properties. Depreciation expense
increased as a result of the increase in real estate assets. The increase in
property expenses was due to higher asset management and subordinated incentive
fees directly attributable to the growth in real estate assets under management.
Net income was also impacted by a $275,000 extraordinary charge related to a
settlement of a dispute relating to the prepayment of a mortgage loan in 1995.
Net income for 1995 and 1996 includes gains from the sale of
securities related to common stock warrants granted by Garden Ridge. An
extraordinary charge on extinguishment of debt of $401,000 was incurred in 1995
in connection with refinancing two mortgage loans. The loans which had annual
interest rates of 9.25% and 10% were replaced with a mortgage loan with an
annual interest rate of 7.65%.
Net income for the year ended December 31, 1995 decreased by
$2,387,000 as compared with net income for the year ended December 31, 1994. The
results for 1994 included the benefit of a gain of $1,536,000 from the sale of
properties and $160,000 from the sale of easement rights. Although the Company
realized a gain of $628,000 on the sale of Garden Ridge stock warrants in 1995,
the Company also incurred the aforementioned $401,000 extraordinary charge on
the extinguishment of debt. Net of these nonrecurring items, income for the year
ended December 31, 1995 would have reflected a decrease of
-2-
<PAGE> 51
$918,000. The decrease in income was the result of increases in depreciation,
amortization, interest and property expenses and was partially offset by an
increase in lease revenues. Depreciation and amortization, which are noncash
charges, increased by $1,126,000 as a result of an increase in real estate
assets and deferred charges related to the placement of limited recourse
mortgage financing. The increase in property expenses was primarily due to an
increase in asset based fees which resulted from the increase in the Company's
real estate assets and costs incurred in connection with the initial independent
appraisal of the Company's real estate portfolio. Interest expense increased by
$2,485,000 as the result of higher mortgage balances and, to a lesser extent,
increases in interest rates on variable rate mortgages. In most instances, the
impact of changes on variable rate obligations are passed through as a rent
adjustment to lessees so that there is no significant effect on net income. The
increase in lease revenues of $3,684,000 was primarily due to the commencement
of new leases throughout 1994 and 1995. Such increases in lease revenues more
than offset the loss of revenues which resulted from the 1994 sale of the Data
Documents Inc. properties. As the result of higher cash balances, other interest
income increased; however, consistent with the Company's objectives, such cash
was ultimately used to invest in real estate rather than held as cash reserves.
The Company reflected an increase in cash flow from operations due to increased
lease revenues and the increase in the Company's asset base.
Leasing revenues and cash flow for 1997 will benefit from the
recognition of a full year's rent on the Del Monte lease which went into effect
in July 1996 and on properties acquired in 1996. Cash flow will also benefit
from rent increases scheduled over the next several years. Rent increases on the
Company's leases with Bell Sports, Inc., Lincoln Technical Institute of Arizona,
Inc., Calcomp Technology, Inc., Childtime, Petsmart, Inc., Waban, Inc. and
Custom Food are scheduled for 1997. Increases on leases with Michigan Mutual
Insurance Company, Detroit Diesel, Oshman Sporting Goods, Inc., Omnicom Group,
Inc., Best Buy Co., Inc., Garden Ridge, Big V Holding and Barnes & Noble, Inc.
are scheduled in 1998. Future operating cash flow will be affected by the
outcome of the Harvest Foods, Inc. ("Harvest") bankruptcy. The Bankruptcy Court
agreed to Harvest's plan to terminate the lease in March 1997. Annual cash flow
from the Harvest lease was $607,000. There are no assurances that future cash
flow from the Harvest property will reach pre-bankruptcy levels. Accordingly,
based on Management's assessment of future cash flows, the Harvest properties
were written down by $1,753,000 in 1996. A portion of the cash flow will be
replaced as the Company has agreements-in-principle to sell one of the
properties and lease two others. The Company is actively remarketing all the
properties.
Cash flow will also be affected by increases in limited
recourse mortgage loan financing. In 1996, the Company placed limited recourse
financing on the Del Monte, Hibbett, Childtime and Detroit Diesel properties.
The Company intends to use or has used a portion of the proceeds from these
financings to purchase additional investments to further diversify the Company's
portfolio.
Because of the long-term nature of the Company's net leases,
inflation and changing prices should not unfavorably affect the Company's
revenues and net income or have an adverse impact on the continuing operation of
the Company's properties. The Company's net leases have rent increases based on
the Consumer Price Index ("CPI") or the Producer Price Index, rents based on
percentage of sales in excess of a specified level, or other periodic increases
which should increase operating revenues in the future. Future rent increases
may be affected by changes in the method of how the CPI is calculated. Although
there are indications that there may be legislation which considers changes to
the methods of calculating the CPI methodology, the Company cannot predict the
outcome of any proposal relating to the CPI formula.
Financial Condition
Except for the properties formerly leased to Harvest, the
Company's properties are leased to corporate tenants under long-term net leases
which generally require tenants to pay all operating expenses relating to the
leased properties. The Company's objective is to use the cash flow from net
leases to meet operating expenses, service its debt, maintain adequate cash
reserves and fund an increasing rate of dividends to shareholders. A significant
portion of the cash provided from operations is distributed to the shareholders
in keeping with the Company's objectives. The Company generally structures
leases so that they will provide increases in cash flow over their initial terms
with such terms generally ranging from 10 to 25 years.
-3-
<PAGE> 52
Cash provided from operations of $15,071,000, reflecting an
increase of 16% from 1995, was sufficient to fund dividend payments of
$12,488,000 and $2,583,000 of $3,353,000 of scheduled mortgage principal
installments. Future cash flow will benefit from additional purchases of real
estate and rent increases. Realization of the full effect of these benefits will
depend on the ability to re-lease the properties vacated by Harvest.
The Company's investing activities included the use of funds
to purchase $19,261,000 of properties and fund $10,134,000 to complete
build-to-suit projects. In addition, the Company used $5,410,000 to purchase an
interest in a limited liability company which leases property to Upper Deck. The
Company received proceeds of $2,044,000 from the sale of two Safeway Stores,
Inc. supermarkets and $835,000 from the sale of Garden Ridge stock warrants.
The Company's financing activities primarily consisted of
using funds provided from operating activities to pay quarterly dividends and
scheduled debt service requirements. During 1996, the Company received
$11,650,000 of proceeds from the placement of debt on previously unleveraged
properties and, $8,000,000 from the refinancing of mortgage debt on the Garden
Ridge properties. The Company purchased the Garden Ridge properties in 1994 and
1995 at an aggregate cost of $12,050,000 (including a portion of such cost
allocated to stock warrants). The Company was able to use the enhancement to
Garden Ridge's credit quality after completion of public stock offering in 1995
to obtain the new financing. The Company received $14,098,000 in 1996 from the
issuance of stock, including $13,000,000 raised from institutional investors.
The Company repaid an advance of $3,472,000 from the Company's line of credit
and prepaid $4,670,000 of mortgage debt.
In order to increase the asset base of the Company and to
further diversify its real estate portfolio, the Company's Board of Directors
authorized an offering of 10,000,000 Shares in a private placement to a limited
number of institutional investors. The Company is actively engaged in a
marketing effort to raise additional capital from institutional investors. There
can be no assurance that the offering will be fully subscribed although
Management believes that institutional investors are a promising market for
raising additional equity capital. The Company issued 1,300,000 shares at $10
per Share ($13,000,000) in 1995 and 1,130,436 shares at $11.50 per Share
($13,000,000) in 1996. The increase in price per share reflects the increase in
real estate values since acquisition based on an independent valuation.
At December 31, 1996, the Company held cash and cash
equivalents of $15,741,000. Although the Company holds a portion of such cash
for working capital purposes, the Company intends to use a substantial portion
of the cash for the acquisition of properties. The Company has $11,750,000
available from its line of credit for the purchase or construction of real
estate, funding of capital improvements or refinancing of mortgage loans. During
the year, a portion of the amounts available under the line of credit, which had
been used to fund construction of build-to-suit projects in 1995, was repaid.
The Company is in compliance with the terms of its line of credit agreement. The
line of credit agreement expires in November 1997.
Except for advances drawn under its line of credit, all of the
Company's debt is limited recourse mortgage financing collateralized by specific
properties. Mortgage loans with combined balances of $5,782,000 and
collateralizing the Harvest properties are in default. The loans are subject to
acceleration; however notice of acceleration has not been received from the
lenders. To the extent that the Company is able to re-lease some or all of the
properties, the Company will attempt to restructure the loans with the existing
lenders. In the case of mortgage financing that does not fully amortize over its
term or is currently due, the Company is responsible for the balloon payment
only to the extent of its interest in the encumbered property because the holder
of each such obligation has recourse only to the collateral as described above.
In the event that balloon payments come due, the Company will seek to refinance
the loans, restructure the debt with the existing lenders, evaluate its ability
to satisfy the obligation from its existing resources or sell the property and
use the sale proceeds to satisfy the mortgage debt. To the extent the remaining
initial lease term on any property remains in place for a number of years beyond
the balloon payment date, the Company believes that the ability to refinance
balloon payment obligations is enhanced. The Company also evaluates all its
outstanding loans for refinancing opportunities which may occur as the result of
changing interest rates or improvements in the credit rating of tenants which
may enable the Company to lower the interest rate on the debt. No balloon
payments on the Company's mortgages are scheduled until 1998, at which time two
limited
-4-
<PAGE> 53
recourse loans with an aggregate balance of $6,000,000 will be due. As the
properties collateralizing the two loans are subject to long-term leases, the
Company believes that the prospects for refinancing the loans are good.
In connection with the purchase of its properties, the Company
requires sellers of such properties to perform environmental reviews. Management
believes, based on the results of such reviews, that the Company'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 degree of contamination, principally in connection
with leakage from underground storage tanks, surface spills 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 Company's leases generally require
tenants to indemnify the Company from all liabilities and losses related to the
leased properties with provisions of such indemnification specifically
addressing environmental matters. The leases generally include provisions which
allow for periodic environmental assessments, paid for by the tenant, and allow
the Company to extend leases until such time as a tenant has satisfied its
environmental obligations. Certain of the leases allow the Company to require
financial assurances from tenants such as performance bonds or letters of credit
if the costs of remediating environmental conditions, in the estimation of the
Company, are in excess of specified amounts. Accordingly, Management believes
that the ultimate resolution of environmental matters will not have a material
adverse effect on the Company's financial condition, liquidity or results of
operations.
In March 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128 "Earnings Per Share" ("SFAS
No. 128"), which establishes standards for computing and presenting earnings per
share. SFAS No. 128 will be effective for financial statements issued for
periods ending after December 15, 1997. The impact of the adoption of this
statement is not expected to be material to the Company's Consolidated Financial
Statements.
-5-
<PAGE> 54
REPORT of INDEPENDENT ACCOUNTANTS
To the Board of Directors of
CAREY INSTITUTIONAL PROPERTIES Incorporated
and Subsidiaries:
We have audited the accompanying consolidated balance sheets
of CAREY INSTITUTIONAL PROPERTIES Incorporated and Subsidiaries as of December
31, 1994, 1995 and 1996, and the related consolidated statements of operations,
shareholders' equity, and cash flows for the years ended December 31, 1994, 1995
and 1996. These financial statements are the responsibility of Carey Property
Advisors, a Pennsylvania limited partnership (the "Advisor"). Our responsibility
is to express an opinion on these financial statements 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 Advisor, 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 consolidated financial position of
CAREY INSTITUTIONAL PROPERTIES Incorporated and Subsidiaries as of December 31,
1994, 1995 and 1996, and the consolidated results of their operations and their
cash flows for the years ended December 31, 1994, 1995 and 1996, in conformity
with generally accepted accounting principles.
/s/Coopers & Lybrand L.L.P.
New York, New York
March 24, 1997
-6-
<PAGE> 55
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 1994, 1995 and 1996
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
ASSETS:
Real estate leased to others:
Accounted for under the operating method:
Land $ 45,008,758 $ 46,359,430 $ 51,923,768
Buildings 86,418,211 106,360,317 133,857,623
------------- ------------- -------------
131,426,969 152,719,747 185,781,391
Accumulated depreciation 2,829,777 5,006,484 7,971,271
------------- ------------- -------------
128,597,192 147,713,263 177,810,120
Net investment in direct financing leases 115,065,063 105,703,258 100,535,180
------------- ------------- -------------
Real estate leased to others 243,662,255 253,416,521 278,345,300
Equity investments 17,124,858 15,992,225 22,034,005
Real estate held for sale 2,616,031
Cash and cash equivalents 4,163,418 22,519,656 15,740,583
Short-term investments 1,000,000 1,000,000
Funds in escrow 2,288,433
Accrued interest and rents receivable 367,569 267,779 718,367
Other assets, net of accumulated amortization
of $303,441, $611,251 and $951,470
in 1994, 1995 and 1996, 7,659,117 3,621,913 3,671,273
------------- ------------- -------------
Total assets $ 276,265,650 $ 299,434,125 $ 320,509,528
============= ============= =============
LIABILITIES:
Limited recourse mortgage notes payable $ 143,841,723 $ 150,656,333 $ 162,284,106
Note payable 3,471,899
Accrued interest payable 1,045,285 1,085,483 1,216,678
Accounts payable and accrued expenses 437,774 532,274 443,321
Accounts payable to affiliates 2,661,039 4,279,849 6,118,940
Dividends payable 2,942,124
Prepaid rental income and security deposits 555,898 950,558 923,825
------------- ------------- -------------
Total liabilities 148,541,719 163,918,520 170,986,870
------------- ------------- -------------
Minority interest 4,313,898 4,522,053 4,749,158
------------- ------------- -------------
Commitments and contingencies
SHAREHOLDERS' EQUITY:
Common stock, $.001 par value; authorized,
40,000,000 shares; 14,167,581, 15,480,537 and
16,724,941 shares issued and outstanding at
December 31, 1994, 1995 and 1996 14,168 15,481 16,725
Additional paid-in capital 124,317,820 137,046,066 151,143,243
Common stock subscribed 2,000,000
Receivable for common stock subscribed (2,000,000)
Dividends in excess of accumulated earnings (921,955) (6,088,570) (5,488,526)
Unrealized appreciation 220,892 73,058
------------- ------------- -------------
123,410,033 131,193,869 145,744,500
Less, common stock in treasury at cost,
22,925 and 100,272 shares at
December 31, 1995 and 1996 (200,317) (971,000)
------------- ------------- -------------
Total shareholders' equity 123,410,033 130,993,552 144,773,500
------------- ------------- -------------
Total liabilities and
shareholders' equity $ 276,265,650 $ 299,434,125 $ 320,509,528
============= ============= =============
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
-7-
<PAGE> 56
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
and SUBSIDIARIES
CONSOLIDATED 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 from operating leases $ 12,096,871 $ 16,926,079 $19,711,736
Interest income from direct financing leases 13,266,349 11,693,250 12,117,529
Other interest income 435,109 618,993 717,373
Other income 160,000
------------ ------------ -----------
25,958,329 29,238,322 32,546,638
------------ ------------ -----------
Expenses:
Interest 11,027,689 13,512,254 14,241,203
Depreciation 1,514,114 2,493,366 2,968,173
Amortization 160,713 307,810 340,219
Property expenses 2,717,500 3,415,448 3,656,785
General and administrative 1,612,470 1,931,493 2,025,319
Writedown to net realizable value 1,753,455
------------ ------------ -----------
17,032,486 21,660,371 24,985,154
------------ ------------ -----------
Income before minority interest in income,
income from equity investments, gains
(loss) on sale and extraordinary item 8,925,843 7,577,951 7,561,484
Minority interest in income 459,583 748,841 766,582
------------ ------------ -----------
Income before income from equity
investments, gains (loss) on sale and
extraordinary item 8,466,260 6,829,110 6,794,902
Income from equity investments 1,613,451 2,172,238 2,969,438
------------ ------------ -----------
Income before gains on sale
and extraordinary item 10,079,711 9,001,348 9,764,340
Gain on sale of securities 628,099 664,431
Gain (loss) on sale of real estate 1,535,763 (7,630)
------------ ------------ -----------
Income before extraordinary item 11,615,474 9,629,447 10,421,141
Extraordinary charge on extinguishment of debt 401,269 275,000
------------ ------------ -----------
Net income $ 11,615,474 $ 9,228,178 $10,146,141
============ ============ ===========
Net income per common share:
Income before extraordinary item $ .82 $ .68 $ .66
Extraordinary item (.03) (.02)
------------ ------------ -----------
$ .82 $ .65 $ .64
============ ============ ===========
Weighted average number of shares outstanding 14,167,581 14,235,452 15,840,426
============ ============ ===========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
-8-
<PAGE> 57
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
and SUBSIDIARIES
CONSOLIDATED STATEMENTS of SHAREHOLDERS' EQUITY
For the years ended December 31, 1994, 1995 and 1996
<TABLE>
<CAPTION>
Dividends
Additional in Excess of
Common Paid-in Accumulated Unrealized Treasury
Stock Capital Earnings Appreciation Stock Total
------- ------------ ------------ ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1993 $14,168 $124,226,525 $ (1,178,571) $123,062,122
Reimbursement of
issuance costs, net 91,295 91,295
Dividends declared (11,358,858) (11,358,858)
Net income 11,615,474 11,615,474
------- ------------ ------------ ------------
Balance at
December 31, 1994 14,168 124,317,820 (921,955) 123,410,033
1,312,956 Shares
issued, $.001
Par, net of costs
of $400,000 1,313 12,728,246 12,729,559
Repurchase of
22,925 Shares $(200,317) (200,317)
Change in unrealized
appreciation of market-
able equity securities $ 220,892 220,892
Dividends declared (14,394,793) (14,394,793)
Net income 9,228,178 9,228,178
------- ------------ ------------ ------------ --------- ------------
Balance at
December 31, 1995 15,481 137,046,066 (6,088,570) 220,892 (200,317) 130,993,552
1,244,404 Shares issued,
$.001 Par, net of costs
of $190,580 1,244 14,097,177 14,098,421
Repurchase of
77,347 Shares (770,683) (770,683)
Change in unrealized
appreciation of market-
able equity securities (147,834) (147,834)
Dividends declared (9,546,097) (9,546,097)
Net income 10,146,141 10,146,141
------- ------------ ------------ ------------ --------- ------------
Balance at
December 31, 1996 $16,725 $151,143,243 $ (5,488,526) $ 73,058 $(971,000) $144,773,500
======= ============ ============ ============ ========= ============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
-9-
<PAGE> 58
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
and SUBSIDIARIES
CONSOLIDATED 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 $ 11,615,474 $ 9,228,178 $ 10,146,141
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 1,674,827 2,801,176 3,308,392
Cash receipts on operating and direct financing
leases less than straight-line adjustments
and amortization of unearned income (474,510) (423,510) (330,351)
Minority interest in income (less than) in excess of
distributions paid (64,312) 208,155 227,105
Income from equity investments in excess of
distributions received (246,439) (242,367) (631,373)
Gains on sale of real estate and securities, net (1,535,763) (628,099) (656,801)
Sale of easement rights (160,000)
Writedown to net realizable value 1,753,455
Extraordinary charge on extinguishment of debt 401,269 275,000
Net change in operating assets and liabilities 1,277,532 1,663,747 1,254,610
------------ ------------ ------------
Net cash provided by operating activities 12,086,809 13,008,549 15,346,178
------------ ------------ ------------
Cash flows from investing activities:
Purchases of real estate and other capitalized costs (55,227,201) (14,617,959) (29,395,042)
Capital (contributions in) distributions
from equity investments (1,294,029) 1,375,000 (5,410,407)
Sale of investments to affiliate 12,008,853
Proceeds from sales of real estate and securities 6,102,362 628,099 2,879,503
Proceeds from sale of easement rights 160,000
Release of escrow funds 1,484,645 8,215,650
Proceeds from repayments on note receivable 450,000
Redemption of short-term investment 1,000,000
Purchases of stock and stock warrants (560,135)
------------ ------------ ------------
Net cash used in investing activities (36,765,370) (4,959,345) (30,475,946)
------------ ------------ ------------
</TABLE>
(Continued)
-10-
<PAGE> 59
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
and SUBSIDIARIES
CONSOLIDATED STATEMENTS of CASH FLOWS, CONTINUED
For the years ended December 31, 1994, 1995 and 1996
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Cash flows from financing activities:
Proceeds from mortgages 40,790,297 24,430,128 19,650,000
Advances on (repayments of) line of credit 3,471,899 (3,471,899)
Purchase of treasury stock (200,317) (770,683)
Prepayments of mortgages (8,721,679) (14,710,280) (4,669,527)
Proceeds from issuance of shares, net of costs 91,295 12,729,559 14,098,421
Payments of mortgage principal (2,488,632) (2,905,238) (3,352,700)
Dividends paid (11,358,858) (11,452,669) (12,488,221)
Payments made in connection with
extinguishment of debt (401,269) (275,000)
Deferred financing costs (681,064) (654,779) (369,696)
------------ ------------ ------------
Net cash provided by financing activities 17,631,359 10,307,034 8,350,695
------------ ------------ ------------
Net (decrease) increase in
cash and cash equivalents (7,047,202) 18,356,238 (6,779,073)
Cash and cash equivalents, beginning of year 11,210,620 4,163,418 22,519,656
------------ ------------ ------------
Cash and cash equivalents, end of year $ 4,163,418 $ 22,519,656 $ 15,740,583
============ ============ ============
</TABLE>
Supplemental schedule of noncash investing and financing activities:
In connection with the sale of an interest in real estate in 1994, the
Company assigned a $3,334,416 interest in a mortgage loan obligation to
the purchaser, an affiliate.
The accompanying notes are an integral part of the consolidated financial
statements.
-11-
<PAGE> 60
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies:
Basis of Consolidation:
The consolidated financial statements include the accounts of Carey
Institutional Properties Incorporated, its wholly-owned
subsidiaries and majority-owned general partnership interests
(collectively, the "Company").
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.
The Company 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
the 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 Company'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 Company 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.
For properties under construction, interest on mortgages is
capitalized rather than expensed and rentals received are
recorded as a reduction of capitalized project (i.e.,
construction) costs in accordance with Statement of Financial
Accounting Standards No. 67.
Substantially all of the Company's leases provide for either
scheduled rent increases, periodic rent increases based on
formulas indexed to increases in the Consumer Price Index ("CPI")
or Producer Price Index or sales overrides.
Continued
-12-
<PAGE> 61
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
Depreciation:
Depreciation is computed using the straight-line method over the
estimated useful lives of the properties - 40 years.
Real Estate Held for Sale:
Real estate held for sale is stated at the lower of cost or fair
value less costs to dispose.
Equity Investments:
The Company's interests in a real estate investment trust ("REIT"),
a general partnership and a limited liability company, which
ownership interests are 50% or less, are accounted for under the
equity method; i.e. at cost, increased or decreased by the
Company's share of earnings or losses, less distributions.
Other Assets:
Included in other assets are deferred charges, deferred rental
income, organization charges, marketable equity securities and
other investments, primarily stock warrants. Deferred charges
are costs incurred in connection with mortgage note financings
and interest rate cap agreements and are deferred and amortized
on a straight-line basis over the terms of the mortgages or
agreements, respectively. Deferred rental income is the
aggregate difference between scheduled rents which vary during
the lease term and income recognized on a straight-line basis.
Organization costs incurred in connection with the formation of
the Company are deferred and amortized on a straight-line basis
over five years from the date of inception.
The Company's marketable equity securities, which consist of 14,400
shares of the Garden Ridge Corporation, are classified as
available-for-sale securities and are reported at fair market
value with the Company's interest in unrealized gains and losses
on these securities reported as a separate component of
shareholders' equity until realized.
Cash Equivalents:
The Company 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 funds. Substantially all of
the Company's cash and cash equivalents at December 31, 1994,
1995 and 1996 were held in the custody of four financial
institutions.
Funds in Escrow:
Funds in escrow consist of funds used to complete property
improvements on specific properties and a mortgage security
deposit which were deposited into restricted accounts. The
escrow funds used to fund improvements at certain of the
Company's properties are capitalized when the improvements are
substantially complete and placed in service.
Treasury Stock:
Treasury stock is recorded at cost.
Offering Costs:
Costs incurred in connection with the raising of capital through the
sale of common stock are deferred and charged to shareholders'
equity upon the issuance of Shares to shareholders.
Continued
-13-
<PAGE> 62
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
Federal Income Taxes:
The Company is qualified as a REIT under the Internal Revenue Code
of 1986 and accordingly, is not subject to Federal income taxes
on amounts distributed to shareholders provided it distributes
at least 95% of its REIT taxable income to its shareholders and
meets other conditions necessary to retain its REIT status.
Reclassifications:
Certain 1994 and 1995 amounts have been reclassified to conform to
the 1996 financial statement presentation.
2. Organization and Offering:
The Company was formed on February 15, 1991 under the General
Corporation Law of Maryland for the purpose of engaging in the
business of investing in and owning industrial and commercial
real estate. Subject to certain restrictions and limitations,
the business of the Company is managed by Carey Property
Advisors (the "Advisor").
Shares were offered to the public on a "best efforts" basis by Carey
Financial Corporation ("Carey Financial") and other selected
dealers at $10 per Share. The offering concluded in August 1993
at which time an aggregate 14,167,581 Shares ($141,675,810) had
been issued. In 1995, the Company established a dividend
reinvestment plan. As of December 31, 1996, 126,925 Shares had
been issued pursuant to the dividend reinvestment plan.
In 1995, the Company's Board of Directors authorized the offering of
10,000,000 Shares in a private placement to a limited number of
institutional investors. As of December 31, 1996, the Company
had issued 2,430,435 Shares ($26,000,000) under this private
placement offering.
The Advisor may be entitled to receive a subordinated preferred
return, measured based upon the cumulative proceeds arising from
the sale of the Company assets. Pursuant to the subordination
provisions of the advisory agreement, the preferred return may
be paid only after the shareholders receive 100% of their
initial investment from the proceeds of assets sales and a
cumulative annual return of 6% since the inception of the
Company. The Advisor's interest in such preferred return amounts
to $449,094 based upon the cumulative proceeds from the sale of
assets since the inception of the Company through December 31,
1996. The Company's ability to satisfy the subordination
provisions of the advisory agreement may not be determinable
until liquidation of a substantial portion of the Company's
assets has been made.
In connection with services performed relating to the
identification, evaluation, structuring and development of the
Company's investments in real estate, affiliates of the Company
received structuring and development fees of $274,506, $223,333
and $1,077,948 in 1994, 1995 and 1996, respectively. Fees are
paid only in connection with completed transactions.
3. Transactions with Related Parties:
Pursuant to an advisory agreement, the Advisor performs certain
services for the Company including the identification,
evaluation, negotiation, purchase and disposition of property,
the day-to-day management of the Company and the performance of
certain administrative services. If in any year the operating
expenses exceed the 2%/25% Guidelines (the greater of 2% of
Average Invested Assets or 25% of net income) as defined in the
Prospectus, the Advisor will have an obligation to reimburse the
Company for such excess.
The Advisor performs multiple services including providing the
management and administration of the Company for which it is
entitled to receive management and incentive fees. Pursuant to
the Advisory Agreement, asset management fees currently due to
the Advisor are equal to .5% of
Continued
-14-
<PAGE> 63
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
Average Invested Assets, as defined. When Shareholders have
received a cumulative dividend return of 8%, which threshold has
not yet been met, the Advisor will also be entitled to receive
an incentive fee of .5% of Average Invested Assets. Based upon
portfolio projections, Management believes it is likely that
this incentive fee will be earned; therefore, although such
incentive fee will not be paid until the threshold is reached,
it has been accrued and included in accounts payable to
affiliates and property expense in the accompanying consolidated
financial statements. Asset management fees paid were $1,341,740
in 1994, $1,477,054 in 1995 and $1,583,958 in 1996. Subordinated
incentive fees, which have not been paid, were in like amount.
General and administrative expense reimbursement consists
primarily of the actual cost of personnel needed in providing
administrative services necessary to the operations of the
Company. Such reimbursements incurred were $484,139, $632,657
and $698,823 in 1994, 1995 and 1996, respectively.
The Company's ownership interests in certain properties are jointly
held with affiliated entities with such interests held as
tenants-in-common and through ownership interests in a real
estate investment trust and two general partnerships. The
Company's interests in jointly held properties range from 23.7%
to 80%. As described below, the Company has purchased additional
interests from affiliates, and has sold interests in three
investments to an affiliate. In the future, real property may be
acquired by entities formed by the Company and affiliates of the
Advisor and, accordingly, transactions with related parties may
arise between the Company and affiliated entities.
During 1994, the Company sold a portion of its interests to
Corporate Property Associates 12 Incorporated ("CPA(R):12"), an
affiliate, in two general partnerships one of which net leases
property to Best Buy Co., Inc.("Best Buy") and one of which net
leases property to Gensia, Inc. ("Gensia") and in directly owned
properties leased to Big V Holding Corp. ("Big V"). CPA(R):12
purchased a 37% interest in the Best Buy general partnership in
May 1994, exercised its option to increase its interest in the
Gensia general partnership from .01% to 50% in October 1994 and
purchased a 45% interest as a tenant-in-common in the Company's
Big V properties in Ellenville and Warwick, New York in July
1994. CPA(R):12 paid the Company $12,008,853 for the purchase of
these interests pursuant to formulas based on the initial cost
for the properties and approved by the Board of Directors.
For the years ended December 31, 1994, 1995 and 1996, fees and
expenses of $122,018, $116,508 and $102,896, respectively, were
incurred for legal services provided by a firm in which the
Secretary of the Company, the Corporate General Partner of the
Advisor, W.P. Carey and other affiliates is a partner.
The Company is a participant in an agreement with W.P. Carey & Co.,
Inc. ("W.P. Carey") and certain 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 Company'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 $71,032, $301,895 and $219,199,
respectively. The increase in 1995 was due, in part, to certain
nonrecurring costs incurred in connection with the relocation of
the Company's offices.
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
$21,246,000 in 1997; $21,227,000 in 1998; $21,231,000 in 1999;
$21,247,000 in 2000; $21,369,000 in 2001; and aggregate
approximately $341,232,000 through 2020.
Continued
-15-
<PAGE> 64
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
Contingent rents were approximately $290,000 in 1994, $334,000 in
1995 and $403,000 in 1996.
5. Net Investment in Direct Financing Leases:
Net investment in direct financing leases is summarized as follows:
<TABLE>
<CAPTION>
December 31,
------------
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Minimum lease payments
receivable $279,448,561 $240,120,607 $220,898,210
Unguaranteed residual value 114,667,688 105,086,885 99,657,812
------------ ------------ ------------
394,116,249 345,207,492 320,556,022
Less: Unearned income 279,051,186 239,504,234 220,020,842
------------ ------------ ------------
$115,065,063 $105,703,258 $100,535,180
============ ============ ============
</TABLE>
Scheduled future minimum rents, exclusive of renewals, under
noncancellable direct financing leases amount to approximately
$11,340,000 in 1997, $11,575,000 in 1998, $11,753,000 in 1999,
$11,746,000 in 2000; $11,769,000 in 2001 and aggregate
approximately $220,898,000 through 2018.
The Company is committed under long-term ground leases for certain
properties formerly occupied by Harvest Foods, Inc. ("Harvest")
through 2011. Future ground lease rental commitments aggregate
$1,751,000.
Contingent rents were approximately $23,000 in 1994, $192,000 in
1995 and $277,000 in 1996.
6. Mortgage Notes Payable and Revolving Credit Facility:
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 $270,463,000 before accumulated depreciation. As
of December 31, 1996, mortgage notes payable have interest rates
varying from 7.45% to 10.5% per annum and mature from 1998 to
2020.
Scheduled principal payments, including mortgage notes subject
to acceleration, during each of the next five years following
December 31, 1996 and thereafter are as follows:
<TABLE>
<CAPTION>
Year Ending December 31,
------------------------
<S> <C>
1997 $ 16,448,232
1998 11,667,278
1999 10,771,314
2000 11,672,944
2001 8,069,760
Thereafter 103,654,578
------------
Total $162,284,106
============
</TABLE>
The Company's revolving credit agreement provides a line of credit
of $11,750,000 as of December 31, 1996 for the purpose of
financing additional investments in real estate including
financing of construction improvements and other purposes. Any
advances under the facility are evidenced by a promissory note
which bears an annual interest rate equivalent to short-term
London Inter-Bank Offered Rates plus 2.25%. Unused amounts are
subject to a nonutilization fee of 0.2% per annum. The amount
available under the credit facility decreases by $250,000 each
month until November 15, 1997, at which time the credit facility
is scheduled to terminate.
Continued
-16-
<PAGE> 65
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
The revolving credit agreement places the following restrictions on
the Company: (i) funds advanced may only be used to purchase
real estate, fund capital improvements or to pay down mortgage
indebtedness; (ii) the lender has the option to apply all net
proceeds from sales of real estate to pay any outstanding
amounts advanced from the credit facility; (iii) the amount of
additional mortgage indebtedness the Company may incur is
limited and (iv) the Company is required to meet certain
financial covenants, including maintaining a minimum tangible
net worth of $97,000,000 and a debt service coverage ratio as
defined of 2 to 1 on advances outstanding. The Company is
currently in compliance with such terms. Amounts advanced under
the credit facility are recourse obligations of the Company. No
amounts were outstanding as of December 31, 1996.
Interest paid on mortgage notes payable and the revolving credit
agreement, including capitalized interest, was $11,670,193,
$13,709,847 and $14,110,088 in 1994, 1995 and 1996,
respectively.
In connection with the placement of mortgages, fees of $194,247,
$225,583 and $511,179, were paid to an affiliate of the Company
in 1994, 1995 and 1996, respectively.
7. Dividends:
Dividends paid to shareholders consist of ordinary income, capital
gains, return of capital or a combination thereof for income tax
purposes. For the three years ended December 31, 1996, dividends
paid per share were reported as follows for tax purposes:
<TABLE>
<CAPTION>
1994 1995 1996
-------- -------- --------
<S> <C> <C> <C>
Ordinary income $ .55 $ .53 $ .66
Capital gains .07 .04
Return of capital .25 .21 .12
-------- -------- --------
$ .80 $ .81 $ .82
======== ======== ========
</TABLE>
A dividend of $.2052 per share ($3,411,109) for the quarter ended
December 31, 1996 was declared and paid in January 1997.
8. Industry Segment Information:
The Company'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 $ 12,096,871 $ 16,926,079 $ 19,711,736
Interest income from direct
financing leases 13,266,349 11,693,250 12,117,529
Adjustments:
Share of leasing revenues applicable
to minority interest (1,143,283) (1,801,209) (1,797,435)
Share of leasing revenues from equity
investments 4,553,223 5,639,126 6,964,508
------------ ------------ ------------
$ 28,773,160 $ 32,457,246 $ 36,996,338
============ ============ ============
</TABLE>
Continued
-17-
<PAGE> 66
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
The Company earned its share of net leasing revenues in 1994, 1995
and 1996 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>
Marriott International, Inc. (1) $ 4,292,332 15% $ 4,330,126 13% $ 4,342,865 12%
Best Buy Co., Inc. (2) 3,734,027 13 3,066,924 10 3,060,497 8
Neodata Corporation 1,282,258 4 2,223,307 7 2,297,743 6
Omnicom Group, Inc. 377,608 1 1,867,500 6 1,867,500 5
Lucent Technologies, Inc. 1,852,829 6 1,852,829 6 1,852,829 5
Big V Holding Corp. (3) 2,067,523 7 1,668,402 5 1,691,883 5
Garden Ridge Corporation 545,774 2 628,426 2 1,403,512 4
Michigan Mutual Insurance
Company 1,353,997 5 1,356,235 4 1,358,702 4
Barnes & Noble, Inc. 1,295,924 5 1,314,068 4 1,334,565 4
The Upper Deck Company (1) 1,312,643 4
Gensia, Inc. (1) 703,155 2 1,309,000 4 1,309,000 4
Merit Medical Systems, Inc. 1,194,684 4 1,303,291 3
Harvest Foods, Inc. (4) 1,237,573 4 1,238,403 4 1,239,340 3
Q Clubs, Inc. (formerly Sports
and Fitness Clubs of America) 655,458 2 656,250 2 1,201,828 3
Waban, Inc. 1,118,356 4 1,118,356 3 1,118,356 3
Plexus Corp. 425,450 2 1,091,500 3 1,091,500 3
Lincoln Technical Institute
of Arizona, Inc. 1,082,400 4 1,082,400 3 1,082,400 3
Bell Sports, Inc. 889,655 3 981,644 3 1,011,804 3
Wal-Mart Stores, Inc. 941,430 3 976,287 3 994,433 3
Nicholson Warehouse L.P. 806,621 3 805,064 3 805,092 2
GATX Logistics, Inc. 794,893 3 794,893 2 794,893 2
Custom Food Products, Inc. 337,750 1 767,264 2
Del Monte Corporation 643,125 2
Superior Telecommunications, Inc. 550,123 2 636,921 2 619,853 2
Childtime Childcare, Inc. 186,667 1 568,480 1
Petsmart, Inc. 463,842 2 469,334 2 478,927 1
Oshman Sporting Goods, Inc. 421,686 2 435,624 1 442,324 1
Hibbet Sporting Goods, Inc. 418,992 1
CalComp Technology, Inc. (formerly
Summmagraphics Corporation) 438,051 2 440,902 1 381,412 1
Safeway Stores Incorporated 393,750 1 393,750 1 167,212
Detroit Diesel Corporation 34,073
Data Documents, Inc. 1,048,445 3
----------- --- ----------- --- ----------- ---
$28,773,160 100% $32,457,246 100% $36,996,338 100%
=========== === =========== === =========== ===
</TABLE>
- ----------
(1) Represents the Company's share of revenues from its equity investment.
(2) Net of rental amount applicable to CPA(R):12's 37% minority interest
acquired from the Company in May 1994.
(3) CPA(R): 12 acquired a 45% interest in two of the Big V Holding Corp.'s
properties in July 1994
(4) Net of ground lease rental expense of approximately $152,000, $158,000 and
$158,000 for 1994, 1995 and 1996, respectively.
Continued
-18-
<PAGE> 67
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
9. Equity Investments:
The Company owns a 23.7% interest in Marcourt Investments
Incorporated ("Marcourt") which, pursuant to a master lease, net
leases 13 hotel properties to a wholly-owned subsidiary of
Marriott International, Inc. and 50% equity interests in Gena
Property Company ("Gena"), a general partnership, which owns
land and buildings in San Diego, California, net leased to
Gensia Inc., a general partnership and Cards Limited Liability
Company ("Cards LLC"), which net leases two office buildings to
The Upper Deck Company. Since October 1994, the Company has held
a 50% interest in Gena. The interest in Cards LLC was purchased
in January 1996.
The summarized financial information of Marcourt is as follows:
(In thousands)
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Assets $149,900 $149,910 $149,694
Liabilities 110,645 108,876 106,002
Shareholders' equity 39,255 41,034 43,692
Revenues 18,140 18,300 18,549
Interest and other expenses 11,486 11,370 11,097
Net income 6,654 6,930 7,452
</TABLE>
Summarized financial information of Gena is as follows:
(In thousands)
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Assets $22,979 $22,287 $21,826
Liabilities 10,050 12,381 11,832
Capital 12,929 9,906 9,994
Revenues 965 2,618 2,618
Expenses 504 1,470 1,439
Net income 461 1,148 1,179
</TABLE>
Summarized financial information of Cards LLC is as follows:
(In thousands)
<TABLE>
<CAPTION>
1996
----
<S> <C>
Assets $26,581
Liabilities 15,705
Capital 10,876
Revenues 2,632
Expenses 1,259
Net income 1,373
</TABLE>
Continued
-19-
<PAGE> 68
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
10. Gains and Loss on Sale:
Data Documents, Inc.:
In May 1993, the Company and Corporate Property Associates 10
Incorporated ("CPA(R):10"), an affiliate, purchased land and
buildings as tenants-in-common for $13,450,000 with 77.78% and
22.22% interests, respectively, and entered into a net lease
with Data Documents, Inc. ("Data Documents"). In 1994, Data
Documents notified the Company and CPA(R):10 that it intended to
restructure its debt. The Company and CPA(R):10 informed Data
Documents that such restructuring would violate the financial
covenants of the lease. Data Documents did not remedy the
covenant violation and, therefore, was obligated to purchase its
leased properties at the higher of the original costs or fair
market value as encumbered by the lease. In November 1994, the
lease was terminated and title to the properties was
transferred. In connection with the transfer, Data Documents
deposited funds in an escrow account pending final determination
of fair market value. The fair market value was subsequently
determined to be $15,775,000. In connection with such final
determination, all remaining sales proceeds were received by the
Company. The Company recognized a gain on the sale of the
properties of $1,535,763 in 1994.
Garden Ridge Corporation:
In December 1993, the Company entered into a net lease with Garden
Ridge Pottery Corporation (subsequently renamed Garden Ridge,
Inc.) ("Garden Ridge"). In connection with executing the lease
transaction, Garden Ridge's parent company, Garden Ridge
Corporation ("Garden Ridge Corp."), granted the Company warrants
to purchase 97,200 shares of common stock, as adjusted for stock
splits, exercisable at $6.67 per common share. On May 9, 1995,
Garden Ridge Corp. completed an initial public offering ("IPO")
of common stock. In connection with the IPO, the Company
exercised its warrants on the 97,200 shares and simultaneously
sold 90,000 of such shares at $15 per share realizing a gain,
net of selling costs, of $628,099.
In connection with entering into a second lease agreement with
Garden Ridge Corp. in 1995, the Company was granted warrants to
purchase 67,500 shares of common stock exercisable at $10 per
share. On April 30, 1996, the Company exercised warrants for
22,500 shares and simultaneously sold such shares realizing a
gain, net of selling costs, of $664,431. Garden Ridge Corp.'s
stock subsequently split on a 2-for-1 basis.
Safeway Stores, Inc.:
In December 1991, the Company and CPA(R):10 purchased three
supermarkets leased to Safeway Stores Incorporated ("Safeway")
as tenants in-common, each with 50% ownership interests. In
1996, the Company and CPA(R):10 sold a property in Glendale,
Arizona and a property in Escondido, California.
On January 26, 1996, the Glendale store was sold for $1,950,000. On
February 15, 1996, the Escondido property was sold for
$3,450,000. A net loss of $7,630 was recognized on the sales.
Net of transaction costs, the Company received $2,044,260 in
cash a promissory note of $560,750. The final installment on the
promissory note, was received in January 1997.
Annual cash flow from the two properties was $252,000.
Continued
-20-
<PAGE> 69
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
11. Extraordinary Charge on Extinguishment of Debt:
In October 1995, the Company refinanced two limited recourse
mortgage loans with annual interest rates of 9.25% and 10%, and
combined balances of $8,910,000, collateralized by the property
leased to Omnicom Group, Inc. In connection with the prepayment
of one of the loans, the Company incurred a prepayment charge of
$401,269 in 1995 as an extraordinary charge on extinguishment of
debt.
In December 1995, the lender filed suit against the Company alleging
that the prepayment premium paid in connection with the
prepayment of one of two loans was understated by approximately
$400,000. The Company reached an agreement with the lender in
November 1996 to settle the dispute for $275,000. Such payment
has been recorded in 1996 as an extraordinary charge on the
extinguishment of debt.
12. Purchase of Real Estate:
On December 17, 1996, the Company purchased land and two buildings
in Orlando, and Hollywood, Florida for $9,325,000 and entered
into a master net lease agreement for both properties with
Detroit Diesel Realty, Inc. ("Detroit Diesel"), with Detroit
Diesel's parent company, Detroit Diesel Corporation as lease
guarantor.
The Detroit Diesel lease provides for an initial lease term of 23
years with two ten-year renewal options. Annual rentals under
the lease are $845,000, with rent increases during each of the
first five years and every three years thereafter, based on a
formula indexed to increases in the Producer Price Index.
In connection with performing services relating to the Company's
real estate purchases, affiliates of the Company received fees
of $194,247, $89,334 and $431,179 in 1994, 1995 and 1996,
respectively.
13. Harvest Foods, Inc.:
In February 1992, the Company and CPA(R):10 purchased as
tenants-in-common, each with 50% ownership interests, 13
supermarkets and two office buildings and entered into a master
lease with Harvest Foods, Inc. ("Harvest"), as lessee. The total
purchase price of the Harvest properties was $20,165,000. The
Company and CPA(R):10 each contributed $3,950,000 of equity and
each obtained $6,132,500 of limited recourse mortgage financing
from two lenders of $4,632,500 and $1,500,000, respectively, to
fund the purchase of the Harvest properties.
In June 1996 Harvest filed a voluntary bankruptcy petition under
Chapter 11 of the United States Bankruptcy Code. Subsequent to
Harvest's filing for Chapter 11 bankruptcy, Harvest filed a
motion to sever the master lease into 15 separate leases. The
Company and CPA(R):10 vigorously opposed the motion which
Harvest subsequently withdrew. In March 1997, the Bankruptcy
Court approved Harvest's motion to disaffirm the master lease.
The Company has agreements-in-principle to sell one of the
properties and lease two of the supermarkets. As final
agreements have not been completed for sale or lease of
properties, there is no assurance that the proposed sale or
lease of properties will occur. The Company's share of annual
rent under the Harvest lease was the sum of (i) $607,086 and
(ii) an amount equal to debt service on the two loans. Based on
the Company's expectation that future cash flow from the
properties will be
Continued
-21-
<PAGE> 70
CAREY INSTITUTIONAL PROPERTIES INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
reduced, Management has concluded that there has been an
impairment to the value of the properties. Based on a writedown
of the properties to their estimated net realizable value of
$8,250,000, the Company has incurred a charge of $1,753,455 for
the year ended December 31, 1996.
The two limited recourse mortgage loans, of which the Company's
share was $5,782,000 at December 31, 1996, are in default and
are subject to acceleration by the lenders as a result of the
filing of the bankruptcy petition. A portion of the debt service
for the period subsequent to December 31, 1996 had not been paid
in a timely manner. As the lender's sole recourse is to the
Harvest properties, the Company and CPA(R):10 are evaluating
their options including proposing a restructuring of the loan.
14. 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 Company estimates that the fair value of mortgage notes payable
approximates the carrying value of such mortgage notes 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 risks.
In conjunction with executing several of its leases, the Company was
granted warrants to purchase common stock of the lessee or lease
guarantor. To the extent that the lessee is not a publicly
traded company, the warrants have been judged at the time of
issuance to be speculative in nature and a nominal cost basis
has been attributed to them. The Company believes it is not
practicable to estimate the fair value of its stock warrants for
closely held companies. At December 31, 1996, the Company held
stock warrants for 90,000 common shares of Garden Ridge and
155,461 common shares of Merit Medical Systems, Inc., both of
which are publicly traded companies. The fair value of the
Company's stock warrants in these two companies as of December
31, 1996, based on quoted prices of their common stock, which
have a carrying value of $341,623, is approximately $793,000.
Such warrants are exercisable currently.
At December 31, 1996, the Company has an interest rate cap agreement
on one of its variable rate limited recourse mortgage loans with
an aggregate notional amount of $3,200,000. The agreement
expires in 1998. The Company has no off-balance sheet risk of
accounting loss on such agreements.
15. New Accounting Pronouncement:
In March 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128 "Earnings
Per Share" ("SFAS No. 128"), which establishes standards for
computing and presenting earnings per share. SFAS No. 128 will
be effective for Financial Statements issued for periods ending
after December 15, 1997. The impact of the adoption of this
statement is not expected to be material to the Company's
Consolidated Financial Statements.
-22-
<PAGE> 71
PROPERTIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME OF LEASE TYPE OF OWNERSHIP
OBLIGOR TYPE OF PROPERTY LOCATION INTEREST
- -------------- ---------------- -------- -----------------
<S> <C> <C> <C>
WAL-MART STORES, INC. Retail Stores Center, Groves, Ownership of a 50%
- 6 locations Silsbee and Vidor, interest in land
Texas; and buildings (1)
Weatherford,
Oklahoma;
Fort Smith,
Arkansas
SAFEWAY STORES Supermarket Broken Arrow, Ownership of a 50%
INCORPORATED Oklahoma interest in land
and building
MARRIOTT Hotels Irvine, Sacramento, Ownership of a 23.69%
INTERNATIONAL, - 13 locations and San Diego, interest in a real estate
INC. California; investment trust owning
Orlando - 2, land and buildings (1)
Florida;
Des Plains,
Illinois;
Indianapolis,
Indiana;
Louisville,
Kentucky;
Linthicum,
Maryland;
Las Vegas, Nevada;
Newark, New Jersey;
Albuquerque,
New Mexico;
Spokane,
Washington
Properties formerly Supermarkets and Little Rock - 7, Hope, Ownership of a 50%
leased to Office Buildings North Little Rock, interest in land
HARVEST FOODS, - 15 locations Conway, Hot Springs, and buildings
INC. Texarakana and (1)(2)
Jonesboro, Arkansas;
Ruston, Louisiana;
Clarksdale, Mississippi
CALCOMP TECH- Office/Manufacturing Austin, Ownership of a 50%
NOLOGY, INC. (formerly Facilities Texas interest in land and
SUMMAGRAPHICS buildings (1)
CORPORATION)
NEODATA Manufacturing/ Boulder, Ownership of a 80%
CORPORATION Distribution Facility Colorado interest in land and
building (1)
BELL SPORTS, INC. Warehouse/ Rantoul, Ownership of land
Manufacturing Facility Illinois and building
</TABLE>
-23-
<PAGE> 72
<TABLE>
<CAPTION>
NAME OF LEASE TYPE OF OWNERSHIP
OBLIGOR TYPE OF PROPERTY LOCATION INTEREST
- -------------- ---------------- -------- -----------------
<S> <C> <C> <C>
OSHMAN SPORTING
GOODS, INC. Retail Store Plano, Ownership of land
Texas and building (1)
MICHIGAN MUTUAL Office Complex Charleston, Ownership of land
INSURANCE COMPANY South Carolina and building (1)
GATX LOGISTICS, INC. Warehouse Jacksonville, Ownership of land
Florida and building (1)
BIG V HOLDING CORP. Supermarkets Greenport, Ownership of land and
- 3 locations Ellenville, buildings in Greenport and
and Warwick, ownership of a 55% interest in
New York land and buildings in Ellenville
and Warwick, New York (1)
LUCENT Warehouse Charlotte, Ownership of land
TECHNOLOGIES, INC. North Carolina and building (1)
BARNES & NOBLE, INC. Retail Stores Farmington, Ownership of land
- 2 locations Connecticut and buildings (1)
and Braintree,
Massachusetts
BEST BUY CO., INC. Retail Stores Denver and Ownership of a 63%
- 17 locations Fort Collins, interest in a general
Colorado; Aurora, partnership owning land
Bedford Park, and buildings (1)
Bloomingdale,
Matteson and
Schaumburg, Illinois;
Omaha, Nebraska;
Albuquerque, New Mexico;
Arlington, Beaumont,
Dallas, El Paso,
Fort Worth, Houston,
Plano, Texas; and
Madison, Wisconsin
LINCOLN TECHNICAL Technical Training Glendale Heights, Ownership of land
INSTITUTE OF Institute Illinois and buildings (1)
ARIZONA, INC.
MERIT MEDICAL Office/Warehouse South Jordan, Utah Ownership of land
SYSTEMS, INC. and building (1)
WABAN, INC. Retail Facility Farmingdale, Ownership of land
New York and building (1)
Q CLUBS, INC. Health Clubs Memphis, Ownership of land
- 2 locations Tennessee and and buildings
Bedford, Texas (1-Memphis)
</TABLE>
-24-
<PAGE> 73
<TABLE>
<CAPTION>
NAME OF LEASE TYPE OF OWNERSHIP
OBLIGOR TYPE OF PROPERTY LOCATION INTEREST
- -------------- ---------------- -------- -----------------
<S> <C> <C> <C>
PETSMART, INC. Warehouse Ennis, Texas Ownership of land
and building (1)
GARDEN RIDGE Retail Stores Round Rock, Texas Ownership of land
CORPORATION and Oklahoma City, and buildings (1)
Oklahoma (under
construction)
NICHOLSON Warehouse Maple Heights, Ownership of land
WAREHOUSE, L.P. Ohio and building (1)
SUPERIOR Manufacturing Brownwood, Ownership of land
TELECOMMUNICATIONS, Texas and building (1)
INC.
GENSIA, INC. Office/Research and San Diego, Ownership of a 50%
Development Facility California interest in a general
partnership owning land
and buildings (1)
CHILDTIME Daycare Centers Newport News, Ownership of a 50%
CHILDCARE, INC. Centreville, Manassas, interest in land
and Century Oaks, VA; and buildings (1)
Napeville, IL
PLEXUS CORP. Manufacturing Neenah, WI Ownership of land
and building (1)
CFP GROUP, INC. Food Processing/ Owingsville, KY Ownership of land
Warehouse Facility and building (1)
OMNICOM GROUP, Office Building Venice, CA Ownership of land
INC. and building (1)
DEL MONTE Warehouses and a Mendota, Illinois; Ownership of a 50%
CORPORATION Special Purpose Facility Plover, Wisconsin; interest in land
Toppenish and and buildings (1)
Yakima, Washington
THE UPPER Office Buildings Carlsbad, Ownership of a 50%
DECK COMPANY California interest in a limited
liability company owning
land and buildings (1)
HIBBETT SPORTING Warehouse/Office Birmingham, Ownership of land
GOODS, INC. Facility Alabama and building (1)
DETROIT DIESEL Distribution/Warehouse Orlando and Ownership of land
CORPORATION Facilities Hollywood, Florida and building
</TABLE>
(1) These properties are encumbered by mortgage notes payable.
(2) Ownership of buildings with ground leases of land for one property in
Little Rock, Arkansas and properties in Hot Springs, North Little Rock
and Jonesboro, Arkansas.
-25-
<PAGE> 74
MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
- --------------------------------------------------------------------------------
Except for limited or sporadic transactions, there is no
established public trading market for the Shares of the Company. As of December
31, 1996, there were 8,934 holders of record of the Shares of the Company.
The Company is required to distribute annually its
Distributable REIT Taxable Income, as defined in the Prospectus, to maintain its
status as a REIT. Quarterly dividends paid by the Company are as follows:
<TABLE>
<CAPTION>
Cash Dividends Paid Per Share
1994 1995 1996
------- ------- -------
<S> <C> <C> <C>
First quarter $.20000 $.20150 $.20350
Second quarter .20025 .20200 .20400
Third quarter .20050 .20250 .20450
Fourth quarter .20100 .20300 .20500
------- ------- -------
$.80175 $.80900 $.81700
======= ======= =======
</TABLE>
REPORT ON FORM 10-K
- --------------------------------------------------------------------------------
The Advisor will supply to any shareholder, 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.
-26-
<PAGE> 75
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
3.1 Articles of Amendment and Restatement. Exhibit 3(A) to Regis-
tration Statement (Form
S-11) No. 33-39409
3.2 Amended Bylaws of Registrant. Exhibit 3(B) to Regis-
tration Statement (Form
S-11) No. 33-39409
10.1 Amended Advisory Agreement . Exhibit 10(A)(2) to
Registration Statement
(Form S-11) No. 33-39409
10.2 Lease between Marcourt Investments Filed as Exhibit 10(D)(1)
Incorporated ("Marcourt") and CTYD to Registrant's Post
III Corporation ("CTYD"). Effective Amendment No. 1
to Form S-11
10.3 Series A-2 9.94% Secured Note from Filed as Exhibit 10(D)(2)
Marcourt to the registered owner of to Registrant's Post
note (Various Series A-1 9.94% Notes Effective Amendment No. 1
in an aggregate amount of 38,750,000 to Form S-11
substantially in the form of the Series
A-1 9.94% Note attached , were issued by
Marcourt in connection with the Financing).
10.4 Series A-2 11.18% Secured Note from Filed as Exhibit 10(D)(3)
Marcourt to the registered owner of to Registrant's Post
note (Various notes in an aggregate Effective Amendment No. 1
amount of 70,250,000 substantially to Form S-11
in the form of the Series A-2 11.18%
Note attached , were issued by Marcourt
in connection with the Financing.
10.5 Indenture between Marcourt, as Filed as Exhibit 10(D)(4)
borrower, to First Fidelity Bank, to Registrant's Post
National Association, New Jersey, as Effective Amendment No. 1
trustee ("Trustee"). to Form S-11
</TABLE>
<PAGE> 76
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.6 Real Estate Deed of Trust from Filed as Exhibit 10(D)(5)
Marcourt to Albuquerque Title Company, to Registrant's Post
as trustee for benefit of the Trustee Effective Amendment No. 1
filed in New Mexico, securing Series to Form S-11
A-1 9.94% Notes and Series A-2 ll.18%
notes allocated to Albuquerque, New
Mexico Marriott property (Deeds of Trust
or Mortgages substantially similar to
this Deed of Trust were filed in all other
jurisdictions in which Marriott Properties
are located. Such other deeds of trust or
mortgages secure the principal amount of
Series A-1 9.94% Notes and Series A-2 11.18%
Notes allocated to the Marriott Properties
located in such other jurisdictions)
10.7 Second Real Estate Deed of Trust from Filed as Exhibit 10(D)(6)
Marcourt to Albuquerque Title Company as to Registrant's Post
trustee for the benefit of the Trustee, filed Effective Amendment No. 1
in New Mexico, securing all Series A-1 9.94% to Form S-11
Notes and Series A-2 11.18% Notes other than
those notes allocated to the Albuquerque, New
Mexico Marriott property (Deeds of trust or
mortgages substantially similar to this
Second Real Estate Deed of Trust were filed
in all other jurisdictions in which the
remaining Marriott Properties are located.
Such other deeds of trust or mortgages
secure the principal amount of Series A-1 9.94%
Notes and Series A-2 11.18% Notes allocated
to all Marriott Properties not located in the
jurisdiction in which such other deeds of trust
were filed for recording).
10.8 Guaranty from the Registrant, Corporate Filed as Exhibit 10(D)(7)
Property Associates 10 Incorporated, Trammell to Registrant's Post
Crow Equity Partners II, Ltd. ("TCEP II") and Effective Amendment No. 1
PA/First Plaza Limited Partnership ("First to Form S-11
Plaza") as guarantors, to the Trustee.
10.9 Shareholders Agreement between the Filed as Exhibit 10(D)(8)
Registrant, Corporate Property Associates to Registrant's Post
10 Incorporated ("CPA(R):10"), TCEP II and Effective Amendment No. 1
First Plaza. to Form S-11
10.10 Assignment and Assumptions of Lease Agreement Filed as Exhibit 10(E)(1)(a)
for property located in Glendale, Arizona to Registrant's Post
Effective Amendment No. 1
to Form S-11
</TABLE>
<PAGE> 77
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.11 Assignment and Assumptions of Lease Agreement Filed as Exhibit 10(E)(1)(b)
for property located in Ft. Smith, Arkansas to Registrant's Post
Effective Amendment No. 1
to Form S-11
10.12 Assignment and Assumptions of Lease Agreement Filed as Exhibit 10(E)(1)(c)
for property located in Escondido, California. to Registrant's Post
Effective Amendment No. 1
to Form S-11
10.13 Assignment and Assumptions of Lease Agreement Filed as Exhibit 10(E)(1)(d)
for property located in Broken Arrow, Oklahoma. to Registrant's Post
Effective Amendment No. 1
to Form S-11
10.14 Assignment and Assumptions of Lease Agreement Filed as Exhibit 10(E)(1)(e)
for property located in Weatherford, Oklahoma. to Registrant's Post
Effective Amendment No. 1
to Form S-11
10.15 Assignment and Assumptions of Lease Agreement Filed as Exhibit 10(E)(1)(f)
for property located in Center, Texas. to Registrant's Post
Effective Amendment No. 1
to Form S-11
10.16 Assignment and Assumptions of Lease Agreement Filed as Exhibit 10(E)(1)(g)
for property located in Groves, Texas. to Registrant's Post
Effective Amendment No. 1
to Form S-11
10.17 Assignment and Assumptions of Lease Agreement Filed as Exhibit 10(E)(1)(h)
for property located in Silsbee, Texas. to Registrant's Post
Effective Amendment No. 1
to Form S-11
10.18 Assignment and Assumptions of Lease Agreement Filed as Exhibit 10(E)(1)(i)
for property located in Vidor, Texas. to Registrant's Post
Effective Amendment No. 1
to Form S-11
10.19 Lease Amendments for the Ft. Smith, Arkansas Filed as Exhibit 10(E)(2)
and Weatherford, Oklahoma properties. to Registrant's Post
Effective Amendment No. 1
to Form S-11
10.20 Promissory Note from subsidiaries of the Filed as Exhibit 10(E)(3)
Registrant and CPA(R):10 to The New England to Registrant's Post
Mutual Life Insurance Company ("New England"). Effective Amendment No. 1
to Form S-11
</TABLE>
<PAGE> 78
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.21 Mortgage/Deed of Trust from subsidiaries Filed as Exhibit 10(E)(4)(a)
of the Registrant and CPA(R):10 to to Registrant's Post
New England encumbering the property Effective Amendment No. 1
in Ft. Smith, Arkansas to Form S-11
10.22 Mortgage/Deed of Trust from subsidiaries Filed as Exhibit 10(E)(4)(b)
of the Registrant and CPA(R):10 to to Registrant's Post
New England encumbering the property Effective Amendment No. 1
in Weatherford, Oklahoma to Form S-11
10.23 Mortgage/Deed of Trust from Filed as Exhibit 10(E)(4)(c)
subsidiaries of the Registrant and to Registrant's Post
CPA(R):10 to New England encumbering Effective Amendment No. 1
the properties in Center, Groves, to Form S-11
Silsbee, and Vidor, Texas.
10.24 Lease Agreement between QRS 10-9 (AR), Filed as Exhibit 10(F)(1)
Inc. ("QRS 10-9") and QRS 11-2(AR), Inc. to Registrant's Post
("QRS 11-2") as landlord and Acadia Effective Amendment No. 3
Stores 63, Inc. ("Tenant") as tenant. to Form S-11
10.25 Co-Tenancy Agreement between QRS 10-9 Filed as Exhibit 10(F)(2)
and QRS 11-2. to Registrant's Post
Effective Amendment No. 3
to Form S-11
10.26 Term Loan Agreement among The First Filed as Exhibit 10(F)(3)
National Bank of Boston ("First to Registrant's Post
Lender"), QRS 10-9 and QRS 11-2. Effective Amendment No. 3
to Form S-11
10.27 Note of QRS 10-9 and QRS 11-2 to First Filed as Exhibit 10(F)(4)
Lender. to Registrant's Post
Effective Amendment No. 3
to Form S-11
10.28 Fee and Leasehold Mortgages from QRS Filed as Exhibit 10(F)(5)
10-9 and QRS 11-2 to First Lender to Registrant's Post
for the following jurisdictions: Effective Amendment No. 3
to Form S-11
a. Arkansas (one representative fee
mortgage and leasehold mortgage
included)
b. Louisiana
c. Mississippi
10.29 Term Loan Agreement among Acadia Filed as Exhibit 10(F)(6)
Partners , L.P. ("Second Lender"), to Registrant's Post
QRS 10-9 and QRS 11-2. Effective Amendment No. 3
to Form S-11
</TABLE>
<PAGE> 79
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.30 Note of QRS 10-9 and QRS 11-2 to Filed as Exhibit 10(F)(7)
Second Lender. to Registrant's Post
Effective Amendment No. 3
to Form S-11
10.31 Fee Mortgages and Leasehold Mortgages Filed as Exhibit 10(F)(8)
from QRS 10-9 and QRS 11 -2 to Second to Registrant's Post
Lender for the following jurisdictions: Effective Amendment No. 3
to Form S-11
a. Arkansas (one representative fee
mortgage and leasehold mortgage
included)
b. Louisiana
c. Mississippi
10.32 Guaranty from Harvest Foods, Inc., a Filed as Exhibit 10(F)(9)
Delaware corporation, to QRS 10-9 and to Registrant's Post
QRS 11-2. Effective Amendment No. 3
to Form S-11
10.33 Guaranty from Harvest Foods, Inc., an Filed as Exhibit 10(F)(10)
Arkansas corporation, to QRS 10-9 and to Registrant's Post
QRS 11-2. Effective Amendment No. 3
to Form S-11
10.34 Lease between QRS 10-12 (TX), Inc. Filed as Exhibit 10(G)(1)
("QRS 10-12"), QRS 11-5 (TX), Inc. to Registrant's Post
("QRS 11-5") and Summagraphics. Effective Amendment No. 3
to Form S-11
10.35 Co-Tenancy Agreement between QRS 10-12, Filed as Exhibit 10(G)(2)
and QRS 11-5. to Registrant's Post
Effective Amendment No. 3
to Form S-11
10.36 $3,700,000 Promissory Note from QRS Filed as Exhibit 10(H)(1)
10-12 (TX), Inc, ("QRS 10-12"), to Registrant's Post
and QRS 11-5 (TX) Inc. ("QRS 11-5"), Effective Amendment No. 4
to Creditanstalt-Bankverein ("Lender"). to Form S-11
10.37 Deed of Trust and Security Agreement Filed as Exhibit 10(H)(2)
from QRS 10- 12 and QRS 11-5 to John O. to Registrant's Post
Langdon, Trustee, for benefit of Lender. Effective Amendment No. 4
to Form S-11
10.38 Guaranty Agreement between Registrant Filed as Exhibit 10(H)(3)
and Corporate Property Associates 10 to Registrant's Post
Incorporated as guarantor and Lender. Effective Amendment No. 4
to Form S-11
10.39 Real Estate Purchase and Sale Contract Filed as Exhibit 10(I)(1)
between Belmet (IL) QRS 11-9, Inc. to Registrant's Post
("QRS 11-9") as purchaser and Mission Effective Amendment No. 4
Leasing and Bank of Rantoul (collectively,
to Form S-11 "Seller").
</TABLE>
<PAGE> 80
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.40 Assignment and Assumption of Lease Filed as Exhibit 10(I)(2)
between QRS 11-9 and Seller. to Registrant's Post
Effective Amendment No. 4
to Form S-11
10.41 Assignment of Permits and Warranties Filed as Exhibit 10(I)(3)
from Seller to QRS 11-9. to Registrant's Post
Effective Amendment No. 4
to Form S-11
10.42 Industrial Building Lease ("Lease") Filed as Exhibit 10(I)(4)
dated November 16, 1989 between Seller to Registrant's Post
and Bell, together with First Amendment Effective Amendment No. 4
to Lease, dated September 19, 1991. to Form S-11
10.43 Second Amendment to Lease. Filed as Exhibit 10(I)(5)
to Registrant's Post
Effective Amendment No. 4
to Form S-11
10.44 Land Purchase Agreement between MMI Filed as Exhibit 10(J)(1)
(SC) QRS 11-11 Inc. ("QRS 11-11") and to Registrant's Post
Amerisure, Inc. regarding three acre Effective Amendment No. 5
parcel. to Form S-11
10.45 Mortgage from Amerisure, Inc. to QRS Filed as Exhibit 10(J)(2)
11-11 regarding three acre parcel. to Registrant's Post
Effective Amendment No. 5
to Form S-11
10.46 Lease Agreement between QRS 11-11, Filed as Exhibit 10(J)(3)
as Landlord. and MMI, as tenant. to Registrant's Post
Effective Amendment No. 5
to Form S-11
10.47 Assignment, Reassignment and Assumption Filed as Exhibit 10(J)(4)
of Lease among Amerisure, Inc., QRS to Registrant's Post
11-11 and UIC. Effective Amendment No. 5
to Form S-11
10.48 Loan Agreement between The Penn Mutual Filed as Exhibit 10(J)(5)
Life Insurance Company ("Penn Mutual") to Registrant's Post
and QRS 11-11. Effective Amendment No. 5
to Form S-11
10.49 $9,500,000 Promissory Note from QRS Filed as Exhibit 10(J)(6)
11-11 to Penn Mutual. to Registrant's Post
Effective Amendment No. 5
to Form S-11
</TABLE>
<PAGE> 81
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.50 Mortgage and Security Agreement from Filed as Exhibit 10(J)(7)
QRS 11-11 to Penn Mutual. to Registrant's Post
Effective Amendment No. 5
to Form S-11
10.51 Lease Agreement between BVS (NY) QRS Filed as Exhibit 10(K)(1)
11-10, Inc. ("QRS 11-10") as landlord, to Registrant's Post
and BVS, as tenant. Effective Amendment No. 5
to Form S-11
10.52 Reciprocal Easement and Operation Filed as Exhibit 10(K)(2)
Agreement between QRS 11-10 and Fairview to Registrant's Post
Plaza Corporation ("FPC"). Effective Amendment No. 5
to Form S-11
10.53 Lease Agreement between QRS 11-12, (FL), Filed as Exhibit 10(L)(2)
Inc, ("QRS 11-12"), as Landlord, and to Registrant's Post
Unit, as tenant. Effective Amendment No. 5
to Form S-11
10.54 Guaranty and Suretyship Agreement Filed as Exhibit 10(L)(4)
from Unit to QRS 11-12. to Registrant's Post
Effective Amendment No. 5
to Form S-11
10.55 Indemnity Agreement between GATX Filed as Exhibit 10(L)(5)
Corporation and QRS 11-12. to Registrant's Post
Effective Amendment No. 5
to Form S-11
10.56 Assignment and Assumption of Lease by Filed as Exhibit 10(M)(1)
Charlotte Telephone Associates Limited to Registrant's Post
Partnership ("CTA") to QRS 11-14 (NC), Effective Amendment No. 5
Inc. ("QRS 11-14"). to Form S-11
10.57 Purchase and Sale Agreement between Filed as Exhibit 10.1 to
Neoserv (CO) QRS 10-13, Inc. ("QRS:10") Registrant's Form 8-K dated
d Neoserv (CO) QRS 11-8, Inc. ("QRS:11") October 29, 1992
as purchasers and Homart Development Co.
("Homart").
10.58 Promissory Note of QRS:10 and QRS:11 to Filed as Exhibit 10.2 to
Homart. Registrant's Form 8-K dated
October 29, 1992
10.59 Deed of Trust from QRS:10 and QRS:11 for Filed as Exhibit 10.3 to
benefit of Homart. Registrant's Form 8-K dated
October 29, 1992
10.60 Option Agreement between QRS:10 and Filed as Exhibit 10.4 to
QRS:11 as option grantee and Homart as Registrant's Form 8-K dated
option grantor. October 29, 1992
</TABLE>
<PAGE> 82
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.61 Co-Tenancy Agreement between QRS:10 and Filed as Exhibit 10.5 to
QRS:11. Registrant's Form 8-K dated
October 29, 1992
10.62 Lease from QRS:10 and QRS:11 as lessor Filed as Exhibit 10.6 to
and Neodata Services, Inc. ("Neodata") Registrant's Form 8-K dated
as lessee. October 29, 1992
10.63 Guaranty Agreement from Neodata Filed as Exhibit 10.7 to
Corporation as guarantor to QRS:10 and Registrant's Form 8-K dated
QRS:11. October 29, 1992
10.64 Promissory Note of QRS:10 and QRS:11 to Filed as Exhibit 10.8 to
Neodata. Registrant's Form 8-K dated
October 29, 1992
10.65 Deed of Trust from QRS:10 and QRS:11 for Filed as Exhibit 10.9 to
benefit of Neodata. Registrant's Form 8-K dated
October 29, 1992
10.66 Construction Contract between QRS:10 and Filed as Exhibit 10.10 to
QRS:11 as owners and Austin Commercial, Registrant's Form 8-K dated
Inc. ("Austin") as contractor. October 29, 1992
10.67 Guaranty from Austin to QRS:10 and Filed as Exhibit 10.11 to
QRS:11. Registrant's Form 8-K dated
October 29, 1992
10.68 Construction Agency Agreement between Filed as Exhibit 10.12 to
QRS:10 and QRS:11 as owners and Neodata Registrant's Form 8-K dated
as agent. October 29, 1992
10.69 Land Purchase Agreement between MMI (SC) Filed as Exhibit 10.1 to
QRS 11-11, Inc. ("QRS 11-11") and Registrant's Form 8-K dated
Amerisure, Inc. ("Amerisure") regarding January 5, 1993
three acre parcel.
10.70 Mortgage from Amerisure to QRS 11-11 Filed as Exhibit 10.2 to
regarding three acre parcel. Registrant's Form 8-K dated
January 5, 1993
10.71 Lease Agreement between QRS 11-11, as Filed as Exhibit 10.3 to
Landlord, and MMI as tenant. Registrant's Form 8-K dated
January 5, 1993
10.72 Assignment, Reassignment and Assumption Filed as Exhibit 10.4 to
of Lease among Amerisure, Inc., QRS 11-11 Registrant's Form 8-K dated
and UIC. January 5, 1993
10.73 Loan Agreement between The Penn Mutual Filed as Exhibit 10.5 to
Life Insurance Company ("Penn Mutual") Registrant's Form 8-K dated
and QRS 11-11. January 5, 1993
</TABLE>
<PAGE> 83
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.74 $9,500,000 Promissory Note from QRS Filed as Exhibit 10.6 to
11-11 to Penn Mutual. Registrant's Form 8-K dated
January 5, 1993
10.75 Mortgage and Security Agreement from Filed as Exhibit 10.7 to
QRS 11-11 to Penn Mutual. Registrant's Form 8-K dated
January 5, 1993
10.76 Lease Agreement between BVS (NY) QRS Filed as Exhibit 10.8 to
11-10, Inc. ("QRS 11-10"), as landlord, Registrant's Form 8-K dated
and BVS, as tenant. January 5, 1993
10.77 Reciprocal Easement and Operation Filed as Exhibit 10.9 to
Agreement between QRS 11-10 and Fairview Registrant's Form 8-K dated
Plaza, Inc. January 5, 1993
10.78 Lease Agreement between QRS 11-12 Filed as Exhibit 10.10 to
(FL), Inc. ("QRS 11-12"), as landlord, Registrant's Form 8-K dated
and Unit, as tenant. January 5, 1993
10.79 Guaranty and Suretyship Agreement from Filed as Exhibit 10.11 to
Unit to QRS 11-12. Registrant's Form 8-K dated
January 5, 1993
10.80 Indemnity Agreement between GATX Filed as Exhibit 10.12 to
Corporation and QRS 11-12. Registrant's Form 8-K dated
January 5, 1993
10.81 Assignment and Assumption of Lease Filed as Exhibit 10.1 to
and Lease Guaranty from Oakbrook Registrant's Form 8-K dated
Development Corp. ("Oakbrook") to April 5, 1993
Books CT QRS 11-15, Inc. ("QRS 11-15").
10.82 Co-Tenancy Agreement between DDI (NE) Filed as Exhibit 10.2 to
QRS 10-15, Inc. ("QRS 10-15") and DDI Registrant's Form 8-K dated
(NE) QRS 11-13, Inc. ("QRS 11-13"). April 5, 1993
10.83 Cross Indemnity Agreement between Filed as Exhibit 10.3 to
QRS 10-15 and QRS 11-13. Registrant's Form 8-K dated
April 5, 1993
10.84 Lease Agreement between QRS 10-15 Filed as Exhibit 10.4 to
and QRS 11-13, as landlord, and Registrant's Form 8-K dated
Data Documents, Inc. ("DDI"), April 5, 1993
as tenant.
10.85 Loan Agreement between QRS 10-15 Filed as Exhibit 10.5 to
and QRS 11-13, as borrower, and Registrant's Form 8-K dated
U S West Financial Services, Inc. April 5, 1993
("US West"), as lender.
</TABLE>
<PAGE> 84
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.86 $8,000,000 Promissory Note from Filed as Exhibit 10.6 to
QRS 10-15 and QRS 11-13 to Registrant's Form 8-K dated
US West. April 5, 1993
10.87 Deed of Trust from QRS 10-15 and Filed as Exhibit 10.7 to
QRS 11-13 to US West (for filing Registrant's Form 8-K dated
in the states of Colorado, Nebraska April 5, 1993
and Texas).
10.88 Mortgage from QRS 10-15 and QRS 11-13 Filed as Exhibit 10.8 to
to US West (for filing in the state of Registrant's Form 8-K dated
Kansas). April 5, 1993
10.89 Assignment of Parent Guaranty from Filed as Exhibit 10.9 to
QRS 10-15 and QRS 11-13. Registrant's Form 8-K dated
April 5, 1993
10.90 Deed of Trust Note from QRS 11-14 (NC), Filed as Exhibit 10.1 to
Inc. ("QRS 11-14") to Kredietbank N.V. Registrant's Form 8-K dated
("Kredietbank"). April 13, 1993
10.91 Deed of Trust from QRS 11-14 for the Filed as Exhibit 10.2 to
benefit of Kredietbank. Registrant's Form 8-K dated
April 13, 1993
10.92 Assignment of Leases and Rents from Filed as Exhibit 10.3 to
QRS 11-14 to Kredietbank. Registrant's Form 8-K dated
April 13, 1993
10.93 Escrow Agreement between Filed as Exhibit 10.4 to
QRS 11-14 and Kredietbank. Registrant's Form 8-K dated
April 13, 1993
10.94 Lease Agreement between BB Property Filed as Exhibit 10.1 to
Company, as lessor, and Best Buy, Registrant's Form 8-K dated
as lessee. May 6, 1993
10.95 Note Purchase Agreement among BB Filed as Exhibit 10.2 to
Property Company, Best Buy, and Registrant's Form 8-K dated
TIAA. May 6, 1993
10.96 $32,800,000 Note from BB Property Filed as Exhibit 10.3 to
Property Company to TIAA. Registrant's Form 8-K dated
May 6, 1993
10.97 Deed of Trust and Security Agreement Filed as Exhibit 10.4 to
from BB Property Company for the benefit Registrant's Form 8-K dated
of TIAA. May 6, 1993
10.98 $3,200,000 Promissory Note from BVS (NY) Filed as Exhibit 10.5 to
QRS 11-10, Inc. ("BVS") to Orix. Registrant's Form 8-K dated
May 6, 1993
</TABLE>
<PAGE> 85
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.99 Mortgage, Assignment of Leases and Rents, Filed as Exhibit 10.6 to
Security Agreement and Fixture Filing Registrant's Form 8-K dated
from BVS to Orix. May 6, 1993
10.100 Purchase Agreement between QRS 11-19, Filed as Exhibit 10.2 to
as owner, and Lincoln Technical Registrant's Form 8-K dated
Institute, as buyer. August 13, 1993
10.101 Lease Agreement between Unitech (IL) Filed as Exhibit 10(P)(1) to
QRS 11-19, Inc. ("QRS 11-19"), as Registrant's Post Effective
landlord, and UTI. Amendment No. 6 to Form S-11
10.102 Guaranty and Suretyship Agreement Filed as Exhibit 10(P)(2) to
from Lincoln Technical Institute Registrant's Post Effective
of Arizona, Inc. to QRS 11-19. Amendment No. 6 to Form S-11
10.103 Modification of Loan Documents and Filed as Exhibit 10(P)(3) to
Assumption Agreement among Chicago Registrant's Post Effective
Investment Properties Limited Partnership, Amendment No. 6 to Form S-11
the Guarantors QRS 11-19 and the
Fidelity Mutual Life
Insurance Company.
10.104 Rate Cap Transaction letter Agreement Filed as Exhibit 10(Q)(4) to
between BVS and Chemical Bank Registrant's Post Effective
("Chemical"). Amendment No. 6 to Form S-11
10.105 Consent and Agreement Filed as Exhibit 10(Q)(5) to
between Chemical, Orix and BVS. Registrant's Post Effective
Amendment No. 6 to Form S-11
10.106 Assignment of Interest Rate Filed as Exhibit 10(Q)(6) to
Protection Agreement from BVS Registrant's Post Effective
to Orix. Amendment No. 6 to Form S-11
10.107 Warrant issued by Merit to Filed as Exhibit 10(S)(1) to
the Registrant. Registrant's Post Effective
Amendment No. 6 to Form S-11
10.108 Lease Agreement between QRS 11-20 (UT), Filed as Exhibit 10(S)(2) to
Inc. ("QRS 11-20"), as landlord, and Registrant's Post Effective
Merit, as tenant. Amendment No. 6 to Form S-11
10.109 Guaranty Agreement from the Filed as Exhibit 10(S)(3) to
Registrant to Merit. Registrant's Post Effective
Amendment No. 6 to Form S-11
10.110 Construction Management Agreement Filed as Exhibit 10(S)(4) to
Merit and the Koll Company. Registrant's Post Effective
Amendment No. 6 to Form S-11
</TABLE>
<PAGE> 86
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.111 Construction Agreement between Merit Filed as Exhibit 10(S)(5) to
and Camco Construction Company, Inc. Registrant's Post Effective
Amendment No. 6 to Form S-11
10.112 Construction Agency Agreement between Filed as Exhibit 10(S)(6) to
Merit and QRS 11-20. Registrant's Post Effective
Amendment No. 6 to Form S-11
10.113 $8,250,000 Promissory Note from QRS 11-20 Filed as Exhibit 10(S)(7) to
to First Interstate Bank of Utah, N.A. Registrant's Post Effective
("Lender"). Amendment No. 6 to Form S-11
10.114 Deed of Trust, Assignment of Rents, Security Filed as Exhibit 10(S)(8) to
Agreement and Financing Statement from Registrant's Post Effective
QRS 11-20 for the benefit of Lender. Amendment No. 6 to Form S-11
10.115 Assignment of Leases and Rents made by Filed as Exhibit 10(S)(9) to
QRS 11-20 in favor of Lender. Registrant's Post Effective
Amendment No. 6 to Form S-11
10.116 Loan Agreement between QRS 11-20 and Filed as Exhibit 10(S)(10) to
Lender. Registrant's Post Effective
Amendment No. 6 to Form S-11
10.117 Assignment and Assumption of Bid dated Filed as Exhibit 10(T)(1) to
as of April 14, 1993 among QRS 11-17 (NY), Registrant's Post Effective
Inc. ("QRS 11-17"), E.B. Properties, Inc. Amendment No. 7 to Form S-11
("EB") and The Dime Savings Bank of New York,
FSB ("Dime"), as amended and supplemented by
the First Supplement dated April 15, 1993 and
by the Second Supplement dated April 22, 1993
and by letters dated May 12, June 9 and June
18, 1993.
10.118 Assignment and Assumption Agreement, dated Filed as Exhibit 10(T)(2)
to March 4, 1993, as amended , between Registrant's Post Effective
Dime and EB, as assigned by Assignment Amendment No. 7 to Form S-11
dated April 14, 1993.
10.119 Lease dated as of August 1, 1986 between Filed as Exhibit 10(T)(3) to
D. Grossman and Mormax Corporation (as Registrant's Post Effective
assumed by QRS 11-21, Inc. ("QRS 11-21") Amendment No. 7 to Form S-11
by virtue of documents listed at (10)(T)(1)).
10.120 Promissory Note from QRS 11-17 to Dime Filed as Exhibit 10(T)(4) to
in the amount of $7,000,000. Registrant's Post Effective
Amendment No. 7 to Form S-11
10.121 Mortgage from QRS 11-17 to Dime. Filed as Exhibit 10(T)(5) to
Registrant's Post Effective
Amendment No. 7 to Form S-11
</TABLE>
<PAGE> 87
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.122 Collateral Assignment of Leases and Rents Filed as Exhibit 10(T)(6) to
by QRS 11-17 in favor of Dime. Registrant's Post Effective
Amendment No. 7 to Form S-11
10.123 Agreement of Indemnity Filed as Exhibit 10(T)(7) to
by QRS 11-17 in favor of Dime. Registrant's Post Effective
Amendment No. 7 to Form S-11
10.124 Lease Agreement between SCF (TN) Filed as Exhibit 10(U)(1) to
QRS 11-21, as landlord, and SCM, Registrant's Post Effective
as tenant. Amendment No. 7 to Form S-11
10.125 Warrant issued by Sports & Fitness Filed as Exhibit 10(U)(2) to
Clubs Inc. ("SFC") to QRS 11-21. Registrant's Post Effective
Amendment No. 7 to Form S-11
10.126 Guaranty and Suretyship Agreement by Filed as Exhibit 10(U)(3) to
SFC and Sports and Fitness Clubs of Registrant's Post Effective
America, Inc. ("SFCA") to QRS 11-21. Amendment No. 7 to Form S-11
10.127 Purchase Agreement between QRS 11-21, Filed as Exhibit 10(U)(4) to
as owner, and SFC, as buyer. Registrant's Post Effective
Amendment No. 7 to Form S-11
10.128 Term Loan Agreement between QRS 11-21, Filed as Exhibit 10(U)(5) to
as borrower, and Union Planters National Registrant's Post Effective
Bank, as lender ("Union Planters"). Amendment No. 7 to Form S-11
10.129 Note in the amount of $2,800,000 dated Filed as Exhibit 10(U)(6) to
July 20, 1993 from QRS 11-21 for the Registrant's Post Effective
benefit of Union Planters. Amendment No. 7 to Form S-11
10.130 Deed of Trust, Assignment of Rents and Filed as Exhibit 10(U)(7) to
Security Agreement from QRS 11-21 for the Registrant's Post Effective
benefit of Union Planters. Amendment No. 7 to Form S-11
10.131 Acknowledgment of Assignment of Lease, Filed as Exhibit 10(U)(8) to
Guaranty and Purchase Agreements between Registrant's Post Effective
SCM, SFC, SFCA, QRS 11-21 and Union Planters. Amendment No. 7 to Form S-11
10.132 Real Estate Contract of Sale between Filed as Exhibit 10(V)(1) to
Abacus Capital Corporation, as seller, Registrant's Post Effective
and Registrant, or its assigns, as Buyer. Amendment No. 7 to Form S-11
10.133 Real Estate Contract of Sale between Filed as Exhibit 10.1 to
Abacus Capital Corporation ("Abacus"), as Registrant's Form 8-K
seller, and Registrant, as buyer. dated February 24, 1994
10.134 Assignment of Real Estate Contract of Filed as Exhibit 10.2 to
Sale from Registrant to the PETsMART Registrant's Form 8-K
Subsidiary. dated February 24, 1994
</TABLE>
<PAGE> 88
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.135 Assignment and Assumption of Lease Filed as Exhibit 10.3 to
between Abacus and the PETsMART Registrant's Form 8-K
Subsidiary. dated February 24, 1994
10.136 Loan Agreement between NationsBank and Filed as Exhibit 10.4 to
the PETsMART Subsidiary. Registrant's Form 8-K
dated February 24, 1994
10.137 $2,500,000 Promissory Note made by the Filed as Exhibit 10.5 to
PETsMART Subsidiary to NationsBank. Registrant's Form 8-K
dated February 24, 1994
10.138 Deed of Trust, Assignment, Security Filed as Exhibit 10.6 to
Agreement and Financing Statement from Registrant's Form 8-K
the PETsMART Subsidiary to NationsBank. dated February 24, 1994
10.139 Lease Agreement between the Braintree Filed as Exhibit 10.7 to
Subsidiary, as landlord, and Barnes Registrant's Form 8-K
& Noble, as tenant. dated February 24, 1994
10.140 Real Estate Purchase and Sale Contract Filed as Exhibit 10.8 to
between the ELWA Subsidiary, as buyer, Registrant's Form 8-K
and Big V, as seller. dated February 24, 1994
10.141 Lease Agreement between the ELWA Filed as Exhibit 10.9 to
Subsidiary, as landlord, and Registrant's Form 8-K
Big V as tenant. dated February 24, 1994
10.142 Guaranty and Suretyship Agreement Filed as Exhibit 10.10 to
executed by Big V Holding. Registrant's Form 8-K
dated February 24, 1994
10.143 Amended, Restated and Consolidated Bonds Filed as Exhibit 10.11 to
to Key Bank, as lender, from the ELWA Registrant's Form 8-K
Subsidiary, as borrower. dated February 24, 1994
10.144 Amended and Restated Mortgage and Filed as Exhibit 10.12 to
Security Agreement from the ELWA Registrant's Form 8-K
Subsidiary, to Key Bank. dated February 24, 1994
10.145 Limited Guaranty of Payment from the Filed as Exhibit 10.13 to
Company to Key Bank. Registrant's Form 8-K
dated February 24, 1994
10.146 Lease Agreement between the Brownwood Filed as Exhibit 10.14 to
Subsidiary, as landlord, and Superior, Registrant's Form 8-K
as tenant. dated February 24, 1994
10.147 Guaranty and Suretyship Agreement from Filed as Exhibit 10.15 to
Alpine to Registrant. Registrant's Form 8-K
dated February 24, 1994
</TABLE>
<PAGE> 89
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.148 $2,700,000 Real Estate Note from the Filed as Exhibit 10.16 to
Brownwood Subsidiary, as maker, to Registrant's Form 8-K
Creditanstalt, as holder. dated February 24, 1994
10.149 Deed of Trust and Security Agreement by Filed as Exhibit 10.17 to
the Brownwood Subsidiary, as guarantor Registrant's Form 8-K
to Hazen H. Dempster, as trustee. dated February 24, 1994
10.150 Guaranty and Agreement between the Filed as Exhibit 10.18 to
Company and Creditanstalt. Registrant's Form 8-K
dated February 24, 1994
10.151 Assignment of Contract from Hyde Park Filed as Exhibit 10.19 to
Holdings, Inc. to the Cleveland Registrant's Form 8-K
Subsidiary. dated February 24, 1994
10.152 Lease Agreement between the Cleveland Filed as Exhibit 10.20 to
Subsidiary, as landlord, and Nicholson, Registrant's Form 8-K
as tenant. dated February 24, 1994
10.153 $4,000,000 Cognovit Promissory Note Filed as Exhibit 10.21 to
from the Cleveland Subsidiary to Bank Registrant's Form 8-K
One. dated February 24, 1994
10.154 Mortgage Deed, Security Agreement and Filed as Exhibit 10.22 to
Assignment of Rents and Leases from the Registrant's Form 8-K
Cleveland Subsidiary to Bank One. dated February 24, 1994
10.155 Business Loan Agreement between the Filed as Exhibit 10.23 to
Cleveland Subsidiary, and Bank One. Registrant's Form 8-K
dated February 24, 1994
10.156 Guaranty from Registrant to Bank One. Filed as Exhibit 10.24 to
Registrant's Form 8-K
dated February 24, 1994
10.157 Lease Agreement between the Gensia Filed as Exhibit 10.25 to
Partnership, as landlord, and Gensia, Registrant's Form 8-K
as tenant. dated February 24, 1994
10.158 $13,000,000 Promissory Note from the Filed as Exhibit 10.26 to
Gensia Partnership to Northwestern. Registrant's Form 8-K
dated February 24, 1994
10.159 Deed of Trust, Security Agreement and Filed as Exhibit 10.27 to
Financing Statement from the Gensia Registrant's Form 8-K
Partnership to Northwestern. dated February 24, 1994
10.160 Guarantee of Recourse Obligations from Filed as Exhibit 10.28 to
Registrant and CPA(R):12 to Northwestern. Registrant's Form 8-K
dated February 24, 1994
</TABLE>
<PAGE> 90
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.161 Assignment of Earnest Money Contract Filed as Exhibit 10.29 to
from Garden Ridge to the Round Rock Registrant's Form 8-K
Subsidiary. dated February 24, 1994
10.162 Lease Agreement between the Round Rock Filed as Exhibit 10.30 to
Subsidiary, as landlord, and Garden Registrant's Form 8-K
Ridge, as tenant. dated February 24, 1994
10.163 $3,465,000 Note from the Round Rock Filed as Exhibit 10.31 to
Subsidiary to Garden Ridge. Registrant's Form 8-K
dated February 24, 1994
10.164 Deed of Trust and Security Agreement Filed as Exhibit 10.32 to
from the Round Rock Subsidiary to Garden Registrant's Form 8-K
Ridge. dated February 24, 1994
10.165 $1,700,000 Promissory Note from the Filed as Exhibit 10.33 to
Plano Subsidiary to National Western. Registrant's Form 8-K
dated February 24, 1994
10.166 Deed of Trust, Security Agreement and Filed as Exhibit 10.34 to
Financing Statement from the Plano Registrant's Form 8-K
Subsidiary to National Western. dated February 24, 1994
10.167 Lease Agreement dated June 15, 1994 between Filed as Exhibit 10.167 to
CTC (VA) QRS 11-32, Inc., as Landlord, and Registrant's Form 10-K for the
Childtime Childcare, Inc., as Tenant. year ended December 31, 1994
dated March 31, 1995
10.168 Construction Agency Agreement dated June 15, Filed as Exhibit 10.168 to
1994 between Childtime Childcare, Inc. and Registrant's Form 10-K for the
CTC (VA) QRS 11-32, Inc. year ended December 31, 1994
dated March 31, 1995
10.169 Lease Agreement dated August 11, 1994 by and Filed as Exhibit 10.169
to between Neenah (WI) QRS 11-31, Inc., as Registrant's Form 10-K for the
Landlord, and Exide Electronic Assembly year ended December 31, 1994
Corporation, as Tenant. dated March 31, 1995
10.170 $5,000,000 Real Estate Note dated August 11, Filed as Exhibit 10.170 to
1994 from Neenah (WI) QRS 11-31, Inc., as Registrant's Form 10-K for the
Maker, and Creditanstalt Corporate Finance, year ended December 31, 1994
Inc., as Holder. dated March 31, 1995
10.171 Lease Agreement dated September 30, 1994 by Filed as Exhibit 10.171 to
and between CFP Associates, as Landlord, and Registrant's Form 10-K for the
Custom Foods Products, Inc., as Tenant. year ended December 31, 1994
dated March 31, 1995
10.172 Loan Agreement dated September 30, 1994 Filed as Exhibit 10.172 to
between CFP Associates, as Borrower, and Registrant's Form 10-K for the
Greyrock Capital Group Inc., as Lender. year ended December 31, 1994
dated March 31, 1995
</TABLE>
<PAGE> 91
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
10.173 $2,000,000 Note dated September 30, 1994 Filed as Exhibit 10.173 to
from CFP Associates, as Maker, and Registrant's Form 10-K for the
Greyrock Capital Group Inc., as Payee. year ended December 31, 1994
dated March 31, 1995
10.174 $200,000 Maximum Amount Promissory Note Filed as Exhibit 10.174 to
dated September 30, 1994 from CFP Associates, Registrant's Form 10-K for the
as Maker, to Custom Foods Products, Inc., as year ended December 31, 1994
Payee. dated March 31, 1995
10.175 Lease Agreement dated October 14, 1994 by and Filed as Exhibit 10.175 to
between ADS (CA) QRS 11-34, Inc., as Landlord, Registrant's Form 10-K for the
and Chiat/Day Inc. Advertising, as Tenant. year ended December 31, 1994
dated March 31, 1995
10.176 $6,000,000 Promissory Note dated October 14, Filed as Exhibit 10.176 to
1994 from ADS (CA) QRS 11-34, Inc., as Registrant's Form 10-K for the
Borrower, to Kearneys Street Real Estate year ended December 31, 1994
Company, L.P., as Lender. dated March 31, 1995
10.177 $3,000,000 Purchase Money Promissory Note Filed as Exhibit 10.177 to
secured by Deed of Trust dated October 14, Registrant's Form 10-K for the
1994 from ADS (CA) QRS 11-34, Inc., as Maker, year ended December 31, 1994
to Venice Operating Corp., as Holder. dated March 31, 1995
10.178 Lease Agreement dated October 31, 1995 by and Filed as Exhibit 10.33 to
between DELMO (PA) QRS 11-36 and DELMO (PA) Registrant's Form 8-K
QRS 12-10 together as Landlord and Del Monte dated March 21, 1996
Corporation, as Tenant.
10.179 Lease Agreement dated December 26, 1995 by and Filed as Exhibit 2.1 to
between Cards Limited Liability Company, as Registrant's Form 8-K
Landlord, and The Upper Deck Company, as Tenant. dated March 21, 1996
10.180 $15,000,000 Promissory Note dated January 3, Filed as Exhibit 2.2 to
1996 from Cards Limited Liability Company to Registrant's Form 8-K
Column Financial, Inc. dated March 21, 1996
21.1 Subsidiaries of Registrant as of Filed as Exhibit 22.1 to
March 31, 1993. Registrant's Form 10-K for the
year ended December 31, 1992
dated March 31, 1993
21.2 Subsidiaries of Registrant. Filed as Exhibit 22 to
Registrant's Post Effective
Amendment No. 6 to Form S-11
21.3 Subsidiaries of Registrant. Filed as Exhibit 22 to
Registrant's Post Effective
Amendment No. 7 to Form S-11
21.4 Subsidiaries of Registrant. Filed as Exhibit 22.4 to
Registrant's Form 10-K for the
year ended December 31, 1993
</TABLE>
<PAGE> 92
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
21.5 Subsidiaries of Registrant as of March 31, 1995. Filed as Exhibit 22.5 to
Registrant's Form 10-K for the
year ended December 31, 1994
dated March 31, 1995
21.6 Subsidiaries of Registrant as of March 31, 1996. Filed as Exhibit 22.6 to
Registrant's Form 10-K for the
year ended December 31, 1995
dated March 28, 1996
21.7 Subsidiaries of Registrant as of March 31, 1997 Filed herewith
23.1 Consent of Coopers & Lybrand dated Filed as Exhibit 24(B)(6) to
June 15, 1993. Registrant's Post Effective
Amendment No. 6 to Form S-11
23.2 Consent of Coopers & Lybrand dated Filed as Exhibit 24(B)(7) to
August 9, 1993. Registrant's Post Effective
Amendment No. 7 to Form S-11
23.3 Consent of Coopers & Lybrand dated Filed as Exhibit 24.3 to
March 28, 1996 Registrant's Form 10-K for the
year ended December 31, 1995
dated March 28, 1996
23.4 Consent of Coopers & Lybrand dated Filed here with
March 27, 1997
28.1 General Warranty Deed from Filed as Exhibit 28(C)(1)
Amerisure, Inc. to (SC) QRS 11-11 to Registrant's Post
Effective Amendment No. 5
to Form S-11
28.2 Amended and Restated Sublease Agreement Filed as Exhibit 28(C)(2)
between MMI, as sublandlord, and Unisun to Registrant's Post Effective
Insurance Company ("UIC"). Amendment No. 5 to Form S-11
28.3 General warranty Deed from FPC to QRS Filed as Exhibit 28(D)(1) to
11-10. Registrant's Post Effective
Amendment No. 5 to Form S-11
28.4 Deed from Unit to QRS 11-12. Filed as Exhibit 28(E)(1)
to Registrant's Post
Effective Amendment No. 5
to Form S-11
28.5 Lease between Unit, as landlord, and Filed as Exhibit 28(E)(2)
SLS, as tenant, as amended. to Registrant's Post
Effective Amendment No. 5
to Form S-11
28.6 Special warranty Deed from CTA, as Filed as Exhibit 28(F)(1)
Grantor to QRS 11-14, as Grantee. to Registrant's Post
Effective Amendment No. 5
to Form S-11
</TABLE>
<PAGE> 93
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
28.7 Lease Agreement between CTA and AT&T. Filed as Exhibit 28(F)(2)
to Registrant's Post
Effective Amendment No. 5
to Form S-11
28.8 Leasehold Deed of Trust from Neodata for Filed as Exhibit 28.1 to
benefit of General Electric Capital Registrant's Form 8-K dated
Corporation. October 29, 1992
28.9 General Warranty Deed from Amerisure Filed as Exhibit 28.1 to
QRS 11-11. Registrant's Form 8-K dated
January 5, 1993
28.10 Amended and Restated Sublease Agreement Filed as Exhibit 28.2 to
between MMI, as sublandlord, and Unisun Registrant's Form 8-K dated
Insurance Company. January 5, 1993
28.11 General Warranty Deed from Fairview Plaza Filed as Exhibit 28.3 to
Corporation to QRS 11-10. Registrant's Form 8-K dated
January 5, 1993
28.12 Deed from Unit to QRS 11-12. Filed as Exhibit 28.4 to
Registrant's Form 8-K dated
January 5, 1993
28.13 Lease between Unit, as landlord, and Filed as Exhibit 28.5 to
SLS, as tenant, as amended. Registrant's Form 8-K dated
January 5, 1993
28.14 Prospectus dated January 21, 1993 of Filed pursuant to Rule
Registrant. 424(b)(s) on January 26, 1993
(Registration No. 33-39409)
28.15 Supplement No. 1 dated March 17, 1993 Filed pursuant to Rule
to Prospectus dated January 21, 1993. 424(b)(s) on March 17, 1993
(Registration No. 33-39409)
28.16 Quit Claim Deed from Oakbrook to Filed as Exhibit 28.1 to Registrant's
QRS 11-15. Form 8-K dated April 5, 1993
28.17 Lease Agreement between Oakbrook and Filed as Exhibit 28.2 to Registrant's
B. Dalton Bookseller, Inc. ("B. Dalton"). Form 8-K dated April 5, 1993
28.18 First Amendment between Oakbrook and Filed as Exhibit 28.3 to Registrant's
B. Dalton Bookseller, Inc. Form 8-K dated April 5, 1993
28.19 Lease Guaranty to Oakbrook from Barnes Filed as Exhibit 28.4 to Registrant's
& Noble, Inc. Form 8-K dated April 5, 1993
28.20 Guaranty and Suretyship Agreement from Filed as Exhibit 28.5 to
Data Documents Holdings, Inc. to QRS Registrant's Form 8-K dated
10-15 and QRS 11-13. April 5, 1993
28.21 Guaranty from Corporate Property Filed as Exhibit 28.6 to
Associates 10 Incorporated and Registrant's Form 8-K dated
Registrant to US West. April 5, 1993
</TABLE>
<PAGE> 94
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
28.22 Guaranty from Registrant to Orix. Filed as Exhibit 28.1 to Registrant's
Form 8-K dated May 6, 1993
28.23 Special Warranty Deed from Merit Filed as Exhibit 28(G)(1) to
to QRS 11-20. Registrant's Post Effective
Amendment No. 6 to Form S-11
28.24 Table VI: Acquisitions of Properties Filed as Exhibit 28(H) to
by Prior Programs. Registrant's Post Effective
Amendment No. 6 to Form S-11
28.25 Limited Warranty Deed from Filed as Exhibit 28.1 to
the David F. Bolger Revocable Trust Registrant's Form 8-K
to the Braintree Subsidiary. dated February 24, 1994
28.26 Special Warranty Deed from Superior to Filed as Exhibit 28.2 to
the Brownwood Subsidiary. Registrant's Form 8-K
dated February 24, 1994
28.27 Corporation Grant Deed from Gensia to Filed as Exhibit 28.3 to
the Gensia Partnership. Registrant's Form 8-K
dated February 24, 1994
28.28 Supplement No. 2 dated June 15, 1993 Filed as Exhibit 28.28 to
to Prospectus dated January 21, 1993. Registrant's Form 10-K for the
year ended December 31, 1993
28.29 Supplement No. 3 dated August 11, 1993 Filed as Exhibit 28.29 to
to Prospectus dated January 21, 1993. Registrant's Form 10-K for the
year ended December 31, 1993
</TABLE>
<PAGE> 1
Exhibit 21.7
SUBSIDIARIES OF REGISTRANT
WALSAFE (CA) QRS 11-1, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF CALIFORNIA AND DOING
BUSINESS UNDER THE NAME WALSAFE (CA) QRS 11-1, INC.
QRS 11-2 (AR), INC., A WHOLLY-OWNED SUBSIDIARY OF REGISTRANT
INCORPORATED UNDER THE LAWS OF THE STATE OF ARKANSAS AND DOING BUSINESS UNDER
THE NAME QRS 11-2 (AR), INC.
QRS 11-3 (MD), INC., A WHOLLY-OWNED SUBSIDIARY OF REGISTRANT
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND AND DOING BUSINESS UNDER
THE NAME ORS 11-3 (MD), INC.
QRS 11-5 (TX), INC., A WHOLLY-OWNED SUBSIDIARY OF REGISTRANT
INCORPORATED UNDER THE LAWS OF THE STATE OF TEXAS AND DOING BUSINESS UNDER THE
NAME OF QRS II -5 (TX), INC.
PLANO (TX) ORS 11-7, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF TEXAS AND DOING BUSINESS
UNDER THE NAME PLANO (TX) QRS 11-7, INC.
NEOSERV (CO) ORS 11-8, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF COLORADO AND DOING
BUSINESS UNDER THE NAME NEOSERV (CO) QRS 11-8, INC.
BELMET (IL) ORS 11-9, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF ILLINOIS AND DOING
BUSINESS UNDER THE NAME BELMET (IL) QRS 11-9, INC.
BVS (NY) QRS 11-10, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF NEW YORK AND DOING
BUSINESS UNDER THE NAME BVS (NY) ORS 11-10, INC.
MMI (SC) QRS 11-11, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF SOUTH CAROLINA AND DOING
BUSINESS UNDER THE NAME MMI (SC) QRS 11-11, INC.
QRS 11-12 (FL), INC., A WHOLLY-OWNED SUBSIDIARY OF REGISTRANT
INCORPORATED UNDER THE LAWS OF THE STATE OF FLORIDA AND DOING BUSINESS UNDER THE
NAME QRS 11-12 (FL), INC.
DDI (NE) ORS 11-13, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF NEBRASKA AND DOING
BUSINESS UNDER THE NAME DDI (NE) QRS 11-13, INC.
QRS 11-14 (NC), INC., A WHOLLY-OWNED SUBSIDIARY OF REGISTRANT
INCORPORATED UNDER THE LAWS OF THE STATE OF NORTH CAROLINA AND DOING BUSINESS
UNDER THE NAME QRS 11-14, (NC), INC.
BOOKS (CT) QRS 11-16, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF CONNECTICUT AND DOING
BUSINESS UNDER THE NAME BOOKS (CT) QRS 11-15, INC.
QRS 11-17 (NY), INC., A WHOLLY-OWNED SUBSIDIARY OF REGISTRANT
INCORPORATED UNDER THE LAWS OF THE STATE OF NEW YORK AND DOING BUSINESS UNDER
THE NAME QRS 11-17 (NY), INC.
BBC (NE) QRS 11-18, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF NEBRASKA AND DOING
BUSINESS UNDER THE NAME BBC (NE) QRS 11-18, INC.
UNITECH (IL) QRS 11-19, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF ILLINOIS AND DOING
BUSINESS UNDER THE NAME UNITECH (IL) QRS 11-19, INC.
QRS 11-20 (UT), INC., A WHOLLY-OWNED SUBSIDIARY OF REGISTRANT
INCORPORATED UNDER THE LAWS OF THE STATE OF UTAH AND DOING BUSINESS UNDER THE
NAME QRS 11-20. (UT), INC.
SFC (TN) QRS 11-21, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF TENNESSEE AND DOING
BUSINESS UNDER THE NAME SFC (TN) QRS 11-21, INC.
PETS (TX) QRS 11-23, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF TEXAS AND DOING BUSINESS
UNDER THE NAME PETS (TX) QRS 11-23, INC.
<PAGE> 2
SUBSIDIARIES OF REGISTRANT
(CONTINUED)
ELWA-BV (NY) QRS 11-24, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF NEW YORK AND DOING
BUSINESS UNDER THE NAME ELWA-BV (NY) QRS 11-24, INC.
GENA (CA) QRS 11-25, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF CALIFORNIA AND DOING
BUSINESS UNDER THE NAME GENA (CA) QRS 11-25, INC.
BN (MA) QRS 11-26, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF MASSACHUSETTS AND DOING
BUSINESS UNDER THE NAME BN (MA) QRS 11-26, INC.
QRS 11-27 (OH), INC., A WHOLLY-OWNED SUBSIDIARY OF REGISTRANT
INCORPORATED UNDER THE LAWS OF THE STATE OF OHIO AND DOING BUSINESS UNDER THE
NAME QRS 11-27 (OH), INC.
ALP (TX) QRS 11-28, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF TEXAS AND DOING BUSINESS
UNDER THE NAME ALP (TX) QRS 11-28, INC.
QRS 11-29 (TX), INC., A WHOLLY-OWNED SUBSIDIARY OF REGISTRANT
INCORPORATED UNDER THE LAWS OF THE STATE OF TEXAS AND DOING BUSINESS UNDER THE
NAME QRS 11-29 (TX), INC.
CFP (MD) ORS 11-30, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND AND DOING
BUSINESS UNDER THE NAME CFP (MD) QRS 11-30, INC.
NEENAH (WI) QRS 11-31, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF WISCONSIN AND DOING
BUSINESS UNDER THE NAME NEENAH (WI) QRS 11-31, INC.
CTC (VA) QRS 11-32, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF VIRGINIA AND DOING
BUSINESS UNDER THE NAME CTC (VA) QRS 11-32, INC.
CFP (MD) QRS 11-33, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND AND DOING
BUSINESS UNDER THE NAME CFP (MD) ORS 11-33, INC.
ADS (CA) QRS 11-34, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF CALIFORNIA AND DOING
BUSINESS UNDER THE NAME ADS (CA) QRS 11-34, INC.
DELMO (PA) QRS 11-36, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF PENNSYLVANIA AND DOING
BUSINESS UNDER THE NAME DELMO (PA) QRS 11-36, INC.
CARDS (CA) QRS 11-37, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF CALIFORNIA AND DOING
BUSINESS UNDER THE NAME CARDS (CA) QRS 11-37, INC.
SFC (TX) QRS 11-38, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF TEXAS AND DOING BUSINESS
UNDER THE NAME SFC (TX) QRS 11-38, INC.
QRS 12-14 (AL), INC., A WHOLLY-OWNED SUBSIDIARY OF REGISTRANT
INCORPORATED UNDER THE LAWS OF THE STATE OF ALABAMA AND DOING BUSINESS UNDER THE
NAME QRS 12-14 (AL), INC.
AUTO (FL) QRS 11-39, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF FLORIDA AND DOING
BUSINESS UNDER THE NAME AUTO (FL) QRS 11-39, INC.
CPFLOAN (MD) QRS 11-40, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND AND DOING
BUSINESS UNDER THE NAME CPFLOAN (MD) QRS 11-40, INC.
ORS 11-PAYING AGENT, INC., A WHOLLY-OWNED SUBSIDIARY OF
REGISTRANT INCORPORATED UNDER THE LAWS OF THE STATE OF NEW YORK AND DOING
BUSINESS UNDER THE NAME QRS 11-PAYING AGENT, INC.
<PAGE> 1
Exhibit 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Carey Institutional Properties Incorporated and Subsidiaries on Form S-3 (File
No. 33-96294) of our report dated March 25, 1996, on our audits of the
consolidated financial statements and financial statement schedule of Carey
Institutional Properties Incorporated and Subsidiaries as of December 31, 1994,
1995 and 1996 and for the years ended December 31, 1994, 1995 and 1996, which
reports are incorporated by reference in the Annual Report on Form 10-K.
/s/Coopers & Lybrand L.L.P.
New York, New York
March 27, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCES 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> 15,740,583
<SECURITIES> 0
<RECEIVABLES> 718,367
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 16,458,950
<PP&E> 286,316,571
<DEPRECIATION> 7,971,271
<TOTAL-ASSETS> 320,509,528
<CURRENT-LIABILITIES> 8,702,764
<BONDS> 162,284,106
0
0
<COMMON> 16,725
<OTHER-SE> 144,756,775
<TOTAL-LIABILITY-AND-EQUITY> 320,509,528
<SALES> 0
<TOTAL-REVENUES> 32,546,638
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 10,403,732
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,241,203
<INCOME-PRETAX> 10,421,141
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 275,000
<CHANGES> 0
<NET-INCOME> 10,146,141
<EPS-PRIMARY> .64
<EPS-DILUTED> .64
</TABLE>
