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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
{X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
_____________________________
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to ____________
Commission file number 1-11550
____________________________________
Wellsford Residential Property Trust
_____________________________________________________________________
(Exact name of registrant as specified in its charter)
Maryland 13-3675988
___________________________ _________________________
(State or other jurisdiction
of incorporation or organization) (IRS Employer Identification No.)
610 Fifth Avenue, New York, NY 10020
__________________________________________________________________________
(Address of principal executive offices)
(Zip Code)
(212) 333-2300
__________________________________________________________________________
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes _____X_____ No _________
Number of common shares of beneficial interest, $.01 par value, outstanding
as of April 30, 1996: 17,037,680
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<PAGE>
<PAGE>
WELLSFORD RESIDENTIAL PROPERTY TRUST
FORM 10-Q
INDEX
Page
Number
______
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 1996
(unaudited) and December 31, 1995 3
Consolidated Statements of Operations
(unaudited) for the three months
March 31, 1996 and 1995 4
Consolidated Statements of Cash Flows
(unaudited) for the three months ended
March 31, 1996 and 1995 5
Notes to Consolidated Financial Statements (unaudited) 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. OTHER INFORMATION 10
SIGNATURES 10
<PAGE>
<PAGE>
WELLSFORD RESIDENTIAL PROPERTY TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1996 1995
------------ ------------
ASSETS (Unaudited)
Real estate assets, at cost:
Land $105,121,296 $105,121,296
Buildings and improvements 605,297,326 605,087,385
------------ ------------
710,418,622 710,208,681
Less, accumulated depreciation (64,685,940) (58,490,833)
------------ ------------
645,732,682 651,717,848
Construction in progress 30,565,276 26,189,876
------------ ------------
676,297,958 677,907,724
Cash and cash equivalents 17,316,919 29,444,008
Restricted cash 12,482,099 12,916,328
Deferred financing costs 5,682,362 5,928,869
Prepaid and other assets 3,318,204 3,441,408
------------ ------------
Total Assets $715,097,542 $729,638,337
____________ ____________
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Senior unsecured notes $223,352,772 $223,306,778
Mortgage notes payable 72,173,134 77,136,941
Unsecured credit facilities -- --
Accrued expenses and other
liabilities 12,196,394 16,403,724
Dividends payable 11,397,667 11,310,053
Security deposits 3,080,969 3,122,229
------------ ------------
Total Liabilities 322,200,936 331,279,725
------------ -----------
Commitments and contingencies -- --
Shareholders' Equity:
Shares of beneficial interest,
100,000,000 shares authorized -
3,999,800 Series A Convertible
Preferred Shares, $.01 par
value per share, liquidation
preference $25 per share,
issued and outstanding; 39,998 39,998
2,300,000 Series B Preferred Shares,
$.01 par value per share,
liquidation preference $25 per
share, issued and outstanding; 23,000 23,000
17,032,097 and 17,026,342 Common
Shares,$.01 par value per share, issued
and outstanding at March 31, 1996 and
December 31, 1995, respectively 170,321 170,264
Paid in capital in excess of
par value 459,756,365 459,634,825
Distributions in excess of
net income (61,007,737) (55,284,084)
Deferred compensation and
shareholder loans receivable (6,085,341) (6,225,391)
------------ ------------
Total Shareholders' Equity 392,896,606 398,358,612
------------ ------------
Total Liabilities and Shareholders'
Equity $715,097,542 $729,638,337
============ ============
See accompanying notes.<PAGE>
<PAGE>
WELLSFORD RESIDENTIAL PROPERTY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
---------------------------------------
1996 1995
------------- -------------
REVENUE
Rental income $30,408,668 $31,227,643
Other income 1,370,674 1,320,509
Interest income 260,144 193,701
---------- ----------
Total Revenue 32,039,486 32,741,853
---------- ----------
EXPENSES
Property operating and maintenance 9,722,165 9,674,620
Real estate taxes 2,420,048 2,512,331
Depreciation and amortization 6,436,099 6,736,171
Property management 1,237,540 1,268,954
Interest 5,517,230 7,151,863
General and administrative 1,011,621 1,281,429
---------- ----------
Total Expenses 26,344,703 28,625,368
---------- ----------
(Loss) on JV properties (20,770) (118,026)
---------- ----------
Net income 5,674,013 3,998,459
Preferred dividends 3,137,100 1,750,000
---------- ----------
Income (loss) available for
common shareholders $2,536,913 $2,248,459
========== ==========
Net income (loss) per common share $0.15 $0.13
========== ==========
Weighted average number of common
shares outstanding 17,031,108 16,909,311
========== ==========
Cash dividends declared per common
share $0.485 $0.48
========== ==========
See accompanying notes.
<PAGE>
<PAGE>
WELLSFORD RESIDENTIAL PROPERTY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
______________________________
CASH FLOWS FROM OPERATING
ACTIVITIES: 1996 1995
____ ____
Net income $ 5,674,013 $ 3,998,459
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and amortization 6,594,497 7,577,947
Amortization of deferred
compensation and shareholder
loans receivable 140,050 129,981
Decrease (increase) in assets
Escrow cash 43,123 1,073,820
Debt service reserve 391,106 (819,559)
Rent receivables 11,401 267,399
Prepaid and other assets 68,721 232,983
(Decrease) increase in
liabilities
Accounts payable (453,567) 298,836
Accrued expenses and other
liabilities (3,753,763) (1,552,939)
Security deposits (41,260) (949)
___________ ___________
Net cash provided by
operating activities 8,674,321 11,205,978
___________ __________
CASH FLOWS FROM INVESTING
ACTIVITIES:
Investment in real estate
assets (4,585,341) (3,735,826)
___________ ___________
Net cash provided by
(used) in investing
activities (4,585,341) (3,735,826)
___________ __________
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from mortgage
notes payable -- 680,180
Proceeds from senior
unsecured notes -- 99,396,000
Net proceeds (payment)
from credit facilities -- (65,500,000)
Payment of deferred financing
costs (59,046) (2,091,991)
Principal payments on mortgage
notes (4,968,568) (31,104,790)
Distributions to shareholders (11,310,053) (9,359,190)
Net proceeds from dividend
reinvestment plan 121,598 --
____________ ____________
Net cash provided by (used
in) financing activities (16,216,069) (7,979,791)
____________ ___________
Net (decrease) in cash and
cash equivalents (12,127,089) (509,639)
Cash and cash equivalents,
beginning of period 29,444,008 13,152,692
____________ ___________
Cash and cash equivalents,
end of period $ 17,316,919 $ 12,643,053
============= =============
SUPPLEMENTAL INFORMATION:
Cash paid during the
period for interest $ 9,900,073 $ 5,047,107
First quarter dividends
declared $ 11,397,667 $ 9,866,469
See accompanying notes.
<PAGE>
<PAGE>
WELLSFORD RESIDENTIAL PROPERTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. General
Wellsford Residential Property Trust and Subsidiaries (the "Company")
is a fully integrated and self administered equity real estate
investment trust ("REIT") engaged in the acquisition, development and
operation of multifamily communities located in the Southwest and
Pacific Northwest regions of the United States. At March 31, 1996, the
Company owned 75 multifamily communities containing 18,296 units.
The accompanying financial statements and related notes of the Company
have been prepared in accordance with generally accepted accounting
principles for interim financial reporting and the instructions to Form
10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain
information and footnote disclosures normally included in financial
statements prepared under generally accepted accounting principles have
been condensed or omitted pursuant to such rule. In the opinion of
management, all adjustments considered necessary for a fair
presentation of the Company's financial position, results of operations
and cash flows have been included and are of a normal and recurring
nature. These financial statements should be read in conjunction with
the Company's Annual Report on Form 10-K for the year ended December
31, 1995.
2. Real Estate Investments
In April 1996, the Company, through a wholly-owned subsidiary, acquired
Marks West, a multifamily community containing 280 units located in
Denver, Colorado, for approximately $18 million including the estimated
cost for certain capital improvements. The acquisition was funded from
cash on hand and $11.2 million of tax-exempt bond financing. The bonds
are collateralized by a non-recourse first mortgage on Marks West, bear
interest at a rate which approximates the Standard & Poor's/J.J. Kenny
index for short-term high grade tax-exempt bonds, and mature in
December 1997. The community's operations have been combined with
those of The Marks, an existing community located contiguous to Marks
West.
In January 1996, the Company prepaid its $4.9 million mortgage on the
community known as Parkwood East from cash on hand. This mortgage bore
interest at 9.625% and would have matured in March 1996.
3. Earnings Per Share
Net income per share was calculated using the weighted average number
of shares outstanding of 17,031,108 and 16,909,311 for the three months
ended March 31,1996 and 1995, respectively. The Company declared a
common dividend of $0.485 per common share, a Series A preferred
dividend of $0.4375 per share, and a Series B preferred dividend of
$0.603125 per share on March 18, 1996 payable to shareholders of record
on March 28, 1996.
<PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
1. General
The Company's operations consist of acquiring, developing and operating
residential multifamily communities located in the Southwest and Pacific
Northwest regions of the United States. At March 31, 1996, the Company
owned 75 multifamily communities containing 18,296 units.
Decreases in revenues and expenses in the periods compared below were due
primarily to the dispositions of seven communities containing a total of
2,245 units during 1995 (the "Disposition Communities"). Certain
comparisons between periods have been made on an actual basis as well as on
a weighted average per unit basis, a technique which adjusts for certain
increases in existing communities and increases related to the acquisitions
of communities.
The Company currently has the following four development projects on which
it has spent $30.6 million through March 31, 1996:
Number Estimated Estimated
Name of Units Location Total Cost Completion Date
Summit 150 Seattle $15.0 million December 1996
Seeley Lake III 182 Tacoma 8.9 million October 1996
Bear Creek Run II 216 Denver 18.8 million October 1996
Blue Ridge 456 Denver 42.5 million October 1997
---- -------------
1,004 $85.2 million
===== =============
Two of these projects, Blue Ridge and Bear Creek Run II, are being
developed pursuant to fixed-price contracts. The Company is committed to
purchase 100% of these projects upon completion and the achievement of
certain occupancy levels, which is anticipated to occur at the dates
disclosed above.
2. Results of Operations
Comparison of the three months ended March 31, 1996 to the three months
ended March 31, 1995.
Rental income decreased by $0.8 million or 3%. $1.8 million of decrease
represents 1995 rental income from the Disposition Communities. On a per
unit basis, rental income increased from $1,543 to $1,669 or 8% due
primarily to increases in rental rates and dispositions of communities with
lower per unit rents than the currently owned communities. Revenues for
the 75 communities which were owned during the first three months of 1995
and 1996 increased by 3%. Average occupancy increased from 93.9% to 95.0%.
Occupancy for the 75 communities owned during the first three months of
both 1995 and 1996 decreased slightly from 95.2% to 95.0%.
<PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
Other income increased by $0.1 million or 4%. $0.1 million of decrease
represents 1995 other income from the Disposition Communities. On a per
unit basis, other income increased from $65 to $75 or 15%, due primarily to
increases in lease cancellation fees related to residents leaving to
acquire homes.
Interest income increased by $0.1 million due primarily to the large cash
balance during January 1996.
As a result of the above changes, total revenues decreased from $32.7
million to $32.0 million or 2%. On a per unit basis, total revenue
increased from $1,618 to $1,758 (or from $539 to $586 per unit per month)
or 9%.
Property operating and maintenance expenses increased by less than
$0.1 million or less than 1%. $0.8 million of decrease represents 1995
property operating and maintenance expenses from the Disposition
Communities. On a per unit basis, these expenses increased from $478 to
$534 or 12% due primarily to the sale of communities having lower per unit
operating costs than the currently owned communities.
Real estate taxes decreased by $0.1 million or 4%. This decrease
represents 1995 real estate taxes on the Disposition Communities. On a per
unit basis, real estate taxes increased from $124 to $133 or 7% due
primarily to increases in assessed values in certain cities.
Property management expense decreased by less than $0.1 million or 2%.
This decrease represents 1995 property management expense related to the
Disposition Communities. On a per unit basis, property management expense
increased from $63 to $68 or 8% due primarily to the sale of communities
having lower per unit management expenses than the currently owned
communities.
Interest expense decreased by $1.6 million or 23%. This decrease is
primarily the result of reduced interest due to the repayment of debt from
the proceeds of the Series B Preferred Shares during 1995.
General and administrative expenses decreased by $0.3 million. On a
per unit basis, this expense decreased from $63 to $56 or 12%. This
decrease is primarily the result of decreased compensation for certain
executive officers.
Depreciation and amortization decreased by $0.3 million or 4% due
primarily to the disposition of communities.
<PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
3. Liquidity and Capital Resources
The Company expects to meet its short-term liquidity requirements generally
through its working capital and cash flow provided by operations. The
Company considers its ability to generate cash to be adequate and expects
it to continue to be adequate to meet operating requirements and
shareholder distributions in accordance with REIT requirements both in the
short and long terms.
The Company expects to meet its long-term liquidity requirements such as
refinancing mortgages, financing acquisitions and development, and
financing capital improvements by long-term borrowings through the issuance
of debt and the offering of additional debt and equity securities.
The Company has a $150 million unsecured revolving credit facility from The
First National Bank of Boston (the "Bank of Boston Credit Facility"). At
March 31, 1996, there were no amounts drawn on the Bank of Boston Credit
Facility. The Bank of Boston Credit Facility may be used for financing
acquisitions, development, capital expenditures, repayment of indebtedness
and working capital purposes.
<PAGE>
<PAGE>
PART II.
OTHER INFORMATION
Item 1: Legal Proceedings - Not Applicable.
Item 2: Changes in Securities - Not Applicable.
Item 3: Defaults upon Senior Securities - Not Applicable.
Item 4: Submission of Matters to a Vote of Security Holders - Not
Applicable
Item 5: Other Information - Not Applicable.
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits filed with this Form 10-Q: None.
(b) No report on Form 8-K was filed by the registrant
during its fiscal quarter ended March 31, 1996.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WELLSFORD RESIDENTIAL PROPERTY TRUST
By: /s/ Jeffrey H. Lynford
-----------------------------------------
Jeffrey H. Lynford, Chairman of the Board
/s/ Gregory F. Hughes
-------------------------------------------------------------
Gregory F. Hughes, Vice President and Chief Financial Officer
Dated: April 30, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This Schedule contains summary financial information
extracted from the consolidated balance sheets and consolidated
statements of income and is qualified in its entirety by
reference to such financial statements.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 29,799,018
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 33,117,222
<PP&E> 740,983,898
<DEPRECIATION> 64,685,940
<TOTAL-ASSETS> 715,097,542
<CURRENT-LIABILITIES> 26,675,030
<BONDS> 295,525,906
<COMMON> 170,321
0
62,998
<OTHER-SE> 392,663,287
<TOTAL-LIABILITY-AND-EQUITY> 715,097,542
<SALES> 0
<TOTAL-REVENUES> 32,039,486
<CGS> 0
<TOTAL-COSTS> 19,815,852
<OTHER-EXPENSES> 20,770
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,517,230
<INCOME-PRETAX> 5,674,013
<INCOME-TAX> 0
<INCOME-CONTINUING> 5,674,013
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,674,013
<EPS-PRIMARY> 0.15
<EPS-DILUTED> 0.15
</TABLE>
