<PAGE>
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended DECEMBER 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 1-12252
EQUITY RESIDENTIAL PROPERTIES TRUST
(Exact Name of Registrant as Specified in Its Charter)
MARYLAND 13-3675988
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
TWO NORTH RIVERSIDE PLAZA, CHICAGO, ILLINOIS 60606
(Address of Principal Executive Offices) (Zip Code)
(312) 474-1300
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Common Shares of Beneficial Interest, New York Stock Exchange
$0.01 Par Value (Name of Each Exchange on
(Title of Class) Which Registered)
Preferred Shares of Beneficial New York Stock Exchange
Interest, $0.01 Par Value (Name of Each Exchange on
(Title of Class) Which Registered)
Securities registered pursuant to Section 12(g) of the Act: None
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
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of the 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. [ ]
The aggregate market value of voting shares held by non-affiliates was
approximately 4.6 billion based upon the closing price on March 12, 1998 of $49
using beneficial ownership of shares rules adopted pursuant to Section 13 of the
Securities Exchange Act of 1934 to exclude voting shares owned by Trustees and
Officers, some of whom may not be held to be affiliates upon judicial
determination.
At March 13, 1998, 95,798,559 of the Registrant's Common Shares of Beneficial
Interest were outstanding.
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
Part II incorporates by reference the Registrant's Current Report on Form 8-K
dated March 1, 1996 and filed on March 7, 1996.
Part IV incorporates by reference the following exhibits as filed with the
Company's Form S-11 on May 21, 1993 (Registration No. 33-63158) and as amended
thereafter: Exhibit 10.2, 10.4, 10.5, 10.6, 10.7, 10.8 and 10.9.
Part IV incorporates by reference the following exhibits as filed with the
Operating Partnership's Form 10 on October 7, 1994 (Registration No. 0-24920)
and as amended thereafter: Exhibit 4.1, 4.2 and 10.10.
Part IV incorporates by reference the following exhibit as filed with the
Operating Partnership's Form 10-Q for the quarter ended September 30, 1995 on
November 9, 1995 and as amended thereafter: Exhibit 10.1.
Part IV incorporates by reference the following exhibits as filed with the
Company's Form 10-K on March 16, 1995 and as amended thereafter: Exhibit 10.3.
Part IV incorporates by reference the following exhibits as filed with the
Company's Form 10-K for the year ended December 31, 1996 on March 20, 1997 and
as amended thereafter: Exhibit 10.11.
Part IV incorporates by reference the following exhibit as filed with the
Company's Form 8-K dated September 10, 1997 and filed on September 10, 1997:
Exhibit 10.12.
Part IV incorporates by reference the following exhibits as filed with the
Company's Form 8-K dated May 30, 1997 and filed on June 5, 1997: Exhibit 3.1
and 3.2.
Part IV incorporates by reference the following exhibit as filed with the
Company's Form 8-K dated January 16, 1997 and filed on January 17, 1997:
Exhibit 2.1.
Part IV incorporates by reference the following appendix as filed with the
Company's Form S-4 filed on April 29, 1997: Exhibit 2.2.
Part IV incorporates by reference the following exhibit as filed with the
Company's Form 8-K dated August 27, 1997 and filed on August 29, 1997: Exhibit
2.3.
Part IV incorporates by reference the following appendix as filed with the
Company's Form S-4 filed on September 18, 1997: Exhibit 2.4.
Part IV incorporates by reference the following exhibits as filed with the
Company's Form S-4 filed on September 18, 1997: Exhibit 10.13 and 10.14.
2
<PAGE>
PART I
EQUITY RESIDENTIAL PROPERTIES TRUST
TABLE OF CONTENTS
PART I. PAGE
----
Item 1. Business 4
Item 2. Properties 20
Item 3. Legal Proceedings 49
Item 4. Submission of Matters to a Vote of Security
Holders 49
PART II.
Item 5. Market for Registrant's Common Equity and Related
Shareholder Matters 50
Item 6. Selected Financial Data 51
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 54
Item 8. Financial Statements and Supplementary Data 66
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 66
PART III.
Item 10. Trustees and Executive Officers of the Registrant 67
Item 11. Executive Compensation 67
Item 12. Security Ownership of Certain Beneficial Owners
and Management 67
Item 13. Certain Relationships and Related Transactions 67
PART IV.
Item 14. Exhibits, Financial Statements, Schedules and
Reports on Form 8-K 68
3
<PAGE>
PART I
ITEM 1. BUSINESS
GENERAL
Equity Residential Properties Trust ("EQR") is a self-administered and
self-managed equity real estate investment trust ("REIT"). EQR was organized
in March 1993 and commenced operations on August 18, 1993 upon completion of
its initial public offering (the "EQR IPO") of 13,225,000 common shares of
beneficial interest, $0.01 par value per share ("Common Shares"). The Company
was formed to continue the multifamily property business objectives and
acquisition strategies of certain affiliated entities controlled by Mr. Samuel
Zell, Chairman of the Board of Trustees of the Company. These entities had
been engaged in the acquisition, ownership and operation of multifamily
residential properties since 1969. As used herein, the term "Company"
includes EQR and those entities owned or controlled by it, as the survivor of
the mergers between EQR and each of Wellsford Residential Property Trust
("Wellsford") (the "Wellsford Merger") and Evans Withycombe Residential, Inc.
("EWR") (the "EWR Merger").
The Company's subsidiaries include ERP Operating Limited Partnership
(the "Operating Partnership"), Evans Withycombe Residential, L.P. (the "EWR
Operating Partnership"), Equity Residential Properties Management Limited
Partnership and Equity Residential Properties Management Limited Partnership
II (collectively, the "Management Partnerships"), a series of partnerships
(the "Financing Partnerships") and limited liability companies ("LLCs"), which
beneficially own certain properties encumbered by mortgage indebtedness.
As of December 31, 1997, the Company owned or had interests in 489
multifamily properties, of which it controlled a portfolio of 463 multifamily
properties (individually, a "Property" and collectively, the "Properties")
containing 135,200 units. The remaining 26 properties represent an investment
in partnership interests and subordinated mortgages collateralized by 21
properties and mortgage loans collateralized by five properties (collectively,
the "Additional Properties") containing 5,267 units. Of the 5,267 units, 1,371
units are property managed by third party unaffiliated entities. The Company's
Properties and the Additional Properties are located throughout the United
States in the following states: Alabama, Arizona, Arkansas, California,
Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Iowa,
Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota,
Missouri, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, Ohio,
Oklahoma, Oregon, South Carolina, Tennessee, Texas, Utah, Virginia, Washington
and Wisconsin. In addition, Equity Residential Properties Management Corp.
("Management Corp.") and Equity Residential Properties Management Corp. II
("Management Corp. II") also provide residential property and asset management
services to 29 properties containing 9,295 units owned by affiliated entities.
The Company is, together with the Operating Partnership, one of the largest
publicly traded REITs (based on the aggregate market value of its outstanding
Common Shares) and is the largest publicly traded REIT owner of multifamily
properties (based on the number of apartment units owned and total revenues
earned).
Since the EQR IPO and through December 31, 1997, the Company, through
the Operating Partnership, has acquired direct or indirect interests in 412
properties (which included the debt
4
<PAGE>
PART I
collateralized by six Properties) containing 118,510 units in the aggregate
for a total purchase price of approximately $6.5 billion, including the
assumption of approximately $1.5 billion of mortgage indebtedness. The
Company also made an $89 million investment in partnership interests and
subordinated mortgages collateralized by 21 of the Additional Properties (its
"$89 Million Mortgage Note Investment") and an $88 million investment in
mortgage loans collateralized by 5 of the Additional Properties (its "$88
Million Mortgage Note Investment"). Since the EQR IPO through December 31,
1997, the Company has disposed of 18 properties, a portion of one Property,
containing 5,035 units, and a vacant land parcel for a total sales price of
approximately $129.8 million and the release of mortgage indebtedness in the
amount of $20.5 million.
The Company's corporate headquarters and executive offices are located
in Chicago, Illinois. In addition, the Company has 29 management offices in the
following cities: Chicago, Illinois; Dallas, Houston and San Antonio, Texas;
Denver, Colorado; Bethesda, Maryland; Atlanta, Georgia; Las Vegas, Nevada;
Scottsdale and Tucson, Arizona; Portland, Oregon; Ypsilanti, Michigan; Charlotte
and Raleigh, North Carolina; Tampa, Jacksonville and Ft. Lauderdale, Florida;
Irvine, Pleasant Hill and Stockton, California; Kansas City, Kansas;
Minneapolis, Minnesota; Louisville, Kentucky; Tulsa, Oklahoma; Boston,
Massachusetts; Federal Way, Redmond and Seattle, Washington; and Nashville and
Memphis, Tennessee. The Company has approximately 4,200 employees. Each of the
Company's Properties is directed by an on-site manager, who supervises the on-
site employees and is responsible for the day-to-day operations of the Property.
The manager is generally assisted by a leasing administrator and/or property
administrator. In addition, a maintenance director at each Property supervises a
maintenance staff whose responsibilities include a variety of tasks, including
responding to service requests, preparing vacant apartments for the next
resident and performing preventive maintenance procedures year-round.
BUSINESS OBJECTIVES AND OPERATING STRATEGIES
The Company seeks to maximize both current income and long-term growth
in income, thereby increasing: (i) the value of the Properties; (ii)
distributions on a per Common Share basis; and (iii) shareholders' value.
The Company's strategies for accomplishing these objectives are:
- - maintaining and increasing Property occupancy while increasing rental
rates;
- - controlling expenses, providing regular preventive maintenance, making
periodic renovations and enhancing amenities;
- - maintaining a ratio of consolidated debt-to-total market
capitalization of less than 50%; and
- - pursuing acquisitions that: (i) are available at prices below
estimated replacement costs; (ii) have potential for rental rate
and/or occupancy increases; (iii) have attractive locations in their
respective markets; and (iv) provide anticipated total returns that
will increase the Company's distributions per Common Share and the
Shareholder's value.
5
<PAGE>
PART I
- - Purchasing newly developed as well as co-investing in the development
of multifamily communities in the Company's existing target markets
where the market conditions warrant such development.
The Company is committed to tenant satisfaction by striving to
anticipate industry trends and implementing strategies and policies consistent
with providing quality tenant services. In addition, the Company continuously
surveys rental rates of competing properties and conducts satisfaction surveys
of residents to determine the factors they consider most important in choosing
a particular apartment unit.
ACQUISITION STRATEGIES
The Company anticipates that future property acquisitions will be
located in the continental United States. Management will continue to use
market information to evaluate acquisition opportunities. The Company's
market data base allows it to review the primary economic indicators of the
markets where the Company currently manages Properties and where it expects to
expand its operations. Acquisitions may be financed from various sources of
capital, which may include undistributed funds from operations ("FFO"),
issuance of additional equity securities, sales of Properties and
collateralized and uncollateralized borrowings. In addition, the Company may
acquire additional multifamily properties in transactions that include the
issuance of limited partnership interests in the Operating Partnership ("OP
Units") as consideration for the acquired properties. Such transactions may,
in certain circumstances, partially defer the sellers' tax consequences.
When evaluating potential acquisitions, the Company will consider: (i)
the geographic area and type of community; (ii) the location, construction
quality, condition and design of the property; (iii) the current and projected
cash flow of the property and the ability to increase cash flow; (iv) the
potential for capital appreciation of the property; (v) the terms of resident
leases, including the potential for rent increases; (vi) the potential for
economic growth and the tax and regulatory environment of the community in
which the property is located; (vii) the occupancy and demand by residents for
properties of a similar type in the vicinity (the overall market and
submarket); (viii) the prospects for liquidity through sale, financing or
refinancing of the property; and (ix) competition from existing multifamily
properties and the potential for the construction of new multifamily
properties in the area. The Company expects to purchase multifamily
properties with physical and market characteristics similar to the Properties.
DEVELOPMENT STRATEGIES
The Company seeks to acquire newly constructed properties and make
investments towards the development of properties in markets where it discerns
strong demand, which the Company believes will enable it to achieve superior
rates of return. The Company's current communities under development and
future developments are in markets or will be in markets where certain market
demographics justify the development of high quality multifamily communities.
In evaluating whether to develop an apartment community in a particular
location,
6
<PAGE>
PART I
the Company analyzes relevant demographic, economic and financial data.
Specifically, the Company considers the following factors, among others, in
determining the viability of a potential new apartment community: (i) income
levels and employment growth trends in the relevant market, (ii) uniqueness of
location, (iii) household growth and net migration of the relevant market's
population, (iv) supply/demand ratio, competitive housing alternatives, sub-
market occupancy and rent levels (v) barriers to entry that would limit
competition, and (vi) the purchase price and yields of available existing
stabilized communities, if any.
DISPOSITION STRATEGIES
Management will use market information to evaluate dispositions.
Factors the Company considers in deciding whether to dispose of its Properties
include the following: (i) potential increases in new construction; (ii)
areas where the economy is expected to decline substantially; and (iii)
markets where the Company does not intend to establish long-term
concentrations. The Company will reinvest the proceeds received from property
dispositions to fund property acquisitions. In addition, when feasible the
Company will structure these transactions as tax deferred exchanges.
FINANCING STRATEGIES
The Company intends to maintain a ratio of consolidated debt-to-total
market capitalization of 50% or less. At December 31, 1997, the Company had a
ratio of approximately 33% based on the closing price of the Company's Common
Shares on the New York Stock Exchange and assuming conversion of all OP Units
plus the liquidation preference of non-voting preferred shares of beneficial
interest, $0.01 par value per share ("Preferred Shares"). It is the Company's
policy that EQR shall not incur indebtedness other than short-term trade,
employee compensation, dividends payable or similar indebtedness that will be
paid in the ordinary course of business, and that indebtedness shall instead
be incurred by the Operating Partnership to the extent necessary to fund the
business activities conducted by the Operating Partnership and its
subsidiaries.
Equity Offerings For the Years Ended December 31, 1997, 1996 and 1995
- ---------------------------------------------------------------------
In June 1995, the Company sold 6,120,000 of its 9 3/8% Series A
Cumulative Redeemable Preferred Shares of Beneficial Interest, $0.01 par value
per share (the "Series A Preferred Shares"), at $25 per share. The Company
raised gross proceeds of $153 million from this offering. The liquidation
preference of each of the Series A Preferred Shares is $25 per Series A
Preferred Share.
In November 1995, the Company sold 5,000,000 depositary shares (the
"Series B Depositary Shares"). Each Series B Depositary Share represents a
1/10 fractional interest in a 9 1/8% Series B Cumulative Redeemable Preferred
Share of Beneficial Interest, $0.01 par value per share (the "Series B
Preferred Shares"). The liquidation preference of each of the Series B
Preferred Shares is $250.00 (equivalent to $25 per Series B Depositary Share).
The Company raised gross proceeds of approximately $125 million from the sale
of the Series B Depositary Shares.
7
<PAGE>
PART I
In January 1996, the Company completed an offering of 1,725,000
registered Common Shares, which were sold at a net price of $29.375 per share
(the "January 1996 Common Share Offering") and received net proceeds of
approximately $50.7 million in connection therewith. In February 1996, the
Company completed an offering of 2,300,000 registered Common Shares, which
were sold at a net price of $29.50 per share (the "February 1996 Common Share
Offering") and received net proceeds of approximately $67.8 million in
connection therewith.
On May 21, 1996, the Company completed an offering of 2,300,000
publicly registered Common Shares, which were sold at a net price of $30.50
per share. On May 28, 1996 the Company completed the sale of 73,287 publicly
registered Common Shares to employees of the Company and to employees of
Equity Group Investments, Inc. ("EGI") and certain of their respective
affiliates and consultants at a net price equal to $30.50 per share. On May
30, 1996, the Company completed an offering of 1,264,400 publicly registered
Common Shares, which were sold at a net price of $30.75 per share. The
Company received net proceeds of approximately $111.3 million in connection
with the sale of the 3,637,687 Common Shares mentioned above (collectively,
the "May 1996 Common Share Offerings").
In September 1996, the Company sold 4,600,000 depositary shares (the
"Series C Depositary Shares"). Each Series C Depositary Share represents a
1/10 fractional interest in a 9 1/8% Series C Cumulative Redeemable Preferred
Share of Beneficial Interest, $0.01 par value per share (the "Series C
Preferred Shares"). The liquidation preference of each of the Series C
Preferred Shares is $250.00 (equivalent to $25 per Series C Depositary Share).
The Company raised net proceeds of $111.4 million from this offering (the
"Series C Preferred Share Offering").
Also in September 1996, the Company completed the sale of 2,272,728
publicly registered Common Shares which were sold at net price of $33 per
share. The Company received net proceeds of approximately $75 million in
connection with this offering (the "September 1996 Common Share Offering").
In November 1996, the Company issued 39,458 Common Shares pursuant to
the 1996 Nonqualified Employee Share Purchase Plan (the "Employee Share
Purchase Plan") at a net price of $30.44 and received net proceeds of
approximately $1.2 million.
In December 1996, the Company completed offerings of 4,440,000
publicly registered Common Shares, which were sold to the public at a price of
$41.25 per share (the "December 1996 Common Share Offerings"). The Company
received net proceeds of approximately $177.4 million.
In March 1997, the Company completed three separate public offerings
relating to an aggregate of 1,921,000 publicly registered Common Shares, which
were sold to the public at a price of $46 per share (the "March 1997 Common
Share Offerings"). The Company received net proceeds of approximately $88.3
million therefrom.
On May 14, 1997, the Company filed with the SEC a Form S-3
Registration Statement to register $500 million of equity securities (the
"June 1997 Equity Shelf Registration"). The SEC declared this registration
statement effective on June 5, 1997.
8
<PAGE>
PART I
In May 1997, the Company sold 7,000,000 depositary shares (the "Series
D Depositary Shares") pursuant to the June 1997 Equity Shelf Registration.
Each Series D Depositary Share represents a 1/10 fractional interest in a
8.60% Series D Cumulative Redeemable Preferred Share of Beneficial Interest,
$0.01 par value per share (the "Series D Preferred Shares"). The liquidation
preference of each of the Series D Preferred shares is $250.00 (equivalent to
$25 per Series D Depositary Share). The Company received net proceeds of
approximately $169.5 million from this offering (the "Series D Preferred Share
Offering").
In June 1997, the Company completed five separate public offerings
comprising an aggregate of 8,992,023 publicly registered Common Shares, which
were sold to the public at prices ranging from $44.06 to $45.88 per share (the
"June 1997 Common Share Offerings"). The Company received net proceeds of
approximately $398.9 million therefrom.
On July 28, 1997, the Company filed with the SEC a Form S-3
Registration Statement to register $750 million of equity securities (the
"August 1997 Equity Shelf Registration"). The SEC declared this registration
statement effective on August 4, 1997.
In September 1997, the Company completed the sale of 498,000 publicly
registered Common Shares which were sold to the public at a price of $51.125
per share. The Company received net proceeds of approximately $24.2 million
in connection with this offering (the "September 1997 Common Share Offering").
In September 1997, the Company sold 11,000,000 depositary shares (the
"Series G Depositary Shares") pursuant to the August 1997 Equity Shelf
Registration. Each Series G Depositary Share represents a 1/10 fractional
interest in a 7 1/4% Series G Convertible Cumulative Preferred Share of
Beneficial Interest, $0.01 par value per share (the "Series G Preferred
Shares"). Series G Depositary Shares representing Series G Preferred Shares
are convertible at the option of the holder thereof at any time into Common
Shares at a conversion price of $58.58 per Common Share (equivalent to a
conversion rate of approximately .4268 Common Shares for each Series G
Depositary Share). The liquidation preference of each of the Series G
Preferred Shares is $250.00 per share (equivalent to $25 per Series G
Depositary Share). The Company received net proceeds of approximately $264
million from this offering (the "Series G Preferred Share Offering"). In
addition, in October 1997, the Company sold 1,650,000 additional Series G
Depositary Shares pursuant to an over-allotment option granted to the
underwriters and received net proceeds of approximately $39.6 million
therefrom.
In October 1997, in connection with the acquisition of a portfolio of
Properties, the Company issued 3,315,500 publicly registered Common Shares,
which were issued at a price of $45.25 per share with a value of approximately
$150 million (the "October 1997 Common Share Offering").
On November 3, 1997, the Company filed with the SEC a Form S-3
Registration Statement to register 7,000,000 Common Shares pursuant to a
Distribution Reinvestment and Share Purchase Plan. This registration
statement was declared effective on November 25, 1997. The Distribution
Reinvestment and Share Purchase Plan (the "DRIP Plan") of the Company provides
holders of record and beneficial owners of Common Shares, Preferred Shares,
and limited partnership interests
9
<PAGE>
PART I
in the Operating Partnership with a simple and convenient method of investing
cash distributions in additional Common Shares. Common Shares may also be
purchased on a monthly basis with optional cash payments made by participants
in the Plan and interested new investors, not currently shareholders of the
Company, at the market price of the Common Shares less a discount ranging
between 0% and 5% (as determined in accordance with the DRIP Plan).
In December 1997, in connection with an acquisition of a Property, the
Company issued 736,296 publicly registered Common Shares, which were issued at a
price of $48.85 per share with a value of approximately $36 million.
Also in December 1997, the Company completed the sale of 467,722
publicly registered Common Shares, which were sold at a price of $51.3125 per
share. The Company received net proceeds of approximately $22.8 million in
connection with this offering (the "December 1997 Common Share Offering").
During 1997, the Company issued 84,183 Common Shares pursuant to the
Employee Share Purchase Plan at net prices which ranged from $35.63 per share
to $42.08 per share and raised approximately $3.2 million in connection
therewith.
Debt Offerings For the Years Ended December 31, 1997, 1996 and 1995
- -------------------------------------------------------------------
In April 1995, the Operating Partnership issued $125 million of 7.95%
unsecured fixed rate notes (the "2002 Notes") in a public debt offering (the
"Second Public Debt Offering"). The Operating Partnership received net
proceeds of approximately $123.1 million in connection with the Second Public
Debt Offering.
In August 1996, the Operating Partnership issued $150 million of 7.57%
unsecured fixed rate notes (the "2026 Notes") in a public debt offering (the
"Third Public Debt Offering"). The Operating Partnership received net
proceeds of approximately $149 million in connection with this issuance.
On September 18, 1996, the Operating Partnership filed with the SEC a
Form S-3 Registration Statement to register $500 million of debt securities
(the "1996 Debt Shelf Registration").
In October 1997, the Operating Partnership issued $150 million of
unsecured fixed rate notes (the "2017 Notes") pursuant to the 1996 Debt Shelf
Registration in a public debt offering (the "Fourth Public Debt Offering").
The 2017 Notes are due on October 15, 2017 and bear interest at 7.125%, which
is payable semiannually in arrears on April 15 and October 15, commencing
April 15, 1998. The 2017 Notes are redeemable at any time by the Operating
Partnership pursuant to the terms thereof. The Operating Partnership received
net proceeds of approximately $147.4 million in connection with this issuance.
In November 1997, the Operating Partnership issued $200 million of
unsecured fixed rate notes pursuant to the 1996 Debt Shelf Registration in a
public debt offering (the "Fifth Public Debt
10
<PAGE>
PART I
Offering"). Of the $200 million issued, $150 million of these notes are due
November 15, 2001 (the "2001 Notes") and bear interest at a rate of 6.55%,
which is payable semiannually in arrears on May 15 and November 15, commencing
on May 15, 1998. The remaining $50 million of these notes are due November
15, 2003 (the "2003 Notes") and bear interest at a rate of 6.65%, which is
payable semiannually in arrears on May 15 and November 15, commencing on May
15, 1998. The Operating Partnership received net proceeds of approximately
$198.5 million in connection with the 2001 Notes and the 2003 Notes.
CREDIT FACILITY
On November 15, 1996, the Company completed an agreement with Morgan
Guaranty Trust Company of New York ("Morgan Guaranty") and Bank of America
Illinois ("Bank of America") to provide the Operating Partnership a $250
million unsecured line of credit. In September 1997, this agreement was
amended to increase the potential borrowings to $500 million. This line of
credit matures in November 1999 and borrowings generally will bear interest at
a per annum rate of one, two, three or six month LIBOR, plus a certain rate
dependent upon the Company's credit rating, which rate is currently at 0.45%,
and is subject to an annual facility fee of $750,000. As of December 31,
1997, $235 million of borrowings were outstanding on this line of credit,
bearing interest at a weighted average rate of 6.46%.
BUSINESS COMBINATIONS
On May 30, 1997, the Company completed the acquisition of the
multifamily property business of Wellsford through the tax-free Wellsford
Merger. The transaction was valued at approximately $1 billion and included
72 Properties of Wellsford containing 19,004 units. The purchase price
consisted of 10.8 million Common Shares issued by the Company with a market
value of $443.7 million, the liquidation value of $157.5 million for the
Wellsford Series A Cumulative Convertible Preferred Shares of Beneficial
Interest and the Wellsford Series B Cumulative Redeemable Preferred Shares of
Beneficial Interest, the assumption of mortgage indebtedness and unsecured
notes in the amount of $345 million, the assumption of other liabilities of
approximately $33.5 million and other merger related costs of approximately
$23.4 million. In the Wellsford Merger, each outstanding common share of
beneficial interest of Wellsford was converted into .625 of a Common Share. In
addition, Wellsford Series A Cumulative Convertible Preferred Shares of
Beneficial Interest were redesignated as the Company's 3,999,800 Series E
Cumulative Convertible Preferred Shares of Beneficial Interest, $0.01 par
value per share (the "Series E Preferred Shares") and Wellsford's Series B
Cumulative Redeemable Preferred Shares of Beneficial Interest were
redesignated as the Company's 2,300,000 9.65% Series F Cumulative Redeemable
Preferred Shares of Beneficial Interest, $0.01 par value per share (the
"Series F Preferred Shares").
On December 23, 1997, the Company completed the acquisition of the
multifamily property business of EWR, through the tax-free EWR Merger. The
transaction was valued at approximately $1.2 billion and included 53
Properties of EWR containing 15,331 units and three Properties under
construction or expansion expected to contain 953 units. The purchase price
consisted of 10.3 million Common Shares issued by the Company with a total
market value of approximately $501.6
11
<PAGE>
PART I
million, the assumption of EWR's minority interest with a market value of
approximately $107.3 million, the assumption of mortgage indebtedness and
unsecured notes in the amount of $498 million, the assumption of other
liabilities of approximately $28.2 million and other EWR Merger related costs
of approximately $16.7 million. In the EWR Merger, each outstanding common
share of beneficial interest of EWR was converted into .50 of a Common Share.
RECENT TRANSACTIONS
From January 1, 1998 through March 13, 1998, the Company acquired 12
properties from unaffiliated third parties for a total purchase price of
approximately $158.2 million, which included the assumption of mortgage
indebtedness of approximately $50.8 million. These properties were Cityscape,
a 156-unit property located in St. Louis Park, Minnesota; 740 River Drive, a
162-unit property located in St. Paul, Minnesota; Prospect Towers, a 157-unit
property located in Hackensack, New Jersey; Park Westend, a 312-unit property
located in Richmond, Virginia; Park Place, a 229-unit property located in
Houston, Texas; Emerald Bay at Winter Park, a 431-unit property located in
Winter Park, Florida; Farnham Park, a 216-unit property located in Houston,
Texas; Plantation, a 232-unit property located in Houston, Texas; Balcones
Club, a 312-unit property located in Austin, Texas; Coach Lantern, a 90-unit
property located in Scarborough, Maine; Foxcroft, a 104-unit property located
in Scarborough, Maine; and Yarmouth Woods, a 138- unit property located in
Yarmouth, Maine.
In January 1998, the Company completed the sale of 4,000,000 publicly
registered Common Shares which were sold to the public at a price of $50.4375
per share. The Company received net proceeds of approximately $195.3 million
in connection with this offering (the "January 1998 Common Share Offering").
In February 1998, the Company completed offerings in the aggregate of
1,988,340 publicly registered Common Shares which were sold to the public at
prices ranging from $48 to $50.625 per share (the "February 1998 Common Share
Offerings"). The Company received net proceeds of approximately $95 million
therefrom.
Through February 1998, the Company sold approximately 639,000 Common
Shares pursuant to the DRIP Plan and raised proceeds of approximately $31.7
million therefrom.
On February 3, 1998, the Company filed with the SEC a Form S-3
Registration Statement to register $1 billion of equity securities. The SEC
declared this registration statement effective on February 27, 1998.
On February 3, 1998, the Operating Partnership filed a Form S-3
Registration Statement to register $1 billion of debt securities. The SEC
declared this registration statement effective on February 27, 1998.
On March 12, 1998, the Company disposed of two Properties for a total
sales price of $16.7 million.
12
<PAGE>
PART I
COMPETITION
All of the Properties are located in developed areas that include
other multifamily properties. The number of competitive multifamily
properties in a particular area could have a material effect on the Company's
ability to lease units at the Properties or at any newly acquired properties
and on the rents charged. The Company may be competing with other entities
that have greater resources than the Company and whose managers have more
experience than the Company's officers and trustees. In addition, other forms
of multifamily properties, including multifamily properties and manufactured
housing controlled by Mr. Zell, and single-family housing, provide housing
alternatives to potential residents of multifamily properties.
TAX STATUS
The Company has elected to be taxed as a REIT under Section 856(c) of
the Internal Revenue Code of 1986, as amended (the "Code"). As a result, the
Company generally will not be subject to Federal income tax to the extent it
distributes 95% of its taxable income to its shareholders. REITs are subject
to a number of organizational and operational requirements. If the Company
fails to qualify as a REIT in any year, its taxable income may be subject to
income tax at regular corporate rates (including any applicable alternative
minimum tax). Even if the Company qualifies for taxation as a REIT, the
Company may be subject to certain state and local taxes on its income and
excise taxes on its undistributed income.
RISK FACTORS
The Company's results of operations are subject to certain risks and
uncertainties relating to the operations of its Properties. Investors should
carefully consider, among other factors, the matters described below prior to
making an investment decision regarding the securities of the Company.
Adverse Consequences of Debt Financing and Preferred Shares
General Risks. As of December 31, 1997, the Properties were subject to
approximately $1.6 billion of mortgage indebtedness and the Company's total
debt equaled approximately $2.9 billion. Of the total debt outstanding, $912.7
million, including the line of credit balance of $235 million, represented
floating rate debt, of which approximately $611 million was issued at tax
exempt rates. In addition, from June 1995 through October 1997, the Company
issued Preferred Shares and Depositary Shares pursuant to offerings previously
mentioned and utilized the proceeds to repay indebtedness and to acquire
additional Properties. The Company is subject to the risks normally
associated with debt or preferred equity financing, including the risk that
the Company's cash flow will be insufficient to meet required payments of
principal and interest as well as Preferred Share distributions, the risk that
existing indebtedness may not be refinanced or that the terms of such
refinancing will not be as favorable as the terms of current indebtedness and
the risk that necessary capital expenditures for such purposes as renovations
and other improvements may not be financed on favorable terms or at all. If
the Company were unable to refinance its indebtedness on acceptable terms, or
at all, the Company might be forced to dispose of one or more of the
Properties on disadvantageous terms, which might result in losses to the
Company and might adversely affect the
13
<PAGE>
PART I
cash available for distributions to shareholders. If interest rates or other
factors at the time of the refinancing result in higher interest rates upon
refinancing, the Company's interest expense would increase, which would affect
the Company's ability to make distributions to its shareholders. Furthermore, if
a Property is mortgaged to secure payment of indebtedness and the Company is
unable to meet mortgage payments, the mortgagee could foreclose upon the
Property, appoint a receiver and receive an assignment of rents and leases or
pursue other remedies, all with a consequent loss of income and asset value to
the Company. Foreclosures could also create taxable income without accompanying
cash proceeds, thereby hindering the Company's ability to meet the REIT
distribution requirements of the Code.
Restrictions on the Company's Activities. A substantial portion of the
Company's debt was issued pursuant to certain indentures (the "Indentures")
which restrict the amount of indebtedness (including acquisition financing) the
Company may incur. Accordingly, in the event that the Company is unable to raise
additional equity or borrow money because of the debt restrictions in the
Indentures, the Company's ability to acquire additional properties may be
limited. If the Company is unable to acquire additional properties, its ability
to increase the distributions with respect to Common Shares, as it has done in
the past, will be limited to management's ability to increase funds from
operations, and thereby cash available for distributions, from the existing
Properties in the Company's portfolio at such time.
Bond Compliance Requirements. Certain of the Company's Properties are
subject to restrictive covenants or deed restrictions relating to current or
previous tax-exempt bond financing and owns the bonds collateralized by several
additional Properties. The Company has retained an independent outside
consultant to monitor compliance with the restrictive covenants and deed
restrictions that affect these Properties. The bond compliance requirements may
have the effect of limiting the Company's income from certain of these
Properties if the Company is required to lower its rental rates to attract low
or moderate income tenants, or eligible/qualified tenants.
CONTROL AND INFLUENCE BY SIGNIFICANT SHAREHOLDERS
As of March 13, 1998, Mr. Zell, certain of the current holders (the
"Zell Holders") of certain OP Units ("Original OP Units") issued at the time of
the EQR IPO to certain affiliates of Mr. Zell which contributed 33 of the
Properties at the time of the EQR IPO (the "Zell Original Owners"), Equity
Properties Management Corp. ("EPMC") and other affiliates of Mr. Zell owned in
the aggregate approximately 4.4% of the Common Shares (assuming that all of the
partnership interests in the Operating Partnership are exchanged for Common
Shares), and certain entities controlled by Starwood Capital Partners L.P.
("Starwood") and its affiliates which contributed 23 of the Properties at the
time of the EQR IPO (the "Starwood Original Owners") owned in the aggregate
approximately 1.7% of the Common Shares (assuming that all of the OP Units are
exchanged for Common Shares). The Starwood Original Owners, together with the
Zell Original Owners, shall be referred to collectively as the "Original
Owners." As of March 13, 1998, the Company had options outstanding to purchase
approximately 5.6 million Common Shares (plus an additional 1.3 million options
to purchase Common Shares which have been authorized by the Company for issuance
subject to shareholder approval) which it has granted to certain officers,
employees and trustees of the Company and consultants to the Company, some of
whom are
14
<PAGE>
PART I
affiliated with Mr. Zell, representing in the aggregate approximately 6% of the
Common Shares outstanding (assuming that all such options are exercised for
Common Shares and all of the outstanding OP Units are exchanged for Common
Shares). Further, the consent of affiliates of Mr. Zell who are Zell Holders and
of the Starwood Original Owners is required for certain amendments to the
Operating Partnership's Fourth Amended and Restated ERP Operating Limited
Partnership Agreement of Limited Partnership (the "Partnership Agreement").
Accordingly, Mr. Zell and the Starwood Original Owners may continue to have
substantial influence over the Company, which influence might not be consistent
with the interests of other shareholders, and on the outcome of any matters
submitted to the Company's shareholders for approval. In addition, although
there is no current agreement, understanding or arrangement for these
shareholders to act together on any matter, these shareholders would be in a
position to exercise significant influence over the affairs of the Company if
they were to act together in the future.
POTENTIAL ENVIRONMENTAL LIABILITY AFFECTING THE COMPANY
Under various federal, state and local environmental laws, ordinances
and regulations, an owner of real estate may be liable for the costs of
removal or remediation of certain hazardous or toxic substances on such
property. These laws often impose environmental liability without regard to
whether the owner knew of, or was responsible for, the presence of such
hazardous or toxic substances. The presence of such substances, or the failure
properly to remediate such substances, may adversely affect the owner's
ability to sell or rent the property or to borrow using the property as
collateral. Persons who arrange for the disposal or treatment of hazardous or
toxic substances may also be liable for the costs of removal or remediation of
such substances at a disposal or treatment facility, whether or not such
facility is owned or operated by such person. Certain laws impose liability
for release of asbestos-containing materials ("ACMs") into the air and third
parties may seek recovery from owners or operators of real properties for
personal injury associated with ACMs. In connection with the ownership (direct
or indirect), operation, management and development of real properties, the
Company or the Subsidiaries, as the case may be, may be considered an owner or
operator of such properties or as having arranged for the disposal or
treatment of hazardous or toxic substances and, therefore, potentially liable
for removal or remediation costs, as well as for certain other related costs,
including governmental fines and injuries to persons and property.
All of the Properties have been the subject of a Phase I, and in
certain cases a supplemental, environmental assessment completed by qualified
independent environmental consultant companies. The most recent environmental
assessments for each of the Properties were conducted within the last five
years. Environmental assessments were obtained prior to the acquisition by
the Company of each of the Properties. These environmental assessments have
not revealed, nor is the Company aware of, any environmental liability that
the Company's management believes would have a material adverse effect on the
Company's business, results of operations, financial condition or liquidity.
No assurance can be given that existing environmental assessments with
respect to any of the Properties reveal all environmental liabilities, that
any prior owner of a Property did not create any material environmental
15
<PAGE>
PART I
condition not known to the Company, or that a material environmental condition
does not otherwise exist as to any one or more Properties.
GENERAL REAL ESTATE INVESTMENT CONSIDERATIONS; CHANGES IN LAWS
General. Real property investments are subject to varying degrees of
risk and are relatively illiquid. Income from real property investments and
the Company's resulting ability to make expected distributions to shareholders
may be adversely affected by the general economic climate, local conditions
such as oversupply of apartment units or a reduction in demand for apartment
units in the area, the attractiveness of the Properties to tenants, zoning or
other regulatory restrictions, the ability of the Company to provide adequate
maintenance and insurance, and increased operating costs (including insurance
premiums and real estate taxes). The Company's income would also be adversely
affected if tenants were unable to pay rent or the Company were unable to rent
apartment units on favorable terms. If the Company were unable to promptly
relet units or renew the leases for a significant number of apartment units,
or if the rental rates upon such renewal or reletting were significantly lower
than expected rates, then the Company's funds from operations and ability to
make expected distributions to shareholders may be adversely affected. In
addition, certain expenditures associated with each equity investment (such as
real estate taxes and maintenance costs) generally are not reduced when
circumstances cause a reduction in income from the investment. The Company
intends to purchase newly developed, as well as invest in the development of
multifamily communities, including the expansion of existing multifamily
communities. Such projects generally require the expenditure of capital, and
consequently there can be no assurance that any of such projects will be
completed or that such projects will prove to be profitable. The failure of
the Company to complete or to profitably operate planned development projects
may have an adverse affect on the Company's results of operations and
financial position. Furthermore, real estate investments are relatively
illiquid and, therefore, will tend to limit the ability of the Company to vary
its portfolio promptly in response to changes in economic or other conditions.
Changes in Laws. Increases in real estate taxes, income taxes and
service or other taxes generally are not passed through to tenants under
existing leases and may adversely affect the Company's FFO and its ability to
make distributions to shareholders. Similarly, changes in laws increasing the
potential liability for environmental conditions existing on Properties or
increasing the restrictions on discharges or other conditions may result in
significant unanticipated expenditures, which would adversely affect the
Company's FFO and its ability to make distributions to shareholders.
OWNERSHIP LIMIT AND LIMITS ON CHANGES IN CONTROL
5% Ownership Limit; Inapplicability to Mr. Zell and Others. In order
to maintain its qualification as a REIT under the Code, not more than 50% of
the value of the outstanding shares of beneficial interest of the Company may
be owned, directly or indirectly, by five or fewer individuals (as defined in
the Code to include certain entities). Certain beneficial owners of the Zell
Holders (i.e., beneficiaries of trusts established for the benefit of Mr. Zell
and his family and trusts established for the benefit of the family of Mr.
Robert Lurie, a deceased partner of Mr. Zell (the "Lurie Family Trusts")),
EPMC, the Starwood Original Owners, Mr. Keith Withycombe and Mr.
16
<PAGE>
PART I
Stephen Evans, a Trustee of the Company (through their potential ownership of
Common Shares), together constitute five individuals for purposes of this test
and, under the Internal Revenue Service's (the "Service") rules applicable to
determining percentages of ownership, will be deemed to own approximately 4.8%
of the value of the outstanding shares of beneficial interest of the Company.
Due to such concentration of ownership of the Company, ownership of more than
5% or the lesser of the number or value of the outstanding shares of
beneficial interest of the Company by any single shareholder has been
restricted, with certain exceptions, for the purpose of maintaining the
Company's qualification as a REIT under the Code. Such restrictions in the
Company's Declaration of Trust do not apply to the ownership of the 5,499,403
Common Shares subject to acquisition by the holders of Original OP Units and
EPMC through the exchange of Original OP Units. Additionally, the Company's
Declaration of Trust allows certain transfers of such Common Shares without
the transferees being subject to the 5% ownership limit, provided such
transfers do not result in an increased concentration in the ownership of the
Company. The Company's Board of Trustees, upon receipt of a ruling from the
Service, an opinion of counsel or other evidence satisfactory to the Board of
Trustees and upon such other conditions as the Board of Trustees may direct,
may also exempt a proposed transferee from this restriction.
The 5% ownership limit, as well as the ability of the Company to issue
additional Common Shares or other shares of beneficial interest (which may
have rights and preferences senior to the Common Shares), may discourage a
change of control of the Company and may also (i) deter tender offers for the
Common Shares, which offers may be advantageous to shareholders, and (ii)
limit the opportunity for shareholders to receive a premium for their Common
Shares that might otherwise exist if an investor were attempting to assemble a
block of Common Shares in excess of 5% of the outstanding shares of beneficial
interest of the Company or otherwise effect a change of control of the
Company.
Possible Adverse Consequences of Ownership Limit. To maintain its
qualification as a REIT for federal income tax purposes, not more than 50% in
value of the outstanding shares of beneficial interest of the Company may be
owned, directly or indirectly, by five or fewer individuals (as defined in the
Code, to include certain entities). Certain beneficial owners of the Zell
Holders (i.e., beneficiaries of trusts established for benefit of Mr. Zell and
his family and the Lurie Family Trusts and EPMC, together with the Starwood
Original Owners, Mr. Withycombe and Mr. Evans (through their potential
ownership of Common Shares) together constitute five individuals for purposes
of this test and, under the Service's rules applicable to determining
percentages of ownership, are deemed to own approximately 4.8% of the value of
the outstanding shares of beneficial interest of the Company. To facilitate
maintenance of its qualification as a REIT for federal income tax purposes,
the Company generally will prohibit ownership, directly or by virtue of the
attribution provisions of the Code, by any single shareholder of more than 5%
of the issued and outstanding Common Shares and generally will prohibit
ownership, directly or by virtue of the attribution provisions of the Code, by
any single shareholder of more than 5% of the issued and outstanding shares of
any class or series of the Company's Preferred Shares (collectively, the
"Ownership Limit"). The Board of Trustees may, in its reasonable discretion,
waive or modify the Ownership Limit with respect to one or more persons who
would not be treated as "individuals" for purposes of the Code if it is
satisfied, based upon information required to be provided by the party seeking
the waiver, that ownership in excess of this limit will not cause
17
<PAGE>
PART I
a person who is an individual to be treated as owning Common Shares or
Preferred Shares in excess of the Ownership Limit, applying the applicable
constructive ownership rules, and will not otherwise jeopardize the Company's
status as a REIT for federal income tax purposes. The Company's Declaration
of Trust also exempts from the Ownership Limit certain of the beneficial
owners of the Original Owners and EPMC, who would exceed the Ownership Limit
as a result of the exchange of the OP Units for Common Shares, which OP Units
were received by them at the time of the formation of EQR. Absent any such
exemption or waiver, Common Shares or Preferred Shares acquired or held in
violation of the Ownership Limit will be transferred to a trust for the
benefit of a designated charitable beneficiary, with the person who acquired
such Common Shares and/or Preferred Shares in violation of the Ownership Limit
not entitled to receive any distributions thereon, to vote such Common Shares
or Preferred Shares, or to receive any proceeds from the subsequent sale
thereof in excess of the lesser of the price paid therefore or the amount
realized from such sale. A transfer of Common Shares and/or Preferred Shares
to a person who, as a result of the transfer, violates the Ownership Limit may
be void under certain circumstances. The Ownership Limit may have the effect
of delaying, deferring or preventing a change in control and, therefore, could
adversely affect the shareholders' ability to realize a premium over the
then-prevailing market price for the Common Shares in connection with such
transaction.
Staggered Board. The Board of Trustees of the Company has been divided
into three classes of trustees. As the term of each class expires, trustees
for that class will be elected for a three-year term and the trustees in the
other two classes will continue in office. The staggered terms for trustees
may impede the shareholders' ability to change control of the Company even if
a change in control were in the shareholders' interest.
Preferred Shares. The Company's Declaration of Trust authorizes the
Board of Trustees to issue up to 100,000,000 preferred shares of beneficial
interest, $.01 par value per share ("Preferred Shares"), and to establish the
preferences and rights (including the right to vote and the right to convert
into Common Shares) of any Preferred Shares issued. The power to issue
Preferred Shares could have the effect of delaying or preventing a change in
control of the Company even if a change in control were in the shareholders'
interest. As of March 13, 1998, 15,343,500 Preferred Shares were issued and
outstanding.
CONSEQUENCES OF FAILURE TO QUALIFY AS A REIT
Taxation as a Corporation. The Company believes that it has qualified
and will continue to qualify as a REIT under the Code, commencing with its
taxable year ended December 31, 1992. However, no assurance can be given that
the Company was organized and has been operated and will be able to operate in
a manner so as to qualify or remain so qualified. Qualification as a REIT
involves the satisfaction of numerous requirements (some on an annual and
quarterly basis) established under highly technical and complex Code
provisions for which there are only limited judicial or administrative
interpretations, and involves the determination of various factual matters and
circumstances not entirely within the Company's control.
If the Company were to fail to qualify as a REIT in any taxable year,
the Company would be subject to federal income tax (including any applicable
alternative minimum tax) on its taxable
18
<PAGE>
PART I
income at corporate rates. Moreover, unless entitled to relief under certain
statutory provisions, the Company also would be disqualified from treatment as
a REIT for the four taxable years following the year during which
qualification is lost. This treatment would reduce the net earnings of the
Company available for investment or distribution to shareholders because of
the additional tax liability to the Company for the years involved. In
addition, distributions to shareholders would no longer be required to be
made.
Other Tax Liabilities. Even if the Company qualifies as a REIT, it
will be subject to certain federal, state and local taxes on its income and
property. In addition, the Company's management operations, which are
conducted through the Management Partnerships, generally will be subject to
federal income tax at regular corporate rates.
DEPENDENCE ON KEY PERSONNEL
The Company is dependent on the efforts of its executive officers.
While the Company believes that it could find replacements for these key
personnel, the loss of their services could have a temporary adverse effect on
the operations of the Company. Only one of these officers has entered into an
employment agreement with the Company.
DISTRIBUTION REQUIREMENTS POTENTIALLY INCREASING INDEBTEDNESS OF THE COMPANY
The Company may be required from time to time, under certain
circumstances, to accrue as income for tax purposes interest and rent earned
but not yet received. In such event, or upon the repayment by the Company or
its Subsidiaries of principal on debt, the Company could have taxable income
without sufficient cash to enable the Company to meet the distribution
requirements of a REIT. Accordingly, the Company could be required to borrow
funds or liquidate investments on adverse terms in order to meet such
distribution requirements.
EXEMPTIONS FOR MR. ZELL AND OTHERS FROM MARYLAND BUSINESS COMBINATION LAW
WHICH TEND TO INHIBIT TAKEOVERS
Under the Maryland General Corporation Law, as amended ("MGCL"),
certain "business combinations" (including a merger, consolidation, share
exchange or, in certain circumstances, an asset transfer or issuance or
reclassification of equity securities) between a Maryland real estate
investment trust and any person who beneficially owns 10% or more of the
voting power of the trust's shares of beneficial interest or an affiliate of
the trust who, at any time within the two-year period prior to the date in
question, was the beneficial owner of 10% or more of the voting power of the
trust's shares of beneficial interest (an "Interested Shareholder"), or an
affiliate of such Interested Shareholder, are prohibited for five years after
the most recent date on which the Interested Shareholder becomes an Interested
Shareholder. Thereafter, any such business combination must be recommended by
the board of trustees of such trust and approved by the affirmative vote of at
least (a) 80% of the votes entitled to be cast by holders of outstanding
voting shares of beneficial interest of the trust and (b) two-thirds of the
votes entitled to be cast by holders of voting shares of beneficial interest
of the trust other than shares held by the Interested Shareholder with whom
(or with whose affiliate) the business combination is to be effected,
19
<PAGE>
PART I
(unless, among other conditions, the holders of the common shares of the trust
receive a minimum price (as defined in the MGCL) for their shares and the
consideration is received in cash or in the same form as previously paid by
the Interested Shareholder for its common shares. As permitted by the MGCL,
the Company has exempted any business combination involving Mr. Zell, the Zell
Original Owners, EPMC and their respective affiliates and associates, present
or future, or any other person acting in concert or as a group with any of the
foregoing persons and, consequently, the five- year prohibition and the
super-majority vote requirements will not apply to a business combination
between any of them and the Company. As a result, Mr. Zell, the Zell Original
Owners, EPMC, any present or future affiliate or associate of theirs or any
other person acting in concert or as a group with any of the foregoing persons
may be able to enter into business combinations with the Company, which may
not be in the best interest of the shareholders, without compliance by the
Company with the super-majority vote requirements and other provisions of the
MGCL.
ITEM 2. THE PROPERTIES
As of December 31, 1997, the Company controlled a portfolio of 463
multifamily Properties located in 34 states containing 135,200 apartment
units. The average number of units per Property was approximately 293. The
units are typically contained in a series of two-story buildings. The
Properties contain an aggregate of 118.9 million rentable square feet, with an
average unit size of 886 square feet. The average rent per unit was $696 and
the average rent per square foot was $0.79.
As of December 31, 1997, the Properties had an average occupancy rate
of 95%. Tenant leases are generally year-to-year and require security
deposits. The Properties typically provide residents with attractive
amenities, which may include a clubhouse, swimming pool, laundry facilities
and cable television access. Certain Properties offer additional amenities
such as saunas, whirlpools, spas, sports courts and exercise rooms.
The Company believes that the Properties provide amenities and common
facilities that create an attractive residence for tenants. It is
management's role to monitor compliance with Property policies and to provide
preventive maintenance of the Properties including common areas, facilities
and amenities. The Company holds periodic meetings of its Property management
personnel for training and implementation of the Company's strategies. The
Company believes that, due in part to this strategy, the Properties
historically have had high occupancy rates.
The distribution of the Properties throughout the United States
reflects the Company's belief that geographic diversification helps insulate
the portfolio from regional and economic influences. At the same time, the
Company has sought to create clusters of Properties within each of its primary
markets in order to achieve economies of scale in management and operation;
however, the Company may acquire additional multifamily properties located
anywhere in the United States.
The Company beneficially owns fee simple title to 456 of the
Properties and holds a 73-year leasehold interest with respect to one Property
(Mallgate). Direct fee simple title for certain of the Properties is owned by
single-purpose nominee corporations or land trusts that engage in no
20
<PAGE>
business other than holding title to the Property for the benefit of the
Company. Holding title in such a manner is expected to make it less costly to
transfer such Property in the future in the event of a sale and should
facilitate financing, since lenders often require title to a Property to be held
in a single purpose entity in order to isolate that Property from potential
liabilities of other Properties. Direct fee simple title for certain other
Properties is owned by an LLC. In addition, with respect to two Properties, the
Company owns the debt collateralized by such Properties and with respect to four
Properties, the Company owns an interest in the debt collateralized by the
Properties. As of December 31, 1997, the Company had an investment in
partnership interests and subordinated mortgages and mortgage loans
collateralized by the Additional Properties. The Additional Properties contain
5,267 units, located in seven states.
The following two tables set forth certain information relating to the
Properties and the Additional Properties:
21
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ALABAMA
Meadows on the Lake/Park,
Birmingham (2 properties) 1986/1987 37 400 418,452 1,046 94% $570 $0.54
ARIZONA
Bay Club, Phoenix 1976 13 420 257,790 614 95% $526 $0.86
Camellero, Scottsdale (1) 1979 15 344 311,526 906 95% $723 $0.80
Canyon Creek, Tucson 1986 10 242 169,946 702 96% $488 $0.69
Canyon Sands, Phoenix (1) 1983 20 412 353,592 858 92% $557 $0.65
Chandler Court, Chandler 1987 20 311 263,338 847 92% $641 $0.76
Crystal Creek, Phoenix 1985 10 273 190,140 696 96% $571 $0.82
Del Coronado, Mesa (1) 1985 19 419 394,062 940 93% $671 $0.71
Desert Sands, Phoenix (1) 1982 20 412 353,592 858 92% $557 $0.65
Flying Sun, Phoenix 1983 4 108 93,708 868 98% $590 $0.68
Fountain Creek, Phoenix 1984 9 186 144,374 776 96% $603 $0.78
Indian Bend, Scottsdale 1973 14 275 226,444 823 93% $692 $0.84
Southbank, Mesa 1985 5 113 99,448 880 96% $573 $0.65
Southcreek, Mesa (1) 1986-89 23 528 472,152 894 93% $663 $0.74
Via Ventura, Scottsdale 1980 19 320 279,187 872 97% $728 $0.83
Villa Madeira, Scottsdale 1971 17 332 291,280 877 95% $700 $0.80
Villa Manana, Phoenix 1971-85 8 260 212,150 816 93% $619 $0.76
Copper Creek, Phoenix 1984 8 144 146,024 1,014 97% $789 $0.78
Crown Court, Phoenix 1987 27 416 464,582 1,117 99% $857 $0.77
</TABLE>
22
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ARIZONA , CONTINUED
Dos Caminos, Phoenix 1983 16 264 265,884 1,007 98% $781 $0.78
The Pointe ASM, Phoenix 1988 14 364 309,548 850 93% $666 $0.78
San Tropez, Phoenix 1989 13 316 332,080 1,051 98% $886 $0.84
Misson Palms, Tucson 1980 35 360 372,918 1,036 99% $669 $0.65
Skyline Gateway, Tucson 1985 8 246 179,422 729 98% $568 $0.78
Sedona Ridge, Phoenix 1988 17 250 235,345 941 95% $728 $0.77
Windemere, Mesa (1) 1986 18 224 187,192 836 95% $591 $0.71
Sycamore Creek, Scottsdale (1) 1984 19 350 335,420 958 91% $759 $0.79
Villa Serenas, Tucson (1) 1973 18 611 452,751 741 87% $506 $0.68
Acacia Creek, Scottsdale 1988-1994 20 508 462,280 910 95% $765 $0.84
Bayside at the Islands, Gilbert (1) 1989 15 272 236,640 870 93% $736 $0.85
Country Brook, Chandler (1) 1986-1996 24 396 380,556 961 95% $739 $0.77
Gateway Villas, Scottsdale 1995 18 180 179,664 998 97% $836 $0.84
Greenwood Village, Tempe (1) 1984 13 270 238,768 884 92% $670 $0.76
Superstition Vista, Mesa 1987 16 316 300,510 951 93% $649 $0.68
Heritage Point, Mesa 1986 7 148 114,436 773 91% $797 $1.03
La Mariposa, Mesa (1) 1986 11 222 206,052 928 96% $645 $0.69
Little Cottonwoods, Tempe (1) 1984 20 379 389,012 1,026 94% $766 $0.75
Miramonte, Scottsdale 1983 4 151 118,568 785 96% $666 $0.85
</TABLE>
23
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ARIZONA, continued
Morningside, Scottsdale (1) 1989 10 160 163,116 1,019 98% $802 $0.79
Mountain Park, Phoenix (1) 1994 12 240 230,560 961 92% $800 $0.83
Park Meadow, Gilbert (1) 1986 7 224 197,120 880 97% $691 $0.79
Rancho Murietta, Tempe 1983 14 292 253,016 866 95% $698 $0.81
Scottsdale Courtyards, Scottsdale (1) 1993 18 274 284,175 1,037 99% $895 $0.86
Scottsdale Meadows, Scottsdale 1984 7 168 149,520 890 95% $727 $0.82
Shadow Brook, Scottsdale (1) 1984 17 224 226,296 1,010 98% $863 $0.85
Shores at Andersen Springs,
Chandler (1) 1989 11 299 265,218 887 95% $776 $0.87
Sonoran, Phoenix (1) 1995 15 429 413,344 964 93% $770 $0.80
The Enclave, Tempe (1) 1994 25 204 194,142 952 98% $850 $0.89
The Meadows, Mesa 1984 15 306 247,378 808 92% $575 $0.71
Towne Square, Chandler 1987-1996 16 584 560,640 960 96% $683 $0.71
Villa Encanto, Phoenix 1983 21 382 309,982 811 93% $631 $0.78
Village at Lakewood, Phoenix (1) 1988 12 240 205,752 857 95% $754 $0.88
Harrison Park, Tucson (1) 1985 6 360 291,240 809 90% $623 $0.77
La Reserve Villas, Tucson (1) 1988 12 240 216,008 900 97% $619 $0.69
Orange Grove Village, Tucson (1) 1986-1995 17 400 285,600 714 90% $561 $0.79
Suntree Village, Tucson (1) 1986 16 424 345,761 815 92% $529 $0.65
Arboretum, Tucson (1) 1987 14 496 439,456 886 97% $569 $0.64
</TABLE>
24
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ARIZONA, continued
Village at Tanque Verde,
Tucson (1) 1984-1994 9 217 174,668 805 91% $571 $0.71
Legends at La Paloma, Tucson 1995 20 312 325,648 1,044 95% $783 $0.75
Bear Canyon, Tucson 1996 14 238 231,640 973 92% $726 $0.75
Promontory Pointe I&II,
Phoenix (1) 1984-1996 27 424 421,446 994 96% $772 $0.78
The Hawthorne, Phoenix 1996 10 276 259,784 941 91% $782 $0.83
Isle at Arrowhead Ranch, Glendale 1996 18 256 244,608 956 95% $839 $0.88
Ladera, Phoenix 1995 15 248 243,312 981 96% $832 $0.85
Ingleside, Phoenix 1995 5 120 118,664 989 98% $865 $0.87
The Heritage, Phoenix (1) 1995 8 204 198,276 972 91% $797 $0.82
Sun Creek, Glendale (1) 1985 7 175 129,661 741 94% $601 $0.81
Silver Creek, Phoenix (1) 1986 5 174 134,820 775 95% $614 $0.79
Preserve at Squaw Park, Phoenix (1) 1990 4 108 92,168 853 94% $836 $0.98
The Palms, Phoenix (1) 1990 5 132 135,460 1,026 98% $924 $0.90
Mirador, Phoenix 1995 16 316 311,928 987 92% $817 $0.83
La Valencia, Mesa 1997 18 361 342,946 950 94% $664 $0.70
ARKANSAS
Combined Little Rock
Properties (1)(3) 1974-1975 44 1,039 889,416 856 93% $520 $0.61
CALIFORNIA
Carmel Terrace, San Diego 1988-89 20 384 298,588 778 97% $816 $1.05
Casa Capricorn & Pardee Casas,
San Diego 1976-1986 19 388 346,720 894 97% $800 $0.90
Creekside Oaks, Walnut Creek (1) 1974 7 316 237,952 753 92% $850 $1.13
</TABLE>
25
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CALIFORNIA, continued
Deerwood, San Diego 1990 29 316 333,079 1,054 95% $1,072 $1.02
Eagle Canyon, Chino Hills 1985 32 252 252,493 1,002 93% $975 $0.97
Emerald Place, Bermuda Dunes 1988 17 240 214,072 892 97% $622 $0.70
Hathaway, Long Beach 1987 17 385 266,805 693 95% $885 $1.28
Lakeville Resort, Petaluma (1) 1984 45 492 461,798 939 98% $806 $0.86
Lands End, Pacifica 1974 7 260 161,121 620 97% $1,062 $1.71
Merrimac Woods, Costa Mesa 1970 39 123 88,160 717 98% $807 $1.13
Mountain Terrace, Stevenson Ranch 1992 39 510 425,612 835 93% $878 $1.05
Oak Park North & South, Agoura (1) 1989-1990 24 444 368,600 830 96% $1,078 $1.30
Park West, Los Angeles 1990 4 444 315,588 711 95% $1,015 $1.43
Promenade Terrace, Corona Hills (1) 1990 27 330 360,838 1,093 99% $882 $0.81
Regency Palms, Huntington Beach 1969 14 310 261,634 844 91% $866 $1.03
Summer Ridge, Riverside 1985 6 136 104,832 771 99% $695 $0.90
Summerset Village, Chatsworth 1985 29 280 286,752 1,024 96% $1,098 $1.07
Villa Solana, Laguna Hills 1984 13 272 245,104 901 97% $915 $1.02
Vista Del Lago, Mission Viejo (1) 1986-88 29 608 512,200 842 92% $941 $1.12
Windridge, Laguna Niguel (1) 1989 19 344 375,312 1,091 95% $1,046 $0.96
Bay Ridge, San Pedro 1987 2 60 46,836 781 95% $908 $1.16
La Mirage, San Diego 1988-1992 75 1,070 972,689 909 94% $1,094 $1.20
</TABLE>
26
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CALIFORNIA, continued
Harborview, San Pedro (1) 1985 7 160 171,800 1,074 89% $1,351 $1.26
Wood Creek, Pleasant Hill 1987 16 256 257,632 1,006 95% $1,253 $1.25
Geary Courtyard, San Francisco (1) 1990 0.4 164 85,675 522 86% $1,123 $2.15
Deerwood, Corona 1992 15 316 338,345 1,071 94% $871 $0.81
Larkspur Woods, Sacramento (1) 1989/1993 16 232 253,134 1,091 95% $959 $0.88
Ridgewood Village, San Diego 1997 9 192 163,336 851 95% $907 $1.07
The Ashton, Corona (1) 1986 24 492 457,184 929 90% $717 $0.77
Canyon Crest Views, Riverside 1982-1983 11 178 212,292 1,193 97% $945 $0.79
Canyon Ridge, San Diego 1989 8 162 126,000 778 99% $854 $1.10
Marquessa, Corona (1) 1992 14 336 299,744 892 94% $770 $0.86
Portofino, Chino Hills 1989 11 176 153,708 873 99% $860 $0.98
Parkview Terrace, Redlands (1) 1986 32 558 446,856 801 96% $699 $0.87
Redlands Lawn and Tennis Club,
Redlands (1) 1986 27 496 394,560 795 93% $658 $0.83
COLORADO
Cheyenne Crest, Colorado Springs 1984 9 208 175,424 843 96% $659 $0.78
Glenridge, Colorado Springs (1) 1985 8 220 176,792 804 96% $648 $0.81
Indian Tree, Arvada 1983 8 168 140,000 833 95% $666 $0.80
Trails, Aurora 1986 11 351 286,964 818 93% $633 $0.77
Willow Glen, Aurora 1983 20 384 302,944 789 94% $614 $0.78
</TABLE>
27
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
COLORADO, continued
Windmill, Colorado Springs 1985 11 304 180,640 594 97% $523 $0.88
Yuma Court, Colorado Springs 1985 5 40 37,400 935 100% $620 $0.66
Village at Bear Creek, Denver 1987-1996 31 472 464,558 984 93% $848 $0.86
Cimmaron Ridge, Denver 1984 10 296 229,048 774 93% $586 $0.76
Colinas Pointe, Denver 1986 13 272 213,984 787 92% $647 $0.82
Highland Pointe, Denver 1984 14 318 237,886 748 97% $568 $0.76
Ironwood at the Ranch, Denver (1) 1986 9 226 184,081 815 97% $732 $0.90
The Marks, Denver (1) 1987-1996 24 616 520,712 845 93% $741 $0.88
The Registry, Denver 1987 9 208 156,558 753 98% $695 $0.92
Sterling Point, Denver 1979 9 143 130,120 910 94% $732 $0.80
Warwick Station, Denver (1) 1986 18 332 250,432 754 96% $689 $0.91
Parkwood East, Fort Collins 1986 25 259 215,064 830 92% $676 $0.81
Dartmouth Woods, Lakewood (1) 1990 13 201 165,777 825 97% $708 $0.86
Highline Oaks, Denver (1) 1986 10 220 170,756 776 94% $679 $0.88
Crescent at Cherry Creek, Denver (1) 1994 6 216 189,191 876 94% $821 $0.94
Cierra Crest, Denver 1996 22 480 439,498 916 95% $808 $0.88
CONNECTICUT
The Classic, Stamford 1990 1 144 165,727 1,151 97% $1,981 $1.72
FLORIDA
Brierwood, Jacksonville 1974 17 196 263,052 1,342 99% $642 $0.48
</TABLE>
28
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FLORIDA, continued
Casa Cordoba, Tallahassee 1972-73 12 168 164,336 978 95% $605 $0.62
Casa Cortez, Tallahassee 1970 4 66 74,916 1,135 94% $628 $0.55
Chaparral, Largo 1976 23 444 451,420 1,017 95% $613 $0.60
Gatehouse on the Green, Pembroke
Pines 1990 21 312 310,140 994 90% $944 $0.95
Gatehouse at Pine Lake, Plantation 1990 25 296 293,792 993 97% $861 $0.87
Habitat, Orlando 1974 17 344 334,352 972 93% $589 $0.61
Hammock's Place, Miami (1) 1986 15 296 307,900 1,040 93% $740 $0.71
Heron Cove, Coral Springs 1987 12 198 189,932 959 98% $786 $0.82
Heron Landing, Lauderhill 1988 11 144 151,684 1,053 94% $771 $0.73
Heron Run, Plantation 1987 13 198 185,504 937 93% $814 $0.87
La Costa Brava, Orlando 1967 10 194 190,780 983 98% $639 $0.65
La Costa Brava, Jacksonville (2) 1970-73 30 464 441,268 951 92% $556 $0.58
Marbrisa, Tampa 1984 37 224 188,544 842 97% $589 $0.70
Oaks of Lakebridge, Ormond Beach 1984 12 170 120,792 711 99% $598 $0.84
Paradise Point, Dania 1987-90 13 260 226,980 873 99% $832 $0.95
Pine Harbour, Orlando 1991 20 366 344,204 940 95% $690 $0.73
Pines of Springdale, W. Palm Beach 1986 5 151 126,975 841 95% $632 $0.75
The Place, Fort Meyers 1986 9 230 183,588 798 96% $556 $0.70
Combined Ft. Lauderdale
Properties (4) 1988-1991 36 737 528,591 717 97% $878 $1.22
</TABLE>
29
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FLORIDA, continued
River Bend, Tampa 1971 15 296 333,580 1,127 96% $565 $0.50
Sabal Pointe, Coral Springs 1995 14 275 355,575 1,293 96% $896 $0.69
Sawgrass Cove, Bradenton 1991 28 336 342,880 1,020 94% $678 $0.66
Springs Colony, Altamonte Springs (1) 1986 10 188 161,168 857 96% $589 $0.69
Stonelake Club, Ocala 1986 15 240 194,320 810 95% $511 $0.63
Woodlake at Killearn, Tallahassee 1986-90 25 352 305,480 868 91% $610 $0.70
Banyan Lake, Boynton Beach 1986 30 288 264,636 919 94% $712 $0.77
Boynton Place, Boynton Beach 1989 12 192 195,840 1,020 95% $715 $0.70
Crosswinds, St. Petersburg 1986 17 208 154,224 741 97% $567 $0.77
Sabal Palm, Pompano Beach 1989 23 416 384,032 923 96% $762 $0.83
Summit Chase, Coral Springs 1985 9 140 134,586 961 94% $714 $0.74
Mariners Wharf, Orange Park 1989 28 272 305,392 1,123 95% $753 $0.67
Northlake, Jacksonville 1989 20 240 193,832 808 94% $596 $0.74
Ocean Walk, Key West (1) 1990 16 296 208,256 704 97% $828 $1.18
Silver Springs, Jacksonville 1985 25 432 361,372 836 95% $547 $0.65
Tivoli Lakes, Deerfield Beach 1991 15 278 247,336 890 96% $789 $0.89
Westwood Pines, Tamarac 1991 15 208 204,460 983 96% $799 $0.81
Hidden Palms, Tampa (1) 1986 14 256 201,518 787 97% $542 $0.69
Vinings at Ashley Lake, Boynton
Beach (1) 1990 36 440 432,756 984 93% $649 $0.66
</TABLE>
30
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GEORGIA
Frey, Atlanta (1) 1985 44 489 453,760 928 90% $704 $0.76
Governor's Place, Augusta 1972 9 190 191,580 1,008 91% $449 $0.45
Greengate, Marietta 1971 11 152 157,808 1,038 92% $646 $0.62
Holcomb Bridge, Atlanta (1) 1985 36 437 419,150 959 96% $703 $0.73
Ivy Place, Atlanta 1978 15 122 180,830 1,482 94% $919 $0.62
Longwood, Decatur 1992 9 268 216,970 810 96% $742 $0.92
Maxwell House, Augusta 1951 1 216 97,173 450 96% $371 $0.82
Park Knoll, Marietta 1983 41 484 587,250 1,213 97% $821 $0.68
Preston Lake, Tucker 1984-86 32 320 338,130 1,057 97% $698 $0.66
Roswell, Atlanta (1) 1985 30 236 225,598 956 98% $731 $0.76
Terraces at Peachtree, Atlanta 1987 1 96 86,800 904 98% $913 $1.01
Woodland Hills, Decatur 1985 19 228 266,304 1,168 97% $788 $0.67
Paces (combined), Atlanta (8) 1984-1989 41 610 592,936 972 94% $768 $0.79
North Hill, Atlanta (1) 1984 30 420 481,150 1,146 93% $764 $0.67
The Clarion, Decatur 1990 9 217 211,582 975 94% $756 $0.78
Garden Lake, Riverdale 1991 19 278 274,256 986 91% $645 $0.65
Highland Grove, Stone Mountain 1988 20 268 243,360 908 94% $671 $0.74
Governor's Point, Roswell (1) 1982/1986 34 468 587,176 1,255 94% $783 $0.62
The Arboretum, Atlanta 1970 18 312 301,139 965 94% $790 $0.82
</TABLE>
31
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
IDAHO
The Seasons, Boise 1990 6 120 108,460 904 97% $631 $0.70
ILLINOIS
Bourbon Square, Palatine (1) 1984-87 47 612 875,160 1,430 98% $1,034 $0.72
Four Lakes III-V, Lisle (1) 1968-1988 107 1,420 1,108,453 781 93% $819 $1.05
Spice Run, Naperville 1988 32 400 396,320 991 98% $862 $0.87
Chantecleer Lakes, Naperville (1) 1986 19 304 280,536 923 97% $894 $0.97
Glenlake Club, Glendale Heights (1) 1988 17 336 268,560 799 91% $767 $0.96
INDIANA
Idlewood, Indianapolis (1) 1991 28 320 262,355 820 90% $621 $0.76
IOWA
3000 Grand, Des Moines 1970 6 186 199,530 1,073 94% $829 $0.77
Regency Woods, West Des Moines (1) 1986 11 200 165,880 829 97% $515 $0.62
KANSAS
Cedar Crest, Overland Park 1986 30 466 430,034 923 98% $632 $0.68
Essex Place, Overland Park 1970-84 34 352 429,048 1,219 96% $792 $0.65
Rosehill Pointe, Lenexa 1984 35 498 459,318 922 93% $611 $0.66
Silverwood, Mission (1) 1986 15 280 234,876 839 98% $632 $0.75
Sunnyoak Village, Overland Park 1984 46 548 492,700 899 98% $588 $0.65
Concorde Bridge, Overland Park 1973 26 248 403,808 1,628 94% $798 $0.49
KENTUCKY
Cloisters on the Green, Lexington 1974 12 228 196,560 862 97% $576 $0.67
Doral, Louisville 1972 10 228 293,106 1,286 95% $618 $0.48
</TABLE>
32
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
KENTUCKY, continued
Mallgate, Louisville 1969 24 540 535,444 992 93% $551 $0.56
Sonnet Cove I-II, Lexington 1972-1974 14 331 346,675 1,047 94% $627 $0.60
Breckinridge Court, Lexington (1) 1986-1987 16 382 276,010 723 95% $464 $0.64
River Oak, Louisville 1989 16 268 200,056 746 95% $516 $0.69
MAINE
Junipers of Yarmouth, Yarmouth 1970 9 225 188,000 836 97% $662 $0.79
Tamarlane, Portland 1986 19 115 101,801 885 98% $716 $0.81
MARYLAND
Canterbury, Germantown (1) 1986 23 544 481,083 884 97% $719 $0.81
Country Club I & II, Silver
Spring (1) 1980-1982 20 376 371,296 987 95% $770 $0.78
Georgian Woods II, Wheaton (1) 1967 17 371 305,693 824 98% $777 $0.94
Greenwich Woods & Hollyview,
Silver Springs (6) 1965-1967 14 606 546,518 902 97% $755 $0.84
Marymont, Laurel 1987-88 10 308 251,264 816 96% $771 $0.95
Northhampton I & II, Largo (1) 1977-1988 58 620 564,399 910 96% $806 $0.89
Oak Mill II, Germantown (1) 1985 8 192 165,611 863 96% $716 $0.83
Town Centre III & IV, Laurel (1) 1968-1969 30 562 553,083 984 98% $721 $0.73
Yorktowne at Olde Mill, Millersville 1974 21 216 195,100 903 97% $691 $0.77
MASSACHUSETTS
Lincoln Heights, Quincy 1991 16 336 266,590 793 93% $1,079 $1.36
Crystal Village, Attleboro 1974 7 91 92,880 1,021 100% $871 $0.85
Mill Village, Randolph 1971-77 11 310 237,755 767 97% $735 $0.96
</TABLE>
33
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MICHIGAN
Country Ridge, Farmington Hills 1986 18 252 278,060 1,103 92% $838 $0.76
Hidden Valley, Ann Arbor 1973 28 324 237,348 733 96% $717 $0.98
Lake in the Woods, Ypsilanti 1969 175 1,028 971,873 945 95% $736 $0.78
Pines of Cloverlane, Pittsfield
Township 1975-79 63 582 471,966 811 96% $624 $0.77
Walden Wood, Southfield (1) 1972 20 210 295,080 1,405 95% $879 $0.63
Arbor Glen, Pittsfield Township 1990 22 220 195,996 891 95% $600 $0.67
Burwick Farms, Howell 1991 37 264 274,540 1,040 95% $786 $0.76
Woodcrest Villa, Westland 1970 26 458 425,200 928 93% $561 $0.60
Woodland Meadows, Ann Arbor 1987-1989 34 306 392,930 1,284 89% $1,075 $0.84
MINNESOTA
Park Place I & II, Plymouth (1) 1986 60 500 569,768 1,140 94% $800 $0.70
Fountain Place I, Eden
Prairie (1)(7) 1989 22 332 382,170 1,151 97% $768 $0.67
Fountain Place II, Eden
Prairie (1)(7) 1989 158 162,598 1,029 97% $771 $0.75
Royal Oaks, Eagan (1) 1989 20 231 209,384 906 98% $740 $0.82
Trailway Pond I, Burnsville (1)(7) 1988 21 75 70,283 937 95% $684 $0.73
Trailway Pond II, Burnsville (1)(7) 1988 165 155,395 942 95% $675 $0.72
Valley Creek I, Woodbury (1)(7) 1989 40 225 212,100 943 92% $713 $0.76
Valley Creek II, Woodbury (1)(7) 1990 177 168,258 951 96% $717 $0.75
White Bear Woods I, White Bear
Lake (1) 1989 4 225 211,992 942 96% $736 $0.78
Woodlane Place I, Woodbury (1) 1989 32 216 297,902 1,379 95% $870 $0.63
Woodlands of Minnetonka, Minnetonka 1988 14 248 268,640 1,083 98% $880 $0.81
</TABLE>
34
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MISSOURI
Hunters Glen, Chesterfield 1985 19 192 156,489 815 98% $654 $0.80
Sleepy Hollow, Kansas City (1) 1987 33 388 325,486 839 93% $566 $0.67
Hunters Ridge, St. Louis (1) 1987 13 198 178,448 901 95% $616 $0.68
South Pointe, St. Louis (1) 1986 8 192 155,520 810 92% $602 $0.74
Ethan's Ridge I, Kansas City (1)(7) 1988 316 283,944 899 92% $542 $0.60
Ethan's Ridge II, Kansas City (1)(7) 1990 52 242 196,614 812 89% $534 $0.66
Ethan's Glen III, Kansas City (1)(7) 1990 48 33,600 700 88% $484 $0.69
NEVADA
Catalina Shores, Las Vegas 1989 13 240 211,200 880 93% $716 $0.81
Cypress Point, Las Vegas 1989 9 212 179,800 848 97% $698 $0.82
Desert Park, Las Vegas 1987 15 368 172,513 469 87% $519 $1.11
Fountains at Flamingo, Las Vegas 1989-91 30 521 417,870 802 94% $687 $0.86
Newport Cove, Henderson 1983 10 140 152,600 1,090 96% $777 $0.71
Silver Shadow, Las Vegas 1992 9 200 194,656 973 90% $716 $0.74
Sunrise Springs, Las Vegas 1989 10 192 164,424 856 94% $681 $0.80
Trails, Las Vegas 1988 28 440 453,656 1,031 94% $757 $0.73
Catalina Shores, Las Vegas
(Wellsford) 1989 14 256 230,872 902 97% $651 $0.72
Crossing at Green Valley, Las Vegas 1986 15 384 330,714 861 96% $654 $0.76
Reflections at the Lakes, Las Vegas 1989 16 326 274,992 844 98% $669 $0.79
NEW HAMPSHIRE
Wellington Hill, Manchester (1) 1987 40 390 394,627 1,012 96% $753 $0.74
</TABLE>
35
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NEW JERSEY
Ravens Crest, Plainsboro (1) 1984 19 704 583,176 828 96% $854 $1.03
NEW MEXICO
Pueblo Villas, Albuquerque 1975 12 232 173,118 746 94% $557 $0.75
Mountain Run, Albuquerque 1985 16 472 335,744 711 95% $554 $0.78
NORTH CAROLINA
Bainbridge, Durham 1984 24 216 191,240 885 94% $705 $0.80
Bridgeport, Raleigh 1990 17 276 252,190 914 95% $724 $0.79
Deerwood Meadows, Greensboro 1986 44 297 217,757 733 94% $562 $0.77
East Pointe, Charlotte (1) 1987 29 310 301,560 973 97% $650 $0.67
Laurel Ridge, Chapel Hill 1975 13 160 158,964 994 98% $727 $0.73
McAlpine Ridge, Charlotte 1989-90 15 320 238,125 744 96% $580 $0.78
Pine Meadow, Greensboro (1) 1974 14 204 226,600 1,111 95% $633 $0.57
Rock Creek, Corrboro 1986 16 188 153,548 817 97% $682 $0.84
Winterwood, Charlotte (1) 1986 23 384 369,260 962 96% $675 $0.70
Woodbridge, Cary (1) 1993-95 28 344 315,624 918 95% $733 $0.80
Woodscape & Woods of North Bend,
Raleigh 1979-1983 55 475 430,167 906 96% $640 $0.71
The Cardinal, Greensboro (1) 1994 17 256 237,727 913 93% $574 $0.63
Willow Brook, Durham 1986 21 176 139,860 795 91% $681 $0.86
The Atrium, Durham 1989 16 208 196,596 945 95% $645 $0.68
The Cedars, Charlotte 1983 32 360 312,400 868 92% $548 $0.63
The Chimneys, Charlotte 1974 16 214 150,152 702 95% $505 $0.72
Creekwood, Charlotte 1987-1990 23 384 322,868 841 93% $792 $0.94
Hidden Oaks & Northwoods Village,
Cary (5) 1986-1988 26 444 345,358 778 95% $660 $0.85
</TABLE>
36
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OHIO
Olentangy Commons, Columbus 1972 76 827 981,190 1,186 99% $773 $0.65
Reserve Square, Cleveland 1973 4 765 631,803 826 86% $917 $1.11
University Park, Toledo 1965 2 99 49,950 505 95% $456 $0.90
Village of Hampshire Heights, Toledo 1950 10 304 187,624 617 83% $431 $0.70
Eastland on the Lake, Columbus 1973 32 376 274,704 724 90% $431 $0.60
Orchard of Landen, Maineville (1) 1985-1988 33 312 288,514 925 96% $695 $0.75
OKLAHOMA
Brittany Square, Tulsa 1982 8 212 170,516 804 92% $524 $0.65
The Lodge, Tulsa 1979 11 208 152,240 732 97% $432 $0.59
Augusta, Oklahoma City 1986 7 197 153,308 778 95% $531 $0.68
Heritage Park, Oklahoma City 1983 23 452 392,218 868 95% $410 $0.47
Invitational, Oklahoma City 1983 10 344 254,976 741 97% $440 $0.59
Raindance, Oklahoma City 1984 22 504 327,248 649 94% $358 $0.55
Windrush, Oklahoma City 1982 10 160 130,112 813 99% $501 $0.62
Wellsford Oaks, Tulsa 1991 9 300 216,368 721 96% $529 $0.73
Huntington Hollow, Tulsa 1981 9 288 180,648 627 96% $371 $0.59
One Eton Square, Tulsa 1985 17 448 313,904 701 95% $531 $0.76
Silver Springs & Woodland Oaks,
Tulsa 1983-1984 24 428 323,977 757 99% $503 $0.66
</TABLE>
37
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OKLAHOMA, continued
Riverside Park, Tulsa (1) 1994 9 288 237,283 824 93% $576 $0.70
OREGON
Bridgecreek, Wilsonville 1987 22 315 274,236 871 92% $677 $0.78
Kempton Downs, Gresham 1990 12 278 277,536 998 88% $698 $0.70
Meadowcreek, Tigard (1) 1985 15 304 247,690 815 94% $661 $0.81
Tanasbourne Terrace, Hillsboro 1986-89 18 373 363,758 975 95% $747 $0.77
Tanglewood, Lake Oswego 1976 8 158 200,660 1,270 88% $847 $0.67
Woodcreek, Beaverton (1) 1982-84 22 440 335,120 762 95% $598 $0.79
Knight's Castle, Wilsonville 1991 22 296 251,627 850 92% $649 $0.76
Club at Tanasbourne, Hillsboro 1990 19 352 302,902 861 91% $698 $0.81
Club at the Green, Beaverton 1991 15 254 238,850 940 92% $692 $0.74
Country Gables, Beaverton (1) 1991 15 288 275,463 956 92% $720 $0.75
Watermark Square, Portland (1) 1990 12 390 350,945 900 95% $637 $0.71
SOUTH CAROLINA
Mallard Cove, Greenville 1983 14 211 264,187 1,252 99% $583 $0.47
Carolina Crossing, Greenville 1967 6 156 121,200 777 94% $432 $0.56
Gleneagle, Greenville 1990 14 192 177,264 923 94% $544 $0.59
Greyeagle, Greenville 1991 11 156 154,624 991 96% $549 $0.55
Hickory Ridge, Greenville 1968 4 90 72,392 804 98% $446 $0.55
Tamarind at Stoneridge, Columbia 1985 15 240 200,976 837 88% $534 $0.64
TENNESSEE
Arbors of Hickory Hollow,
Nashville (1) 1986 31 336 337,260 1,004 95% $637 $0.63
</TABLE>
38
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TENNESSEE, continued
Arbors of Brentwood,
Nashville (1) 1986-87 41 346 320,993 928 92% $690 $0.74
Brixworth, Nashville 1985 6 216 144,912 671 92% $745 $1.11
Canterchase, Nashville (1) 1985 22 235 170,140 724 97% $542 $0.75
Ridgemont, Chattanooga 1988 21 280 236,530 845 97% $506 $0.60
Mountain Brook, Chattanooga 1987 43 226 192,200 850 95% $476 $0.56
Spinnaker Cove, Nashville (1) 1986 21 278 238,524 858 95% $676 $0.79
Wyndridge II , Memphis (1)(7) 1988 59 284 263,962 929 95% $616 $0.66
Wyndridge III, Memphis (1)(7) 1988 284 263,962 929 94% $613 $0.66
The Willows, Knoxville (1) 1987-1988 19 250 219,760 879 91% $612 $0.70
Farmington Gates, Germantown 1976 11 182 192,428 1,057 93% $610 $0.58
Ridgeway Commons, Memphis 1970 12 127 168,650 1,328 87% $623 $0.47
Village of Sycamore Ridge, Memphis 1977 14 114 148,560 1,313 93% $624 $0.48
Cambridge at Hickory Hollow,
Nashville 1997 24 360 358,776 997 73% $717 $0.72
Trinity Lakes & Autumn Creek,
Cordova (1) 1985-1991 40 540 484,374 897 94% $603 $0.67
Preakness, Antioch (1) 1986 13 260 193,500 744 96% $548 $0.74
TEXAS
7979 Westheimer, Houston 1973 15 459 401,571 875 94% $646 $0.74
Altamonte, San Antonio (1) 1985 17 432 322,928 748 97% $527 $0.70
Arbors of Las Colinas, Irving 1985 15 408 334,556 820 99% $679 $0.83
Breton Mill, Houston (1) 1986 14 392 294,152 750 99% $564 $0.75
Celebration at Westchase, Houston 1979 13 367 305,609 833 98% $565 $0.68
</TABLE>
39
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TEXAS, continued
Champion Oaks, Houston (1) 1984 10 252 190,628 756 97% $561 $0.74
Dawntree, Carrollton 1982 23 400 370,152 925 96% $604 $0.65
Forest Ridge, Arlington 1984-85 29 660 555,364 841 94% $614 $0.73
Fountainhead I-III, San Antonio (1) 1985-87 23 688 457,616 665 96% $515 $0.77
Harbour Landing, Corpus Christi 1985 11 284 193,288 681 96% $543 $0.80
Hampton Green, San Antonio 1979 11 293 222,341 759 94% $483 $0.64
Hearthstone, San Antonio 1982 11 252 167,464 665 95% $434 $0.65
Hunter's Green, Fort Worth (1) 1981 10 248 188,720 761 98% $491 $0.65
Keystone, Austin (1) 1981 6 166 111,440 671 97% $570 $0.85
Kingswood Manor, San Antonio 1983 6 129 109,996 853 91% $523 $0.61
Lakewood Oaks, Dallas 1987 12 352 257,606 732 97% $678 $0.93
Lincoln Green I-III, San Antonio 1984-86 24 680 465,664 685 98% $480 $0.70
Marina Club, Ft. Worth 1987 14 387 265,475 686 95% $477 $0.70
Northgate Village, San Antonio 1984 10 264 214,928 814 98% $509 $0.63
Parkwest, Austin 1985 15 196 179,046 914 97% $736 $0.81
Preston in Willow Bend, Plano 1985 13 229 233,893 1,021 95% $768 $0.75
Ridgetree, Dallas 1983 17 798 597,642 749 93% $527 $0.70
Saddle Creek, Carrollton 1980 16 238 244,488 1,027 95% $690 $0.67
Songbird, San Antonio (1) 1981 15 262 277,720 1,060 91% $633 $0.60
Sutton Place, Dallas 1985 10 456 301,440 661 98% $601 $0.91
</TABLE>
40
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TEXAS, continued
The Lodge, San Antonio 1979 10 384 259,512 676 93% $493 $0.73
The Trails, Arlington 1984 9 208 141,696 681 98% $528 $0.78
Village Oaks, Austin (1) 1984 13 280 199,152 711 99% $667 $0.94
Woodmoor, Austin 1981 9 208 151,348 728 99% $580 $0.80
Burn Brae, Dallas 1984 12 282 221,966 787 97% $556 $0.71
Calais, Dallas 1986 13 264 206,210 781 94% $593 $0.76
Copperfield, San Antonio 1984 10 258 197,736 766 95% $498 $0.65
Countryside, San Antonio 1980 9 220 159,214 724 95% $475 $0.66
Forest Valley, San Antonio 1983 8 185 149,493 808 95% $531 $0.66
Landera, San Antonio 1983 9 184 168,176 914 96% $571 $0.62
The Overlook, San Antonio 1985 16 411 298,133 725 97% $461 $0.64
Regatta, San Antonio 1983 10 200 171,634 858 98% $574 $0.67
Trails End, San Antonio 1983 19 308 202,376 657 96% $458 $0.70
Villas of Oak Creste, San Antonio 1979 10 280 208,446 744 91% $464 $0.62
Waterford, San Antonio 1983 5 133 87,376 657 93% $495 $0.75
Foxchase, Grand Prairie 1983 15 260 243,218 935 94% $584 $0.62
Cambridge Village, Lewisville 1987 10 200 160,036 800 95% $668 $0.84
Rincon, Houston 1996 5 288 240,787 836 96% $894 $1.07
Trails at Dominion, Houston (1) 1992-1995 55 843 766,592 909 94% $684 $0.75
Town Center, Kingwood 1994 10 258 220,630 855 94% $757 $0.89
Preston Bend, Dallas (1) 1986 9 255 185,364 727 93% $636 $0.87
</TABLE>
41
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TEXAS, continued
Blue Swan, San Antonio (1) 1985-1994 12 285 226,036 793 92% $540 $0.68
Jefferson at Walnut Creek,
Austin (1) 1994 20 342 286,188 837 95% $776 $0.93
Kirby Place, Houston (1) 1994 9 362 359,931 994 95% $991 $1.00
Parkridge Place, Irving 1985 23 536 455,496 850 98% $625 $0.74
Chartwell Court, Houston 1995 14 243 253,553 1,043 96% $764 $0.73
UTAH
Quail Cove, Salt Lake City 1987 17 420 362,580 863 93% $581 $0.67
Settlers Point, Salt Lake City 1986 16 288 263,040 913 93% $639 $0.70
Springs of Country Woods, Salt
Lake City 1982 24 590 486,648 825 94% $614 $0.74
Brookfield, Salt Lake City 1985 6 128 101,424 792 95% $603 $0.76
VIRGINIA
Amberton, Manassas (1) 1986 7 190 143,402 755 96% $706 $0.94
Kingsport, Alexandria 1985 13 416 285,793 687 99% $700 $1.02
Saddle Ridge, Ashburn 1989 14 216 194,142 899 92% $862 $0.96
Sheffield Court, Arlington 1986 14 597 356,822 598 98% $839 $1.40
Tanglewood, Manassas (1) 1987 29 432 388,704 900 93% $729 $0.81
Wilde Lake, Richmond (1) 1989 18 189 172,980 915 94% $695 $0.76
Woodside, Lorton 1987 13 252 231,781 920 96% $789 $0.86
Cascade at Landmark, Alexandria 1990 5 277 272,720 985 96% $934 $0.95
Brookridge, Centreville (1) 1989 15 252 252,353 1,001 96% $810 $0.81
WASHINGTON
2900 on First, Seattle 1989-91 1 135 87,320 647 98% $879 $1.36
</TABLE>
42
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WASHINGTON, continued
Brentwood, Vancouver 1990 14 296 286,132 967 94% $663 $0.69
Chandler's Bay I, Kent 1989 36 293 278,874 952 94% $740 $0.78
Charter Club, Everett 1991 12 201 172,773 860 97% $736 $0.86
Creekside, Mountlake Terrace (1) 1987 43 512 407,296 796 94% $714 $0.90
Eagle Rim, Redmond 1986-88 20 156 137,920 884 94% $807 $0.91
Edgewood, Woodinville (1) 1986 10 203 166,299 819 98% $743 $0.91
Fox Run, Federal Way 1988 5 143 127,960 895 96% $670 $0.75
Huntington Park, Everett 1991 14 381 307,793 808 96% $705 $0.87
Newport Heights, Seattle 1985 5 80 59,056 738 99% $721 $0.98
Orchard Ridge, Lynnwood 1988 6 104 86,548 832 97% $707 $0.85
Pointe East, Redmond 1988 6 76 83,280 1,096 91% $1,027 $0.94
Village of Newport, Federal Way 1987 4 100 76,890 769 94% $616 $0.80
Waterstone Place, Federal Way 1990 37 750 616,436 822 94% $611 $0.74
Wellington, Silverdale (1) 1990 11 240 214,024 892 88% $635 $0.71
North Creek Heights, Seattle 1990 9 114 104,306 915 97% $832 $0.91
Panther Ridge, Seattle 1980 20 260 221,000 850 94% $569 $0.67
Highland Creste, Seattle 1989 10 198 192,556 973 98% $646 $0.66
Ridgegate, Seattle 1990 9 153 141,594 925 96% $690 $0.75
Whitedove Pointe, Seattle 1992 5 96 102,834 1,071 96% $783 $0.73
Cherry Hill, Seattle 1991 7 108 101,390 939 97% $801 $0.85
</TABLE>
43
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WASHINGTON , continued
Plum Tree Park, Seattle 1991 8 196 174,310 889 96% $723 $0.81
Firdale Village, Seattle 1986 23 386 323,522 838 95% $730 $0.87
Martha Lake, Seattle 1991 8 155 135,662 875 100% $694 $0.79
Country Club Village, Seattle 1991 7 151 157,898 1,046 92% $889 $0.85
2300 Elliott, Seattle 1992 0.5 91 67,403 741 93% $892 $1.20
Metropolitan Park, Seattle 1991 0.4 82 49,702 606 92% $836 $1.38
Seventh and James, Seattle 1992 0.7 96 61,282 638 93% $827 $1.30
Merrill Creek, Tacoma 1994 15 149 138,867 932 95% $662 $0.71
Stoney Creek, Tacoma 1990 16 231 211,580 916 93% $646 $0.71
Windridge, Tacoma 1989 4 80 65,111 814 90% $563 $0.69
Surprise Lake Village, Tacoma 1986 32 338 328,032 971 93% $699 $0.72
Chestnut Hills, Tacoma 1991 8 157 143,236 912 98% $580 $0.64
The Hamptons, Tacoma (1) 1991 11 230 202,324 880 95% $955 $1.09
Gold Pointe, Tacoma 1990 5 84 88,422 1,053 92% $812 $0.77
The Village at Seeley Lake, Tacoma 1990 17 522 469,180 899 92% $634 $0.71
Westridge, Tacoma 1987-1991 38 714 686,675 962 94% $667 $0.69
The Ridgetop, Tacoma 1988 13 221 197,250 893 78% $635 $0.71
Gates of Redmond I & II,
Redmond (1) 1979-1989 15 280 249,728 892 92% $892 $1.00
Summit at Lake Union 1995-1997 1 150 109,352 729 92% $959 $1.32
Indigo Springs, Kent (1) 1991 24 278 255,360 919 96% $727 $0.79
</TABLE>
44
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- CONTINUED
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WASHINGTON , continued
Waterford at the Lakes, Kent 1990 18 344 313,514 911 89% $730 $0.80
James Street Crossing, Kent (1) 1989 21 300 250,368 835 99% $641 $0.77
-----------------------------------------------------------------------------------
TOTAL PROPERTIES: 7,873 134,247 118,928,676
-----------------------------------------------------------------------------------
AVERAGE: 17 293 259,670 886 95% $696 $0.79
===================================================================================
</TABLE>
(1) Encumbered by a third party mortgage.
(2) Includes La Costa Brava (JAX) and Cedar Cove.
(3) Includes Fox Run, Greenwood Forest, Walnut Ridge, and Williamsburg.
(4) Includes Port Royale I, Port Royale II, and Lincoln Harbor.
Lincoln Harbor is encumbered by a third party mortgage.
(5) Northwoods Village is encumbered by a third party mortgage.
(6) Greenwich Woods is encumbered by a third party mortgage.
(7) Acreage is for combined phases.
(8) Includes Paces Station and Paces on the Green.
45
<PAGE>
ITEM 2. PROPERTIES
PROPERTIES- Continued
Development and Construction Activity
The apartment communities under construction and in lease up are
listed below:
<TABLE>
<CAPTION>
Actual Actual or
Average Estimated Date of Estimated Estimated
Total Unit Size Construction Cost Construction Commencement Date of Stabilized
Name City Units (Sq. Ft.) (Millions) Commencement of Lease-Up Occupancy
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ARIZONA
Montierra Scottsdale 249 1,052 $21 3:97 2:98 1:99
The Retreat, Phase I Phoenix 240 973 14 1:97 3:97 2:98
The Retreat, Phase II Phoenix 240 973 17 3:97 2:98 1:99
Vista Grove Mesa 224 911 14 1:97 3:97 2:98
--- ---
TOTAL 953 $66
=== ===
</TABLE>
46
<PAGE>
ITEM 2. PROPERTIES (continued)
ADDITIONAL PROPERTIES
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CALIFORNIA
Brookside Place, Stockton (9) 1981 10 90 96,664 1,074 98% $738 $0.69
Canyon Creek, San Ramon (9) 1984 13 268 257,676 961 91% $1,155 $1.20
Cobblestone Village, Fresno (9) 1983 15 162 153,118 945 96% $559 $0.59
Country Oaks, Agoura (9) 1985 15 256 258,558 1,010 94% $1,245 $1.23
Edgewater, Bakersfield (9) 1984 15 258 240,322 931 95% $659 $0.71
Feather River, Stockton (9) 1981 8 128 97,328 760 94% $550 $0.72
Hidden Lake, Sacramento (9) 1985 17 272 261,808 963 95% $704 $0.73
Lakeview, Lodi (9) 1983 9 138 136,972 993 97% $706 $0.71
Lantern Cove, Foster City (9) 1985 17 232 228,432 985 87% $1,614 $1.64
Schooner Bay I, Foster City (9) 1985 12.5 168 167,345 996 91% $1,747 $1.75
Schooner Bay II, Foster City (9) 1985 12.5 144 143,442 996 94% $1,734 $1.74
South Shore, Stockton (9) 1979 8 129 141,055 1,093 94% $752 $0.70
Waterfield Square I, Stockton (9) 1984 10 170 160,100 942 93% $581 $0.62
Waterfield Square II, Stockton (9) 1984 9 158 151,488 959 98% $601 $0.63
Willow Brook, Pleasant Hill (9) 1985 12 228 234,840 1,030 93% $1,281 $1.24
Willow Creek, Fresno (9) 1984 7 116 118,422 1,021 94% $670 $0.66
COLORADO
Deerfield, Denver (9) 1983 9 158 146,380 926 96% $728 $0.79
Foxridge, Englewood (9) 1984 15 300 292,992 977 96% $789 $0.81
ILLINOIS
Glengarry Club, Bloomingdale (10) 1990 16 250 215,098 860 99% $880 $1.02
</TABLE>
47
<PAGE>
ITEM 2. PROPERTIES (continued)
ADDITIONAL PROPERTIES
<TABLE>
<CAPTION>
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MINNESOTA
The Gates at Carlson, Minnetonka (10) 1989 17 435 396,300 911 96% $807 $0.89
NEW MEXICO
Mesa Del Oso, Albuquerque (9) 1983 25 221 252,169 1,141 94% $902 $0.79
Tierra Antigua, Albuquerque (9) 1985 9 148 152,241 1,029 96% $762 $0.74
OKLAHOMA
Lakewood, Tulsa (9) 1985 9 152 157,372 1,035 98% $676 $0.65
WISCONSIN
Plum Tree I, II & III, Hales
Corner (10) 1987-1989 27 332 355,074 1,070 96% $942 $0.88
Ravinia, Greenfield (10) 1991 19 206 219,932 1,068 96% 832 $0.78
Woodlands of Brookfield,
Brookfield (10) 1990 35 148 185,320 1,252 97% $1,260 $1.01
----------------------------------------------------------------------------------
TOTAL ADDITIONAL PROPERTIES: 371 5,267 5,220,448
----------------------------------------------------------------------------------
AVERAGE: 14 203 200,786 991 95% $931 $0.94
==================================================================================
</TABLE>
(9) All of these Additional Properties are encumbered by mortgages,
of which the Company has an investment in the second and third
mortgages (which are subordinate to first mortgages owned by
third party unaffiliated entities).
(10) The Company has an investment in six mortgage loans
collateralized by these Additional Properties.
48
<PAGE>
PART I
ITEM 3. LEGAL PROCEEDINGS
Richard M. Perlman, a former employee of companies controlled by Mr.
Zell, filed a legal proceeding against Mr. Zell and various partnerships and
corporations controlled by Mr. Zell claiming, inter alia, that he had an
----------
interest in 20 of 46 of the Initial Properties (the "Zell Properties") and
that he suffered damages when those Properties were transferred into the REIT.
The proceeding was filed on July 21, 1995 (Richard M. Perlman et al. v. Samuel
-----------------------------------
Zell, et al.) (United States District Court for the Northern District of
- ------------
Illinois-Eastern Division, Case No. 95 C 4242). The Company is not a party to
this lawsuit. This action has proceeded to a jury verdict and the Company has
incurred no liability and will incur no losses in connection with such action.
In addition, only ordinary routine litigation incidental to the
business which is not deemed material was initiated during the year ended
December 31, 1997. The Company does not believe there is any other
litigation, except as mentioned in the previous paragraph, threatened against
the Company other than routine litigation arising out of the ordinary course
of business, some of which is expected to be covered by liability insurance,
none of which is expected to have a material adverse effect on the
consolidated financial statements of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On December 23, 1997, a special meeting of shareholders was held
whereby the shareholders were asked to approve the EWR Merger. Of the votes
that were collected, there were 55,803,089 votes for the EWR Merger, 224,294
votes against the EWR Merger and 102,495 abstentions.
49
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS
MATTERS
The following table sets forth for the periods indicated, the high and
low sales prices for and the distributions paid on the Company's Common Shares
which trade on the New York Stock Exchange under the trading symbol EQR.
<TABLE>
<CAPTION>
Sales Price
-----------------
High Low Distributions
---- --- -------------
<S> <C> <C> <C>
Fiscal Year 1997
Fourth Quarter Ended December 31, 1997 $55 $47 3/8 $0.67
Third Quarter Ended September 30, 1997 $54 9/16 $47 1/8 $0.625
Second Quarter Ended June 30, 1997 $47 1/2 $41 1/4 $0.625
First Quarter Ended March 31, 1997 $48 7/8 $39 3/4 $0.625
</TABLE>
<TABLE>
<CAPTION>
Sales Price
-----------------
High Low Distributions
---- --- -------------
<S> <C> <C> <C>
Fiscal Year 1996
Fourth Quarter Ended December 31, 1996 $43 1/2 $35 5/8 $0.625
Third Quarter Ended September 30, 1996 $36 1/8 $32 7/8 $0.59
Second Quarter Ended June 30, 1996 $33 1/2 $30 7/8 $0.59
First Quarter Ended March 31, 1996 $33 3/4 $28 1/4 $0.59
</TABLE>
In addition, on March 2, 1998, the Company declared a $0.67
distribution per Common Share payable on April 10, 1998 to shareholders of
record on March 27, 1998.
The number of beneficial holders of Common Shares at December 31,
1997, was approximately 34,665. The number of outstanding Common Shares as of
December 31, 1997 was 89,085,265.
50
<PAGE>
PART II
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected financial and operating
information on a historical basis for the Company and EQR's Predecessor
Business. The following information should be read in conjunction with all of
the financial statements and notes thereto included elsewhere in this Form
10-K. The historical operating data for the years ended December 31, 1995,
1994, and 1993 have been derived from the historical Financial Statements of
the Company and EQR's Predecessor Business audited by Grant Thornton L.L.P.,
independent accountants. The historical operating data for the years ended
December 31, 1997 and 1996 have been derived from the historical Financial
Statements of the Company audited by Ernst & Young LLP, independent auditors.
The net income per weighted average Common Share amounts have been presented
and, where appropriate, restated as required to comply with Statement of
Financial Accounting Standards No. 128, Earnings Per Share. For a further
discussion of net income per weighted average Common Share and the impact of
Statement No. 128, see Note 9 of Notes to the Consolidated Financial
Statements as included elsewhere in this Form 10-K. Certain capitalized terms
as used herein, are defined in the Notes to the Consolidated Financial
Statements.
51
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED AND COMBINED HISTORICAL, INCLUDING EQR'S PREDECESSOR BUSINESS
(AMOUNTS IN THOUSANDS EXCEPT FOR PER SHARE AND PROPERTY DATA)
<TABLE>
<CAPTION>
Year Ended December 31, (1)
--------------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Total revenues $ 747,321 $ 478,385 $ 390,384 $ 231,034 $ 112,070
========== ========== ========== ========== ==========
Income before gain on disposition of properties,
extraordinary items and allocation to Minority
Interests/EQR's Predecessor Business $ 176,014 $ 97,033 $ 59,738 $ 45,988 $ 8,137
========== ========== ========== ========== ==========
Net income $ 176,592 $ 101,624 $ 67,719 $ 34,418 $ 6,095
========== ========== ========== ========== ==========
Net income available to Common Shares $ 117,580 $ 72,609 $ 57,610 $ 34,418 $ 6,095
========== ========== ========== ========== ==========
Net income per weighted average Common Share outstanding $ 1.79 $ 1.70 $ 1.68 $ 1.34 $ 0.42
========== ========== ========== ========== ==========
Net income per weighted average Common Share outstanding -
assuming dilution $ 1.76 $ 1.69 $ 1.67 $ 1.34 $ 0.42
========== ========== ========== ========== ==========
Weighted average Common Shares outstanding 65,729 42,586 34,358 25,621 14,601
========== ========== ========== ========== ==========
Weighted average Common Shares outstanding-assuming dilution 74,281 51,102 43,983 34,206 22,986
========== ========== ========== ========== ==========
Distributions declared per Common Share outstanding $ 2.55 $ 2.40 $ 2.18 $ 2.01 $ 0.68
========== ========== ========== ========== ==========
BALANCE SHEET DATA (at end of period):
Real estate, before accumulated depreciation (2) $7,121,435 $2,983,510 $2,188,939 $1,963,476 $ 634,577
Real estate, after accumulated depreciation (2) $6,676,673 $2,681,998 $1,970,600 $1,770,735 $ 478,210
Total assets $7,094,631 $2,986,127 $2,141,260 $1,847,685 $ 535,914
Total debt $2,948,323 $1,254,274 $1,002,219 $ 994,746 $ 278,642
Minority Interests $ 273,404 $ 150,637 $ 168,963 $ 177,438 $ 83,159
Shareholders' equity $3,689,991 $1,458,830 $ 884,517 $ 609,936 $ 146,485
OTHER DATA:
Total properties (at end of period) (3) 463 218 174 163 79
Total apartment units (at end of period) (3) 135,200 67,705 53,294 50,704 24,419
Funds from operations available to Common Shares (4) $ 270,763 $ 160,267 $ 120,965 $ 83,886 $ 30,127
Cash flow provided by (used for):
Operating activities $ 331,135 $ 210,930 $ 141,534 $ 93,997 $ 25,582
Investing activities $(1,543,324) $ (635,655) $ (324,018) $ (896,515) $ (106,543)
Financing activities $1,098,213 $ 558,568 $ 175,874 $ 808,495 $ 94,802
</TABLE>
52
<PAGE>
PART II
ITEM 6. SELECTED FINANCIAL AND OPERATING INFORMATION (COMBINED HISTORICAL
(CONTINUED))
(1) Historical results for the year ended December 31, 1993 included combined
results of EQR's Predecessor Business for the period January 1, 1993 through
August 17, 1993.
(2) Includes approximately $36 million of construction in progress as of
December 31, 1997.
(3) In August 1995 the Company also made its $89 million Mortgage Note
Investment collateralized by 21 of the Additional Properties. In addition, in
April 1997, the Company made its $88 million Mortgage Note Investment
collateralized by five of the Additional Properties. The Additional
Properties consist of 5,267 units.
(4) The Company generally considers FFO to be one measure of the performance
of real estate companies, including an equity REIT. The new definition of FFO
adopted in March 1995 by the Board of Governors of the National Association of
Real Estate Investment Trusts ("NAREIT") defines FFO as net income (loss)
(computed in accordance with generally accepted accounting principles
("GAAP"), excluding gains (or losses) from debt restructuring and sales of
property, plus depreciation on real estate assets, and after adjustments for
unconsolidated partnerships and joint ventures. Adjustments for
unconsolidated partnerships and joint ventures are calculated to reflect FFO
on the same basis. The Company believes that FFO is helpful to investors as a
measure of the performance of an equity REIT because, along with cash flows
from operating activities, financing activities and investing activities, it
provides investors an understanding of the ability of the Company to incur and
service debt and to make capital expenditures. FFO does not represent cash
generated from operating activities in accordance with GAAP and therefore
should not be considered an alternative to net income as an indication of the
Company's performance or to net cash flows from operating activities as
determined by GAAP as a measure of liquidity and is not necessarily indicative
of cash available to fund cash needs. The Company's calculation of FFO
represents net income available to Common Shares, excluding gains on
dispositions of properties, gains on early extinguishment of debt, and
write-off of unamortized costs on refinanced debt, plus depreciation on real
estate assets, income allocated to Minority Interests and amortization of
deferred financing costs related to the Predecessor Business. The Company's
calculation of FFO may differ from the methodology for calculating FFO
utilized by other REITs and, accordingly, may not be comparable to such other
REITs. The Company's calculation of FFO for 1995 and 1994 has been restated
to reflect the effects of the new definition as mentioned above. FFO for the
year ended December 31, 1994 includes the effect of a one-time charge of
approximately $879,000 for the relocation of the property management
headquarters to Chicago. In addition, FFO for the year ended December 31,
1993 excludes the effect of refinancing costs of approximately $3.3 million
which represented costs associated with the prepayment of certain mortgage
loans.
53
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
ITEM 7. OVERVIEW
The following discussion and analysis of the results of operations and
financial condition of the Company should be read in conjunction with
"Selected Financial Data" and the historical Consolidated Financial Statements
thereto appearing elsewhere in this Form 10-K. Due to the Company's ability
to control the Operating Partnership, the EWR Operating Partnership, the
Management Partnerships, the Financing Partnerships and the LLCs, each entity
has been consolidated with the Company for financial reporting purposes.
Forward-looking statements in this report are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995. The words "believes", "expects" and "anticipates" and other similar
expressions which are predictions of or indicate future events and trends and
which do not relate solely to historical matters, identify forward-looking
statements. Such forward-looking statements are subject to risks and
uncertainties, which could cause actual results, performance, or achievements
of the Company to differ materially from anticipated future results,
performance or achievements expressed or implied by such forward-looking
statements. Factors that might cause such differences include, but are not
limited to, the following: the alternative sources of capital to the Company
are too high; occupancy levels and market rents may be adversely affected by
local economic and market conditions, which are beyond the Company's control;
and additional factors as discussed in Part I of the Annual Report as filed on
Form 10-K. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The
Company undertakes no obligation to publicly release any revisions to these
forward-looking statements, which may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
RESULTS OF OPERATIONS
Since EQR's IPO and through December 31, 1997, the Company has
acquired direct or indirect interests in 412 properties (the "Acquired
Properties"), containing 118,510 units in the aggregate for a total purchase
price of approximately $6.5 billion, including the assumption of approximately
$1.5 billion of mortgage indebtedness and $0.4 billion of unsecured notes.
The Company's interest in six of the Acquired Properties at the time of
acquisition thereof consisted solely of ownership of the debt collateralized
by such Acquired Properties. The Company purchased ten of such Acquired
Properties or 2,694 units between the IPO and December 31, 1993 (the "1993
Acquired Properties"); 84 of such Acquired Properties or 26,286 units in 1994
(the "1994 Acquired Properties"); 17 of such Acquired Properties or 5,035
units in 1995 (the "1995 Acquired Properties"); 49 of such Acquired Properties
consisting of 15,665 units in 1996 (the "1996 Acquired Properties"); and 252
of such Acquired Properties consisting of 68,830 units in 1997 (the "1997
Acquired Properties"), which include the Properties acquired in connection
with the Wellsford Merger and the EWR Merger (collectively, the "Mergers").
The Acquired Properties are presented in the Consolidated and Combined
Financial Statements of the Company from the date of each acquisition or the
closing dates of the Mergers. In addition, in August 1995, the Company made
its $89 Million Mortgage Note Investment collateralized by 21 of the
Additional Properties. Also in April 1997, the Company made its $88 Million
Mortgage Note Investment
54
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
collateralized by five of the Additional Properties.
During 1995, the Company disposed of six properties containing 2,445
units (the "1995 Disposed Properties"). During 1996, the Company disposed of
five properties containing 1,254 units (the "1996 Disposed Properties").
During 1997 the Company disposed of seven properties, a portion of one
property and a vacant land parcel containing 1,336 units (the "1997 Disposed
Properties").
The Company's overall results of operations for the three years ended
December 31, 1997 have been significantly impacted by the Company's
acquisition activity. The significant changes in rental revenues, property
and maintenance expenses, real estate taxes and insurance, depreciation
expense, property management and interest expense can all primarily be
attributed to the acquisition of the Acquired Properties. The impact of the
Acquired Properties is discussed in greater detail in the following
paragraphs.
Properties that the Company owned for all of both 1997 and 1996
representing 49,805 units (the "1997 Same Store Properties") and Properties
that the Company owned for all of both 1996 and 1995 representing 45,699 units
(the "1996 Same Store Properties") also impacted the Company's results of
operations and are discussed as well in the following paragraphs.
COMPARISON OF THE YEAR ENDED DECEMBER 31, 1997 TO THE YEAR ENDED
DECEMBER 31, 1996
For the year ended December 31, 1997, income before gain on
disposition of properties, extraordinary item and allocation to Minority
Interests increased by $79 million when compared to the year ended December
31, 1996. This increase was primarily due to increases in rental revenues net
of increases in property and maintenance expenses, real estate taxes and
insurance, property management expenses, depreciation, interest expense and
general and administrative expenses. All of the increases in the various line
item accounts mentioned above can be primarily attributed to the 1997 Acquired
Properties and 1996 Acquired Properties. These increases were partially
offset by the 1997 Disposed Properties and the 1996 Disposed Properties. The
increase in interest income of $7.5 million earned on the Company's mortgage
note investments is primarily attributable to its $88 Million Mortgage Note
Investment as well as an increase in interest income earned on its $89 Million
Mortgage Note Investment.
In regard to the 1997 Same Store Properties, rental revenues increased
by approximately $11.9 million or 3.1% primarily as a result of higher rental
rates charged to new tenants and tenant renewals. Overall property operating
expenses which include property and maintenance, real estate taxes and
insurance and an allocation of property management expenses decreased
approximately $1.5 million or 0.9%. This decrease was primarily the result of
lower medical and health care insurance costs, which resulted in lower payroll
costs. In addition, the Company was also successful in reducing its costs for
leasing and advertising as well as building, maintenance and grounds costs by
consolidating its vendor services in selected submarkets in order to obtain
volume
55
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
pricing discounts and by consolidating its personnel in selected submarkets
where Properties were centrally located. With respect to the lower medical
and health care insurance costs, the Company believes this is not a
sustainable trend but only benefited the 1997 results.
Property management represents expenses associated with the management
of the Company's Properties. These expenses increased by approximately $9.3
million primarily due to the continued expansion of the Company's property
management business to facilitate the management of the Company's additional
properties. During 1997, the Company opened new management offices in
Houston, Texas; Ypsilanti, Michigan; Kansas City, Kansas; Irvine, California;
Minneapolis, Minnesota; Charlotte, North Carolina; and Louisville, Kentucky.
In addition, the Company assumed a management office in Tulsa, Oklahoma,
related to the Wellsford Merger and significantly expanded a management office
in Scottsdale, Arizona related to the EWR Merger.
Fee and asset management revenues and fee and asset management
expenses are associated with the management of properties not owned by the
Company that are managed for affiliates. These expenses decreased by $0.5
million due to the disposition of certain of these properties, resulting in
the Company no longer providing fee and asset management services to such
properties.
Interest expense, including amortization of deferred financing costs,
increased by approximately $38.3 million. This increase was primarily the
result of an increase in the Company's average indebtedness outstanding which
increased by $564.5 million, primarily due to the Wellsford Merger. However,
the Company's effective interest costs decreased from 7.87% in 1996 to 7.5% in
1997.
General and administrative expenses, which include corporate operating
expenses, increased approximately $5.2 million between the years under
comparison. This increase was primarily due to adding corporate personnel,
higher salary costs and shareholder reporting costs as well as an increase in
professional fees. General and administrative expenses as a percentage of
total revenues were 2.02% for the year ended December 31, 1997, which was a
slight decrease from 2.06% in 1996.
COMPARISON OF THE YEAR ENDED DECEMBER 31, 1996 TO THE YEAR ENDED
DECEMBER 31, 1995
For the year ended December 31, 1996, income before gain on
disposition of properties, extraordinary items and allocation to Minority
Interests increased by $37.3 million when compared to the year ended December
31, 1995. This increase was primarily due to increases in rental revenues net
of increases in property and maintenance expenses, real estate taxes and
insurance, property management expenses, depreciation, interest expense and
general and administrative expenses. All of the increases in the various line
item accounts mentioned above can be primarily attributed to the 1996 Acquired
Properties and 1995 Acquired Properties. These increases were partially
offset by the 1996 Disposed Properties and the 1995 Disposed Properties.
Interest income
56
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
earned on the Company's mortgage note investment increased by approximately $8
million and was an additional factor that impacted the year to year change.
In regard to the 1996 Same Store Properties, rental revenues increased
by approximately $15.9 million or 4.8% primarily as a result of higher rental
rates charged to new tenants and tenant renewals and higher average occupancy
levels. Overall property operating expenses which include property and
maintenance, real estate taxes and insurance and an allocation of property
management expenses increased approximately $1.7 million or 1.2%. This
increase was primarily the result of higher payroll expenses and utility
costs. For 1996 the Company also increased its per unit charge for property
level insurance which increased insurance expense by approximately $0.7
million. In addition, real estate taxes increased due to reassessments on
certain of the 1996 Same Store Properties.
Property management represents expenses associated with the management
of the Company's Properties. These expenses increased by approximately $2.3
million primarily as a result of the expansion of the Company's property
management business with the addition of a management office in Seattle,
Washington and during the third quarter of 1996 the addition of two new
management offices located in Raleigh, North Carolina and Ft. Lauderdale,
Florida. Other factors that impacted this increase were higher payroll and
travel costs and legal and professional fees.
Fee and asset management revenues and fee and asset management
expenses are associated with the management of properties not owned by the
Company that are managed for affiliates. These revenues decreased by $0.3
million primarily due to the disposition of certain of these properties.
Interest expense, including amortization of deferred financing costs,
increased by approximately $3.8 million. This increase was primarily the
result of an increase in the Company's average indebtedness outstanding which
increased by $75.8 million. However, the Company's effective interest cost
decreased from 8.09% in 1995 to 7.87% in 1996.
General and administrative expenses, which include corporate operating
expenses, increased approximately $1.7 million between the years under
comparison. This increase was primarily due to adding corporate personnel,
higher salary costs and shareholder reporting costs as well as an increase in
professional fees. General and administrative expenses as a percentage of
total revenues were 2.06% for the year ended December 31, 1996, which was a
slight decrease from 2.08% in 1995.
57
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
FOR THE YEAR ENDED DECEMBER 31, 1997
As of January 1, 1997, the Company had approximately $147.3 million of
cash and cash equivalents and $250 million available on its line of credit.
After taking into effect the various transactions discussed in the following
paragraphs, cash and cash equivalents at December 31, 1997 were approximately
$33.3 million and the amounts available on the Company's line of credit were
$265 million, of which $24.7 million is restricted. In addition, the Company
had $6.6 million of proceeds from a property sale included in
deposits-restricted. The following discussion also explains the changes in
net cash provided by operating activities, net cash (used for) investing
activities and net cash provided by financing activities, all of which are
presented in the Company's Consolidated Statements of Cash Flows.
Part of the Company's strategy in funding the purchase of multifamily
properties, excluding those Properties acquired through the Mergers, is to
utilize its line of credit and to subsequently repay the line of credit from
the issuance of additional equity or debt securities. Continuing to employ
this strategy, during 1997 the Company and/or the Operating Partnership: (i)
issued a total of approximately 11.9 million Common Shares through various
offerings, other than issuances in connection with the acquisitions of
Properties and received total net proceeds of approximately $536.8 million,
(ii) completed the offerings of the Series D Preferred Shares and the Series G
Preferred Shares and received net proceeds of approximately $473.1 million and
(iii) issued the 2017 Notes, the 2001 Notes and the 2003 Notes and received
net proceeds of approximately $345.9 million. All of these proceeds have been
or will be utilized to purchase additional properties and/or repay the line of
credit and mortgage indebtedness on certain Properties.
With respect to Property acquisitions during the year, including the
effects of the Mergers, the Company purchased 252 Properties containing 68,830
units for a total purchase price of approximately $4.1 billion, including the
issuances of 25.1 million Common Shares, the assumption of EWR's minority
interest with a market value of approximately $107.3 million, the liquidation
value of $157.5 million for the Series E Preferred Shares and Series F
Preferred Shares, the assumption of mortgage indebtedness and unsecured notes
of approximately $1.3 billion and issuance of OP Units with a value of
approximately $5.3 million. The cash portion of these acquisitions were
primarily funded from amounts drawn on the Company's line of credit and
proceeds received in connection with the transactions mentioned in the
previous paragraph.
During the year ended December 31, 1997, the Company also disposed of
seven properties, a portion of one Property and a vacant land parcel which
generated net proceeds of approximately $35.8 million. Proceeds from the
dispositions were ultimately applied to purchase additional Properties.
As of December 31, 1997, the Company had total indebtedness of
approximately $2.9 billion, which included mortgage indebtedness of $1.6
billion (including premiums of $3.9
58
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
million), of which $723 million represented tax exempt bond indebtedness, and
unsecured debt of $1.4 billion (including net discounts and premiums in the
amount of $5.7 million). During the year, the Company repaid an aggregate of
$113.4 million of mortgage indebtedness on 29 of its Properties. In addition,
the Floating Rate Notes were repaid at maturity on December 22, 1997. These
repayments were funded from the Company's line of credit or from proceeds
received from the various capital transactions mentioned in previous
paragraphs.
The Company has, from time to time, entered into interest rate
protection agreements (financial instruments) to reduce the potential impact
of increases in interest rates but believes it has limited exposure to the
extent of non-performance by the counterparties of each protection agreement
since each counterparty is a major U.S. financial institution, and the Company
does not anticipate their non-performance. No such financial instrument has
been used for trading purposes. In February 1996, the Company entered into
two interest rate protection agreements that were intended to hedge the
Company's interest rate risk at maturity of $175 million of indebtedness. The
first agreement hedged the interest rate risk of $50 million of mortgage loans
scheduled to mature in September 1997 by locking the five year Treasury Rate,
commencing October 1, 1997. This agreement was cancelled in July 1997, at no
cost to the Company, in conjunction with a new interest rate agreement
discussed below. The second agreement hedged the interest rate risk of the
Operating Partnership's 1999 Notes by locking the effective four year Treasury
Rate commencing May 15, 1999. There was no current cost to the Company for
entering into these agreements. In July 1997, the Company entered into two
interest rate protection agreements to effectively fix the interest rate cost
of the Company's 2001 Notes and 2003 Notes. One agreement was for a notional
amount of $100 million with a locked in treasury rate at 6.134%. The second
agreement was for a notional amount of $75 million with a locked in treasury
rate of 6.287%. The fair value of these instruments as of December 31, 1997
approximates their carrying or contract values.
The Company has a policy of capitalizing expenditures made for new
assets, including newly acquired properties and the costs associated with
placing these assets into service. Expenditures for improvements and
renovations that significantly enhance the value of existing assets or
substantially extend the useful life of an asset are also capitalized.
Capital spent for replacement-type items such as appliances, draperies,
carpeting and floor coverings, mechanical equipment and certain furniture and
fixtures is also capitalized. Expenditures for ordinary maintenance and
repairs are expensed to operations as incurred. With respect to acquired
properties, the Company has determined that it generally spends $1,000 per
unit during its first three years of ownership to fully improve and enhance
these properties to meet the Company's standards. In regard to
replacement-type items described above, the Company generally expects to spend
$300 per unit on an annual recurring basis.
During the year ended December 31, 1997, total capital expenditures
for the Company approximated $60 million. Of this amount, approximately $9.5
million related to capital improvements and major repairs for certain of the
1995, 1996 and 1997 Acquired Properties.
59
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
Capital improvements and major repairs for all of the Company's pre- EQR IPO
properties and certain Acquired Properties approximated $19.4 million, or $217
per unit. Capital spent for replacement-type items approximated $21.4
million, or $239 per unit, which is in line with the Company's expected annual
recurring per unit cost. Also included in total capital expenditures was
approximately $9.7 million expended for non-real estate additions such as
computer software, computer equipment, furniture and fixtures and leasehold
improvements for the Company's property management offices and its corporate
headquarters. Such capital expenditures were primarily funded from working
capital reserves and from net cash provided by operating activities. Total
capital expenditures for 1998 are budgeted to be approximately $94.5 million,
which includes approximately $29.7 million related to capital improvements and
major repairs for certain of the 1995, 1996 and 1997 Acquired Properties.
Minority Interests as of December 31, 1997 increased by $122.8 million
when compared to December 31, 1996. The primary factors that impacted this
account during the year were the assumption of the EWR minority interest
having a market value of $107.3 million, distributions declared to Minority
Interests, which amounted to $19.1 million for the year, the allocation of its
income from operations in the amount of $13.3 million, the conversion of OP
Units into Common Shares and issuances of Common Shares during the year.
Total distributions paid in 1997 amounted to $292.1 million, which
included the distributions declared in the fourth quarter of 1996. The fourth
quarter of 1997 distributions to Common Shares holders and Minority Interests
were paid on December 30, 1997. On March 2, 1998, the Company declared a
$0.67 distribution per Common Share, $0.585938 per Series A Preferred Share,
$0.570313 per Series B Depositary Share and Series C Depositary Share,
$0.5375 per Series D Depositary Share, $0.603125 per Series F Preferred Share
and a $0.453125 per Series G Depositary Share payable to shareholders of
record on March 27, 1998. The Common Share distributions will be paid on April
10, 1998 and the Preferred and Depositary Share distributions will be paid on
April 15, 1998. Also on March 2, 1998, the Company declared a $0.4375 per
Series E Preferred Share payable to shareholders of record on March 13, 1998.
This Preferred Share distribution will be paid on April 1, 1998.
Subsequent to December 31, 1997 and through March 12, 1998, the
Company acquired 12 additional properties representing 2,539 units for a total
purchase price of approximately $158.2 million, including the assumption of
approximately $50.8 million of mortgage indebtedness. These acquisitions were
funded from proceeds of the January 1998 Common Share Offering. The Company
is actively seeking to acquire additional multifamily properties with physical
and market characteristics similar to the Properties. During the remainder of
1998, the Company expects to acquire between 10,000 to 15,000 multifamily
units. However, there is no assurance that this level of property
acquisitions can be achieved.
In January 1998, the Company received proceeds of approximately $195.3
million from the January 1998 Common Share Offering. These proceeds were
utilized to repay a portion on
60
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
the line of credit, to purchase additional properties and/or repay mortgage
indebtedness on one Property.
In February 1998, the Company received net proceeds of approximately
$95 million from the February 1998 Common Share Offerings. These net proceeds
were utilized to repay the remaining balance outstanding on the line of credit
and to purchase additional properties.
Through February 1998, the Company sold approximately 639,000 Common
Shares pursuant to the DRIP Plan and raised proceeds of approximately $31.7
million.
The Company anticipates that it may continue to sell certain
Properties in the portfolio and may sell up to 2,500 multifamily units during
1998. However, there is no assurance that this level of property dispositions
may be achieved.
In March 1998, the Company disposed of two Properties for a total
sales price of $16.7 million. These proceeds will be utilized to purchase
additional Properties.
The Company expects to meet its short-term liquidity requirements,
including capital expenditures relating to maintaining its existing
Properties, generally through its working capital, net cash provided by
operating activities and borrowings under its line of credit. The Company
considers its cash provided by operating activities to be adequate to meet
operating requirements and payments of distributions. The Company also
expects to meet its long-term liquidity requirements, such as scheduled
mortgage debt maturities, reduction of outstanding amounts under its line of
credit, property acquisitions, financing of construction and development
activities and capital improvements through the issuance of unsecured notes
and equity securities including additional OP Units as well as from
undistributed FFO and proceeds received from the disposition of certain
Properties. In addition, the Company has certain uncollateralized Properties
available for additional mortgage borrowings in the event that the public
capital markets are unavailable to the Company or the cost of alternative
sources of capital to the Company is too high.
In November 1996, the Company reached an agreement with Morgan
Guaranty and Bank of America to provide the Operating Partnership, with a new
credit facility with potential borrowings of up to $250 million. In September
1997, this agreement was amended whereby the potential borrowings were
increased to $500 million. This line of credit matures in November 1999 and
will continue to be used for property acquisitions and for any working capital
needs. As of March 13, 1998, no amounts were outstanding under this facility.
In connection with the Wellsford Merger, the Company has provided a
standby obligation in the amount of $30 million pursuant to an agreement
entered into with Wellsford Real Properties, Inc., a Maryland corporation
("WRP"), for the construction financing for a multifamily development project
located in Denver, Colorado. In addition, the Company has
61
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
provided a $14.8 million credit enhancement with respect to bonds issued to
finance certain public improvements at the multifamily development project.
In December 1997, the Company entered into a joint venture agreement
with a multifamily residential real estate developer whereby the Company will
make investments in a limited partnership to fund its portion of the project
cost. As of December 31, 1997, the Company funded approximately $6.9 million
in connection with this agreement. In addition, the Company also funded $20
million to guarantee third party construction financing and will be obligated
to fund an additional $20 million in 1998. Subsequent to December 31, 1997,
the Company has also funded approximately $9.9 million and anticipates to fund
up to an additional $85 million in 1998.
The Company has conducted a review of its computer operating systems
and has identified those areas that could be affected by the "Year 2000" issue
and has developed a plan to resolve this issue. The Company believes that by
modifying certain existing hardware and software and, in other cases,
converting to new application systems, the Year 2000 problem can be resolved
without significant operational difficulties. The Company has initiated
formal communications with all of its significant suppliers to determine the
extent to which the Company's interface systems are vulnerable to those third
parties' failure to remediate their own year 2000 issues. The Company has
also identified the cost of the Year 2000 issue and does not expect the
financial impact to be material to the Company's results of operations or
financial position.
FOR THE YEAR ENDED DECEMBER 31, 1996
As of January 1, 1996, the Company had approximately $13.4 million of
cash and cash equivalents and $158 million available on its line of credit.
After taking into effect the various transactions discussed in the following
paragraphs, cash and cash equivalents at December 31, 1996 were approximately
$147.3 million and the amounts available on the Company's line of credit were
$250 million. In addition, the Company had $3.6 million of proceeds from a
property sale included in deposits-restricted. The following discussion also
explains the changes in net cash provided by operating activities, net cash
(used for) investing activities and net cash provided by financing activities,
all of which are presented in the Company's Consolidated Statements of Cash
Flows.
During 1996 the Company and/or the Operating Partnership: (i) issued
a total of approximately 14.4 million Common Shares through various offerings
and received total net proceeds of $483 million, (ii) completed the offering
of the Series C Preferred Shares and received net proceeds of $111.4 million,
(iii) issued the 2026 Notes and received net proceeds of $149 million and (iv)
refinanced certain of its tax-exempt bonds in two separate transactions for a
total of $112.2 million of net proceeds. All of these proceeds were utilized
to purchase additional properties and/or repay the line of credit and mortgage
indebtedness on certain
62
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
Properties.
With respect to Property acquisitions during 1996, the Company
purchased 49 Properties containing 15,665 units for a total acquisition cost
of $778.2 million, which included the assumption of $142.2 million of mortgage
indebtedness, the forgiveness of debt of $2.7 million and the issuance of OP
Units having a value of approximately $0.4 million. These acquisitions were
primarily funded from amounts drawn on the Company's line of credit and a
portion of the proceeds received in connection with the transactions mentioned
in the previous paragraph.
During the year ended December 31, 1996, the Company also disposed of
five properties which generated net proceeds of approximately $40 million.
Proceeds from the dispositions were ultimately applied to purchase additional
Properties.
As of December 31, 1996, the Company had total indebtedness of
approximately $1.3 billion, which included mortgage indebtedness of $755.4
million, of which $274 million represented tax exempt bond indebtedness, and
unsecured debt of $498.8 million (net of a $1.2 million discount). During the
year, the Company repaid an aggregate of $57 million of mortgage indebtedness
on eight of its Properties. These repayments were funded from the Company's
line of credit or from proceeds received from the various capital transactions
mentioned in previous paragraphs.
During the year ended December 31, 1996, total capital expenditures
for the Company approximated $45.9 million. Of this amount, approximately
$10.6 million related to capital improvements and major repairs for certain of
the 1994, 1995 and 1996 Acquired Properties. Capital improvements and major
repairs for all of the Company's pre-EQR IPO properties and certain Acquired
Properties approximated $13.8 million, or $232 per unit. Capital spent for
replacement-type items approximated $16.3 million, or $276 per unit, which is
in line with the Company's expected annual recurring per unit cost. In regard
to capital spent for upgrades at certain properties and tenant improvements
with respect to the retail and commercial office space at one Property, the
amount was approximately $2.9 million. Also included in total capital
expenditures was approximately $2.3 million expended for non-real estate
additions such as computer software, computer equipment, furniture and
fixtures and leasehold improvements for the Company's management offices and
its corporate headquarters. Such capital expenditures were primarily funded
from working capital reserves and from net cash provided by operating
activities.
Minority Interests as of December 31, 1996 decreased by $18.3 million
when compared to December 31, 1995. The primary factors that impacted this
account during the year were distributions declared to Minority Interests,
which amounted to $20.5 million for the year, the allocation of its income
from operations in the amount of $14.3 million, the conversion of OP Units
into Common Shares and issuances of Common Shares during the year.
63
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
FUNDS FROM OPERATIONS
Commencing in 1996, the Company implemented the new definition of FFO
adopted by the Board of Governors of NAREIT in March 1995. The new definition
primarily eliminates the amortization of deferring financing costs and
depreciation of non-real estate assets as items added back to net income when
calculating FFO.
The Company generally considers FFO to be one measure of the
performance of real estate companies including an equity REIT. The resolution
adopted by the Board of Governors of NAREIT defines FFO as net income (loss)
(computed in accordance with GAAP), excluding gains (or losses) from debt
restructuring and sales of property, plus depreciation on real estate assets,
and after adjustments for unconsolidated partnerships and joint ventures.
Adjustments for unconsolidated partnerships and joint ventures are calculated
to reflect FFO on the same basis. The Company believes that FFO is helpful to
investors as a measure of the performance of an equity REIT because, along
with cash flows from operating activities, financing activities and investing
activities, it provides investors an understanding of the ability of the
Company to incur and service debt and to make capital expenditures. FFO in
and of itself does not represent cash generated from operating activities in
accordance with GAAP and therefore should not be considered an alternative to
net income as an indication of the Company's performance or to net cash flows
from operating activities as determined by GAAP as a measure of liquidity and
is not necessarily indicative of cash available to fund cash needs. The
Company's calculation of FFO represents net income available to Common Shares,
excluding gains on dispositions of properties, gains on early extinguishment
of debt, and write-off of unamortized costs on refinanced debt, plus
depreciation on real estate assets, income allocated to Minority Interests and
amortization of deferred financing costs related to the Predecessor Business.
The Company's calculation of FFO may differ from the methodology for
calculating FFO utilized by other REITs and, accordingly, may not be
comparable to such other REITs.
For the year ended December 31, 1997, FFO increased $110.5 million
representing a 69% increase when compared to the year ended December 31, 1996.
For the year ended December 31, 1996, FFO increased by $39.3 million
representing a 32.5% increase when compared to the year ended December 31,
1995.
64
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
The following is a reconciliation of net income available to Common
Shares to FFO available to Common Shares and OP Units for the years ended
December 31, 1997, 1996 and 1995:
<TABLE>
<CAPTION>
(Amount in thousands)
Year Year Year
Ended Ended Ended
12/31/97 12/31/96 12/31/95
--------- --------- ---------
<S> <C> <C> <C>
Net income available to Common Shares $ 117,580 $ 72,609 $ 57,610
Adjustments:
Income allocated to Minority Interests 13,260 14,299 15,636
Depreciation on real estate assets 153,526 91,174 70,581
Amortization of deferred financing
costs related to predecessor business 235 1,075 755
Write-off of unamortized costs on
refinanced debt (0) 3,512 (0)
Gain on early extinguishment of debt (0) (0) (2,000)
Gain on disposition of properties (13,838) (22,402) (21,617)
--------- --------- ---------
FFO available to Common Shares and
OP Units $ 270,763 $ 160,267 $ 120,965
========= ========= =========
</TABLE>
65
<PAGE>
PART II
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Index to Consolidated Financial Statements on page F-1 of this Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
On March 7, 1996, the Company filed a Current Report on Form 8-K, as
amended, reporting the dismissal of Grant Thornton L.L.P. as its independent
public accountants that is incorporated herein by reference.
66
<PAGE>
PART III
ITEMS 10, 11, 12 AND 13.
TRUSTEES AND EXECUTIVE OFFICERS OF THE REGISTRANT, EXECUTIVE COMPENSATION,
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND CERTAIN
RELATIONSHIP AND RELATED TRANSACTIONS.
The information required by Item 10, Item 11, Item 12 and Item 13 are
incorporated by reference to, and will be contained in, the Company's
definitive proxy statement, which the Company anticipates will be filed no
later than April 29, 1998, and thus these items have been omitted in
accordance with General Instruction G(3) to Form 10-K.
67
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
(a)
(1 & 2) See Index to Financial Statements and Schedules on page F-1
of this Form 10-K.
(3) Exhibits:
2.1++++ Agreement and Plan of Merger by and between Equity Residential
Properties Trust and Wellsford Residential Property Trust dated as
of January 16, 1997
2.2# Articles of Merger by and between Equity Residential Properties
Trust and Wellsford Residential Property Trust
2.3## Agreement and Plan of Merger by and between Equity Residential
Properties Trust and Evans Withycombe Residential, Inc. dated as of
August 27, 1997
2.4### Articles of Merger by and between Equity Residential Properties
Trust and Evans Withycombe Residential, Inc.
3.1+++ Second Amended and Restated Declaration of Trust of Equity
Residential Properties Trust dated May 30, 1997
3.2+++ Second Amended and Restated Bylaws of Equity Residential Properties
Trust
4.1** Indenture, dated as of May 16, 1994, by and among the Operating
Partnership, as obligor, the Company, as guarantor and The First
National Bank of Chicago, as trustee in connection with 8 1/2% senior
notes due May 15, 1999
4.2** Indenture, dated October 1, 1994, between the Operating Partnership,
as obligor and The First National Bank of Chicago, as trustee in
connection with up to $500 million of debt securities
10.1*** Fourth Amended and Restated Agreement of Limited Partnership of ERP
Operating Limited Partnership
10.2* Agreement of Limited Partnership of Equity Residential Properties
Management Limited Partnership
10.3**** Agreement of Limited Partnership of Equity Residential Properties
Management Limited Partnership II
10.4* Noncompetition Agreement (Zell)
10.5* Noncompetition Agreement (Crocker)
10.6* Noncompetition Agreement (Spector)
10.7* Form of Noncompetition Agreement (other officers)
10.8* Services Agreement between Equity Residential Properties Trust and
Equity Group Investments, Inc.
10.9* Form of Property Management Agreement (REIT properties)
10.10** Form of Property Management Agreement (Non-REIT properties)
10.11+ Amended and Restated Master Reimbursement Agreement, dated as of
November 1, 1996 by and between Federal National Mortgage
Association and EQR-Bond Partnership
10.12++ Second Amended and Restated Revolving Credit Agreement, dated as of
September 9, 1997 among the Operating Partnership and Morgan
Guaranty Trust Company of New York, as lead agent, Bank of America
National Trust and Savings Association, as co-lead agent, The First
National Bank of Chicago, as co-agent, U.S. Bank National
Association f/k/a and d/b/a First Bank National Association, as
co-agent and NationsBank of Texas, N.A., as co-agent
68
<PAGE>
PART IV
and NationsBank of Texas, N.A., as co-agent
10.13#### Consulting Agreement dated August 27, 1997 between Equity
Residential Properties Management Limited Partnership and Stephen O.
Evans
10.14#### Employment Agreement dated August 27, 1997 between Equity
Residential Properties Management Limited Partnership and Richard G.
Berry
10.15 Amendment No. 1 to Amended and Restated Agreement of Limited
Partnership of Evans Withycombe Residential, L.P.
12 Computation of Ratio of Earnings to Fixed Charges
21 List of Subsidiaries of Equity Residential Properties Trust
23.1 Consent of Grant Thornton L.L.P.
23.2 Consent of Ernst & Young LLP.
24.1 Power of Attorney for John W. Alexander dated March 2, 1998
24.2 Power of Attorney for James D. Harper, Jr. dated March 2, 1998
24.3 Power of Attorney for Errol R. Halperin dated March 2, 1998
24.4 Power of Attorney for B. Joseph White dated March 2, 1998
24.5 Power of Attorney for Barry S. Sternlicht dated March 4, 1998
24.6 Power of Attorney for Henry H. Goldberg dated March 2, 1998
24.7 Power of Attorney for Edward Lowenthal dated March 2, 1998
24.8 Power of Attorney for Jeffrey H. Lynford dated March 2, 1998
24.9 Power of Attorney for Stephen O. Evans dated March 2, 1998
- -----------------------
* Included as an exhibit to the Company's Form S-11 Registration
Statement, File No. 33-63158, and incorporated herein by reference.
** Included as an exhibit to the Operating Partnership's Form 10/A, dated
December 12, 1994, File No. 0-24920, and incorporated herein by
reference.
*** Included as an exhibit to the Operating Partnership's Form 10-Q for
the quarter ended September 30, 1995, dated November 7, 1995, and
incorporated herein by reference.
**** Included as an exhibit to the Company's Form 10-K for the year ended
December 31, 1994.
+ Included as an exhibit to the Company's Form 10-K for the year ended
December 31, 1996.
++ Included as an exhibit to the Company's Form 8-K dated September 10,
1997, filed on September 10, 1997.
+++ Included as an exhibit to the Company's Form 8-K dated May 30, 1997,
filed on June 5, 1997.
++++ Included as an exhibit to the Company's Form 8-K dated January 16,
1997, filed on January 17, 1997.
# Included as Appendix B in the Company's Form S-4 filed on April 29,
1997.
## Included as an exhibit to the Company's Form 8-K dated August 27,
1997, filed on August 29, 1997.
### Included as Appendix B in the Company's Form S-4 filed on September
18, 1997.
#### Included as an exhibit to the Company's Form S-4 filed on September
18, 1997.
(b) Reports on Form 8-K:
A Report on Form 8-K dated October 9, 1997, reporting information for property
acquisitions.
A Report on Form 8-K/A dated October 9, 1997, reporting information for
property acquisitions.
(c) Exhibits:
See Item 14(a)(3) above.
(d) Financial Statement Schedules:
See Index to Financial Statements attached hereto on page F-1 of this
Form 10-K.
69
<PAGE>
PART IV
SIGNATURES
----------
Pursuant to the requirements of the Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on behalf by the undersigned thereunto duly authorized.
EQUITY RESIDENTIAL PROPERTIES TRUST
Date: March 13, 1998 By: /s/ Douglas Crocker II
-------------- -------------------------------------------
Douglas Crocker II
President, Chief Executive Officer,
Trustee and *Attorney-in-Fact
Date: March 13, 1998 By: /s/ David J. Neithercut
-------------- -------------------------------------------
David J. Neithercut
Executive Vice-President and
Chief Financial Officer
Date: March 13, 1998 By: /s/ Michael J. McHugh
-------------- -------------------------------------------
Michael J. McHugh
Executive Vice-President, Chief Accounting
Officer, Treasurer and *Attorney-in-fact
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.
Date: March 13, 1998 By: /s/ Samuel Zell
-------------- -------------------------------------------
Samuel Zell
Chairman of the Board of Trustees
Date: March 13, 1998 By: /s/ Gerald A. Spector
-------------- -------------------------------------------
Gerald A. Spector
Executive Vice-President, Chief
Operating Officer and Trustee
Date: March 13, 1998 By: /s/ Sheli Z. Rosenberg
-------------- -------------------------------------------
Sheli Z. Rosenberg
Trustee
70
<PAGE>
PART IV
SIGNATURES-CONTINUED
--------------------
Date: March 13, 1998 By: /s/ James D. Harper
-------------- -------------------------------------------
James D. Harper
Trustee
Date: March 13, 1998 By: /s/ Errol R. Halperin
-------------- -------------------------------------------
Errol R. Halperin
Trustee
Date: March 13, 1998 By: /s/ Barry S. Sternlicht
-------------- -------------------------------------------
Barry S. Sternlicht
Trustee
Date: March 13, 1998 By: /s/ John W. Alexander
-------------- -------------------------------------------
John W. Alexander
Trustee
Date: March 13, 1998 By: /s/ B. Joseph White
-------------- -------------------------------------------
B. Joseph White
Trustee
Date: March 13, 1998 By: /s/ Henry H. Goldberg
-------------- -------------------------------------------
Henry H. Goldberg
Trustee
Date: March 13, 1998 By: /s/ Jeffrey H. Lynford
-------------- -------------------------------------------
Jeffrey H. Lynford
Trustee
Date: March 13 1998 By: /s/ Edward Lowenthal
-------------- -------------------------------------------
Edward Lowenthal
Trustee
Date: March 13, 1998 By: /s/ Stephen O. Evans
-------------- -------------------------------------------
Stephen O. Evans
Trustee
71
<PAGE>
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
EQUITY RESIDENTIAL PROPERTIES TRUST
PAGE
FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT
Report of Independent Auditors F-2
Report of Independent Accountants F-3
Consolidated Balance Sheets as of
December 31, 1997 and 1996 F-4 to F-5
Consolidated Statements of Operations for
the years ended December 31, 1997, 1996 and 1995 F-6
Consolidated Statements of Cash Flows for
the years ended December 31, 1997, 1996 and 1995 F-7 to F-8
Consolidated Statements of Changes in Shareholders' Equity
for the years ended December 31, 1997, 1996 and 1995 F-9
Notes to Consolidated Financial Statements F-10 to F-49
SCHEDULE FILED AS PART OF THIS REPORT
Report of Independent Accountants S-1
Schedule III - Real Estate and Accumulated Depreciation S-2 to S-12
F-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Trustees and Shareholders
Equity Residential Properties Trust
We have audited the accompanying consolidated balance sheets of Equity
Residential Properties Trust (the "Company") as of December 31, 1997 and 1996
and the related consolidated statements of operations, changes in
shareholders' equity and cash flows for the years then ended. Our audits also
included the financial statement schedule listed in the Index at Item 14(a).
These financial statements and schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit 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 management, 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 consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Equity Residential Properties Trust at December 31, 1997 and 1996, and the
consolidated results of its operations and its cash flows for the years then
ended, in conformity with generally accepted accounting principles. Also, in
our opinion, the related financial statement schedule, when considered in
relation to the basic financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.
/s/ Ernst & Young LLP
-----------------
ERNST & YOUNG LLP
Chicago, Illinois
February 26, 1998
except for Note 24, as to which the date is
March 12, 1998
F-2
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees
Equity Residential Properties Trust
We have audited the accompanying consolidated statements of operations, changes
in shareholders' equity and cash flows for the year ended December 31, 1995
of Equity Residential Properties Trust. These financial statements are the
responsibility of management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit 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 management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated results of its operations and its cash
flows of Equity Residential Properties Trust for the year ended December 31,
1995, in conformity with generally accepted accounting principles.
/s/ GRANT THORNTON LLP
GRANT THORNTON LLP
Chicago, Illinois
February 14, 1996
F-3
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS EXCEPT FOR SHARE AMOUNTS)
<TABLE>
<CAPTION>
December 31, December 31,
1997 1996
ASSETS ------------- -------------
<S> <C> <C>
Investment in real estate
Land $ 791,980 $ 284,879
Depreciable property 6,293,415 2,698,631
Construction in progress 36,040 -
------------- -------------
7,121,435 2,983,510
Accumulated depreciation (444,762) (301,512)
------------- -------------
Investment in real estate, net of
accumulated depreciation 6,676,673 2,681,998
Cash and cash equivalents 33,295 147,271
Investment in mortgage notes, net 176,063 86,596
Rents receivable 3,302 1,450
Deposits - restricted 36,374 20,637
Escrow deposits - mortgage 44,864 15,434
Deferred financing costs, net 23,092 14,555
Other assets 100,968 18,186
------------- -------------
TOTAL ASSETS $ 7,094,631 $ 2,986,127
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $ 1,582,559 $ 755,434
Notes, net 1,130,764 498,840
Line of credit 235,000 -
Accounts payable and accrued expenses 67,699 33,117
Accrued interest payable 28,048 12,737
Rents received in advance and
other liabilities 38,750 16,466
Security deposits 28,193 14,128
Distributions payable 20,223 45,938
------------- -------------
TOTAL LIABILITIES 3,131,236 1,376,660
------------- -------------
Commitments and contingencies
Minority Interests 273,404 150,637
------------- -------------
</TABLE>
See accompanying notes.
F-4
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(AMOUNTS IN THOUSANDS EXCEPT FOR SHARE AMOUNTS)
<TABLE>
<CAPTION>
December 31, December 31,
1997 1996
------------ ------------
<S> <C> <C>
Shareholders' equity:
Preferred Shares of beneficial interest, $.01 par value;
100,000,000 shares authorized:
9 3/8% Series A Cumulative Redeemable Preferred
Shares of Beneficial Interest, liquidation preference
$25 per share, 6,120,000 shares issued and outstanding 153,000 153,000
9 1/8% Series B Cumulative Redeemable Preferred
Shares of Beneficial Interest, liquidation preference
$250 per share, 500,000 shares issued and outstanding 125,000 125,000
9 1/8% Series C Cumulative Redeemable Preferred
Shares of Beneficial Interest, liquidation preference
$250 per share, 460,000 shares issued and outstanding 115,000 115,000
8.60% Series D Cumulative Redeemable Preferred
Shares of Beneficial Interest, liquidation preference
$250 per share, 700,000 shares issued and outstanding 175,000 -
Series E Cumulative Convertible Preferred
Shares of Beneficial Interest, liquidation preference
$25 per share, 3,998,500 shares issued and outstanding 99,963 -
9.65% Series F Cumulative Redeemable Preferred
Shares of Beneficial Interest, liquidation preference
$25 per share, 2,300,000 shares issued and outstanding 57,500 -
7 1/4% Series G Convertible Cumulative Preferred
Shares of Beneficial Interest, liquidation preference
$250 per share, 1,265,000 shares issued and outstanding 316,250 -
Common Shares of beneficial interest, $.01 par value,
200,000,000 shares authorized, 89,085,265 shares issued
and outstanding as of December 31, 1997 and 51,154,836
shares issued and outstanding as of December 31, 1996 891 512
Paid in capital 2,785,661 1,147,214
Employee notes (5,145) (5,255)
Distributions in excess of accumulated earnings (133,129) (76,641)
----------- -----------
Total shareholders' equity 3,689,991 1,458,830
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 7,094,631 $ 2,986,127
=========== ===========
</TABLE>
See accompanying notes.
F-5
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS EXCEPT FOR PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------
1997 1996 1995
---------------------------------------
<S> <C> <C> <C>
REVENUES
Rental income $ 707,733 $ 454,412 $ 373,919
Fee and asset management 5,697 6,749 7,030
Interest income - investment in mortgage notes 20,366 12,819 4,862
Interest and other income 13,525 4,405 4,573
----------- ----------- -----------
Total revenues 747,321 478,385 390,384
----------- ----------- -----------
EXPENSES
Property and maintenance 176,075 127,172 112,186
Real estate taxes and insurance 69,520 44,128 37,002
Property management 26,793 17,512 15,213
Fee and asset management 3,364 3,837 3,887
Depreciation 156,644 93,253 72,410
Interest:
Expense incurred 121,324 81,351 78,375
Amortization of deferred financing costs 2,523 4,242 3,444
General and administrative 15,064 9,857 8,129
----------- ----------- -----------
Total expenses 571,307 381,352 330,646
----------- ----------- -----------
Income before gain on disposition of properties,
extraordinary items and allocation to Minority
Interests 176,014 97,033 59,738
Gain on disposition of properties 13,838 22,402 21,617
----------- ----------- -----------
Income before extraordinary items and allocation
to Minority Interests 189,852 119,435 81,355
Write-off of unamortized costs on refinanced debt - (3,512) -
Gain on early extinguishment of debt - - 2,000
----------- ----------- -----------
Income before allocation to Minority Interests 189,852 115,923 83,355
Income allocated to Minority Interests (13,260) (14,299) (15,636)
----------- ----------- -----------
Net income 176,592 101,624 67,719
Preferred distributions (59,012) (29,015) (10,109)
----------- ----------- -----------
Net income available to Common Shares $ 117,580 $ 72,609 $ 57,610
=========== =========== ===========
Weighted average Common Shares outstanding 65,729 42,586 34,358
=========== =========== ===========
Distributions declared per Common Share
outstanding $ 2.55 $ 2.40 $ 2.18
=========== =========== ===========
Tax treatment of distributions (unaudited)
Ordinary income $ 2.24 $ 1.88 $ 1.70
=========== =========== ===========
Return of Capital $ 0.26 $ 0.43 $ 0.48
=========== =========== ===========
Long-Term Capital Gain $ 0.05 $ 0.09 $ -
=========== =========== ===========
Net income per weighted average Common Share
outstanding $ 1.79 $ 1.70 $ 1.68
=========== =========== ===========
Net income per weighted average Common Share
outstanding - assuming dilution $ 1.76 $ 1.69 $ 1.67
=========== =========== ===========
</TABLE>
See accompanying notes.
F-6
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------
1997 1996 1995
----------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 176,592 $ 101,624 $ 67,719
Adjustments to reconcile net income to net cash provided by
operating activities:
Income allocated to Minority Interests 13,260 14,299 15,636
Depreciation 156,644 93,253 72,410
Amortization of deferred financing costs (including
discounts and premiums on debt) 2,170 4,558 3,717
Amortization of discount on investment in mortgage notes (3,100) (613) -
Gain on disposition of properties (13,838) (22,402) (21,617)
Write-off of unamortized costs on refinanced debt - 3,512 -
Gain on early extinguishment of debt - - (2,000)
Changes in assets and liabilities:
(Increase) in rents receivable (1,373) (409) (259)
(Increase) in deposits - restricted (23,183) (556) (218)
(Increase) decrease in other assets (20,608) 158 1,913
Increase in accounts payable and accrued expenses 20,235 9,901 3,765
Increase in accrued interest payable 12,224 4,383 2,616
Increase (decrease) in rents received in advance and
other liabilities 12,112 3,222 (2,148)
----------- ----------- ----------
Net cash provided by operating activities 331,135 210,930 141,534
----------- ----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in real estate, net (1,190,380) (641,015) (239,964)
Improvements to real estate (50,246) (33,001) (32,800)
Additions to non-real estate (9,754) (2,347) (3,669)
Proceeds from disposition of real estate, net 35,758 40,093 46,426
Purchase of management contract rights (5,000) - -
(Increase) decrease in mortgage deposits (25,521) 1,311 (1,299)
Deposits (made) on real estate acquisitions (8,815) (16,916) (15,107)
Deposits applied on real estate acquisitions 16,761 15,107 5,200
(Increase) decrease in investment in mortgage notes (86,367) 1,171 (87,154)
EWR Merger costs and related activities (114,654) - -
Wellsford Merger costs and related activities (62,254) - -
Other investing activities, net (42,852) (58) 4,349
----------- ----------- ----------
Net cash (used for) investing activities (1,543,324) (635,655) (324,018)
----------- ----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of Common Shares 540,010 489,139 -
Proceeds from sale of Preferred Shares 491,250 115,000 278,000
Proceeds from exercise of options 4,999 4,028 2,664
Proceeds from sale of 2002 Notes, net of discount - - 124,011
Proceeds from sale of 2026 Notes - 150,000 -
Proceeds from sale of 2001Notes, net of discount 149,684 - -
Proceeds from sale of 2003 Notes, net of discount 49,916 - -
Proceeds from sale of 2017 Notes, net of discount 148,703 - -
Principal repayment on the Floating Rate Notes (100,000) - -
Redemption of Preference Units - (1,083) (1,352)
Payment of offering costs (22,470) (10,415) (10,353)
Distributions to Common Share and Preferred Share owners (267,253) (121,860) (77,081)
Distributions to Minority Interests (24,829) (20,444) (18,794)
Principal receipts on employee notes 269 76 143
Proceeds from restructuring of tax-exempt bond investments 9,350 112,209 -
Proceeds from line of credit 442,500 250,000 317,000
Repayments on line of credit (207,500) (342,000) (387,000)
Principal payments on mortgage notes payable (120,546) (60,706) (47,787)
Deferred financing costs (10,799) (9,111) (4,558)
Increase in security deposits 7,819 3,735 948
Other financing activities 7,110 - 33
----------- ----------- ----------
Net cash provided by financing activities 1,098,213 558,568 175,874
----------- ----------- ----------
Net (decrease) increase in cash and cash equivalents (113,976) 133,843 (6,610)
Cash and cash equivalents, beginning of year 147,271 13,428 20,038
----------- ----------- ----------
Cash and cash equivalents, end of year $ 33,295 $ 147,271 $ 13,428
=========== =========== ==========
</TABLE>
See accompanying notes.
F-7
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------
1997 1996 1995
-----------------------------------------
<S> <C> <C> <C>
Supplemental information:
Cash paid during the period for interest $ 109,100 $ 76,968 $ 75,759
=========== ========== ==========
Mortgage loans assumed through Mergers $ 333,966 $ - $ -
=========== ========== ==========
Mortgage loans assumed through acquisitions of real estate $ 597,245 $ 142,237 $ 23,554
=========== ========== ==========
Unsecured notes assumed through Mergers $ 383,954 $ - $ -
=========== ========== ==========
Real estate assumed through foreclosure $ - $ 10,854 $ -
=========== ========== ==========
Net real estate contributed in exchange for OP units or
Common Shares $ 298,599 $ 440 $ 18,811
=========== ========== ==========
Real estate conveyed in exchange for release of mortgage
indebtedness $ - $ - $ 20,500
=========== ========== ==========
Liquidation value of Preferred Shares redesignated through
Wellsford Merger $ 157,495 $ - $ -
=========== ========== ==========
Common Shares issued through Mergers $ 945,312 $ - $ -
=========== ========== ==========
Net liabilities assumed through Mergers $ 33,237 $ - $ -
=========== ========== ==========
</TABLE>
See accompanying notes.
F-8
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------
1997 1996 1995
--------------------------------------------
<S> <C> <C> <C>
PREFERRED SHARES
Balance, beginning of year $ 393,000 $ 278,000 $ -
9 3/8% Series A Cumulative Redeemable - - 153,000
9 1/8% Series B Cumulative Redeemable - - 125,000
9 1/8% Series C Cumulative Redeemable - 115,000 -
8.60% Series D Cumulative Redeemable 175,000 - -
Series E Cumulative Convertible 99,963 - -
9.65% Series F Cumulative Redeemable 57,500 - -
7 1/4% Series G Convertible Cumulative 316,250 - -
----------- ----------- -----------
Balance, end of year $ 1,041,713 $ 393,000 $ 278,000
=========== =========== ===========
COMMON SHARES, $.01 PAR VALUE
Balance, beginning of year $ 512 $ 350 $ 340
Issuance through proceeds from offerings 160 144 -
Common Shares issued in connection with Mergers 211 - -
Conversion of OP Units into Common Shares 6 16 9
Issuance through exercise of options and
restricted share grants 2 2 1
----------- ----------- -----------
Balance, end of year $ 891 $ 512 $ 350
=========== =========== ===========
PAID IN CAPITAL
Balance, beginning of year $ 1,147,214 $ 652,829 $ 636,751
Sale of Common Shares, net 536,356 482,591 -
Common Shares issued in connection with Mergers
and acquisitions 1,131,095 - -
Issuance of Common Shares through conversion of
OP Units into Common Shares 11,267 27,651 15,664
Issuance of Common Shares for employee notes - - 1,959
Issuance of Common Shares through exercise of
options and restricted share grants 7,322 4,353 2,881
Offering costs associated with Preferred Shares (18,976) (4,011) (9,422)
Adjustment for Minority Interests ownership
in Operating Partnership (28,617) (16,199) 4,996
----------- ----------- -----------
Balance, end of year $ 2,785,661 $ 1,147,214 $ 652,829
=========== =========== ===========
EMPLOYEE NOTES
Balance, beginning of year $ (5,255) $ (5,331) $ (3,515)
Notes received for issuance of Common Shares - - (1,959)
Principal receipts 110 76 143
----------- ----------- -----------
Balance, end of year $ (5,145) $ (5,255) $ (5,331)
=========== =========== ===========
DISTRIBUTIONS IN EXCESS
OF ACCUMULATED EARNINGS
Balance, beginning of year $ (76,641) $ (41,331) $ (23,640)
Net income to Common Shares 117,580 72,609 57,610
Distributions on Common Shares (174,068) (107,919) (75,301)
----------- ----------- -----------
Balance, end of year $ (133,129) $ (76,641) $ (41,331)
=========== =========== ===========
</TABLE>
See accompanying notes.
F-9
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND FORMATION OF THE COMPANY
Equity Residential Properties Trust, formed in March 1993, ("EQR"), is
a self-administered and self-managed equity real estate investment trust
("REIT"). As used herein, the term "Company" means EQR, and its subsidiaries,
as the survivor of the mergers between EQR and each of Wellsford Residential
Property Trust ("Wellsford") (the "Wellsford Merger") and Evans Withycombe
Residential, Inc. ("EWR") (the "EWR Merger"). The Company has elected to be
taxed as a REIT under Section 856(c) of the Internal Revenue Code 1986, as
amended (the "Code"). As a result, the Company generally will not be subject
to Federal income tax to the extent it distributes 95% of its taxable income
to its shareholders. REITs are subject to a number of organizational and
operational requirements. If the Company fails to qualify as a REIT in any
year, its taxable income may be subject to income tax at regular corporate
rates (including any applicable alternative minimum tax). Even if the Company
qualifies for taxation as a REIT, the Company may be subject to certain state
and local taxes on its income and excise taxes on its undistributed income.
EQR is the successor to the multifamily property business of Equity
Properties Management Corp. ("EPMC"), an entity controlled by Mr. Samuel Zell,
Chairman of the Board of Trustees of the Company, and a series of other
entities which owned 69 of the multifamily properties contributed to the
Company at the time of the Company's initial public offering (the "Initial
Properties"). Forty- six of the Initial Properties (the "Zell Properties")
were contributed or sold by entities substantially controlled by Mr. Zell and
primarily owned by Mr. Zell and trusts for the benefit of Mr. Robert Lurie, a
deceased partner of Mr. Zell. The remaining 23 of the Initial Properties (the
"Starwood Properties") were acquired from entities controlled by Starwood
Capital Partners, L.P. ("Starwood") and its affiliates ("Starwood Original
Owners"). Prior to the completion of the Company's initial public offering
(the "EQR IPO") of 13,225,000 common shares of beneficial interest, $.01 par
value per share ("Common Shares"), EPMC provided multifamily residential
management services (the "Management Business") to the Zell Properties.
The Company is engaged in the acquisition, disposition, ownership,
management and operation of multifamily properties. As of December 31, 1997,
the Company controlled a portfolio of 463 multifamily properties (individually
a "Property" and collectively the "Properties") containing 135,200 apartment
units. The Company's interest in six of these Properties at the time of
acquisition thereof consisted solely of ownership of debt collateralized by
such Properties. The Company also has an investment in partnership interests
and subordinated mortgages collateralized by 21 properties and mortgage loans
collateralized by five properties (collectively, the "Additional Properties").
The Properties and Additional Properties are located throughout the United
States in the following 35 states: Alabama, Arizona, Arkansas, California,
Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Iowa,
Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota,
Missouri, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, Ohio,
Oklahoma, Oregon, South Carolina, Tennessee, Texas, Utah, Virginia, Washington
and Wisconsin.
F-10
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
In exchange for contributing 33 of the Zell Properties and the
Management Business and the Starwood Properties, the 33 existing entities (the
"Zell Original Owners"), and entities controlled by Starwood and EPMC received
a total of 8,433,238 partnership interests ("OP Units") (including an
additional 93,639 OP Units issued in August 1994 and 1,835 OP Units issued in
September 1995) in ERP Operating Limited Partnership (the "Operating
Partnership"). The OP Units are exchangeable on a one-for-one basis into
Common Shares. The other 13 Zell Properties were acquired from 13 existing
partnerships (the "Zell Sellers") for $43.5 million in cash. The Management
Business, the Zell Original Owners and the Zell Sellers are collectively the
"EQR's Predecessor Business".
The Company has formed a series of partnerships (the "Financing
Partnerships") which beneficially own certain Properties encumbered by
mortgage indebtedness. The Operating Partnership owns a 1% limited partner
interest and a 98% general partner interest in each Financing Partnership. The
remaining 1% general partner interest in each Financing Partnership is owned
by various qualified REIT subsidiaries wholly owned by the Company (each a
"QRS Corporation"). Rental income from the Properties that are beneficially
owned by a Financing Partnership is used first to service the applicable
mortgage debt and pay other operating expenses and any excess is then
distributed 1% to the applicable QRS Corporation, as the general partner of
such Financing Partnership, and 99% to the Operating Partnership, as the sole
1% limited partner and as the 98% general partner. The Company has also
formed a series of limited liability companies (the "LLCs") which own certain
Properties and one such LLC which has an investment in partnership interests
and subordinated mortgages collateralized by 21 of the Additional Properties.
The Operating Partnership is a 99% managing member of each LLC and a QRS
Corporation is a 1% member of each LLC. In addition, the Company also owns a
1% general partner interest and a 81.1% limited partner interest in Evans
Withycombe Residential, L. P. (the "EWR Operating Partnership") and the
Operating Partnership owns a 16.1% limited partner interest and a 1% managing
general partner interest in the EWR Operating Partnership.
As of December 31, 1997, 451 Properties were managed by either Equity
Residential Properties Management Limited Partnership, the successor to the
Management Business contributed by EPMC contemporaneously with the EQR IPO or
Equity Residential Properties Management Limited Partnership II (collectively,
the "Management Partnerships"). The Management Partnerships collect a
property management fee consistent with a reasonable arms- length charge for
the performance of such services. The sole general partner of the Management
Partnerships with a 1% interest is the Operating Partnership. The sole
limited partners of the Management Partnerships are Equity Residential
Properties Management Corp. ("Management Corp.") and Equity Residential
Properties Management Corp. II ("Management Corp. II"), respectively, and each
has a 99% interest in the respective partnership.
2. BASIS OF PRESENTATION
The Wellsford Merger and the EWR Merger (collectively, the "Mergers")
were treated as purchases in accordance with Accounting Principles Board
Opinion No. 16. The fair value of the
F-11
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
consideration given by the Company in the Mergers was used as the valuation
basis for each of the combinations. The assets acquired and the liabilities
assumed of Wellsford were recorded at their relative fair values as of May 30,
1997 (the "Wellsford Closing Date"). The assets acquired and the liabilities
assumed of EWR were recorded at their relative fair values as of December 23,
1997 (the "EWR Closing Date"). The accompanying consolidated statements of
operations and cash flows include the results of both Wellsford and EWR from
their respective closing dates.
Due to the Company's ability as general partner to control either
through ownership or by contract the Operating Partnership, the Management
Partnerships, the Financing Partnerships, the LLCs and the EWR Operating
Partnership, each such entity has been consolidated with the Company for
financial reporting purposes. In regard to Management Corp., Management Corp. II
and Evans Withycombe Management, Inc., the Company does not have legal control;
however, these entities are consolidated for financial reporting purposes, the
effects of which are immaterial. Certain reclassifications have been made to the
prior year's financial statements in order to conform to the current year
presentation.
3. BUSINESS COMBINATIONS
In connection with the Wellsford Merger each outstanding common share
of beneficial interest of Wellsford was converted into .625 of a Common Share
of the Company. In addition, Wellsford's Series A Cumulative Convertible
Preferred Shares of Beneficial Interest were redesignated as the Company's
3,999,800 Series E Cumulative Convertible Preferred Shares of Beneficial
Interest, $0.01 par value per share (the "Series E Preferred Shares") and
Wellsford's Series B Cumulative Redeemable Preferred Shares of Beneficial
Interest were redesignated as the Company's 2,300,000 9.65% Series F
Cumulative Redeemable Preferred Shares of Beneficial Interest, $0.01 par value
per share (the "Series F Preferred Shares").
On the Wellsford Closing Date, 72 Properties containing 19,004 units
and other related assets were acquired for a total purchase price of
approximately $1 billion. The purchase price consisted of 10.8 million Common
Shares issued by the Company with a market value of $443.7 million, the
liquidation value of $157.5 million for the Series E Preferred Shares and the
Series F Preferred Shares, the assumption of mortgage indebtedness and
unsecured notes in the amount of $345 million, the assumption of other
liabilities of approximately $33.5 million and other merger related costs of
approximately $23.4 million.
On the EWR Closing Date, 53 Properties containing 15,331 units and
three Properties under construction or expansion expected to contain 953 units
and other related assets were acquired for a total purchase price of
approximately $1.2 billion. In connection with the EWR Merger, as of the EWR
Closing Date, each outstanding common share of beneficial interest of EWR was
converted into .50 of a Common Share of the Company. The purchase price
consisted of 10.3 million Common Shares issued by the Company with a total
market value of approximately $501.6 million, the assumption of EWR's minority
interest with a market value of approximately $107.3 million, the assumption
of mortgage indebtedness and unsecured notes in the amount of $498 million,
the assumption of other liabilities of approximately $28.2 million and other
EWR Merger related costs
F-12
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
of approximately $16.7 million.
4. SHAREHOLDERS' EQUITY AND MINORITY INTERESTS
On September 11, 1995, the Company filed with the Securities and
Exchange Commission (the "SEC") a Form S-3 Registration Statement to register
up to $500 million of its non-voting preferred shares of beneficial interest,
$0.01 par value per share ("Preferred Shares"), Common Shares and depositary
shares, pursuant to a shelf offering (the "Second Shelf Registration").
In January 1996, the Company completed an offering of 1,725,000
registered Common Shares, which were sold at a net price of $29.375 per share
(the "January 1996 Common Share Offering") and received net proceeds of
approximately $50.7 million in connection therewith.
Also in January 1996, the Company filed with the SEC a Form S-3
Registration Statement to register 1,676,423 Common Shares which may be sold
by the holders thereof or by holders of OP Units upon the issuance of Common
Shares in exchange for such OP Units.
In February 1996, the Company completed an offering of 2,300,000
registered Common Shares, which were sold at a net price of $29.50 per share
(the "February 1996 Common Share Offering") and received net proceeds of
approximately $67.8 million in connection therewith.
On May 21, 1996, the Company completed an offering of 2,300,000
publicly registered Common Shares, which were sold at a net price of $30.50
per share. On May 28, 1996, the Company completed the sale of 73,287 publicly
registered Common Shares to employees of the Company and to employees of
Equity Group Investments, Inc. and certain of its subsidiaries ("EGI") and
certain of their respective affiliates and consultants at a net price equal to
$30.50 per share. On May 30, 1996, the Company completed an offering of
1,264,400 publicly registered Common Shares, which were sold at a net price of
$30.75 per share. The Company received net proceeds of approximately $111.3
million in connection with the sale of the 3,637,687 Common Shares mentioned
above (collectively, the "May 1996 Common Share Offerings").
On June 26, 1996, the Company filed with the SEC a Form S-3
Registration Statement to register 608,665 Common Shares which may be issued
by the Company to holders of 608,665 OP Units. The SEC declared this
Registration effective on September 6, 1996.
On September 18, 1996, the Company filed with the SEC a Form S-3
Registration Statement to register $500 million of equity securities (the
"1996 Equity Shelf Registration"). The SEC declared this Registration
effective on September 23, 1996.
In September 1996, the Company completed the sale of 2,272,728
publicly registered Common Shares, which were sold at a net price of $33 per
share. The Company received net proceeds of approximately $75 million in
connection with this offering (the "September 1996 Common Share Offering").
F-13
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
On September 27, 1996, the Company filed with the SEC a Form S-3
Registration Statement to register 1,182,835 Common Shares which may be issued
by the Company to holders of 1,182,835 OP Units. The SEC declared this
Registration effective on October 3, 1996.
In December 1996, the Company completed offerings of 4,440,000
publicly registered Common Shares, which were sold to the public at a price of
$41.25 per share (the "December 1996 Common Share Offerings"). The Company
received net proceeds of approximately $177.4 million in connection therewith.
In March 1997, the Company completed three separate public offerings
relating to an aggregate of 1,921,000 publicly registered Common Shares, which
were sold to the public at a price of $46 per share (the "March 1997 Common
Share Offerings"). The Company received net proceeds of approximately $88.3
million therefrom.
On May 14, 1997, the Company filed with the SEC a Form S-3
Registration Statement to register $500 million of equity securities (the
"June 1997 Equity Shelf Registration"). The SEC declared this registration
statement effective on June 5, 1997.
In June 1997, the Company completed five separate public offerings
comprising an aggregate of 8,992,023 publicly registered Common Shares, which
were sold to the public at prices ranging from $44.06 to $45.88 per share (the
"June 1997 Common Share Offerings"). The Company received net proceeds of
approximately $398.9 million therefrom.
On July 28, 1997, the Company filed with the SEC a Form S-3
Registration Statement to register $750 million of equity securities (the
"August 1997 Equity Shelf Registration"). The SEC declared this registration
statement effective on August 4, 1997.
In September 1997, the Company completed the sale of 498,000 publicly
registered Common Shares, which were sold to the public at a price of $51.125
per share. The Company received net proceeds of approximately $24.2 million
in connection with this offering (the "September 1997 Common Share Offering").
In October 1997, in connection with the acquisition of a portfolio of
Properties, the Company issued 3,315,500 publicly registered Common Shares,
which were issued at a price of $45.25 per share with a value of approximately
$150 million (the "October 1997 Common Share Offering").
On December 11, 1997, in connection with the acquisition of one
Property, the Company issued 736,296 publicly registered Common Shares, which
were issued at a price of $48.85 per share with a value of approximately $36
million. On December 23, 1997, the Company completed an offering of 467,722
publicly registered Common Shares, which were sold to the public at a price of
$51.3125 per share and received net proceeds of approximately $22.8 million in
connection therewith. The sale of the 1,204,018 Common Shares mentioned above
is collectively, the "December 1997 Common Share Offerings".
The following table presents the changes in the Company's issued and
outstanding
F-14
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Common Shares for the years ended December 31, 1997, 1996 and 1995
(excluding OP Units of 9,592,590, 7,858,228 and 8,208,882 outstanding at
December 31, 1997, 1996 and 1995, respectively):
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Common Shares outstanding at January 1, 51,154,836 35,011,715 33,963,655
Common Shares issued through March 1997
Common Share Offerings 1,921,000 -- --
Common Shares issued through June 1997
Common Share Offerings 8,992,023 -- --
Common Shares issued through September 1997
Common Share Offering 498,000 -- --
Common Shares issued through October 1997
Common Share Offering 3,315,500 -- --
Common Shares issued through December 1997
Common Share Offerings 1,204,018 -- --
Common Shares issued through conversion of
Wellsford common shares 10,823,016 -- --
Common Shares issued through conversion of
EWR common shares 10,288,583 -- --
Common Shares issued through conversion of
Series E Preferred Shares 723 -- --
Common Shares issued through January 1996
Common Share Offering -- 1,725,000 --
Common Shares issued through February 1996
Common Share Offering -- 2,300,000 --
Common Shares issued through May 1996
Common Share Offerings -- 3,637,687 --
Common Shares issued through September 1996
Common Share Offering -- 2,272,728 --
Common Shares issued through December 1996
Common Share Offerings -- 4,440,000 --
Common Shares issued through Employee Share
Purchase Plan 84,183 39,458 --
Common Shares issued for employee notes -- -- 75,000
Common Shares issued through exercise
of options 180,138 150,840 100,966
Common Shares issued through restricted
share grants 28,246 21,879 --
Common Shares issued through
Conversion of OP units 582,185 1,545,866 865,174
Common Shares issued for profit-sharing
Contribution 13,140 10,001 7,997
Common Shares held in treasury (326) (338) (1,077)
---------- ---------- ----------
Common Shares outstanding at December 31, 89,085,265 51,154,836 35,011,715
========== ========== ==========
</TABLE>
F-15
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
The declaration of trust of the Company provides that the Company may
issue up to 100,000,000 Preferred Shares with specific rights, preferences and
other attributes as the Board of Trustees may determine, which may include
preferences, powers and rights that are senior to the rights of holders of the
Company's Common Shares. Under certain circumstances, the issuance of
Preferred Shares may require shareholder approval pursuant to the rules and
the regulations of the New York Stock Exchange.
In June 1995, the Company sold 6,120,000 of its 9 3/8% Series A
Cumulative Redeemable Preferred Shares of Beneficial Interest, $0.01 par value
per share (liquidation preference $25 per share) (the "Series A Preferred
Shares"), pursuant to a $250 million shelf registration (the "Preferred Shelf
Registration"), at $25 per share. The Company raised gross proceeds of $153
million from this offering (the "Series A Preferred Share Offering"). The net
proceeds of approximately $148.2 million from the Series A Preferred Share
Offering were contributed by the Company to the Operating Partnership in
exchange for 6,120,000 of the Operating Partnership's 9 3/8% Series A
cumulative redeemable preference units. The Series A Preferred Shares are
cumulative from the date of original issue and are payable quarterly on or
about the fifteenth day of January, April, July and October of each year, at
the annual rate of 9 3/8% of the liquidation preference of $25 per share. The
Series A Preferred Shares are not redeemable prior to June 1, 2000. On or
after June 1, 2000, the Preferred Shares may be redeemed for cash at the
option of the Company in whole or in part, at a redemption price of $25 per
share, plus accrued and unpaid distributions, if any, thereon.
In November 1995, the Company sold 5,000,000 depositary shares (the
"Series B Depositary Shares") pursuant to the Preferred Shelf Registration and
the Second Shelf Registration. Each Series B Depositary Share represents a
1/10 fractional interest in a 9 1/8% Series B Cumulative Redeemable Preferred
Share of Beneficial Interest, $0.01 par value per share (the "Series B
Preferred Shares"). The liquidation preference of each of the Series B
Preferred Shares is $250.00 (equivalent to $25 per Series B Depositary Share).
The Company raised gross proceeds of $125 million from this offering (the
"Series B Preferred Share Offering"). The net proceeds of approximately $121
million from the Series B Preferred Share Offering were contributed by the
Company to the Operating Partnership in exchange for 500,000 of the Operating
Partnership's 9 1/8% Series B cumulative redeemable preference units. The
Series B Preferred Shares are cumulative from the date of original issue and
are payable quarterly on or about the fifteenth day of January, April, July
and October of each year, commencing on January 15, 1996, at the annual rate
of 91/8% of the liquidation preference of $25 per Depositary Share. The
Series B Preferred Shares are not redeemable prior to October 15, 2005. On
and after October 15, 2005, the Series B Preferred Shares may be redeemed for
cash at the option of the Company, in whole or in part, at a redemption price
of $250 per share (equivalent to $25 per Series B Depositary Share), plus
accrued and unpaid distributions, if any, thereon.
In September 1996 the Company sold 4,600,000 depositary shares (the
"Series C Depositary Shares") pursuant to the Second Shelf Registration. Each
Series C Depositary Share
F-16
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
represents a 1/10 fractional interest in a 9 1/8% Series C Cumulative
Redeemable Preferred Share of Beneficial Interest, $0.01 par value per share
(the "Series C Preferred Shares"). The liquidation preference of each of the
Series C Preferred Shares is $250.00 (equivalent to $25 per Series C
Depositary Share). The Company raised gross proceeds of $115 million from this
offering (the "Series C Preferred Share Offering"). The Company contributed
the net proceeds of approximately $111.4 million from the Series C Preferred
Share Offering to the Operating Partnership in exchange for 460,000 of the
Operating Partnership's 9 1/8% Series C cumulative redeemable preference
units. The Series C Preferred Shares are cumulative from the date of original
issue and are payable quarterly on or about the fifteenth day of January,
April, July and October of each year, commencing on October 15, 1996, at the
annual rate of 9 1/8% of the liquidation preference of $25 per Series C
Depositary Share. The Series C Preferred Shares are not redeemable prior to
September 9, 2006. On and after September 9, 2006, the Series C Preferred
Shares may be redeemed for cash at the option of the Company, in whole or in
part, at a redemption price of $250 per share (equivalent to $25 per Series C
Depositary Share), plus accrued and unpaid distributions, if any, thereon.
In May 1997, the Company sold 7,000,000 depositary shares (the "Series
D Depositary Shares") pursuant to the June 1997 Equity Shelf Registration.
Each Series D Depositary Share represents a 1/10 fractional interest in a
8.60% Series D Cumulative Redeemable Preferred Share of Beneficial Interest,
$0.01 par value per share (the "Series D Preferred Shares"). The liquidation
preference of each of the Series D Preferred shares is $250.00 (equivalent to
$25 per Series D Depositary Share). The Company received net proceeds of
approximately $169.5 million from this offering (the "Series D Preferred Share
Offering"). The Company contributed the net proceeds of approximately $169.5
million from the Series D Preferred Share Offering to the Operating
Partnership in exchange for 700,000 of the Operating Partnership's 8.60%
Series D cumulative redeemable preference units.
The Series E Preferred Shares are cumulative from the date of original
issue and are payable quarterly on January 1, April 1, July 1 and October 1 in
an amount equal to $1.75 per share per annum. Each Series E Preferred Share
is convertible at the option of the holder thereof at any time into Common
Shares at a conversion price of $44.93 per Common Share (equivalent to a
conversion rate of approximately .5564 Common Share for each Series E
Preferred Share). The Series E Preferred Shares are not redeemable prior to
November 1, 1998. On and after November 1, 1998, the Series E Preferred
Shares may be redeemed at the option of the Company, in whole or in part,
initially at $25.875 per share and thereafter at prices declining to $25.00
per share on and after November 1, 2003, plus accrued and unpaid
distributions, if any, thereon. In October 1997, 1,300 of the Series E
Preferred Shares were converted into 723 Common Shares of the Company.
The Series F Preferred Shares are cumulative from the date of
original issue and are payable quarterly on or about the fifteenth day of
January, April, July and October of each year at the rate of 9.65% of the
liquidation preference of $25 per share. The Series F Preferred Shares are not
redeemable prior to August 24, 2000. On or after August 24, 2000, the Series
F Preferred Shares may be redeemed for cash at the option of the Company, in
whole or in part, at a redemption price
F-17
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
of $25.00 per share, plus accrued and unpaid distributions, if any, thereon.
In September 1997, the Company sold 11,000,000 depositary shares (the
"Series G Depositary Shares") pursuant to the August 1997 Equity Shelf
Registration. Each Series G Depositary Share represents a 1/10 fractional
interest in a 7 1/4% Series G Convertible Cumulative Preferred Share of
Beneficial Interest, $0.01 par value per share (the "Series G Preferred
Shares"). Series G Depositary Shares representing Series G Preferred Shares
are convertible at the option of the holder thereof at any time into Common
Shares at a conversion price of $58.58 per Common Share (equivalent to a
conversion rate of approximately .4268 Common Shares for each Series G
Depositary Share). The liquidation preference of each of the Series G
Preferred Shares is $250.00 per share (equivalent to $25 per Series G
Depositary Share). The Company received net proceeds of approximately $264
million from this offering (the "Series G Preferred Share Offering"). In
addition, in October 1997, the Company sold 1,650,000 additional Series G
Depositary Shares pursuant to an over-allotment option granted to the
underwriters and received net proceeds of approximately $39.6 million
therefrom. The Company contributed the net proceeds of approximately $303.6
million from the Series G Preferred Share Offering to the Operating
Partnership in exchange for 1,265,000 of the Operating Partnership's 7 1/4%
Series G convertible cumulative preference units.
Net proceeds from the Company's Common Share offerings are contributed
by the Company to the Operating Partnership in return for an increased
ownership percentage and are treated as capital transactions in the Company's
Consolidated Financial Statements. As a result, the net offering proceeds are
allocated between shareholders' equity and the equity position of the limited
partners of the Operating Partnership (collectively, the "Minority Interests")
(to the extent represented by OP Units), to account for the change in their
respective percentage ownership of the underlying equity of the Operating
Partnership.
Assuming conversion of all OP Units, total Common Shares outstanding
at December 31, 1997 would have been 98,677,855. As of December 31, 1997, the
Minority Interests held 9,592,590 OP Units, which represented a 9.72% interest
in the Operating Partnership.
The Company paid a $0.625, $0.625, $0.625 and $0.67 per Common Share
distribution on April 11, July 11, October 10 and December 30, 1997,
respectively, for the quarters ended March 31, June 30, September 30 and
December 31, 1997, to Common Share holders of record on March 28, June 27,
September 26 and December 15, 1997, respectively.
F-18
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
The following table summarizes the distributions paid to Preferred
Share and Depositary Share holders related to the year ended December 31,
1997:
<TABLE>
<CAPTION>
For the
Quarter or Period
Dividend Amount Date Paid ended Record Date
--------------- --------- ----------------- -----------
<S> <C> <C> <C> <C>
Series A Preferred
Share holders $0.585938 04/15/97 03/31/97 03/28/97
0.585937 07/15/97 06/30/97 06/27/97
0.585938 10/15/97 09/30/97 09/26/97
0.585937 01/15/98 12/31/97 12/30/97
Series B Depositary
Share holders $0.570313 04/15/97 03/31/97 03/28/97
0.570312 07/15/97 06/30/97 06/27/97
0.570313 10/15/97 09/30/97 09/26/97
0.570312 01/15/98 12/31/97 12/30/97
Series C Depositary
Share holders $0.570313 04/15/97 03/31/97 03/28/97
0.570312 07/15/97 06/30/97 06/27/97
0.570313 10/15/97 09/30/97 09/26/97
0.570312 01/15/98 12/31/97 12/30/97
Series D Depositary
Share holders (A) $0.334400 07/15/97 06/30/97 06/27/97
0.537500 10/15/97 09/30/97 09/26/97
0.537500 01/15/98 12/31/97 12/30/97
Series E Preferred
Share holders $0.437500 07/01/97 06/30/97 06/16/97
0.437500 10/01/97 09/30/97 09/15/97
0.437500 01/02/98 12/31/97 12/15/97
Series F Preferred
Share holders $0.603125 07/15/97 06/30/97 06/27/97
0.603125 10/15/97 09/30/97 09/26/97
0.603125 01/15/98 12/31/97 12/30/97
Series G Depositary
Share holders (B) $0.110800 10/15/97 09/30/97 10/01/97
0.453125 01/15/98 12/31/97 12/30/97
</TABLE>
(A) Partial distribution of $0.3344 covers the period May 21 through July 15,
1997.
(B) Partial distribution of $0.1108 covers the period September 24 through
October 15, 1997.
5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Real estate assets and depreciation
Real Estate is recorded at cost less accumulated depreciation less an
adjustment, if any, for impairment. Real estate intended to be held and
operated by the Company over their remaining useful life are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of the particular real estate may not be recoverable. If
these events or changes in circumstances are present, the Company estimates
the sum of the expected future cash flows
F-19
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(undiscounted) to result from the operations and eventual disposition of the
particular real estate, and if less than the carrying amount of the real
estate, the Company will recognize an impairment loss. Upon recognition of
any impairment loss the Company measures that loss based on the amount by
which the carrying amount of the real estate exceeds the estimated fair value
of the real estate.
For rental properties to be disposed of, an impairment loss is
recognized when the fair value of the real estate, less the estimated cost to
sell, is less than the carrying amount of the real estate measured at the time
the Company has a commitment to sell the property and/or is actively marketing
the property for sale. Real estate to be disposed of is reported at the lower
of its carrying amount or its estimated fair value, less its cost to sell.
Depreciation is not recorded during the period in which assets are held for
disposal.
Depreciation is computed on a straight-line basis over the estimated
useful lives of the assets. The Company uses a 30-year estimated life for
buildings, a 10-year estimated life for land improvements and up to a
seven-year estimated life for furniture, fixtures and equipment. Expenditures
for ordinary maintenance and repairs are expensed to operations as incurred
and significant renovations and improvements that improve and/or extend the
useful life of the asset are capitalized over their estimated useful life.
Initial direct leasing costs are expensed as incurred and such expense
approximates the deferral and amortization of initial direct leasing costs
over the lease terms. Property sales or dispositions are recorded when title
transfers and sufficient consideration has been received by the Company. Upon
disposition, the related costs and accumulated deprecation are removed from
the respective accounts. Any gain or loss on sale or disposition is
recognized in accordance with generally accepted accounting principles.
The Company classifies developments and lease-up properties as
construction-in-progress until construction on the apartment community has
been completed and the apartment community has reached stabilized occupancy.
The Company generally considers a property stabilized when it first reaches
93% physical occupancy. The Company also classifies land relating to
construction- in-progress as land on its balance sheet. Land associated with
construction-in-progress was $8.3 million as of December 31, 1997.
(b) Cash and Cash Equivalents
The Company considers all demand deposits, money market accounts and
investments in certificates of deposit and repurchase agreements purchased
with a maturity of three months or less, at the date of purchase, to be cash
equivalents. The Company maintains its cash and cash equivalents at financial
institutions. The combined account balances at each institution periodically
exceed the Federal Depository Insurance Corporation ("FDIC") insurance
coverage, and, as a result, there is a concentration of credit risk related to
amounts on deposit in excess of FDIC insurance coverage. The Company believes
that the risk is not significant, as the Company does not anticipate their
non-performance.
F-20
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(c) Deferred Financing Costs
Deferred financing costs include fees and costs incurred to obtain the
Company's lines of credit, long-term financing and costs for certain interest
rate protection agreements. These costs are amortized over the terms of the
related debt. Unamortized financing costs are written-off when debt is
retired before the maturity date. As of December 31, 1997 and 1996, the
accumulated amortization of such deferred financing costs was $4.2 million and
$3.8 million, respectively.
(d) Interest Rate Protection Agreements
The Company from time to time enters into interest rate protection
agreements to effectively convert floating rate debt to a fixed rate basis, as
well as to hedge anticipated financing transactions. Net amounts paid or
received under these agreements are recognized as an adjustment to interest
expense when such amounts are incurred or earned. Settlement amounts paid or
received in connection with terminated interest rate protection agreements are
deferred and amortized over the remaining term of the related financing
transaction on the straight-line method. The Company believes it has limited
exposure to the extent of non-performance by the counterparties of each
protection agreement since each counterparty is a major U.S. financial
institution, and the Company does not anticipate their non-performance.
(e) Fair Value of Financial Instruments
The fair values of the Company's financial instruments, including cash
and cash equivalents, and mortgage notes payable, other notes payable, lines
of credit and other financial instruments, approximate their carrying or
contract values. With respect to the Company's investment in mortgage notes,
the fair value as of December 31, 1997 was estimated to be approximately
$184.8 million compared to the Company's carrying value of $176.1 million. The
estimated fair value of the Company's investment in mortgage notes represents
the estimated net present value based on the expected future property level
cash flows and an estimated current market discount rate.
(f) Revenue Recognition
Rental income attributable to leases is recorded when due from tenants
and is recognized monthly as it is earned, which is not materially different
than on a straight-line basis. Interest income is recorded on an accrual
basis.
(g) Lease Agreements
A substantial portion of the leases entered into between the tenant
and a multifamily property for the rental of an apartment unit is
month-to-month or year-to-year, renewable upon consent of both parties.
F-21
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(h) Income Taxes
Due to the structure of the Company as a REIT and the nature of the
operations of the Properties and Management Business, the results of
operations contain no provision for Federal income taxes. However, the
Company is subject to certain state and local income, excise or franchise
taxes. The Company paid no Federal income taxes during the year ended
December 31, 1997. The aggregate cost of land and depreciable property for
Federal income tax purposes as of December 31, 1997 was approximately $6.2
billion.
(i) Income per Common Share
In 1997, the Financial Accounting Standards Board issued Statement No.
128, Earnings per Share ("Statement 128"). Statement 128 replaced the
calculation of primary and fully diluted earnings per share with basic and
diluted earnings per share. Unlike primary earnings per share, basic earnings
per share excludes any dilutive effects of options, warrants and convertible
securities. Diluted earnings per share is very similar to the previously
reported fully diluted earnings per share. All net income per weighted
average Common Share and net income per weighted average Common Share -
assuming dilution amounts for all periods have been presented, and where
appropriate, restated to conform to the Statement 128 requirements. The
conversion of an OP Unit to a Common Share will have no effect on income per
Common Share, either on a basic or diluted basis, since the allocation of
earnings to an OP Unit is equivalent to a Common Share. The effect of a
conversion of an OP Unit to a Common Share has been excluded from the basic
earnings per share calculation due to certain restrictions.
(j) Minority Interests
Net income is allocated to the Minority Interests based on their
respective ownership percentage of the Operating Partnership. Ownership
percentage is represented by dividing the number of OP Units held by the
Minority Interests by the total OP Units held by Minority Interests and the
Company. Issuance of additional Common Shares or OP Units changes the
ownership interests of both the Minority Interests and the Company. Such
transactions and the proceeds therefrom are treated as capital transactions
and result in an allocation between shareholders' equity and Minority
Interests to account for the change in the respective percentage ownership of
the underlying equity of the Operating Partnership.
(k) Use of Estimates
In preparation of the Company's financial statements in conformity
with generally accepted accounting principles, management makes 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 as well as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
F-22
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
6. REAL ESTATE
The following summarizes the carrying amounts for the real estate as
of December 31, 1997 and 1996:
<TABLE>
<CAPTION>
1997 1996
---- ----
(Amounts in thousands)
<S> <C> <C>
Land $ 791,980 $ 284,879
Buildings and Improvements 6,060,779 2,566,568
Furniture, Fixtures and Equipment 232,636 132,063
Construction in Progress 36,040 -
----------- -----------
Real Estate 7,121,435 2,983,510
Accumulated Depreciation (444,762) (301,512)
----------- -----------
Real Estate, net $6,676,673 $2,681,998
=========== ===========
</TABLE>
In addition to the Mergers, during the year ended December 31, 1997,
the Company acquired the 124 Properties listed below. Each Property was
purchased from an unaffiliated third party, except for 12 of the Properties,
which were purchased from affiliates of the Company, Zell/Merrill Lynch Real
Estate Opportunity Partners Limited Partnership ("Zell/Merrill I") and
subsidiaries of Zell/Merrill Lynch Real Estate Opportunity Partners Limited
Partnership II ("Zell/Merrill II"). The total purchase price for the
Properties acquired from Zell/Merrill I and Zell/Merrill II was approximately
$162.2 million. In connection with certain of the acquisitions listed below,
the Company assumed mortgage indebtedness of approximately $597.2 million and
issued OP Units and Common Shares having a value of approximately $191.3
million. The cash portion of these transactions was funded primarily from
proceeds raised from the March 1997 Common Share Offerings, the Series D
Preferred Share Offering, the June 1997 Common Share Offerings, the September
1997 Common Share Offering, the Series G Preferred Share Offering, the October
Common Share Offering, and the December Common Share Offerings as well as from
proceeds raised from the issuances of debt securities as discussed in Note 13.
F-23
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE>
<CAPTION>
Total
Acquisition
Date Number Cost (in
Acquired Property Location of Units thousands)
- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C>
01/02/97 Town Center Kingwood, TX 258 $ 12,874
01/21/97 Harborview San Pedro, CA 160 19,109
01/31/97 The Cardinal Greensboro, NC 256 13,180
02/12/97 Trails at Dominion Houston, TX 843 38,525
02/25/97 Dartmouth Woods Lakewood, CO 201 12,489
02/28/97 Rincon Houston, TX 288 21,157
02/28/97 Waterford at the Lakes Kent, WA 344 19,443
03/17/97 Junipers at Yarmouth Yarmouth, ME 225 9,326
03/20/97 Lincoln Harbor Ft. Lauderdale, FL 324 22,325
03/24/97 Sedona Ridge Phoenix, AZ 250 15,262
03/28/97 Club at the Green Beaverton, OR 254 14,906
03/28/97 Boulder Creek (formerly Knight's Castle) Wilsonville, OR 296 15,239
04/04/97 Country Gables Beaverton, OR 288 16,030
04/04/97 Watermark Square Portland, OR 390 15,984
04/04/97 Indigo Springs Kent, WA 278 12,903
04/29/97 Summit Chase Coral Springs, FL 140 5,613
05/13/97 Willow Brook Durham, NC 176 8,553
05/15/97 The Willows Knoxville, TN 250 11,064
05/21/97 Cascade at Landmark Alexandria, VA 277 23,322
05/21/97 Sabal Palm Club Pompano Beach, FL 416 23,913
05/21/97 Tamarlane Portland, ME 115 5,861
05/22/97 Spinnaker Cove Hermitage, TN 278 14,700
05/29/97 Banyan Lake Boynton Beach, FL 288 14,031
05/30/97 Wyndridge III Memphis, TN 284 15,204
06/06/97 Wyndridge II Memphis, TN 284 15,285
06/13/97 Windemere Mesa, AZ 224 9,641
06/13/97 Preston Bend Dallas, TX 255 11,062
06/13/97 Highline Oaks Denver, CO 220 10,782
06/17/97 Hunter's Ridge/South Pointe St. Louis, MO 390 19,603
06/19/97 Club at Tanasbourne Hillsboro, OR 352 20,098
06/26/97 Wood Creek Pleasant Hill, CA 256 32,816
07/02/97 Ridgemont/Mountain Brook Chattanooga, TN 506 15,105
07/11/97 Foxchase Grand Prairie, TX 260 8,528
07/18/97 La Mirage San Diego, CA 1,070 128,988
07/31/97 Bay Ridge San Pedro, CA 60 4,581
08/07/97 Boynton Place Boynton Beach, FL 192 9,425
08/07/97 Gates of Redmond I Redmond, WA 180 14,445
08/12/97 Cambridge Village Lewisville, TX 200 9,614
08/12/97 Crosswinds St. Petersburg, FL 208 7,351
08/15/97 Gates of Redmond II Redmond, WA 100 8,025
08/27/97 Paces Station/Paces on the Green Atlanta, GA 610 37,432
</TABLE>
F-24
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE>
<CAPTION>
Total
Acquisition
Date Number Cost (in
Acquired Property Location of Units thousands)
- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C>
09/05/97 North Hill Atlanta, GA 420 21,093
09/05/97 Casa Camino Ruiz (formerly Pardee Casas) San Diego, CA 196 13,345
09/29/97 The Classic Stamford, CT 144 22,776
09/30/97 Cambridge at Hickory Hollow Nashville, TN 360 21,155
10/02/97 Brookfield Salt Lake City, UT 128 6,833
10/09/97 Atrium Durham, NC 208 11,233
10/09/97 Burwick Farms Howell, MI 264 11,026
10/09/97 Carolina Crossing Greenville, SC 156 5,481
10/09/97 Chimneys Charlotte, NC 214 9,051
10/09/97 Clarion Decatur, GA 217 15,026
10/09/97 Concorde Bridge Overland Park, KS 248 19,737
10/09/97 Creekwood Charlotte, NC 384 18,599
10/09/97 Eastland on the Lake Columbus, OH 376 8,183
10/09/97 Garden Lake Riverdale, GA 278 14,645
10/09/97 Glen Eagle Greenville, SC 192 8,340
10/09/97 Grey Eagle Greenville, SC 156 7,255
10/09/97 Hickory Ridge Greenville, SC 90 2,858
10/09/97 Hidden Oaks Cary, NC 216 11,770
10/09/97 Highland Grove Stone Mt., GA 268 16,662
10/09/97 Mariners Wharf Orange Park, FL 272 18,594
10/09/97 Northlake Jacksonville, FL 240 11,660
10/09/97 Silver Springs Jacksonville, FL 432 18,310
10/09/97 Tamarind at Stoneridge Columbia, SC 240 10,545
10/09/97 Tivoli Lakes Club Deerfield Beach, FL 278 18,051
10/09/97 Village of Sycamore Ridge Memphis, TN 114 6,228
10/09/97 Woodland Meadows Ann Arbor, MI 306 20,045
10/17/97 Deerwood Corona, CA 316 25,073
10/21/97 Autumn Creek Cordova, TN 210 11,024
10/21/97 Blue Swan San Antonio, TX 285 9,018
10/21/97 Brookridge Centreville, VA 252 18,541
10/21/97 Chantecleer Lakes Naperville, IL 304 23,038
10/21/97 Crescent at Cherry Creek Denver, CO 216 17,721
10/21/97 Governor's Pointe Roswell, GA 468 28,258
10/21/97 Hidden Palms Tampa, FL 256 8,427
10/21/97 Idlewood Indianapolis, IN 320 14,043
10/21/97 Jefferson at Walnut Creek Austin, TX 342 17,343
10/21/97 Kirby Place Houston, TX 362 29,533
10/21/97 Larkspur Woods Sacramento, CA 232 20,335
10/21/97 Northwoods Village Cary, NC 228 12,830
10/21/97 Orchard of Landen Maineville, OH 312 20,236
10/21/97 Preakness Antioch, TN 260 9,237
</TABLE>
F-25
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE>
<CAPTION>
Total
Acquisition
Date Number Cost (in
Acquired Property Location of Units thousands)
- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C>
10/21/97 Riverside Park Tulsa, OK 288 13,828
10/21/97 Sycamore Creek Scottsdale, AZ 350 22,232
10/21/97 Trinity Lakes Cordova, TN 330 16,944
11/21/97 Parkridge Place Irving, TX 536 23,503
11/21/97 Villa Serenas Tucson, AZ 611 16,843
12/05/97 Hollyview Silver Spring, MD 42 1,684
12/11/97 Cierra Crest Denver, CO 480 39,632
12/11/97 Arbor Glen Ypsilanti, MI 220 10,922
12/11/97 Breckenridge Lexington, KY 382 16,458
12/11/97 Ethans Ridge I Kansas City, MO 316 19,459
12/11/97 Ethans Ridge II Kansas City, MO 242 14,655
12/11/97 Ethans Glen III Kansas City, MO 48 2,441
12/11/97 Farmington Gates Germantown, TN 182 9,697
12/11/97 Fountain Place I Eden Prairie, MN 332 23,999
12/11/97 Fountain Place II Eden Prairie, MN 158 12,265
12/11/97 Geary Court Yard San Francisco, CA 164 17,194
12/11/97 James Street Crossing Kent, WA 300 20,786
12/11/97 Ocean Walk Key West, FL 296 28,353
12/11/97 Regency Woods West Des Moines, IA 200 7,451
12/11/97 Ridgeway Commons Memphis, TN 127 5,684
12/11/97 River Oak Louisville, KY 268 12,539
12/11/97 Royal Oak Eagan, MN 231 15,982
12/11/97 The Cedars Charlotte, NC 360 20,253
12/11/97 Trailway Pond I Burnsville, MN 75 4,768
12/11/97 Trailway Pond II Burnsville, MN 165 11,047
12/11/97 Valley Creek I Woodbury, MN 225 16,226
12/11/97 Valley Creek II Woodbury, MN 177 12,295
12/11/97 Westwood Pines Tamarac, FL 208 15,261
12/11/97 White Bear Woods White Bear Lake, MN 225 16,213
12/11/97 Wood Crest Villa Westland, MI 458 9,260
12/11/97 Wood Lane Place Woodbury, MN 216 20,033
12/17/97 Crystal Village Attleboro, MA 91 6,349
12/17/97 Mill Village Randolph, MA 310 19,584
12/18/97 Ridgewood Village San Diego, CA 192 19,779
12/18/97 Meadows in the Park Birmingham, AL 200 9,525
12/18/97 Meadows on the Lake Birmingham, AL 200 9,521
12/18/97 Vinings at Ashley Lake Boynton Beach, FL 440 26,860
12/23/97 Chartwell Court Houston, TX 243 14,036
12/30/97 Glenlake Club Glendale Heights, IL 336 21,708
12/31/97 Arboretum Atlanta, GA 312 20,607
------ ----------
33,542 $1,982,828
====== ==========
</TABLE>
F-26
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
7. INVESTMENT IN LIMITED PARTNERSHIPS - DEVELOPMENT PROPERTIES
In December 1997, the Company entered into a joint venture agreement
with a multifamily residential real estate developer whereby the Company will
make investments in a limited partnership to fund a portion of the total
project development cost of new multifamily developments in certain of the
Company's target markets (the "Joint Venture Agreement"). As of December 31,
1997, the Company has funded approximately $6.9 million in connection with
this agreement. The amounts invested are included in other assets on the
balance sheet.
8. REAL ESTATE DISPOSITIONS
During 1997, the Company disposed of the properties listed below.
Each property was sold to an unaffiliated third party.
<TABLE>
<CAPTION>
Disposition
Number Price (in
Date Disposed Property Location of Units thousands)
- ------------- -------- -------- -------- ----------
<S> <C> <C> <C> <C>
03/28/97 Plantation Monroe, LA 200 $ 4,800
08/25/97 Paradise Pointe Land Hollywood, FL N/A 712
11/19/97 Quail Run Oklahoma City, OK 208 5,000
11/19/97 Stonebrook Oklahoma City, OK 360 8,850
12/11/97 Cambridge Tacoma, WA 96 3,665
12/11/97 Crown Pointe Tacoma, WA 76 2,542
12/11/97 Windemere Tacoma, WA 36 1,342
12/11/97 Diplomat South Beech Grove, IN 272 7,000
12/18/97 Village of Hampshire
Heights (Partial) Toledo, OH 88 2,600
----- --------
1,336 $ 36,511
===== ========
</TABLE>
The Company recognized a total gain of approximately $13.8 million on
the disposition of these seven Properties, the portion of one Property and the
vacant land parcel.
During the year ended December 31, 1995, the Company recorded a $1
million loss, which represented the estimated impairment in connection with
the potential sale of University Park, located in Toledo, Ohio. This Property
had a net carrying amount as of December 31, 1995 of approximately $1.1
million after the impairment loss. The impairment loss on real estate to be
disposed of is included in gain on disposition of properties on the statement
of operations for the year ended December 31, 1995.
9. CALCULATION OF NET INCOME PER WEIGHTED AVERAGE COMMON SHARE
The following tables sets forth the computation of net income per
weighted average Common Share outstanding and net income per weighted average
Common Share outstanding - assuming dilution.
F-27
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------
1997 1996 1995
---------------- ------------- --------------
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
NUMERATOR:
Income before gain on disposition of properties,
extraordinary items, allocation of income to
Minority Interests and preferred distributions $ 176,014 $ 97,033 $ 59,738
Allocation of income to Minority Interests (13,260) (14,299) (15,636)
Distributions to preferred shareholders (59,012) (29,015) (10,109)
---------- ---------- ----------
Income before gain on disposition of properties and
extraordinary items 103,742 53,719 33,993
Gain on disposition of properties 13,838 22,402 21,617
Extraordinary items 0 (3,512) 2,000
---------- ---------- ----------
Numerator for net income per weighted average
Common Share outstanding 117,580 72,609 57,610
Effect of dilutive securities:
Allocation of income to Minority Interests 13,260 14,299 15,636
---------- ---------- ----------
Numerator for net income per weighted average
Common Share outstanding - assuming dilution $ 130,840 $ 86,908 $ 73,246
========== ========== ==========
DENOMINATOR:
Denominator for net income per weighted
average Common Share outstanding 65,729 42,586 34,358
Effect of dilutive securities:
Contingent incremental employee share options 1,099 412 116
OP Units 7,453 8,104 9,509
---------- ---------- ----------
Denominator for net income per weighted average
Common Share outstanding - assuming dilution 74,281 51,102 43,983
========== ========== ==========
Net income per weighted average Common
Share outstanding $ 1.79 $ 1.70 $ 1.68
========== ========== ==========
Net income per weighted average Common
Share outstanding - assuming dilution $ 1.76 $ 1.69 $ 1.67
========== ========== ==========
</TABLE>
F-28
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------
1997 1996 1995
---------------- ------------- --------------
<S> <C> <C> <C>
NET INCOME PER WEIGHTED AVERAGE COMMON SHARE
OUTSTANDING:
Income before gain on disposition of properties and
extraordinary items per weighted average Common Share
outstanding $ 1.58 $ 1.26 $ 0.99
Gain on disposition of properties 0.21 0.52 0.63
Extraordinary items 0 (0.08) 0.06
---------- ---------- ----------
Net income per weighted average Common
Share outstanding $ 1.79 $ 1.70 $ 1.68
========== ========== ==========
NET INCOME PER WEIGHTED AVERAGE COMMON SHARE
OUTSTANDING - ASSUMING DILUTION:
Income before gain on disposition of properties and
extraordinary items per weighted average Common Share
outstanding - assuming dilution $ 1.55 $ 1.25 $ 0.98
Gain on disposition of properties 0.21 0.52 0.63
Extraordinary items 0 (0.08) 0.06
---------- ---------- ----------
Net income per weighted average Common
Share outstanding - assuming dilution $ 1.76 $ 1.69 $ 1.67
========== ========== ==========
</TABLE>
For additional disclosures regarding the employee share options, see Note 18.
Convertible Preferred Shares that could be converted into 2,763,898 shares of
common shares were outstanding at December 31, 1997 but were not included in
the computation of diluted earnings per share because it would be
anti-dilutive.
F-29
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
10. INVESTMENT IN MORTGAGE NOTES, NET
In 1995, the Company made an $89 million investment in partnership
interests and subordinated mortgages collateralized by 21 of the Additional
Properties. These 21 Additional Properties consist of 3,896 units, located in
California, Colorado, New Mexico and Oklahoma. This included an $87.1 million
investment in second and third mortgages (net of an original discount of
approximately $12.7 million to their face value), $1.6 million represents a
one time payment for an interest rate protection agreement and $0.3 million
represents an investment for primarily a 49.5% limited partnership interest in
the title-holding entities. As the Company does not control the general
partners of the title-holding entities and substantially all of the Company's
investment is in second and third mortgages (which are subordinate to first
mortgages owned by third party unaffiliated entities), the $87.1 million
investment is accounted for as an investment in mortgage notes. The $1.6
million payment made for the interest rate protection agreement is included in
deferred financing costs and is being amortized over the term of the related
debt. The investment in limited partnership interests is accounted for under
the equity method and is included in other assets on the balance sheet.
As of December 31, 1997 the second mortgage notes had a combined
principal balance of approximately $25.5 million, accrue interest at a rate of
9.45% per annum, receive principal amortization from excess cash flow and have
a stated maturity date of December 31, 2019. The third mortgage notes had a
combined principal balance of approximately $71.1 million, accrue interest at
a rate of 6.15% per annum, plus up to an additional 3% per annum to the extent
of available cash flow. Contingent interest on the third mortgage notes is
recognized to the extent it is determined to be received. The third mortgage
notes have a stated maturity of December 31, 2024. Receipt of principal and
interest on the second and third mortgage notes is subordinated to the receipt
of all interest on the first mortgage notes. With respect to the discount on
these notes, the unamortized balance at December 31, 1997 was $9 million.
During 1997 and 1996, the Company amortized $3.1 million and $0.6 million,
respectively, which is included in interest income- investment in mortgage
notes in the consolidated statement of operations. This discount is being
amortized utilizing the effective yield method.
On April 28, 1997, the Company made an $88 million investment in six
mortgage loans collateralized by five multifamily properties. These five
multifamily properties are included in the Additional Properties. As of
December 31, 1997, these six mortgage loans had a combined principal balance
of approximately $88 million and accrue interest at a rate of 8.25%. These
six mortgage loans are scheduled to mature on January 1, 2006.
11. MORTGAGE NOTES PAYABLE
As of December 31, 1997, the Company had outstanding mortgage
indebtedness of approximately $1.6 billion encumbering 152 of the Properties.
The carrying value of such Properties (net of accumulated depreciation of
$145.1 million) was approximately $2.6 billion. The mortgage notes payables
are generally due in monthly installments of interest only. In connection
F-30
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
with the Properties acquired during the year ended December 31, 1997,
including the effects of the Mergers, the Company assumed the outstanding
mortgage balances on 90 Properties in the aggregate amount of $931 million,
which includes a premium of approximately $3.9 million recorded in connection
with the EWR Merger.
Concurrent with the refinancing of certain tax-exempt bonds and as a
requirement of the credit provider of the bonds, the Financing Partnership,
which owns certain of the Properties, entered into interest rate protection
agreements, which were assigned to the credit provider as additional security.
The Financing Partnership pays interest based on a fixed interest rate and the
counterparty of the agreement pays interest to the Company at a floating rate
that is calculated based on the Public Securities Association Index for
municipal bonds ("PSA Municipal Index"). As of December 31, 1997 and 1996, the
aggregate notional amounts of these agreements were approximately $174.3
million and $166.8 million, respectively. The fixed interest rates for these
agreements were 4.81%, 4.528% and 4.90%. The termination dates are October 1,
2003, January 1, 2004 and April 1, 2004. The Company simultaneously entered
into substantially identical reverse interest rate protection agreements.
Under these agreements the Company pays interest monthly at a floating rate
based on the PSA Municipal Index and the counterparty pays interest to the
Company based on a fixed interest rate. As of December 31, 1997 and 1996, the
aggregate notional amount of these agreements was approximately $174.3 million
and $166.8 million, respectively. The fixed interest rates received by the
Company in exchange for paying interest based on the PSA Municipal Index for
these agreements were 4.74%, 4.458% and 4.83%. The termination dates are
October 1, 2003, January 1, 2004 and April 1, 2004. Collectively, these
agreements effectively cost the Company 0.07% per annum on the current
outstanding aggregate notional amount. The Company believes that it has
limited exposure to the extent of non-performance by the counterparties of the
agreements since each counterparty is a major U.S. financial institution, and
the Company does not anticipate their non-performance. Furthermore, any
non-performance by the counterparty is offset by non-performance by the
Company.
The Company also has an interest rate cap agreement for a notional
amount of $228,000,000, for which it will receive payments if the PSA index
exceeds 5.75%, that terminates on December 1, 1999. Any payments by the
counterparty under this agreement have been collaterally assigned to the
provider of certain sureties related to the tax exempt bonds secured by
certain of it's Properties. The Company has no payment obligations to the
counterparty with respect to this agreement.
As of December 31, 1997, scheduled maturities for the Company's
outstanding mortgage indebtedness are at various dates through October 1,
2030. During the year ended December 31, 1997, effective interest cost on
these mortgage notes was 7.5%. During the year ended December 31, 1997, the
Company repaid the outstanding mortgage balances on 29 Properties in the
aggregate amount of $113.4 million. Subsequent to December 31, 1997, the
Company repaid the outstanding mortgage balance on one Property in the amount
of approximately $18.2 million. In February 1996, the Company entered into
an interest rate protection agreement, which hedged the interest rate risk of
$50 million of mortgage loans, scheduled to mature in September 1997 by
locking the
F-31
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
five year Treasury Rate, commencing October 1, 1997 through October 1, 2002.
This agreement was cancelled in July 1997, at no cost to the Company, in
conjunction with the Company entering into another interest rate protection
agreement to effectively fix the cost of the Company's unsecured notes issued
in November 1997.
As of December 31, 1996, the Company had outstanding mortgage
indebtedness of approximately $755.4 million encumbering 88 of the Properties.
The carrying value of such Properties (net of accumulated depreciation of
$141.2 million) was approximately $1.1 billion. The mortgage notes payables
are generally due in monthly installments of interest only. In connection
with the Properties acquired during the year ended December 31, 1996, the
Company assumed the outstanding mortgage balances on 14 Properties in the
aggregate amount of $142.2 million. In addition, during 1996, in two separate
transactions, certain indebtedness evidenced by tax-exempt bonds encumbering
certain Properties was refinanced resulting in an increase in mortgage
indebtedness affecting these Properties of approximately $112 million. In
connection with one of these transactions, the Company also recorded an
extraordinary loss in the amount of approximately $3.5 million, which
represented the write-off of unamortized deferred financing costs from the
early retirement of debt.
During the year ended December 31, 1996, the effective interest cost
on these mortgage notes was 7.87%. During the year ended December 31, 1996,
the Company repaid the outstanding mortgage balances on eight Properties in
the aggregate amount of $57 million.
During 1996 the Company terminated two interest rate protection
agreements that were initially entered into in connection with two mortgage
loans with notional amounts totaling $64.2 million. These two agreements
effectively converted these two mortgage loans to fixed rate instruments based
on the London Interbank Offered Rate ("LIBOR"). Upon the termination of these
agreements the Company received settlement payments of approximately $230,000.
Aggregate payments of principal on mortgage notes payable for each of
the next five years and thereafter are as follows:
<TABLE>
<CAPTION>
YEAR TOTAL
---- -----
(in thousands)
<S> <C>
1998 $ 61,109
1999 18,130
2000 37,154
2001 185,550
2002 178,797
Thereafter 1,101,819
----------
Total $1,582,559
==========
</TABLE>
F-32
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
12. LINES OF CREDIT
On November 15, 1996, the Company completed an agreement with Morgan
Guaranty Trust Company of New York and Bank of America Illinois to provide
the Operating Partnership a $250 million unsecured line of credit. In
September 1997, this agreement was amended to increase the potential
borrowings to $500 million. This line of credit matures in November 1999 and
borrowings generally will bear interest at a per annum rate of one, two, three
or six month LIBOR, plus a certain rate dependent upon the Company's credit
rating, which rate is currently 0.45%, and is subject to an annual facility
fee of $750,000. As of December 31, 1997, $235 million were outstanding on
this line of credit, bearing interest at a weighted average rate of 6.46%.
F-33
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
13. NOTES
On May 16, 1994, the Operating Partnership issued $125 million of
unsecured senior notes (the "1999 Notes") in a private placement (the "Debt
Offering") to qualified institutional buyers. The 1999 Notes were issued at a
discount, which is being amortized over the life of the 1999 Notes on a
straight-line basis. As of December 31, 1997 the unamortized discount balance
was approximately $0.2 million. The 1999 Notes are due May 15, 1999 and bear
interest at a rate of 8.5%, which is payable semiannually in arrears on May 15
and November 15. In February 1996 the Company entered into an interest rate
protection agreement that hedged the interest rate risk of the 1999 Notes by
locking the effective four-year Treasury Rate, commencing May 15, 1999. There
was no current cost to the Company for entering into this agreement.
In December 1994, the Operating Partnership registered $500 million in
debt securities pursuant to a debt shelf registration statement (the "Debt
Shelf Registration") of which $100 million of unsecured floating rate notes
(the "Floating Rate Notes") were issued by the Operating Partnership on
December 22, 1994 (the "Public Debt Offering"). The Floating Rate Notes were
repaid at maturity on December 22, 1997.
In April 1995, the Operating Partnership issued $125 million of
unsecured fixed rate notes (the "2002 Notes") in connection with the Debt
Shelf Registration in a public debt offering (the "Second Public Debt
Offering"). The 2002 Notes were issued at a discount, which is being
amortized over the life of the 2002 Notes on a straight-line basis. As of
December 31, 1997 the unamortized discount balance was approximately $0.6
million. The 2002 Notes are due on April 15, 2002 and bear interest at 7.95%,
which is payable semiannually on each October 15 and April 15. The Operating
Partnership received net proceeds of $123.1 million in connection with the
Second Public Debt Offering. Prior to the issuance of the 2002 Notes, the
Operating Partnership entered into an interest rate protection agreement to
effectively fix the interest rate cost of such issuance. The Operating
Partnership made a one-time settlement payment of this protection transaction,
which was approximately $0.8 million and is being amortized over the term of
the 2002 Notes on a straight-line basis. As of December 31, 1997 the
unamortized balance of this cost was approximately $0.5 million.
In August 1996, the Operating Partnership issued $150 million of
unsecured fixed rate notes (the "2026 Notes") in connection with the Debt
Shelf Registration in a public debt offering (the "Third Public Debt
Offering"). The 2026 Notes are due on August 15, 2026 and bear interest at
7.57%, which is payable semiannually in arrears on February 15 and August 15,
commencing February 15, 1997. The 2026 Notes are redeemable at any time after
August 15, 2006 by the Operating Partnership pursuant to the terms thereof.
The Operating Partnership received net proceeds of approximately $149 million
in connection with this issuance. Prior to the issuance of the 2026 Notes,
the Company entered into an interest rate protection agreement to effectively
fix the interest rate cost of this issuance to 7.5%. The Operating
Partnership received a one-time settlement payment from this transaction,
which was approximately $0.6 million, which amount is
F-34
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
being amortized over the term of the 2026 Notes on a straight-line basis. As
of December 31, 1997, the unamortized balance was approximately $0.5 million.
On September 18, 1996, the Operating Partnership filed with the SEC a
Form S-3 Registration Statement to register $500 million of debt securities
(the "1996 Debt Shelf Registration"). The SEC declared this Registration
effective on September 23, 1996.
In October 1997, the Operating Partnership issued $150 million of
unsecured fixed rate notes (the "2017 Notes") in connection with the 1996 Debt
Shelf Registration in a public debt offering (the "Fourth Public Debt
Offering"). The 2017 Notes were issued at a discount, which is being
amortized over the life of the 2017 Notes on a straight-line basis. As of
December 31, 1997 the unamortized discount balance was approximately $1.2
million. The 2017 Notes are due on October 15, 2017 and bear interest at
7.125%, which is payable semiannually in arrears on April 15 and October 15,
commencing April 15, 1998. The 2017 Notes are redeemable at any time by the
Operating Partnership pursuant to the terms thereof. The Operating
Partnership received net proceeds of approximately $147.4 million in
connection with this issuance.
In November 1997, the Operating Partnership issued $200 million of
unsecured fixed rate notes in connection with the 1996 Debt Shelf Registration
in a public debt offering (the "Fifth Public Debt Offering"). Of the $200
million issued, $150 million of these notes are due November 15, 2001 (the
"2001 Notes") and bear interest at a rate of 6.55%, which is payable
semiannually in arrears on May 15 and November 15, commencing on May 15, 1998.
The remaining $50 million of these notes are due November 15, 2003 (the "2003
Notes") and bear interest at a rate of 6.65%, which is payable semiannually in
arrears on May 15 and November 15, commencing on May 15, 1998. The 2001 Notes
were issued at a discount, which is being amortized over the life of the 2001
Notes on a straight-line basis. As of December 31, 1997 the unamortized
discount balance was approximately $0.3 million. The Operating Partnership
received net proceeds of approximately $148.9 million in connection with the
2001 Notes. The 2003 Notes were issued at a discount, which is being
amortized over the life of the 2003 Notes on a straight-line basis. As of
December 31, 1997 the unamortized discount balance was approximately $0.1
million. The Operating Partnership received net proceeds of approximately
$49.6 million in connection with the 2003 Notes. Prior to the issuance of the
2001 and 2003 Notes, the Operating Partnership entered into two interest rate
protection agreements to effectively fix the interest rate costs of such
issuances. The Operating Partnership made a one time settlement payment of
each protection transaction, which was approximately $5 million and $1.7
million, respectively, which are being amortized over the term of the Notes on
a straight-line basis. As of December 31, 1997 the unamortized balance of
these costs were approximately $4.9 million and $1.6 million, respectively.
Included in the note balance are four unsecured note issuances assumed
in connection with the Wellsford Merger. These are discussed in the following
three paragraphs.
In January 1995, $100 million of senior unsecured notes due February
1, 2002 (the "2002-A Notes") were issued. The 2002-A Notes bear interest at a
rate of 9.375%, which is payable
F-35
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
semiannually in arrears on August 1 and February 1. In connection with the
assumption of the 2002-A Notes, the Company recorded a premium in the amount
of $5.6 million, which is being amortized over the remaining life of the notes
on a straight-line basis. As of December 31, 1997, the unamortized premium
balance relating to the 2002-A Notes was approximately $4.9 million.
In August 1995, $125 million of senior unsecured notes were issued.
Of the $125 million issued, $55 million of these notes are due August 15, 2000
(the "2000 Notes") and bear interest at a rate of 7.25%, which is payable
semiannually in arrears on February 15 and August 15. The remaining $70
million of these notes are due August 15, 2005 (the "2005 Notes") and bear
interest at a rate of 7.75%, which is payable semiannually in arrears on
February 1 and August 1.
In November 1996, $25 million of medium term unsecured floating rate
notes due November 24, 1999 (the "1999-A Notes") were issued. The 1999-A
Notes bear interest at 90 day LIBOR plus 0.32%, which is payable quarterly in
arrears on the 25th day of each February, May, August and November.
Also included in the note balance are two unsecured note issuances
assumed in connection with the EWR Merger. These are discussed in the
following two paragraphs.
In April 1997, $75 million of senior unsecured notes due April 15,
2004 (the "2004 Notes") were issued. The 2004 Notes bear interest at a rate
of 7.5%, which is payable semiannually in arrears on October 15 and April 15.
In connection with the assumption of the 2004 Notes, the Company recorded a
premium in the amount of $1.7 million, which is being amortized over the
remaining life of the notes on a straight-line basis. As of December 31,
1997, the unamortized premium balance relating to the 2004 Notes was
approximately $1.7 million.
In April 1997, $50 million of senior unsecured notes due April 15,
2007 (the "2007 Notes") were issued. The 2007 Notes bear interest at a rate
of 7.625%, which is payable semiannually in arrears on October 15 and April
15. In connection with the assumption of the 2007 Notes, the Company recorded
a premium in the amount of $1.6 million, which is being amortized over the
remaining life of the notes on a straight-line basis. As of December 31,
1997, the unamortized premium balance relating to the 2007 Notes was
approximately $1.6 million.
In regard to all of the interest rate protection agreements mentioned
in the previous paragraphs, the Company believes that it has limited exposure
to the extent of non-performance by the counterparties of each agreement since
each counterpart is a major U.S. financial institution, and the Company does
not anticipate their non-performance.
14. EMPLOYEE TRANSACTIONS
As of December 31, 1997, the outstanding principal balance on the
employee notes issued in connection with Common Shares purchased was, in the
aggregate, approximately $5.14 million. Douglas Crocker II, President and
Chief Executive Officer of the Company, and four other officers
F-36
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
had purchased an aggregate of 194,000 Common Shares at prices which range from
$26 to $31.625 per Common Share. These purchases were financed by loans made
by the Company in the aggregate amount of approximately $5.4 million. The
employee notes accrue interest, payable in arrears, at rates that range from
6.15% per annum to 7.93% per annum. Scheduled maturities are at various dates
through March 2005. The employee notes are recourse to Mr. Crocker and the
four other officers and are collateralized by pledges of the 194,000 Common
Shares purchased. Subsequent to December 31,1997, one of the four other
officers repaid his note in full.
In addition, as of December 31, 1997, the outstanding principal
balance on additional notes issued to Mr. Crocker and one other officer was
approximately $0.7 million. These notes accrue interest, payable in arrears,
at one month LIBOR plus 2% per annum. Scheduled maturities are at various
dates through March 2003. The notes are recourse to Mr. Crocker and the other
officer and are collateralized by pledges of options, share awards and Common
Shares purchased.
Mr. Crocker has a deferred compensation agreement (the "Deferred
Compensation Agreement") which Deferred Compensation Agreement will provide
Mr. Crocker with a salary benefit after his termination of employment with the
Company. If Mr. Crocker's employment is terminated without cause, he would be
entitled to annual deferred compensation for a 10-year period commencing on
the termination date in an amount equal to his average annual base
compensation (before bonus) for the prior five calendar years, multiplied by a
percentage equal to 10% per year since December 31, 1995. In the event Mr.
Crocker's employment is terminated as a result of his death, permanent
disability or incapacity, he would be entitled to a similar amount except the
annual percentage would be 15% and the maximum paid per year would not exceed
100% of his average base salary. Should Mr. Crocker be terminated for cause
or should he choose to leave voluntarily without good reason, he would not be
entitled to any deferred compensation. The Company recognized approximately
$0.5 million of compensation expense for both 1997 and 1996 related to this
Deferred Compensation Agreement.
In addition, Gerald Spector, Executive Vice President and Chief
Operating Officer of the Company, entered into a Deferred Compensation
Agreement in 1997, which agreement provides Mr. Spector with a salary benefit
after his termination of employment with the Company. If Mr. Spector's
employment is terminated without cause, he would be entitled to annual
deferred compensation for a 15-year period commencing on the termination date
in an amount equal to 75% of his average annual base compensation (before
bonus) for the prior five calendar years, multiplied by a percentage equal to
6.67% per each year since December 31, 1996. In the event Mr. Spector's
employment is terminated as a result of his death, permanent disability or
incapacity, he would be entitled to a similar amount except that the annual
percentage would be 10%, not 6.67%. Should Mr. Spector be terminated for
cause or should he choose to leave voluntarily without good reason, he would
not be entitled to any deferred compensation. The Company recognized
approximately $0.2 million of compensation expense in 1997 related to this
Deferred Compensation Agreement.
The Board of Trustees also approved a share distributions agreement
(the "Share Distributions Agreement") for Mr. Crocker. On January 18, 1996,
Mr. Crocker was issued options
F-37
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
to purchase 100,000 Common Shares at the then current market price of the
Common Shares, which vest over a 3-year period and are effective for 10 years.
Pursuant to the terms of the Share Distributions Agreement, upon the exercise
of any of these options, Mr. Crocker would be entitled to an amount equal to
the amount of Common Share distributions that would have been paid on said
shares being exercised had he owned said shares for the period from January
18, 1996 until the date of the exercise of the options in question. Mr.
Crocker's death or termination of employment would not affect this agreement
with the Company.
In May, 1997, Jeffrey Lynford and Edward Lowenthal (trustees of the
Company) each executed a consulting agreement with the Company. Each
consulting agreement has a term of five years from May 30, 1997, the closing
date of the Wellsford Merger. Pursuant to the consulting agreements, each of
Messrs. Lynford and Lowenthal will serve as a senior management consultant to
the Company and will receive compensation at the rate of $200,000 per year
plus reimbursement for reasonable out-of-pocket expenses.
In connection with the EWR Merger, in December, 1997, Stephen Evans
executed a consulting agreement with an affiliate of the Company. The
consulting agreement has a term of two years and expires on December 31, 1999.
Pursuant to the consulting agreement, Mr. Evans will serve as a senior
management consultant to the Company and will receive compensation at the rate
of $225,000 per year. Mr. Evans also received an option to purchase 115,500
Common Shares that will vest in three equal annual installments and will have
an exercise price equal to $50.125 per Common Share. Mr. Evans will also be
eligible to participate in all of the Company's employee benefit plans in
which persons in comparable positions participate, treating Mr. Evans as an
employee.
Also in connection with the EWR Merger, in December, 1997, Richard
Berry executed an employment agreement with an affiliate of the Company which
expires on December 31, 2000 and provides for cash compensation of $250,000
per annum. Pursuant to the agreement, Mr. Berry exchanged all unvested
restricted shares of Evans common shares at the time of the EWR Merger into
18,747 restricted Common Shares of the Company, which will vest on December
31, 2000. Mr. Berry also received an option to purchase 77,500 Common Shares
that will vest in three equal annual installments and will have an exercise
price equal to $50.125 per Common Share. The agreement also provided that Mr.
Berry will be eligible to participate in all of the Company's employee benefit
plans which persons in comparable positions participate.
In December, 1997, Mr. Berry also entered into a Deferred Compensation
Agreement with the Company which will pay benefits only in the event Mr.
Berry's employment with the Company is terminated prior to January 1, 2000. In
such a case, the amount payable under Mr. Berry's agreement will equal the
value of any restricted Common Shares received in exchange for EWR common
shares which are forfeited upon his termination of employment. The payment
will be made in two semi-annual installments over the one-year period
following termination of employment, and interest of 9% per annum will accrue
on the balance over the one-year payment period.
F-38
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
The Company has established a defined contribution plan (the "401(k)
Plan") that provides retirement benefits for employees that meet minimum
employment criteria. The Company contributes 100% of the first 4% of eligible
compensation that a participant contributes to the 401(k) Plan. Participants
are vested in the Company's contributions over five years. The Company made
contributions in the amount of $0.8 million for the year ended December 31,
1996 and expects to make contributions in the amount of approximately $1.5
million for the year ended December 31, 1997.
15. DEPOSITS-RESTRICTED
Deposits-restricted as of December 31, 1997 primarily included a
deposit in the amount of $20 million held in a third party escrow account made
to provide third party construction financing in connection with the Joint
Venture Agreement. Also, approximately $8.8 million was held in third party
escrow accounts made in connection with the Company's disposition of Diplomat
South and for several expected 1998 acquisitions. In addition, approximately
$7.6 million was for tenant security and utility deposits for certain of the
Company's Properties.
Deposits-restricted, as of December 31, 1996, primarily included
deposits in the amount of approximately $16.4 million held in third party
escrow accounts which were made in connection with five Properties acquired in
1997. In addition, approximately $3.7 million was for tenant security and
utility deposits for certain of the Company's Properties.
F-39
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
16. GAIN ON EARLY EXTINGUISHMENT OF DEBT
In June 1995, the Company paid approximately $12.6 million in full
satisfaction of a $14.6 million mortgage note obligation related to one of its
Properties. As a result, the Company recognized a gain of $2 million on the
extinguishment of this indebtedness.
17. SUMMARIZED PRO FORMA CONDENSED STATEMENT OF OPERATIONS (UNAUDITED)
The following Summarized Pro Forma Condensed Statement of Operations
has been prepared as if the March 1997 Common Share Offerings, the Series D
Preferred Share Offering, the June 1997 Common Share Offerings, the Wellsford
Merger, the September 1997 Common Share Offering, the Series G Preferred Share
Offering, the Fourth Public Debt Offering, the October 1997 Common Share
Offering, the Fifth Public Debt Offering, the December 1997 Common Share
Offerings, the EWR Merger, the acquisition of an additional 124 Properties,
including the related assumption of $597.2 million of mortgage indebtedness,
the repayment of $113.4 million of mortgage indebtedness and the disposition
of seven properties (as described in Note 3, Note 4, Note 6, Note 8, Note 11
and Note 13 of Notes to Consolidated Financial Statements) had occurred on
January 1, 1997. This would result in 89,085,265 Common Shares outstanding.
In management's opinion, the Summarized Pro Forma Condensed Statement of
Operations does not purport to present what actual results would have been had
the above transactions occurred on January 1, 1997, or to project results for
any future period. The amounts presented in the following statement are in
thousands except for share amounts:
F-40
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE>
<CAPTION>
Summarized Pro Forma
Condensed Statement
of Operations
For the Year Ended
December 31, 1997
-----------------
<S> <C>
Total Revenues $ 1,107,581
Total Expenses 878,989
-----------
Pro Forma income before allocation to Minority Interests $ 228,592
===========
Pro Forma net income 214,806
Preferred distributions 86,768
-----------
Pro Forma net income available for Common Shares $ 128,038
===========
Pro Forma net income per Common Share - assuming no dilution $ 1.44
===========
</TABLE>
18. SHARE OPTION PLAN
Pursuant to the Company's Amended and Restated 1993 Share Option and
Share Award Plan (the "Third Amended Option and Award Plan") officers,
directors, key employees and consultants of the Company may be offered the
opportunity to acquire Common Shares through the grant of share options
("Options") including non-qualified share options ("NQSOs"), incentive share
options ("ISOs") and share appreciation rights ("SARs") or may be granted
restricted or non- restricted shares. Additionally, under the Option and
Award Plan, certain officers of the Company may be awarded Common Shares,
subject to conditions and restrictions as described in the Option and Award
Plan. Options and SARs are sometimes referred to herein as "Awards". As to
the Options that have been granted through December 31, 1997, generally,
one-third are exercisable one year after the initial grant, one-third are
exercisable two years following the date such Options were granted and the
remaining one-third are exercisable three years following the date such
Options were granted.
The Company has reserved 5,600,000 Common Shares for issuance under
the Option and Award Plan. The Options generally are granted at the fair
market value of the Company's Common Shares at the date of grant, vest over a
three year period, are exercisable upon vesting and expire ten years from the
date of grant. The exercise price for all Options under the Third Amended
Option and Award Plan shall not be less than the fair market value of the
underlying Common Shares at the time the Option is granted. The Third Amended
Option and Award Plan will terminate at such time as no further Common Shares
are available for issuance upon the exercise of Options and all outstanding
Options have expired or been exercised. The Board of Trustees may at any time
amend or terminate the Third Amended Option and Award Plan, but termination
will not affect Awards previously granted. Any Options, which had vested
prior to such a termination, would remain exercisable by the holder thereof.
The Company has elected to apply the provisions of Accounting
Principles Board Opinion
F-41
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
No. 25, "Accounting for Stock Issued to Employees," (APB No. 25) in the
computation of compensation expense. Under APB No. 25's intrinsic value
method, compensation expense is determined by computing the excess of the
market price of the shares over the exercise price on the measurement date.
For the Company's share options, the intrinsic value on the measurement date
(or grant date) is zero, and no compensation expense is recognized. Financial
Accounting Standards Board No. 123 (FASB No. 123) requires the Company to
disclose pro forma net income and income per share as if a fair value based
accounting method had been used in the computation of compensation expense.
The fair value of the options computed under FASB No. 123 would be recognized
over the vesting period of the options. The fair value for the Company's
options granted subsequent to December 31, 1994 was estimated at the time the
options were granted using the Black Scholes option pricing model with the
following weighted-average assumptions for 1995, 1996 and 1997, respectively:
risk-free interest rates of 6.51%, 6.35% and 6.33%; dividend yields of 7.64%,
6.98% and 5.32%; volatility factors of the expected market price of the
Company's Common Shares of 0.226, 0.226 and 0.218; and a weighted-average
expected life of the option of seven years.
The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options that have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because the Company's Options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a
reliable single measure of the fair value of its Options.
For purposes of pro forma disclosures, the estimated fair value of the
Options is amortized to expense over the Options' vesting period. The
following is the pro forma information for the years ended December 31, 1997,
1996 and 1995:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Pro forma net income available to
Common Shares $112,482 $ 70,905 $ 57,171
======== ======== ========
Pro forma income per weighted
average Common Share outstanding $ 1.71 $ 1.66 $ 1.66
======== ======== ========
</TABLE>
The table below summarizes the Option activity of the Third Amended
Option and Award Plan for the three years ended December 31, 1997:
F-42
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE>
<CAPTION>
Common Weighted Average
Shares Subject to Exercise Price
Options or Awards Per Common Share
----------------- ----------------
<S> <C> <C>
Balance at January 1, 1995 949,033 $27.31
Options granted 602,900 $26.41
Options cancelled (91,319) $27.50
Options exercised (100,966) $26.39
---------- ------
Balance at December 31, 1995 1,359,648 $26.97
Options granted 1,195,962 $30.54
Options cancelled (74,519) $29.00
Options exercised (151,178) $26.64
---------- ------
Balance at December 31, 1996 2,329,913 $28.76
Options granted 2,025,321 $44.00
Options cancelled (68,258) $34.50
Options exercised (180,138) $27.78
---------- ------
Balance at December 31, 1997 4,106,838 $36.22
========== ======
</TABLE>
As of December 31, 1997, 1996 and 1995, 1,329,516 shares, 898,075
shares and 743,368 shares were exercisable, respectively. Exercise prices for
Options outstanding as of December 31, 1997 ranged from $26 to $54.8125.
Expiration dates ranged from August 11, 2003 to December 24, 2007. The
remaining weighted-average contractual life of those Options was 8.27 years.
The weighted-average grant date fair value of Options granted during 1997 was
$7.37.
19. EMPLOYEE SHARE PURCHASE PLAN
Under the Company's Employee Share Purchase Plan certain eligible
officers, trustees and employees of the Company may annually acquire up to
$100,000 of Common Shares of the Company. The aggregate number of Common
Shares available under the Employee Share Purchase Plan shall not exceed
1,000,000, subject to adjustment by the Board of Trustees. The Common Shares
may be purchased quarterly at a price equal to 85% of the lesser of: (a) the
closing price for a share on the last day of such quarter; and (b) the greater
of: (i) the closing price for a share on the first day of such quarter, and
(ii) the average closing price for a share for all the business days in the
quarter. During 1996, the Company issued 39,458 Common Shares at a net price
of $30.44 per share. During 1997, the Company issued 84,183 Common Shares at
net prices that ranged from $35.63 per share to $42.08 per share and raised
approximately $3.2 million in connection therewith.
20. DISTRIBUTION REINVESTMENT AND SHARE PURCHASE PLAN
On November 3, 1997, the Company filed with the SEC a Form S-3
Registration Statement to register 7,000,000 Common Shares pursuant to a
Distribution Reinvestment and Share Purchase Plan. The registration statement
was declared effective on November 25, 1997.
The Distribution Reinvestment and Share Purchase Plan (the "DRIP
Plan") of the Company provides holders of record and beneficial owners of
Common Shares, Preferred Shares, and limited partnership interests in the
Operating Partnership with a simple and convenient method of investing
F-43
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
cash distributions in additional Common Shares. Common Shares may also be
purchased on a monthly basis with optional cash payments made by participants
in the Plan and interested new investors, not currently shareholders of the
Company, at the market price of the Common Shares less a discount ranging
between 0% and 5% (as determined in accordance with the DRIP Plan).
21. COMMITMENTS AND CONTINGENCIES
The Company, as an owner of real estate, is subject to various
environmental laws of Federal and local governments. Compliance by the
Company with existing laws has not had a material adverse effect on the
Company's financial condition and results of operations. However, the Company
cannot predict the impact of new or changed laws or regulations on its current
Properties or on properties that it may acquire in the future.
The Company does not believe there is any other litigation, except as
mentioned in the previous paragraph, threatened against the Company other than
routine litigation arising out of the ordinary course of business, some of
which is expected to be covered by liability insurance, none of which is
expected to have a material adverse effect on the consolidated financial
statements of the Company.
In connection with the Joint Venture Agreement, as discussed in Note
7, the Company is obligated to fund an additional $20 million in connection
with the third party construction financing.
In connection with the Wellsford Merger, the Company has provided a
standby obligation in the amount of $30 million pursuant to an agreement
entered into with Wellsford Real Properties, Inc., a Maryland corporation
("WRP"), for the construction financing for a multifamily development project
located in Denver, Colorado. In addition, the Company has provided a $14.8
million credit enhancement with respect to bonds issued to finance certain
public improvements at the multifamily development project.
The Company has lease agreements with an affiliated party covering
office space occupied by the management offices located in Tampa, Florida (the
"Tampa Office") and Chicago, Illinois (the "Chicago Office"). The Tampa
Office agreement expires on October 31, 2001 and the Chicago Office agreement
expires on July 31, 2000.
The Company also has seven additional lease agreements with
unaffiliated parties covering space occupied by the management offices located
in Dallas, Texas (the "Dallas Office"); Bethesda, Maryland (the "Bethesda
Office"); Denver, Colorado (the "Denver Office"); Seattle, Washington (the
"Seattle Office"); Atlanta, Georgia (the "Atlanta Office"); Scottsdale,
Arizona (the "Scottsdale Office") and Irvine, California (the "Irvine
Office"). The lease agreement for the Dallas Office expires on February 28,
1999, the lease agreement for the Bethesda Office expires on November 30,
1998, the lease agreement for the Denver Office expires on December 31, 2002,
the lease agreement for the Seattle Office expires on November 30, 2000, the
lease agreement for the Atlanta Office expires on May 14, 2001, the lease
agreement for the Scottsdale Office expires on July 31, 1999 and the lease
agreement for the Irvine Office expires on July 31, 1998.
F-44
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
The Company also has a lease agreement with an affiliated party
covering office space occupied by the corporate headquarters located in
Chicago, Illinois. This agreement, as amended, expires on July 31, 2001. In
addition, commencing September 1, 1996, the Company increased the office space
occupied by its corporate personnel. The lease agreement covering the
additional space expires on April 29, 1998.
During the years ended December 31, 1997, 1996 and 1995, total
rentals, including a portion of real estate taxes, insurance, repairs and
utilities, aggregated $1,491,766, $1,020,311, and $1,049,731, respectively.
The minimum basic aggregate rental commitment under the above
described leases in years succeeding December 31, 1997 is as follows:
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
1998 $1,755,789
1999 1,324,472
2000 1,125,808
2001 710,376
2002 208,318
----------
Total $5,124,763
==========
</TABLE>
22. TRANSACTIONS WITH RELATED PARTIES
Certain related entities provided services to the Company. These
included, but were not limited to, Rosenberg & Liebentritt, P.C., which
provided legal services, and Greenberg & Pociask, Ltd., which provided tax and
accounting services. Fees paid to these related entities in the aggregate
amounted to approximately $1.3 million, $0.7 million and $2.5 million for the
years ended December 31, 1997, 1996 and 1995, respectively. In addition, The
Riverside Agency, Inc., which provided insurance brokerage services, was paid
fees and reimbursed premiums and loss claims in the amount of $0.3 million,
$4.1 million and $2.6 million for the years ended December 31, 1997, 1996 and
1995, respectively. As of December 31, 1997, 1996 and 1995, $643,519,
$315,700 and $366,300, respectively, was owed to Rosenberg & Liebentritt, P.C.
for legal fees incurred in connection with securities offerings, litigation
matters, property acquisitions and other general corporate matters.
Equity Group Investments, Inc. and certain of its subsidiaries,
including Equity Assets Management, Inc., Eagle Flight Services, Equity
Properties & Development, L.P. and EPMC ("EGI"), have provided certain
services to the Company which include, but are not limited to, financial and
accounting services, investor relations, corporate secretarial, computer and
support services, real estate tax evaluation services, market consulting and
research services, financing services, information systems services and
property development services. Fees paid to EGI for these services amounted
to $1.1 million, $1.3 million and $3.4 million for the years ended December
31, 1997, 1996 and 1995, respectively. Amounts due to EGI were approximately
$74,578, $0.3 million and $1.1 million as of December 31, 1997, 1996 and 1995,
respectively.
F-45
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
In connection with the affiliated lease agreements discussed in Note
21, the Company paid Equity Office Holdings, L.L.C. ("EOH") $145,511, $118,919
and $104,421 in connection with the Chicago Office, $177,793, $137,638 and
$9,783 in connection with the Tampa Office and $632,693, $409,392 and $632,725
in connection with the space occupied by the corporate headquarters for the
years ended December 31, 1997, 1996 and 1995, respectively. Amounts due to
EOH were approximately $59,675 and $46,435 as of December 31, 1997 and 1996,
respectively. As of December 31, 1995, no amounts were owed to EOH.
In connection with the Private Equity Offering and the Shelf Offering,
the Company paid Equity Institutional Investors, Inc. ("EII") consulting fees
in the amount of $200,000 for the year ended December 31, 1995. As of
December 31, 1997 and 1996, no amounts were owed to EII for consulting
services.
Artery Property Management, Inc. ("Artery") provided the Company
consulting services with regard to property acquisitions and additional
business opportunities. Fees paid for those services and reimbursed expenses
amounted to approximately $0.2 million and $0.7 million for the years ended
December 31, 1996 and 1995.
Rudnick & Wolfe, a law firm in which Mr. Errol Halperin, a trustee of
the Company, is a partner, provided legal services to the Company. Fees paid
to this firm amounted to approximately $2.3 million, $4,300 and $41,300 for
the years ended December 31, 1997, 1996 and 1995, respectively.
In addition, the Company has provided acquisitions, asset and property
management services to certain related entities for properties not owned by
the Company. Fees received for providing such services were approximately
$5.7 million, $6.7 million and $7 million for the years ended December 31,
1997, 1996 and 1995, respectively.
23. QUARTERLY FINANCIAL DATA (UNAUDITED):
The following unaudited quarterly data has been prepared on the basis
of a December 31 year end. The 1997 and 1996 net income per weighted average
Common Share amounts have been presented and, where appropriate, restated to
comply with Statement of Financial Accounting Standards No. 128, Earnings Per
Share. For further discussion of net income per weighted average Common Share
outstanding and impact of Statement No. 128, see Note 5 of Notes to
Consolidated Financial Statements. Amounts are in thousands, except for per
share amounts.
F-46
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE>
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
1997 3/31 6/30 9/30 12/31
---- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Total revenues $141,387 $164,937 $203,354 $237,643
======== ======== ======== ========
Income before allocation
to Minority Interests $ 36,388 $ 38,628 $ 50,320 $ 64,516
======== ======== ======== ========
Net income $ 32,962 $ 35,709 $ 47,234 $ 60,687
======== ======== ======== ========
Net income available
to Common Shares $ 23,901 $ 23,831 $ 30,886 $ 38,962
======== ======== ======== ========
Weighted average Common
Shares outstanding 51,791 58,940 73,757 78,050
======== ======== ======== ========
Net income per weighted
average Common Share
outstanding $ 0.46 $ 0.40 $ 0.42 $ 0.50
======== ======== ======== ========
Net income per weighted
average Common Share
outstanding - assuming dilution $ 0.45 $ 0.40 $ 0.41 $ 0.49
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
1996 3/31 6/30 9/30 12/31
---- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Total Revenues $106,321 $113,267 $124,459 $134,338
======== ======== ======== ========
Income before allocation
to Minority Interests $ 21,295 $ 23,310 $ 22,111 $ 49,207
======== ======== ======== ========
Net income $ 18,394 $ 20,288 $ 19,608 $ 43,334
======== ======== ======== ========
Net income available
to Common Shares $ 11,957 $ 13,851 $ 12,529 $ 34,272
======== ======== ======== ========
Weighted average Common
Shares outstanding 37,877 41,114 43,781 47,505
======== ======== ======== ========
Net income per weighted
average Common
Share outstanding $ 0.32 $ 0.34 $ 0.29 $ 0.72
======== ======== ======== ========
Net income per weighted
average Common Share
outstanding - assuming dilution $ 0.31 $ 0.33 $ 0.28 $ 0.71
======== ======== ======== ========
</TABLE>
F-47
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
24. SUBSEQUENT EVENTS
On January 7, 1998, the Company acquired Cityscape Apartments, a
156-unit multifamily property located in St. Louis Park, Minnesota, from an
unaffiliated third party for a purchase price of approximately $12.3 million.
On January 9, 1998, the Company acquired 740 River Drive Apartments, a
162-unit multifamily property located in St. Paul, Minnesota, from an
unaffiliated third party for a purchase price of approximately $12.8 million,
which included the assumption of mortgage indebtedness of approximately $7
million.
On January 13, 1998, the Company acquired Prospect Towers Apartments,
a 157-unit multifamily property, including a vacant parcel of land, located in
Hackensack, New Jersey, from an unaffiliated third party for a purchase price
of approximately $36.3 million, which included the assumption of mortgage
indebtedness of approximately $14.9 million.
On January 16, 1998, the Company acquired Park Place Apartments, a
229-unit multifamily property located in Houston, Texas, from an unaffiliated
third party for a purchase price of approximately $13.6 million, which
included the assumption of mortgage indebtedness of approximately $10.2
million.
On January 16, 1998, the Company acquired Park Westend Apartments, a
312-unit multifamily property located in Richmond, Virginia, from an
unaffiliated third party for a purchase price of approximately $13.3 million,
which included the assumption of mortgage indebtedness of approximately $7.2
million.
On January 27, 1998, the Company completed an offering of 4,000,000
publicly registered Common Shares, which were sold at a price of $50.4375 per
share. The Company received net proceeds of approximately $195.3 million in
connection therewith.
On January 29, 1998, the Company acquired Emerald Bay at Winter Park
Apartments, a 431-unit multifamily property located in Winter Park, Florida,
from an unaffiliated third party for a purchase price of approximately $15.7
million.
On February 3, 1998, the Company filed with the SEC a Form S-3
Registration Statement to register $1 billion of equity securities. The SEC
declared this Registration effective on February 27, 1998.
On February 5, 1998, the Company acquired Farnham Park Apartments, a
216-unit multifamily property located in Houston, Texas, from an unaffiliated
third party for a purchase price of approximately $15.7 million, which
included the assumption of mortgage indebtedness of approximately $11.5
million.
On February 18, 1998, the Company completed offerings of 988,340
publicly registered Common Shares, which were sold at a price of $50.625 per
share. The Company received net proceeds of approximately $47.5 million in
connection therewith.
F-48
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
On February 23, 1998, the Company completed an offering of 1 million
publicly registered Common Shares, which were sold at a price of $48 per
share. The Company received net proceeds of approximately $47.5 million in
connection therewith.
On February 25, 1998, the Company acquired Plantation Apartments, a
232-unit multifamily property located in Houston, Texas, from an unaffiliated
third party for a purchase price of approximately $10 million.
On February 27, 1998, the Company acquired Balcones Club Apartments, a
312-unit multifamily property located in Austin, Texas, from an unaffiliated
third party for a purchase price of approximately $12.3 million.
Through February 1998, the Company sold approximately 639,000 Common
Shares pursuant to the DRIP Plan and raised proceeds of approximately $31.7
million.
On March 2, 1998, the Company acquired Coach Lantern Apartments, a
90-unit multifamily property located in Scarborough, Maine, from an
unaffiliated third party for a purchase price of approximately $4.7 million.
On March 2, 1998, the Company acquired Foxcroft Apartments, a 104-unit
multifamily property located in Scarborough, Maine, from an unaffiliated third
party for a purchase price of approximately $4.9 million.
On March 2, 1998, the Company acquired Yarmouth Woods Apartments, a
138-unit multifamily property located in Yarmouth, Maine, from an unaffiliated
third party for a purchase price of approximately $6.6 million.
On March 2, 1998, the Company declared a $0.67 distribution per Common
Share, $0.585938 per Series A Preferred Share, $0.570313 per Series B
Depositary Share and per Series C Depositary Share, $0.5375 per Series D
Depositary Share, $0.603125 per Series F Preferred Share and $0.453125 per
Series G Depositary Share for the quarter ended March 31, 1998 to shareholders
of record on March 27, 1998. In addition, the Company declared a $0.4375 per
Series E Preferred Share for the quarter ended March 31, 1998 to shareholders
of record on March 13, 1998.
On March 12, 1998, the Company disposed of two Properties for a total
sales price of $16.7 million.
F-49
<PAGE>
To the Board of Trustees
Equity Residential Properties Trust
In connection with our audit of the consolidated financial statements of
Equity Residential Properties Trust referred to in our report dated February
14, 1996, which financial statements are included in this Form 10-K, we have
also audited the 1995 information in the financial statement schedule listed
in the Index to the Financial Statements and Schedule. In our opinion, this
financial statement schedule presents fairly, in all material respects, the
1995 information required to be set forth therein.
/s/ GRANT THORNTON LLP
-------------------------------
GRANT THORNTON LLP
Chicago, Illinois
February 14, 1996
S-1
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
Real Estate and Accumulated Depreciation
December 31, 1997
<TABLE>
<CAPTION>
Initial Cost to
Description Company
- -------------------------------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Encumbrances Land Fixtures
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2300 Elliott Seattle, WA 0 796,700 7,170,461
2900 on First Seattle, WA 0 1,176,400 10,588,096
3000 Grand Des Moines, IA 0 858,305 7,827,336
7979 Westheimer Houston, TX 0 1,388,400 12,495,280
Acacia Creek Scottsdale, AZ 0 6,121,856 35,300,728
Altamonte San Antonio, TX 14,600,000 1,663,100 14,968,079
Amberton Manassas, VA 10,597,067 888,800 8,352,507
Arbor Glen Pittsfield Twp, MI 0 1,092,300 9,830,191
Arboretum (GA) Atlanta, GA 0 4,679,400 15,927,313
Arbors of Brentwood Nashville, TN (D) 404,570 13,189,508
Arbors of Hickory Hollow Nashville, TN (D) 202,285 6,594,754
Arbors of Las Colinas Irving, TX 0 1,662,300 14,960,709
Ashton, The Corona Hills, CA 17,300,000 2,594,264 33,012,228
Atrium Durham, NC 0 1,122,600 10,103,027
Augusta (WRP) Oklahoma City, OK 0 873,200 7,866,622
Autumn Creek Cordova, TN (E) 1,680,000 9,330,921
Bainbridge Durham, NC 0 1,042,900 9,385,579
Banyan Lake Boynton Beach, FL 0 2,736,000 11,204,508
Bay Club Phoenix, AZ 0 828,100 5,821,759
Bay Ridge San Pedro, CA 0 2,385,399 2,180,081
Bayside at the Islands Gilbert, AZ (P) 3,306,484 15,541,586
Bear Canyon (Evans) Tucson, AZ 0 1,660,608 11,203,464
Bear Creek Village Denver, CO 0 4,519,700 40,677,102
Blue Swan San Antonio, TX (E) 1,424,800 7,589,821
Bourbon Square Palatine, IL 27,846,353 3,982,600 35,843,025
Breckenridge Lexington, KY 9,592,152 1,645,800 14,812,310
Brentwood Vancouver, WA 0 1,318,200 11,863,517
Breton Mill Houston, TX (F) 212,720 8,154,404
Bridgecreek Wilsonville, OR 0 1,294,600 11,651,108
Bridgeport Raleigh, NC 0 1,296,200 11,665,351
Brierwood Jacksonville, FL 0 546,100 4,914,681
Brittany Square Tulsa, OK 0 625,000 4,220,662
Brixworth Nashville, TN 0 1,172,100 10,549,371
Brookfield Salt Lake City, UT 0 1,152,000 5,673,250
Brookridge Centreville, VA (E) 2,520,000 15,993,105
Burn Brae Dallas, TX 0 1,255,000 11,294,815
Burwick Farms Howell, MI 0 1,102,200 9,919,799
Calais Dallas, TX 0 1,118,900 10,070,076
Cambridge at Hickory Hollow Nashville, TN 0 3,240,000 17,908,952
Cambridge Village Lewisville, TX 0 800,000 8,751,405
Camellero Scottsdale, AZ 11,842,927 1,923,600 17,312,869
Canterbury Germantown, MD 31,363,911 2,781,300 26,656,574
Canterchase Nashville, TN 5,765,286 862,200 7,759,711
Canyon Creek Tucson, AZ 0 834,313 5,840,188
Canyon Crest Views Riverside, CA 0 1,744,640 17,355,155
Canyon Ridge San Diego, CA 0 4,869,448 11,969,198
Canyon Sands Phoenix, AZ 8,624,067 1,475,900 13,282,737
Cardinal, The Greensboro, NC 7,472,027 1,280,000 11,838,616
Carmel Terrace San Diego, CA 0 2,288,300 20,632,540
Carolina Crossing Greenville, SC 0 547,800 4,930,347
Casa Camino Ruiz San Diego, CA 0 3,920,000 9,390,192
Casa Capricorn San Diego, CA 0 1,260,100 11,341,085
Casa Cordoba Tallahassee, FL 0 307,055 2,732,177
Casa Cortez Tallahassee, FL 0 120,590 1,196,857
Cascade at Landmark Alexandria, VA 0 3,601,000 19,649,825
</TABLE>
<TABLE>
<CAPTION>
Cost Capitalized
Subsequent to
Acquisition
Description (Improvements, net) (I)
- --------------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Land Fixtures
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
2300 Elliott Seattle, WA 0 52,545
2900 on First Seattle, WA 1,300 204,426
3000 Grand Des Moines, IA 0 1,256,198
7979 Westheimer Houston, TX 1,700 964,639
Acacia Creek Scottsdale, AZ 0 0
Altamonte San Antonio, TX 1,970 664,704
Amberton Manassas, VA 11,800 862,260
Arbor Glen Pittsfield Twp, MI 0 (0)
Arboretum (GA) Atlanta, GA 0 1
Arbors of Brentwood Nashville, TN 100 918,181
Arbors of Hickory Hollow Nashville, TN 700 1,613,873
Arbors of Las Colinas Irving, TX 1,600 1,119,028
Ashton, The Corona Hills, CA 0 0
Atrium Durham, NC 0 7,769
Augusta (WRP) Oklahoma City, OK 0 31,204
Autumn Creek Cordova, TN 1,300 11,719
Bainbridge Durham, NC 33,400 918,181
Banyan Lake Boynton Beach, FL 2,600 96,561
Bay Club Phoenix, AZ 100 1,222,091
Bay Ridge San Pedro, CA 15,701 0
Bayside at the Islands Gilbert, AZ 0 0
Bear Canyon (Evans) Tucson, AZ 0 0
Bear Creek Village Denver, CO 0 60,349
Blue Swan San Antonio, TX 0 4,359
Bourbon Square Palatine, IL 2,700 2,647,335
Breckenridge Lexington, KY 0 0
Brentwood Vancouver, WA 39,021 944,655
Breton Mill Houston, TX 100 708,380
Bridgecreek Wilsonville, OR 5,290 1,079,812
Bridgeport Raleigh, NC 500 366,851
Brierwood Jacksonville, FL 5,800 181,788
Brittany Square Tulsa, OK 0 417,992
Brixworth Nashville, TN 1,700 116,540
Brookfield Salt Lake City, UT 300 7,652
Brookridge Centreville, VA 900 26,748
Burn Brae Dallas, TX 0 73,217
Burwick Farms Howell, MI 0 3,672
Calais Dallas, TX 0 83,333
Cambridge at Hickory Hollow Nashville, TN 0 5,763
Cambridge Village Lewisville, TX 800 62,113
Camellero Scottsdale, AZ 1,300 512,137
Canterbury Germantown, MD 0 2,173,671
Canterchase Nashville, TN 1,400 333,999
Canyon Creek Tucson, AZ 100 405,082
Canyon Crest Views Riverside, CA 0 0
Canyon Ridge San Diego, CA 0 0
Canyon Sands Phoenix, AZ 16,850 153,409
Cardinal, The Greensboro, NC 1,200 60,113
Carmel Terrace San Diego, CA 0 175,737
Carolina Crossing Greenville, SC 0 3,171
Casa Camino Ruiz San Diego, CA 2,300 32,792
Casa Capricorn San Diego, CA 2,600 89,786
Casa Cordoba Tallahassee, FL 0 846,277
Casa Cortez Tallahassee, FL 0 494,584
Cascade at Landmark Alexandria, VA 1,600 69,440
</TABLE>
<TABLE>
<CAPTION>
Gross Amount Carried
at Close of
Description Period 12/31/97
- --------------------------------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Land Fixtures (A) Total (B)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2300 Elliott Seattle, WA 796,700 7,223,006 8,019,706
2900 on First Seattle, WA 1,177,700 10,792,522 11,970,222
3000 Grand Des Moines, IA 858,305 9,083,534 9,941,839
7979 Westheimer Houston, TX 1,390,100 13,459,919 14,850,019
Acacia Creek Scottsdale, AZ 6,121,856 35,300,728 41,422,584
Altamonte San Antonio, TX 1,665,070 15,632,783 17,297,853
Amberton Manassas, VA 900,600 9,214,767 10,115,367
Arbor Glen Pittsfield Twp, MI 1,092,300 9,830,191 10,922,491
Arboretum (GA) Atlanta, GA 4,679,400 15,927,313 20,606,713
Arbors of Brentwood Nashville, TN 404,670 14,107,689 14,512,359
Arbors of Hickory Hollow Nashville, TN 202,985 8,208,627 8,411,612
Arbors of Las Colinas Irving, TX 1,663,900 16,079,737 17,743,637
Ashton, The Corona Hills, CA 2,594,264 33,012,228 35,606,492
Atrium Durham, NC 1,122,600 10,110,796 11,233,396
Augusta (WRP) Oklahoma City, OK 873,200 7,897,826 8,771,026
Autumn Creek Cordova, TN 1,681,300 9,342,640 11,023,940
Bainbridge Durham, NC 1,076,300 10,303,760 11,380,060
Banyan Lake Boynton Beach, FL 2,738,600 11,301,069 14,039,669
Bay Club Phoenix, AZ 828,200 7,043,850 7,872,050
Bay Ridge San Pedro, CA 2,401,100 2,180,081 4,581,181
Bayside at the Islands Gilbert, AZ 3,306,484 15,541,586 18,848,070
Bear Canyon (Evans) Tucson, AZ 1,660,608 11,203,464 12,864,072
Bear Creek Village Denver, CO 4,519,700 40,737,451 45,257,151
Blue Swan San Antonio, TX 1,424,800 7,594,180 9,018,980
Bourbon Square Palatine, IL 3,985,300 38,490,360 42,475,660
Breckenridge Lexington, KY 1,645,800 14,812,310 16,458,110
Brentwood Vancouver, WA 1,357,221 12,808,172 14,165,393
Breton Mill Houston, TX 212,820 8,862,784 9,075,604
Bridgecreek Wilsonville, OR 1,299,890 12,730,920 14,030,810
Bridgeport Raleigh, NC 1,296,700 12,032,202 13,328,902
Brierwood Jacksonville, FL 551,900 5,096,469 5,648,369
Brittany Square Tulsa, OK 625,000 4,638,654 5,263,654
Brixworth Nashville, TN 1,173,800 10,665,911 11,839,711
Brookfield Salt Lake City, UT 1,152,300 5,680,902 6,833,202
Brookridge Centreville, VA 2,520,900 16,019,853 18,540,753
Burn Brae Dallas, TX 1,255,000 11,368,032 12,623,032
Burwick Farms Howell, MI 1,102,200 9,923,471 11,025,671
Calais Dallas, TX 1,118,900 10,153,409 11,272,309
Cambridge at Hickory Hollow Nashville, TN 3,240,000 17,914,715 21,154,715
Cambridge Village Lewisville, TX 800,800 8,813,518 9,614,318
Camellero Scottsdale, AZ 1,924,900 17,825,006 19,749,906
Canterbury Germantown, MD 2,781,300 28,830,245 31,611,545
Canterchase Nashville, TN 863,600 8,093,710 8,957,310
Canyon Creek Tucson, AZ 834,413 6,245,270 7,079,683
Canyon Crest Views Riverside, CA 1,744,640 17,355,155 19,099,795
Canyon Ridge San Diego, CA 4,869,448 11,969,198 16,838,646
Canyon Sands Phoenix, AZ 1,492,750 13,436,146 14,928,896
Cardinal, The Greensboro, NC 1,281,200 11,898,729 13,179,929
Carmel Terrace San Diego, CA 2,288,300 20,808,277 23,096,577
Carolina Crossing Greenville, SC 547,800 4,933,518 5,481,318
Casa Camino Ruiz San Diego, CA 3,922,300 9,422,984 13,345,284
Casa Capricorn San Diego, CA 1,262,700 11,430,871 12,693,571
Casa Cordoba Tallahassee, FL 307,055 3,578,454 3,885,509
Casa Cortez Tallahassee, FL 120,590 1,691,441 1,812,031
Cascade at Landmark Alexandria, VA 3,602,600 19,719,265 23,321,865
</TABLE>
<TABLE>
<CAPTION>
Life Used to
Description Compute
- ---------------------------------------------------------------------------------------------------------- Depreciation in
Accumulated Date of Latest Income
Apartment Name Location Depreciation Construction Statement (C)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2300 Elliott Seattle, WA 150,310 1992 30 Years
2900 on First Seattle, WA 666,232 1989-91 30 Years
3000 Grand Des Moines, IA 4,532,117 1970 30 Years
7979 Westheimer Houston, TX 1,133,263 1973 30 Years
Acacia Creek Scottsdale, AZ 32,729 1988-1994 30 Years
Altamonte San Antonio, TX 1,914,056 1985 30 Years
Amberton Manassas, VA 998,358 1986 30 Years
Arbor Glen Pittsfield Twp, MI 21,111 1990 30 Years
Arboretum (GA) Atlanta, GA 1,598 1970 30 Years
Arbors of Brentwood Nashville, TN 2,223,819 1986 30 Years
Arbors of Hickory Hollow Nashville, TN 1,414,692 1986 30 Years
Arbors of Las Colinas Irving, TX 2,360,743 1984/85 30 Years
Ashton, The Corona Hills, CA 28,361 1986 30 Years
Atrium Durham, NC 85,311 1989 30 Years
Augusta (WRP) Oklahoma City, OK 172,697 1986 30 Years
Autumn Creek Cordova, TN 68,100 1991 30 Years
Bainbridge Durham, NC 1,434,370 1984 30 Years
Banyan Lake Boynton Beach, FL 250,216 1986 30 Years
Bay Club Phoenix, AZ 1,233,244 1976 30 Years
Bay Ridge San Pedro, CA 52,595 1987 30 Years
Bayside at the Islands Gilbert, AZ 15,060 1989 30 Years
Bear Canyon (Evans) Tucson, AZ 10,494 1996 30 Years
Bear Creek Village Denver, CO 837,574 1987 30 Years
Blue Swan San Antonio, TX 59,138 1985-1994 30 Years
Bourbon Square Palatine, IL 5,536,065 1984-87 30 Years
Breckenridge Lexington, KY 32,070 1986-1987 30 Years
Brentwood Vancouver, WA 1,231,183 1990 30 Years
Breton Mill Houston, TX 1,355,393 1986 30 Years
Bridgecreek Wilsonville, OR 1,705,010 1987 30 Years
Bridgeport Raleigh, NC 1,755,355 1990 30 Years
Brierwood Jacksonville, FL 275,998 1974 30 Years
Brittany Square Tulsa, OK 2,234,419 1982 30 Years
Brixworth Nashville, TN 532,581 1985 30 Years
Brookfield Salt Lake City, UT 52,370 1985 30 Years
Brookridge Centreville, VA 113,182 1989 30 Years
Burn Brae Dallas, TX 248,625 1984 30 Years
Burwick Farms Howell, MI 86,052 1991 30 Years
Calais Dallas, TX 225,361 1986 30 Years
Cambridge at Hickory Hollow Nashville, TN 166,041 1997 30 Years
Cambridge Village Lewisville, TX 122,405 1987 30 Years
Camellero Scottsdale, AZ 1,622,709 1979 30 Years
Canterbury Germantown, MD 3,159,698 1986 30 Years
Canterchase Nashville, TN 405,797 1985 30 Years
Canyon Creek Tucson, AZ 1,042,284 1986 30 Years
Canyon Crest Views Riverside, CA 14,860 1982-1983 30 Years
Canyon Ridge San Diego, CA 13,122 1989 30 Years
Canyon Sands Phoenix, AZ 826,111 1983 30 Years
Cardinal, The Greensboro, NC 382,792 1994 30 Years
Carmel Terrace San Diego, CA 2,338,102 1988-89 30 Years
Carolina Crossing Greenville, SC 43,718 1988-89 30 Years
Casa Camino Ruiz San Diego, CA 111,041 1976-1986 30 Years
Casa Capricorn San Diego, CA 522,582 1981 30 Years
Casa Cordoba Tallahassee, FL 2,527,797 1972/1973 30 Years
Casa Cortez Tallahassee, FL 1,129,397 1970 30 Years
Cascade at Landmark Alexandria, VA 431,609 1990 30 Years
</TABLE>
S-2
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
Real Estate and Accumulated Depreciation
December 31, 1997
<TABLE>
<CAPTION>
Initial Cost to
Description Company
- -------------------------------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Encumbrances Land Fixtures
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Catalina Shores Las Vegas, NV 0 1,222,200 10,999,974
Catalina Shores (WRP) Las Vegas, NV 0 1,427,200 12,844,577
Cedar Crest Overland Park, KS 0 2,159,800 19,438,107
Cedars, The Charlotte, NC 0 2,025,300 18,139,423
Celebration Westchase Houston, TX 0 2,204,590 6,312,399
Champion Oaks Houston, TX 7,050,922 931,900 8,519,479
Chandler Court Chandler, AZ 0 1,352,600 12,172,974
Chandler's Bay Kent, WA 0 1,503,400 13,530,223
Chantecleer Lakes Naperville, IL (E) 6,688,000 16,327,809
Chaparral Largo, FL 0 303,100 6,169,465
Charter Club Everett, WA 0 998,700 8,988,560
Chartwell Court Houston, TX 0 1,215,000 12,820,142
Cherry Hill Seattle, WA 0 700,100 6,301,194
Chestnut Hills Tacoma, WA 0 756,300 6,806,382
Cheyenne Crest Colorado Springs, CO 0 73,950 3,936,559
Chimneys Charlotte, NC 0 904,700 8,141,844
Cierra Crest Denver, CO 0 4,800,000 34,825,500
Cimarron Ridge Denver, CO 0 1,591,100 14,319,997
Clarion Decatur, GA 0 1,501,900 13,517,171
Classic, The Stamford, CT 0 2,880,000 19,881,820
Cloisters On The Green Lexington, KY 0 187,074 2,193,726
Club at Tanasbourne Hillsboro, OR 0 3,520,000 16,259,589
Club at the Green Beaverton, OR 0 2,030,150 12,601,596
Colinas Pointe Denver, CO 0 1,587,400 14,287,051
Concorde Bridge Overland Park, KS 0 1,972,400 17,751,898
Copper Creek (WRP) Phoenix, AZ 0 1,017,400 9,156,964
Copperfield (WRP) San Antonio, TX 0 791,200 7,121,171
Country Brook Chandler, AZ (P) 1,505,219 29,485,866
Country Club I Silver Spring, MD 7,051,066 1,119,500 10,815,232
Country Club II Silver Spring, MD 5,817,446 850,000 8,255,502
Country Club Village (WRP) Seattle, WA 0 1,150,500 10,354,697
Country Gables Beaverton, OR 8,538,246 1,580,500 14,240,626
Country Ridge Farmington Hills, MI 0 1,605,800 14,452,066
Countryside (WRP) San Antonio, TX 0 667,500 6,007,294
Creekside Oaks Walnut Creek, CA 11,394,343 2,167,300 19,505,628
Creekside Village Mountlake Terrace, WA 15,536,616 2,802,900 25,226,096
Creekwood Charlotte, NC 0 1,859,300 16,733,418
Crescent at Cherry Creek Denver, CO (E) 2,592,000 15,119,233
Crossing at Green Valley (WRP) Las Vegas, NV 0 2,408,500 21,676,899
Crosswinds St. Petersburg, FL 0 1,561,200 5,789,894
Crown Court (WRP) Phoenix, AZ 0 3,156,600 28,409,516
Crystal Creek Phoenix, AZ 0 952,900 8,576,084
Crystal Village Attleboro, MA 0 1,365,000 4,956,700
Cypress Point Las Vegas, NV 0 953,800 8,583,719
Dartmouth Woods Denver, CO 4,396,157 1,608,000 10,815,913
Dawntree Carrollton, TX 0 1,204,600 10,841,783
Deerwood (Corona) Corona, CA 0 4,740,000 20,295,433
Deerwood (SD) San Diego, CA 0 2,075,700 18,680,801
Deerwood Meadows Greensboro, NC 0 986,643 6,906,503
Del Coronado Mesa, AZ (O) 1,963,200 17,669,207
Desert Park Las Vegas, NV 0 1,085,400 9,401,015
Desert Sands Phoenix, AZ 8,618,262 1,464,200 13,177,336
Doral Louisville, KY 0 96,607 1,526,628
Dos Caminos (WRP) Phoenix, AZ 0 1,727,900 15,551,044
Eagle Canyon Chino Hills, CA 0 1,806,800 16,261,336
</TABLE>
<TABLE>
<CAPTION>
Cost Capitalized
Subsequent to
Acquisition
Description (Improvements, net) (I)
- ------------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Land Fixtures
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Catalina Shores Las Vegas, NV 4,800 484,568
Catalina Shores (WRP) Las Vegas, NV 0 15,045
Cedar Crest Overland Park, KS 900 846,386
Cedars, The Charlotte, NC 0 88,336
Celebration Westchase Houston, TX 100 866,081
Champion Oaks Houston, TX 0 203,859
Chandler Court Chandler, AZ 500 408,378
Chandler's Bay Kent, WA 3,500 666,513
Chantecleer Lakes Naperville, IL 900 21,615
Chaparral Largo, FL 0 2,749,681
Charter Club Everett, WA 2,400 252,157
Chartwell Court Houston, TX 400 95
Cherry Hill Seattle, WA 0 10,087
Chestnut Hills Tacoma, WA 0 59,907
Cheyenne Crest Colorado Springs, CO 100 802,593
Chimneys Charlotte, NC 0 4,184
Cierra Crest Denver, CO 600 5,619
Cimarron Ridge Denver, CO 0 77,597
Clarion Decatur, GA 0 6,665
Classic, The Stamford, CT 900 12,854
Cloisters On The Green Lexington, KY 0 1,484,959
Club at Tanasbourne Hillsboro, OR 800 317,522
Club at the Green Beaverton, OR 0 274,120
Colinas Pointe Denver, CO 0 43,001
Concorde Bridge Overland Park, KS 0 12,979
Copper Creek (WRP) Phoenix, AZ 0 29,668
Copperfield (WRP) San Antonio, TX 0 144,095
Country Brook Chandler, AZ 0 0
Country Club I Silver Spring, MD 1,457 556,907
Country Club II Silver Spring, MD 2,294 23,886
Country Club Village (WRP) Seattle, WA 0 19,629
Country Gables Beaverton, OR 0 209,183
Country Ridge Farmington Hills, MI 16,150 449,918
Countryside (WRP) San Antonio, TX 100 141,248
Creekside Oaks Walnut Creek, CA 3,300 575,111
Creekside Village Mountlake Terrace, WA 4,700 664,333
Creekwood Charlotte, NC 0 6,559
Crescent at Cherry Creek Denver, CO 900 8,552
Crossing at Green Valley (WRP) Las Vegas, NV 0 45,437
Crosswinds St. Petersburg, FL 0 0
Crown Court (WRP) Phoenix, AZ 0 193,587
Crystal Creek Phoenix, AZ 600 366,894
Crystal Village Attleboro, MA 2,700 24,183
Cypress Point Las Vegas, NV 5,890 530,211
Dartmouth Woods Denver, CO 1,800 63,769
Dawntree Carrollton, TX 900 1,054,940
Deerwood (Corona) Corona, CA 600 37,163
Deerwood (SD) San Diego, CA 6,395 2,903,044
Deerwood Meadows Greensboro, NC 100 749,467
Del Coronado Mesa, AZ 1,200 360,176
Desert Park Las Vegas, NV 0 631,659
Desert Sands Phoenix, AZ 16,850 765,588
Doral Louisville, KY 0 2,665,189
Dos Caminos (WRP) Phoenix, AZ 0 74,234
Eagle Canyon Chino Hills, CA 2,100 133,967
</TABLE>
<TABLE>
<CAPTION>
Gross Amount Carried
at Close of
Description Period 12/31/97
- --------------------------------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Land Fixtures (A) Total (B)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Catalina Shores Las Vegas, NV 1,227,000 11,484,542 12,711,542
Catalina Shores (WRP) Las Vegas, NV 1,427,200 12,859,622 14,286,822
Cedar Crest Overland Park, KS 2,160,700 20,284,492 22,445,192
Cedars, The Charlotte, NC 2,025,300 18,227,759 20,253,059
Celebration Westchase Houston, TX 2,204,690 7,178,480 9,383,170
Champion Oaks Houston, TX 931,900 8,723,338 9,655,238
Chandler Court Chandler, AZ 1,353,100 12,581,352 13,934,452
Chandler's Bay Kent, WA 1,506,900 14,196,736 15,703,636
Chantecleer Lakes Naperville, IL 6,688,900 16,349,424 23,038,324
Chaparral Largo, FL 303,100 8,919,146 9,222,246
Charter Club Everett, WA 1,001,100 9,240,717 10,241,817
Chartwell Court Houston, TX 1,215,400 12,820,237 14,035,637
Cherry Hill Seattle, WA 700,100 6,311,281 7,011,381
Chestnut Hills Tacoma, WA 756,300 6,866,289 7,622,589
Cheyenne Crest Colorado Springs, CO 74,050 4,739,152 4,813,202
Chimneys Charlotte, NC 904,700 8,146,028 9,050,728
Cierra Crest Denver, CO 4,800,600 34,831,119 39,631,719
Cimarron Ridge Denver, CO 1,591,100 14,397,594 15,988,694
Clarion Decatur, GA 1,501,900 13,523,836 15,025,736
Classic, The Stamford, CT 2,880,900 19,894,674 22,775,574
Cloisters On The Green Lexington, KY 187,074 3,678,685 3,865,759
Club at Tanasbourne Hillsboro, OR 3,520,800 16,577,111 20,097,911
Club at the Green Beaverton, OR 2,030,150 12,875,716 14,905,866
Colinas Pointe Denver, CO 1,587,400 14,330,052 15,917,452
Concorde Bridge Overland Park, KS 1,972,400 17,764,877 19,737,277
Copper Creek (WRP) Phoenix, AZ 1,017,400 9,186,632 10,204,032
Copperfield (WRP) San Antonio, TX 791,200 7,265,266 8,056,466
Country Brook Chandler, AZ 1,505,219 29,485,866 30,991,085
Country Club I Silver Spring, MD 1,120,957 11,372,139 12,493,096
Country Club II Silver Spring, MD 852,294 8,279,388 9,131,682
Country Club Village (WRP) Seattle, WA 1,150,500 10,374,326 11,524,826
Country Gables Beaverton, OR 1,580,500 14,449,809 16,030,309
Country Ridge Farmington Hills, MI 1,621,950 14,901,984 16,523,934
Countryside (WRP) San Antonio, TX 667,600 6,148,542 6,816,142
Creekside Oaks Walnut Creek, CA 2,170,600 20,080,738 22,251,338
Creekside Village Mountlake Terrace, WA 2,807,600 25,890,429 28,698,029
Creekwood Charlotte, NC 1,859,300 16,739,977 18,599,277
Crescent at Cherry Creek Denver, CO 2,592,900 15,127,785 17,720,685
Crossing at Green Valley (WRP) Las Vegas, NV 2,408,500 21,722,336 24,130,836
Crosswinds St. Petersburg, FL 1,561,200 5,789,894 7,351,094
Crown Court (WRP) Phoenix, AZ 3,156,600 28,603,103 31,759,703
Crystal Creek Phoenix, AZ 953,500 8,942,978 9,896,478
Crystal Village Attleboro, MA 1,367,700 4,980,883 6,348,583
Cypress Point Las Vegas, NV 959,690 9,113,930 10,073,620
Dartmouth Woods Denver, CO 1,609,800 10,879,682 12,489,482
Dawntree Carrollton, TX 1,205,500 11,896,723 13,102,223
Deerwood (Corona) Corona, CA 4,740,600 20,332,596 25,073,196
Deerwood (SD) San Diego, CA 2,082,095 21,583,845 23,665,940
Deerwood Meadows Greensboro, NC 986,743 7,655,970 8,642,713
Del Coronado Mesa, AZ 1,964,400 18,029,383 19,993,783
Desert Park Las Vegas, NV 1,085,400 10,032,674 11,118,074
Desert Sands Phoenix, AZ 1,481,050 13,942,924 15,423,974
Doral Louisville, KY 96,607 4,191,817 4,288,424
Dos Caminos (WRP) Phoenix, AZ 1,727,900 15,625,277 17,353,177
Eagle Canyon Chino Hills, CA 1,808,900 16,395,303 18,204,203
</TABLE>
<TABLE>
<CAPTION>
Life Used to
Description Compute
- ---------------------------------------------------------------------------------------------------------- Depreciation in
Accumulated Date of Latest Income
Apartment Name Location Depreciation Construction Statement (C)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Catalina Shores Las Vegas, NV 1,461,633 1989 30 Years
Catalina Shores (WRP) Las Vegas, NV 274,961 1989 30 Years
Cedar Crest Overland Park, KS 887,080 1986 30 Years
Cedars, The Charlotte, NC 38,641 1983 30 Years
Celebration Westchase Houston, TX 1,385,691 1979 30 Years
Champion Oaks Houston, TX 1,075,300 1984 30 Years
Chandler Court Chandler, AZ 747,295 1987 30 Years
Chandler's Bay Kent, WA 1,685,964 1989 30 Years
Chantecleer Lakes Naperville, IL 117,084 1986 30 Years
Chaparral Largo, FL 5,573,973 1976 30 Years
Charter Club Everett, WA 1,315,175 1991 30 Years
Chartwell Court Houston, TX 11,536 1995 30 Years
Cherry Hill Seattle, WA 133,334 1991 30 Years
Chestnut Hills Tacoma, WA 150,043 1991 30 Years
Cheyenne Crest Colorado Springs, CO 864,281 1984 30 Years
Chimneys Charlotte, NC 70,526 1974 30 Years
Cierra Crest Denver, CO 71,391 1996 30 Years
Cimarron Ridge Denver, CO 308,253 1984 30 Years
Clarion Decatur, GA 111,794 1990 30 Years
Classic, The Stamford, CT 175,445 1990 30 Years
Cloisters On The Green Lexington, KY 2,536,077 1974 30 Years
Club at Tanasbourne Hillsboro, OR 322,537 1990 30 Years
Club at the Green Beaverton, OR 335,656 1991 30 Years
Colinas Pointe Denver, CO 304,668 1986 30 Years
Concorde Bridge Overland Park, KS 145,402 1973 30 Years
Copper Creek (WRP) Phoenix, AZ 193,496 1984 30 Years
Copperfield (WRP) San Antonio, TX 169,373 1984 30 Years
Country Brook Chandler, AZ 24,552 1986-1996 30 Years
Country Club I Silver Spring, MD 1,239,522 1980 30 Years
Country Club II Silver Spring, MD 838,309 1982 30 Years
Country Club Village (WRP) Seattle, WA 216,195 1991 30 Years
Country Gables Beaverton, OR 397,356 1991 30 Years
Country Ridge Farmington Hills, MI 868,662 1986 30 Years
Countryside (WRP) San Antonio, TX 143,873 1980 30 Years
Creekside Oaks Walnut Creek, CA 768,339 1974 30 Years
Creekside Village Mountlake Terrace, WA 2,981,611 1987 30 Years
Creekwood Charlotte, NC 142,811 1987-1990 30 Years
Crescent at Cherry Creek Denver, CO 106,269 1994 30 Years
Crossing at Green Valley (WRP) Las Vegas, NV 459,509 1986 30 Years
Crosswinds St. Petersburg, FL 77,892 1986 30 Years
Crown Court (WRP) Phoenix, AZ 602,508 1987 30 Years
Crystal Creek Phoenix, AZ 864,913 1985 30 Years
Crystal Village Attleboro, MA 7,413 1974 30 Years
Cypress Point Las Vegas, NV 1,165,833 1989 30 Years
Dartmouth Woods Denver, CO 316,417 1990 30 Years
Dawntree Carrollton, TX 1,434,699 1982 30 Years
Deerwood (Corona) Corona, CA 151,497 1992 30 Years
Deerwood (SD) San Diego, CA 2,905,131 1990 30 Years
Deerwood Meadows Greensboro, NC 1,298,270 1986 30 Years
Del Coronado Mesa, AZ 1,641,724 1985 30 Years
Desert Park Las Vegas, NV 782,460 1987 30 Years
Desert Sands Phoenix, AZ 826,194 1982 30 Years
Doral Louisville, KY 1,937,083 1972 30 Years
Dos Caminos (WRP) Phoenix, AZ 328,887 1983 30 Years
Eagle Canyon Chino Hills, CA 758,955 1985 30 Years
</TABLE>
S-3
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
Real Estate and Accumulated Depreciation
December 31, 1997
<TABLE>
<CAPTION>
Initial Cost to
Description Company
- -------------------------------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Encumbrances Land Fixtures
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Eagle Rim Redmond, WA 0 976,200 8,785,605
East Pointe Charlotte, NC 9,634,931 1,364,100 12,276,563
Eastland on the Lake Columbus, OH 0 817,400 7,356,350
Edgewood Woodinville, WA 6,041,999 1,068,200 9,613,388
Emerald Place Bermuda Dunes, CA 0 954,400 8,589,110
Essex Place Overland Park, KS 0 1,831,900 16,486,600
Ethans Glen III Kansas City, MO 2,366,364 244,100 2,197,138
Ethans Ridge II Kansas City, MO 10,991,981 1,465,500 13,189,192
Ethans Ridge I Kansas City, MO 16,232,216 1,945,900 17,513,216
Farmington Gates Germantown, TN 0 969,700 8,727,328
Firdale Village (WRP) Seattle, WA 0 2,279,400 20,514,917
Flying Sun Phoenix, AZ 0 87,120 2,035,537
Forest Ridge Arlington, TX 0 2,339,300 21,053,447
Forest Valley (WRP) San Antonio, TX 0 590,000 5,310,328
Fountain Creek Phoenix, AZ 0 686,000 6,173,818
Fountain Place I Eden Prairie, MN 24,676,652 2,399,900 21,599,215
Fountain Place II Eden Prairie, MN 12,612,600 1,226,500 11,038,139
Fountainhead Combined San Antonio, TX 23,275,000 3,617,449 13,446,560
Fountains at Flamingo Las Vegas, NV 0 3,180,900 28,628,533
Four Lakes Lisle, IL 10,344,569 2,465,000 13,178,449
Four Lakes 5 Lisle, IL 39,680,000 600,000 16,530,115
Fox Run (AR) Little Rock, AR 5,481,038 422,014 4,053,552
Fox Run (WA) Federal Way, WA 0 638,500 5,746,956
Foxchase Grand Prairie, TX 0 781,500 7,559,700
Frey Road Atlanta, GA 19,700,000 2,464,900 22,183,783
Garden Lake Riverdale, GA 0 1,464,500 13,180,548
Gatehouse at Pine Lake Plantation , FL 0 1,886,200 16,975,382
Gatehouse on the Green Pembroke Pines, FL 0 2,216,800 19,951,085
Gates of Redmond Combined Redmond, WA 9,974,725 3,603,100 18,867,454
Gateway Villas (Evans) Scottsdale, AZ 0 1,431,048 14,901,923
Geary Court Yard San Francisco, CA 17,709,692 1,719,400 15,474,355
Georgian Woods II Wheaton, MD 10,507,869 2,049,000 19,287,578
Glen Eagle Greenville, SC 0 833,500 7,503,698
Glenlake Glendale Heights, IL 15,045,000 5,040,000 16,663,439
Glenridge Colorado Springs, CO (F) 884,688 4,466,900
Gold Pointe (WRP) Tacoma, WA 0 528,800 4,759,015
Governor's Place Augusta, GA 0 347,355 2,518,146
Governor's Pointe Roswell, GA (E) 3,744,000 24,480,337
Greengate Marietta, GA 0 132,979 1,476,005
Greenwich Woods Silver Spring, MD 17,752,586 3,095,700 29,073,395
Greenwood Forest Little Rock, AR 3,562,675 559,038 1,736,549
Greenwood Village (Evans) Tempe, AZ (P) 2,118,781 17,222,332
Grey Eagle Greenville, SC 0 725,200 6,527,253
Habitat Orlando, FL 0 600,000 494,032
Hammock's Place Miami, FL (F) 319,080 12,216,608
Hampton Green San Antonio, TX 0 1,561,830 2,962,670
Hamptons (WRP) Tacoma, WA 6,025,964 1,119,200 10,072,905
Harborview San Pedro, CA 12,510,709 6,400,000 12,608,900
Harbour Landing Corpus Christi, TX 0 761,600 6,854,524
Harrison Park (Evans) Tucson, AZ (P) 1,265,094 16,314,580
Hathaway Long Beach, CA 0 2,512,200 22,609,720
Hawthorne (Evans) Phoenix, AZ 0 2,697,050 15,669,963
Hearthstone San Antonio, TX 0 1,035,700 3,375,132
Heritage Park (WRP) Oklahoma City, OK 0 1,325,600 11,941,770
Heron Cove Coral Springs, FL 0 823,000 7,997,360
</TABLE>
<TABLE>
<CAPTION>
Cost Capitalized
Subsequent to
Acquisition
Description (Improvements, net) (I)
- ------------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Land Fixtures
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Eagle Rim Redmond, WA 1,600 370,746
East Pointe Charlotte, NC 1,800 869,258
Eastland on the Lake Columbus, OH 0 8,979
Edgewood Woodinville, WA 1,900 362,053
Emerald Place Bermuda Dunes, CA 2,100 539,453
Essex Place Overland Park, KS 3,500 1,503,929
Ethans Glen III Kansas City, MO 0 (0)
Ethans Ridge II Kansas City, MO 0 0
Ethans Ridge I Kansas City, MO 0 0
Farmington Gates Germantown, TN 0 0
Firdale Village (WRP) Seattle, WA 0 92,426
Flying Sun Phoenix, AZ 100 178,012
Forest Ridge Arlington, TX 23,400 893,265
Forest Valley (WRP) San Antonio, TX 0 33,906
Fountain Creek Phoenix, AZ 500 233,154
Fountain Place I Eden Prairie, MN 0 0
Fountain Place II Eden Prairie, MN 0 0
Fountainhead Combined San Antonio, TX 0 1,317,395
Fountains at Flamingo Las Vegas, NV 2,200 543,785
Four Lakes Lisle, IL 0 6,778,000
Four Lakes 5 Lisle, IL 0 3,193,317
Fox Run (AR) Little Rock, AR 0 4,873,142
Fox Run (WA) Federal Way, WA 1,200 430,801
Foxchase Grand Prairie, TX 0 187,368
Frey Road Atlanta, GA 2,300 957,611
Garden Lake Riverdale, GA 0 182
Gatehouse at Pine Lake Plantation , FL 10,400 303,635
Gatehouse on the Green Pembroke Pines, FL 11,400 336,832
Gates of Redmond Combined Redmond, WA 0 (0)
Gateway Villas (Evans) Scottsdale, AZ 0 0
Geary Court Yard San Francisco, CA 0 0
Georgian Woods II Wheaton, MD 4,400 1,573,039
Glen Eagle Greenville, SC 0 2,898
Glenlake Glendale Heights. IL 500 4,136
Glenridge Colorado Springs, CO 100 577,000
Gold Pointe (WRP) Tacoma, WA 0 3,634
Governor's Place Augusta, GA 0 845,541
Governor's Pointe Roswell, GA 1,300 32,433
Greengate Marietta, GA 0 1,186,277
Greenwich Woods Silver Spring, MD 5,300 1,686,629
Greenwood Forest Little Rock, AR 0 2,705,648
Greenwood Village (Evans) Tempe, AZ 0 0
Grey Eagle Greenville, SC 0 2,105
Habitat Orlando, FL 0 5,792,585
Hammock's Place Miami, FL 100 699,083
Hampton Green San Antonio, TX 0 1,997,624
Hamptons (WRP) Tacoma, WA 0 62,118
Harborview San Pedro, CA 2,400 97,863
Harbour Landing Corpus Christi, TX 3,400 844,168
Harrison Park (Evans) Tucson, AZ 0 0
Hathaway Long Beach, CA 300 362,145
Hawthorne (Evans) Phoenix, AZ 0 0
Hearthstone San Antonio, TX 100 358,136
Heritage Park (WRP) Oklahoma City, OK 0 52,391
Heron Cove Coral Springs, FL 0 529,581
</TABLE>
<TABLE>
<CAPTION>
Gross Amount Carried
at Close of
Description Period 12/31/97
- -------------------------------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Land Fixtures (A) Total (B)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Eagle Rim Redmond, WA 977,800 9,156,351 10,134,151
East Pointe Charlotte, NC 1,365,900 13,145,821 14,511,721
Eastland on the Lake Columbus, OH 817,400 7,365,329 8,182,729
Edgewood Woodinville, WA 1,070,100 9,975,441 11,045,541
Emerald Place Bermuda Dunes, CA 956,500 9,128,563 10,085,063
Essex Place Overland Park, KS 1,835,400 17,990,529 19,825,929
Ethans Glen III Kansas City, MO 244,100 2,197,138 2,441,238
Ethans Ridge II Kansas City, MO 1,465,500 13,189,192 14,654,692
Ethans Ridge I Kansas City, MO 1,945,900 17,513,216 19,459,116
Farmington Gates Germantown, TN 969,700 8,727,328 9,697,028
Firdale Village (WRP) Seattle, WA 2,279,400 20,607,343 22,886,743
Flying Sun Phoenix, AZ 87,220 2,213,549 2,300,769
Forest Ridge Arlington, TX 2,362,700 21,946,712 24,309,412
Forest Valley (WRP) San Antonio, TX 590,000 5,344,234 5,934,234
Fountain Creek Phoenix, AZ 686,500 6,406,972 7,093,472
Fountain Place I Eden Prairie, MN 2,399,900 21,599,215 23,999,115
Fountain Place II Eden Prairie, MN 1,226,500 11,038,139 12,264,639
Fountainhead Combined San Antonio, TX 3,617,449 14,763,955 18,381,404
Fountains at Flamingo Las Vegas, NV 3,183,100 29,172,318 32,355,418
Four Lakes Lisle, IL 2,465,000 19,956,449 22,421,449
Four Lakes 5 Lisle, IL 600,000 19,723,432 20,323,432
Fox Run (AR) Little Rock, AR 422,014 8,926,694 9,348,708
Fox Run (WA) Federal Way, WA 639,700 6,177,757 6,817,457
Foxchase Grand Prairie, TX 781,500 7,747,067 8,528,567
Frey Road Atlanta, GA 2,467,200 23,141,394 25,608,594
Garden Lake Riverdale, GA 1,464,500 13,180,730 14,645,230
Gatehouse at Pine Lake Plantation , FL 1,896,600 17,279,017 19,175,617
Gatehouse on the Green Pembroke Pines, FL 2,228,200 20,287,917 22,516,117
Gates of Redmond Combined Redmond, WA 3,603,100 18,867,454 22,470,554
Gateway Villas (Evans) Scottsdale, AZ 1,431,048 14,901,923 16,332,971
Geary Court Yard San Francisco, CA 1,719,400 15,474,355 17,193,755
Georgian Woods II Wheaton, MD 2,053,400 20,860,617 22,914,017
Glen Eagle Greenville, SC 833,500 7,506,596 8,340,096
Glenlake Glendale Heights. IL 5,040,500 16,667,575 21,708,075
Glenridge Colorado Springs, CO 884,788 5,043,900 5,928,688
Gold Pointe (WRP) Tacoma, WA 528,800 4,762,649 5,291,449
Governor's Place Augusta, GA 347,355 3,363,687 3,711,042
Governor's Pointe Roswell, GA 3,745,300 24,512,770 28,258,070
Greengate Marietta, GA 132,979 2,662,282 2,795,261
Greenwich Woods Silver Spring, MD 3,101,000 30,760,024 33,861,024
Greenwood Forest Little Rock, AR 559,038 4,442,197 5,001,235
Greenwood Village (Evans) Tempe, AZ 2,118,781 17,222,332 19,341,113
Grey Eagle Greenville, SC 725,200 6,529,358 7,254,558
Habitat Orlando, FL 600,000 6,286,617 6,886,617
Hammock's Place Miami, FL 319,180 12,915,691 13,234,871
Hampton Green San Antonio, TX 1,561,830 4,960,294 6,522,124
Hamptons (WRP) Tacoma, WA 1,119,200 10,135,023 11,254,223
Harborview San Pedro, CA 6,402,400 12,706,763 19,109,163
Harbour Landing Corpus Christi, TX 765,000 7,698,692 8,463,692
Harrison Park (Evans) Tucson, AZ 1,265,094 16,314,580 17,579,674
Hathaway Long Beach, CA 2,512,500 22,971,865 25,484,365
Hawthorne (Evans) Phoenix, AZ 2,697,050 15,669,963 18,367,013
Hearthstone San Antonio, TX 1,035,800 3,733,268 4,769,068
Heritage Park (WRP) Oklahoma City, OK 1,325,600 11,994,161 13,319,761
Heron Cove Coral Springs, FL 823,000 8,526,941 9,349,941
</TABLE>
<TABLE>
<CAPTION>
Life Used to
Description Compute
- ---------------------------------------------------------------------------------------------------------- Depreciation in
Accumulated Date of Latest Income
Apartment Name Location Depreciation Construction Statement (C)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Eagle Rim Redmond, WA 1,077,791 1986-88 30 Years
East Pointe Charlotte, NC 1,966,632 1987 30 Years
Eastland on the Lake Columbus, OH 70,714 1973 30 Years
Edgewood Woodinville, WA 1,195,349 1986 30 Years
Emerald Place Bermuda Dunes, CA 1,350,476 1988 30 Years
Essex Place Overland Park, KS 2,450,711 1970-84 30 Years
Ethans Glen III Kansas City, MO 4,694 1990 30 Years
Ethans Ridge II Kansas City, MO 27,725 1990 30 Years
Ethans Ridge I Kansas City, MO 36,736 1988 30 Years
Farmington Gates Germantown, TN 18,719 1976 30 Years
Firdale Village (WRP) Seattle, WA 440,440 1986 30 Years
Flying Sun Phoenix, AZ 424,499 1983 30 Years
Forest Ridge Arlington, TX 1,328,842 1984/85 30 Years
Forest Valley (WRP) San Antonio, TX 122,414 1983 30 Years
Fountain Creek Phoenix, AZ 606,748 1984 30 Years
Fountain Place I Eden Prairie, MN 44,795 1989 30 Years
Fountain Place II Eden Prairie, MN 22,795 1989 30 Years
Fountainhead Combined San Antonio, TX 5,588,082 1985/1987 30 Years
Fountains at Flamingo Las Vegas, NV 3,311,794 1989-91 30 Years
Four Lakes Lisle, IL 9,091,003 1968/1988* 30 Years
Four Lakes 5 Lisle, IL 6,372,664 1968/1988* 30 Years
Fox Run (AR) Little Rock, AR 4,858,010 1974 30 Years
Fox Run (WA) Federal Way, WA 769,830 1988 30 Years
Foxchase Grand Prairie, TX 141,655 1983 30 Years
Frey Road Atlanta, GA 2,841,384 1985 30 Years
Garden Lake Riverdale, GA 111,552 1991 30 Years
Gatehouse at Pine Lake Plantation , FL 653,865 1990 30 Years
Gatehouse on the Green Pembroke Pines, FL 760,545 1990 30 Years
Gates of Redmond Combined Redmond, WA 259,422 1979/1982-1989 30 Years
Gateway Villas (Evans) Scottsdale, AZ 12,822 1995 30 Years
Geary Court Yard San Francisco, CA 31,439 1990 30 Years
Georgian Woods II Wheaton, MD 2,317,407 1967 30 Years
Glen Eagle Greenville, SC 64,798 1990 30 Years
Glenlake Glendale Heights. IL 3,350 1988 30 Years
Glenridge Colorado Springs, CO 867,818 1985 30 Years
Gold Pointe (WRP) Tacoma, WA 100,860 1990 30 Years
Governor's Place Augusta, GA 2,157,305 1972 30 Years
Governor's Pointe Roswell, GA 149,002 1982-1986 30 Years
Greengate Marietta, GA 1,392,136 1971 30 Years
Greenwich Woods Silver Spring, MD 3,449,631 1967 30 Years
Greenwood Forest Little Rock, AR 2,447,887 1975 30 Years
Greenwood Village (Evans) Tempe, AZ 15,417 1984 30 Years
Grey Eagle Greenville, SC 55,944 1991 30 Years
Habitat Orlando, FL 3,869,251 1974 30 Years
Hammock's Place Miami, FL 1,988,058 1986 30 Years
Hampton Green San Antonio, TX 963,905 1979 30 Years
Hamptons (WRP) Tacoma, WA 222,665 1991 30 Years
Harborview San Pedro, CA 411,773 1985 30 Years
Harbour Landing Corpus Christi, TX 1,164,132 1985 30 Years
Harrison Park (Evans) Tucson, AZ 14,484 1985 30 Years
Hathaway Long Beach, CA 1,913,780 1987 30 Years
Hawthorne (Evans) Phoenix, AZ 14,721 1996 30 Years
Hearthstone San Antonio, TX 682,606 1982 30 Years
Heritage Park (WRP) Oklahoma City, OK 278,231 1983 30 Years
Heron Cove Coral Springs, FL 1,009,310 1987 30 Years
</TABLE>
S-4
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
Real Estate and Accumulated Depreciation
December 31, 1997
<TABLE>
<CAPTION>
Initial Cost to
Description Company
- -------------------------------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Encumbrances Land Fixtures
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Heron Landing (K) Lauderhill, FL 0 707,100 6,363,784
Heron Pointe Boynton Beach, FL 0 1,546,700 7,883,775
Heron Run Plantation, FL 0 917,800 8,854,001
Hickory Ridge Greenville, SC 0 285,800 2,571,956
Hidden Oaks Cary, NC 0 1,176,200 10,593,460
Hidden Palms Tampa, FL (E) 2,048,000 6,365,313
Hidden Valley Club Ann Arbor, MI 0 915,000 7,583,653
Highland Creste (WRP) Seattle, WA 0 935,200 8,416,381
Highland Grove Stone Mt., GA 0 1,665,700 14,996,293
Highland Point (WRP) Denver, CO 0 1,631,900 14,686,971
Highline Oaks Denver, CO 7,100,000 1,055,000 9,651,649
Holcomb Bridge Atlanta, GA 9,545,000 2,142,400 19,281,704
Hollyview Silver Springs, MD 0 189,000 1,484,475
Hunter's Glen Chesterfield, MO 0 913,500 8,221,026
Hunter's Green Fort Worth, TX (F) 524,200 3,404,622
Hunters Ridge/South Pointe St. Louis, MO 18,890,250 1,950,000 17,521,575
Huntington Hollow Tulsa, OK 0 668,600 6,017,211
Huntington Park Everett, WA 0 1,594,500 14,350,001
Idlewood Indianapolis, IN (E) 2,560,000 11,456,641
Indian Bend Phoenix, AZ 0 1,072,500 9,652,385
Indian Tree Arvada, CO 0 881,125 4,868,332
Indigo Springs Kent, WA 8,075,846 1,270,000 11,438,562
Invitational (WRP) Oklahoma City, OK 0 1,153,000 10,385,325
Ironwood at the Ranch Wesminster, CO 5,985,000 1,493,300 13,439,783
Isle at Arrowhead Ranch Glendale, AZ 0 1,650,237 19,733,360
Ivy Place (L) Atlanta, GA 0 793,200 7,139,200
James Street Crossing Kent, WA 16,395,379 2,078,600 18,707,436
Jefferson at Walnut Creek Austin, TX (E) 2,736,000 14,581,785
Junipers At Yarmouth Yarmouth, ME 0 1,350,000 7,807,113
Kempton Downs Gresham, OR 0 1,182,200 10,639,993
Keystone Austin, TX 2,907,322 498,000 4,482,306
Kingsport Alexandria, VA 0 1,262,250 11,454,606
Kingswood Manor San Antonio, TX 0 293,900 2,061,996
Kirby Place Houston, TX (E) 3,620,000 25,898,825
Knight's Castle (Boulder Creek) Wilsonville, OR 0 3,552,000 11,462,403
La Costa Brava (Jax) Jacksonville, FL (J) 0 835,757 4,964,681
La Costa Brava (ORL) Orlando, FL 0 206,626 1,380,505
La Mariposa (Evans) Mesa, AZ (P) 2,047,539 12,426,243
La Mirage San Diego, CA 0 6,005,200 122,982,486
La Reserve (Evans) Oro Valley, AZ (P) 3,264,562 4,923,865
La Valencia (Evans) Mesa, AZ 0 3,553,350 20,498,635
Ladera (Evans) Mesa, AZ 0 2,978,879 20,598,113
Lake In The Woods (MI) Ypsilanti, MI 0 1,859,625 16,314,064
Lakeville Resort Petaluma, CA 20,655,022 2,734,100 24,773,523
Lakewood Oaks Dallas, TX 0 1,630,200 14,671,813
Landera (WRP) San Antonio, TX 0 766,300 6,896,811
Lands End Pacifica, CA 0 1,824,500 16,423,435
Larkspur Woods Sacramento, CA (E) 5,800,000 14,512,065
Laurel Ridge Chapel Hill, NC 0 160,000 1,752,118
Lincoln Green I San Antonio, TX 0 947,366 2,133,002
Lincoln Green II San Antonio, TX 0 1,052,340 5,828,311
Lincoln Green III San Antonio, TX 0 536,010 2,069,688
Lincoln Harbor Ft. Lauderdale, FL 10,000,000 7,454,900 14,879,369
Lincoln Heights Quincy, MA 0 5,925,000 33,575,000
Little Cottonwoods Tempe, AZ (P) 3,050,133 26,981,993
</TABLE>
<TABLE>
<CAPTION>
Cost Capitalized
Subsequent to
Acquisition
Description (Improvements, net) (I)
- -----------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Land Fixtures
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Heron Landing (K) Lauderhill, FL 4,700 336,641
Heron Pointe Boynton Beach, FL 0 0
Heron Run Plantation, FL 0 647,809
Hickory Ridge Greenville, SC 0 596
Hidden Oaks Cary, NC 0 0
Hidden Palms Tampa, FL 900 12,391
Hidden Valley Club Ann Arbor, MI 0 821,697
Highland Creste (WRP) Seattle, WA 0 207,838
Highland Grove Stone Mt., GA 0 (0)
Highland Point (WRP) Denver, CO 0 39,774
Highline Oaks Denver, CO 2,400 72,496
Holcomb Bridge Atlanta, GA 900 946,475
Hollyview Silver Springs, MD 1,000 9,281
Hunter's Glen Chesterfield, MO 1,700 306,971
Hunter's Green Fort Worth, TX 100 748,534
Hunters Ridge/South Pointe St. Louis, MO 4,200 126,860
Huntington Hollow Tulsa, OK 0 28,729
Huntington Park Everett, WA 3,000 532,840
Idlewood Indianapolis, IN 900 25,500
Indian Bend Phoenix, AZ 3,200 528,384
Indian Tree Arvada, CO 100 437,701
Indigo Springs Kent, WA 500 193,475
Invitational (WRP) Oklahoma City, OK 0 56,332
Ironwood at the Ranch Wesminster, CO 0 105,395
Isle at Arrowhead Ranch Glendale, AZ 0 0
Ivy Place (L) Atlanta, GA 9,750 259,057
James Street Crossing Kent, WA 0 0
Jefferson at Walnut Creek Austin, TX 900 24,307
Junipers At Yarmouth Yarmouth, ME 3,200 166,009
Kempton Downs Gresham, OR 35,149 859,655
Keystone Austin, TX 500 469,658
Kingsport Alexandria, VA 0 1,576,439
Kingswood Manor San Antonio, TX 100 365,009
Kirby Place Houston, TX 900 12,991
Knight's Castle (Boulder Creek) Wilsonville, OR 1,500 222,776
La Costa Brava (Jax) Jacksonville, FL (J) 0 5,955,711
La Costa Brava (ORL) Orlando, FL 0 5,329,782
La Mariposa (Evans) Mesa, AZ 0 0
La Mirage San Diego, CA 0 0
La Reserve (Evans) Oro Valley, AZ 0 0
La Valencia (Evans) Mesa, AZ 0 0
Ladera (Evans) Mesa, AZ 0 0
Lake In The Woods (MI) Ypsilanti, MI 0 5,853,066
Lakeville Resort Petaluma, CA 2,400 109,861
Lakewood Oaks Dallas, TX 1,400 648,829
Landera (WRP) San Antonio, TX 0 45,632
Lands End Pacifica, CA 1,200 450,898
Larkspur Woods Sacramento, CA 1,300 21,647
Laurel Ridge Chapel Hill, NC 0 2,938,512
Lincoln Green I San Antonio, TX 0 3,711,030
Lincoln Green II San Antonio, TX 0 (0)
Lincoln Green III San Antonio, TX 0 0
Lincoln Harbor Ft. Lauderdale, FL 0 (0)
Lincoln Heights Quincy, MA 0 0
Little Cottonwoods Tempe, AZ 0 0
</TABLE>
<TABLE>
<CAPTION>
Gross Amount Carried
at Close of
Description Period 12/31/97
- -------------------------------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Land Fixtures (A) Total (B)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Heron Landing (K) Lauderhill, FL 711,800 6,700,425 7,412,225
Heron Pointe Boynton Beach, FL 1,546,700 7,883,775 9,430,475
Heron Run Plantation, FL 917,800 9,501,810 10,419,610
Hickory Ridge Greenville, SC 285,800 2,572,552 2,858,352
Hidden Oaks Cary, NC 1,176,200 10,593,460 11,769,660
Hidden Palms Tampa, FL 2,048,900 6,377,704 8,426,604
Hidden Valley Club Ann Arbor, MI 915,000 8,405,350 9,320,350
Highland Creste (WRP) Seattle, WA 935,200 8,624,219 9,559,419
Highland Grove Stone Mt., GA 1,665,700 14,996,293 16,661,993
Highland Point (WRP) Denver, CO 1,631,900 14,726,745 16,358,645
Highline Oaks Denver, CO 1,057,400 9,724,145 10,781,545
Holcomb Bridge Atlanta, GA 2,143,300 20,228,179 22,371,479
Hollyview Silver Springs, MD 190,000 1,493,756 1,683,756
Hunter's Glen Chesterfield, MO 915,200 8,527,997 9,443,197
Hunter's Green Fort Worth, TX 524,300 4,153,156 4,677,456
Hunters Ridge/South Pointe St. Louis, MO 1,954,200 17,648,435 19,602,635
Huntington Hollow Tulsa, OK 668,600 6,045,940 6,714,540
Huntington Park Everett, WA 1,597,500 14,882,841 16,480,341
Idlewood Indianapolis, IN 2,560,900 11,482,141 14,043,041
Indian Bend Phoenix, AZ 1,075,700 10,180,769 11,256,469
Indian Tree Arvada, CO 881,225 5,306,033 6,187,258
Indigo Springs Kent, WA 1,270,500 11,632,037 12,902,537
Invitational (WRP) Oklahoma City, OK 1,153,000 10,441,657 11,594,657
Ironwood at the Ranch Wesminster, CO 1,493,300 13,545,178 15,038,478
Isle at Arrowhead Ranch Glendale, AZ 1,650,237 19,733,360 21,383,597
Ivy Place (L) Atlanta, GA 802,950 7,398,257 8,201,207
James Street Crossing Kent, WA 2,078,600 18,707,436 20,786,036
Jefferson at Walnut Creek Austin, TX 2,736,900 14,606,092 17,342,992
Junipers At Yarmouth Yarmouth, ME 1,353,200 7,973,121 9,326,321
Kempton Downs Gresham, OR 1,217,349 11,499,648 12,716,997
Keystone Austin, TX 498,500 4,951,964 5,450,464
Kingsport Alexandria, VA 1,262,250 13,031,045 14,293,295
Kingswood Manor San Antonio, TX 294,000 2,427,005 2,721,005
Kirby Place Houston, TX 3,620,900 25,911,816 29,532,716
Knight's Castle (Boulder Creek) Wilsonville, OR 3,553,500 11,685,178 15,238,678
La Costa Brava (Jax) Jacksonville, FL (J) 835,757 10,920,392 11,756,149
La Costa Brava (ORL) Orlando, FL 206,626 6,710,287 6,916,913
La Mariposa (Evans) Mesa, AZ 2,047,539 12,426,243 14,473,782
La Mirage San Diego, CA 6,005,200 122,982,486 128,987,686
La Reserve (Evans) Oro Valley, AZ 3,264,562 4,923,865 8,188,427
La Valencia (Evans) Mesa, AZ 3,553,350 20,498,635 24,051,985
Ladera (Evans) Mesa, AZ 2,978,879 20,598,113 23,576,992
Lake In The Woods (MI) Ypsilanti, MI 1,859,625 22,167,130 24,026,755
Lakeville Resort Petaluma, CA 2,736,500 24,883,384 27,619,884
Lakewood Oaks Dallas, TX 1,631,600 15,320,642 16,952,242
Landera (WRP) San Antonio, TX 766,300 6,942,443 7,708,743
Lands End Pacifica, CA 1,825,700 16,874,333 18,700,033
Larkspur Woods Sacramento, CA 5,801,300 14,533,712 20,335,012
Laurel Ridge Chapel Hill, NC 160,000 4,690,630 4,850,630
Lincoln Green I San Antonio, TX 947,366 5,844,032 6,791,398
Lincoln Green II San Antonio, TX 1,052,340 5,828,311 6,880,651
Lincoln Green III San Antonio, TX 536,010 2,069,688 2,605,698
Lincoln Harbor Ft. Lauderdale, FL 7,454,900 14,879,369 22,334,269
Lincoln Heights Quincy, MA 5,925,000 33,575,000 39,500,000
Little Cottonwoods Tempe, AZ 3,050,133 26,981,993 30,032,126
</TABLE>
<TABLE>
<CAPTION>
Life Used to
Description Compute
- ---------------------------------------------------------------------------------------------------------- Depreciation in
Accumulated Date of Latest Income
Apartment Name Location Depreciation Construction Statement (C)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Heron Landing (K) Lauderhill, FL 470,034 1988 30 Years
Heron Pointe Boynton Beach, FL 115,301 1989 30 Years
Heron Run Plantation, FL 1,097,027 1987 30 Years
Hickory Ridge Greenville, SC 23,136 1968 30 Years
Hidden Oaks Cary, NC 90,488 1988 30 Years
Hidden Palms Tampa, FL 42,474 1986 30 Years
Hidden Valley Club Ann Arbor, MI 4,474,589 1973 30 Years
Highland Creste (WRP) Seattle, WA 199,033 1989 30 Years
Highland Grove Stone Mt., GA 125,202 1988 30 Years
Highland Point (WRP) Denver, CO 317,666 1984 30 Years
Highline Oaks Denver, CO 192,711 1986 30 Years
Holcomb Bridge Atlanta, GA 2,525,354 1985 30 Years
Hollyview Silver Springs, MD 4,178 1965 30 Years
Hunter's Glen Chesterfield, MO 402,678 1985 30 Years
Hunter's Green Fort Worth, TX 731,261 1981 30 Years
Hunters Ridge/South Pointe St. Louis, MO 350,101 1986-1987 30 Years
Huntington Hollow Tulsa, OK 145,857 1981 30 Years
Huntington Park Everett, WA 2,087,851 1991 30 Years
Idlewood Indianapolis, IN 72,537 1991 30 Years
Indian Bend Phoenix, AZ 1,368,573 1973 30 Years
Indian Tree Arvada, CO 1,041,993 1983 30 Years
Indigo Springs Kent, WA 322,845 1991 30 Years
Invitational (WRP) Oklahoma City, OK 237,275 1983 30 Years
Ironwood at the Ranch Wesminster, CO 287,752 1986 30 Years
Isle at Arrowhead Ranch Glendale, AZ 16,870 1996 30 Years
Ivy Place (L) Atlanta, GA 432,030 1978 30 Years
James Street Crossing Kent, WA 38,781 1989 30 Years
Jefferson at Walnut Creek Austin, TX 90,510 1994 30 Years
Junipers At Yarmouth Yarmouth, ME 220,554 1970 30 Years
Kempton Downs Gresham, OR 1,120,921 1990 30 Years
Keystone Austin, TX 526,567 1981 30 Years
Kingsport Alexandria, VA 1,476,716 1986 30 Years
Kingswood Manor San Antonio, TX 422,154 1983 30 Years
Kirby Place Houston, TX 153,938 1994 30 Years
Knight's Castle (Boulder Creek) Wilsonville, OR 311,992 1991 30 Years
La Costa Brava (Jax) Jacksonville, FL (J) 5,943,831 1970/1973 30 Years
La Costa Brava (ORL) Orlando, FL 3,556,803 1967 30 Years
La Mariposa (Evans) Mesa, AZ 11,619 1986 30 Years
La Mirage San Diego, CA 1,942,957 1988/1992 30 Years
La Reserve (Evans) Oro Valley, AZ 7,043 1988 30 Years
La Valencia (Evans) Mesa, AZ 19,275 1998 30 Years
Ladera (Evans) Mesa, AZ 18,460 1995 30 Years
Lake In The Woods (MI) Ypsilanti, MI 11,131,520 1969 30 Years
Lakeville Resort Petaluma, CA 1,073,613 1984 30 Years
Lakewood Oaks Dallas, TX 1,887,694 1987 30 Years
Landera (WRP) San Antonio, TX 153,078 1983 30 Years
Lands End Pacifica, CA 936,029 1974 30 Years
Larkspur Woods Sacramento, CA 102,811 1989/1993 30 Years
Laurel Ridge Chapel Hill, NC 2,145,136 1975 30 Years
Lincoln Green I San Antonio, TX 2,613,354 1984/1986 30 Years
Lincoln Green II San Antonio, TX 2,132,722 1984/1986 30 Years
Lincoln Green III San Antonio, TX 781,318 1984/1986 30 Years
Lincoln Harbor Ft. Lauderdale, FL 405,336 1989 30 Years
Lincoln Heights Quincy, MA 30,600 1991 30 Years
Little Cottonwoods Tempe, AZ 23,773 1984 30 Years
</TABLE>
S-5
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
Real Estate and Accumulated Depreciation
December 31, 1997
<TABLE>
<CAPTION>
Initial Cost to
Description Company
- -------------------------------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Encumbrances Land Fixtures
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lodge (OK), The Tulsa, OK 0 313,571 2,677,951
Lodge (TX), The San Antonio, TX 0 1,363,636 5,496,784
Longwood Decatur, GA 0 1,452,000 13,067,523
Mallard Cove Greenville, SC 0 803,700 7,233,160
Mallgate Louisville, KY 0 0 6,162,515
Marbrisa Tampa, FL 0 811,500 7,303,334
Marina Club Fort Worth, TX 0 781,000 7,028,588
Mariners Wharf Orange Park, FL 0 1,858,800 16,733,097
Marks (WRP) Denver, CO 21,085,000 4,928,500 44,356,994
Marquessa (Evans) Corona Hills, CA 18,169,122 6,888,500 21,767,775
Martha Lake (WRP) Seattle, WA 0 823,200 7,409,199
Marymont (MD) Laurel, MD 0 1,901,800 17,116,593
Maxwell House Augusta, GA 0 216,000 1,846,772
McAlpine Ridge Charlotte, NC 0 1,283,400 11,550,225
Meadow Creek Tigard, OR 8,595,327 1,298,100 11,682,684
Meadows in the Park Birmingham, AL 0 1,000,000 8,525,000
Meadows on the Lake Birmingham, AL 0 1,000,000 8,521,175
Merril Creek (WRP) Tacoma, WA 0 814,200 7,327,478
Merrimac Woods Costa Mesa, CA 0 673,300 6,059,722
Metropolitan Park (WRP) Seattle, WA 0 493,200 4,438,977
Mill Village Randolph, MA 0 6,200,000 13,249,725
Mirador (Evans) Phoenix, AZ 0 2,597,518 23,368,137
Miramonte Scottsdale, AZ 0 1,132,500 8,846,622
Mission Palms Tucson, AZ 0 2,023,400 18,210,383
Morningside (Evans) Scottsdale, AZ (P) 670,470 12,591,349
Mountain Park Ranch Phoenix, AZ (Q) 1,662,332 18,223,755
Mountain Run (WRP) Albuquerque, NM 0 2,023,400 20,735,983
Mountain Terrace Stevenson Ranch, CA 0 3,977,200 35,794,729
Newport Cove Henderson, NV 0 698,700 6,288,245
Newport Heights Seattle, WA 0 390,700 3,516,229
North Creek Heights Seattle, WA 0 753,800 6,784,170
North Hill Atlanta, GA 16,428,599 2,520,000 18,501,949
Northampton 1 Largo, MD 13,194,809 1,843,200 17,318,363
Northampton 2 Largo, MD 0 1,494,100 14,279,723
Northgate Village San Antonio, TX 0 660,000 5,753,724
Northlake (FL) Jacksonville, FL 0 1,166,000 10,494,125
Northwoods Village Cary, NC (E) 1,368,000 11,443,857
Oak Mill 2 Germantown, MD 9,507,486 854,000 8,187,169
Oak Park North Agoura Hills, CA (O) 1,706,500 15,358,942
Oak Park South Agoura Hills, CA (O) 1,683,400 15,150,835
Oaks of Lakebridge Ormond Beach, FL 0 413,700 3,742,503
Ocean Walk Key West, FL 21,099,078 2,834,900 25,517,673
Olentangy Joint Venture Columbus, OH 0 3,032,336 20,862,191
One Eton Square Tulsa, OK 0 1,570,100 14,130,762
Orange Grove Village Tucson, AZ (P) 1,813,154 14,867,839
Orchard of Landen Maineville, OH (E) 2,496,000 17,720,225
Orchard Ridge Seattle, WA 0 482,600 4,343,826
Overlook San Antonio, TX 0 1,100,000 9,900,000
Paces Station/ Paces on the Green Atlanta, GA 0 4,801,500 32,630,170
Panther Ridge (WRP) Seattle, WA 0 1,055,800 9,501,841
Paradise Pointe Dania, FL 0 1,493,800 13,452,161
Park Knoll Atlanta, GA 0 2,904,500 26,140,219
Park Meadow (Evans) Gilbert, AZ (P) 835,217 15,094,226
Park Place I & II Plymouth, MN 17,820,599 2,428,200 21,853,006
Park West Austin, TX 0 648,605 4,541,683
</TABLE>
<TABLE>
<CAPTION>
Cost Capitalized
Subsequent to
Acquisition
Description (Improvements, net) (I)
- -----------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Land Fixtures
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Lodge (OK), The Tulsa, OK 0 893,076
Lodge (TX), The San Antonio, TX 0 3,582,672
Longwood Decatur, GA 2,048 364,818
Mallard Cove Greenville, SC 9,650 282,242
Mallgate Louisville, KY 0 3,857,169
Marbrisa Tampa, FL 2,000 210,354
Marina Club Fort Worth, TX 3,269 1,581,230
Mariners Wharf Orange Park, FL 0 2,285
Marks (WRP) Denver, CO 0 419,868
Marquessa (Evans) Corona Hills, CA 0 0
Martha Lake (WRP) Seattle, WA 0 17,730
Marymont (MD) Laurel, MD 2,000 539,218
Maxwell House Augusta, GA 0 723,153
McAlpine Ridge Charlotte, NC 600 589,390
Meadow Creek Tigard, OR 1,000 750,229
Meadows in the Park Birmingham, AL 0 0
Meadows on the Lake Birmingham, AL 0 0
Merril Creek (WRP) Tacoma, WA 0 11,830
Merrimac Woods Costa Mesa, CA 2,400 138,194
Metropolitan Park (WRP) Seattle, WA 0 34,772
Mill Village Randolph, MA 2,900 131,810
Mirador (Evans) Phoenix, AZ 0 0
Miramonte Scottsdale, AZ 0 0
Mission Palms Tucson, AZ 0 89,971
Morningside (Evans) Scottsdale, AZ 0 0
Mountain Park Ranch Phoenix, AZ 0 0
Mountain Run (WRP) Albuquerque, NM 280,600 82,948
Mountain Terrace Stevenson Ranch, CA 1,800 209,401
Newport Cove Henderson, NV 1,600 840,955
Newport Heights Seattle, WA 500 233,100
North Creek Heights Seattle, WA 0 40,015
North Hill Atlanta, GA 5,000 65,715
Northampton 1 Largo, MD 0 1,398,297
Northampton 2 Largo, MD 19,400 1,134,141
Northgate Village San Antonio, TX 100 428,995
Northlake (FL) Jacksonville, FL 0 (0)
Northwoods Village Cary, NC 900 17,260
Oak Mill 2 Germantown, MD 133 748,473
Oak Park North Agoura Hills, CA 400 90,433
Oak Park South Agoura Hills, CA 400 144,685
Oaks of Lakebridge Ormond Beach, FL 2,100 451,071
Ocean Walk Key West, FL 0 (0)
Olentangy Joint Venture Columbus, OH 0 8,151,199
One Eton Square Tulsa, OK 0 199,151
Orange Grove Village Tucson, AZ 0 0
Orchard of Landen Maineville, OH 1,300 18,489
Orchard Ridge Seattle, WA 3,000 186,875
Overlook San Antonio, TX 200 59,744
Paces Station/ Paces on the Green Atlanta, GA 0 0
Panther Ridge (WRP) Seattle, WA 0 94,493
Paradise Pointe Dania, FL 0 1,369,517
Park Knoll Atlanta, GA 4,300 1,390,997
Park Meadow (Evans) Gilbert, AZ 0 0
Park Place I & II Plymouth, MN 7,400 649,815
Park West Austin, TX 100 543,341
</TABLE>
<TABLE>
<CAPTION>
Gross Amount Carried
at Close of
Description Period 12/31/97
- -------------------------------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Land Fixtures (A) Total (B)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lodge (OK), The Tulsa, OK 313,571 3,571,027 3,884,598
Lodge (TX), The San Antonio, TX 1,363,636 9,079,456 10,443,092
Longwood Decatur, GA 1,454,048 13,432,341 14,886,389
Mallard Cove Greenville, SC 813,350 7,515,402 8,328,752
Mallgate Louisville, KY 0 10,019,684 10,019,684
Marbrisa Tampa, FL 813,500 7,513,688 8,327,188
Marina Club Fort Worth, TX 784,269 8,609,818 9,394,087
Mariners Wharf Orange Park, FL 1,858,800 16,735,382 18,594,182
Marks (WRP) Denver, CO 4,928,500 44,776,862 49,705,362
Marquessa (Evans) Corona Hills, CA 6,888,500 21,767,775 28,656,275
Martha Lake (WRP) Seattle, WA 823,200 7,426,929 8,250,129
Marymont (MD) Laurel, MD 1,903,800 17,655,811 19,559,611
Maxwell House Augusta, GA 216,000 2,569,925 2,785,925
McAlpine Ridge Charlotte, NC 1,284,000 12,139,615 13,423,615
Meadow Creek Tigard, OR 1,299,100 12,432,913 13,732,013
Meadows in the Park Birmingham, AL 1,000,000 8,525,000 9,525,000
Meadows on the Lake Birmingham, AL 1,000,000 8,521,175 9,521,175
Merril Creek (WRP) Tacoma, WA 814,200 7,339,308 8,153,508
Merrimac Woods Costa Mesa, CA 675,700 6,197,915 6,873,615
Metropolitan Park (WRP) Seattle, WA 493,200 4,473,749 4,966,949
Mill Village Randolph, MA 6,202,900 13,381,535 19,584,435
Mirador (Evans) Phoenix, AZ 2,597,518 23,368,137 25,965,655
Miramonte Scottsdale, AZ 1,132,500 8,846,622 9,979,122
Mission Palms Tucson, AZ 2,023,400 18,300,354 20,323,754
Morningside (Evans) Scottsdale, AZ 670,470 12,591,349 13,261,819
Mountain Park Ranch Phoenix, AZ 1,662,332 18,223,755 19,886,087
Mountain Run (WRP) Albuquerque, NM 2,304,000 20,818,931 23,122,931
Mountain Terrace Stevenson Ranch, CA 3,979,000 36,004,130 39,983,130
Newport Cove Henderson, NV 700,300 7,129,200 7,829,500
Newport Heights Seattle, WA 391,200 3,749,329 4,140,529
North Creek Heights Seattle, WA 753,800 6,824,185 7,577,985
North Hill Atlanta, GA 2,525,000 18,567,664 21,092,664
Northampton 1 Largo, MD 1,843,200 18,716,660 20,559,860
Northampton 2 Largo, MD 1,513,500 15,413,864 16,927,364
Northgate Village San Antonio, TX 660,100 6,182,719 6,842,819
Northlake (FL) Jacksonville, FL 1,166,000 10,494,125 11,660,125
Northwoods Village Cary, NC 1,368,900 11,461,117 12,830,017
Oak Mill 2 Germantown, MD 854,133 8,935,642 9,789,775
Oak Park North Agoura Hills, CA 1,706,900 15,449,375 17,156,275
Oak Park South Agoura Hills, CA 1,683,800 15,295,520 16,979,320
Oaks of Lakebridge Ormond Beach, FL 415,800 4,193,574 4,609,374
Ocean Walk Key West, FL 2,834,900 25,517,673 28,352,573
Olentangy Joint Venture Columbus, OH 3,032,336 29,013,390 32,045,726
One Eton Square Tulsa, OK 1,570,100 14,329,913 15,900,013
Orange Grove Village Tucson, AZ 1,813,154 14,867,839 16,680,993
Orchard of Landen Maineville, OH 2,497,300 17,738,714 20,236,014
Orchard Ridge Seattle, WA 485,600 4,530,701 5,016,301
Overlook San Antonio, TX 1,100,200 9,959,744 11,059,944
Paces Station/ Paces on the Green Atlanta, GA 4,801,500 32,630,170 37,431,670
Panther Ridge (WRP) Seattle, WA 1,055,800 9,596,334 10,652,134
Paradise Pointe Dania, FL 1,493,800 14,821,678 16,315,478
Park Knoll Atlanta, GA 2,908,800 27,531,216 30,440,016
Park Meadow (Evans) Gilbert, AZ 835,217 15,094,226 15,929,443
Park Place I & II Plymouth, MN 2,435,600 22,502,821 24,938,421
Park West Austin, TX 648,705 5,085,024 5,733,729
</TABLE>
<TABLE>
<CAPTION>
Life Used to
Description Compute
- ---------------------------------------------------------------------------------------------------------- Depreciation in
Accumulated Date of Latest Income
Apartment Name Location Depreciation Construction Statement (C)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lodge (OK), The Tulsa, OK 1,958,126 1979 30 Years
Lodge (TX), The San Antonio, TX 3,068,584 1979(#) 30 Years
Longwood Decatur, GA 1,832,622 1992 30 Years
Mallard Cove Greenville, SC 438,174 1983 30 Years
Mallgate Louisville, KY 5,986,361 1969 30 Years
Marbrisa Tampa, FL 356,644 1984 30 Years
Marina Club Fort Worth, TX 1,212,618 1987 30 Years
Mariners Wharf Orange Park, FL 138,521 1989 30 Years
Marks (WRP) Denver, CO 935,337 1987 30 Years
Marquessa (Evans) Corona Hills, CA 22,579 1992 30 Years
Martha Lake (WRP) Seattle, WA 159,637 1991 30 Years
Marymont (MD) Laurel, MD 2,040,482 1987-88 30 Years
Maxwell House Augusta, GA 1,098,947 1951 30 Years
McAlpine Ridge Charlotte, NC 1,381,439 1989-90 30 Years
Meadow Creek Tigard, OR 1,511,374 1985 30 Years
Meadows in the Park Birmingham, AL 12,178 1986 30 Years
Meadows on the Lake Birmingham, AL 12,178 1987 30 Years
Merril Creek (WRP) Tacoma, WA 157,161 1994 30 Years
Merrimac Woods Costa Mesa, CA 291,450 1970 30 Years
Metropolitan Park (WRP) Seattle, WA 94,680 1991 30 Years
Mill Village Randolph, MA 20,408 1971/1977 30 Years
Mirador (Evans) Phoenix, AZ 20,506 1995 30 Years
Miramonte Scottsdale, AZ 8,002 1983 30 Years
Mission Palms Tucson, AZ 392,022 1980 30 Years
Morningside (Evans) Scottsdale, AZ 10,468 1989 30 Years
Mountain Park Ranch Phoenix, AZ 15,697 1994 30 Years
Mountain Run (WRP) Albuquerque, NM 451,625 1985 30 Years
Mountain Terrace Stevenson Ranch, CA 1,297,678 1992 30 Years
Newport Cove Henderson, NV 1,194,422 1983 30 Years
Newport Heights Seattle, WA 468,798 1985 30 Years
North Creek Heights Seattle, WA 144,788 1990 30 Years
North Hill Atlanta, GA 220,601 1984 30 Years
Northampton 1 Largo, MD 2,346,885 1977 30 Years
Northampton 2 Largo, MD 1,559,004 1988 30 Years
Northgate Village San Antonio, TX 1,176,859 1984 30 Years
Northlake (FL) Jacksonville, FL 89,530 1989 30 Years
Northwoods Village Cary, NC 82,552 1986 30 Years
Oak Mill 2 Germantown, MD 923,107 1985 30 Years
Oak Park North Agoura Hills, CA 1,184,275 1990 30 Years
Oak Park South Agoura Hills, CA 1,265,504 1989 30 Years
Oaks of Lakebridge Ormond Beach, FL 691,385 1984 30 Years
Ocean Walk Key West, FL 51,779 1990 30 Years
Olentangy Joint Venture Columbus, OH 16,047,783 1972 30 Years
One Eton Square Tulsa, OK 321,009 1985 30 Years
Orange Grove Village Tucson, AZ 13,983 1986/1995 30 Years
Orchard of Landen Maineville, OH 126,481 1985/1988 30 Years
Orchard Ridge Seattle, WA 595,509 1988 30 Years
Overlook San Antonio, TX 234,278 1985 30 Years
Paces Station/ Paces on the Green Atlanta, GA 411,876 1984-1988/1989 30 Years
Panther Ridge (WRP) Seattle, WA 212,607 1980 30 Years
Paradise Pointe Dania, FL 1,864,192 1987-90 30 Years
Park Knoll Atlanta, GA 3,979,207 1983 30 Years
Park Meadow (Evans) Gilbert, AZ 12,704 1986 30 Years
Park Place I & II Plymouth, MN 1,130,133 1986 30 Years
Park West Austin, TX 819,900 1985 30 Years
</TABLE>
S-6
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
Real Estate and Accumulated Depreciation
December 31, 1997
<TABLE>
<CAPTION>
Initial Cost to
Description Company
- -------------------------------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Encumbrances Land Fixtures
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Park West (CA) Los Angeles, CA 0 3,033,300 27,299,323
Parkridge Place Las Colinas, TX 0 6,430,800 17,073,584
Parkview Terrace Redlands, CA 22,650,000 4,969,200 35,650,329
Parkwood East (WRP) Fort Collins, CO 0 1,644,000 14,796,301
Pine Harbour Orlando, FL 0 1,661,000 14,948,625
Pine Meadow Greensboro, NC 4,852,620 719,300 6,474,036
Pines at Cloverlane Pittsfield Township, MI 0 1,906,600 17,159,269
Pines of Springdale West Palm Beach, FL 0 471,200 4,240,800
Plum Tree Park (WRP) Seattle, WA 0 1,133,400 10,200,420
Pointe at South Mountain Phoenix, AZ 0 2,228,800 20,058,955
Pointe East Redmond, WA 0 601,800 5,416,489
Port Royale Ft. Lauderdale, FL 0 1,752,100 15,769,281
Port Royale II Ft. Lauderdale, FL 0 1,015,700 9,141,355
Portofino (Evans) Chino Hills, CA 0 3,572,400 14,627,241
Preakness Antioch, TN (E) 1,560,000 7,653,521
Preserve at Squaw Peak Phoenix, AZ (P) 517,788 8,518,393
Preston Bend Dallas, TX 8,719,000 1,083,000 9,925,055
Preston in Willowbend Plano, TX 0 872,500 7,852,675
Preston Lake Atlanta, GA 0 1,430,900 12,877,986
Promenade Terrace Corona Hills, CA 16,221,259 2,281,000 20,529,476
Promontory Pointe 1 & 2 Phoenix, AZ (P) 2,355,509 30,388,237
Pueblo Villas Albuquerque, NM 0 854,300 7,688,783
Quail Cove (WRP) Salt Lake City, UT 0 2,271,800 20,446,430
Raindance (WRP) Oklahoma City, OK 0 1,147,600 10,341,301
Rancho Murietta (Evans) Tempe, AZ 0 1,766,282 17,548,512
Ravens Crest Plainsboro, NJ (O) 4,673,000 42,057,149
Redlands Lawn and Tennis Redlands, CA 24,050,000 4,822,320 26,312,144
Reflections at the Lakes Las Vegas, NV 0 1,896,000 17,063,715
Regatta (WRP) San Antonio, TX 0 818,500 7,366,677
Regency Palms Huntington Beach, CA 0 1,856,500 16,708,950
Regency Woods Des Moines, IA 6,351,345 745,100 6,705,430
Registry (WRP) Denver, CO 0 1,303,100 11,727,649
Reserve Square Combined Cleveland, OH 0 2,618,352 23,565,022
Ridgegate (WRP) Seattle, WA 0 805,800 7,251,986
Ridgemont/Mountain Brook Chattanooga, TN 0 1,472,000 13,505,272
Ridgetop (WRP) Tacoma, WA 0 811,500 221,000
Ridgetree I & II Dallas, TX 0 2,094,600 18,851,177
Ridgeway Commons Memphis, TN 0 568,400 5,115,501
Ridgewood Village San Diego, CA 0 5,760,000 14,019,345
Rincon Houston, TX 0 4,400,000 16,725,229
River Bend Tampa, FL 0 602,945 2,161,915
River Oak Louisville, KY 0 1,253,900 11,285,573
Riverside Park Tulsa, OK (E) 1,440,000 12,374,977
Rock Creek Corrboro, NC 0 895,100 8,056,360
Rosehill Pointe Lenexa, KS 0 2,073,400 18,660,475
Roswell Atlanta, GA 8,100,000 1,217,500 10,957,845
Royal Oak Eagan, MN 13,148,135 1,598,200 14,383,478
Sabal Palm Pompano Beach, FL 0 3,536,000 20,167,175
Sabal Pointe (M) Coral Springs, FL 0 1,941,900 17,477,592
Saddle Creek Carrollton, TX 0 703,300 6,329,899
Saddle Ridge Loudoun County, VA 0 1,351,800 12,165,984
San Tropez (WRP) Phoenix, AZ 0 2,738,000 24,641,839
Sawgrass Cove Bradenton, FL 0 1,671,200 15,041,179
Scottsdale Courtyards Scottsdale, AZ (P) 2,979,269 25,007,146
Scottsdale Meadows Scottsdale, AZ 0 1,512,000 11,382,507
</TABLE>
<TABLE>
<CAPTION>
Cost Capitalized
Subsequent to
Acquisition
Description (Improvements, net) (I)
- -----------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Land Fixtures
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Park West (CA) Los Angeles, CA 100 425,857
Parkridge Place Las Colinas, TX 0 (0)
Parkview Terrace Redlands, CA 0 0
Parkwood East (WRP) Fort Collins, CO 0 26,384
Pine Harbour Orlando, FL 3,300 837,768
Pine Meadow Greensboro, NC 1,350 254,030
Pines at Cloverlane Pittsfield Township, MI 1,200 2,825,711
Pines of Springdale West Palm Beach, FL 2,667 457,139
Plum Tree Park (WRP) Seattle, WA 0 42,215
Pointe at South Mountain Phoenix, AZ 0 80,664
Pointe East Redmond, WA 800 135,313
Port Royale Ft. Lauderdale, FL 2,100 521,095
Port Royale II Ft. Lauderdale, FL 6,500 298,668
Portofino (Evans) Chino Hills, CA 0 0
Preakness Antioch, TN 1,300 21,698
Preserve at Squaw Peak Phoenix, AZ 0 0
Preston Bend Dallas, TX 2,200 52,194
Preston in Willowbend Plano, TX 0 1,355,716
Preston Lake Atlanta, GA 34,993 1,027,970
Promenade Terrace Corona Hills, CA 1,800 191,484
Promontory Pointe 1 & 2 Phoenix, AZ 0 0
Pueblo Villas Albuquerque, NM 1,300 188,040
Quail Cove (WRP) Salt Lake City, UT 0 88,480
Raindance (WRP) Oklahoma City, OK 0 45,344
Rancho Murietta (Evans) Tempe, AZ 0 0
Ravens Crest Plainsboro, NJ 2,850 1,590,420
Redlands Lawn and Tennis Redlands, CA 0 0
Reflections at the Lakes Las Vegas, NV 0 42,277
Regatta (WRP) San Antonio, TX 0 25,844
Regency Palms Huntington Beach, CA 900 315,425
Regency Woods Des Moines, IA 0 0
Registry (WRP) Denver, CO 0 22,556
Reserve Square Combined Cleveland, OH 500 9,291,751
Ridgegate (WRP) Seattle, WA 0 107,187
Ridgemont/Mountain Brook Chattanooga, TN 5,200 122,414
Ridgetop (WRP) Tacoma, WA 0 7,097,213
Ridgetree I & II Dallas, TX 20,600 1,125,099
Ridgeway Commons Memphis, TN 0 0
Ridgewood Village San Diego, CA 0 0
Rincon Houston, TX 1,700 29,725
River Bend Tampa, FL 0 2,070,955
River Oak Louisville, KY 0 0
Riverside Park Tulsa, OK 900 12,033
Rock Creek Corrboro, NC 600 77,277
Rosehill Pointe Lenexa, KS 19,600 1,281,269
Roswell Atlanta, GA 2,500 646,187
Royal Oak Eagan, MN 0 (0)
Sabal Palm Pompano Beach, FL 2,000 219,699
Sabal Pointe (M) Coral Springs, FL 9,700 247,208
Saddle Creek Carrollton, TX 4,800 2,989,706
Saddle Ridge Loudoun County, VA 13,000 255,748
San Tropez (WRP) Phoenix, AZ 0 68,367
Sawgrass Cove Bradenton, FL 2,950 950,843
Scottsdale Courtyards Scottsdale, AZ 0 0
Scottsdale Meadows Scottsdale, AZ 0 0
</TABLE>
<TABLE>
<CAPTION>
Gross Amount Carried
at Close of
Description Period 12/31/97
- -------------------------------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Land Fixtures (A) Total (B)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Park West (CA) Los Angeles, CA 3,033,400 27,725,180 30,758,580
Parkridge Place Las Colinas, TX 6,430,800 17,073,584 23,504,384
Parkview Terrace Redlands, CA 4,969,200 35,650,329 40,619,529
Parkwood East (WRP) Fort Collins, CO 1,644,000 14,822,685 16,466,685
Pine Harbour Orlando, FL 1,664,300 15,786,393 17,450,693
Pine Meadow Greensboro, NC 720,650 6,728,066 7,448,716
Pines at Cloverlane Pittsfield Township, MI 1,907,800 19,984,980 21,892,780
Pines of Springdale West Palm Beach, FL 473,867 4,697,939 5,171,806
Plum Tree Park (WRP) Seattle, WA 1,133,400 10,242,635 11,376,035
Pointe at South Mountain Phoenix, AZ 2,228,800 20,139,619 22,368,419
Pointe East Redmond, WA 602,600 5,551,802 6,154,402
Port Royale Ft. Lauderdale, FL 1,754,200 16,290,376 18,044,576
Port Royale II Ft. Lauderdale, FL 1,022,200 9,440,023 10,462,223
Portofino (Evans) Chino Hills, CA 3,572,400 14,627,241 18,199,641
Preakness Antioch, TN 1,561,300 7,675,219 9,236,519
Preserve at Squaw Peak Phoenix, AZ 517,788 8,518,393 9,036,181
Preston Bend Dallas, TX 1,085,200 9,977,249 11,062,449
Preston in Willowbend Plano, TX 872,500 9,208,391 10,080,891
Preston Lake Atlanta, GA 1,465,893 13,905,956 15,371,849
Promenade Terrace Corona Hills, CA 2,282,800 20,720,960 23,003,760
Promontory Pointe 1 & 2 Phoenix, AZ 2,355,509 30,388,237 32,743,746
Pueblo Villas Albuquerque, NM 855,600 7,876,823 8,732,423
Quail Cove (WRP) Salt Lake City, UT 2,271,800 20,534,910 22,806,710
Raindance (WRP) Oklahoma City, OK 1,147,600 10,386,645 11,534,245
Rancho Murietta (Evans) Tempe, AZ 1,766,282 17,548,512 19,314,794
Ravens Crest Plainsboro, NJ 4,675,850 43,647,569 48,323,419
Redlands Lawn and Tennis Redlands, CA 4,822,320 26,312,144 31,134,464
Reflections at the Lakes Las Vegas, NV 1,896,000 17,105,992 19,001,992
Regatta (WRP) San Antonio, TX 818,500 7,392,520 8,211,020
Regency Palms Huntington Beach, CA 1,857,400 17,024,375 18,881,775
Regency Woods Des Moines, IA 745,100 6,705,430 7,450,530
Registry (WRP) Denver, CO 1,303,100 11,750,205 13,053,305
Reserve Square Combined Cleveland, OH 2,618,852 32,856,773 35,475,625
Ridgegate (WRP) Seattle, WA 805,800 7,359,173 8,164,973
Ridgemont/Mountain Brook Chattanooga, TN 1,477,200 13,627,686 15,104,886
Ridgetop (WRP) Tacoma, WA 811,500 7,318,213 8,129,713
Ridgetree I & II Dallas, TX 2,115,200 19,976,276 22,091,476
Ridgeway Commons Memphis, TN 568,400 5,115,501 5,683,901
Ridgewood Village San Diego, CA 5,760,000 14,019,345 19,779,345
Rincon Houston, TX 4,401,700 16,754,954 21,156,654
River Bend Tampa, FL 602,945 4,232,870 4,835,815
River Oak Louisville, KY 1,253,900 11,285,573 12,539,473
Riverside Park Tulsa, OK 1,440,900 12,387,010 13,827,910
Rock Creek Corrboro, NC 895,700 8,133,637 9,029,337
Rosehill Pointe Lenexa, KS 2,093,000 19,941,744 22,034,744
Roswell Atlanta, GA 1,220,000 11,604,032 12,824,032
Royal Oak Eagan, MN 1,598,200 14,383,478 15,981,678
Sabal Palm Pompano Beach, FL 3,538,000 20,386,874 23,924,874
Sabal Pointe (M) Coral Springs, FL 1,951,600 17,724,799 19,676,399
Saddle Creek Carrollton, TX 708,100 9,319,605 10,027,705
Saddle Ridge Loudoun County, VA 1,364,800 12,421,732 13,786,532
San Tropez (WRP) Phoenix, AZ 2,738,000 24,710,205 27,448,205
Sawgrass Cove Bradenton, FL 1,674,150 15,992,022 17,666,172
Scottsdale Courtyards Scottsdale, AZ 2,979,269 25,007,146 27,986,415
Scottsdale Meadows Scottsdale, AZ 1,512,000 11,382,507 12,894,507
</TABLE>
<TABLE>
<CAPTION>
Life Used to
Description Compute
- ---------------------------------------------------------------------------------------------------------- Depreciation in
Accumulated Date of Latest Income
Apartment Name Location Depreciation Construction Statement (C)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Park West (CA) Los Angeles, CA 2,327,056 1987/90 30 Years
Parkridge Place Las Colinas, TX 72,945 1985 30 Years
Parkview Terrace Redlands, CA 32,340 1986 30 Years
Parkwood East (WRP) Fort Collins, CO 314,010 1986 30 Years
Pine Harbour Orlando, FL 2,228,205 1991 30 Years
Pine Meadow Greensboro, NC 391,654 1974 30 Years
Pines at Cloverlane Pittsfield Township, MI 1,526,711 1975-79 30 Years
Pines of Springdale West Palm Beach, FL 675,625 1985/87(x) 30 Years
Plum Tree Park (WRP) Seattle, WA 218,141 1991 30 Years
Pointe at South Mountain Phoenix, AZ 427,547 1988 30 Years
Pointe East Redmond, WA 631,778 1988 30 Years
Port Royale Ft. Lauderdale, FL 1,855,727 1988 30 Years
Port Royale II Ft. Lauderdale, FL 648,784 1991 30 Years
Portofino (Evans) Chino Hills, CA 14,186 1989 30 Years
Preakness Antioch, TN 58,736 1986 30 Years
Preserve at Squaw Peak Phoenix, AZ 7,128 1990 30 Years
Preston Bend Dallas, TX 199,067 1986 30 Years
Preston in Willowbend Plano, TX 1,380,925 1985 30 Years
Preston Lake Atlanta, GA 2,017,909 1984-86 30 Years
Promenade Terrace Corona Hills, CA 1,088,860 1990 30 Years
Promontory Pointe 1 & 2 Phoenix, AZ 25,964 1984/1996 30 Years
Pueblo Villas Albuquerque, NM 431,289 1975 30 Years
Quail Cove (WRP) Salt Lake City, UT 441,451 1987 30 Years
Raindance (WRP) Oklahoma City, OK 251,597 1984 30 Years
Rancho Murietta (Evans) Tempe, AZ 15,488 1983 30 Years
Ravens Crest Plainsboro, NJ 5,422,677 1984 30 Years
Redlands Lawn and Tennis Redlands, CA 25,069 1986 30 Years
Reflections at the Lakes Las Vegas, NV 364,317 1989 30 Years
Regatta (WRP) San Antonio, TX 163,257 1983 30 Years
Regency Palms Huntington Beach, CA 1,135,696 1969 30 Years
Regency Woods Des Moines, IA 14,880 1986 30 Years
Registry (WRP) Denver, CO 248,875 1987 30 Years
Reserve Square Combined Cleveland, OH 4,271,742 1973 30 Years
Ridgegate (WRP) Seattle, WA 158,777 1990 30 Years
Ridgemont/Mountain Brook Chattanooga, TN 248,558 1987/1988 30 Years
Ridgetop (WRP) Tacoma, WA 164,208 1988 30 Years
Ridgetree I & II Dallas, TX 1,175,476 1983 30 Years
Ridgeway Commons Memphis, TN 11,509 1970 30 Years
Ridgewood Village San Diego, CA 19,152 1997 30 Years
Rincon Houston, TX 486,390 1996 30 Years
River Bend Tampa, FL 3,002,362 1971 30 Years
River Oak Louisville, KY 24,275 1989 30 Years
Riverside Park Tulsa, OK 90,734 1994 30 Years
Rock Creek Corrboro, NC 320,980 1986 30 Years
Rosehill Pointe Lenexa, KS 1,238,431 1984 30 Years
Roswell Atlanta, GA 1,447,662 1985 30 Years
Royal Oak Eagan, MN 29,864 1989 30 Years
Sabal Palm Pompano Beach, FL 459,000 1989 30 Years
Sabal Pointe (M) Coral Springs, FL 1,185,004 1995 30 Years
Saddle Creek Carrollton, TX 1,925,906 1980 30 Years
Saddle Ridge Loudoun County, VA 972,500 1989 30 Years
San Tropez (WRP) Phoenix, AZ 512,245 1989 30 Years
Sawgrass Cove Bradenton, FL 2,143,633 1991 30 Years
Scottsdale Courtyards Scottsdale, AZ 21,828 1993 30 Years
Scottsdale Meadows Scottsdale, AZ 10,229 1984 30 Years
</TABLE>
S-7
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
Real Estate and Accumulated Depreciation
December 31, 1997
<TABLE>
<CAPTION>
Initial Cost to
Description Company
- -------------------------------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Encumbrances Land Fixtures
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sedona Ridge Ahwatukee, AZ 0 5,508,000 9,700,530
Settler's Pointe (WRP) Salt Lake City, UT 0 1,715,100 15,436,275
Seventh & James (WRP) Seattle, WA 0 663,800 5,974,099
Shadow Brook Phoenix, AZ (P) 3,065,496 18,328,501
Sheffield Court Arlington, VA 0 3,349,350 30,246,228
Shores at Andersen Springs Chandler, AZ (P) 2,743,816 22,732,844
Silver Creek Phoenix, AZ (P) 712,102 6,688,724
Silver Shadow Las Vegas, NV 0 952,100 8,568,921
Silver Springs (FL) Jacksonville, FL 0 1,828,700 16,458,192
Silver Springs Tulsa, OK 0 672,500 6,052,669
Silverwood Mission, KS 11,000,000 1,230,000 11,196,244
Skyline Gateway Tucson, AZ 0 1,128,400 10,155,997
Sleepy Hollow Kansas City, MO 12,500,000 2,193,547 13,689,443
Songbird San Antonio, TX 6,844,309 1,080,500 9,724,928
Sonnet Cove I Lexington, KY 0 183,407 2,422,860
Sonnet Cove II Lexington, KY 0 100,000 1,108,405
Sonoran (Evans) Phoenix, AZ (P) 2,361,922 31,760,934
South Creek Mesa, AZ 16,236,161 2,669,300 24,023,758
Southbank Mesa, AZ 0 319,600 2,876,874
Spice Run Naperville, IL 0 2,578,900 23,210,030
Spinnaker Cove Hermitage, TN 14,205,000 1,420,500 12,789,873
Springs Colony Orlando, FL 9,350,000 631,900 5,687,010
Springs of Country Woods Salt Lake City, UT 0 3,547,400 31,926,882
Sterling Point Denver, CO 0 935,500 8,419,865
Stonelake Club Ocala, FL 0 250,000 2,024,968
Stoney Creek Tacoma, WA 0 1,215,200 10,937,144
Summer Ridge Riverside, CA 0 600,500 5,404,571
Summerset Village Chatsworth, CA 0 2,628,500 23,656,668
Summit at Lake Union Seattle, WA 0 1,424,600 12,821,002
Summit Chase Coral Springs, FL 0 1,120,000 4,413,035
Sun Creek (Evans) Glendale, AZ (P) 896,929 7,044,103
Sunny Oak Village Overland Park, KS 0 2,222,600 20,003,050
Sunrise Springs Las Vegas, NV 0 972,600 8,753,491
Suntree Village (Evans) Oro Valley, AZ (P) 1,571,745 13,067,845
Superstition Vista/ Heritage Point Mesa, AZ 0 2,307,357 28,479,012
Surprise Lake Village Tacoma, WA 0 1,830,200 16,471,470
Sutton Place Dallas, TX 0 1,316,500 11,848,717
Sycamore Creek Scottsdale, AZ (E) 3,150,000 19,068,201
Tamarind at Stoneridge Columbia, SC 0 1,053,800 9,490,859
Tamarlane Portland, ME 0 690,000 5,143,970
Tanasbourne Terrace Hillsboro, OR 0 1,873,000 16,857,220
Tanglewood (OR) Portland, OR 0 760,000 6,839,589
Tanglewood (VA) Manassas, VA 24,855,587 2,103,400 19,559,772
Terraces at Peachtree Atlanta, GA 0 582,800 5,245,560
The Arboretum Tucson, AZ (Q) 3,453,446 18,978,563
The Enclave Tempe, AZ (Q) 1,500,192 19,262,528
The Heritage Phoenix, AZ (P) 1,211,205 13,104,261
The Ingleside Phoenix, AZ 0 1,203,600 10,662,988
The Legends Tucson, AZ 0 2,729,788 17,866,476
The Meadows Mesa, AZ 0 650,000 15,408,042
The Palms Phoenix, AZ (P) 3,285,226 11,242,231
Place, The Fort Myers, FL 0 722,900 6,506,350
Seasons, The Boise, ID 0 604,400 5,439,624
The Trails at Dominion Houston, TX 25,859,753 2,529,000 35,693,699
The Willows Knoxville, TN 8,068,889 1,100,000 9,906,909
</TABLE>
<TABLE>
<CAPTION>
Cost Capitalized
Subsequent to
Acquisition
Description (Improvements, net) (I)
- -----------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Land Fixtures
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sedona Ridge Ahwatukee, AZ 0 53,410
Settler's Pointe (WRP) Salt Lake City, UT 0 40,529
Seventh & James (WRP) Seattle, WA 0 32,273
Shadow Brook Phoenix, AZ 0 0
Sheffield Court Arlington, VA 0 2,064,923
Shores at Andersen Springs Chandler, AZ 0 0
Silver Creek Phoenix, AZ 0 0
Silver Shadow Las Vegas, NV 1,340 302,146
Silver Springs (FL) Jacksonville, FL 0 23,594
Silver Springs Tulsa, OK 0 8,702
Silverwood Mission, KS 0 453,320
Skyline Gateway Tucson, AZ 0 49,230
Sleepy Hollow Kansas City, MO 0 1,561,709
Songbird San Antonio, TX 2,000 254,902
Sonnet Cove I Lexington, KY 0 1,813,961
Sonnet Cove II Lexington, KY 0 821,113
Sonoran (Evans) Phoenix, AZ 0 0
South Creek Mesa, AZ 2,000 316,264
Southbank Mesa, AZ 10,900 344,878
Spice Run Naperville, IL 800 442,721
Spinnaker Cove Hermitage, TN 41,231 448,527
Springs Colony Orlando, FL 8,500 710,248
Springs of Country Woods Salt Lake City, UT 0 71,221
Sterling Point Denver, CO 0 30,474
Stonelake Club Ocala, FL 100 388,685
Stoney Creek Tacoma, WA 0 12,395
Summer Ridge Riverside, CA 1,900 65,362
Summerset Village Chatsworth, CA 2,200 125,536
Summit at Lake Union Seattle, WA 0 81,917
Summit Chase Coral Springs, FL 1,700 82,165
Sun Creek (Evans) Glendale, AZ 0 0
Sunny Oak Village Overland Park, KS 22,350 1,228,997
Sunrise Springs Las Vegas, NV 2,700 249,026
Suntree Village (Evans) Oro Valley, AZ 0 0
Superstition Vista/ Heritage Point Mesa, AZ 0 0
Surprise Lake Village Tacoma, WA 0 85,303
Sutton Place Dallas, TX 41,900 2,512,250
Sycamore Creek Scottsdale, AZ 900 13,124
Tamarind at Stoneridge Columbia, SC 0 (0)
Tamarlane Portland, ME 900 26,507
Tanasbourne Terrace Hillsboro, OR 3,700 844,799
Tanglewood (OR) Portland, OR 3,000 1,073,753
Tanglewood (VA) Manassas, VA 4,895 1,698,051
Terraces at Peachtree Atlanta, GA 700 399,025
The Arboretum Tucson, AZ 0 0
The Enclave Tempe, AZ 0 0
The Heritage Phoenix, AZ 0 0
The Ingleside Phoenix, AZ 0 0
The Legends Tucson, AZ 0 0
The Meadows Mesa, AZ 0 0
The Palms Phoenix, AZ 0 0
Place, The Fort Myers, FL 3,340 463,261
Seasons, The Boise, ID 3,600 296,957
The Trails at Dominion Houston, TX 2,800 299,173
The Willows Knoxville, TN 500 56,479
</TABLE>
<TABLE>
<CAPTION>
Gross Amount Carried
at Close of
Description Period 12/31/97
- -------------------------------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Land Fixtures (A) Total (B)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sedona Ridge Ahwatukee, AZ 5,508,000 9,753,940 15,261,940
Settler's Pointe (WRP) Salt Lake City, UT 1,715,100 15,476,804 17,191,904
Seventh & James (WRP) Seattle, WA 663,800 6,006,372 6,670,172
Shadow Brook Phoenix, AZ 3,065,496 18,328,501 21,393,997
Sheffield Court Arlington, VA 3,349,350 32,311,151 35,660,501
Shores at Andersen Springs Chandler, AZ 2,743,816 22,732,844 25,476,660
Silver Creek Phoenix, AZ 712,102 6,688,724 7,400,826
Silver Shadow Las Vegas, NV 953,440 8,871,067 9,824,507
Silver Springs (FL) Jacksonville, FL 1,828,700 16,481,786 18,310,486
Silver Springs Tulsa, OK 672,500 6,061,371 6,733,871
Silverwood Mission, KS 1,230,000 11,649,564 12,879,564
Skyline Gateway Tucson, AZ 1,128,400 10,205,227 11,333,627
Sleepy Hollow Kansas City, MO 2,193,547 15,251,152 17,444,699
Songbird San Antonio, TX 1,082,500 9,979,830 11,062,330
Sonnet Cove I Lexington, KY 183,407 4,236,821 4,420,228
Sonnet Cove II Lexington, KY 100,000 1,929,518 2,029,518
Sonoran (Evans) Phoenix, AZ 2,361,922 31,760,934 34,122,856
South Creek Mesa, AZ 2,671,300 24,340,022 27,011,322
Southbank Mesa, AZ 330,500 3,221,752 3,552,252
Spice Run Naperville, IL 2,579,700 23,652,751 26,232,451
Spinnaker Cove Hermitage, TN 1,461,731 13,238,400 14,700,131
Springs Colony Orlando, FL 640,400 6,397,258 7,037,658
Springs of Country Woods Salt Lake City, UT 3,547,400 31,998,103 35,545,503
Sterling Point Denver, CO 935,500 8,450,339 9,385,839
Stonelake Club Ocala, FL 250,100 2,413,653 2,663,753
Stoney Creek Tacoma, WA 1,215,200 10,949,539 12,164,739
Summer Ridge Riverside, CA 602,400 5,469,933 6,072,333
Summerset Village Chatsworth, CA 2,630,700 23,782,203 26,412,903
Summit at Lake Union Seattle, WA 1,424,600 12,902,919 14,327,519
Summit Chase Coral Springs, FL 1,121,700 4,495,200 5,616,900
Sun Creek (Evans) Glendale, AZ 896,929 7,044,103 7,941,032
Sunny Oak Village Overland Park, KS 2,244,950 21,232,047 23,476,997
Sunrise Springs Las Vegas, NV 975,300 9,002,517 9,977,817
Suntree Village (Evans) Oro Valley, AZ 1,571,745 13,067,845 14,639,590
Superstition Vista/ Heritage Point Mesa, AZ 2,307,357 28,479,012 30,786,369
Surprise Lake Village Tacoma, WA 1,830,200 16,556,773 18,386,973
Sutton Place Dallas, TX 1,358,400 14,360,967 15,719,367
Sycamore Creek Scottsdale, AZ 3,150,900 19,081,325 22,232,225
Tamarind at Stoneridge Columbia, SC 1,053,800 9,490,859 10,544,659
Tamarlane Portland, ME 690,900 5,170,477 5,861,377
Tanasbourne Terrace Hillsboro, OR 1,876,700 17,702,019 19,578,719
Tanglewood (OR) Portland, OR 763,000 7,913,342 8,676,342
Tanglewood (VA) Manassas, VA 2,108,295 21,257,823 23,366,118
Terraces at Peachtree Atlanta, GA 583,500 5,644,585 6,228,085
The Arboretum Tucson, AZ 3,453,446 18,978,563 22,432,009
The Enclave Tempe, AZ 1,500,192 19,262,528 20,762,720
The Heritage Phoenix, AZ 1,211,205 13,104,261 14,315,466
The Ingleside Phoenix, AZ 1,203,600 10,662,988 11,866,588
The Legends Tucson, AZ 2,729,788 17,866,476 20,596,264
The Meadows Mesa, AZ 650,000 15,408,042 16,058,042
The Palms Phoenix, AZ 3,285,226 11,242,231 14,527,457
Place, The Fort Myers, FL 726,240 6,969,611 7,695,851
Seasons, The Boise, ID 608,000 5,736,581 6,344,581
The Trails at Dominion Houston, TX 2,531,800 35,992,872 38,524,672
The Willows Knoxville, TN 1,100,500 9,963,388 11,063,888
</TABLE>
<TABLE>
<CAPTION>
Life Used to
Description Compute
- ---------------------------------------------------------------------------------------------------------- Depreciation in
Accumulated Date of Latest Income
Apartment Name Location Depreciation Construction Statement (C)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sedona Ridge Ahwatukee, AZ 265,997 1988 30 Years
Settler's Pointe (WRP) Salt Lake City, UT 329,025 1986 30 Years
Seventh & James (WRP) Seattle, WA 125,673 1992 30 Years
Shadow Brook Phoenix, AZ 16,746 1984 30 Years
Sheffield Court Arlington, VA 3,231,742 1986 30 Years
Shores at Andersen Springs Chandler, AZ 20,075 1989 30 Years
Silver Creek Phoenix, AZ 6,190 1986 30 Years
Silver Shadow Las Vegas, NV 1,262,807 1992 30 Years
Silver Springs (FL) Jacksonville, FL 142,541 1985 30 Years
Silver Springs Tulsa, OK 137,860 1984 30 Years
Silverwood Mission, KS 1,452,746 1986 30 Years
Skyline Gateway Tucson, AZ 223,810 1985 30 Years
Sleepy Hollow Kansas City, MO 4,866,627 1987 30 Years
Songbird San Antonio, TX 485,613 1981 30 Years
Sonnet Cove I Lexington, KY 2,837,430 1972 30 Years
Sonnet Cove II Lexington, KY 1,333,319 1974 30 Years
Sonoran (Evans) Phoenix, AZ 27,005 1995 30 Years
South Creek Mesa, AZ 1,316,091 1986-89 30 Years
Southbank Mesa, AZ 499,946 1985 30 Years
Spice Run Naperville, IL 882,510 1988 30 Years
Spinnaker Cove Hermitage, TN 291,074 1986 30 Years
Springs Colony Orlando, FL 902,698 1986 30 Years
Springs of Country Woods Salt Lake City, UT 680,475 1982 30 Years
Sterling Point Denver, CO 178,681 1979 30 Years
Stonelake Club Ocala, FL 467,496 1986 30 Years
Stoney Creek Tacoma, WA 235,210 1990 30 Years
Summer Ridge Riverside, CA 297,826 1985 30 Years
Summerset Village Chatsworth, CA 1,080,473 1985 30 Years
Summit at Lake Union Seattle, WA 266,259 1995-97 30 Years
Summit Chase Coral Springs, FL 114,037 1985 30 Years
Sun Creek (Evans) Glendale, AZ 6,593 1985 30 Years
Sunny Oak Village Overland Park, KS 1,197,980 1984 30 Years
Sunrise Springs Las Vegas, NV 1,077,228 1989 30 Years
Suntree Village (Evans) Oro Valley, AZ 12,572 1986 30 Years
Superstition Vista/ Heritage Point Mesa, AZ 24,680 1987 30 Years
Surprise Lake Village Tacoma, WA 356,880 1986 30 Years
Sutton Place Dallas, TX 2,281,510 1985 30 Years
Sycamore Creek Scottsdale, AZ 136,570 1984 30 Years
Tamarind at Stoneridge Columbia, SC 82,084 1985 30 Years
Tamarlane Portland, ME 101,568 1986 30 Years
Tanasbourne Terrace Hillsboro, OR 2,219,894 1986-89 30 Years
Tanglewood (OR) Portland, OR 1,111,520 1976 30 Years
Tanglewood (VA) Manassas, VA 2,379,284 1987 30 Years
Terraces at Peachtree Atlanta, GA 467,119 1987 30 Years
The Arboretum Tucson, AZ 18,632 1987 30 Years
The Enclave Tempe, AZ 16,197 1994 30 Years
The Heritage Phoenix, AZ 11,428 1995 30 Years
The Ingleside Phoenix, AZ 9,271 1995 30 Years
The Legends Tucson, AZ 16,518 1995 30 Years
The Meadows Mesa, AZ 13,136 1984 30 Years
The Palms Phoenix, AZ 11,289 1990 30 Years
Place, The Fort Myers, FL 923,559 1986 30 Years
Seasons, The Boise, ID 745,408 1990 30 Years
The Trails at Dominion Houston, TX 1,127,962 1992 30 Years
The Willows Knoxville, TN 235,907 1987-1988 30 Years
</TABLE>
S-8
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
Real Estate and Accumulated Depreciation
December 31, 1997
<TABLE>
<CAPTION>
Initial Cost to
Description Company
- -------------------------------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Encumbrances Land Fixtures
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tivoli Lakes Club Deerfield Beach, FL 0 1,804,200 16,237,641
Town Centre III Laurel, MD 6,042,201 982,300 9,301,830
Town Centre IV Laurel, MD 9,595,674 1,564,200 14,787,362
Towne Centre Kingwood, TX 0 1,290,000 11,517,230
Towne Square Chandler, AZ 0 1,924,710 36,366,334
Trails (CO), The Aurora, CO 0 1,217,800 8,525,346
Trails (NV), The Las Vegas, NV 0 3,076,200 27,685,764
Trails (TX), The Arlington, TX 0 616,700 5,550,590
Trail's End (WRP) San Antonio, TX 0 951,300 8,561,640
Trailway Pond I Burnsville, MN 4,913,909 476,800 4,291,344
Trailway Pond II Burnsville, MN 11,365,354 1,104,700 9,942,611
Trinity Lakes Cordova, TN (E) 1,980,000 14,937,161
University Park Toledo, OH 0 70,000 834,378
Valley Creek I Woodbury, MN 12,827,815 1,622,600 14,603,730
Valley Creek II Woodbury, MN 10,110,100 1,229,500 11,065,355
Via Ventura Phoenix, AZ 0 1,476,500 13,288,894
Villa Encanto Phoenix, AZ 0 2,884,447 22,092,558
Villa Madeira Phoenix, AZ 0 1,580,000 14,219,907
Villa Manana Phoenix, AZ 0 951,400 8,562,443
Villa Serenas Tucson, AZ 9,274,638 2,424,900 14,418,493
Villa Solana Laguna Hills, CA 0 1,663,500 14,971,366
Village at Lakewood Phoenix, AZ (Q) 3,166,411 13,811,768
Village at Seeley Lake Tacoma, WA 0 2,760,400 24,843,439
Village at Tanque Verde Tucson, AZ (Q) 1,434,838 7,126,993
Village Oaks Austin, TX 5,348,183 1,184,400 10,659,432
Village of Hampshire Toledo, OH 0 151,912 1,320,453
Village of Newport Federal Way, WA 0 414,900 3,733,899
Village of Sycamore Ridge Memphis, TN 0 621,300 5,591,828
Villas of Oak Creste San Antonio, TX 0 905,800 8,151,738
Vinings at Ashley Lake Boynton Beach, FL 24,150,000 3,519,900 23,340,219
Vista Del Lago Mission Viejo, CA 32,003,439 4,524,400 41,357,681
Walden Wood Southfield, MI 5,895,724 833,300 7,499,662
Walnut Ridge Little Rock, AR 3,654,026 196,079 2,424,631
Warwick Station (WRP) Denver, CO 10,223,000 2,281,900 20,537,450
Waterford (WRP) San Antonio, TX 0 457,000 4,112,840
Waterford at the Lakes Kent, WA 0 3,100,200 16,343,191
Watermark Square Portland, OR 8,548,333 1,580,000 14,239,426
Waterstone Place Seattle, WA 0 2,950,900 26,558,353
Wellington(Salant) Silverdale, WA 8,264,153 1,097,300 9,876,034
Wellington Hill Manchester, NH 28,625,000 1,872,500 16,852,955
Wellsford Oaks (WRP) Tulsa, OK 0 1,310,500 11,794,290
Westridge (WRP) Tacoma, WA 0 3,501,900 31,517,540
</TABLE>
<TABLE>
<CAPTION>
Cost Capitalized
Subsequent to
Acquisition
Description (Improvements, net) (I)
- -----------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Land Fixtures
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Tivoli Lakes Club Deerfield Beach, FL 0 17,450
Town Centre III Laurel, MD 0 1,337,232
Town Centre IV Laurel, MD 4,700 44,169
Towne Centre Kingwood, TX 1,300 65,714
Towne Square Chandler, AZ 0 0
Trails (CO), The Aurora, CO 100 1,316,571
Trails (NV), The Las Vegas, NV 3,000 846,263
Trails (TX), The Arlington, TX 21,300 606,375
Trail's End (WRP) San Antonio, TX 0 32,719
Trailway Pond I Burnsville, MN 0 (0)
Trailway Pond II Burnsville, MN 0 0
Trinity Lakes Cordova, TN 1,200 25,292
University Park Toledo, OH 0 1,437,570
Valley Creek I Woodbury, MN 0 0
Valley Creek II Woodbury, MN 0 0
Via Ventura Phoenix, AZ 9,600 4,422,615
Villa Encanto Phoenix, AZ 0 0
Villa Madeira Phoenix, AZ 2,100 604,467
Villa Manana Phoenix, AZ 3,900 594,025
Villa Serenas Tucson, AZ 0 0
Villa Solana Laguna Hills, CA 1,600 894,305
Village at Lakewood Phoenix, AZ 0 0
Village at Seeley Lake Tacoma, WA 0 42,914
Village at Tanque Verde Tucson, AZ 0 0
Village Oaks Austin, TX 1,600 333,504
Village of Hampshire Toledo, OH 0 7,039,152
Village of Newport Federal Way, WA 1,400 273,557
Village of Sycamore Ridge Memphis, TN 200 14,910
Villas of Oak Creste San Antonio, TX 0 41,733
Vinings at Ashley Lake Boynton Beach, FL 0 0
Vista Del Lago Mission Viejo, CA 1,400 1,146,126
Walden Wood Southfield, MI 1,400 951,415
Walnut Ridge Little Rock, AR 0 3,061,884
Warwick Station (WRP) Denver, CO 100 56,889
Waterford (WRP) San Antonio, TX 0 5,740
Waterford at the Lakes Kent, WA 0 0
Watermark Square Portland, OR 500 164,414
Waterstone Place Seattle, WA 13,100 2,482,718
Wellington(Salant) Silverdale, WA 2,000 460,910
Wellington Hill Manchester, NH 17,700 1,700,778
Wellsford Oaks (WRP) Tulsa, OK 0 41,827
Westridge (WRP) Tacoma, WA 0 85,539
</TABLE>
<TABLE>
<CAPTION>
Gross Amount Carried
at Close of
Description Period 12/31/97
- -------------------------------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Land Fixtures (A) Total (B)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tivoli Lakes Club Deerfield Beach, FL 1,804,200 16,255,091 18,059,291
Town Centre III Laurel, MD 982,300 10,639,062 11,621,362
Town Centre IV Laurel, MD 1,568,900 14,831,531 16,400,431
Towne Centre Kingwood, TX 1,291,300 11,582,944 12,874,244
Towne Square Chandler, AZ 1,924,710 36,366,334 38,291,044
Trails (CO), The Aurora, CO 1,217,900 9,841,917 11,059,817
Trails (NV), The Las Vegas, NV 3,079,200 28,532,027 31,611,227
Trails (TX), The Arlington, TX 638,000 6,156,965 6,794,965
Trail's End (WRP) San Antonio, TX 951,300 8,594,359 9,545,659
Trailway Pond I Burnsville, MN 476,800 4,291,344 4,768,144
Trailway Pond II Burnsville, MN 1,104,700 9,942,611 11,047,311
Trinity Lakes Cordova, TN 1,981,200 14,962,453 16,943,653
University Park Toledo, OH 70,000 2,271,948 2,341,948
Valley Creek I Woodbury, MN 1,622,600 14,603,730 16,226,330
Valley Creek II Woodbury, MN 1,229,500 11,065,355 12,294,855
Via Ventura Phoenix, AZ 1,486,100 17,711,509 19,197,609
Villa Encanto Phoenix, AZ 2,884,447 22,092,558 24,977,005
Villa Madeira Phoenix, AZ 1,582,100 14,824,374 16,406,474
Villa Manana Phoenix, AZ 955,300 9,156,468 10,111,768
Villa Serenas Tucson, AZ 2,424,900 14,418,493 16,843,393
Villa Solana Laguna Hills, CA 1,665,100 15,865,671 17,530,771
Village at Lakewood Phoenix, AZ 3,166,411 13,811,768 16,978,179
Village at Seeley Lake Tacoma, WA 2,760,400 24,886,353 27,646,753
Village at Tanque Verde Tucson, AZ 1,434,838 7,126,993 8,561,831
Village Oaks Austin, TX 1,186,000 10,992,936 12,178,936
Village of Hampshire Toledo, OH 151,912 8,359,605 8,511,517
Village of Newport Federal Way, WA 416,300 4,007,456 4,423,756
Village of Sycamore Ridge Memphis, TN 621,500 5,606,738 6,228,238
Villas of Oak Creste San Antonio, TX 905,800 8,193,471 9,099,271
Vinings at Ashley Lake Boynton Beach, FL 3,519,900 23,340,219 26,860,119
Vista Del Lago Mission Viejo, CA 4,525,800 42,503,807 47,029,607
Walden Wood Southfield, MI 834,700 8,451,077 9,285,777
Walnut Ridge Little Rock, AR 196,079 5,486,515 5,682,594
Warwick Station (WRP) Denver, CO 2,282,000 20,594,339 22,876,339
Waterford (WRP) San Antonio, TX 457,000 4,118,581 4,575,581
Waterford at the Lakes Kent, WA 3,100,200 16,343,191 19,443,391
Watermark Square Portland, OR 1,580,500 14,403,840 15,984,340
Waterstone Place Seattle, WA 2,964,000 29,041,071 32,005,071
Wellington(Salant) Silverdale, WA 1,099,300 10,336,944 11,436,244
Wellington Hill Manchester, NH 1,890,200 18,553,733 20,443,933
Wellsford Oaks (WRP) Tulsa, OK 1,310,500 11,836,117 13,146,617
Westridge (WRP) Tacoma, WA 3,501,900 31,603,079 35,104,979
</TABLE>
<TABLE>
<CAPTION>
Life Used to
Description Compute
- ---------------------------------------------------------------------------------------------------------- Depreciation in
Accumulated Date of Latest Income
Apartment Name Location Depreciation Construction Statement (C)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tivoli Lakes Club Deerfield Beach, FL 134,957 1991 30 Years
Town Centre III Laurel, MD 1,268,507 1969 30 Years
Town Centre IV Laurel, MD 1,554,184 1968 30 Years
Towne Centre Kingwood, TX 408,693 1994 30 Years
Towne Square Chandler, AZ 30,725 1987-1996 30 Years
Trails (CO), The Aurora, CO 1,759,465 1986 30 Years
Trails (NV), The Las Vegas, NV 3,302,624 1988 30 Years
Trails (TX), The Arlington, TX 888,529 1984 30 Years
Trail's End (WRP) San Antonio, TX 197,375 1983 30 Years
Trailway Pond I Burnsville, MN 8,964 1988 30 Years
Trailway Pond II Burnsville, MN 20,688 1988 30 Years
Trinity Lakes Cordova, TN 108,814 1985 30 Years
University Park Toledo, OH 1,297,134 1965 30 Years
Valley Creek I Woodbury, MN 30,187 1989 30 Years
Valley Creek II Woodbury, MN 22,949 1990 30 Years
Via Ventura Phoenix, AZ 2,185,107 1980 30 Years
Villa Encanto Phoenix, AZ 20,046 1983 30 Years
Villa Madeira Phoenix, AZ 1,921,248 1971 30 Years
Villa Manana Phoenix, AZ 1,250,094 1971-85 30 Years
Villa Serenas Tucson, AZ 65,839 1973 30 Years
Villa Solana Laguna Hills, CA 2,196,894 1984 30 Years
Village at Lakewood Phoenix, AZ 13,546 1988 30 Years
Village at Seeley Lake Tacoma, WA 534,825 1990 30 Years
Village at Tanque Verde Tucson, AZ 7,225 1984-1994 30 Years
Village Oaks Austin, TX 433,603 1984 30 Years
Village of Hampshire Toledo, OH 2,903,527 1950 30 Years
Village of Newport Federal Way, WA 504,348 1987 30 Years
Village of Sycamore Ridge Memphis, TN 47,175 1977 30 Years
Villas of Oak Creste San Antonio, TX 187,591 1979 30 Years
Vinings at Ashley Lake Boynton Beach, FL 32,655 1990 30 Years
Vista Del Lago Mission Viejo, CA 5,926,549 1986-88 30 Years
Walden Wood Southfield, MI 1,285,958 1972 30 Years
Walnut Ridge Little Rock, AR 2,883,808 1975 30 Years
Warwick Station (WRP) Denver, CO 433,103 1986 30 Years
Waterford (WRP) San Antonio, TX 93,042 1983 30 Years
Waterford at the Lakes Kent, WA 480,862 1990 30 Years
Watermark Square Portland, OR 405,091 1990 30 Years
Waterstone Place Seattle, WA 4,408,853 1990 30 Years
Wellington(Salant) Silverdale, WA 1,007,298 1990 30 Years
Wellington Hill Manchester, NH 2,506,313 1987 30 Years
Wellsford Oaks (WRP) Tulsa, OK 259,729 1991 30 Years
Westridge (WRP) Tacoma, WA 686,050 1987/1991 30 Years
</TABLE>
S-9
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
Real Estate and Accumulated Depreciation
December 31, 1997
<TABLE>
<CAPTION>
Initial Cost to
Description Company
- -------------------------------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Encumbrances Land Fixtures
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Westwood Pines Tamarac, FL 0 1,526,200 13,735,152
White Bear Woods White Bear Lake, MN 14,184,170 1,621,300 14,591,904
Whitedove Pointe (WRP) Seattle, WA 0 605,300 5,447,856
Wilde Lake Richmond, VA 4,440,000 934,600 8,411,613
Williamsburg Square Little Rock, AR 3,288,623 315,000 1,745,958
Willow Brook (NC) Durham, NC 0 1,408,000 7,105,081
Willowglen Aurora, CO 0 1,708,000 15,371,641
Windemere Mesa, AZ 6,244,353 949,000 8,653,152
Windmill Colorado Springs, CO 0 395,544 4,953,156
Windridge Laguna Niguel, CA (O) 2,660,800 23,947,096
Windridge (WRP) Tacoma, WA 0 322,700 2,904,779
Windrush Oklahoma City, OK 0 588,800 5,311,532
Winterwood Charlotte, NC 12,127,756 1,720,100 15,481,455
Wood Creek (CA) Pleasant Hill, CA 0 9,728,000 22,992,918
Wood Crest Villa Westland, MI 0 925,900 8,333,827
Wood Lane Place Woodbury, MN 14,014,000 2,003,300 18,029,538
Woodbridge (N) Cary, NC 4,766,485 1,981,900 17,839,380
Woodcreek Beaverton, OR 11,345,849 1,753,700 15,783,764
Woodlake at Killearn Tallahassee, FL 0 1,404,300 12,638,426
Woodland Hills Decatur, GA 0 1,223,900 11,017,542
Woodland Meadows Ann Arbor, MI 0 2,003,600 18,032,640
Woodland Oaks Tulsa, OK 0 893,100 8,038,166
Woodlands of Minnetonka Minnetonka, MN 0 2,392,500 13,557,500
Woodmoor Austin, TX 0 649,300 5,843,200
Woods at North Bend Raleigh, NC 0 1,039,000 9,350,616
Woodscape Raleigh, NC 0 956,000 8,603,550
Woodside Lorton, VA 0 1,308,100 12,503,220
Wyndridge 2 Memphis, TN 14,135,000 1,486,000 13,586,157
Wyndridge 3 Memphis, TN 10,855,000 1,500,000 13,505,510
Yorktowne at Olde Mill Millersville, MD 0 216,000 1,330,710
Yuma Court Colorado Springs, CO 0 113,163 836,429
Development Properties (R) 0 8,271,910 36,040,199
Operating Partnership Chicago, IL 0 0 88,566
Management Business Chicago, IL 0 0 3,442,962
-------------- ------------ --------------
TOTAL $1,232,242,100 $790,764,741 $6,054,502,781
============== ============ ==============
</TABLE>
<TABLE>
<CAPTION>
Cost Capitalized
Subsequent to
Acquisition
Description (Improvements, net) (I)
- -----------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Land Fixtures
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Westwood Pines Tamarac, FL 0 0
White Bear Woods White Bear Lake, MN 0 0
Whitedove Pointe (WRP) Seattle, WA 0 14,340
Wilde Lake Richmond, VA 12,600 193,734
Williamsburg Square Little Rock, AR 0 3,371,274
Willow Brook (NC) Durham, NC 1,500 38,550
Willowglen Aurora, CO 1,200 572,196
Windemere Mesa, AZ 300 38,442
Windmill Colorado Springs, CO 100 561,634
Windridge Laguna Niguel, CA 2,100 414,946
Windridge (WRP) Tacoma, WA 0 6,113
Windrush Oklahoma City, OK 0 54,821
Winterwood Charlotte, NC 1,700 1,123,101
Wood Creek (CA) Pleasant Hill, CA 1,900 93,025
Wood Crest Villa Westland, MI 0 (0)
Wood Lane Place Woodbury, MN 0 0
Woodbridge (N) Cary, NC 100 217,126
Woodcreek Beaverton, OR 2,100 1,308,090
Woodlake at Killearn Tallahassee, FL 3,855 953,291
Woodland Hills Decatur, GA 700 294,522
Woodland Meadows Ann Arbor, MI 0 8,575
Woodland Oaks Tulsa, OK 0 55,909
Woodlands of Minnetonka Minnetonka, MN 0 0
Woodmoor Austin, TX 4,500 932,671
Woods at North Bend Raleigh, NC 500 700,511
Woodscape Raleigh, NC 1,300 60,098
Woodside Lorton, VA 17,900 281,207
Wyndridge 2 Memphis, TN 2,000 210,964
Wyndridge 3 Memphis, TN 2,500 196,045
Yorktowne at Olde Mill Millersville, MD 0 4,632,854
Yuma Court Colorado Springs, CO 100 117,614
Development Properties (R) 0 0
Operating Partnership Chicago, IL 0 0
Management Business Chicago, IL 1,000 14,414,292
---------- ------------
TOTAL $1,215,488 $274,952,132
========== ============
</TABLE>
<TABLE>
<CAPTION>
Gross Amount Carried
at Close of
Description Period 12/31/97
- -------------------------------------------------------------------------------------------------------------------------------
Building &
Apartment Name Location Land Fixtures (A) Total (B)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Westwood Pines Tamarac, FL 1,526,200 13,735,152 15,261,352
White Bear Woods White Bear Lake, MN 1,621,300 14,591,904 16,213,204
Whitedove Pointe (WRP) Seattle, WA 605,300 5,462,196 6,067,496
Wilde Lake Richmond, VA 947,200 8,605,347 9,552,547
Williamsburg Square Little Rock, AR 315,000 5,117,232 5,432,232
Willow Brook (NC) Durham, NC 1,409,500 7,143,631 8,553,131
Willowglen Aurora, CO 1,709,200 15,943,837 17,653,037
Windemere Mesa, AZ 949,300 8,691,593 9,640,893
Windmill Colorado Springs, CO 395,644 5,514,790 5,910,434
Windridge Laguna Niguel, CA 2,662,900 24,362,042 27,024,942
Windridge (WRP) Tacoma, WA 322,700 2,910,892 3,233,592
Windrush Oklahoma City, OK 588,800 5,366,353 5,955,153
Winterwood Charlotte, NC 1,721,800 16,604,556 18,326,356
Wood Creek (CA) Pleasant Hill, CA 9,729,900 23,085,943 32,815,843
Wood Crest Villa Westland, MI 925,900 8,333,827 9,259,727
Wood Lane Place Woodbury, MN 2,003,300 18,029,538 20,032,838
Woodbridge (N) Cary, NC 1,982,000 18,056,506 20,038,506
Woodcreek Beaverton, OR 1,755,800 17,091,854 18,847,654
Woodlake at Killearn Tallahassee, FL 1,408,155 13,591,717 14,999,872
Woodland Hills Decatur, GA 1,224,600 11,312,064 12,536,664
Woodland Meadows Ann Arbor, MI 2,003,600 18,041,215 20,044,815
Woodland Oaks Tulsa, OK 893,100 8,094,075 8,987,175
Woodlands of Minnetonka Minnetonka, MN 2,392,500 13,557,500 15,950,000
Woodmoor Austin, TX 653,800 6,775,871 7,429,671
Woods at North Bend Raleigh, NC 1,039,500 10,051,127 11,090,627
Woodscape Raleigh, NC 957,300 8,663,648 9,620,948
Woodside Lorton, VA 1,326,000 12,784,427 14,110,427
Wyndridge 2 Memphis, TN 1,488,000 13,797,121 15,285,121
Wyndridge 3 Memphis, TN 1,502,500 13,701,555 15,204,055
Yorktowne at Olde Mill Millersville, MD 216,000 5,963,564 6,179,564
Yuma Court Colorado Springs, CO 113,263 954,043 1,067,306
Development Properties (R) 8,271,910 36,040,199 44,312,109
Operating Partnership Chicago, IL 0 88,566 88,566
Management Business Chicago, IL 1,000 17,857,254 17,858,254
------------ -------------- --------------
TOTAL $791,980,229 $6,329,454,913 $7,121,435,142
============ ============== ==============
</TABLE>
<TABLE>
<CAPTION>
Life Used to
Description Compute
- ---------------------------------------------------------------------------------------------------------- Depreciation in
Accumulated Date of Latest Income
Apartment Name Location Depreciation Construction Statement (C)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Westwood Pines Tamarac, FL 28,369 1991 30 Years
White Bear Woods White Bear Lake, MN 30,180 1989 30 Years
Whitedove Pointe (WRP) Seattle, WA 115,546 1992 30 Years
Wilde Lake Richmond, VA 329,313 1989 30 Years
Williamsburg Square Little Rock, AR 2,529,820 1974 30 Years
Willow Brook (NC) Durham, NC 170,045 1986 30 Years
Willowglen Aurora, CO 783,226 1983 30 Years
Windemere Mesa, AZ 169,704 1986 30 Years
Windmill Colorado Springs, CO 1,135,695 1985 30 Years
Windridge Laguna Niguel, CA 2,728,806 1989 30 Years
Windridge (WRP) Tacoma, WA 64,341 1989 30 Years
Windrush Oklahoma City, OK 119,419 1982 30 Years
Winterwood Charlotte, NC 2,431,640 1986 30 Years
Wood Creek (CA) Pleasant Hill, CA 416,329 1987 30 Years
Wood Crest Villa Westland, MI 21,418 1970 30 Years
Wood Lane Place Woodbury, MN 36,704 1989 30 Years
Woodbridge (N) Cary, NC 1,229,658 1993-95 30 Years
Woodcreek Beaverton, OR 2,198,878 1982-84 30 Years
Woodlake at Killearn Tallahassee, FL 1,951,520 1986 30 Years
Woodland Hills Decatur, GA 702,025 1985 30 Years
Woodland Meadows Ann Arbor, MI 149,772 1987-1989 30 Years
Woodland Oaks Tulsa, OK 178,918 1983 30 Years
Woodlands of Minnetonka Minnetonka, MN 12,818 1988 30 Years
Woodmoor Austin, TX 1,012,769 1981 30 Years
Woods at North Bend Raleigh, NC 840,918 1983 30 Years
Woodscape Raleigh, NC 416,109 1979 30 Years
Woodside Lorton, VA 1,402,458 1987 30 Years
Wyndridge 2 Memphis, TN 277,559 1988 30 Years
Wyndridge 3 Memphis, TN 298,409 1988 30 Years
Yorktowne at Olde Mill Millersville, MD 4,010,721 1974 30 Years
Yuma Court Colorado Springs, CO 170,222 1985 30 Years
Development Properties (R) 0 (R)
Operating Partnership Chicago, IL 42,766 (H)
Management Business Chicago, IL 8,109,998 (G)
------------
TOTAL $444,761,975
============
</TABLE>
S-10
<PAGE>
SCHEDULE III
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1997
NOTES:
(A) The balance of furniture & fixtures included in the total amount was
$232,636,142 as of December 31, 1997.
(B) The aggregate cost for Federal Income Tax purposes as of December 31,
1997 was approximately $6.2 billion.
(C) The life to compute depreciation for furniture & fixtures is 7 years.
(D) These two properties are encumbered by $14,947,187 in bonds.
(E) These 17 properties are encumbered by $136,000,000 in bonds.
(F) These four properties are encumbered by $15,500,000 in bonds.
(G) This asset consists of various acquisition dates and represents
furniture, fixtures and equipment owned by the Management Business.
(H) This asset consists of various acquisition dates and represents
furniture, fixtures and equipment owned by the Operating Partnership.
(I) Improvements are net of write-off of fully depreciated assets which are
no longer in service.
(J) Combined with Cedar Cove.
(K) Formerly known as Oxford & Sussex.
(L) Formerly known as Post Place.
(M) Formerly known as The Vinings at Coral Springs.
(N) Formerly known as The Plantations (NC).
(O) These five properties are pledged as additional collateral in connection
with the tax-exempt bond refinancing.
(P) These 21 properties are encumbered by $133,669,779 in bonds.
(Q) These 5 properties are encumbered by a $50,200,125 note payable.
(R) Balances represent development properties Montierra, The Retreat and
Vista Grove. These apartment communities are currently under construction
and/or are in the process of being leased up.
* Four Lakes was constructed in phases between 1968 & 1988.
(#) The Lodge-Texas was struck by a tornado that destroyed most of the
property. The property was reconstructed during 1989 & 1990.
(x) Pines of Springdale was constructed in phases between 1985 & 1987.
S-11
<PAGE>
Schedule III
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)
(AMOUNTS IN THOUSANDS)
The changes in total real estate for the years ended December 31, 1997, 1996,
and 1995 are as follows:
<TABLE>
<CAPTION>
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
Balance, beginning of year $2,983,510 $2,188,939 $1,963,476
Acquisitions 4,112,126 789,056 288,277
Improvements 60,043 33,001 32,800
Write-off of fully depreciated assets
which are no longer in service (930) (20) (34,320)
Dispositions and other (33,314) (27,466) (61,294)
----------- ----------- -----------
Balance, end of year $7,121,435 $2,983,510 $2,188,939
=========== =========== ===========
</TABLE>
The changes in accumulated depreciation for the years ended December 31, 1997,
1996 and 1995 are as follows:
<TABLE>
<CAPTION>
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Balance, beginning of year $301,512 $218,339 $192,741
Depreciation 156,644 93,253 72,410
Write-off of fully depreciated assets
which are no longer in service (930) (20) (34,320)
Dispositions and other (12,464) (10,060) (12,492)
--------- --------- ---------
Balance, end of year $444,762 $301,512 $218,339
========= ========= =========
</TABLE>
S-12
<PAGE>
Exhibit 10.15
AMENDMENT NO. 1 TO AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
EVANS WITHYCOMBE RESIDENTIAL, L.P.
THIS AMENDMENT NO. 1 TO AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF EVANS WITHYCOMBE RESIDENTIAL, L.P. (this "Amendment"),
effective as of the Effective Time (as defined in the Agreement and Plan of
Merger dated as of August 27, 1997 ("Merger Agreement") between Equity
Residential Properties Trust and Evans Withycombe Residential, Inc.).
RECITALS:
A. Evans Withycombe Residential, L.P., a Delaware limited partnership (the
"Partnership"), is governed by that certain Amended and Restated Agreement of
Limited Partnership of Evans Withycombe Residential, L.P. dated as of August
17, 1994 (the "Agreement").
B. Evans Withycombe Residential, Inc., a Maryland corporation ("EWR") and
the general partner of the Partnership, and Equity Residential Properties
Trust, a Maryland real estate investment ("EQR"), have merged pursuant to the
Merger Agreement (the "Merger").
C. Pursuant to the Merger Agreement, the limited partners of the Partnership
have approved the contribution of all the assets of the Partnership, subject
to its liabilities, to ERP Operating Partnership, an Illinois limited
partnership, on the terms and conditions provided for in the Merger Agreement
(the "Asset Contribution").
D. In connection with the Merger and the Asset Contribution, the limited
partners of the Partnership desire to amend the Agreement as hereinafter set
forth.
E. The limited partners of the Partnership further desire to ratify and
confirm the decision of the Board of Directors of Evans Withycombe
Residential, Inc., in its capacity as general partner of the Partnership, not
to present for consideration by the limited partners of the Partnership that
certain proposed Amendment to the Agreement dated as of June 18, 1997 (the
"11.2 Amendment").
AGREEMENTS:
1. AMENDMENTS TO ARTICLE 1: PROVISIONS RELATING TO DEFINED TERMS.
(a) Article 1 of the Partnership Agreement is hereby amended by adding
thereto the following definitions:
"ASSET CONTRIBUTION AGREEMENT" means the Asset Contribution Agreement
dated August 27, 1997 between the Partnership and ERP.
"EFFECTIVE TIME" means the time the State Department of Assessments and
Taxation of Maryland accepts for record the Articles of Merger between EQR
and Evans Withycombe Residential, Inc.
"EQR" means Equity Residential Properties Trust, a Maryland real estate
investment trust, as successor by merger to Evans Withycombe Residential,
Inc., a Maryland corporation.
"ERP" means ERP Operating Limited Partnership, an Illinois limited
partnership of which EQR is the general partner.
"ERP COMMON UNITS" mean units of common partnership interest in ERP.
"ERP UNITS" mean units of partnership interest in ERP.
(b) The definitions of "Option Plans", "Partnership Record Date" and "Value"
are hereby amended to change the references therein to "General Partner" to
"EQR."
(c) The definition of "Common Shares" is hereby amended to read as follows:
"COMMON SHARES" mean common shares of beneficial interest, $.01 par value
per share, of EQR.
1
<PAGE>
(d) The definition of "General Partner" is hereby amended to read as
follows:
"GENERAL PARTNER" means EQR and ERP, as co-general partners, and their
respective successors as co-general partners of the Partnership.
(e) The definition of "Transaction" in Article I is hereby deleted.
(f) The definition of "Unit Adjustment Factor" is hereby amended to read as
follows:
"UNIT ADJUSTMENT FACTOR" means 1.00 until the Effective Time and from and
after the Effective Time 0.50; provided that in the event that EQR (a)
declares or pays a dividend on its outstanding Common Shares in Common
Shares or makes a distribution to all holders of its outstanding Common
Shares in Common Shares, (b) subdivides its outstanding Common Shares or
(c) combines its outstanding Common Shares into a smaller number of Common
Shares, the Unit Adjustment Factor shall be adjusted by multiplying the
Unit Adjustment Factor by a fraction, the numerator of which shall be the
number of Common Shares issued and outstanding on the record date (assuming
for such purpose that such dividend, distribution, subdivision or
combination has occurred as of such time), and the denominator of which
shall be the actual number of Common Shares (determined without the above
assumption) issued and outstanding on the record date for such dividend,
contribution, subdivision or combination. In addition, while Section 7.5
hereof provides that EQR shall not directly or indirectly enter into or
conduct any business except as permitted in said Section, if an event were
to occur that would significantly affect the economic relationship between
a Partnership Unit and a Common Share, the Unit Adjustment Factor shall
also be appropriately adjusted. Any such adjustment to the Unit Adjustment
Factor shall be determined by the Board of Trustees of EQR, whose
determination as to whether an adjustment is necessary and the amount of
such adjustment shall be conclusive absent manifest error. Any adjustment
to the Unit Adjustment Factor shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for
such event.
2. CHANGE OF PRINCIPAL OFFICE. The second sentence of Section 2.3 of the
Agreement is hereby amended to read as follows:
"The principal office of the Partnership is located at Two North
Riverside Plaza, Suite 400, Chicago, Illinois 60606, or such other place as
the General Partner may from time to time designate by notice to the
Limited Partners."
3. AMENDMENTS TO CHANGE REFERENCES FROM GENERAL PARTNER TO EQR. The
following Sections of the Agreement are hereby amended to change references
therein to "General Partner" to references to "EQR."
(a) Section 3.1;
(b) Section 3.2;
(c) Section 4.2(e) (renumbered pursuant to this Amendment as Section
4.2(b));
(d) the last sentence of Section 4.5;
(e) Section 7.1(a)(1);
(f) the penultimate sentence of Section 7.7(a);
(g) Section 8.3(a);
(h) Section 9.3;
(i) Section 10.3; and
(j) Section 14.1(b)(6).
4. GENERAL PARTNERSHIP INTERESTS. The last sentence of Section 4.1(a) is
hereby amended to read as follows:
"A number of Partnership Units held by EQR equal to one percent (1%) of all
outstanding Partnership Units shall be deemed to be a General Partnership
Interest and a number of Partnership Units held by ERP equal to one percent
(1%) of all outstanding Partnership Units shall be deemed to be a General
Partnership Interest."
5. DELETION OF REQUIREMENT TO CONTRIBUTE FUNDS. Section 4.1(b)(2) of the
Agreement is hereby deleted in its entirety.
6. EQR'S SHARES NOT EQUATED TO PARTNERSHIP UNITS. Sections 4.2(b), 4.2(c)
and 4.2(d) of the Agreement are hereby deleted in their entirety and paragraph
(e) of Section 4.2 is hereby redesignated as paragraph (b) of Section 4.2.
7. DISTRIBUTION OF ERP COMMON UNITS IN LIQUIDATION. The Agreement is hereby
amended by adding thereto a new Section 5.5, which shall read as follows:
"5.5 DISTRIBUTION OF ERP COMMON UNITS. Notwithstanding anything to the
contrary in this Agreement, the ERP Common Units which may be received by
the Partnership pursuant to the Asset Contribution Agreement may
2
<PAGE>
be distributed to the Partners in liquidation of the Partnership on the
basis of one ERP Common Unit for each Partnership Unit then outstanding."
8. CONFORMING AMENDMENT. The proviso at the end of Section 7.1(a)(3) is
hereby amended to read as follows:
"provided, further, that the sale of all or substantially all of the assets
of the Partnership shall require the Consent of a majority of the
Percentage Interests of the Limited Partnership Interests (including
Limited Partnership Interests held by the General Partner)."
9. SALE OF ALL ASSETS PERMITTED. Section 7.2(a) of the Agreement is hereby
amended to read as follows:
"(a) take any action which would make it impossible to carry on the
ordinary business of the Partnership, except as otherwise provided in this
Agreement (it being understood and agreed that, subject to Section
7.1(a)(3), a sale of any or all of the assets of the Partnership, for
example, would be an ordinary part of the Partnership's business and
affairs and is specifically permitted hereby);"
10. OUTSIDE ACTIVITIES OF EQR. Section 7.5 of the Agreement is hereby
deleted in its entirety and the following is substituted in lieu thereof:
"Section 7.5 INTENTIONALLY OMITTED."
11. ASSET CONTRIBUTION AGREEMENT PERMITTED. Section 7.6(c) of the Agreement
is hereby amended to read as follows:
"(c) CONTRACT WITH GENERAL PARTNER. Except as expressly permitted by this
Agreement and except as contemplated by the Asset Contribution Agreement,
neither the General Partner nor any of its Affiliates shall sell, transfer
or convey any property to, or purchase any property from, the Partnership,
directly or indirectly, except pursuant to transactions that are on terms
that are fair and reasonable and no less favorable to the Partnership than
would be obtained from an unaffiliated third party in connection
therewith."
12. ACTION TO MAINTAIN REIT STATUS OF EQR. Section 7.9(d) of the Agreement
is hereby amended to read as follows:
"(d) ACTIONS TO MAINTAIN REIT STATUS OR AVOID TAXATION OF
EQR. Notwithstanding any other provisions of this Agreement or the Act, any
action of the General Partner on behalf of the Partnership or any decision
of the General Partner to refrain from acting on behalf of the Partnership,
undertaken in the good faith belief that such action or omission is
necessary or advisable in order (i) to protect the ability of EQR to
continue to qualify as a REIT or (ii) to avoid the incurrence of any taxes
by EQR under Section 857 or Section 4981 of the Code, is expressly
authorized under this Agreement and is deemed approved by all of the
Limited Partners."
13. TITLE TO PARTNERSHIP ASSETS TRANSFERRED TO ERP PURSUANT TO ASSET
CONTRIBUTION AGREEMENT. The third sentence of Section 7.10 of the Agreement is
hereby amended to read as follows:
"The General Partner hereby declares and warrants that, except for
Partnership assets contributed to ERP pursuant to the Asset Contribution
Agreement, any Partnership assets for which legal title is held in the name
of the General Partner or any nominee or Affiliate of the General Partner
shall be held by the General Partner for the use and benefit of the
Partnership in accordance with the provisions of this Agreement; provided,
however, that the General Partner shall use its best efforts to cause
beneficial and record title to such assets to be vested in the Partnership
as soon as reasonably practicable."
14. ADJUSTMENT TO OUTSTANDING UNITS. Section 8.5(b) of the Agreement is
hereby amended to read as follows:
"(b) ADJUSTMENTS TO OUTSTANDING PARTNERSHIP UNITS AND NOTIFICATION OF
CHANGES IN UNIT ADJUSTMENT FACTOR. The number of outstanding Partnership
Units shall be subject to adjustment from time to time by the Unit
Adjustment Factor. The Partnership shall notify each Limited Partner in
writing of any change made to the Unit Adjustment Factor within ten (10)
Business Days of the date such change becomes effective."
15. TRANSFER OF GENERAL PARTNER'S PARTNERSHIP INTEREST.
(a) Section 11.2(a) of the Agreement is hereby amended to read as follows:
"(a) GENERAL. In no event may the General Partner at any time assign,
sell, transfer, pledge, hypothecate or otherwise dispose of all or any
portion of its General Partnership Interest except by operation of law."
(b) Section 11.2(c) of the Agreement is hereby deleted in its entirety.
3
<PAGE>
16. NO REQUIREMENT TO SELL ERP UNITS RECEIVED UPON LIQUIDATION. Section 13.2
of the Agreement is hereby amended by adding at the end thereof a new sentence
which reads as follows:
"Notwithstanding anything to the contrary contained herein (including,
without limiting the generality of the foregoing, Section 13.2(a)(4)), the
General Partner shall cause the Partnership to distribute the ERP Common
Units received by the Partnership pursuant to the Asset Contribution
Agreement in liquidation of the Partnership Units on the basis of one ERP
Unit for each outstanding Partnership Unit. The General Partner shall be
under no obligation to sell such ERP Common Units. The Partnership may
remain in existence and undertake the activities as contemplated by Section
6 of the Asset Contribution Agreement as part of its winding up."
17. NO PRIOR AMENDMENT. The Limited Partners of the Partnership hereby
ratify, approve and confirm in all respects the decision of the Board of
Directors of Evans Withycombe Residential, Inc. not to present the 11.2
Amendment to the Limited Partners of the Partnership, with the same force and
effect as if the Limited Partners of the Partnership had voted against the
adoption of the 11.2 Amendment.
18. ELIMINATION OF CERTIFICATES FOR UNIT.
(a) The definition of Partnership Unit is hereby amended by deleting the
second sentence thereof.
(b) The Agreement is hereby amended by deleting Exhibit D thereof in its
entirety.
19. REFERENCE TO AND EFFECT ON THE PARTNERSHIP AGREEMENT.
(a) At and after the Effective Time, each reference in the Partnership
Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of
like import referring to the Partnership Agreement shall mean and be a
reference to the Partnership Agreement as amended by this Amendment.
(b) The Partnership Agreement as amended and restated as of August 17, 1994
and as amended by this Amendment shall remain in full force and effect and is
hereby ratified and confirmed.
20. HEADINGS. Section and subsection headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of
this Amendment for any other purpose or be given any substantive effect.
21. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.
22. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document.
4
<PAGE>
IN WITNESS WHEREOF, the Partners have executed this Amendment as of the
Effective Time.
GENERAL PARTNERS:
EQUITY RESIDENTIAL PROPERTIES TRUST, a
Maryland real estate investment trust,
General Partner
By: Shelley Dunck
--------------------------------------
Title: Vice President
---------------------------------
ERP OPERATING LIMITED PARTNERSHIP, an
Illinois limited partnership
By: EQUITY RESIDENTIAL PROPERTIES TRUST,
a Maryland real estate investment
trust, its general partner
By: Shelley Dunck
-----------------------------------
Title: Vice President
------------------------------
LIMITED PARTNERS:
EQUITY RESIDENTIAL PROPERTIES TRUST, a
Maryland real estate investment trust,
Limited Partner, as attorney-in-fact for
the Limited Partners
By: Shelley Dunck
--------------------------------------
Title: Vice President
--------------------------------
ERP OPERATING LIMITED PARTNERSHIP, an
Illinois limited partnership, Limited
Partner, as attorney-in-fact for the
Limited Partners
By: EQUITY RESIDENTIAL PROPERTIES TRUST,
a Maryland real estate investment
trust, its general partner
By: Shelley Dunck
-----------------------------------
Title: Vice President
------------------------------
5
<PAGE>
Exhibit 12
EQUITY RESIDENTIAL PROPERTIES TRUST
Consolidated and Combined Historical, Including Predecessor Business
Earnings to Combined Fixed Charges and Preferred Distributions Ratio
<TABLE>
<CAPTION>
Historical
----------- ----------- ----------- ----------- -----------
12/31/97 12/31/96 12/31/95 12/31/94 12/31/93
----------- ----------- ----------- ----------- -----------
(Amounts in thousands)
<S> <C> <C> <C> <C> <C>
REVENUES
Rental income $ 707,733 $ 454,412 $ 373,919 $ 220,727 $ 104,388
Fee income - outside managed 5,697 6,749 7,030 4,739 4,651
Interest income - investment in mortgage notes 20,366 12,819 4,862 - -
Interest and other income 13,525 4,405 4,573 5,568 3,031
----------- ----------- ----------- ----------- -----------
Total revenues 747,321 478,385 390,384 231,034 112,070
----------- ----------- ----------- ----------- -----------
EXPENSES
Property and maintenance 176,075 127,172 112,186 66,534 35,324
Real estate taxes and insurance 69,520 44,128 37,002 23,028 11,403
Property management 26,793 17,512 15,213 10,249 3,491
Property management - non-recurring - - - 879 -
Fee and asset management 3,364 3,837 3,887 2,056 2,524
Depreciation 156,644 93,253 72,410 37,273 15,384
Interest:
Expense incurred 121,324 81,351 78,375 37,044 26,042
Amortization of deferred financing costs 2,523 4,242 3,444 1,930 3,322
Refinancing costs - - - - 3,284
General and administrative 15,064 9,857 8,129 6,053 3,159
----------- ----------- ----------- ----------- -----------
Total expenses 571,307 381,352 330,646 185,046 103,933
----------- ----------- ----------- ----------- -----------
Income before extraordinary items $ 176,014 $ 97,033 $ 59,738 $ 45,988 $ 8,137
========== ========== ========== ========== ==========
Combined Fixed Charges and Preferred Distributions:
Interest and other financing costs $ 121,324 $ 81,351 $ 78,375 $ 37,044 $ 26,042
Refinancing costs - - - - 3,284
Amortization of deferred financing costs 2,523 4,242 3,444 1,930 3,322
Preferred distributions 59,012 29,015 10,109 - -
----------- ----------- ----------- ----------- -----------
Total Combined Fixed Charges
and Preferred Distributions $ 182,859 $ 114,608 $ 91,928 $ 38,974 $ 32,648
========== ========== ========== ========== ==========
Earnings before combined fixed charges
and preferred distributions $ 299,861 $ 182,626 $ 141,557 $ 84,962 $ 40,785
========== ========== ========== ========== ==========
Funds from operations before combined fixed
charges and preferred distributions $ 456,505 $ 275,879 $ 213,967 $ 123,114 $ 56,169
========== ========== ========== ========== ==========
Ratio of earnings before combined fixed charges
and preferred distributions to combined fixed
charges and preferred distributions 1.64 1.59 1.54 2.18 1.25
========== ========== ========== ========== ==========
Ratio of funds from operations before combined fixed
charges and preferred distributions to combined
fixed charges and preferred distributions 2.50 2.41 2.33 3.16 1.72
========== ========== ========== ========== ==========
</TABLE>
<PAGE>
EXHIBIT 21
EQUITY RESIDENTIAL PROPERTIES TRUST
SUBSIDIARIES
------------
1. ERP Operating Limited Partnership
2. Equity Residential Properties Management Limited Partnership
3. Equity Residential Properties Management Limited Partnership II
4. Equity Residential Properties Management Corp. I (own preferred stock only,
not common)
5. Equity Residential Properties Management Corp. II (own preferred stock
only, not common)
6. EQR-BS Financing Limited Partnership
7. EQR-Chaparral Creek GP Limited Partnership
8. EQR-Lincoln Green I and II GP Limited Partnership
9. EQR-Lodge (OK) GP Limited Partnership
10. EQR-Stonebrook GP Limited Partnership
11. EQR-Sleepy Hollow Financing Limited Partnership
12. EQR-EOI Financing Limited Partnership
13. EQR-Continental Villas Financing Limited Partnership
14. EQR-Doral Financing Limited Partnership
15. EQR-Governor's Place Financing Limited Partnership
16. EQR-Plantation Financing Limited Partnership
17. EQR-Valley Park South Financing Limited Partnership
18. EQR-Yorktowne Financing Limited Partnership
19. EQR-SWN Line Financing Limited Partnership
20. EQR-Arbors Financing Limited Partnership
21. EQR-Breton Hammocks Financing Limited Partnership
22. EQR-Emerald Place Financing Limited Partnership
23. EQR-Essex Place Financing Limited Partnership
24. EQR-Met Financing Limited Partnership
25. EQR-Met CA Financing Limited Partnership
26. EQR-Wellington Hill Financing Limited Partnership - (New Hampshire)
27. EQR-Tanasbourne Terrace Financing Limited Partnership
28. EQR-Reserve Square Limited Partnership - (Ohio)
29. EQR-Fountainhead I Financing General Partnership
30. EQR-Fountainhead II Financing General Partnership
31. EQR-Fountainhead III Financing General Partnership
32. E-Chaparral Associates Limited Partnership
33. Equity-Chaparral Venture Limited Partnership
34. E-G-One Associates
35. Equity Green I Venture
36. E-G-Two Associates
37. Equity-Green II Venture
38. E-Stonebrook Associates
39. Equity-Stonebrook Venture Limited Partnership
40. E-Lodge Associates Limited Partnership
<PAGE>
41. Equity-Lodge Venture Limited Partnership
42. Country Club Associates Limited Partnership
43. Second Country Club Associates Limited Partnership
44. Second Georgian Woods Limited Partnership
45. Greenwich Woods Associates Limited Partnership
46. Artery Northampton Limited Partnership
47. Third Towne Centre Limited Partnership
48. Fourth Towne Centre Limited Partnership
49. Georgian Woods Annex Associates
50. EQR-Keystone Financing General Partnership
51. EQR-Camellero Financing Limited Partnership
52. EQR-Arizona, L.L.C. - (Delaware)
53. EQR-Washington, L.L.C. - (Delaware)
54. EQR-Wellington, L.L.C. - (Delaware)
55. EQR-Oregon, L.L.C. - (Delaware)
56. EQR-Waterfall, L.L.C. - (Delaware)
57. EQR-Virginia, L.L.C. - (Delaware)
58. Multifamily Portfolio LP Limited Partnership
59. EQR-Plantation, L.L.C. - (Delaware)
60. EQR-California, L.L.C.;
61. EQR-ArtBHolder, L.L.C.;
62. EQR-ArtCapLoan, L.L.C.;
63. EQR-Keystone Financing G.P.;
64. Country Ridge General Partnership;
65. Rosehill Pointe General Partnership;
66. EQR-Canter Chase General Partnership;
67. Hunter's Glen General Partnership;
68. Sunny Oak Village General Partnership;
69. EQR-Pine Meadows Garden General Partnership;
70. EQR-Bond Partnership;
71. EQR-Park Place I General Partnership;
72. EQR-Park Place II General Partnership;
73. Songbird General Partnership;
74. Cedar Crest General Partnership;
75. EQR-Creekside Oaks General Partnership;
76. EQR-Village Oaks General Partnership;
77. EQR-Lakeville Resort General Partnership;
78. EQR-Trails at Dominion General Partnership;
79. EQR-Virginia, L.L.C.;
80. EQR-Dartmouth Woods General Partnership
81. Wadlington Investments General Partnership
82. EQR-Warwick, L.L.C.;
83. EQR-Ironwood, L.L.C.;
84. EQR-Spinnaker Cove, L.L.C.;
85. EQR-Wyndridge II, L.L.C.
86. EQR-Wyndridge III, L.L.C.;
87. EQR-Highline Oaks, L.L.C.;
88. EQR-Marks A, L.L.C.;
89. EQR-Missouri, L.L.C.;
<PAGE>
90. EQR-Ridgemont/Mountain Brook, L.L.C.;
91. EQR-Marks B, L.L.C.;
92. EQR-Coach Lantern, L.L.C.;
93. EQR-Foxcroft, L.L.C.;
94. EQR-Yarmouth, L.L.C.;
95. EQR-Chardonnay Park, L.L.C.;
96. EQR-Preston Bend General Partnership;
97. EQR-Villa Serenas General Partnership;
98. The Gates of Redmond, L.L.C.;
99. EQR-North Hill, L.L.C.;
100. EQR-Watson General Partnership;
101. CAPREIT Woodland Meadows Limited Partnership;
102. CAPREIT Burwick Farms Limited Partnership;
103. CAPREIT Mariner's Wharf Limited Partnership;
104. CAPREIT Silver Springs Limited Partnership;
105. CAPREIT Northlake Limited Partnership;
106. CAPREIT Tivoli Lakes Club Limited Partnership;
107. CAPREIT Eastland on the Lake Limited Partnership;
108. CAPREIT Concorde Bridge Limited Partnership;
109. CAPREIT Garden Lake Limited Partnership;
110. CAPREIT Highland Grove Limited Partnership;
111. CAPREIT Clarion Limited Partnership;
112. CAPREIT Atrium Limited Partnership;
113. CAPREIT Chimneys Limited Partnership;
114. CAPREIT Creekwood Limited Partnership;
115. CAPREIT Hidden Oaks Limited Partnership;
116. CAPREIT Botany Arms Limited Partnership;
117. CAPREIT Hampton Arms Limited Partnership;
118. CAPREIT Gleneagle Limited Partnership;
119. CAPREIT Greyeagle Limited Partnership;
120. CAPREIT Tarmarind at Stonebridge Limited Partnership;
121. CAPREIT Sycamore Ridge Limited Partnership;
122. Capital Realty Investors Tax Exempt Fund Limited Partnership;
123. CRICO of Fountain Place Limited Partnership;
124. CRICO of Woodland Place Limited Partnership;
125. CRICO of Royal Oaks Limited Partnership;
126. CRICO of Trailway Pond I Limited Partnership;
127. CRICO of Valley Creek I Limited Partnership;
128. CRICO of Valley Creek II Limited Partnership;
129. CRICO of White Bear Woods I Limited Partnership;
130. CRICO of James Street Crossing Limited Partnership
131. CRICO of Regency Woods Limited Partnership
132. CRICO of Ocean Walk Limited Partnership
133. CRICO of Trailway Pond II Limited Partnership;
134. CRICO of Ethan's I Limited Partnership;
135. CRICO of Ethans II Limited Partnership;
136. FPAII Limited Partnership;
137. CAPREIT Arbor Glen Limited Partnership;
138. CAPREIT Woodcrest Villa Limited Partnership;
<PAGE>
139. CAPREIT Farmington Gates Limited Partnership;
140. CAPREIT Ridgeway Commons Limited Partnership;
141. CAPREIT River Oak Limited Partnership;
142. CAPREIT Cedars Limited Partnership;
143. CAPREIT Westwood Pines Limited Partnership;
144. Geary Courtyard Associates;
145. EQR-Vinings at Ashley Lake, L.L.C.;
146. EQR-Flatlands, L.L.C.;
147. EQR-Fairfield, L.L.C.;
148. Evans Withycombe Residential, L.P.;
149. McKinley Hills Partners-85;
150. EW Chandler Limited Partnership;
151. Evans Withycombe Finance Partnership, L.P.;
152. EQR-740 River Drive, L.L.C.;
153. Rolido Park General Partnership;
154. EQR/Lincoln Guaranty Credit Limited Partnership;
155. EQR/Lincoln No. One Master Limited Partnership; and
156. Evans Withycombe Residential, L.P.
<PAGE>
EXHIBIT 21
QRS CORPORATIONS
1. ERP-QRS BS, Inc.;
2. ERP-QRS Lincoln Green, Inc.;
3. ERP-QRS Lodge (OK), Inc.;
4. ERP-QRS Stonebrook, Inc.;
5. ERP-QRS Sleepy Hollow, Inc.;
6. ERP-QRS EOI, Inc.;
7. ERP-QRS Continental Villas, Inc.;
8. ERP-QRS Doral, Inc.;
9. ERP-QRS Governor's Place, Inc.;
10. ERP-QRS Plantation, Inc.;
11. ERP-QRS Valley Park South, Inc.;
12. ERP-QRS Yorktowne, Inc.;
13. ERP-QRS SWN Line, Inc.;
14. ERP-QRS Arbors, Inc.;
15. ERP-QRS Breton Hammocks, Inc.;
16. ERP-QRS Emerald Place, Inc.;
17. ERP-QRS Essex Place, Inc.;
18. ERP-QRS Met,Inc.;
19. ERP-QRS Met CA, Inc.;
20. ERP-QRS Wellington Hill, Inc.;
21. ERP-QRS Tanasbourne Terrace, Inc.;
22. ERP-QRS Reserve Square, Inc.;
23. EQR-QRS Camellero, Inc.;
24. QRS-LLC, Inc.;
25. QRS-Waterfall, Inc.;
26. QRS-ArtBHolder, Inc.;
27. QRS-ArtCapLoan, Inc.
28. ERP-QRS Rosehill Pointe, Inc.;
29. ERP-QRS Country Ridge, Inc.;
30. ERP-QRS Lakeville Resort, Inc.;
31. ERP-QRS Park Place I, Inc.;
32. ERP-QRS Park Place II, Inc.;
33. ERP-QRS Sunny Oak Village, Inc.;
34. ERP-QRS Pine Meadows Garden, Inc.;
35. ERP-QRS Hunter's Glen, Inc.;
36. ERP-QRS Canter Chase, Inc;
37. QRS-Bond, Inc.;
38. ERP-QRS Songbird, Inc.;
39. ERP-QRS Cedar Crest, Inc.;
40. ERP-QRS Creekside Oaks, Inc.;
41. ERP-QRS Village Oaks, Inc.;
42. ERP-QRS Lakeville Resort, Inc.;
<PAGE>
43. ERP-QRS Trails at Dominion, Inc.;
44. ERP-QRS Dartmouth Woods, Inc.
45. Wadlington, Inc.;
46. QRS-Marks A, Inc.;
47. QRS-Marks B, Inc.;
48. QRS-Warwick, Inc.;
49. QRS-Ironwood, Inc.;
50. EQR-QRS Ridgemont/Mountain Brook, Inc.;
51. EQR-QRS Spinnaker Cove, Inc.;
52. EQR-QRS Wyndridge II, Inc.;
53. ERP-QRS Villa Serenas, Inc.;
54. EQR-QRS Wyndridge III, Inc.;
55. EQR-QRS Highline Oaks, Inc.;
56. QRS-Coach Lantern, Inc.;
57. QRS-Foxcroft, Inc.;
58. QRS-Yarmouth Woods, Inc.;
59. QRS-Chardonnay Park, Inc.;
60. ERP-QRS Preston Bend, Inc.;
61. QRS-Missouri, Inc.;
62. QRS-Gates of Redmond, Inc.;
63. QRS-North Hill, Inc.;
64. ERP-QRS Watson, Inc.;
65. ERP-QRS CPRT, Inc.;
66. ERP-QRS CPRT II, Inc.;
67. QRS-Vinnings at Ashley Lake, Inc.;
68. ERP-QRS Flatlands, Inc.;
69. ERP-QRS Fairfield, Inc.;
70. ERP-QRS Glenlake Club, Inc.;
71. QRS-740 River Drive, Inc.;
72. Evans Withycombe Finance, Inc.; and
73. ERP-QRS Rolido Parque, Inc.
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation of our reports on page F-3 and S-1 of
this Form 10-K by reference in the prospectuses constituting part of the
Registration Statements on Form S-3 (Nos. 33-84974, 33-97680, 333-06873,
333-12983, 333-39289 and 333-45533) and Form S-8 (Nos. 333-06867 and 333-06869)
of Equity Residential Properties Trust.
/s/ Grant Thornton LLP
GRANT THORNTON LLP
Chicago, Illinois
March 19, 1998
<PAGE>
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statements
(Forms S-3 No. 333-45533 and No. 333-39289 and Forms S-8 No. 333-37121 and No.
333-06869) of Equity Residential Properties Trust and in the related
Prospectuses of our report dated February 26, 1998, except for Note 24, as to
which the date is March 12, 1998, with respect to the consolidated financial
statements and schedule of Equity Residential Properties Trust included in this
Annual Report (Form 10-K) for the year ended December 31, 1997.
/s/ Ernst & Young LLP
Ernst & Young LLP
Chicago, Illinois
March 19, 1998
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
-----------------
STATE OF ILLINOIS
COUNTY OF COOK
KNOW ALL MEN BY THESE PRESENTS that John W. Alexander, having an address at
229 N. Church St., Suite 200-Box E Charlotte, NC 28202, has made, constituted
- ------------------------------------------------------
and appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas
Crocker II and Michael J. McHugh, or either of them, having an address at Two
North Riverside Plaza, Chicago, Illinois 60606, his true and lawful Attorney-in-
Fact for him and his name, place and stead to sign and execute in any and all
capacities this Annual Report on Form 10-K and any or all amendments to this
Annual Report granting unto each of such, Attorney-in-Fact, full power and
authority to do and perform each and every act and thing, requisite and
necessary to be done in an about the premises, as fully, to all intents and
purposes as he might or could do if personally present at the doing thereof,
with full power of substitution and revocation, hereby ratifying and confirming
all that each of such Attorney-in-Fact or his substitutes shall lawfully do or
cause to be done by virtue hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, John W. Alexander, has hereunto set his hand this
2nd day of March, 1998.
- --- -----
/s/ John W. Alexander
---------------------
John W. Alexander
I, Lisa Currie, a Notary Public in and for said County in the State of
-----------
aforesaid, do hereby certify that John W. Alexander, personally known to me to
be the same person whose name is subscribed to the foregoing instrument appeared
before me this day in person and acknowledged that he signed and delivered said
instrument as his own free voluntary act for the uses and purposes therein set
forth.
Given under my hand and notarial seal this 2nd day of March, 1998.
--- -----
Lisa Currie
______________________________
(Notary Public)
My Commission Expires: February 7, 2001
----------------
<PAGE>
EXHIBIT 24.2
POWER OF ATTORNEY
-----------------
STATE OF ILLINOIS
COUNTY OF COOK
KNOW ALL MEN BY THESE PRESENTS that James D. Harper, Jr., having an address
at 3250 Mary Street, Suite 206, Coconut Grove, FL 33133, has made, constituted
----------------------------------------------------
and appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas
Crocker II and Michael J. McHugh, or either of them, having an address at Two
North Riverside Plaza, Chicago, Illinois 60606, his true and lawful Attorney-in-
Fact for him and his name, place and stead to sign and execute in any and all
capacities this Annual Report on Form 10-K and any or all amendments to this
Annual Report granting unto each of such, Attorney-in-Fact, full power and
authority to do and perform each and every act and thing, requisite and
necessary to be done in an about the premises, as fully, to all intents and
purposes as he might or could do if personally present at the doing thereof,
with full power of substitution and revocation, hereby ratifying and confirming
all that each of such Attorney-in-Fact or his substitutes shall lawfully do or
cause to be done by virtue hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, James D. Harper, Jr., has hereunto set his hand this
2nd day of March, 1998.
- ---- -----
/s/ James D. Harper, Jr.
------------------------
James D. Harper, Jr.
I, Lisa Currie, a Notary Public in and for said County in the State of
-----------
aforesaid, do hereby certify that James D. Harper, Jr., personally known to me
to be the same person whose name is subscribed to the foregoing instrument
appeared before me this day in person and acknowledged that he signed and
delivered said instrument as his own free voluntary act for the uses and
purposes therein set forth.
Given under my hand and notarial seal this 2nd day of March, 1998.
--- -----
Lisa Currie
_____________________________
(Notary Public)
My Commission Expires: February 7, 2001
----------------
<PAGE>
EXHIBIT 24.3
POWER OF ATTORNEY
-----------------
STATE OF ILLINOIS
COUNTY OF COOK
KNOW ALL MEN BY THESE PRESENTS that Errol R. Halperin, having an address at
203 N. LaSalle St., Suite 1800, Chicago, IL 60601-1293, has made, constituted
- ------------------------------------------------------
and appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas
Crocker II and Michael J. McHugh, or either of them, having an address at Two
North Riverside Plaza, Chicago, Illinois 60606, his true and lawful Attorney-in-
Fact for him and his name, place and stead to sign and execute in any and all
capacities this Annual Report on Form 10-K and any or all amendments to this
Annual Report granting unto each of such, Attorney-in-Fact, full power and
authority to do and perform each and every act and thing, requisite and
necessary to be done in an about the premises, as fully, to all intents and
purposes as he might or could do if personally present at the doing thereof,
with full power of substitution and revocation, hereby ratifying and confirming
all that each of such Attorney-in-Fact or his substitutes shall lawfully do or
cause to be done by virtue hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, Errol R. Halperin, has hereunto set his hand this
2nd day of March, 1998.
- --- -----
/s/ Errol R. Halperin
---------------------
Errol R. Halperin
I, Lisa Currie, a Notary Public in and for said County in the State of
-----------
aforesaid, do hereby certify that Errol R. Halperin, personally known to me to
be the same person whose name is subscribed to the foregoing instrument appeared
before me this day in person and acknowledged that he signed and delivered said
instrument as his own free voluntary act for the uses and purposes therein set
forth.
Given under my hand and notarial seal this 2nd day of March, 1998.
--- -----
Lisa Currie
______________________________
(Notary Public)
My Commission Expires: February 7, 2001
----------------
<PAGE>
EXHIBIT 24.4
POWER OF ATTORNEY
-----------------
STATE OF ILLINOIS
COUNTY OF COOK
KNOW ALL MEN BY THESE PRESENTS that B. Joseph White, having an address at
701 Tappan, Ann Arbor, MI 48109-1234, has made, constituted and appointed and BY
- ------------------------------------
THESE PRESENTS, does make, constitute and appoint Douglas Crocker II and Michael
J. McHugh, or either of them, having an address at Two North Riverside Plaza,
Chicago, Illinois 60606, his true and lawful Attorney-in-Fact for him and his
name, place and stead to sign and execute in any and all capacities this Annual
Report on Form 10-K and any or all amendments to this Annual Report granting
unto each of such, Attorney-in-Fact, full power and authority to do and perform
each and every act and thing, requisite and necessary to be done in an about the
premises, as fully, to all intents and purposes as he might or could do if
personally present at the doing thereof, with full power of substitution and
revocation, hereby ratifying and confirming all that each of such Attorney-in-
Fact or his substitutes shall lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, B. Joseph White, has hereunto set his hand this 2nd
---
day of March, 1998.
-----
/s/ B. Joseph White
-------------------
B. Joseph White
I, Lisa Currie, a Notary Public in and for said County in the State of
-----------
aforesaid, do hereby certify that B. Joseph White, personally known to me to be
the same person whose name is subscribed to the foregoing instrument appeared
before me this day in person and acknowledged that he signed and delivered said
instrument as his own free voluntary act for the uses and purposes therein set
forth.
Given under my hand and notarial seal this 2nd day of March, 1998.
--- -----
Lisa Currie
______________________________
(Notary Public)
My Commission Expires: February 7, 2001
----------------
<PAGE>
EXHIBIT 24.5
POWER OF ATTORNEY
-----------------
STATE OF CONNECTICUT
COUNTY OF FAIRFIELD
-------------
KNOW ALL MEN BY THESE PRESENTS that Barry S. Sternlicht, having an address
at Three Pickwick Plaza, Suite 250, Greenwich, CT 06830 , has made,
---------------------------------------------------------------
constituted and appointed and BY THESE PRESENTS, does make, constitute and
appoint Douglas Crocker II and Michael J. McHugh, or either of them, having an
address at Two North Riverside Plaza, Chicago, Illinois 60606, his true and
lawful Attorney-in-Fact for him and his name, place and stead to sign and
execute in any and all capacities this Annual Report on Form 10-K and any or all
amendments to this Annual Report granting unto each of such, Attorney-in-Fact,
full power and authority to do and perform each and every act and thing,
requisite and necessary to be done in an about the premises, as fully, to all
intents and purposes as he might or could do if personally present at the doing
thereof, with full power of substitution and revocation, hereby ratifying and
confirming all that each of such Attorney-in-Fact or his substitutes shall
lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, Barry S. Sternlicht, has hereunto set his hand this
4th day of March , 1998.
- ----- -----------
/s/ Barry S. Sternlicht
-----------------------
Barry S. Sternlicht
I, Karen B. Murray , a Notary Public in and for said County in the
----------------------
State of aforesaid, do hereby certify that Barry S. Sternlicht, personally known
to me to be the same person whose name is subscribed to the foregoing instrument
appeared before me this day in person and acknowledged that he signed and
delivered said instrument as his own free voluntary act for the uses and
purposes therein set forth.
Given under my hand and notarial seal this 4th day of March , 1998.
----- -----------
Karen B. Murray
---------------------------
(Notary Public)
My Commission Expires: February 28, 2002
-----------------------
<PAGE>
EXHIBIT 24.6
POWER OF ATTORNEY
-----------------
STATE OF ILLINOIS
COUNTY OF COOK
KNOW ALL MEN BY THESE PRESENTS that Henry H. Goldberg, having an address at
4733 Bethesda Ave., Suite 400, Bethesda, MD 20814, has made, constituted and
- -------------------------------------------------
appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas
Crocker II and Michael J. McHugh, or either of them, having an address at Two
North Riverside Plaza, Chicago, Illinois 60606, his true and lawful Attorney-in-
Fact for him and his name, place and stead to sign and execute in any and all
capacities this Annual Report on Form 10-K and any or all amendments to this
Annual Report granting unto each of such, Attorney-in-Fact, full power and
authority to do and perform each and every act and thing, requisite and
necessary to be done in an about the premises, as fully, to all intents and
purposes as he might or could do if personally present at the doing thereof,
with full power of substitution and revocation, hereby ratifying and confirming
all that each of such Attorney-in-Fact or his substitutes shall lawfully do or
cause to be done by virtue hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, Henry H. Goldberg, has hereunto set his hand this
2nd day of March, 1998.
- --- -----
/s/ Henry H. Goldberg
---------------------
Henry H. Goldberg
I, Lisa Currie, a Notary Public in and for said County in the State of
-----------
aforesaid, do hereby certify that Henry H. Goldberg, personally known to me to
be the same person whose name is subscribed to the foregoing instrument appeared
before me this day in person and acknowledged that he signed and delivered said
instrument as his own free voluntary act for the uses and purposes therein set
forth.
Given under my hand and notarial seal this 2nd day of March, 1998.
--- -----
Lisa Currie
_______________
(Notary Public)
My Commission Expires: February 7, 2001
----------------
<PAGE>
EXHIBIT 24.7
POWER OF ATTORNEY
-----------------
STATE OF ILLINOIS
COUNTY OF COOK
KNOW ALL MEN BY THESE PRESENTS that Edward Lowenthal, having an address at
610 Fifth Avenue, 7th Floor, New York, NY 11020, has made, constituted and
- -----------------------------------------------
appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas
Crocker II and Michael J. McHugh, or either of them, having an address at Two
North Riverside Plaza, Chicago, Illinois 60606, his true and lawful Attorney-in-
Fact for him and his name, place and stead to sign and execute in any and all
capacities this Annual Report on Form 10-K and any or all amendments to this
Annual Report granting unto each of such, Attorney-in-Fact, full power and
authority to do and perform each and every act and thing, requisite and
necessary to be done in an about the premises, as fully, to all intents and
purposes as he might or could do if personally present at the doing thereof,
with full power of substitution and revocation, hereby ratifying and confirming
all that each of such Attorney-in-Fact or his substitutes shall lawfully do or
cause to be done by virtue hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, Edward Lowenthal, has hereunto set his hand this 2nd
---
day of March, 1998.
-----
/s/ Edward Lowenthal
--------------------
Edward Lowenthal
I, Lisa Currie, a Notary Public in and for said County in the State of
-----------
aforesaid, do hereby certify that Edward Lowenthal, personally known to me to be
he same person whose name is subscribed to the foregoing instrument appeared
before me this day in person and acknowledged that he signed and delivered said
instrument as his own free voluntary act for the uses and purposes therein set
forth.
Given under my hand and notarial seal this 2nd day of March, 1998.
--- -----
Lisa Currie
_______________
(Notary Public)
My Commission Expires: February 7, 2001
----------------
<PAGE>
EXHIBIT 24.8
POWER OF ATTORNEY
-----------------
STATE OF ILLINOIS
COUNTY OF COOK
KNOW ALL MEN BY THESE PRESENTS that Jeffrey H. Lynford, having an address
at 610 Fifth Avenue, 7th Floor, New York, NY 10020, has made, constituted and
-----------------------------------------------
appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas
Crocker II and Michael J. McHugh, or either of them, having an address at Two
North Riverside Plaza, Chicago, Illinois 60606, his true and lawful Attorney-in-
Fact for him and his name, place and stead to sign and execute in any and all
capacities this Annual Report on Form 10-K and any or all amendments to this
Annual Report granting unto each of such, Attorney-in-Fact, full power and
authority to do and perform each and every act and thing, requisite and
necessary to be done in an about the premises, as fully, to all intents and
purposes as he might or could do if personally present at the doing thereof,
with full power of substitution and revocation, hereby ratifying and confirming
all that each of such Attorney-in-Fact or his substitutes shall lawfully do or
cause to be done by virtue hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, Jeffrey H. Lynford, has hereunto set his hand this
2nd day of March, 1998.
- --- -----
/s/ Jeffrey H. Lynford
----------------------
Jeffrey H. Lynford
I, Lisa Currie, a Notary Public in and for said County in the State of
-----------
aforesaid, do hereby certify that Jeffrey H. Lynford, personally known to me to
be the same person whose name is subscribed to the foregoing instrument appeared
before me this day in person and acknowledged that he signed and delivered said
instrument as his own free voluntary act for the uses and purposes therein set
forth.
Given under my hand and notarial seal this 2nd day of March, 1998.
--- -----
Lisa Currie
_______________
(Notary Public)
My Commission Expires: February 7, 2001
----------------
<PAGE>
EXHIBIT 24.9
POWER OF ATTORNEY
-----------------
STATE OF ILLINOIS
COUNTY OF COOK
KNOW ALL MEN BY THESE PRESENTS that Stephen O. Evans, having an address at
6991 East Camelback Road, Suite A200, Scottsdale, AZ 85251, has made,
- ----------------------------------------------------------
constituted and appointed and BY THESE PRESENTS, does make, constitute and
appoint Douglas Crocker II and Michael J. McHugh, or either of them, having an
address at Two North Riverside Plaza, Chicago, Illinois 60606, his true and
lawful Attorney-in-Fact for him and his name, place and stead to sign and
execute in any and all capacities this Annual Report on Form 10-K and any or all
amendments to this Annual Report granting unto each of such, Attorney-in-Fact,
full power and authority to do and perform each and every act and thing,
requisite and necessary to be done in an about the premises, as fully, to all
intents and purposes as he might or could do if personally present at the doing
thereof, with full power of substitution and revocation, hereby ratifying and
confirming all that each of such Attorney-in-Fact or his substitutes shall
lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, Stephen O. Evans, has hereunto set his hand this 2nd
---
day of March, 1998.
-----
/s/ Stephen O. Evans
--------------------
Stephen O. Evans
I, Lisa Currie, a Notary Public in and for said County in the State of
aforesaid, do hereby certify that Stephen O. Evans, personally known to me to be
he same person whose name is subscribed to the foregoing instrument appeared
before me this day in person and acknowledged that he signed and delivered said
instrument as his own free voluntary act for the uses and purposes therein set
forth.
Given under my hand and notarial seal this 2nd day of March, 1998.
--- -----
Lisa Currie
___________________
(Notary Public)
My Commission Expires: February 7, 2001
----------------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 33,295
<SECURITIES> 0
<RECEIVABLES> 3,302
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 205,521
<PP&E> 7,121,435
<DEPRECIATION> (444,762)
<TOTAL-ASSETS> 7,094,631
<CURRENT-LIABILITIES> 182,913
<BONDS> 2,948,323
0
1,041,713
<COMMON> 891
<OTHER-SE> 2,647,387
<TOTAL-LIABILITY-AND-EQUITY> 7,094,631
<SALES> 733,796
<TOTAL-REVENUES> 747,321
<CGS> 0
<TOTAL-COSTS> 272,388
<OTHER-EXPENSES> 15,064
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 123,847
<INCOME-PRETAX> 176,014
<INCOME-TAX> 0
<INCOME-CONTINUING> 176,014
<DISCONTINUED> 13,838
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 117,580
<EPS-PRIMARY> 1.79
<EPS-DILUTED> 1.76
</TABLE>
