<PAGE> 1
As filed with the Securities and Exchange Commission on August 24, 1999
Registration No. 333-70295
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
CAMDEN PROPERTY TRUST
(Exact name of registrant as specified in its charter)
TEXAS 76-6088377
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
THREE GREENWAY PLAZA, SUITE 1300
HOUSTON, TEXAS 77046
(713) 354-2500
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
----------------
RICHARD J. CAMPO
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
CAMDEN PROPERTY TRUST
THREE GREENWAY PLAZA, SUITE 1300
HOUSTON, TEXAS 77046
(713) 354-2500
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
----------------
Copies to:
Bryan L. Goolsby
Locke Liddell & Sapp LLP
2200 Ross Avenue, Suite 2200
Dallas, Texas 75201
(214) 740-8000
FAX: (214) 740-8800
----------------
Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement becomes effective. [ ]
If the only securities being registered on this form are being offered
pursuant to divided or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
---------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED AUGUST 24, 1999.
PROSPECTUS
CAMDEN PROPERTY TRUST
672,490 COMMON SHARES OF BENEFICIAL INTEREST
o The selling shareholders listed on page 26 may offer and resell up to
672,490 common shares under this prospectus for each of their own
accounts. Beginning on December 25, 1998, these shares may be obtained
by the selling shareholders upon an exchange of units of limited
liability company interest in Oasis Martinique, LLC. Each unit is
exchangeable for 0.759 of a common share. Instead of issuing common
shares upon a tender of units for exchange, we may deliver cash in an
amount equal to the market value of the equivalent number of common
shares.
o This prospectus relates to (1) our possible issuance of common shares
if, and to the extent that, the selling shareholders tender units for
exchange and (2) the offer and sale of these shares by the selling
shareholders. We will not receive any proceeds from the issuance of
shares to the selling shareholders or from the sales of shares by the
selling shareholders.
o The selling shareholders may sell the shares from time to time on the
New York Stock Exchange or otherwise. They may sell the shares at
prevailing market prices or at prices negotiated with buyers. The
selling shareholders will be responsible for any commissions or
discounts due to brokers and dealers. The amount of those commissions
or discounts will be negotiated before the sales. We have agreed to
pay all other offering expenses.
o Our common shares trade on the New York Stock Exchange under the
symbol "CPT." On August 23, 1999, the closing sale price of a common
share on the New York Stock Exchange was $27 15/16.
YOU SHOULD CAREFULLY CONSIDER THE RISKS SET FORTH UNDER RISK FACTORS
STARTING ON PAGE 3 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is __________, 1999
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SUMMARY..................................................................... 2
RISK FACTORS................................................................ 3
WHERE YOU CAN FIND MORE INFORMATION......................................... 8
INCORPORATION OF DOCUMENTS BY REFERENCE .... ............................... 8
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS ................. 9
THE COMPANY ................................................................ 9
USE OF PROCEEDS ............................................................ 10
DESCRIPTION OF CAPITAL SHARES .............................................. 10
EXCHANGE OF UNITS .......................................................... 11
COMPARISON OF OWNERSHIP OF UNITS AND COMMON SHARES ......................... 13
MATERIAL FEDERAL INCOME TAX CONSEQUENCES ................................... 19
SELLING SHAREHOLDERS ....................................................... 26
PLAN OF DISTRIBUTION ....................................................... 27
LEGAL MATTERS .............................................................. 28
EXPERTS .................................................................... 28
</TABLE>
<PAGE> 4
SUMMARY
The following information highlights selected information contained
elsewhere in this prospectus. It is not complete and may not contain all of the
information that is important to you. You should read the entire prospectus
carefully, including the risk factors.
Offices: Our executive offices are located
at Three Greenway Plaza, Suite
1300, Houston, Texas 77046, and
our telephone number is (713)
354-2500.
Our Business: We are a Houston-based real estate
investment trust that owns,
develops, acquires, manages and
disposes of multifamily apartment
communities in the Southwest,
Southeast, Midwest and Western
regions of the United States.
Merger With Oasis Residential: On April 8, 1998, Oasis
Residential, Inc. was merged with
and into one of our wholly-owned
subsidiaries. Prior to the merger,
Oasis Residential was the managing
member of, and held an approximate
99% interest in, Oasis Martinique.
As a result of the merger, we
became the managing member of, and
acquired this approximate 99%
interest in, Oasis Martinique. The
remaining approximate 1% interest,
comprising 886,022 units, is held
by the selling shareholders. As of
the date of this prospectus, the
only real property owned by Oasis
Martinique is the 713-unit
Martinique Apartment Homes
community in Orange, California,
which was built in 1986.
Original Issuance of Units: On October 23, 1997, ISCO and IFT
Properties, Ltd. contributed the
Martinique Apartment Homes
community to Oasis Martinique in
exchange for a total of 886,022
units.
Exchange of Units: Beginning on December 25, 1998,
each unit became exchangeable for
0.759 of a common share. This
exchange ratio is subject to
adjustment if we split or
subdivide our common shares,
effect a reverse share split or
otherwise combine our outstanding
common shares, or pay a share
dividend to holders of common
shares. Instead of issuing common
shares upon a tender of shares for
exchange, we may deliver cash in
an amount equal to the market
value of the equivalent number of
common shares. Upon an exchange of
units for shares, our ownership
interest in Oasis Martinique will
increase.
Restrictions on Ownership of Shares: To ensure that we qualify as a
REIT, transfer of our capital
shares is subject to limitations,
and ownership of our shares by any
single person is generally limited
to 9.8% of the total number of
outstanding capital shares. Any
purported transfer in violation of
these limitations will be void.
These limitations are described in
more detail on page 11 under the
heading "Description of Capital
Shares--Restrictions on
Ownership."
2
<PAGE> 5
RISK FACTORS
The following information discusses the most significant factors that
makes an investment in our shares speculative or risky. You should carefully
consider the following information in conjunction with the other information
contained or incorporated by reference in this prospectus before making a
decision to invest in our shares.
AN EXCHANGE OF UNITS IS TAXABLE
An exchange of units will be treated as a sale of units for federal income tax
purposes. The exchanging holder will generally recognize gain in an amount
equal to the value of the common shares and amount of cash received, plus the
amount of liabilities of Oasis Martinique allocable to the units being
exchanged, less the holder's tax basis in the units. It is possible that the
amount of gain recognized or the resulting tax liability could exceed the value
of the shares received in the exchange.
RISING INTEREST RATES WOULD INCREASE OUR COSTS AND COULD AFFECT THE MARKET
PRICE OF OUR SECURITIES
We have incurred and expect to continue to incur debt in the future. Some of
this debt has variable or floating interest rates. Accordingly, if interest
rates increase, our interest costs will also increase. In addition, an increase
in market interest rates may lead purchasers of our securities to demand a
higher annual yield, which could adversely affect the market price of our
outstanding equity or debt securities.
FAILURE TO GENERATE SUFFICIENT CASH FLOWS COULD LIMIT OUR ABILITY TO MAKE
REQUIRED PAYMENTS FOR DEBT SERVICE AND PAY DISTRIBUTIONS TO SHAREHOLDERS
The following factors, among others, may adversely affect the cash flows
generated by our properties:
o the national and local economic climates;
o local real estate market conditions, such as an oversupply of
apartment homes;
o the perceptions by perspective residents of the safety, convenience
and attractiveness of our properties and the neighborhoods in which
they are located;
o the need to periodically repair, renovate and relet space; and
o our ability to pay for adequate maintenance and insurance and
increased operating costs, including real estate taxes.
Some significant expenditures associated with each property, such as mortgage
payments, if any, real estate taxes and maintenance costs, are generally not
reduced when operations from the property decreases.
UNFAVORABLE CHANGES IN MARKET AND ECONOMIC CONDITIONS COULD HURT OCCUPANCY OR
RENTAL RATES
The market and economic conditions in the southeastern, southwestern,
midwestern and western regions of the United States may significantly affect
apartment home occupancy or rental rates. Occupancy and rental rates in those
markets, in turn, may significantly affect our profitability and our ability to
satisfy our financial obligations and make distributions to shareholders. The
risks that may affect conditions in these markets include the following:
o the economic climate, which may be adversely impacted by plant
closings, industry slowdowns and other factors;
o local conditions, such as oversupply of apartments or a reduction in
demand for apartments in an area;
o a future economic downturn that, unlike the last recession, which was
a "rolling recession" because it affected the economies of different
regions at different times, simultaneously affects more than one of
our geographical markets;
o the inability or unwillingness of residents to pay their current rent
or rent increases;
o the potential effect of rent control or rent stabilization laws, or
other laws regulating housings, on any of our properties, that could
prevent us from raising rents; and
3
<PAGE> 6
o competition from other available apartments and changes in market
rental rates.
DIFFICULTIES OF SELLING REAL ESTATE COULD LIMIT OUR FLEXIBILITY
Real estate investments can be hard to sell, especially if market conditions
are poor. This may limit our ability to vary our portfolio promptly in response
to changes in economic or other conditions. In addition, the Internal Revenue
Code limits our ability to sell properties that we have held for fewer than
four years, which may affect our ability to sell properties without adversely
affecting shareholder return.
FAILURE TO IMPLEMENT OUR PROPERTY DEVELOPMENT STRATEGY COULD IMPACT OUR
PROFITABILITY
We intend to continue to develop and construct multifamily apartment
communities. Our development and construction activities may be exposed to a
number of risks that may increase our construction costs. This could adversely
impact our profitability and our ability to satisfy our financial obligations
and make distributions to shareholders. These risks include the following:
o we may be unable to obtain, or may face delays in obtaining, necessary
zoning, land-use, building, occupancy and other required permits and
authorizations, which could result in increased costs;
o we may incur construction costs for a property that exceed our
original estimates due to increased materials, labor or other costs,
which could make completion of the property uneconomical, and we may
not be able to increase rents to compensate for the increase in
construction costs;
o occupancy rates and rents at a newly completed community may fluctuate
depending on a number of factors, including market and economic
conditions, and may result in the community not being profitable;
o we may not be able to obtain financing with favorable terms for the
development of a community, which may make us unable to proceed with
its development; we may not be able to complete construction and
lease-up of a community on schedule, which could result in increased
costs; and
o construction costs have been increasing in many of our markets, and
may continue to increase in the future.
FAILURE TO IMPLEMENT OUR PROPERTY ACQUISITION STRATEGY COULD IMPACT OUR
PROFITABILITY
In the normal course of our business, we continually evaluate a number of
potential acquisitions and may acquire additional operating properties. Our
inability to successfully implement our acquisition strategy could result in
our market penetration decreasing, which could adversely affect our
profitability and our ability to satisfy our financial obligations and make
distributions to shareholders. Our acquisition activities and their success may
be exposed to a number of risks, including the following:
o we may not be able to identify properties to acquire or effect the
acquisition;
o we may not be able to successfully integrate acquired properties and
operations;
o our estimate of the costs of repositioning or redeveloping the
acquired property may prove inaccurate; and
o the acquired property may fail to perform as we expected in analyzing
our investment.
INSUFFICIENT CASH FLOW COULD AFFECT OUR DEBT FINANCING AND CREATE REFINANCING
RISK
As of June 30, 1999, we had outstanding mortgage indebtedness of approximately
$356.8 million and senior unsecured debt of approximately $704.4 million, of
which approximately $39.0 million was floating rate debt. This indebtedness
could have important consequences. For example:
o if a property is mortgaged to secure payment of indebtedness, and if
we are unable to meet our mortgage payments, we could sustain a loss
as a result of foreclosure on the mortgage;
4
<PAGE> 7
o if funds from operations are less than the required principal and
interest payments on our existing indebtedness, which in all cases
will not have been fully amortized at maturity, we might not be able
to refinance the debt or the terms of such refinancing might not be as
favorable as the terms of our existing indebtedness;
o our vulnerability to general adverse economic and industry conditions
could be increased; and
o our flexibility in planning for, or reacting to, changes in our
business and industry could be limited.
ISSUANCES OF ADDITIONAL DEBT OR EQUITY MAY ADVERSELY IMPACT OUR FINANCIAL
CONDITION
Our capital requirements depend on numerous factors, including the occupancy
rates of our apartment properties, dividend payment rates to our shareholders,
development and capital expenditures, costs of operations and potential
acquisitions. We cannot accurately predict the timing and amount of our capital
requirements. If our capital requirements vary materially from our plans, we
may require additional financing sooner than anticipated. Accordingly, we could
become more leveraged, resulting in an increased risk of default on our
obligations and in an increase in our debt service requirements, both of which
could adversely affect our financial condition and our ability to access debt
and equity capital markets in the future.
LOSSES FROM NATURAL CATASTROPHES MAY EXCEED OUR INSURANCE COVERAGE
We carry comprehensive liability, fire, flood, extended coverage and rental
loss insurance on our properties, which we believe is of the type and amount
customarily obtained on real property assets. We intend to obtain similar
coverage for properties we acquire in the future. However, some losses,
generally of a catastrophic nature, such as losses from floods or earthquakes,
may be subject to limitations. We exercise our discretion in determining
amounts, coverage limits and deductibility provisions of insurance, with a view
to maintaining appropriate insurance on our investments at a reasonable cost
and on suitable terms. If we suffer a substantial loss, our insurance coverage
may not be sufficient to pay the full current market value or current
replacement value of our lost investment. Inflation, changes in building codes
and ordinances, environmental considerations and other factors also might make
it infeasible to use insurance proceeds to replace a property after it has been
damaged or destroyed.
POTENTIAL LIABILITY FOR ENVIRONMENTAL CONTAMINATION COULD RESULT IN SUBSTANTIAL
COSTS
Under various federal, state and local laws, ordinances and regulations, we are
liable for the costs to investigate and remove or remediate hazardous or toxic
substances on or in our properties, often regardless of whether we knew of or
were responsible for the presence of these substances. These costs may be
substantial. Also, if hazardous or toxic substances are present on a property,
or if we fail to properly remediate such substances, our ability to sell or
rent such property or to borrow using such property as collateral may be
adversely affected.
COMPLIANCE OR FAILURE TO COMPLY WITH LAWS REQUIRING ACCESS TO OUR PROPERTIES BY
DISABLED PERSONS COULD RESULT IN SUBSTANTIAL COST
The Americans with Disabilities Act, the Fair Housing Act of 1988 and other
federal, state and local laws generally require that public accommodations be
made accessible to disabled person. Noncompliance could result in the
imposition of fines by the government or the award of damages to private
litigants. These laws may require us to modify our existing properties. These
laws may also restrict renovations by requiring improved access to such
buildings by disabled persons or may require us to add other structural
features that increase our construction costs. Legislation or regulations
adopted in the future may impose further burdens or restrictions on us with
respect to improved access by disabled persons. We cannot ascertain the costs
of compliance with these laws, which may be substantial.
POTENTIAL LIABILITY FOR PENDING LITIGATION COULD RESULT IN INCREASED COSTS AND
EXPENSES
Prior to our merger with Oasis Residential, Oasis Residential had been
contacted by several regulatory agencies with regard to alleged failures to
comply with the Fair Housing Amendments Act. These inquiries
5
<PAGE> 8
pertained to nine properties owned by Oasis Residential prior to the merger. We
currently own seven of these properties.
On February 1, 1999, the Justice Department filed a lawsuit against us and
several other defendants in the United States District Court for the District
of Nevada. We are currently in the process of determining the extent of the
alleged noncompliance and the changes that may be necessitated. At this time,
we are not able to provide an estimate of costs and expenses associated with
this matter. We are also unable to assure you that we will be successful in the
defense of the Justice Department action.
The complaint alleges (1) that the design and construction of these properties
violated the Fair Housing Act and (2) that we, through the merger with Oasis
Residential, have discriminated in the rental of dwellings to persons because
of handicap. The complaint requests an order that:
o declares that the defendants' policies and practices violated the Fair
Housing Act;
o enjoins us from (1) failing or refusing, to the extent possible, to
bring our properties into compliance with the Fair Housing Act, (2)
failing or refusing to take such affirmative steps as may be necessary
to restore, as nearly as possible, the alleged victims of the
defendants' alleged unlawful practices to positions they would have
been in but for the discriminatory conduct and (3) designing or
constructing any future multi-family dwellings that do not contain the
accessibility and adaptability features set forth in the Fair Housing
Act; and
o requires us to pay damages, including punitive damages, and a civil
penalty.
FAILURE TO QUALIFY AS A REIT WOULD CAUSE US TO BE TAXED AS A CORPORATION, WHICH
WOULD SIGNIFICANTLY LOWER FUNDS AVAILABLE FOR DISTRIBUTION TO SHAREHOLDERS
If we fail to qualify as a REIT for federal income tax purposes, we will be
taxed as a corporation for both current and past years. We cannot assure you
that the Internal Revenue Service will not challenge our qualification as a
REIT. We also cannot assure you that new legislation, regulations,
administrative interpretations or court decisions will not change the tax laws
with respect to qualification as a REIT or the federal tax consequences of such
qualification.
In addition, the ownership of an interest in Oasis Martinique may involve
special tax risks. These include the possible challenge by the Internal Revenue
Service of allocations of income and expense items, which could affect the
computation of our taxable income. These also include the possible challenge by
the Internal Revenue Service of the status of Oasis Martinique as a limited
liability company that is taxable as a partnership for federal income tax
purposes. If Oasis Martinique was instead treated as an association taxable as
a corporation for federal income tax purposes, Oasis Martinique would be
treated as a taxable entity. In such a situation, we would likely fail to meet
the tests to qualify as a REIT.
For any taxable year that we fail to qualify as a REIT, we would be subject to
federal income tax on our taxable income at corporate rates, plus any
applicable alternative minimum tax. In addition, unless entitled to relief
under applicable statutory provisions, we 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 our net earnings available
for investment or distribution to shareholders because of the additional tax
liability for the year or years involved. In addition, distributions would no
longer qualify for the dividends paid deduction nor be required to be made. To
the extent that distributions to shareholders would have been made in
anticipation of our qualifying as a REIT, we might be required to borrow funds
or to liquidate some of our investments to pay the applicable tax.
SHARE OWNERSHIP LIMITS AND OUR ABILITY TO ISSUE ADDITIONAL EQUITY SECURITIES
MAY PREVENT TAKEOVERS BENEFICIAL TO SHAREHOLDERS
For us to maintain our qualification as a REIT, not more than 50% in value of
our outstanding shares may be owned, directly or indirectly, by five or fewer
individuals. As defined for federal income tax purposes, the term "individuals"
includes a number of specified entities. To minimize the possibility that we
will fail to qualify as a REIT under this test, our declaration of trust
includes restrictions on transfers of
6
<PAGE> 9
our shares and ownership limits. The ownership limits, as well as our ability
to issue other classes of equity securities, may delay, defer or prevent a
change in control. These provisions may also deter tender offers for our
shares, which may be attractive to you, or limit your opportunity to receive a
premium for your shares that might otherwise exist if a third party were
attempting to effect a change in control transaction.
INCREASED COMPETITION COULD LIMIT OUR ABILITY TO LEASE APARTMENTS OR INCREASE
OR MAINTAIN RENTS
Our apartment communities compete with numerous housing alternatives in
attracting residents, including other rental apartments and single-family homes
that are available for rent or sale. Competitive residential housing in a
particular area could adversely affect our ability to lease apartments and
increase or maintain rents.
UNEXPECTED YEAR 2000 PROBLEMS COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION
Many of the world's computer systems currently record years in a two-digit
format. These computer systems will be unable to properly interpret dates
beyond the year 1999, which could lead to disruptions in our operations. This
is commonly referred to as the "Year 2000" issue. Unexpected problems
associated with the Year 2000 could arise during the implementation of our Year
2000 program, which could adversely affect our financial condition and results
of operations. Our financial condition and results of operations could also be
adversely affected if all of our systems are not Year 2000 compliant or other
companies on which we rely are not timely converted. We have implemented a Year
2000 comprehensive plan of action, which is divided into four phases: (1)
identification, (2) assessment, (3) notification/certification, and (4)
testing/contingency plans. This plan includes three major elements: computer
systems, other equipment and third parties. We are on the fourth phase for our
computer systems and the third phase for our other equipment and third party
services.
7
<PAGE> 10
WHERE YOU CAN FIND MORE INFORMATION
We are a public company and file annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission.
You may read and copy any document we file at the SEC's public reference room
at 450 Fifth Street, N.W., Washington, D.C. 20549. You can request copies of
these documents by writing to the SEC and paying a fee for the copying cost.
Please call the SEC at 1-800-SEC-0330 for more information about the operation
of the public reference room. Our SEC filings are also available to the public
at the SEC's web site at http://www.sec.gov. In addition, you may read and copy
our SEC filings at the office of the New York Stock Exchange at 20 Broad
Street, New York, New York 10005. Our website address is
http://www.camdenprop.com.
This prospectus is only part of a registration statement on Form S-3 that we
have filed with the SEC under the Securities Act of 1933 and therefore omits
some of the information contained in the registration statement. We have also
filed exhibits and schedules to the registration statement that are excluded
from this prospectus, and you should refer to the applicable exhibit or
schedule for a complete description of any statement referring to any contract
or other document. You may inspect or obtain a copy the registration statement,
including the exhibits and schedules, as described in the previous paragraph.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file with
it, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this prospectus and the information we file later with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
subsequent to the date of this prospectus and prior to the termination of this
offering of our common shares.
The following documents we have filed with the SEC (File No. 1-12110) are
incorporated by reference:
o Annual Report on Form 10-K for the year ended December 31, 1998;
o Quarterly Report on Form 10-Q for the quarter ended March 31, 1999;
o Quarterly Report on Form 10-Q for the quarter ended June 30, 1999;
o Current Report on Form 8-K filed on March 10, 1999;
o Current Report on Form 8-K/A filed on March 10, 1999;
o Current Report on Form 8-K filed on April 16, 1999;
o Current Report on Form 8-K filed on April 20, 1999; and
o Form 8-A filed on June 20, 1993.
You may request a copy of these filings at no cost by writing or telephoning G.
Steven Dawson, Senior Vice President-Finance and Chief Financial Officer, at
the following address and telephone number:
Camden Property Trust
Three Greenway Plaza
Suite 1300
Houston, Texas 77046
(713) 354-2500
You should rely only on the information incorporated by reference or provided
in this prospectus or in any prospectus supplement. We have not authorized
anyone else to provide you with different information. You should not assume
that the information in this prospectus or any prospectus supplement is
accurate as of any date other than the date on the front of those documents.
8
<PAGE> 11
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
We have made statements in this prospectus that are "forward-looking" in that
they do not discuss historical fact, but instead note future expectations,
projections, intentions or other items relating to the future. These
forward-looking statements include those made in the documents incorporated by
reference in this prospectus.
Reliance should not be place on these forward-looking statements because they
are subject to known and unknown risks, uncertainties and other facts that may
cause our actual results or performance to differ materially from those
contemplated by the forward-looking statements. Many of those factors are noted
in conjunction with the forward-looking statements in the text. Other important
factors that could cause actual results to differ include:
o the results of our efforts to implement our property development
strategy;
o the effect of economic conditions;
o failure to qualify as a real estate investment trust;
o the costs of our capital;
o actions of our competitors and our ability to respond to those
actions;
o changes in government regulations, tax rates and similar matters;
o environmental uncertainties and natural disasters;
o unexpected Year 2000 problems; and
o other risks detailed in our other SEC reports or filings.
These forward-looking statements represent our estimates and assumptions only
as of the date of this prospectus.
THE COMPANY
We are a Houston-based REIT that owns, develops, acquires, manages and disposes
of multifamily apartment communities in the Southwest, Southeast, Midwest and
Western regions of the United States. At June 30, 1999, we owned interests in,
operated or were developing 160 multifamily properties containing 56,210
apartment homes located in nine states. Eleven of our multifamily properties
containing 4,720 apartment homes were under development at June 30, 1999. One
of our newly developed multifamily properties containing 306 apartment homes
was in lease up at June 30, 1999. We have several additional sites which we
intend to develop into multifamily apartment communities.
MARKET FOR SHARES; DIVIDENDS AND DISTRIBUTIONS
Our common shares are listed on the New York Stock Exchange under the symbol
"CPT." On July 16, 1999 we paid a quarterly dividend of $0.52 per common share
to all holders of record of common shares as of June 30, 1999, and paid an
equivalent amount per unit to holders of units of limited liability company
interest in Oasis Martinique and units of limited partnership interest in
Camden Operating, L.P. This dividend to holders of common shares or units
equates to an annualized dividend rate of $2.08 per common share or unit.
Our preferred shares are listed on the New York Stock Exchange under the symbol
"CPTPrA." On August 15, 1999 we paid a quarterly dividend on our preferred
shares of $0.5625 per share to all preferred shareholders of record as of June
30, 1999. This dividend to holders of preferred shares equates to an annualized
dividend rate of $2.25 per preferred share.
We intend to continue making regular quarterly distributions to our
shareholders and unitholders in accordance with REIT qualification requirements
under the federal tax code while maintaining what management believes to be a
conservative payout ratio. We also expect to continue reducing the payout ratio
by raising distributions at a rate that is less than our funds from operations
growth rate. Distributions depend upon a variety of factors, and there can be
no assurance that distributions will be made.
9
<PAGE> 12
USE OF PROCEEDS
We will not receive any proceeds from the issuance of common shares to the
selling shareholders or from sales of these shares by the selling shareholders.
We have registered these shares because of registration rights granted to the
selling shareholders. Upon an exchange of units, our ownership interest in
Oasis Martinique will increase.
DESCRIPTION OF CAPITAL SHARES
Our Declaration of Trust provides that we may issue up to 110,000,000 shares of
beneficial interest, consisting of 100,000,000 common shares and 10,000,000
preferred shares. At August 10, 1999, 41,398,047 common shares and 4,165,000
Series A Cumulative Convertible Preferred Shares were outstanding.
COMMON SHARES
Holders of common shares are entitled to one vote per share. There is no
cumulative voting in the election of trust managers. The board may declare
dividends on common shares in its discretion if funds are legally available for
those purposes. On liquidation, common shareholders are entitled to receive pro
rata any of our remaining assets, after we satisfy or provide for the
satisfaction of all liabilities and obligations on our preferred shares, if
any. Common shareholders do not have preemptive rights to subscribe for or
purchase any of our capital shares or any other of our securities, except as
may be granted by the board.
PREFERRED SHARES
Under our declaration of trust, the board is authorized, without shareholder
approval, to issue preferred shares in one or more series, with the
designations, powers, preferences, rights, qualifications, limitations and
restrictions as the board determines. Thus, the board, without shareholder
approval, could authorize the issuance of preferred shares with voting,
conversion and other rights that could adversely affect the voting power and
other rights of common shareholders or that could make it more difficult for
another company to enter into a business combination with us.
SERIES A PREFERRED SHARES
No holder of Series A Preferred Shares has any preemptive right to subscribe
for any securities. Unless converted into common shares or redeemed, our Series
A Preferred Shares have a perpetual term, with no maturity.
Maturity; Redemption. Our Series A Preferred Shares have no stated maturity,
and are not subject to any sinking fund or mandatory redemption. The shares are
not redeemable prior to April 30, 2001 after which date we may, at our option,
redeem the shares, in whole or in part, either for:
o $25.00 in cash, plus any accumulated, accrued and unpaid dividends; or
o the number of common shares equal to the per share liquidation
preference of the preferred shares to be redeemed without regard to
any accumulated, accrued and unpaid cash dividends to the date of
redemption divided by $32.4638. This divisor is subject to adjustment
if we change our capitalization.
Ranking; Liquidation Preference. Our Series A Preferred Shares rank senior to
our common shares with respect to payment of dividends and amounts upon our
liquidation, dissolution or winding up. Upon any such event, the holders of
Series A Preferred Shares will be entitled to receive a liquidation preference
of $25.00 per share plus an amount equal to all accumulated, accrued and unpaid
dividends.
Dividends. Holders of Series A Preferred Shares are entitled to receive, when
as and if declared by our board, cumulative cash dividends payable in an amount
per share equal to the greater of:
o $0.5625 per quarter, which is equivalent to $2.25 per year; or
o the cash dividend payable on a common share.
Voting Rights. Holders of our Series A Preferred Shares do not have any voting
rights, except if the dividends are in arrears for six or more quarterly
10
<PAGE> 13
periods, in which case such holders may vote for the election of a total of two
additional trust managers.
Conversion. Holders of Series A Preferred Shares may convert each of their
shares at any time up to the redemption date for such shares into 0.7701 of a
common share, subject to adjustment.
RESTRICTIONS ON OWNERSHIP
In order for us to qualify as a REIT under the Internal Revenue Code, not more
than 50% in value of our outstanding capital shares may be owned, directly or
indirectly, by five or fewer individuals or entities during the last half of a
taxable year. In addition, our capital shares must be beneficially owned by 100
or more persons during at least 335 days of a taxable year of 12 months, or
during a proportionate part of a shorter taxable year.
Because the board believes it is essential for us to continue to qualify as a
REIT, our declaration of trust provides that in general no holder may own, or
be deemed to own by virtue of the attribution provisions of the Internal
Revenue Code, more than 9.8% of our total outstanding capital shares. Any
transfer of shares will not be valid if it would:
o create a direct or indirect ownership of shares in excess of 9.8% of
our total outstanding capital shares;
o result in shares being owned by fewer than 100 persons;
o result in our being "closely held" within the meaning of Section
856(h) of the Internal Revenue Code; or
o result in our disqualification as a REIT.
If any person owns or is deemed to own more than 9.8% of our total outstanding
capital shares, the shares that exceed this ownership limit will automatically
be deemed to be transferred to us. We will act as trustee of a trust for the
exclusive benefit of the transferees to whom such shares may ultimately be
transferred without violating this ownership limit. While in trust, these
shares will not be entitled to participate in dividends or other distributions
and, except as required by law, will not be entitled to vote. We will have the
right, for a period of 90 days during the time any securities are held by us in
trust, to purchase all or any portion of these securities from the original
shareholder at the lesser of the price paid for the shares and the market price
of the shares on the date we exercise our option to purchase.
All certificates representing capital shares will bear a legend referring to
the restrictions described above.
These restrictions on ownership may have the effect of precluding acquisition
of control unless the board and shareholders determine that maintenance of REIT
status is no longer in our best interests.
SHAREHOLDER LIABILITY
Our declaration of trust provides that no shareholder will be personally or
individually liable in any manner whatsoever for any debt, act, omission or
obligation incurred by us or our board. A shareholder will be under no
obligation to us or to our creditors with respect to such shares other than the
obligation to pay to us the full amount of the consideration for which such
shares were issued or to be issued. By statute, the State of Texas provides
limited liability for shareholders of a REIT organized under the Texas Real
Estate Investment Trust Act.
TRANSFER AGENT AND REGISTRAR
American Stock Transfer & Trust Company or its successor is the transfer agent
and registrar for the common and preferred shares.
EXCHANGE OF UNITS
The rights of unitholders to exchange their units for common shares were
granted in the Exchange Rights Agreement, dated as of October 23, 1997, among
Oasis Residential, Oasis Martinique and the unitholders named therein (the
"Exchange Agreement"), and the Amended and Restated Limited Liability Company
Agreement of Oasis Martinique, LLC, dated as of October 23, 1997 (the "LLC
Agreement"). The
11
<PAGE> 14
following summary of the exchange rights of holders of units is not complete.
You should look at the Exchange Rights Agreement and the LLC Agreement that are
filed as exhibits to the registration statement of which this prospectus is a
part. To obtain a copy of these documents, see "Where You Can Find More
Information" on page 8.
Each unitholder has the right, beginning on December 25, 1998, to require us to
acquire all or a portion of their units in exchange for, at our election, cash
or our common shares. No unitholder effecting an exchange of all or a portion
of its units is entitled to tender less than 1,000 units for exchange at any
one time, unless such lesser amount is all of the units then owned by the
exchanging holder.
Upon exchange, the exchanging holder will receive either that number of common
shares determined by multiplying the number of units tendered by an adjustment
factor or, at our election, an amount of cash equal to the market value of such
number of shares. As of the date of this prospectus, the adjustment factor is
0.759. The adjustment factor will be adjusted to account for the economic
effect of any:
o split or subdivision of our common shares;
o reverse share split or other combination of outstanding common shares;
or
o payment of dividends in our common shares to holders of our common
shares.
If we elect to deliver cash in lieu of all or any portion of the shares, the
exchanging holder will receive shares valued at the average of the daily
closing prices for the 10 consecutive business days commencing 15 business days
before the date of tender.
An exchanging holder effecting an exchange of all or a portion of its units
must deliver to us an exercise notice, substantially in the form of Exhibit B
to the Exchange Agreement. Within 10 business days after our receipt of the
exercise notice, we will deliver a response notice in the form of Exhibit A to
the Exchange Agreement. On the twelfth business day after the date we receive
an exercise notice, we will deliver to the exchanging holder the number of
common shares to be exchanged or, at our election, cash, each in an amount
determined as described above. The common shares to be delivered will be duly
authorized, validly issued, fully paid and nonassessable shares, free of any
pledge, lien, encumbrance or restriction, other than those provided in our
declaration of trust, any claim pledge, lien, encumbrance or restriction
contained in an agreement to which the exchanging holder is a party or
otherwise imposed as a result of actions taken by the unitholder. We will pay
any documentary, stamp or similar issue or transfer tax due on the issue of
common shares upon exchange other than any tax that is due because such shares
are to issued in a name other than that of the exercising holder.
Prior to the date that we receive the exercise notice, the exercising holder
will be treated as the holder of the tendered units for all purposes of the LLC
Agreement, and will have no rights as a holder of our common shares. If such
date is a record date for the payment of a dividend, the exercising unitholder
will be treated as a holder of any common shares issuable pursuant to the
Exchange Agreement and not as a unitholder. As of such date, the unitholder
will in general have no further claim or interest in the tendered units.
12
<PAGE> 15
COMPARISON OF OWNERSHIP OF UNITS AND COMMON SHARES
OASIS MARTINIQUE
CAMDEN PROPERTY TRUST
FORM OF ORGANIZATION AND ASSETS OWNED
Oasis Martinique was organized as a Delaware limited liability company. As of
the date of this prospectus, the only real property owned by Oasis Martinique
is the 713-unit Martinique Apartment Homes community in Orange, California.
This community was built in 1986 and contributed to Oasis Martinique on October
23, 1997.
Camden Property Trust is a Texas real estate investment trust. We have elected
to be taxed as a REIT under the Internal Revenue Code and intend to maintain
our qualification as a REIT. At June 30, 1999, we owned interests in, operated
or were developing 160 multifamily properties containing 56,210 apartment homes
located in nine states. Eleven of our multifamily properties containing 4,720
apartment homes were under development at June 30, 1999. One of our newly
developed multifamily properties containing 306 apartment homes was in lease up
at June 30, 1999. We have several additional sites which we intend to develop
into multifamily apartment communities.
PURPOSE
Oasis Martinique's purpose is to own, manage, operate, maintain, improve,
encumber, sell or otherwise dispose of, Martinique Apartment Homes, and any
other apartment buildings or communities acquired by Oasis Martinique in the
future, and to ultimately distribute funds.
Under our declaration of trust, we may purchase, hold, lease, manage, sell,
exchange, develop, subdivide and improve real property and interests in real
property.
ADDITIONAL EQUITY
As the managing member of Oasis Martinique, Camden Property Trust may determine
that Oasis Martinique requires additional funds and contribute such funds in
exchange for capital contributions. The LLC Agreement provides that no
additional member may be admitted as a member of Oasis Martinique, except upon
the acquisition of a member's interest in Oasis Martinique. The admission of an
additional member requires our consent. The LLC Agreement also provides that no
additional units will be issued.
Subject to applicable New York Stock Exchange Rules, our board may issue
additional common or preferred shares, so long as the total number of shares
issued does not exceed the authorized number of shares set forth in our
declaration of trust. Our declaration of trust authorizes us to issue
100,000,000 common shares and 10,000,000 preferred shares.
13
<PAGE> 16
OASIS MARTINIQUE
CAMDEN PROPERTY TRUST
MANAGEMENT CONTROL
All management powers over the business and affairs of Oasis Martinique are
vested in Camden Property Trust as the managing member. No non-managing member
has any right to participate in or exercise control or management power over
the business and affairs of Oasis Martinique.
Our board has exclusive control over our business affairs subject only to the
applicable provisions of Texas law and the provisions of our declaration of
trust and bylaws.
FIDUCIARY DUTIES
Under Delaware law, Camden Property Trust, as the managing member of Oasis
Martinique, owes a fiduciary duty to Oasis Martinique. Consequently, we are
required to exercise good faith and integrity in all of our dealings with Oasis
Martinique.
Also, the LLC Agreement provides that:
o we, as the managing member, are in general not liable to Oasis
Martinique or any non-managing member for losses sustained or
liabilities incurred as a result of errors in judgment or of any act
or omission if we acted in good faith in accordance with the LLC
Agreement;
o as long as we appointed an agent in good faith, we are not responsible
for any misconduct or negligence of such agent; and
o we will be presumed to have acted in good faith if we acted in
reliance of opinions of consultants and advisors in their areas of
expertise.
Under Texas law, our board must perform their duties in good faith and in a
manner that they reasonably believe to be in our best interests. Trust managers
who act in such a manner generally will not be liable to us for monetary
damages by reason of being a member of the board.
14
<PAGE> 17
OASIS MARTINIQUE
CAMDEN PROPERTY TRUST
MANAGEMENT LIABILITY AND INDEMNIFICATION
Oasis Martinique has agreed to indemnify each member and its partners,
directors, officers, employees or agents against all losses arising from any
actions that relate to the operations or property of Oasis Martinique. However,
these persons will not be indemnified for fraud, willful misconduct, gross
negligence or knowing violations of the law or for any transaction for which a
person received an improper person benefit in violation of any provision of the
LLC Agreement or applicable law. The persons indemnified under this agreement
include Camden Property Trust and our trust managers and officers.
Our trust managers and officers will be indemnified against all losses they
suffer as a result of serving in this capacity as provided in the Texas Real
Estate Investment Trusts Act and our declaration of trust and bylaws. Our board
must determine that the person or officer seeking indemnification acted in good
faith while reasonably believing, in the case of conduct in an official
capacity, that such conduct was in our best interests. In all other cases, such
conduct must be at least not opposed to our best interests and, in the case of
any criminal proceeding, such person must have had no reasonable belief that
such conduct was unlawful. If the person involved is not a trust manager or
officer, but is or was our employee or agent, or is or was serving at our
request as a trust manager, officer, employee or agent of another entity, our
board may cause us to indemnify such person to the same extent allowed for
trust managers and officers.
ANTI-TAKEOVER PROVISIONS
Under the LLC Agreement, we may hinder Oasis Martinique from engaging in a
merger or other business combination. Also, we may not be removed as managing
member by the other members with or without cause. We may also restrict a
non-managing member from transferring units. In addition, we have the right,
exercisable on and after the date on which the non-managing members hold less
than 88,602 units, to acquire all of the outstanding units held by the
non-managing members.
Our organizational documents contain a number of provisions that may have the
effect of delaying or discouraging an unsolicited proposal for our acquisition
or the removal of incumbent management. These include provisions that:
o allow the board to authorize preferred shares with superior voting
rights to the common shares;
o are designed to avoid concentration of share ownership in a manner
that would jeopardize our status as a REIT under the Internal Revenue
Code; and
o require the affirmative vote of the holders of not less than 80% of
our outstanding capital shares for the approval of business
combinations and similar transactions with beneficial owners of more
than 50% of our shares.
15
<PAGE> 18
OASIS MARTINIQUE
CAMDEN PROPERTY TRUST
VOTING RIGHTS
Under the LLC Agreement, the non-managing members have voting rights only as to
specified matters, including the following:
o dissolving or liquidating Oasis Martinique,
o bankruptcy, insolvency and similar events;
o merging, consolidating or selling of all or substantially all of its
assets to any other person, except in a transaction or series of
transactions described in Section 1031 of the Internal Revenue Code;
o commingling the assets of Oasis Martinique with those of any other
person;
o guaranteeing or otherwise becoming responsible for debt of any other
person or holding out Oasis Martinique's credit as being available to
satisfy obligations of others;
o pledging or otherwise encumbering its assets for the benefit of any
other person;
o amending, modifying or terminating the LLC Agreement other than to
reflect the admission, substitution, termination or withdrawal of
members;
o subject to the rights of transfer provided in the LLC Agreement,
transferring or approving in the transfer of the membership interest
of the managing member, or admitting into Oasis Martinique any
successor managing member; or
o having any subsidiary of Oasis Martinique.
The non-managing members do not otherwise have the right to vote on decisions
relating to the operations or management of Oasis Martinique.
At each annual meeting of shareholders, shareholders elect our trust managers.
All common shares have one vote per share and our declaration of trust permits
the board to classify and issue preferred shares in one or more series having
voting power that may differ from that of the common shares.
Texas law requires that fundamental changes in an entity's structure be
approved by shareholders. These changes include:
o amendments to the declaration of trust;
o mergers and consolidations;
o dissolution; and
o sales of all or substantially all of our assets not in the ordinary
course of business.
16
<PAGE> 19
OASIS MARTINIQUE
CAMDEN PROPERTY TRUST
LIABILITY OF INVESTORS
Under the LLC Agreement and Delaware law, the liability of non-managing members
for the debts and obligations of Oasis Martinique is generally limited to the
amount of their investment in Oasis Martinique, together with their interest in
any undistributed income.
Under Texas law, shareholders are not liable for our debts or obligations.
LIQUIDITY
Non-managing members may not generally transfer their units without our
consent.
Shares issued pursuant to this prospectus will be freely transferable, subject
to prospectus delivery and other requirements of the Securities Act of 1933.
Our common shares are listed on the New York Stock Exchange. The breadth and
strength of this secondary market will depend, among other things, upon the
number of shares outstanding, our financial results, the general interest in
our and other real estate investments, and our dividend yield compared to that
of other debt and equity securities.
DISTRIBUTION RIGHTS
Under the LLC Agreement, Oasis Martinique makes quarterly distributions to
non-managing members as generally described below:
o an amount per unit equal to the cash dividend a unitholder would have
received if its units had been exchanged for Camden common shares; and
o an amount to all non-managing members equal to 5% of Oasis
Martinique's net cash flow in excess of $6.6 million, payable to each
non-managing member in proportion to its unit holdings; and
o an amount to all non-managing members equal to 1% of any remaining net
cash flow, payable to each non-managing member in proportion to its
unit holdings.
Holders of our common shares are entitled to such dividends as may be legally
declared from time to time by our board. In order for us to qualify as a REIT,
we are required to distribute with respect to each taxable year dividends,
other than capital gain dividends, to our shareholders in an aggregate amount
at least equal to:
o the sum of 95% of our "REIT taxable income," which is computed without
regard to the dividends-paid deduction and our capital gain, and 95%
of the net income, if any, from foreclosure property; minus
o the sum of particular items of non-cash income.
17
<PAGE> 20
OASIS MARTINIQUE
CAMDEN PROPERTY TRUST
TAXES
Oasis Martinique itself is not subject to federal income tax. Instead, each
unitholder includes its allocable share of Oasis Martinique's taxable income or
loss in determining its individual federal income tax liability. Cash
distributions from Oasis Martinique are not taxable to a unitholder in the
absence of allocations of income except to the extent they exceed such holder's
basis in its interest in Oasis Martinique. A holder's basis will include such
holder's allocable share of Oasis Martinique non-recourse debt.
Income and loss from Oasis Martinique generally is subject to the "passive
activity" limitations. Under the "passive activity" rules, income and loss from
Oasis Martinique that is considered "passive" generally can only be offset
against income and loss from other investments that constitute "passive
activities."
Unitholders are required, in some cases, to file state income tax returns
and/or pay state income taxes in the states in which Oasis Martinique owns
property, even if they are not residents of those states. As of the date of
this prospectus, Oasis Martinique's only real property is located in
California.
Distributions made by us to our taxable domestic shareholders out of current or
accumulated earnings and profits will be taken into account by them as ordinary
income. Distributions that are designated as capital gain dividends generally
will be taxed as gains from the sale or disposition of a capital asset.
Distributions in excess of current or accumulated earnings and profits will be
treated as a non-taxable return of basis to the extent of a shareholder's
adjusted basis in its common shares, with the excess taxed as capital gain.
Dividends paid by us will be treated as "portfolio" income and cannot be offset
with losses from "passive activities."
Shareholders who are individuals generally should not be required to file state
income tax returns and/or pay state income taxes outside of their state of
residence with respect to our operations and distributions. We may be required
to pay state income taxes in some states.
18
<PAGE> 21
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of the material federal income tax
consequences relating to us and our common shares. The summary is based on
current law. It is not tax advice and presents general information only. The
summary is not exhaustive of all possible tax consequences. Your actual tax
consequences as a taxpayer can be complicated and will depend on your specific
situation, including variables you cannot control. You should consult your own
tax advisor for a full understanding of the tax consequences of the purchase,
holding and sale of common shares. You should also consult your tax advisor to
determine the effect of any potential changes in applicable tax laws.
We have elected to be taxed as a REIT under the Internal Revenue Code since our
taxable year ended December 31, 1993. We believe that we have been organized
and have operated in a manner that qualifies us for taxation as a REIT under
the Internal Revenue Code. We also believe that we will continue to operate in
a manner that will preserve our status as a REIT. We cannot, however, assure
you that such requirements will be met in the future.
We have not requested a ruling from the Internal Revenue Service regarding our
REIT status. We have, however, received an opinion from the law firm of Locke
Liddell & Sapp LLP to the effect that:
o we have met the requirements for qualification and taxation as a REIT
for each taxable year commencing with the taxable year ended December
31, 1993;
o our diversity of equity ownership, operations through the date of the
opinion and proposed method of operation should allow us to qualify as
a REIT for the taxable year ending December 31, 1999;
o as of the date of the opinion, Oasis Martinique will be treated for
federal income tax purposes as a partnership and not taxable as an
association taxable as a corporation; and
o the discussion regarding "Material Federal Income Tax Consequences"
set forth in this section, to the extent that it describes matters of
law or legal conclusions, is correct in all material respects.
The opinion is expressed as of its date and Locke Liddell & Sapp LLP has no
obligation to advise us of any change in applicable law or of any matters
stated, represented or assumed, after the date of such opinion.
You should be aware that opinions of counsel are not binding upon the Internal
Revenue Service or any court. Our opinion of counsel is based upon written
factual representations and covenants made by us regarding the past, present
and future conduct of our business operations and the business operations of
Oasis Martinique. Furthermore, our opinion of counsel regarding our continued
qualification as a REIT is conditioned upon, and such continued qualification
as a REIT will depend on, our ability to meet, through actual annual operating
results, the various REIT qualification tests under the Internal Revenue Code.
In addition, we cannot assure you that new legislation, regulations or
administrative interpretations will not change the tax laws with respect to our
qualification as a REIT, the qualification of Oasis Martinique as a partnership
or any other matter discussed herein.
TAX CONSEQUENCES OF AN EXCHANGE OF UNITS
An exchange of units for common shares or cash will be a fully taxable
transaction to a unitholder. The unitholder will generally recognize gain in an
amount equal to the value of the common shares and the amount of cash received,
plus the amount of liabilities of Oasis Martinique allocable to the units being
exchanged, less its tax basis in these units. This gain may exceed the value of
the common shares and the amount of cash received. However, if we elect to pay
cash for the units exchanged and we use cash received from Oasis Martinique for
such purpose, it is possible that such payment will be treated for federal
income tax purposes as a redemption by Oasis Martinique of the units exchanged.
In this case, the unitholder would recognize gain to the extent that the cash
received, plus the amount of any of Oasis Martinique's liabilities allocable to
the units being exchanged, exceeds the adjusted tax basis in all of the
holder's units prior to such payment.
19
<PAGE> 22
The recognition of any loss resulting from an exchange of units is subject to a
number of limitations set forth in the Internal Revenue Code. The character of
any gain or loss arising from an exchange as capital or ordinary will depend on
the character of the units in the hands of the unitholder as well as the nature
of the assets of Oasis Martinique at the time of the exchange. As of the date
of this prospectus, Oasis Martinique's only real property is the Martinique
Apartment Homes community.
FEDERAL INCOME TAXATION OF THE COMPANY
As long as we qualify for taxation as a REIT, we generally will not be subject
to federal corporate income taxes on that portion of our ordinary income or
capital gain that is currently distributed to shareholders. An investment in a
corporation usually results in "double taxation" on earnings, once at the
corporate level and once again at the shareholder level. The REIT provisions of
the Internal Revenue Code generally allow us to deduct dividends paid to our
shareholders. The deduction for dividends paid to shareholders substantially
eliminates the federal "double taxation" on earnings.
Even if we qualify for taxation as a REIT, we will be subject to federal income
tax as follows:
o we will be taxed at regular corporate rates on our undistributed REIT
taxable income, including undistributed net capital gains;
o under some circumstances, we may be subject to the "alternative
minimum tax" as a consequence of our items of tax preference;
o we will be taxed at the highest corporate rate on our net income from
the sale or other disposition of "foreclosure property" that is held
primarily for sale to customers in the ordinary course of business or
other non-qualifying income from foreclosure property;
o we will be subject to a 100% tax on any net income from prohibited
transactions, which are, in general, sales or other dispositions of
property held primarily for sale to customers in the ordinary course
of business, other than foreclosure property;
o if we fail to satisfy the gross income tests under the REIT provisions
of the Internal Revenue Code, but have maintained our qualification as
a REIT, we will be subject to a tax equal to the net income
attributable to the greater of the amount by which we fail such tests,
multiplied by a fraction intended to reflect our profitability;
o we will be subject to a 4% excise tax on the excess of the
distributions to shareholders required by the Internal Revenue Code,
over the amount we actually distribute; and
o if (a) we acquire any asset from a corporation that is subject to full
corporate-level tax in a carryover-basis transaction, and (b) we
subsequently recognize gain on the disposition of such asset during
the ten-year period beginning on the date on which we acquire the
asset, then the excess of the fair market value of the asset as of the
beginning of the 10-year period over our adjusted basis in such asset
at such time will be subject to tax at the highest regular corporate
rate.
REIT QUALIFICATION
Income Tests. In general, in order to qualify as a REIT, we must derive at
least 95% of our gross income from real estate sources and passive investments,
such as dividends and interest and gain from the sale or disposition of stock
or securities. We must also derive at least 75% of our gross income from real
estate sources. Rent derived from leases will be qualifying income under the
REIT requirements, provided several requirements are satisfied. Among other
requirements, a lease may not have the effect of giving us a share of the net
income of the lessee, and the amount of personal property leased under the
lease must not exceed a defined threshold. In addition, all leases must also
qualify as "true" leases for federal income tax purposes, and not as service
contracts, joint ventures and other types of arrangements. Generally, we may
not provide services to lessees or their subtenants, other than customary and
de minimis non-customary services.
Payments under a lease will not constitute qualifying income for purposes of
the REIT requirements if we own, directly or indirectly, 10% or more of the
20
<PAGE> 23
ownership interests in the lessee. Constructive ownership rules will apply to
determine our ownership in a lessee. For instance, we may be deemed to own the
assets of any shareholder who owns 10% or more in value of our shares. These
assets that we may potentially be deemed to own would include any ownership
interest owned in lessees of our properties.
Our declaration of trust contains provisions that are designed to prevent a
shareholder from owning common shares that would cause us to own, actually or
constructively, 10% or more of the ownership interests in a lessee. Thus, we
should never own, actually or constructively, 10% or more of a lessee. However,
no absolute assurance can be given that transfers, or other events of which we
have no knowledge, will not cause us to own constructively 10% or more of one
or more lessees at some future date.
Asset Tests. On the last day of each calendar quarter, we must meet two tests
concerning the nature of our assets. First, at least 75% of the value of our
total assets generally must consist of real estate assets, cash, cash items,
including receivables, and government securities. For this purpose, "real
estate assets" include interests in real property, interests in loans secured
by mortgages on real property or by interests in real property, shares in other
REITs and particular options, but exclude mineral, oil or gas royalty
interests. The temporary investment of new capital in debt instruments also
qualifies under this 75% asset test, but only for the one-year period beginning
on the date we receive the new capital. Second, the asset tests prevent us from
holding 10% or more of the voting securities of corporate issuers other than
our wholly-owned corporate subsidiaries. The asset tests also prevent us from
investing more than 5% of our assets in securities of corporate issuers other
than our wholly-owned corporate subsidiaries. We must satisfy the asset tests
at the close of each quarter. If we fail an asset test as of the close of a
quarter, we must satisfy the asset tests within the 30-day period following the
close of that quarter. We cannot assure you that the Internal Revenue Service
will not challenge our compliance with these tests. If we hold assets in
violation of the applicable asset tests, we would be disqualified as a REIT.
Other Restrictions. The REIT requirements impose a number of other restrictions
on our operations. For example, any net income that we derive from sales of
property in the ordinary course of business, other than inventory acquired by
reason of some foreclosures, is subject to a 100% tax unless eligible for a
safe harbor. Due to minimum distribution requirements, we must generally
distribute each year at least 95% of our taxable income for the year, excluding
any net capital gain.
FAILURE TO QUALIFY AS A REIT
If we fail to qualify for taxation as a REIT in any taxable year and the relief
provisions do not apply, the following consequences will occur:
o we will be subject to tax, including any applicable alternative
minimum tax, on our taxable income at regular corporate rates;
o we will be unable to deduct distributions to our shareholders;
o we will not be required to make shareholder distributions;
o to the extent that we make distributions from our current and
accumulated earnings and profits, the distributions will be dividends,
taxable to our shareholders as ordinary income;
o subject to the limitations of the Internal Revenue Code, our corporate
shareholders may be eligible for the dividends-received deduction; and
o unless we are entitled to relief under specific statutory provisions,
we will be disqualified from qualification as a REIT for the four
taxable years following the year during which qualification is lost.
It is not possible to state whether in all circumstances we would be entitled
to such statutory relief. For example, if we fail to satisfy the gross income
tests because nonqualifying income that we intentionally incur exceeds the
limit on such income, the Internal Revenue Service could conclude that we are
not entitled to statutory relief because our failure to satisfy the tests was
not due to reasonable cause.
21
<PAGE> 24
TAXATION OF TAXABLE U.S. SHAREHOLDERS
As used below, the term "U.S. Shareholder" means a holder of common shares of
who for United States federal income tax purposes:
o is a citizen or resident of the United States;
o is a corporation, partnership, or other entity created or organized in
or under the laws of the United States or of any state thereof or in
the District of Columbia, unless, in the case of a partnership,
Treasury Regulations provide otherwise;
o is an estate the income of which is subject to United States federal
income taxation regardless of its source; or
o is a trust whose administration is subject to the primary supervision
of a United States court and which has one or more United States
persons who have the authority to control all substantial decisions of
the trust.
However, to the extent provided in Treasury Regulations, some trusts in
existence on August 20, 1996, and treated as United States persons prior to
this date that elect to continue to be treated as United States persons, will
also be considered U.S. Shareholders.
Distributions Generally. As long as we qualify as a REIT, any distributions
that we make to our shareholders out of our current or accumulated earnings and
profits, other than capital gain dividends discussed below, will constitute
dividends taxable to our taxable U.S. Shareholders as ordinary income. These
distributions will not be eligible for the dividends-received deduction in the
case of U.S. Shareholders that are corporations. For purposes of determining
whether the distributions we make to holders of common shares are out of
current or accumulated earnings and profits, our earnings and profits will be
allocated first to our outstanding preferred shares and then to common shares.
To the extent that we make distributions, other than capital gain dividends, in
excess of our current and accumulated earnings and profits, these distributions
will be treated first as a tax-free return of capital to each U.S. Shareholder.
This treatment will reduce the adjusted basis which each U.S. Shareholder has
in its shares for tax purposes by the amount of the distribution. Basis will
not, however, be adjusted below zero.
If we make such distributions to a shareholder in excess of the U.S.
Shareholder's adjusted basis in its shares and if the shares have been held as
a capital asset, the distributions will be taxable as capital gains. If we make
such distributions to a shareholder in excess of the U.S. Shareholder's
adjusted basis in its shares and if the U.S. Shareholder has held the shares
for more than one year, the distributions will be taxable as long-term capital
gain.
If (a) we declare dividends in October, November or December of any year that
are payable to shareholders of record on a specified date in any of these
months, and (b) we actually pay the dividend on or before January 31 of the
following calendar year, we will treat such dividends as both paid by us and
received by the shareholders on December 31 of the year in which the dividends
are declared.
Shareholders may not include in their own income tax returns any of our net
operating losses or capital losses.
Capital Gain Distributions. Distributions that we properly designate as capital
gain dividends will be taxable to taxable U.S. Shareholders as gains to the
extent that they do not exceed our actual net capital gain for the taxable year
from the sale or disposition of a capital asset. Capital gain dividends are
taxable to non-corporate U.S. Shareholders at a 20% or 25% rate. The rate will
depend on the period of time we have held the assets that produced these gains,
whether there is any "unrecaptured Section 1250 gain," as described below, and
whether we make any designations that affect the rate. U.S. Shareholders that
are corporations may, however, be required to treat up to 20% of particular
capital gain dividends as ordinary income.
Capital Gains. The Internal Revenue Service Restructuring and Reform Act of
1998 altered the taxation of capital gain income. Under this act, individuals,
trusts and estates that hold particular investments for more than one year are
generally taxed at a maximum long-term capital gain rate of 20% on the sale or
exchange of those investments. In addition, the Taxpayer Relief Act of 1997
provided for changes to prior law, including a maximum rate of 25% for
22
<PAGE> 25
"unrecaptured Section 1250 gain" for individuals, trusts and estates and
special rules for "qualified 5-year gain." This act allows the Internal Revenue
Service to prescribe regulations on how the act's new capital gain rates will
apply to sales of capital assets by or interests in "pass-thru entities,"
including REITs. In general, Internal Revenue Service Notice 97-64 provides
that a REIT must determine the maximum amounts that may be designated in each
class of capital gain dividends as if the REIT were an individual whose
ordinary income is subject to a marginal tax rate of at least 28%. As discussed
below, similar rules will apply in the case of designated retained capital
gains. Final regulations when issued may alter the current Internal Revenue
Service administrative pronouncements. In addition, the Internal Revenue
Service has not prescribed regulations regarding the application of the new
rates to the sale of shares in REITs, and it remains unclear whether and how
the new rules will affect such sales. Investors are urged to consult their own
tax advisors with respect to the rules contained in this act.
Passive Activity Losses and Investment Interest Limitations. Distributions we
make and gain arising from the sale or exchange by a U.S. Shareholder of our
shares will not be treated as passive activity income. As a result, U.S.
Shareholders generally will not be able to apply any "passive losses" against
this income or gain. Generally, our distributions that do not constitute a
return of capital will be treated as investment income for purposes of
computing the investment interest limitation. Gain arising from the sale or
other disposition of our shares, however, will generally not be treated as
investment income.
Retention of Net Long-Term Capital Gains. We may elect to retain, rather than
distribute as a capital gain dividend, our net long-term capital gains. If we
make this election, we would pay tax on our retained net long-term capital
gains. In addition, to the extent we elect to retain net long-term capital
gains, a U.S. Shareholder generally would:
o subject to limitations, include its proportionate share of our
undistributed long-term capital gains in computing its long-term
capital gains in its return for its taxable year in which the last day
of our taxable year falls;
o be deemed to have paid the capital gains tax imposed on us on the
designated amounts included in the U.S. Shareholder's long-term
capital gains;
o receive a credit or refund for the amount of tax deemed paid by it;
o increase the adjusted basis of its common shares by the difference
between the amount of includable gains and the tax deemed to have been
paid by it; and
o in the case of a U.S. Shareholder that is a corporation, appropriately
adjust its earnings and profits for the retained capital gains in
accordance with Treasury Regulations to be prescribed by the Internal
Revenue Service.
DISPOSITIONS OF COMMON SHARES
U.S. Shareholders who sell or dispose of common shares will recognize gain or
loss for federal income tax purposes in an amount equal to the difference
between the amount of cash and the fair market value of any property received
on the sale or other disposition and the holder's adjusted basis in the shares
for tax purposes. If the common shares were held as a capital asset, then this
gain or loss will be capital gain or loss. If the common shares were held for
more than one year, the capital gain or loss will be long-term capital gain or
loss. In general, if the common shares were held for six months or less and a
U.S. Shareholder recognizes loss upon the sale or other disposition of the
common shares, the loss will be treated as a long-term capital loss, to the
extent distributions were received from us that were required to be treated as
long-term capital gains. The calculation of this six-month holding period
requires the application of relevant holding period rules.
BACKUP WITHHOLDING
We report to our U.S. Shareholders and the Internal Revenue Service the amount
of dividends paid during each calendar year, and the amount of any tax
withheld. Under the backup withholding rules, a shareholder may be subject to
backup withholding at the rate of 31% with respect to dividends paid unless the
holder:
o is a corporation or comes within other specific exempt categories and,
when required, demonstrates this fact; or
23
<PAGE> 26
o provides a taxpayer identification number, certifies as to no loss of
exemption from backup withholding, and otherwise complies with
applicable requirements of the backup withholding rules.
A U.S. Shareholder that does not provide us with a correct taxpayer
identification number may also be subject to penalties imposed by the Internal
Revenue Service. Backup withholding is not an additional tax. Any amount paid
as backup withholding will be creditable against the shareholder's income tax
liability. In addition, we may be required to withhold a portion of capital
gain distributions to any shareholder who fails to certify its non-foreign
status. See "--Taxation of Non-U.S. Shareholders."
TAXATION OF TAX-EXEMPT SHAREHOLDERS
The Internal Revenue Service has ruled that amounts distributed as dividends by
a qualified REIT do not constitute unrelated business taxable income when
received by a tax-exempt entity. Based on that ruling, except for the
tax-exempt shareholders described below, if a tax-exempt shareholder has not
held its shares as "debt financed property" within the meaning of the Internal
Revenue Code and the shares are not otherwise used in a trade or business, then
dividend income received from us will not be unrelated business taxable income
to the tax-exempt shareholder. Generally, common shares will be "debt financed
property" if the exempt shareholder financed the acquisition of the common
shares through a borrowing. Similarly, income from the sale of shares will not
constitute unrelated business taxable income unless a tax-exempt shareholder
has held its shares as "debt financed property" within the meaning of the
Internal Revenue Code or has used the shares in its trade or business.
For tax-exempt shareholders that are social clubs, voluntary employee benefit
associations, supplemental unemployment benefit trusts, and qualified group
legal services plans exempt from federal income taxation under Internal Revenue
Code Section 501(c)(7), (c)(9), (c)(17) or (c)(20), respectively, income from
an investment in our shares will constitute unrelated business taxable income
unless the organization is able to properly deduct amounts set aside or placed
in reserve for specified purposes so as to offset the income generated by its
investment in our shares. These prospective investors should consult their own
tax advisors concerning these "set aside" and reserve requirements.
However, a portion of the dividends paid by a "pension held REIT" will be
treated as unrelated business taxable income to any trust that:
o is described in Section 401(a) of the Internal Revenue Code;
o is tax-exempt under Section 501(a) of the Internal Revenue Code; and
o holds more than 10% by value of the interests in the REIT.
Tax-exempt pension funds that are described in Section 401(a) of the Internal
Revenue Code are referred to below as "qualified trusts."
A REIT is a "pension held REIT" if:
o it would not have qualified as a REIT but for the fact that Section
856(h)(3) of the Internal Revenue Code provides that stock owned by
qualified trusts will be treated, for purposes of the "not closely
held" requirement, as owned by the beneficiaries of the trust rather
than by the trust itself; and
o either, (1) at least one such qualified trust holds more than 25% by
value of the interests in the REIT, or (2) one or more such qualified
trusts, each of which owns more than 10% by value of the interests in
the REIT, holds in the aggregate more than 50% by value of the
interests in the REIT.
The percentage of any REIT dividend treated as unrelated business taxable
income is equal to the ratio of:
o the unrelated business taxable income earned by the REIT, treating the
REIT as if it were a qualified trust and therefore subject to tax on
its unrelated business taxable income, to
o the total gross income of the REIT.
A de minimis exception applies where the percentage
24
<PAGE> 27
is less than 5% for any year. The provisions requiring qualified trusts to
treat a portion of REIT distributions as unrelated business taxable income will
not apply if the REIT is able to satisfy the "not closely held" requirement
without relying upon the "look-through" exception with respect to qualified
trusts.
TAXATION OF NON-U.S. SHAREHOLDERS
The preceding discussion does not address the rules governing United States
federal income taxation of the ownership and disposition of common shares by
persons that are not U.S. Shareholders. In general, non-U.S. Shareholders may
be subject to special tax withholding requirements on distributions from us and
with respect to their sale or other disposition of our common shares, except to
the extent reduced or eliminated by an income tax treaty between the United
States and the non-U.S. Shareholder's country. A non-U.S. Shareholder who is a
shareholder of record and is eligible for reduction or elimination of
withholding must file an appropriate form with us in order to claim such
treatment. Non-U.S. Shareholders should consult their own tax advisors
concerning the federal income tax consequences to them of an acquisition of
common shares, including the federal income tax treatment of dispositions of
interests in us and the receipt of distributions from us.
OTHER TAX CONSEQUENCES
We may be subject to state or local taxation in various state or local
jurisdictions, including those in which we transact business. In addition, our
shareholders may be subject to state or local taxation in various state or
local jurisdictions, including those in which they reside. Our state and local
tax treatment may not conform to the federal income tax consequences discussed
above. In addition, your state and local tax treatment may not conform to the
federal income tax consequences discussed above. Consequently, you should
consult your tax advisor regarding the effect of state and local tax laws on a
disposition of units or an investment in our shares.
STATUS OF OASIS MARTINIQUE AS A PARTNERSHIP
The ownership of an interest in Oasis Martinique, a limited liability company
that is intended to be taxable as a partnership for federal income tax
purposes, may involve special tax risks, including:
o the possible challenge by the Internal Revenue Service of allocations
of income, loss and other items, which could affect the computation of
our taxable income or the taxable income of a holder of units; and
o the possible challenge by the Internal Revenue Service of the status
of Oasis Martinique as a partnership, as opposed to an association
taxable as a corporation, for federal income tax purposes.
If Oasis Martinique were treated as an association taxable as a corporation for
federal income tax purposes, Oasis Martinique would be treated as a taxable
entity. In addition, in such a situation:
o if we owned more than 10% of the outstanding voting securities of
Oasis Martinique or the value of such securities exceeded 5% of the
value of our assets, we would fail to satisfy the REIT asset tests and
would therefore fail to qualify as a REIT;
o distributions from Oasis Martinique to us would be treated as
dividends, which are not taken into account in satisfying the 75%
gross income test described above and could, therefore, make it more
difficult for us to satisfy such test;
o the interest in Oasis Martinique held by us would not qualify as a
"real estate asset," which could make it more difficult for us to meet
the 75% asset test described above; and
o we would not be able to deduct our share of any losses generated by
Oasis Martinique in computing our taxable income.
PROPOSED LEGISLATION
The rules dealing with federal income taxation are constantly under review by
Congress, the IRS and the Treasury Department. For example, on February 1,
1999, President Clinton released a proposed budget for fiscal year 2000. The
budget proposal contained a variety of proposed income tax changes, three of
which pertain to REITs. First, under current law, REITs may not own more than
10% of the voting stock of a regular corporation. Under the proposal, REITs
also would not be permitted to own more than 10% of the value of all classes of
stock of a corporation unless the corporation qualified as a "qualified
business subsidiary" or a
25
<PAGE> 28
"qualified independent contractor subsidiary." Even if it does so qualify, the
proposal would disallow a deduction for all interest payments on debt to, or
guaranteed by, a REIT that owns stock of such entities. Second, the proposal
would prohibit any one person other than a REIT from owning more than 50% of
the total combined voting power of all voting stock or more than 50% of the
total value of shares of all classes of stock of the REIT. Current law already
contains ownership restrictions applicable to individuals; this new limitation
would affect owners other than individuals. This proposal would be effective
for entities electing REIT status for taxable years beginning on or after the
date of first committee action. Third, the proposal would treat a regular C
corporation with a fair market value of more than $5,000,000 that elects REIT
status or merges into a REIT as if the regular corporation had liquidated and
distributed all its assets to its shareholders, and its shareholders had then
contributed the assets to the electing or existing REIT. This deemed
liquidation would cause the regular corporation to be taxed as if it had sold
its assets for fair market value and would cause its shareholders to be taxed
as if they had sold their stock for fair market value. The proposal would be
effective for elections that are first effective for a taxable year beginning
after January 1, 2000, and for mergers into REITs after December 31, 1999.
Partially in response to the first proposal described above, legislation has
been passed by the House of Representatives and the Senate proposing the
adoption of the Real Estate Investment Modernization Act of 1999. This proposed
legislation, if enacted, among other things, also would prohibit a REIT from
owning more than 10% of the total voting power and more than 10% of the total
value of the outstanding securities of any one issuer, unless that issuer
constitutes a "taxable REIT subsidiary." However, the definition of a taxable
REIT subsidiary contained in this proposed legislation is broader than the
budget proposal definition of a qualified business subsidiary or a qualified
independent contractor subsidiary. Changes to and interpretations of the
federal laws could adversely affect the tax consequences of an investment in
our common shares. We cannot predict whether, when, in what forms, or with what
effective dates, these or any other provisions could become effective.
SELLING SHAREHOLDERS
SECURITY OWNERSHIP BY THE SELLING SHAREHOLDERS
The following table sets forth the number of units held by the selling
shareholders as of August 10, 1999 and the maximum number of common shares that
may be sold by the selling shareholders. Each unit may be exchanged for 0.759
of a common share, subject to adjustment if we split or subdivide our common
shares, effect a reverse share split or otherwise combine our outstanding
common shares, or pay a share dividend to holders of our common shares. In lieu
of issuing common shares upon the exchange of the units, we may, at our option,
issue cash in an amount equal to the market value of an equivalent number of
common shares. Since the selling shareholders may sell all, some or none of
their shares, no estimate can be made of the aggregate number of shares that
are to be offered by the selling shareholders under this prospectus or that
will be owned by each selling shareholder upon completion of the offering to
which this prospectus relates.
<TABLE>
<CAPTION>
Maximum Number of Common
Selling Shareholder Number of Units Held Shares to be Sold
- ------------------- -------------------- ------------------------
<S> <C> <C>
American Realprop(1) 302,000 229,218
City National Bank(1) 302,000 229,218
IFT Properties, Ltd. 8,860 6,724
ISCO(1) 575,162 436,548
Merrill Lynch International Private 575,162 436,548
Finance Limited(1)
</TABLE>
- --------------------
(1) ISCO received 877,162 units in connection with its contribution of the
Martinique Apartment Homes community to Oasis Martinique. ISCO has
transferred 302,000 units to American Realprop. American Realprop
subsequently
26
<PAGE> 29
pledged these 302,000 units to City National Bank. City National Bank
may obtain ownership of these 302,000 units upon a default by American
Realprop under the pledge agreement and subsequent exercise of its
rights as a secured creditor to retain the pledged units. ISCO has
also pledged 575,162 units to Merrill Lynch International Private
Finance Limited. Merrill Lynch International Private Financing Limited
may obtain ownership of these 575,162 units upon a default by ISCO
under the pledge agreement and subsequent exercise of its rights as a
secured creditor to retain the pledged units.
MATERIAL RELATIONSHIPS BETWEEN THE COMPANY AND THE SELLING SHAREHOLDERS
On October 23, 1997, Oasis Residential, IFT Properties, Ltd. and ISCO completed
a transaction in which IFT and ISCO contributed the Martinique Apartment Homes
community to Oasis Martinique. Oasis Residential is a predecessor to us by
virtue of the merger of Oasis Residential with one of our wholly-owned
subsidiaries, which was completed on April 8, 1998. Prior to the merger, Oasis
Residential was the managing member of, and held an approximate 99% interest
in, Oasis Martinique. As a result of the merger, we became the managing member
of, and acquired this approximate 99% interest in, Oasis Martinique. The
remaining approximate 1% interest, comprising 886,022 units, is held by the
selling shareholders.
Merrill Lynch & Co., an affiliate of Merrill Lynch International Private
Finance Limited, was the financial advisor to Oasis Residential in the merger
with us. As part of this role, Merrill Lynch & Co. rendered an opinion to Oasis
Residential as to the fairness of the consideration to be received by Oasis
stockholders in the merger. Oasis Residential paid a fee of $4,836,000 to
Merrill Lynch & Co. in connection with the merger. Merrill Lynch & Co. and some
of its affiliates have, in the past, provided financial advisory services to us
and to Oasis and may continue to provide us with such services, and has
received, and may receive, fees for the rendering of such services. In
addition, in the ordinary course of business, Merrill Lynch International
Private Finance Limited and its affiliates trade our securities for their own
accounts and the accounts of their customers and, accordingly, may at any time
hold a long or short position in these securities.
TRANSFERS OF UNITS BY THE SELLING SHAREHOLDERS
Under the LLC Agreement, a unitholder may transfer units at any time with our
consent. In addition, a unitholder may, without our consent, pledge its units to
a lender as collateral for a bona fide loan with terms that maintain the
holder's ownership in units. A unitholder may also transfer its units after
December 24, 1998 to the following persons:
o an "accredited investor" as defined in Rule 501 under the Securities
Act of 1933;
o a person who is not acquiring the units in a transaction that does not
constitute a "sale" within the meaning of Section 2(3) of the
Securities Act of 1933;
o specified family members if the transfer is a gift;
o a trust of which the holder or its family members are beneficiaries;
o a person who directly or indirectly controls or is controlled by or is
under common control with the holder; or
o a direct or indirect owner of the holder.
Such transferees of the units may also be selling shareholders under this
prospectus. One or more supplemental prospectuses will be filed pursuant to
Rule 424 under the Securities Act of 1933 to set forth the required information
regarding any additional selling shareholders.
PLAN OF DISTRIBUTION
This prospectus relates to:
o our possible issuance of common shares if, and to the extent that, a
selling shareholder tenders units for exchange; and
o the offer and sale from time to time by the selling shareholders of
any shares that may be issued in an exchange.
We have registered the shares for sale to allow the holders thereof to freely
trade their securities, but
27
<PAGE> 30
registration of such shares does not necessarily mean that any of such shares
will be offered or sold by the holders thereof.
We will not receive any proceeds from the offering by the selling shareholders
or from the issuance of common shares to the selling shareholders upon
receiving a notice of exchange. Our common shares may be sold from time to time
to purchasers directly by any of the selling shareholders. Alternatively, the
selling shareholders may from time to time offer the shares through dealers or
agents, who may receive compensation in the form of commissions from the
selling shareholders and/or the purchasers of shares for whom they may act as
agent. The sale of the shares by selling shareholders may be effected from time
to time in one or more negotiated transactions at negotiated prices or in
transactions on any exchange or automated quotation system on which the
securities may be listed or quoted. The selling shareholders and any dealers or
agents that participate in the distribution of our common shares may be deemed
to be underwriters within the meaning of the Securities Act of 1933 and any
profit on the sale of our common shares by them and any commissions received by
any such dealers or agents might be deemed to be underwriting commissions under
such act. In order to comply with states securities laws, if applicable, the
common shares will not be sold in a particular state unless the shares have
been registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied with. One or more
supplemental prospectuses will be filed pursuant to Rule 424 under the
Securities Act of 1933 to describe any material arrangements for the
distribution of the shares when such arrangements are entered into by the
selling shareholders and any broker-dealers that participate in the
distribution of our common shares.
LEGAL MATTERS
Particular legal matters, including the legality of the common shares offered
hereby, will be passed upon for us by Locke Liddell & Sapp LLP, Dallas, Texas.
EXPERTS
The consolidated financial statements and related financial statement schedule
incorporated in this prospectus by reference from Camden Property Trust's
Annual Report on Form 10-K for the year ended December 31, 1998 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports, which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
28
<PAGE> 31
672,490 Shares
CAMDEN PROPERTY
TRUST
Common Shares of
Beneficial Interest
-----------------------
PROSPECTUS
-----------------------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR
IN DOCUMENTS THAT WE HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO
PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT.
THIS PROSPECTUS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO BUY ANY SECURITY OTHER THAN THE COMMON SHARES OFFERED. THIS PROSPECTUS IS
NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SECURITIES TO ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR
SOLICITATION. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS
PROSPECTUS IS CORRECT ON ANY DATE AFTER THE DATE ON THE PROSPECTUS, EVEN THOUGH
THIS PROSPECTUS IS DELIVERED OR SHARES ARE SOLD PURSUANT TO THIS PROSPECTUS ON
A LATER DATE.
________, 1999
<PAGE> 32
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection
with the offering contemplated by this Registration Statement:
<TABLE>
<S> <C>
Registration Fee........................................... $ 4,920
Accounting Fees and Expenses............................... 15,000
Legal Fees and Expenses.................................... 25,000
Miscellaneous.............................................. 2,080
-------
Total...................................................... $47,000
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (B) of Section 9.20 of the Texas Real Estate Investment
Trust Act, as amended (the "Act"), empowers a real estate investment trust to
indemnify any person who was, is, or is threatened to be made a named defendant
or respondent in any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, arbitrative, or
investigative, any appeal in such an action, suit, or proceeding, or any
inquiry or investigation that can lead to such an action, suit or proceeding
because the person is or was a trust manager, officer, employee or agent of the
real estate investment trust or is or was serving at the request of the real
estate investment trust as a trust manager, director, officer, partner,
venturer, proprietor, trustee, employee, agent, or similar functionary of
another real estate investment trust, corporation, partnership, joint venture,
sole proprietorship, trust, employee benefit plan, or other enterprise against
expenses (including court costs and attorney fees), judgments, penalties, fines
and settlements if he conducted himself in good faith and reasonably believed
his conduct was in or not opposed to the best interests of the real estate
investment trust and, in the case of any criminal proceeding, had no reasonable
cause to believe that his conduct was unlawful.
The Act further provides that, except to the extent otherwise
permitted by the Act, a person may not be indemnified in respect of a
proceeding in which the person is found liable on the basis that personal
benefit was improperly received by him or in which the person is found liable
to the real estate investment trust. Indemnification pursuant to Subsection (B)
of Section 9.20 of the Act is limited to reasonable expenses actually incurred
and may not be made in respect of any proceeding in which the person has been
found liable for willful or intentional misconduct in the performance of his
duty to the real estate investment trust.
Subsection (c) of Section 15.10 of the Act provides that a trust
manager will not be liable for any claims or damages that may result from his
acts in the discharge of any duty imposed or power conferred upon him by the
real estate investment trust, if, in the exercise of ordinary care, he acted in
good faith and in reliance upon information, opinions, reports, or statements,
including financial statements and other financial data, concerning the real
estate investment trust, that were prepared or presented by officers or
employees of the real estate investment trust, legal counsel, public
accountants, investment bankers, or certain other professionals, or a committee
of trust managers of which the trust manager is not a member. In addition, no
trust manager shall be liable to the real estate investment trust for any act,
omission, loss, damage, or expense arising from the performance of his duty to
a real estate investment trust, save only for his own willful misfeasance,
willful malfeasance or gross negligence.
Article Sixteen of Camden Property Trust's (the "Company's") Amended
and Restated Declaration of Trust provides that the Company shall indemnify
officers and trust managers, as set forth below:
II-1
<PAGE> 33
(a) The Company shall indemnify, to the extent permitted by Texas
law in accordance with the Company's Bylaws, every person who is
or was a trust manager or officer of the Company or its
corporate predecessor and any person who is or was serving at
the request of the Company or its corporate predecessor as a
director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another foreign or
domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise
with respect to all costs and expenses incurred by such person
as a result of such person being made or threatened to be made a
defendant or respondent in a proceeding by reason of his holding
or having held a position named above in this paragraph.
(b) If the indemnification provided in paragraph (a) is either (i)
insufficient to cover all costs and expenses incurred by any
person named in such paragraph as a result of such person being
made or threatened to be made a defendant or respondent in a
proceeding by reason of his holding or having held a position
named in such paragraph or (ii) not permitted by Texas law, the
Company shall indemnify, to the fullest extent that
indemnification is permitted by Texas law, every person who is
or was a trust manager or officer of the Company or its
corporate predecessor and any person who is or was serving at
the request of the Company or its corporate predecessor as a
director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another foreign or
domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise
with respect to all costs and expenses incurred by such person
as a result of such person being made or threatened to be made a
defendant or respondent in a proceeding by reason of his holding
or having held a position named above in this paragraph.
The Company's Bylaws provide that the Company may indemnify any trust
manager or officer of the Company who was, is or is threatened to be made a
party to any suit or proceeding, whether civil, criminal, administrative,
arbitrative or investigative, because the person is or was a trust manager,
officer, employee or agent of the Company, or is or was serving at the request
of the Company in the same or another capacity in another corporation or
business association, against judgments, penalties, fines, settlements and
reasonable expenses actually incurred if it is determined that the person: (i)
conducted himself in good faith, (ii) reasonably believed that, in the case of
conduct in his official capacity, his conduct was in the best interests of the
Company, and that, in all other cases, his conduct was at least not opposed to
the best interests of the Company, and (iii) in the case of any criminal
proceeding, had no reasonable cause to believe his conduct was unlawful;
provided that, if the person is found liable to the Company, or is found liable
on the basis that personal benefit was improperly received by the person, the
indemnification (A) is limited to reasonable expenses actually incurred by the
person in connection with the proceeding and (B) will not be made in respect of
any proceeding in which the person shall have been found liable for willful or
intentional misconduct in the performance of his duty to the Company.
ITEM 16. EXHIBITS
4.1 Amended and Restated Declaration of Trust, as amended (filed as
Exhibit 3.1 to Camden Property Trust's Annual Report on Form
10-K for the year ended December 31, 1993 (File No. 1-12110) and
incorporated herein by reference)
4.2 Second Amended and Restated Bylaws of the Company (filed as
Exhibit 3.1 to Camden Property Trust's Annual Report on Form
10-K for the year ended December 31, 1997 (File No. 1-12110) and
incorporated herein by reference)
4.3 Specimen certificate for Common Shares (filed as Exhibit 4.1 to
Camden Property Trust's Registration Statement on Form S-11
filed September 15, 1993 (No. 33-68736) and incorporated herein
by reference)
4.4 Form of Statement of Designation, Preferences and Rights of
Series A Cumulative Convertible Preferred Shares of Beneficial
Interest (filed as Exhibit 4.1 to Camden Property Trust's
Registration Statement on Form S-4 filed February 6, 1998 (No.
333-45817) and incorporated herein by reference)
II-2
<PAGE> 34
*5.1 Opinion of Locke Liddell & Sapp LLP as to the legality of the
securities being registered
**8.1 Opinion of Locke Liddell & Sapp LLP as to certain tax matters
**23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Locke Liddell & Sapp LLP (included in Exhibit 5.1
hereto)
23.3 Consent of Locke Liddell & Sapp LLP (included in Exhibit 8.1
hereto)
*24.1 Power of Attorney (included on signature page)
*99.1 Form of Registration Rights Agreement, dated as of April 6,
1998, by and among Oasis Residential, Inc., ISCO and IFT
Properties, Ltd.
*99.2 Form of Registration Rights Agreement, dated as of April 2,
1998, by and between Oasis Residential, Inc. and Merrill Lynch
International Private Finance Limited
99.3 Contribution Agreement, dated as of October 23, 1998, by and
among Oasis Residential, Inc., Costa Mesa Partners, LLC, ISCO,
IFT Properties, Ltd, Edward Israel and Robert Cohen (filed as
Exhibit 10.58 to Oasis Residential, Inc.'s Annual Report on Form
10-K for the year ended December 31, 1997 (File No. 1-12428) and
incorporated herein by reference)
99.4 Amended and Restated Limited Liability Company Agreement of
Oasis Martinique, LLC, dated as of October 23, 1998, by and
among Oasis Residential, Inc. and the persons named therein
(filed as Exhibit 10.59 to Oasis Residential, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1997 (File
No. 1-12428) and incorporated herein by reference)
99.5 Exchange Agreement, dated as of October 23, 1998, by and among
Oasis Residential, Inc., Oasis Martinique, LLC and the holders
listed thereon (filed as Exhibit 10.60 to Oasis Residential,
Inc.'s Annual Report on Form 10-K for the year ended December
31, 1997 (File No. 1-12428) and incorporated herein by
reference)
- ------------
* Previously filed.
** Filed herewith.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended
(the "Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), that are incorporated by reference in the
Registration Statement.
II-3
<PAGE> 35
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement
relating to the securities offered therein, and the
offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each
filing of the registrant's annual report pursuant to Section
13(a) or 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by
reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to trust managers, directors,
officers and controlling persons of the registrant pursuant to
the provisions described in Item 15 of this Registration
Statement or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than in payment by the registrant of expenses incurred or paid
by a trust manager, director, officer or controlling person in
the successful defense of any action, suit or proceeding) is
asserted against the registrant by such trust manager, director,
officer or controlling person in connection with the securities
being registered hereby, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
II-4
<PAGE> 36
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on the 24th day of
August, 1999.
CAMDEN PROPERTY TRUST
By: /s/ G. Steven Dawson
---------------------------------------
G. Steven Dawson
Senior Vice President-Finance, Chief Financial
Officer, Treasurer and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
amendment has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- ----------
<S> <C> <C>
* Chairman of the Board of Trust August 24, 1999
- ------------------------- Managers and Chief Executive
Richard J. Campo Officer (Principal Executive
Officer)
*
- ------------------------- President, Chief Operating Officer August 24, 1999
D. Keith Oden and Trust Manager
/s/ G. Steven Dawson Senior Vice President-Finance, August 24, 1999
- ------------------------- Chief Financial Officer, Treasurer
G. Steven Dawson and Secretary (Principal Financial
and Accounting Officer)
*
- ------------------------- Trust Manager August 24, 1999
William R. Cooper
*
- ------------------------- Trust Manager August 24, 1999
George R. Hrdlicka
</TABLE>
II-5
<PAGE> 37
<TABLE>
<S> <C> <C>
* Trust Manager August 24, 1999
- -------------------------
Lewis A. Levey
* Trust Manager August 24, 1999
- -------------------------
F. Gardner Parker
* Trust Manager August 24, 1999
- -------------------------
Steven A. Webster
* Trust Manager August 24, 1999
- -------------------------
Scott S. Ingraham
</TABLE>
* By: /s/ G. Steven Dawson
-----------------------------
G. Steven Dawson
Attorney-in-Fact
II-6
<PAGE> 38
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
4.1 Amended and Restated Declaration of Trust, as amended (filed as
Exhibit 3.1 to Camden Property Trust's Annual Report on Form
10-K for the year ended December 31, 1993 (File No. 1-12110) and
incorporated herein by reference)
4.2 Second Amended and Restated Bylaws of the Company (filed as
Exhibit 3.1 to Camden Property Trust's Annual Report on Form
10-K for the year ended December 31, 1997 (File No. 1-12110) and
incorporated herein by reference)
4.3 Specimen certificate for Common Shares (filed as Exhibit 4.1 to
Camden Property Trust's Registration Statement on Form S-11
filed September 15, 1993 (No. 33- 68736) and incorporated herein
by reference)
4.4 Form of Statement of Designation, Preferences and Rights of
Series A Cumulative Convertible Preferred Shares of Beneficial
Interest (filed as Exhibit 4.1 to Camden Property Trust's
Registration Statement on Form S-4 filed February 6, 1998 (No.
333- 45817) and incorporated herein by reference)
*5.1 Opinion of Locke Liddell & Sapp LLP as to the legality of the
securities being registered
**8.1 Opinion of Locke Liddell & Sapp LLP as to certain tax matters
**23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Locke Liddell & Sapp LLP (included in Exhibit 5.1
hereto)
23.3 Consent of Locke Liddell & Sapp LLP (included in Exhibit 8.1
hereto)
*24.1 Power of Attorney (included on signature page)
*99.1 Form of Registration Rights Agreement, dated as of April 6,
1998, by and among Oasis Residential, Inc., ISCO and IFT
Properties, Ltd.
*99.2 Form of Registration Rights Agreement, dated as of April 2,
1998, by and between Oasis Residential, Inc. and Merrill Lynch
International Private Finance Limited
99.3 Contribution Agreement, dated as of October 23, 1998, by and
among Oasis Residential, Inc., Costa Mesa Partners, LLC, ISCO,
IFT Properties, Ltd, Edward Israel and Robert Cohen (filed as
Exhibit 10.58 to Oasis Residential, Inc.'s Annual Report on Form
10-K for the year ended December 31, 1997 (File No. 1-12428) and
incorporated herein by reference)
99.4 Amended and Restated Limited Liability Company Agreement of
Oasis Martinique, LLC, dated as of October 23, 1998, by and
among Oasis Residential, Inc. and the persons named therein
(filed as Exhibit 10.59 to Oasis Residential, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1997 (File
No. 1-12428) and incorporated herein by reference)
99.5 Exchange Agreement, dated as of October 23, 1998, by and among
Oasis Residential, Inc., Oasis Martinique, LLC and the holders
listed thereon (filed as Exhibit 10.60 to Oasis Residential,
Inc.'s Annual Report on Form 10-K for the year ended December
31, 1997 (File No. 1-12428) and incorporated herein by
reference)
</TABLE>
- ------------
* Previously filed.
** Filed herewith.
<PAGE> 1
EXHIBIT 8.1
[LOCKE LIDDELL & SAPP LLP LETTERHEAD]
August 24, 1999
Camden Property Trust
Three Greenway Plaza
Suite 1300
Houston, Texas 77046
Ladies and Gentlemen:
We have acted as securities counsel to Camden Property Trust, a Texas
real estate investment trust (the "Company"), in connection with the
registration by the Company under the Securities Act of 1933, as amended (the
"Securities Act"), of 672,490 common shares of beneficial interest of the
Company, par value $0.01 per share (the "Camden Common Shares"), on a
Registration Statement on Form S-3 (the "Registration Statement") filed with
the Securities and Exchange Commission (the "Commission"). The Camden Common
Shares are to be issued to certain holders of units of limited liability
company interest (the "Units") of Oasis Martinique, LLC, a Delaware limited
liability company ("Oasis Martinique"), upon exchange of the Units.
The opinions set forth in this letter are based on relevant provisions
of the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
Regulations promulgated thereunder (including proposed and temporary
Regulations), and interpretations of the foregoing as expressed in court
decisions, administrative determinations, the legislative history and existing
administrative rulings and practices of the Internal Revenue Service ("IRS")
(including its practices and policies in issuing private letter rulings, which
are not binding on the IRS except with respect to a taxpayer that receives such
a ruling), all as of the date hereof. These provisions and interpretations are
subject to change, which may or may not be retroactive in effect, that might
result in modifications of our opinion.
In rendering the following opinion, we have examined such statutes,
regulations, records, certificates and other documents as we have considered
necessary or appropriate as a basis for such opinion, including the following:
(1) the Registration Statement (including all amendments made thereto through
the date hereof); (2) the Amended and Restated Declaration of Trust and the
Second Amended and Restated Bylaws of the Company, as amended to date; (3) the
Registration Rights Agreement, dated as of April 6, 1986, by and among Oasis
Residential, Inc., ISCO and IFT Properties, Ltd.; (4) the Registration Rights
Agreement, dated as of April 2, 1998, by and between Oasis Residential, Inc.
and Merrill Lynch International Private Finance Limited; (5) the Amended and
Restated Limited Liability Company Agreement of Oasis Martinique, LLC, dated as
of October 23, 1998, by and among Oasis Residential, Inc. and the persons named
therein; (6) the Exchange Agreement, dated as of October 23, 1998, by and among
Oasis Residential, Inc., Oasis Martinique, LLC and the holders listed thereon;
and (7) certain written factual representations of the Company contained in an
Officer's Certificate to Counsel for Camden Property Trust regarding certain
income tax matters dated on or about the date hereof (the "Officer's
Certificate").
In our examination, we have assumed (without any independent
investigation or review thereof), with your consent, that all of the factual
representations and factual statements set forth in the documents we reviewed
are true and correct, and all of the obligations imposed under such documents
have been and will be performed or satisfied in accordance with their terms. We
have further assumed the genuineness of all signatures, the legal capacity of
natural persons, the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents submitted to
us as certified or photostatic copies, the authenticity of the originals of
such copies and the
<PAGE> 2
authenticity of telegraphic or telephonic confirmations of public officials and
others. As to facts material to our opinion, we have relied upon certificates
or telegraphic or telephonic confirmations of public officials as well as the
Officer's Certificate and other certificates, documents, statements and other
information of the Company, Oasis Martinique or representatives or officers
thereof.
For purposes of rendering our opinion, we have not made an independent
investigation or audit of any of the facts set forth in any of the
above-referenced documents, including the Registration Statement and the
Officer's Certificate. We have consequently relied upon your representations
that the information presented in such documents or otherwise furnished to us
accurately and completely describes all material facts relevant to our
opinions.
Our opinions are based solely on the above-referenced documents that
we have examined; the additional information that we have obtained, and the
representations that have been made to us, and cannot be relied upon if any
fact contained in such documents or in such additional information is, or later
becomes, inaccurate or if any representation made to us is, or later becomes,
inaccurate. Any inaccuracy in, or breach of, any of the aforementioned
documents, statements, representations, warranties and assumptions or any
change after the date hereof in applicable law could adversely affect our
opinion.
Based upon, and subject to the foregoing and the next paragraph below
and provided that the Company filed a proper election to be taxed as a real
estate investment trust ("REIT") with its timely filed federal income tax
return for the taxable year ending December 31, 1993, which has not been
terminated or revoked, we are of the opinion that:
1. The Company has met the requirements for qualification and taxation
as a REIT for each taxable year commencing with the taxable year ended December
31, 1993.
2. The Company's diversity of equity ownership, operations through the
date hereof and proposed method of operation should allow it to qualify as a
REIT for the 1999 taxable year.
3. As of the date hereof, Oasis Martinique is treated for federal
income tax purposes as a partnership, and not as an association taxable as a
corporation.
4. The discussion in the Registration Statement under the heading
"Material Federal Income Tax Consequences" to the extent that it describes
matters of law or legal conclusions, is correct in all material respects.
We express no opinion with respect to the transactions described
herein and in the Registration Statement other than those set forth herein. We
assume no obligation to advise you of any changes in our opinion subsequent to
the delivery of this opinion letter. The Company's qualification and taxation
as a REIT depend upon the Company's ability to meet on a continuing basis,
through actual annual operating and other results, the various requirements
under the Code with regard to, among other things, the sources of its income,
the composition of its assets, the level of its distributions to shareholders,
and the diversity of its share ownership. Locke Liddell & Sapp LLP will not
review or audit the Company's compliance with these requirements on a
continuing basis. Accordingly, no assurance can be given that the actual
operating results of the Company, Oasis Martinique and the other entities in
which the Company or Oasis Martinique own interests, the sources of their
income, the nature of their assets, the level of distributions to shareholders
and the diversity of share ownership for any given taxable year will satisfy
the requirements under the Code for qualification and taxation as a REIT. An
opinion of counsel merely represents counsel's best judgment with respect to
the probable outcome on the merits and is not binding on the IRS or the courts.
There can be no assurance that positions contrary to our opinions will not be
taken by the IRS, or that a court considering the issues would not hold
contrary to such opinions. No ruling has been (or will be) sought from the IRS
by the Company as to the federal income tax matters addressed in this opinion.
<PAGE> 3
This opinion letter has been prepared and furnished to you solely for
use in connection with the filing of the Registration Statement. We hereby
consent to the use and filing of this opinion as an exhibit to the Registration
Statement and to all references to us in the Registration Statement.
Very truly yours,
/s/ LOCKE LIDDELL & SAPP LLP
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Camden Property Trust on Form S-3 of our reports dated January 26, 1999, except
for Notes 3, 6, 11 and 12 as to which the date is February 23, 1999, appearing
in or incorporated by reference in the Annual Report on Form 10-K of Camden
Property Trust for the year ended December 31, 1998 and to the reference to us
under the heading "Experts" in the prospectus, which is part of this
Registration Statement.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Houston, Texas
August 24, 1999
