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As filed with the Securities and Exchange Commission on May 28, 1999.
Registration No. 333-70295
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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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)
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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)
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Copies to:
BRYAN L. GOOLSBY
LOCKE LIDDELL & SAPP LLP
2001 ROSS AVENUE, SUITE 3000
DALLAS, TEXAS 75201
(214) 849-5500
FAX: (214) 849-5599
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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.
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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 MAY 28, 1999.
PROSPECTUS
CAMDEN PROPERTY TRUST
672,490 COMMON SHARES OF BENEFICIAL INTEREST
(PAR VALUE $.01 PER SHARE)
o The selling shareholders listed on page 25 may offer and resell up to
672,490 common shares under this prospectus for each of their own
accounts. These common shares will be obtained by the selling
shareholders upon their exchange of units of limited liability company
interest in Oasis Martinique, LLC for common shares.
o Beginning on December 25, 1998, each unit held by the selling
shareholders became exchangeable for 0.759 of a common share, or a
total of 672,490 common shares. 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 May 27, 1999, the closing sale price of a common share on the
New York Stock Exchange was $27.00.
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
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TABLE OF CONTENTS
<TABLE>
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Page
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<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...............................................................12
COMPARISON OF OWNERSHIP OF UNITS AND COMMON SHARES..............................13
MATERIAL FEDERAL INCOME TAX CONSEQUENCES........................................18
SELLING SHAREHOLDERS............................................................25
PLAN OF DISTRIBUTION............................................................26
LEGAL MATTERS...................................................................27
EXPERTS.........................................................................27
</TABLE>
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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. ISCO
subsequently pledged 575,162 of its
units to Merrill Lynch International
Private Finance Limited.
Exchange of Units: Beginning on December 25, 1998, each
unit became exchangeable for 0.759
of a common share, or a total of
672,490 common shares. 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 limited to 9.8% of
the total number of outstanding
capital shares, subject to certain
restrictions. 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."
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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.
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.
POSSIBLE ADVERSE IMPACT OF MARKET CONDITIONS ON SHARE PRICE
The market value of our shares could be substantially affected by general market
conditions, including changes in interest rates, government regulatory action
and changes in tax laws. An increase in market interest rates may lead
purchasers of our shares to demand higher dividends from us, which could
adversely affect the market price of our shares. Government regulatory action,
including changes in real estate and zoning laws and increases in real property
and income tax rates, could increase our operating costs, which could adversely
affect our financial condition and results of operations.
POSSIBLE ADVERSE IMPACT OF AN ECONOMIC DOWNTURN
If an economic downturn occurs, the demand and rents for apartments could fall
and adversely affect our financial condition and results of operations. Our
financial condition and results of operations could also be adversely affected
if we become unable to collect rent from a significant number of residents if
apartments could not be rented on favorable terms.
DEPENDENCE ON RENTAL INCOME
A substantial portion of our income is derived from rental income from our
properties. Income from properties may be adversely affected by the general
economic climate, local conditions (such as oversupply of apartments or a
reduction in demand for apartments in an area), the attractiveness of the
properties to residents, competition from other available apartments, changes in
market rental rates, the need to periodically repair, renovate and relet space,
and our ability to pay for adequate maintenance and insurance and increased
operating costs (including real estate taxes). Some significant expenditures
associated with each investment (such as mortgage payments, if any, real estate
taxes and maintenance costs) are generally not reduced when circumstances cause
a reduction in income from the property. If our properties do not generate
income sufficient to meet operating expenses, debt service and capital
expenditures, our financial conditions and results of operations could be
adversely affected.
UNCERTAINTIES RELATING TO ILLIQUIDITY OF INVESTMENTS IN REAL ESTATE
Real estate investments are relatively illiquid and, therefore, will tend to
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.
POSSIBLE ADVERSE IMPACT OF FAILURE TO IMPLEMENT OUR PROPERTY DEVELOPMENT
STRATEGY
We are subject to the risks of real estate development with respect to the
properties we are currently developing. We will be subject to similar risks in
connection with any future development of other properties. Public opposition to
our development plans, construction delays, cost overruns, lack of financing,
difficulties in lease-up or our inability to obtain necessary permits could
increase our development costs, which could adversely affect our financial
condition and results of operations.
POSSIBLE ADVERSE IMPACT OF FAILURE TO IMPLEMENT OUR PROPERTY ACQUISITION
STRATEGY
In the normal course of our business, we continually evaluate a number of
potential acquisitions and may acquire additional operating properties. We
cannot
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assure you, however, that we will have the opportunity to continue to make
suitable property acquisitions on terms favorable to us. If we are unable to
identify properties to acquire, effect acquisitions or successfully integrate
acquired properties and operations, our market penetration could decrease, which
could adversely affect our financial condition and results of operations.
DEPENDENCE ON GEOGRAPHICAL REGIONS
The developed properties in our current portfolio are located in the Southwest,
Southeast, Midwest and Western regions of the United States, and consist of
multifamily apartment communities. We are vulnerable to declines in the economic
conditions or the market for apartments in these areas, which could have an
adverse impact on the performance of our portfolio. The last recession was a
"rolling recession," because it affected the economies of different regions at
different times. A future economic downturn that affects more than one of our
geographical markets simultaneously could increase the adverse impact on our
financial condition and results of operations.
WE HAVE A SUBSTANTIAL AMOUNT OF DEBT
As of March 31, 1999, we had outstanding mortgage indebtedness of approximately
$357.8 million, borrowings under our unsecured lines of credit of approximately
$165.0 million and senior unsecured debt of approximately $490.5 million (of
which approximately $268.4 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;
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.
WE MAY INCUR MORE DEBT OR ISSUE ADDITIONAL EQUITY
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.
UNINSURED AND UNDERINSURED LOSSES COULD RESULT IN LOSS OF VALUE OF PROPERTY
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, there are certain
types of losses, generally of a catastrophic nature, such as losses from floods
or earthquakes, that may be subject to limitations in certain areas. Our board
exercises its 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 cost 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.
POSSIBLE ENVIRONMENTAL LIABILITIES
Under various federal, state and local laws, ordinances and regulations, we are
liable for the costs of removal or remediation of certain hazardous or toxic
substances on or in our properties. These laws often impose
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liability without regard to whether we knew of, or were responsible for, the
presence of the hazardous or toxic substances. All of our properties have been
subjected to Phase I site assessments or similar environmental audits to
determine if there is a likelihood of contamination from either on- or off-site
sources. These audits have been carried out in accordance with accepted industry
practices. We have also conducted limited subsurface investigations and tested
for radon and lead-based paint where such procedures have been recommended by
our consultants. We cannot assure you that existing environmental studies reveal
all environmental liabilities or that any prior owner did not create any
material environmental condition not known to us. The costs of investigation,
remediation or removal of hazardous substances may be substantial. 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.
POTENTIAL EFFECT OF COSTS OF COMPLIANCE WITH LAWS BENEFITTING DISABLED PERSONS
A number of federal, state and local laws (including the Americans with
Disabilities Act of 1990) and regulations exist that may require modifications
to existing buildings or restrict certain renovations by requiring improved
access to such buildings by disabled persons and may require other structural
features that add to the costs of buildings. Legislation or regulations adopted
in the future may impose further burdens or restrictions on us with respect to
improved access by disabled persons. The costs of compliance with these laws and
regulations may be substantial, and limits or restrictions on construction or
completion of certain renovations may limit implementation of our investment
strategy in some instances or reduce overall returns on our investments, which
could have a material adverse effect on our financial condition and results of
operations.
UNCERTAINTIES RELATING TO PENDING LITIGATION
Prior to our merger with Oasis Residential, Oasis Residential had been contacted
by certain regulatory agencies with regard to alleged failures to comply with
the Fair Housing Amendments Act as it pertained to nine properties (seven of
which we currently own) constructed for first occupancy after March 31, 1991. 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.
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.
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.
ADVERSE CONSEQUENCES OF FAILURE TO QUALIFY AS A REIT
We have been taxed as a REIT for federal income tax purposes since our taxable
year ended December 31, 1993. Although we believe that we were organized and
have been operating in conformity with the requirements for qualification as a
REIT under the Internal Revenue Code, no assurance can be given that the
Internal Revenue Service will not challenge our qualifications. We do not plan
to request a ruling from the Internal Revenue Service that we qualify as a REIT.
We have, however, received an opinion from the law firm of Locke Liddell & Sapp
LLP that provides, among other things, that we have met the requirements for
qualification and taxation as a REIT for the taxable year ended December 31,
1998 and that our diversity of
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equity ownership, operations through the date of the opinion and proposed method
of operation should allow us to qualify as a REIT for our 1999 taxable year. 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 change in
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 certain
representations and covenants made by us regarding the past, present and future
conduct of our business operations. Furthermore, our opinion of counsel is
conditioned on, and our continued qualification as a REIT will depend on, our
ability to meet, through actual annual operating results, the various REIT
qualification tests. Such requirements are discussed in more detail beginning on
page 18 under the heading "Material Federal Income Tax Consequences." In
addition, we 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 income tax consequences of such
qualification.
For any taxable year that we fail to qualify as a REIT, we would be subject to
federal income tax (including any applicable alternative minimum tax) on our
taxable income at corporate rates. In addition, unless entitled to relief under
certain 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
certain of our investments to pay the applicable tax.
STATUS OF OASIS MARTINIQUE AS A PARTNERSHIP FOR FEDERAL INCOME TAX PURPOSES
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 and expense items, which could affect the computation of our
taxable income; 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 could
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 (which is described on page 20 under the heading "Material
Federal Income Tax Consequences--REIT Qualification"), and could,
therefore, make it more difficult for us to satisfy such test;
o our interest in Oasis Martinique would not qualify as a "real estate
asset," which could make it more difficult for us to meet the 75% asset
test (which is described on page 20 under the heading "Material Federal
Income Tax Consequences--REIT Qualification");
o we would not be able to deduct our share of any losses generated by
Oasis Martinique in computing our taxable income.
Although we believe that Oasis Martinique will be treated for federal income tax
purposes as a partnership (rather than an association taxable as a corporation),
we do not plan to request a ruling from the Internal Revenue Service that Oasis
Martinique will be treated for federal income tax purposes as a partnership. We
have, however, received an opinion from the law firm of Locke Liddell & Sapp LLP
that provides, among other things, that as of the date of the opinion Oasis
Martinique will be treated for federal income tax
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purposes as a partnership and not as an association taxable as a corporation.
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 change in
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 certain
representations and covenants made by us regarding the past, present and future
conduct of the business operations of Oasis Martinique. In addition, we cannot
assure you that new legislation, regulations, administrative interpretations or
court decisions will not change the tax laws with respect to the qualification
of Oasis Martinique as a partnership or the federal income tax consequences of
such qualification.
COMPLIANCE WITH REIT RULES COULD REQUIRE US TO LIMIT THE NUMBER OF SHARES A
PERSON MAY OWN AND AFFECT CHANGE OF CONTROL TRANSACTIONS
In order 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 in the Internal Revenue Code to include certain
entities). To minimize the possibility that we will fail to qualify as a REIT
under this test, our declaration of trust authorizes the board to take such
action as may be required to preserve our qualification as a REIT. Our
declaration of trust, subject to certain exceptions, also provides that no
holder may own, or be deemed to own, more than 9.8% of our total outstanding
capital shares. These ownership limits, as well as our ability to issue other
classes of equity securities, may delay, defer or prevent a change in control
and may also deter tender offers for our shares, which offers 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.
UNCERTAINTIES RELATING TO OUR COMPETITORS
As a developer and manager of multifamily apartment communities in the
Southwest, Southeast, Midwest and Western regions of the United States, we
generally compete in these areas for residents and development and acquisition
opportunities with a number of multifamily property and real estate companies,
some of whom may have greater resources than we do. The number of competitive
multifamily properties and real estate companies in these areas could have a
material adverse effect on our ability to rent apartments or to raise or
maintain the rents charged and on our development and acquisition opportunities,
which could adversely affect our financial condition and results of operations.
UNCERTAINTIES RELATING TO CHANGES IN POLICIES
Our major policies, including policies with respect to acquisitions, financings,
growth, operations, development, debt capitalization and distributions, are
determined by our board. The board may from time to time amend or revise these
and other policies without a shareholder vote. Accordingly, you will have no
control over changes in these and similar policies, and changes in our policies
may not fully serve the interest of all shareholders.
UNEXPECTED YEAR 2000 PROBLEMS
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. 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. 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.
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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 certain
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 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.
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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.
Forward-looking statements 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.
Given these uncertainties, you should not place undue reliance on these
forward-looking statements. 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 March 31, 1999, we owned interests in,
operated or were developing 160 multifamily properties containing 56,190
apartment homes located in nine states. Eleven of our multifamily properties
containing 4,700 apartment homes were under development at March 31, 1999. Two
of our newly developed multifamily properties containing 546 apartment homes
were in various stages of lease up at March 31, 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 April 16, 1999, we paid a quarterly dividend of $0.52 per common share
to all holders of record of common shares as of March 31, 1999, and an
equivalent amount per unit was paid 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 May 15, 1999, we paid a quarterly dividend on our preferred shares
of $0.5625 per share to all preferred shareholders of record as of March 31,
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. However, distributions depend upon a variety of factors, and
there can be no assurance that distributions will be made.
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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 May 1, 1999, 41,399,672 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 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 (which price is subject to adjustment); or
o $25.00 in cash, plus any accumulated, accrued and unpaid dividends.
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 (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
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
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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, subject to certain exceptions, that 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 vote (except as required by law), and will not be
entitled to participate in dividends or other distributions. 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
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
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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, with certain exceptions, have no further claim or interest in the tendered
units.
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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, which
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 March 31, 1999, we owned interests in, operated or
were developing 160 multifamily properties containing 56,190 apartment homes
located in nine states. Eleven of our multifamily properties containing 4,700
apartment homes were under development at March 31, 1999. Two of our newly
developed multifamily properties containing 546 apartment homes were in various
stages of lease up at March 31, 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, and, in general, carry on any other business and do any other act in
connection with the foregoing and have and exercise all powers conferred by the
laws of the State of Texas upon real restate investment trusts formed under the
Texas Real Estate Investment Trust Act.
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, and only upon 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, in its
discretion, 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 (100,000,000 common shares and 10,000,000 preferred
shares).
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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, except for certain action that require
the consent of the non-managing members (which are described below under "Voting
Rights").
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, is accountable to Oasis Martinique as fiduciary and, consequently,
is required to exercise good faith and integrity in all of its dealings with
respect to Oasis Martinique's affairs. The LLC Agreement generally provides that
we will incur no liability 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 addition, we are not
responsible for any misconduct or negligence on the part of our officers, trust
managers or other agents provided we appointed such agents in good faith. We may
consult with legal counsel, accountants, appraisers, management consultants
investment bankers and other consultants and advisors, and any action we take or
omit to take in reliance upon their opinion, as to matters that we reasonably
believe to be within their professional or expert competence, will be
conclusively presumed to have been done or omitted in good faith and in
accordance with their opinion.
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.
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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, which includes Camden Property Trust
and our trust managers and officers, from and against all losses arising from
any actions that relate to the operations of property of Oasis Martinique,
except for fraud, willful misconduct, gross negligence or knowing violations of
the law or for any transaction for which such indemnitee received an improper
person benefit in violation or breach of any provision of the LLC Agreement or
applicable law.
Our trust managers and officers will be indemnified against judgments, fines,
penalties, amounts paid in settlement and claims imposed upon or asserted
against them as provided in the Texas Real Estate Investment Trusts Act and our
declaration of trust and bylaws. Such indemnification covers all costs and
expenses reasonably incurred by such officer or trust manager. 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 or, in all other cases, that such conduct
was at least not opposed to our best interests and, in the case of any criminal
proceeding, that such person had no reasonable belief that such conduct was
unlawful. If the person involved is not a trust manager or officer, our board
may cause us to indemnify such person to the same extent allowed for trust
managers and officers if such person 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.
ANTI-TAKEOVER PROVISIONS
Except in limited circumstances described below under "Voting Rights," we have
exclusive management power over the business and affairs of Oasis Martinique.
Accordingly, we may hinder the ability of Oasis Martinique to engage in a merger
transaction or other business combination. We may not be removed as managing
member by the other members with or without cause. Under the LLC Agreement, we
must obtain the consent of non-managing members holding 80% of the outstanding
units prior to entering into certain merger transactions. These limitations may
have the effect of hindering the ability of Oasis Martinique to enter into
certain business combinations. A non-managing member is restricted in its right
to transfer units without our consent. Also, on and after the date on which the
non-managing members hold less than 88,602 units, we have the right 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 under certain circumstances, require the affirmative vote of the holders
of not less than 80% of our outstanding capital shares for the approval of
certain business combinations.
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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 certain 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.
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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" (computed without regard to
the dividends paid deduction and its net capital gain) and 95% of the net
income (after tax), if any, from foreclosure property,
o minus the sum of certain items of non-cash income.
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OASIS MARTINIQUE CAMDEN PROPERTY TRUST
TAXES
Oasis Martinique itself is not subject to federal income taxes. 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 (which 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 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. See
"Material Federal Income Tax Consequences" below.
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 certain states.
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 for taxation as a REIT under the
Internal Revenue Code. We also believe that we will continue to operate in a
manner which 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. However, we have 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
the taxable year ended December 31, 1998;
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
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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 certain
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 (and such 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.
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. 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 (once at the corporate
level and once again at the shareholder level) that usually results from an
investment in a corporation.
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 certain 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
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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 C corporation (i.e., a corporation
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 certain passive
investments. 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 (as opposed to 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
ownership interests in the lessee. Constructive ownership rules will apply to
determine our ownership in a lessee. For instance, we will be deemed to own the
assets of shareholders (potentially including any ownership interest owned in
lessees of our properties) who own 10% or more in value of our shares. 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 certain interests in real property, shares in
other REITs and certain 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 a corporate issuer (other than
our wholly-owned corporate subsidiaries), or from investing more than 5% of our
assets in securities of any corporate issuer (other than our wholly-owned
corporate subsidiaries). We must satisfy the asset tests at the close of each
quarter (or, to the extent that we fail an asset test as of the close of the
quarter, within the 30-day period following the close of the 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 certain
relief provisions do not apply, the following consequences will occur:
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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 certain 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.
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, certain 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 (but not below
zero). If we make such distributions to a shareholder in excess of the U.S.
Shareholder's adjusted basis in its shares, the distributions will be taxable as
capital gains (provided that the shares have been held as a capital asset) and
will be taxable as long-term capital gain if the U.S. Shareholder has held the
shares for more than one year. 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.
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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 depending on the
period of time we have held the assets that produced these gains (and whether
there is any "unrecaptured Section 1250 gain," as described below), and on
certain designations, if any, that we may make. U.S. Shareholders that are
corporations may, however, be required to treat up to 20% of certain 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 certain 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 "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 how the new rules will affect such sales
(if at all). 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 (to the extent they 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 not be treated as
investment income under certain circumstances.
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 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 (subject to
certain limitations as to the amount that is includable);
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 a U.S. Shareholder recognizes loss
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upon the sale or other disposition of common shares held for six months or less
(after applying certain holding period rules), 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.
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 certain other exempt categories and, when
required, demonstrates this fact; or
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, if a tax-exempt
shareholder (except certain tax-exempt shareholders described below) 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 certain 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.
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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 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
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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 "qualified
independent contractor subsidiary" (as long as, in such case, all of the REIT's
qualified business subsidiaries or qualified independent contractor subsidiaries
do not represent more than 15% of the REIT's total assets). Even if a REIT 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.
Changes to the federal income tax laws and interpretations thereof could
adversely affect the tax consequences of an investment in us. 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 May 28, 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>
IFT Properties, Ltd. 8,860 6,724
ISCO(1) 877,162 665,766
Merrill Lynch International Private 575,162 436,547
Finance Limited1
</TABLE>
- --------------------
(1) ISCO received 877,162 units in connection with its contribution of the
Martinique Apartment Homes community to Oasis Martinique. ISCO subsequently
pledged 575,162 of these units to Merrill Lynch International Private
Finance Limited. Merrill Lynch International Private Financing Limited may
obtain ownership of these 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.
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MATERIAL RELATIONSHIPS BETWEEN THE COMPANY AND THE SELLING SHAREHOLDERS
On October 23, 1997, Oasis Residential (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), IFT Properties, Ltd. and ISCO completed a
transaction in which IFT and ISCO contributed the Martinique Apartment Homes
community to Oasis Martinique. 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 certain 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 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
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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 certain 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
Certain legal matters relating to the validity 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.
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672,490 Shares
CAMDEN PROPERTY
TRUST
Common Shares of
Beneficial Interest
(Par Value $.01 Per Share)
-----------------------
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> 31
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:
(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
II-1
<PAGE> 32
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)
*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
II-2
<PAGE> 33
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.
(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
II-3
<PAGE> 34
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> 35
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 28th of May, 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 May 28, 1999
- --------------------------- Managers and Chief Executive
Richard J. Campo Officer (Principal Executive
Officer)
* President, Chief Operating May 28, 1999
- --------------------------- Officer and Trust Manager
D. Keith Oden
/s/ G. Steven Dawson Senior Vice President-Finance, May 28, 1999
- --------------------------- Chief Financial Officer, Treasurer
G. Steven Dawson and Secretary (Principal Financial
and Accounting Officer)
* Trust Manager May 28, 1999
- ---------------------------
William R. Cooper
* Trust Manager May 28, 1999
- ---------------------------
George R. Hrdlicka
* Trust Manager May 28, 1999
- ---------------------------
Lewis A. Levey
</TABLE>
II-5
<PAGE> 36
<TABLE>
<S> <C> <C>
* Trust Manager May 28, 1999
- ---------------------------
F. Gardner Parker
* Trust Manager May 28, 1999
- ---------------------------
Steven A. Webster
* Trust Manager May 28, 1999
- ---------------------------
Scott S. Ingraham
</TABLE>
* By: /s/ G. Steven Dawson
------------------------------
G. Steven Dawson
Attorney-in-Fact
II-6
<PAGE> 37
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number
- -------
<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.
II-7
<PAGE> 1
EXHIBIT 8.1
Locke Liddell & Sapp LLP
2001 Ross Avenue, Suite 3000
Dallas, Texas 75201
May 28, 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 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 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
<PAGE> 2
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 the taxable year ended December 31, 1998.
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
May 28, 1999
