<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1997
-------------
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT
For the transition period from ____________ to _____________
Commission File Number 0-20272
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RESOURCE CAPITAL GROUP, INC.
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(Exact name of small business issuer as specified in its charter)
<TABLE>
<S> <C>
Delaware 13-3617377
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(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
419 Crossville Road, Suite 204 Roswell, GA 30075
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(Address of principal executive offices) (Zip Code)
</TABLE>
770-649-7000
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(Issuer's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15 (d) of the Exchange Act during the past 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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Check whether the registrant filed all documents and reports required to be
filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of June 30, 1997, 406,726 shares of common stock of the Registrant were
outstanding.
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INDEX
RESOURCE CAPITAL GROUP, INC.
<TABLE>
<CAPTION>
Part I. Financial Information Page
Number
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<S> <C>
Item 1. Consolidated Financial Statements (Unaudited)
Consolidated Balance Sheet - June 30, 1997
and December 31, 1996 3
Consolidated Statement of Operations - For the
Three Months and Six Months Ended June 30,
1997 and 1996 4
Consolidated Statement of Cash Flows - For the
Six Months Ended June 30, 1997 and 1996 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis or
Plan of Operation 10
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 14
</TABLE>
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PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
a) Consolidated Balance Sheet
RESOURCE CAPITAL GROUP, INC.
Consolidated Balance Sheet
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
June 30, December 31,
1997 1996
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<S> <C> <C>
Cash and cash equivalents $ 527,321 $ 298,655
Investment in marketable equity securities-at market (note 8) 24,195 104,375
Escrow deposits 61,639
Investments in and receivables from partnerships (note 3) 2,699,729 2,719,316
Receivables 15,779 181,122
Real and personal property, at cost (notes 4 and 5)
Land 1,421,912 1,106,231
Buildings and improvements 2,874,024 6,070,520
Furniture and equipment 150,013 284,199
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4,445,949 7,460,950
Less accumulated depreciation (117,792) (181,500)
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4,328,157 7,279,450
Deferred charges-net of accumulated amortization 70,234 269,670
Other assets 114,495 116,661
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$ 7,779,910 $ 11,030,888
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Note payable $ 121,071 $ 155,828
Accounts payable 19,974 59,684
Accrued expenses
Interest 18,723 46,243
Payroll 20,958 35,418
Professional fees 18,000 36,000
Taxes 57,373 76,289
Other 17,195 25,438
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132,249 219,388
Security deposits 29,248 71,351
Mortgages payable 2,443,303 5,711,237
Deferred tax liability 105,052 81,607
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Total Liabilities 2,850,897 6,299,095
Commitments and contingencies
Minority interest 111,390 109,409
Stockholders' equity
Common stock - authorized 1,000,000
$.01 par value per share, issued 498,608 4,986 4,986
Additional paid-in capital 4,459,034 4,459,034
Stock warrants outstanding (note 7) 24,690
Retained earnings 454,188 273,829
Treasury stock, at cost, 91,882 shares (131,712) (131,712)
Unrealized gain on investment 6,437 16,247
------------- -------------
Total Stockholders' Equity 4,817,623 4,622,384
------------- -------------
$ 7,779,910 $ 11,030,888
============= =============
</TABLE>
See notes to consolidated financial statements
3
<PAGE> 4
b) Consolidated Statement of Operations
RESOURCE CAPITAL GROUP, INC.
Consolidated Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ------------------------
1997 1996 1997 1996
--------- ---------- ------------ ----------
<S> <C> <C> <C> <C>
Income
Rental operations $ 291,245 $ 223,247 $ 735,379 $ 282,846
Interest - affiliated entity 53,146 53,146 106,291 106,291
Equity in earnings (loss) of
unconsolidated partnerships 25,272 2,391 37,885 (2,835)
Management fees - affiliated entity 13,000 15,000 28,000 30,000
Interest - investments 6,952 7,854 9,060 19,951
Gain on sale of marketable equity securities (note 8) 18,521
Gain on sale of property (note 5) 525,779 525,779
Other income 3,091 294 3,510 585
--------- ---------- ------------ ----------
Total Income 918,485 301,932 1,464,425 436,838
--------- ---------- ------------ ----------
Expenses
Rental operations 158,941 111,398 370,348 129,995
General and administrative 137,682 112,758 268,415 237,322
Interest 90,769 79,264 229,275 90,735
Depreciation and amortization 238,721 34,923 310,685 46,391
--------- ---------- ------------ ----------
Total Expenses 626,113 338,343 1,178,723 504,443
--------- ---------- ------------ ----------
Income (loss) before minority share of (income) 292,372 (36,411) 285,702 (67,605)
Minority share of (income) (8,152) (4,810) (12,431) (10,198)
--------- ---------- ------------ ----------
Income (loss) before income taxes 284,220 (41,221) 273,271 (77,803)
(Provision for) benefit of income taxes (note 6) (96,635) 14,015 (92,912) 26,453
--------- ---------- ------------ ----------
Net income (loss) $ 187,585 $ (27,206) $ 180,359 $ (51,350)
========= ========== ============ ==========
Net income (loss) per share $ .46 $ (.06) $ .44 $ (.12)
========= ========== ============ ==========
</TABLE>
See notes to consolidated financial statements
4
<PAGE> 5
b) Consolidated Statement of Cash Flows
RESOURCE CAPITAL GROUP, INC.
Consolidated Statement of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-------------------------------
1997 1996
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<S> <C> <C>
Cash flows from operating activities
Net Income (loss) $ 180,359 $ (51,350)
Adjustments to reconcile net income (loss) to net
cash provided (used) by operating activities
Depreciation and amortization 310,685 46,391
Interest - affiliated entity 42,472 42,472
Equity in (earnings) loss of unconsolidated partnerships (37,885) 2,835
Gain on sale of property (525,779)
Minority share of (income) loss 12,431 10,198
Gain on sale of marketable equity securities (18,521)
Changes in certain other accounts
Investment in marketable securities, net (1,414) (505)
Escrow deposits 61,639
Deferred charges and other assets 2,166 (638,405)
Receivables 165,343
Accounts payable (39,710) 92,005
Accrued expenses (87,139) (17,945)
Deferred tax liability 23,445 (26,453)
Security deposits (42,103) 51,267
Stock warrants outstanding 24,690
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Net cash provided (used) by operating activities 70,679 (489,490)
------------- ----------
Cash flows from investing activities
Additions to real and personal property (1,500,861) (4,302,895)
Proceeds from sale of property 4,866,684
Purchase of limited partner interest in
unconsolidated partnerships (39,325)
Repayments from (advances to) affiliated entity, net 15,000 (87,500)
Receipt from sale of marketable securities 90,305
Receipt from affiliated entity 225,000
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Net cash provided (used) by investing activities 3,471,128 (4,204,720)
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Cash flows from financing activities
Payments on mortgage payable (3,744,849)
Proceeds of mortgage payable 476,915 4,604,770
Receipt from minority interest 50 8,070
Payments on note payable (34,757) (27,016)
Purchase of treasury stock (50,133)
Distribution to minority interest (10,500) (201,250)
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Net cash provided (used) by financing activities (3,313,141) 4,334,441
------------- ----------
Net increase (decrease) in cash and cash equivalents 228,666 (359,769)
Cash and cash equivalents at beginning of period 298,655 1,236,202
------------- ----------
Cash and cash equivalents at end of period $ 527,321 $ 876,433
============= ==========
</TABLE>
See notes to consolidated financial statements
5
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RESOURCE CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1997
(UNAUDITED)
Readers of this quarterly report should refer to the Company's audited
financial statements for the year ended December 31, 1996 as certain footnote
disclosures which would substantially duplicate those contained in such audited
financial statements have been omitted from this report.
Note 1 Adjustments
In the opinion of management, the accompanying unaudited consolidated financial
statements contain all adjustments necessary to present the Company's financial
position, results of operations and cash flows for the periods indicated. Such
adjustments consisted only of normal recurring items.
Note 2 Summary of significant accounting policies
Principals of Consolidation
The consolidated financial statements of Resource Capital Group, Inc. have been
prepared in accordance with generally accepted accounting principles and
reflect the policies detailed below.
The consolidated financial statements of the Company include the accounts of
Resource Capital Group, Inc. and its seventy-five (75) percent owned
subsidiaries: 8050 Roswell Associates, LLC, (Roswell) and 419 Crossville
Associates, LLC (Crossville) and its ninety-nine (99) percent owned
subsidiaries: Colonial Park Commons LLC, (Colonial), Heide Lot, LLC (Heide),
Meggan Lot, LLC (Meggan), AGS Carriage House Associates (Carriage) and AGS
Compass Pointe Associates (Compass) and its one hundred (100) percent owned
subsidiaries: Woodstock Office One, LLC (Woodstock) and 8046 Roswell Road, LLC
(8046). Hunter Management Company controls the remaining ownership interest in
each subsidiary . All intercompany transactions and balances have been
eliminated in consolidation.
Prior to June 1996, Carriage and Compass were accounted for under the equity
method. The Company's general and limited partnership interests in both AGS
Partners MLP, L.P. (MLP) and AGS Meadow Oaks Associates (Meadow) continue to be
accounted for under the equity method.
6
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Note 3 Investment in and receivables from partnerships
The balances are summarized as follows:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
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<S> <C> <C>
Notes receivable from MLP $ 1,983,501 $ 1,983,501
Accrued interest receivable from MLP 24,794 24,794
Advances receivable from MLP 1,026,678 1,041,678
Accountability to partnerships (135,244) (130,657)
----------- ----------
2,899,729 2,919,316
Valuation allowance (200,000) (200,000)
----------- -----------
$ 2,699,729 $ 2,719,316
=========== ===========
</TABLE>
Interest income earned and received from MLP on these notes receivable totaled
$74,381 for the three months ended June 30, 1997 and 1996.
Based upon an evaluation of the Company's notes receivable from MLP, in 1995
management provided a $200,000 valuation allowance to reflect its estimate of
their realizability.
Note 4 Acquisition of properties
In September, 1996 Colonial Park Commons LLC (Colonial) was formed and
capitalized with a $300,000 contribution, of which $297,000 was funded by the
Company while $3,000 was funded by Hunter Management Company (Hunter).
Colonial acquired an 18,387 square foot office building located in Roswell,
Fulton County, Georgia for $1,010,000. The purchase was financed, in part,
with a $787,500 mortgage payable. Additionally in September 1996, Meggan Lot,
LLC (Meggan) and Heide Lot, LLC (Heide) were also formed and capitalized with a
$100,000 contribution into each of which $99,000 was funded by the Company
while the remaining $1,000 was funded by Hunter. Meggan and Heide each paid
$100,000 to acquire approximately .8 acres of land surrounding the Colonial
Property in Roswell, Fulton County, Georgia.
In June, 1996 the Company acquired a 94% limited partnership interest in
Carriage and Compass. Prior to June, 1996 the Company had only a 5% general
partnership interest in these partnerships. The mortgages on each property
were held by the US Department of Housing and Urban Development (HUD); however
during 1995 HUD sold the mortgages to an unrelated financial institution. In
prior years the Carriage and Compass Partnerships had been unable to generate
sufficient cash flows to fund the required debt service payment and, as a
result, had been in technical default under the mortgage agreement. Following
the purchase of the mortgages from HUD, the financial institution began
foreclosure proceedings on each property. The company, acting as General
Partner decided to expand the Carriage and Compass Partnerships to raise
sufficient
7
<PAGE> 8
cash to fund all unpaid and accrued debt service payments. Additionally to
expedite the process of raising capital the Company offered to purchase from
the limited partners their partnership interest for $1,000 per unit. In this
regard, during March through June 1996, the Company paid a total of $39,325 for
74% of the limited partners interest in Carriage and 91% of the limited
partners interest in Compass. The remaining limited partners in Carriage and
Compass forfeited their interests pursuant to the terms of their respective
partnerships agreements.
In 1996 the Company made capital contributions aggregating $807,415 into
Carriage and Compass to fund the accrued and unpaid debt service payments and
fully reinstate the mortgages. As a result of the acquisition of a majority of
the limited partner interest and the forfeiture by the remaining limited
partners of their interest, effective June 1, 1996, the Company owned 99% (5%
general partner interest and 94% limited partner interest) of each partnership.
The remaining 1% limited partner interest is owned by Hunter who contributed
$8,155 into Carriage and Compass.
In June, 1997 Woodstock Office One, LLC (Woodstock) was formed and capitalized
with a $600,00 contribution, which was funded by the Company as the one hundred
percent owner. Woodstock acquired an 11,250 square foot office building
located in Woodstock, Cherokee County, Georgia for $600,000.
On June 30, 1997 the Company acquired a one hundred percent interest in 8046
Roswell Road, LLC (8046) from Hunter Management Company for $323,000 and
assumption of the first mortgage on the property in the approximate amount of
$477,000. 8046 owns an 8,000 square foot office building located in Atlanta,
Fulton County, Georgia.
The Company is presently negotiating to acquire all the outstanding shares of
stock of Hunter Management Company in exchange for 10,000 shares of Company
Stock. Hunter's assets consist primarily of minority equity interests in
Company owned properties and management contracts.
Note 5 Sale of properties
On May 15, 1997 Carriage House and Compass Pointe Apartments were sold to an
unrelated group of individuals from Monroe, Louisiana. The sales price for the
two properties totaled $4,866,684. The purchaser acquired the properties
subject to the first mortgage on each property which totaled $3,704,658. The
Company recognized a gain from the sale of the properties in the amount of
$525,779.
8
<PAGE> 9
Note 6 Income Taxes
The provision for income taxes of $92,912 for the six months ended June 30,
1997 is based on the tax obtained by applying the statutory rate to the taxable
income earned in the period. The Company recorded a tax benefit of $26,453 for
the six months ended June 30, 1996.
Note 7 Stock warrants outstanding
In 1997 the Company granted stock warrants to the outside directors as a group
equal to 2% of the capitalization of the Company or 8,230 shares. The warrants
are effective through July 2001 and shares can be acquired at $1.00 per share.
The Company recognized compensation expense of $24,690 in the financial
statements for the period ended March 31, 1997 pursuant to Financial Accounting
Standards Board SFAS No. 123 "Accounting for Stock-Based Compensation".
Note 8 Gain on sale of marketable equity securities
In February 1997, the Company realized $90,305 from the sale of a portion of
the marketable equity securities owned by the Company and recognized a gain in
the amount of $18,521.
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Liquidity and Capital Resources
The Company's liquidity is based primarily on its cash reserves, real estate
operating and investment income, its ability to obtain mortgage financing, plus
the interest income and loan repayments received on its notes receivable from
its affiliate, AGS Partners MLP, L.P. (MLP). These funds are used to pay the
Company's normal operating expenses and fund new acquisitions.
As of June 30, 1997, the Company had cash reserves of $527,321. For the six
months ended June 30, 1997, the Company received $148,762 in interest income
from MLP and advances receivable from MLP decreased $15,000. The Company's
cash reserves and current level of income are sufficient to meet the Company's
current level of operating expenses on an ongoing basis.
Occupancy levels and rental rates have increased substantially over the past 4
years on the MLP properties. The net operating income at the property levels
continue to be sufficient to make full interest payments on the notes payable
to the Company. As the rental markets have continued to recover, the Company
has advanced funds to MLP to make capital improvements, replacements and
upgrades to the individual apartment units, buildings and mechanical systems.
MLP plans to continue to make major capital improvements during 1997 in an
attempt to maximize the resale values of the properties.
The ultimate realization of the Company's investment in and receivable from MLP
is dependent on the future operations and/or sale of the MLP properties. Based
on 1997 and future budgets and recent property valuations, management believes
that the two remaining MLP properties have potential for future operating cash
flows and future re-sale values. In 1995 management decided to make a
valuation allowance against the MLP notes of $200,000. MLP has begun marketing
one (1) of its two (2) remaining apartment properties. Management intends to
make further adjustments to this allowance depending upon the results. Based
upon current cash flow projections of the MLP, management feels the $200,000
valuation allowance is more than adequate at June 30, 1997.
The operating properties of the MLP and the various other real estate
partnerships in which the Company is the general partner are financed with
non-recourse debt. The Company is not liable for the principal or interest on
the mortgages and the other assets of the partnerships are more than adequate
to satisfy other recourse liabilities. Therefore, the Company's liquidity
should not be adversely affected by these general partner obligations.
10
<PAGE> 11
In May 1995, the Company acquired for $330,000 a 75% interest in 8050 Roswell
Associates, LLC (Roswell) a Georgia limited liability Company which owns a
9,000 square foot office building in Atlanta, Fulton County, Georgia. Hunter
Management Company owns the remaining 25% interest. The purchase price for the
Roswell property approximated $440,000 and was financed, in part, with a
$360,000 mortgage on the building. The Company was repaid $247,500 in capital
from the proceeds of the mortgage. Based on 1997 and future budgets and recent
property valuations the investment should produce future operating cash flows
and future resale values for the Company.
In November, 1995 the Company purchased for $750,000 a 75% interest in 419
Crossville Associates, LLC (Crossville) a Georgia limited liability Company
which owns a 19,000 square foot office building in Roswell, Fulton County,
Georgia. Hunter Management Company owns the remaining 25% interest. The
building was purchased in an all cash transaction, however, in May, 1996
Crossville obtained an $880,000 mortgage on the property and used the proceeds
to return $600,000 to the Company. The Company and Hunter have both guaranteed
this mortgage. Based on 1997 and future budgets and recent property
valuations, the investment should produce future operating cash flows and
future resale values for the Company.
The Company is the General Partner and also a Limited Partner of AGS Carriage
House Associates and AGS Compass Pointe Associates. In 1996, the Company
expanded both partnerships to raise additional capital. In this regard the
Company has contributed $807,415 to these two properties and acquired a 94%
limited partner interest in the partnerships. Hunter contributed $8,155 in
capital and has obtained a 1% limited partner interest. The capital was
utilized by the partnerships to fully reinstate the first mortgages secured by
the properties. The properties were sold on May 15, 1997 for a sales price of
$4,866,684. As a result of the sale, the Company recouped its investment and
reported a gain of $525,779.
In September 1996, the Company purchased for $297,000 a 99% interest in
Colonial Park Commons, LLC (Colonial Park) which owns an 18,387 square foot
office building in Roswell, Fulton County, Georgia. Hunter Management
contributed $3,000 and owns the remaining 1%. Colonial Park obtained a
$787,500 mortgage on the office building. The mortgage is guaranteed by the
Company and Hunter. In addition, the Company acquired for $198,000 a 99%
interest in Heide Lot, LLC and Meggan Lot, LLC which owns the two developmental
building lots adjacent to the Colonial Park office building. Hunter
contributed $2,000 and owns the remaining 1%. Based on 1997 and future budgets
and recent property valuation, these investments should produce future
operating cash flows and future resale values for the Company.
11
<PAGE> 12
In June 1997 the Company acquired for $600,000 a 100% interest in Woodstock
Office One, LLC (Woodstock) a Georgia limited liability Company which owns an
11,250 square foot office building in Woodstock, Cherokee County, Georgia. The
Company is presently negotiating for a first mortgage on the property. Based
on 1997 and future budgets and recent property valuations the investment should
produce future operating cash flows and future resale values for the Company.
On June 30, 1997 the Company acquired for $323,000 a 100% interest in 8046
Roswell Road, LLC (8046) a Georgia limited liability Company which owns an
8,000 square foot office building in Atlanta, Fulton County, Georgia. The
purchase price for the 8046 property approximated $800,000 and was financed, in
part, with the assumption on the first mortgage in the amount of approximately
$477,000. The Company acquired the interest from Hunter Management Company.
Based on 1997 and future budgets and recent property valuations the investment
should produce future operating cash flows and future resale values for the
Company.
For the three months ended June 30, 1997 the Company received $13,000 in fees
from Hunter Management Company for management supervisory services provided in
connection with the various MLP properties.
Results of Operations
The Company's business plan includes continuing its transition from an asset
base consisting primarily of mortgage receivables from MLP and general and
limited partner interests in apartment buildings located throughout the
country, into small apartment properties and suburban office buildings
concentrated in Atlanta, Georgia and other fast growing metropolitan areas in
the southeast. Despite the expenses associated with this transition, for the
three months ended June 30, 1997, the Company recognized net income of $187,585
compared to a loss of $27,206 for the corresponding period in 1996 due
primarily to the $525,779 gain realized from the Carriage and Compass property
sales. Total revenue for the three months ended June 30, 1997 was $918,485
versus $301,932 for the same period in 1996. This increase in revenue was
caused substantially by the 1997 gain from the sale of Carriage House and
Compass Pointe Apartments in the amount of $525,779. Rental income increased
$67,998 in 1997 due to the September 1996 acquisition of the Colonial and the
June 1996 acquisitions of the Carriage and Compass properties.
Total expenses for the three months ended June 30, 1997 were $626,113 compared
to $338,343 for the same period in 1996. The increase in expenses from 1997 to
1996 was caused in part by the
12
<PAGE> 13
amortization of the remaining loan costs in the amount of approximately
$194,000 for the Carriage and Compass mortgages and the operating expenses
incurred by the Colonial, Carriage and Compass properties.
General and administrative expenses for the three months ended June 30, 1997 of
$137,682 increased $24,924 from the same period last year. This increase is
attributed to professional fees incurred from the sale of Carriage House and
Compass Pointe Apartments.
Depreciation and amortization of $238,721 for the three months ended June 30,
1997 increased $203,798 over the same period in 1996 due primarily to the 1997
sale of the Carriage and Compass properties and the resulting amortization of
the remaining loan costs.
Interest expense increased $11,505 for the three months ended June 30, 1997 as
compared to the corresponding period in 1996 as a result of increased debt
associated with the Colonial, Carriage and Compass acquisitions.
Inflation
Inflation in the future may increase rental revenues as well as operating
expenses, all in accordance with general market trends.
13
<PAGE> 14
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
(a) Report on Form 8-K filed on May 27, 1997 regarding
the sale of Carriage House and Compass Pointe
Apartments
14
<PAGE> 15
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
Registrant caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Resource Capital Group, Inc.
(Registrant)
By: /s/Albert G. Schmerge III
-------------------------
Albert G. Schmerge III
President, CEO and
Chairman of the Board
Date: August 14, 1997
15
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 527,321
<SECURITIES> 24,195
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 4,445,949
<DEPRECIATION> 117,792
<TOTAL-ASSETS> 7,779,910
<CURRENT-LIABILITIES> 0
<BONDS> 2,443,303
0
0
<COMMON> 4,986
<OTHER-SE> 4,812,637
<TOTAL-LIABILITY-AND-EQUITY> 7,779,910
<SALES> 0
<TOTAL-REVENUES> 1,464,425
<CGS> 0
<TOTAL-COSTS> 370,348
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 229,275
<INCOME-PRETAX> 273,271
<INCOME-TAX> 92,912
<INCOME-CONTINUING> 180,359
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 180,359
<EPS-PRIMARY> .44
<EPS-DILUTED> 0
</TABLE>
