<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended September 30, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the Transition Period from _______ to _______
Commission File Number: 1-12546
PACIFIC GULF PROPERTIES INC.
(Exact name of Registrant as specified in its Charter)
MARYLAND 33-0577520
State of Incorporation (I.R.S. Employer Identification No.)
363 SAN MIGUEL DRIVE NEWPORT BEACH,
CALIFORNIA 92660-7805 (Address of principal
executive offices, including zip code)
714-721-2700
(Registrant's telephone number, including area code)
COMMON STOCK, PAR VALUE $.01 PER SHARE, 7,317,915 SHARES
WERE OUTSTANDING AS OF NOVEMBER 12, 1996
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the Registrant was
required to file such reports) and
(2) has been subject to such filing
requirements for the past 90 days.
Yes X No
---- ----
<PAGE> 2
PACIFIC GULF PROPERTIES INC.
FORM 10-Q
<TABLE>
PAGE
----
<S> <C> <C>
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
INDEX TO FINANCIAL STATEMENTS
Consolidated Balance Sheets as of September 30, 1996 and
December 31, 1995 1
Consolidated Statements of Operations for the Nine-
Month periods ended September 30, 1996 and September 30, 1995 2
Consolidated Statements of Operations for the Three-
Month periods ended September 30, 1996 and September 30, 1995 3
Consolidated Statements of Cash Flows for the Nine-
Month periods ended September 30, 1996 and September 30, 1995 4
Notes to Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II: OTHER INFORMATION 10
SIGNATURES 11
</TABLE>
<PAGE> 3
PACIFIC GULF PROPERTIES INC.
CONSOLIDATED BALANCE SHEETS
(in thousands except share data)
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
------------------ -----------------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Real estate assets
Land $ 109,505 $ 75,011
Buildings 256,586 225,142
--------- ---------
366,091 300,153
Accumulated depreciation (26,634) (21,461)
--------- ---------
339,457 278,692
Cash and cash equivalents 2,631 2,847
Accounts receivable 1,114 959
Other assets 6,489 6,093
--------- ---------
349,691 288,591
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgage notes payable $ 137,774 $ 133,678
Revolving line of credit 39,244 16,169
Accounts payable and accrued liabilities 7,340 5,644
Dividends payable 2,928 1,943
Convertible subordinated debentures 55,722 55,659
--------- ---------
243,008 213,093
Minority interest in consolidated
partnership 3,518 3,518
Commitments and contingencies -- --
Shareholders' equity
Preferred shares, $.01 par value;
5,000,000 shares authorized; no
shares outstanding -- --
Common shares, $.01 par value;
25,000,000 outstanding; 7,317,403
(September 30, 1996) and
4,856,937 (December 31, 1995) 74 49
Excess shares, $.01 par value;
30,000,000 shares authorized; no
shares outstanding -- --
Additional paid-in capital 114,877 77,979
Outstanding restricted stock (918) (669)
Distributions in excess of net
earnings (10,868) (5,379)
--------- ---------
103,165 71,980
--------- ---------
$ 349,691 $ 288,591
========= =========
</TABLE>
See accompanying notes
1
<PAGE> 4
PACIFIC GULF PROPERTIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except share data)
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended September 30
------------------------------
1996 1995
---- ----
<S> <C> <C>
REVENUES
Rental income
Multifamily properties $ 21,673 $ 17,437
Industrial properties 14,469 8.943
---------- ----------
36,142 26,380
---------- ----------
EXPENSES
Rental property expenses
Multifamily properties 8,527 7,254
Industrial properties 3,791 1,903
---------- ----------
12,318 9,157
Depreciation 5,921 4,360
Interest (including amortization of
debenture discount and financing
costs of $924 and $725 respectively) 13,613 9,881
General and administrative 2,056 1,544
---------- ----------
33,908 24,942
---------- ----------
INCOME BEFORE GAIN ON SALE OF REAL ESTATE 2,234 1,438
Gain on sale of real estate 74 --
---------- ----------
NET INCOME $ 2,308 $ 1,438
========== ==========
WEIGHTED AVERAGE COMMON SHARES 5,955,680 4,821,957
========== ==========
NET INCOME PER COMMON SHARE $ .39 $ .30
========== ==========
DIVIDENDS DECLARED PER COMMON SHARE $ 1.20 $ 1.17
========== ==========
</TABLE>
See accompanying notes
2
<PAGE> 5
PACIFIC GULF PROPERTIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except share data)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended September 30
-------------------------------
1996 1995
---- ----
<S> <C> <C>
REVENUES
Rental income
Multifamily properties $ 7,372 $ 6,614
Industrial properties 6,071 2,930
---------- ----------
13,443 9,544
---------- ----------
EXPENSES
Rental property expenses
Multifamily properties 2,834 2,641
Industrial properties 1,714 632
---------- ----------
4,548 3,273
Depreciation 2,116 1,573
Interest (including amortization of
debenture discount and financing costs of
$325 and $277 respectively) 4,782 3,728
General and administrative 708 604
---------- ----------
12,154 9,178
---------- ----------
INCOME BEFORE GAIN ON SALE OF REAL ESTATE 1,289 366
Gain on sale of real estate 74 --
---------- ----------
NET INCOME 1,363 366
========== ==========
WEIGHTED AVERAGE COMMON SHARES 7,323,936 4,856,515
========== ==========
NET INCOME PER COMMON SHARE $ .19 $ .08
========== ==========
DIVIDENDS DECLARED PER COMMON SHARE $ .40 $ .39
========== ==========
</TABLE>
See accompanying notes
3
<PAGE> 6
PACIFIC GULF PROPERTIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended September 30
------------------------------
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 2,308 $ 1,438
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation 5,921 4,360
Amortization of debenture
discount and financing costs 924 725
Gain on sale of real estate (74) --
Compensation expense recognized
from restricted stock issued to
employees 102 53
Net increase in certain other
assets (1,525) (2,615)
Net increase in certain
liabilities 1,697 537
-------- ---------
Net cash provided by operating
activities 9,353 4,498
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Net disposals of real estate assets 7,695 --
Net additions to real estate assets (74,163) (81,295)
-------- ---------
Net cash provided by investing
activities (66,468) (81,295)
-------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from mortgage notes payable 8,000 116,114
Proceeds from revolving line of credit 28,075 21,100
Repayment of mortgage notes payable (3,904) (9,784)
Repayment of revolving lines of credit (5,000) (47,247)
Issuance of common shares 36,540 1
Net increase in minority interest in
consolidated partnership -- 3,518
Distributions paid (6,812) (5,636)
-------- ---------
Net cash provided by financing
activities 56,899 78,066
-------- ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS (216) 1,269
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 2,847 3,515
-------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,631 $ 4,784
======== =========
</TABLE>
See accompanying notes
4
<PAGE> 7
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. INTERIM FINANCIAL STATEMENTS
Pacific Gulf Properties Inc. was incorporated in Maryland and operates
as a Real Estate Investment Trust ("REIT") under the Internal Revenue
Code of 1986, as amended. The consolidated financial statements include
the accounts of Pacific Gulf Properties Inc. (the "Company") and its
consolidated partnership, PGP Inland Communities, L.P. (the
"Partnership"). The information furnished has been prepared in
accordance with generally accepted accounting principles for interim
financial reporting and the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted. Certain prior year amounts have been reclassified
to conform to the current year presentations. In the opinion of
management, all adjustments considered necessary for the fair
presentation of the Company's financial position, results of operations
and cash flows have been included. These financial statements should be
read in conjunction with the Company's Annual Report on Form 10-K for
the year ended December 31, 1995.
2. REAL ESTATE ACQUISITIONS AND DISPOSITIONS
In August of 1996, the Company acquired an industrial property with
approximately 327,000 leasable square feet located in the City of
Industry, California for approximately $8,750,000. The Company also
acquired 4.6 acres of land in Rancho Santa Margarita, California for
approximately $1,606,000, on which the Company is planning to develop a
166 unit senior housing apartment community. In June and July 1996, the
Company used, among other financing sources, the proceeds from a public
offering to acquire nine industrial properties (the "Acquisition
Properties") containing approximately 1,352,000 leasable square feet.
In March 1996, the Company acquired an industrial park with
approximately 189,000 leasable square feet located in Garden Grove,
California for approximately $6,800,000.
In August of 1996, the Company sold 14.32 acres of land and a 55,656
square foot industrial building located in Baldwin Park, California to
an existing tenant for aggregate consideration of $7,695,000 under the
terms of an option to purchase contained in the original leases. The
sale generated a gain on sale of $74,000.
3. CONVERTIBLE SUBORDINATED DEBENTURES
As of September 30, 1996, the aggregate principal amount of convertible
subordinated debentures outstanding (before debenture discounts) was
$56,506,000. The debentures, which are convertible into common stock at
a rate of 53.6986 common shares per $1,000 of principal amount of
debentures. Conversion of all the outstanding debentures would require
the issuance of an additional 3,034,293 shares of common stock. (If the
debentures were fully converted, the net income attributable to each
common share would not be diluted.)
On November 8, 1996, the Company filed a registration statement on Form
S-4 with the Securities and Exchange Commission offering to exchange up
to all of its outstanding 8.375% Convertible Subordinated Debentures
which are due 2001, for not more than 58 nor less than 54 shares of
common stock for each $1,000 principal amount of debentures.
5
<PAGE> 8
4. SHAREHOLDERS' EQUITY
On May 30, 1996, the Company received net proceeds of approximately
$30.1 million from a public offering of 2,015,581 shares of its common
stock at $16.375 per share. On June 12, 1996 the Company received
additional net proceeds of approximately $6.5 million related to such
offering upon the exercise of the underwriters' overallotment option to
purchase an additional 420,000 common shares. Proceeds from the May
1996 public offering and overallotment, together with borrowings
approximating $28.0 million under the Company's revolving line of
credit, have been used to acquire the properties described in Note 2.
In June 1996, the Company issued 21,000 shares of restricted stock to
employees. Under the restricted stock program, the shares will vest
over seven years. The aggregate value of the shares on the date of
grant, was $351,750 and such amount is being expensed over the vesting
period with the unamortized portion reflected as outstanding restricted
stock in the shareholders' equity section. At the time the restricted
shares were issued, the market price of the common stock was $16.75.
During the nine months ended September, 1996, 1,469 shares of common
stock were issued through the Company's Dividend Reinvestment Program.
During the quarter ended March 31, 1996, debentures with an aggregate
face value of approximately $45,000 were converted into 2,416 shares of
common stock.
5. PER COMMON SHARE DATA
Per common share amounts are calculated based upon weighted average
common shares outstanding and common share equivalents of 5,955,680 and
4,821,957 for the nine months ended September 30, 1996 and 1995,
respectively and 7,323,936 and 4,856,515 for the three months ended
September 30, 1996 and 1995, respectively. Common share equivalents
include stock options which are considered dilutive for the purposes of
computing primary earnings per share.
6. DISTRIBUTIONS
On September 12, 1996, the Company declared its quarterly distribution
covering shares outstanding at September 30, 1996. The distribution of
$.40 per common share was calculated based on an estimated annual
distribution of $1.60. The distribution was paid on October 11, 1996 to
holders of record on October 2, 1996.
7. INTEREST
Interest incurred for the nine months ended September 30 consists of
the following:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Interest $12,689,000 $9,156,000
Amortization:
Debenture discount and costs 429,000 417,000
Costs related to financing assumed from
the Company's Predecessor and line of
credit costs 296,000 222,000
Long-term financing costs 199,000 86,000
----------- ----------
$13,613,000 $9,881,000
=========== ==========
</TABLE>
6
<PAGE> 9
PACIFIC GULF PROPERTIES INC
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion addresses the consolidated financial statements of the
Company for the nine months ended September 30, 1996 and 1995, together with
liquidity and capital resources as of September 30, 1996.
COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 1996 TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1995
Multifamily rental income increased by $4,236,000, or 24%, from $17,437,000 in
1995 to $21,673,000 in 1996. This increase was primarily attributable to an
increase in occupancies and to the acquisition of twelve multifamily properties
containing 1,736 apartment units during the third quarter of 1995 offset by the
disposition of four multifamily properties containing 1,085 apartment units
during the last quarter of 1995. Industrial rental income increased by
$5,526,000, or 62%, from $8,943,000 in 1995 to $14,469,000 in 1996. This
increase was primarily attributable to the recent acquisition of twelve
industrial parks containing approximately 2,343,000 of leasable square feet of
space. As a result of these changes, total revenues increased by $9,762,000, or
37%, from $26,380,000 in 1995 to $36,142,000 in 1996.
Multifamily rental income for the nine months ended September 30, 1996 totaled
$21,673,000 and included $9,523,000 related to twelve multifamily properties
acquired during the third quarter of 1995.
Industrial rental income for the nine months ended September 30, 1996 totaled
$14,469,000 and included $5,564,000 related to the recent acquisition of twelve
industrial parks, eight of which were acquired in June 1996.
Multifamily rental property expenses increased by $1,273,000, or 18%, from
$7,254,000 in 1995 to $8,527,000 in 1996. This increase was primarily
attributable to the acquisition of twelve multifamily properties containing
1,736 apartment units in 1995 offset by the disposition of four multifamily
properties containing 1,085 apartment units during the last quarter of 1995.
Industrial rental property expenses increased by $1,888,000, or 99%, from
$1,903,000 in 1995 to $3,791,000 in 1996. This increase was primarily
attributable to the recent acquisition of twelve industrial parks.
Multifamily rental property expenses for the nine months ended September 30,
1996 totaled $8,527,000 and included $4,167,000 related to eleven multifamily
properties acquired during the third quarter of 1995, and one property acquired
during the fourth quarter of 1995.
Industrial rental property expenses for the nine months ended September 30, 1996
totaled $3,791,000 and included $1,822,000 related to the acquisition of the
twelve industrial parks referred to above.
Total depreciation increased by $1,561,000, or 36%, from $4,360,000 in 1995 to
$5,921,000 in 1996. This increase was primarily attributable to additional
depreciation relating to the acquisition of twelve multifamily properties in
late 1995, eleven recently acquired industrial parks, and capital improvements
made to rehabilitate existing properties.
Interest expense (including amortization of debenture discount and financing
costs) increased by $3,732,000, or 38%, from $9,881,000 in 1995 to $13,613,000
in 1996. This increase was attributable to increased borrowings outstanding
during 1996, as compared to 1995, including new borrowings of $86,118,000
relating to the acquisitions referred to above.
7
<PAGE> 10
General and administrative expenses increased by $512,000, or 33%, from
$1,544,000 in 1995 to $2,056,000 in 1996. This increase was primarily
attributable to personnel increases related to acquisitions, and to the accrual
of estimated bonuses in 1996 (no similar accrual was made in 1995).
For the nine months ended September 30, 1996, the Company generated net income
of $2,308,000 compared to net income of $1,438,000 in 1995. These results are
attributable to a $74,000 gain from sale of real estate discussed at Note 2 and
the foregoing.
COMPARISON OF THE THREE MONTHS ENDED SEPTEMBER 30, 1996 TO THE THREE MONTHS
ENDED SEPTEMBER 30, 1995
Multifamily rental income increased by $758,000, or 11%, from $6,614,000 in 1995
to $7,372,000 in 1996. This increase was primarily attributable to an increase
in occupancies, rental rates and to the acquisition of twelve multifamily
properties containing 1,736 apartment units during the third quarter of 1995
offset by the disposition of four multifamily properties containing 1,085
apartment units during the last quarter of 1995. Industrial rental income
increased by $3,141,000, or 107%, from $2,930,000 in 1995 to $6,071,000 in 1996.
This increase was primarily attributable to the recent acquisition of twelve
industrial parks containing approximately 2,343,000 square feet of space. As a
result of these changes, total revenues increased by $3,899,000, or 41%, from
$9,544,000 in 1995 to $13,443,000 in 1996.
Multifamily rental income for the three months ended September 30, 1996 totaled
$7,372,000 and included $3,183,000 related to twelve multifamily properties
acquired during the third and fourth quarters of 1995.
Industrial rental income for the three months ended September 30, 1996 totaled
$6,071,000 and included $3,163,000 related to the recent acquisition of twelve
industrial parks.
Multifamily rental property expenses increased by $193,000, or 7%, from
$2,641,000 in 1995 to $2,834,000 in 1996. This increase was primarily
attributable to the acquisition of twelve multifamily properties containing
1,736 apartment units during the third quarter of 1995. Industrial rental
property expenses increased $1,082,000, or 171%, from $632,000 in 1995 to
$1,714,000 in 1996. This increase was primarily attributable to the recent
acquisition of twelve industrial parks.
Multifamily rental property expenses for the three months ended September 30,
1996 totaled $2,834,000 and included $1,297,000 related to twelve multifamily
properties acquired during the third quarter of 1995.
Industrial rental property expenses for the three months ended September 30,
1996 totaled $1,714,000 and included $1,039,000 related to the recent
acquisition of twelve industrial parks, eight of which were acquired in June,
1996.
Total depreciation increased by $543,000, or 35%, from $1,573,000 in 1995 to
$2,116,000 in 1996. This increase was primarily attributable to additional
depreciation relating to the acquisition of twelve multifamily properties in
late 1995, twelve recently acquired industrial parks, and capital improvements
made to rehabilitate existing properties.
Interest expense (including amortization of debenture discount and financing
costs) increased by $1,054,000, or 28%, from $3,728,000 in 1995 to $4,782,000 in
1996. This increase was primarily attributable to increased borrowings
outstanding during 1996, as compared to 1995, including net borrowings of
$86,118,000 relating primarily to the acquisitions referred to above.
8
<PAGE> 11
General and administrative expenses increased by $104,000, or 17%, from $604,000
in 1995 to $708,000 in 1996. This increase was primarily attributable to
personnel increases related to acquisitions made during the second half of 1995
and in 1996, and to the accrual of estimated bonuses in 1996 (no similar accrual
was made in 1995 during the corresponding period).
For the three months ended September 30, 1996, the Company generated net income
of $1,363,000 compared to net income of $366,000 in 1995. These results are
attributable to a $74,000 gain from sale of real estate discussed at Note 2 and
the foregoing.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1996, the Company had $2,631,000 of cash to meet its immediate
short-term liquidity requirements. Future short-term liquidity requirements are
anticipated to be met through net cash flow from operations, existing working
capital and, if necessary, funding from the Company's revolving line of credit.
The Company has a secured revolving line of credit from Bank of America (the
"Bank") for a maximum amount of $65,000,000 which expires in July, 1998. As of
September 30, 1996, the Company had borrowed $39,244,000 under the revolving
line of credit.
On October 3, 1996, the Company borrowed $16,900,000 from a life insurance
company for a 14-year term at an interest rate of 8%. These loans, the proceeds
of which were used to pay down $16.5 million on the Company's revolving line of
credit, are secured by three industrial parks totaling 905,000 square feet
located in Southern California.
On May 30, 1996, the Company modified its existing line of credit agreement with
the Bank. The modification included expanding the total facility to a maximum
amount of $68,000,000, extending the term until July 1998 and revising certain
covenant provisions. In conjunction with this modification, the Company executed
a $33,000,000 unsecured short-term line of credit with the Bank which provided
$19.5 million which was used to acquire the Acquisition Properties. Subsequent
to June 1996, this unsecured short-term facility expired, and the remaining loan
balance was incorporated into the existing secured line of credit and the
maximum amount of the line was reduced from $68,000,000 to $65,000,000.
During the first quarter of 1996, the Company borrowed $8,000,000 from a life
insurance company for a ten-year term at an interest rate of 7.3%. This loan is
secured by a 304-unit apartment community located in Kent, Washington. The
proceeds of this loan were used, in part, to acquire a 189,000 square foot
industrial park located in Garden Grove, California.
In March 1996, the Company extended four letters of credit which secure a
portion of the Company's tax-exempt mortgage debt to December 31, 1996.
The immediately preceding paragraphs contain forward looking information
involving risks and uncertainties that could significantly impact the Company's
expected liquidity requirements in the short and long term. While it is
impossible to itemize the many factors and specific events that could affect the
Company's outlook for its liquidity requirements, such factors would include the
actual timing of and costs associated with the Company's acquisitions, the
actual capital expenditures associated therewith, and the strength of the local
economies of the submarkets in which the Company operates. Higher than expected
acquisition, rental and/or rehabilitation costs, delays in the rehabilitation of
properties, a downturn in the local economies and/or the lack of growth of such
economies could reduce the Company's revenues and increase its expenses,
resulting in a greater burden on the Company's liquidity than that which the
Company has described above.
9
<PAGE> 12
PART II: OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
The Company filed a registration statement on Form S-4, as amended on
November 8, 1996 describing under Item 3 the offer (the "Exchange
Offer") to exchange no more than 58 and no less than 54 shares of
common stock for each $1,000 principal amount of its outstanding 8.375%
Convertible Subordinated Debentures due 2001 (the "Debentures"). The
Debentures are currently convertible, outside of the Exchange Offer
into 53.6986 shares of Common Stock. The Exchange Offer will expire,
unless extended, at 5:00 p.m., Eastern Standard Time, on December 10,
1996.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule.
10
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PACIFIC GULF PROPERTIES INC.
/s/ GLENN L. CARPENTER /s/ DONALD G. HERRMAN
- ------------------------------------ -------------------------------------
Glenn L. Carpenter Donald G. Herrman
Chairman and Chief Executive Officer Chief Financial Officer and Secretary
DATED: November 13, 1996
--------------------------
11
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 2,631
<SECURITIES> 0
<RECEIVABLES> 2,114
<ALLOWANCES> 1,000
<INVENTORY> 0
<CURRENT-ASSETS> 3,745
<PP&E> 366,091
<DEPRECIATION> 26,634
<TOTAL-ASSETS> 349,691
<CURRENT-LIABILITIES> 10,268
<BONDS> 232,740
0
0
<COMMON> 74
<OTHER-SE> 103,091
<TOTAL-LIABILITY-AND-EQUITY> 103,165
<SALES> 0
<TOTAL-REVENUES> 36,142
<CGS> 0
<TOTAL-COSTS> 20,295
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,613
<INCOME-PRETAX> 2,234
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,234
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,308
<EPS-PRIMARY> .39
<EPS-DILUTED> 0
</TABLE>
