<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
----------------------------------
Date of Report (Date of earliest event reported): SEPTEMBER 4, 1997
-----------------
BAY APARTMENT COMMUNITIES, INC.
(Exact name of Registrant as specified in charter)
MARYLAND 1-12672 77-0404318
-------- ------- ----------
(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification no.)
4340 STEVENS CREEK BOULEVARD, SUITE 275, SAN JOSE, CA 95129
-----------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(408) 983-1500
--------------
(Registrant's telephone number, including area code)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
In September, 1997, the Company acquired two apartment home communities and
one land site, which have not previously been disclosed in a Current Report on
Form 8-K, for an aggregate purchase price of approximately $80.09 million. As of
September 8, 1997, the Company's portfolio consists of 44 communities containing
11,840 apartment homes and five land sites on which it is building, or plans to
commence building in the future, communities, which will contain an aggregate of
approximately 1,793 apartment homes. The recently acquired properties are
described below. Substantially all of the purchase price for each property
acquired was funded by drawing on the Company's $200 million unsecured line of
credit from Union Bank of Switzerland and other participating banks. Neither the
Company, any subsidiary of the Company nor any director or officer of the
Company was affiliated with or had a material relationship with the seller of
any property described below.
THE PARK APARTMENTS. On September 4, 1997, the Company purchased a 351
apartment home community located in Hacienda Heights, California from Crimson
Real Estate Limited Partnership for approximately $20.9 million. The Company
intends to renovate the community's leasing office, landscaping and apartment
home interiors. In addition, the Company intends to convert 200 carport spaces
to garages and add stackable washers and dryers to the apartment homes.
LAKESIDE APARTMENTS. On September 5, 1997, the Company purchased a 750
apartment home community located in Burbank, California from Olympus/April Joint
Venture for approximately $50.26 million. The Company intends to replace the
community's roofs and existing galvanized plumbing, convert existing parking
facilities to garages, add stackable washers and dryers in the community's two
and three bedroom apartment homes, and renovate the interiors of the community's
apartment homes, including new carpeting, paint and fixtures. In addition, the
Company intends to add an exercise facility adjacent to the community's leasing
office.
MOUNTAIN VIEW LAND SITE. On September 8, 1997, the Company acquired a 1.917
acre land site in Mountain View, California which includes a 50% undivided
interest in an existing underground parking garage adjacent to this land site,
subject to agreements which specifically allocate parking rights between an
adjacent office building and this development, including 266 spaces reserved
exclusively for residents of the community planned for this site. The land site
was purchased in two separate parcels, one from View Tower One LLC for
approximately $3.93 million and the other from Starker Services, Inc. for
approximately $5.0 million. The Company intends to build two 12-story towers on
this land site, which will contain a total of 266 apartment homes and
approximately 10,000 square feet of ground level space for a recreation,
leasing and community center. The acquisition of this site includes
substantially all necessary public approvals and previously paid city fees
totaling approximately $800,000.
2
<PAGE> 3
ITEM 5. OTHER EVENTS.
In 1996, Bay Apartment Communities, Inc. (the "Company") engaged the
services of two consulting firms to compile and analyze data to be used in the
daily operational and long-term strategic decision-making of the Company's
management. Together, these studies provide the Company with general market
overviews, demographic trends, and analyses of effective rents, historical
vacancy rates and projects in planning, primarily for counties within the San
Francisco Bay Area (defined to include Alameda, Contra Costa, Marin, Napa, San
Francisco, San Mateo, Sonoma, Santa Clara and Solano Counties) rental market.
One report, completed by Ann Roulac and Company, is based on an analysis of
the research compiled by RealData, Inc., the current producer of the Bay Area
Apartment Market Report (BAAMR), a detailed reference guide to the San Francisco
Bay Area apartment market. The scope of Ann Roulac and Company's engagement was
to identify 100 plus investment grade apartment properties from the BAAMR
database of 450 properties for the Alameda, San Francisco, San Mateo and Santa
Clara Counties. The data presented by Ann Roulac and Company are based on
surveys with managers of 100 properties in the four subject counties.
The second report, completed by the Rosen Consulting Group, focused its
analyses on five counties (i.e., San Mateo, Santa Clara, Alameda, San Francisco
and Orange), four of which are located in the San Francisco Bay Area. In
preparing its report, the Rosen Consulting Group analyzed recent economic trends
and forecasted employment trends, demographic trends and the affordability and
demand for rental units.
The reports prepared for the Company by Ann Roulac and Company and the
Rosen Consulting Group were attached as exhibits to the Company's report on Form
8-K dated July 5, 1996, and an addendum to the report by the Rosen Consulting
Group was attached to the Company's report on Form 8-K dated January 21, 1997 as
an exhibit thereto. Attached as exhibits hereto are (i) a subsequent report by
Ann Roulac and Company dated February, 1997 and (ii) a subsequent addendum to
the report by the Rosen Consulting Group. The foregoing description of the
contents of the consulting reports does not purport to be complete and is
qualified in its entirety by reference to such exhibits.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements under Rule 3-14 of Regulation S-X
(b) Pro Forma Financial Statements
(c) Exhibits
23.1 Consent of Coopers & Lybrand L.L.P., Independent Accountants.
3
<PAGE> 4
23.2 Consent of Ann Roulac and Company.
23.3 Consent of Rosen Consulting Group.
99.1 Report by Ann Roulac and Company entitled San Francisco Bay Area
Rental Analysis, dated February, 1997.
99.2 Addendum to the report by Rosen Consulting Group dated July 5, 1996.
4
<PAGE> 5
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors
Bay Apartment Communities, Inc.:
We have audited the accompanying Historical Summary of Revenues and Direct
Operating Expenses (the Historical Summary) of The Park Apartments, Burbank,
California (the Property) for the year ended December 31, 1996. The Historical
Summary is the responsibility of the Property's owner. Our responsibility is to
express an opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Historical Summary is free of material misstatement.
An audit includes examining on a test basis, evidence supporting the amounts and
disclosures in the Historical Summary. An audit also includes assessing the
basis of accounting used and significant estimates made by management, as well
as evaluating the overall presentation of the Historical Summary. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with rules and regulations of the Securities and Exchange Commission, as
described in Note A, and is not intended to be a complete presentation of the
Property's revenues and expenses and may not be comparable to results from
proposed future operations of the Property.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the revenues and direct operating expenses, described in Note
A, of The Park Apartments, Burbank, California, for the year ended December 31,
1996, in conformity with generally accepted accounting principles.
/s/ COOPERS & LYBRAND L.L.P.
San Francisco, California
September 6, 1997
F - 1
<PAGE> 6
THE PARK APARTMENTS
HISTORICAL SUMMARY OF REVENUES AND
DIRECT OPERATING EXPENSES
-------
<TABLE>
<CAPTION>
Year Ended
December 31,
1996
----------
<S> <C>
Revenues:
Rental income $2,668,530
Other 115,075
----------
2,783,605
----------
Direct operating expenses:
On-site management 318,491
Real property tax 178,709
Utilities 188,104
Repairs and maintenance 265,667
Other 82,812
----------
1,033,783
----------
Revenues in excess of direct
operating expenses $1,749,822
==========
</TABLE>
The accompanying note is an integral
part of this Historical Summary.
F - 2
<PAGE> 7
THE PARK APARTMENTS
NOTE TO HISTORICAL SUMMARY OF REVENUES
AND DIRECT OPERATING EXPENSES
-------
A. Property and Basis of Accounting:
The accompanying Historical Summary of Revenues and Direct Operating
Expenses has been prepared in accordance with Rule 3-14 of Regulation
S-X of the Securities and Exchange Commission and relates to the
operations of The Park Apartments, located in Burbank, California with
351 apartment homes.
In accordance with Rule 3-14, direct operating expenses are presented
exclusive of depreciation, interest, management fees, and income taxes.
Rental income attributable to residential leases is recorded when due
from tenants.
F - 3
<PAGE> 8
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors
Bay Apartment Communities, Inc.:
We have audited the accompanying Historical Summary of Revenues and Direct
Operating Expenses (the Historical Summary) of Lakeside Apartments, Hacienda
Heights, California (the Property) for the year ended December 31, 1996. The
Historical Summary is the responsibility of the Property's owner. Our
responsibility is to express an opinion on the Historical Summary based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Historical Summary is free of material misstatement.
An audit includes examining on a test basis, evidence supporting the amounts and
disclosures in the Historical Summary. An audit also includes assessing the
basis of accounting used and significant estimates made by management, as well
as evaluating the overall presentation of the Historical Summary. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with rules and regulations of the Securities and Exchange Commission, as
described in Note A, and is not intended to be a complete presentation of the
Property's revenues and expenses and may not be comparable to results from
proposed future operations of the Property.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the revenues and direct operating expenses, described in Note
A, of Lakeside Apartments, Hacienda Heights, California, for the year ended
December 31, 1996, in conformity with generally accepted accounting principles.
/s/ COOPERS & LYBRAND L.L.P.
San Francisco, California
September 6, 1997
F - 4
<PAGE> 9
LAKESIDE APARTMENTS
HISTORICAL SUMMARY OF REVENUES AND
DIRECT OPERATING EXPENSES
-------
<TABLE>
<CAPTION>
Year Ended
December 31,
1996
----------
<S> <C>
Revenues:
Rental income $6,140,017
Other 198,273
----------
6,338,290
----------
Direct operating expenses:
On-site management 682,353
Real property tax 412,969
Utilities 315,046
Repairs and maintenance 1,188,274
Other 206,740
----------
2,805,382
----------
Revenues in excess of direct
operating expenses $3,532,908
==========
</TABLE>
The accompanying note is an integral
part of this Historical Summary.
F - 5
<PAGE> 10
LAKESIDE APARTMENTS
NOTE TO HISTORICAL SUMMARY OF REVENUES
AND DIRECT OPERATING EXPENSES
-------
A. Property and Basis of Accounting:
The accompanying Historical Summary of Revenues and Direct Operating
Expenses has been prepared in accordance with Rule 3-14 of Regulation
S-X of the Securities and Exchange Commission and relates to the
operations of Lakeside Apartments, located in Hacienda Heights,
California with 750 apartment homes.
In accordance with Rule 3-14, direct operating expenses are presented
exclusive of depreciation, interest, management fees, and income taxes.
Rental income attributable to residential leases is recorded when due
from tenants.
F - 6
<PAGE> 11
BAY APARTMENT COMMUNITIES, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1996
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
1997
Historical Acquisitions Pro Forma
---------- ------------ ---------
<S> <C> <C> <C>
Assets:
Real estate assets:
Land $152,277 $25,467 A $177,744
Buildings and improvements 511,583 42,263 A 553,846
Furniture, fixtures & equipment 35,542 3,426 A 38,968
-------- -------- --------
699,402 71,156 770,558
Less: accumulated depreciation (52,554) 0 (52,554)
-------- -------- --------
Operating real estate assets 646,848 71,156 718,004
Construction in progress 50,945 0 50,945
-------- -------- --------
Net real estate assets 697,793 71,156 768,949
Cash & cash equivalents 920 0 920
Restricted cash 960 0 960
Other assets, net 12,236 0 12,236
-------- -------- --------
Total Assets $711,909 $71,156 $783,065
======== ======== ========
Liabilities and Shareholders' Equity:
Liabilities:
Notes payable $273,688 $70,103 B $343,791
Accounts payable and accrued expenses 5,450 0 5,450
Dividends payable 8,939 0 8,939
Other liabilities 4,553 1,053 C 5,606
-------- -------- --------
Total Liabilities 292,630 71,156 363,786
Minority interest 7,002 0 7,002
Shareholders' Equity:
Preferred stock 27 0 27
Common stock 190 0 190
Paid in capital 435,723 0 435,723
Dividends in excess of accumulated earnings (23,663) 0 (23,663)
-------- -------- --------
Total Shareholders' Equity 412,277 0 412,277
-------- -------- --------
Total Liabilities and Shareholders' Equity $711,909 $71,156 $783,065
======== ======== ========
</TABLE>
F - 7
<PAGE> 12
BAY APARTMENT COMMUNITIES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED
DECEMBER 31, 1996
(In thousands, except share
and per share data)
(Unaudited)
<TABLE>
<CAPTION>
1997
Historical Acquisitions Pro Forma
---------- ------------ ---------
<S> <C> <C> <C>
Revenue:
Rental $80,377 $8,809 D $89,186
Other 2,216 313 D 2,529
---------- ---------- ----------
Total revenue 82,593 9,122 91,715
---------- ---------- ----------
Expenses:
Property operating 18,924 3,047 E 21,971
Property taxes 6,353 592 E 6,945
General and administrative 3,895 201 E 4,096
Interest and financing 14,276 4,398 F 18,674
Depreciation and amortization 18,689 1,898 G 20,587
---------- ---------- ----------
Total expenses 62,137 10,136 72,273
---------- ---------- ----------
Income before minority interest and
extraordinary item 20,456 (1,014) 19,442
Minority interest (319) - (319)
---------- ---------- ----------
Income before extraordinary item 20,137 (1,014) 19,123
Extraordinary item (511) - (511)
---------- ---------- ----------
Net income 19,626 (1,014) 18,612
Preferred dividend requirement (4,264) - (4,264)
---------- ---------- ----------
Earnings available to common shares $15,362 ($1,014) $14,348
========== ========== ==========
Weighted average shares outstanding 15,126,242 15,126,242
========== ==========
Per share $1.02 $0.95
========== ==========
</TABLE>
F - 8
<PAGE> 13
1. Basis of Presentation:
The pro forma financial statements of Bay Apartment Communities, Inc. (the
"Company"), which are unaudited, have been prepared based on the historical
financial statements of the Company. The pro forma consolidated balance sheet
has been prepared as if the acquisition of the two apartment communities as of
September 5, 1997 (the "1997 Acquisition Communities"), had occurred on December
31, 1996. The pro forma consolidated balance sheet does not reflect the
acquisition of two land site parcels for $8.93 million described herein. The pro
forma consolidated statement of operations for the twelve months ended December
31, 1996, has been prepared as if the above mentioned events had occurred on
January 1, 1996. In management's opinion, all adjustments necessary to reflect
the effects of these transactions have been made. The pro forma financial
statements should be read in conjunction with the historical financial
statements of the Company.
2. PRO FORMA ADJUSTMENTS:
A - Additional real estate assets are attributable to the 1997 Acquisition
Communities which consist of the $50.3 million acquisition of the Lakeside
Apartments, and the $20.9 million acquisition of the The Park Apartments.
B - Increase in notes payable is attributable to cash used to acquire the 1997
Acquisition Communities which was drawn from the Credit Facility.
C - Increase in other liabilities is attributable to resident deposits and
accrued property taxes from the 1997 Acquisition Communities.
D - Additional rental and other revenue is attributable to the 1997
Acquisition Communities.
E - Additional property operating expense, property tax expense, and general
and administrative expense are attributable to the 1997 Acquisition
Communities.
F - Additional interest and financing expense is attributable to the interest
incurred on funds obtained from the Credit Facility which were used to
acquire the 1997 Acquisition Communities.
G - Depreciation expense attributable to the 1997 Acquisition Communities has
been computed using the straight-line method over 30 years for buildings
and 7 years for furniture, fixtures and equipment.
F - 9
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Company has duly caused this report to be filed on its behalf by
the undersigned thereunto duly authorized.
BAY APARTMENT COMMUNITIES, INC.
Dated: September 8, 1997 By: /s/ Jeffrey B. Van Horn
----------------------------------------
Jeffrey B. Van Horn
Vice President, Chief Financial Officer
and Secretary
5
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements of
Bay Apartment Communities, Inc. on Form S-8 (File No. 333-16809), Form S-8 (File
No. 333-16837), Form S-3 (File No. 333-16647), Form S-3 (File No. 333-15407),
and Form S-3 (File No. 333-15875) of our report dated September 6, 1997, on our
audit of the Historical Summary of Revenues and Direct Operating Expenses of
Park Apartments for the year ended December 31, 1996, and of our report dated
September 6, 1997, on our audit of the Historical Summary of Revenues and Direct
Operating Expenses of Lakeside Apartments for the year ended December 31, 1996,
which reports are included in this Current Report on Form 8-K.
/s/ COOPERS & LYBRAND L.L.P.
San Francisco, California
September 9, 1997
<PAGE> 1
EXHIBIT 23.2
CONSENT OF ANN ROULAC AND COMPANY
---------------------------------
September 8, 1997
We consent to the incorporation by reference in the Registration Statement of
Bay Apartment Communities, Inc. (the "Company") on Form S-3 (File No. 333-15875)
(the "Registration Statement"), and any registration statement filed pursuant to
Rule 462(b) of the Securities Act of 1933 which relates to the securities
registered under the Registration Statement, of our report dated February, 1997,
entitled San Francisco Bay Area Rental Analysis, which report is included in the
Company's report on Form 8-K filed with this consent. We also consent to being
named as an expert in any Prospectus Supplement to the Registration Statement.
ANN ROULAC AND COMPANY
By: /s/ Ann N. Roulac
--------------------------
Ann N. Roulac
President
6
<PAGE> 1
EXHIBIT 23.3
CONSENT OF ROSEN CONSULTING GROUP
---------------------------------
September 8, 1997
We consent to the incorporation by reference in the Registration Statement of
Bay Apartment Communities, Inc. (the "Company") on Form S-3 (File No. 333-15875)
(the "Registration Statement"), and any registration statement filed pursuant to
Rule 462(b) of the Securities Act of 1933 which relates to the securities
registered under the Registration Statement, of (i) our report dated June 28,
1996, entitled the Apartment Markets in Orange, Santa Clara, Alameda, San
Francisco and San Mateo counties, and an addendum thereto, which report and
addendum were included in the Company's reports on Form 8-K dated July 5, 1996
and January 21, 1997, respectively, and (ii) the addendum thereto included in
the Company's report on Form 8-K to which this consent is an exhibit. We also
consent to being named as an expert in this Prospectus Supplement to the
Registration Statement with respect to demographics and market information.
ROSEN CONSULTING GROUP
By: /s/ Kenneth T. Rosen
----------------------------------
Kenneth T. Rosen
7
<PAGE> 1
Exhibit 99.1
San Francisco Bay Area
Rental Analysis
PRESENTED TO
Bay Apartment Communities
PREPARED BY
Ann Roulac and Company
98 Main Street, Suite 439
Tiburon, CA 94920
415-435-2825
February 1997
<PAGE> 2
Bay Apartment Communities, Inc.
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Table of Contents
Definition of Terms........................................................2
Market Overview............................................................3
Effective Rents............................................................5
Historical Rent Increases..................................................8
Historical Vacancy Rates..................................................10
Index of Exhibits
Exhibit I .........................................County and City Summaries
Exhibit II .............................List of Apartment Properties Surveyed
Exhibit III .................Rental Surveys of Institutional Grade Properties
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Ann Roulac and Company
1
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Bay Apartment Communities, Inc.
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DEFINITION OF TERMS
Effective Rent: The average asking street rent less the value of all
concessions, including without limitation, moving allowances
or discounts. Note: Due to extremely tight market conditions
in the Bay Area, as of the writing of this report, we found
rental concessions to be negligible at this time.
Percent Change: The percent increase or decrease in the rental rate between
the applicable reporting periods.
Vacant Units: The total number of physically unoccupied units in completed
buildings throughout the applicable apartment complex or Bay
Area region.
Vacancy Rate: The percent of physically unoccupied units in completed
buildings throughout the applicable apartment complex or Bay
Area region, calculated by dividing the vacant units by the
total number of units in the applicable apartment complex or
Bay Area region.
Institutional
Quality/Grade: Professionally managed apartment properties of 100 units or
more that are generally newer. However, older apartment
properties that are structurally sound and well positioned
in the applicable Bay Area region are included as well.
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Ann Roulac and Company
2
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Bay Apartment Communities, Inc.
- --------------------------------------------------------------------------------
MARKET OVERVIEW
The following are highlights from our research of the four Bay Area counties as
of January 1997.
ALAMEDA COUNTY OVERVIEW
- Average rental rates from the survey were $1,060 or $1.28/square foot.
- The highest average rents were in Fremont with an average rent of
$1,141 or $1.45/square foot.
- Rent increases for 1996 were 8.87% and were up significantly during
the first half of 1996 increasing 5.93%.
- Union City experienced the largest rent increases in Alameda County ,
which increased 13.13% during 1996.
- Vacancy rates increased from 1.44% at year end 1995 to 1.50% at year
end 1996
SAN FRANCISCO COUNTY OVERVIEW
- Average rental rates from the survey were $1,456 or $2.03/square foot.
- Rental increases for 1996 were 17.14% while rents in San Francisco
increased by 11.18% during the first half of 1996.
- Vacancy rates decreased from 2.30% at year end 1995 to 0.23% at year
end, 1996.
SAN MATEO COUNTY OVERVIEW
- Average rental rates from the survey were $1,345 or $1.68/square foot.
- The highest average rents were in Redwood Shores with an average rent
of $1,672 or $1.92/square foot.
- Rent increases in San Mateo were the largest of the four counties
surveyed at 12.88% for the first half of 1996, and 21.06% at year end
1996.
- Vacancy rates as of year end 1995 were 1.04% and had increased to
1.43% by year end 1996.
- --------------------------------------------------------------------------------
Ann Roulac and Company
3
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Bay Apartment Communities, Inc.
- --------------------------------------------------------------------------------
SANTA CLARA COUNTY OVERVIEW
- Average rental rates from the survey were $1,366 or $1.59/square foot.
- The highest average rents were reported in Mountain View with an
average rent of $1,491 or $1.73/square foot.
- Of the four counties surveyed, Santa Clara reported the largest rent
increases at 16.46% for 1995. Rental increases through the first half
of 1996 were up 12.04% yet by year end the rent increase was 15.87%.
- Vacancy rates as of year end 1995 were 0.36% and have increased
slightly to 0.82%.
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Ann Roulac and Company
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Bay Apartment Communities, Inc.
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EFFECTIVE RENTS
STATUS OF EFFECTIVE RENTS
The following table reflects the weighted average effective rents for
institutional grade apartment properties for the four counties surveyed by Ann
Roulac and Company and outlined below. The weighted averages were calculated
based on the total number of units in each county.
<TABLE>
- ---------------------------------------------------------------------------------------------
RENTAL RATES AS OF JANUARY 1997
- ---------------------------------------------------------------------------------------------
<CAPTION>
RENT RENT PER SQUARE FOOT
------------------------------- ----------------------------
COUNTY MIN MAX WEIGHTED MIN MAX WEIGHTED
AVG AVG
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alameda $1,032 $1,088 $1,060 $1.24 $1.31 $1.28
- ---------------------------------------------------------------------------------------------
San Francisco $1,252 $1,660 $1,456 $1.74 $2.31 $2.03
- ---------------------------------------------------------------------------------------------
San Mateo $1,295 $1,396 $1,345 $1.61 $1.74 $1.68
- ---------------------------------------------------------------------------------------------
Santa Clara $1,307 $1,425 $1,366 $1.52 $1.66 $1.59
- ---------------------------------------------------------------------------------------------
WEIGHTED AVERAGE $1,222 $1,392 $1,307 $1.53 $1.75 $1.65
- ---------------------------------------------------------------------------------------------
</TABLE>
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Ann Roulac and Company
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<PAGE> 7
Bay Apartment Communities, Inc.
- --------------------------------------------------------------------------------
The following table reflects the rental range of the weighted average effective
rents for institutional grade apartment properties for the cities within the
four counties surveyed and outlined below:
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------
EFFECTIVE RENTS AS OF JANUARY 1997
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
RENT RENT PER SQUARE FOOT
---------------------------------- -------------------------------------
COUNTY / CITY / # UNITS MIN MAX WEIGHTED MIN MAX WEIGHTED
AVG AVG
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALAMEDA COUNTY (7,940) $1,032 $1,088 $1,060 $1.24 $1.31 $1.28
Dublin (1,421) 1,038 1,090 1,064 1.18 1.24 1.21
Fremont (2,140) 1,103 1,178 1,141 1.40 1.49 1.45
Hayward (2,023) 916 985 951 1.08 1.16 1.12
Pleasanton (1,804) 1,073 1,095 1,084 1.25 1.28 1.27
Union City (282) 970 995 982 1.38 1.41 1.40
- ----------------------------------------------------------------------------------------------------------------------
SAN FRANCISCO COUNTY (6,563) $1,252 $1,660 $1,456 $1.74 $2.31 $2.03
- ----------------------------------------------------------------------------------------------------------------------
San Francisco (6,563) 1,152 1,660 1,456 1.74 2.31 2.03
- ----------------------------------------------------------------------------------------------------------------------
SAN MATEO COUNTY (5,199) $1,295 $1,396 $1,345 $1.61 $1.74 $1.68
- ----------------------------------------------------------------------------------------------------------------------
Daly City (396) 1,149 1,149 1,149 1.60 1.60 1.60
- ----------------------------------------------------------------------------------------------------------------------
Foster City (2,480) 1,370 1,478 1,424 1.63 1.76 1.70
- ----------------------------------------------------------------------------------------------------------------------
Pacifica (580) 1,028 1,172 1,100 1.40 1.60 1.50
- ----------------------------------------------------------------------------------------------------------------------
Redwood City (452) 1,507 1,620 1,564 1.95 2.10 2.03
- ----------------------------------------------------------------------------------------------------------------------
Redwood Shores (185) 1,574 1,770 1,672 1.81 2.03 1.92
- ----------------------------------------------------------------------------------------------------------------------
San Bruno (606) 1,080 1,105 1,093 1.39 1.42 1.41
- ----------------------------------------------------------------------------------------------------------------------
San Mateo (500) 1,310 1,460 1,385 1.64 1.83 1.74
- ----------------------------------------------------------------------------------------------------------------------
SANTA CLARA COUNTY(12,189) $1,307 $1,425 $1,366 $1.52 $1.66 $1.59
- ----------------------------------------------------------------------------------------------------------------------
Campbell (608) 1,307 1,390 1,349 1.47 1.56 1.52
- ----------------------------------------------------------------------------------------------------------------------
Mountain View (1,190) 1,455 1,526 1,491 1.69 1.77 1.73
- ----------------------------------------------------------------------------------------------------------------------
San Jose (4,252) 1,210 1,433 1,322 1.37 1.62 1.50
- ----------------------------------------------------------------------------------------------------------------------
Santa Clara( 3,097) 1,345 1,416 1,381 1.62 1.70 1.66
- ----------------------------------------------------------------------------------------------------------------------
Sunnyvale (3,042) 1,346 1,393 1,370 1.61 1.67 1.64
- ----------------------------------------------------------------------------------------------------------------------
TOTAL 31,891
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
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Ann Roulac and Company
6
<PAGE> 8
Bay Apartment Communities, Inc.
- --------------------------------------------------------------------------------
RENTAL RATES
The following table reflects the weighted average effective rents for
institutional grade apartment properties for the cities within the four counties
surveyed and outlined below:
<TABLE>
- --------------------------------------------------------------------------------
AVERAGE EFFECTIVE RENTS
- --------------------------------------------------------------------------------
<CAPTION>
COUNTY / CITY 1/1/95 1/1/96 1/1/97
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
ALAMEDA COUNTY $913 $962 $1,060
- --------------------------------------------------------------------------------
Dublin 925 969 1,064
- --------------------------------------------------------------------------------
Fremont 976 1,048 1,141
- --------------------------------------------------------------------------------
Hayward 855 868 951
- --------------------------------------------------------------------------------
Pleasanton 909 974 1,084
- --------------------------------------------------------------------------------
Union City 829 868 982
- --------------------------------------------------------------------------------
SAN FRANCISCO COUNTY $1,149 $1,243 $1,456
- --------------------------------------------------------------------------------
San Francisco 1,149 1,243 1,456
- --------------------------------------------------------------------------------
SAN MATEO COUNTY $1,047 $1,111 $1,345
- --------------------------------------------------------------------------------
Daly City 905 968 1,149
- --------------------------------------------------------------------------------
Foster City 1,057 1,175 1,424
- --------------------------------------------------------------------------------
Pacifica 868 879 1,100
- --------------------------------------------------------------------------------
Redwood City 1,079 1,180 1,564
- --------------------------------------------------------------------------------
Redwood Shores 1,306 1,363 1,672
- --------------------------------------------------------------------------------
San Bruno 889 953 1,093
- --------------------------------------------------------------------------------
San Mateo 978 1,108 1,385
- --------------------------------------------------------------------------------
SANTA CLARA COUNTY $1,006 $1,179 $1,366
- --------------------------------------------------------------------------------
Campbell 869 1,191 1,349
- --------------------------------------------------------------------------------
Mountain View 1,083 1,259 1,491
- --------------------------------------------------------------------------------
San Jose 989 1,156 1,322
- --------------------------------------------------------------------------------
Santa Clara 1,014 1,189 1,416
- --------------------------------------------------------------------------------
Sunnyvale 988 1,168 1,393
- --------------------------------------------------------------------------------
</TABLE>
NOTE: Data through 6/30/95 for Pacifica and San Bruno were not used in
calculating the San Mateo County average due to incomplete information.
- --------------------------------------------------------------------------------
Ann Roulac and Company
7
<PAGE> 9
Bay Apartment Communities, Inc.
- --------------------------------------------------------------------------------
HISTORICAL RENT INCREASES
RENT INCREASES FOR INSTITUTIONAL APARTMENT PROPERTIES
The following table reflects the rent increases for the 100 institutional grade
apartment properties for the four counties surveyed by Ann Roulac and Company on
both a periodic and annualized basis:
<TABLE>
- --------------------------------------------------------------------------------
RENT INCREASES FOR INSTITUTIONAL PROPERTIES
- --------------------------------------------------------------------------------
<CAPTION>
ANNUALIZED PERCENT
INCREASE INCREASE CHANGE INCREASE
- --------------------------------------------------------------------------------
COUNTY / CITY 1/1/96
1994 1995 TO 6/30/96 1996
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alameda 2.00 5.26 5.93 10.19
- --------------------------------------------------------------------------------
San Francisco 8.72 8.12 11.18 17.14
- --------------------------------------------------------------------------------
San Mateo 3.90 5.97 12.88 21.06
- --------------------------------------------------------------------------------
Santa Clara 4.00 16.46 12.04 15.87
- --------------------------------------------------------------------------------
WEIGHTED AVERAGE 3.62 10.99 10.49 16.07
- --------------------------------------------------------------------------------
</TABLE>
Source: Ann Roulac and Company, January 1997
The annualized rental increases were calculated by multiplying the monthly
increase by twelve. The largest average increase occurred during the January
1996 to June 1996 time frame. The rental rate gains through 1996 were most
substantial in the county of San Mateo, with an increase of 21.06%, followed by
San Francisco with an increase of 17.14%, Santa Clara with an increase of
15.87%, and Alameda with an increase of 10.19%.
- --------------------------------------------------------------------------------
Ann Roulac and Company
8
<PAGE> 10
Bay Apartment Communities, Inc.
- --------------------------------------------------------------------------------
The following table summarizes the rent increases for the institutional grade
apartment properties surveyed by Ann Roulac and Company for the counties and
cities outlined below:
<TABLE>
- --------------------------------------------------------------------------------
RENT INCREASES FOR INSTITUTIONAL PROPERTIES
- --------------------------------------------------------------------------------
<CAPTION>
ANNUALIZED
INCREASE INCREASE INCREASE
- --------------------------------------------------------------------------------
COUNTY / CITY
1994 1995 1996
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
ALAMEDA COUNTY 2.00 5.26 10.19
- --------------------------------------------------------------------------------
Dublin 1.08 4.71 9.80
- --------------------------------------------------------------------------------
Fremont -1.22 7.23 8.87
- --------------------------------------------------------------------------------
Hayward 5.78 1.45 9.56
- --------------------------------------------------------------------------------
Pleasanton 3.36 7.10 11.29
- --------------------------------------------------------------------------------
Union City 4.70 4.67 13.13
- --------------------------------------------------------------------------------
SAN FRANCISCO
COUNTY 8.72 8.12 17.14
- --------------------------------------------------------------------------------
San Francisco 8.72 8.12 17.14
- --------------------------------------------------------------------------------
SAN MATEO COUNTY 3.90 5.97 21.06
- --------------------------------------------------------------------------------
Daly City 0.22 7.06 18.70
- --------------------------------------------------------------------------------
Foster City 4.44 10.92 21.19
- --------------------------------------------------------------------------------
Pacifica n/a n/a 13.64
- --------------------------------------------------------------------------------
Redwood City 1.88 9.11 32.54
- --------------------------------------------------------------------------------
Redwood Shores 8.12 4.36 22.67
- --------------------------------------------------------------------------------
San Bruno --- 7.11 14.69
- --------------------------------------------------------------------------------
San Mateo 3.76 12.98 25.00
- --------------------------------------------------------------------------------
SANTA CLARA COUNTY 4.00 16.46 15.87
- --------------------------------------------------------------------------------
Campbell 4.00 13.46 13.27
- --------------------------------------------------------------------------------
Mountain View 0.02 15.59 18.43
- --------------------------------------------------------------------------------
San Jose 0.00 16.14 14.36
- --------------------------------------------------------------------------------
Santa Clara 5.40 16.65 19.09
- --------------------------------------------------------------------------------
Sunnyvale 5.60 16.33 19.26
- --------------------------------------------------------------------------------
</TABLE>
Source: Ann Roulac and Company, January 1997
NOTE: The annualized rental increases were calculated by multiplying the
monthly increase by twelve.
- --------------------------------------------------------------------------------
Ann Roulac and Company
9
<PAGE> 11
Bay Apartment Communities, Inc.
- --------------------------------------------------------------------------------
HISTORICAL VACANCY RATES
The following table outlines the annual average vacancy rates for eight Bay Area
counties from the database of 1,280 apartment properties of 40 units or more in
size in the San Francisco Bay Area reported by RealFacts in their December 1996
report. The apartment properties surveyed are representative of the market as a
whole, and include both older and newer properties.
<TABLE>
- --------------------------------------------------------------------------------
HISTORICAL VACANCY RATES FROM REALFACTS
- --------------------------------------------------------------------------------
<CAPTION>
BAY AREA 1992 1993 1994 1995 1996
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alameda 4.57 4.65 4.70 3.54 3.00
- --------------------------------------------------------------------------------
Contra Costa 4.48 5.69 5.24 5.09 4.30
- --------------------------------------------------------------------------------
Marin 3.04 3.79 2.53 2.56 4.50
- --------------------------------------------------------------------------------
San Francisco 5.50 4.55 4.00 2.35 2.40
- --------------------------------------------------------------------------------
San Mateo 3.13 3.48 3.17 1.94 2.10
- --------------------------------------------------------------------------------
Santa Clara 3.66 3.82 3.48 1.47 2.30
- --------------------------------------------------------------------------------
Solano 4.13 5.18 5.71 5.02 6.20
- --------------------------------------------------------------------------------
Sonoma 3.29 4.33 4.93 3.09 3.00
- --------------------------------------------------------------------------------
Weighted Average 3.98 4.43 4.16 2.87 3.00
- --------------------------------------------------------------------------------
</TABLE>
Source: RealFacts, December 1996
In order to compare the performance of institutional quality apartment
properties to the market as a whole, we have analyzed the vacancy rates for
institutional grade apartment properties in the four surveyed counties. The
results indicate that the vacancy rates for institutional properties have
decreased by approximately 0.15% in the last year from 1.14% in January 1996 to
0.99% in January 1997, and are lower than the apartment database surveyed by
RealFacts.
- --------------------------------------------------------------------------------
Ann Roulac and Company
10
<PAGE> 12
Bay Apartment Communities, Inc.
- --------------------------------------------------------------------------------
The following table reflects the vacancy rates for institutional grade apartment
properties for the four counties surveyed by Ann Roulac and Company:
<TABLE>
- --------------------------------------------------------------------------------
VACANCY RATES FOR INSTITUTIONAL PROPERTIES
- --------------------------------------------------------------------------------
<CAPTION>
COUNTY 1/1/95 1/1/96 1/1/97
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Alameda 3.34 1.44 1.50
- --------------------------------------------------------------------------------
San Francisco 4.13 2.30 0.23
- --------------------------------------------------------------------------------
San Mateo 3.67 1.04 1.43
- --------------------------------------------------------------------------------
Santa Clara 3.80 0.36 0.82
- --------------------------------------------------------------------------------
AVERAGE 3.66 1.14 0.99
- --------------------------------------------------------------------------------
</TABLE>
Source: Ann Roulac and Company, January 1997
- --------------------------------------------------------------------------------
Ann Roulac and Company
11
<PAGE> 13
Bay Apartment Communities, Inc.
- --------------------------------------------------------------------------------
VACANCY RATES
Apartment vacancy rates for the institutional grade apartment properties
surveyed by Ann Roulac and Company in the cities within the four surveyed
Counties are reflected in the following table:
<TABLE>
- --------------------------------------------------------------------------------
VACANCY RATES FOR INSTITUTIONAL PROPERTIES
- --------------------------------------------------------------------------------
<CAPTION>
COUNTY / CITY 1/1/95 1/1/96 1/1/97
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
ALAMEDA COUNTY 3.34% 1.44% 1.50%
- --------------------------------------------------------------------------------
Dublin 1.34% 0.35% 0.91%
- --------------------------------------------------------------------------------
Fremont 5.53% 1.98% 1.62%
- --------------------------------------------------------------------------------
Hayward 3.51% 2.13% 1.48%
- --------------------------------------------------------------------------------
Pleasanton 2.44% 1.05% 1.44%
- --------------------------------------------------------------------------------
Union City 1.42% 0.35% 3.90%
- --------------------------------------------------------------------------------
SAN FRANCISCO COUNTY 4.13% 2.30% 0.23%
- --------------------------------------------------------------------------------
San Francisco 4.13% 2.30% 0.23%
- --------------------------------------------------------------------------------
SAN MATEO COUNTY 3.67% 1.04% 1.43%
- --------------------------------------------------------------------------------
Daly City 8.84% 0.00% 0.25%
- --------------------------------------------------------------------------------
Foster City 2.57% 1.49% 1.85%
- --------------------------------------------------------------------------------
Pacifica 1.11% 0.00% 0.15%
- --------------------------------------------------------------------------------
Redwood City 3.98% 0.44% 3.32%
- --------------------------------------------------------------------------------
Redwood Shores 2.70% 0.00% 2.70%
- --------------------------------------------------------------------------------
San Bruno 4.29% 0.96% 0.00%
- --------------------------------------------------------------------------------
San Mateo 5.73% 1.40% 0.80%
- --------------------------------------------------------------------------------
SANTA CLARA COUNTY 3.80% 0.36% 0.82%
- --------------------------------------------------------------------------------
Campbell 5.00% 0.49% 1.48%
- --------------------------------------------------------------------------------
Mountain View 3.44% 0.00% 0.59%
- --------------------------------------------------------------------------------
San Jose 4.93% 0.56% 0.45%
- --------------------------------------------------------------------------------
Santa Clara 3.91% 0.36% 1.20%
- --------------------------------------------------------------------------------
Sunnyvale 2.89% 0.20% 0.92%
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Ann Roulac and Company
12
<PAGE> 14
Bay Apartment Communities, Inc.
- --------------------------------------------------------------------------------
Exhibit I
County and City Summaries
- --------------------------------------------------------------------------------
Ann Roulac and Company
<PAGE> 15
Bay Apartment Communities, Inc.
- --------------------------------------------------------------------------------
Exhibit II
List of Apartment Properties Surveyed
- --------------------------------------------------------------------------------
Ann Roulac and Company
<PAGE> 16
Bay Apartment Communities, Inc.
- --------------------------------------------------------------------------------
Exhibit II
ALAMEDA COUNTY
DUBLIN Amador Lake
Amador Oaks
Cotton Wood
Dublin Meadows
Parkwood
FREMONT Alicante
Creekside Village
Hampton Place
Mission Wells
Red Hawk
Sun Pointe Village
Pathfinder Village
Sun Pointe Village
Watermark Place
Willow Creek
HAYWARD Barrington Hills
Clarendon Hills
Hillcrest
Mission Heights
Summerwood
Waterford
Wimbledon Woods
PLEASANTON Civic Square
Hacienda Commons
Hacienda Gardens
Springhouse
Stoneridge
UNION CITY Veranda
- --------------------------------------------------------------------------------
Ann Roulac and Company
<PAGE> 17
Bay Apartment Communities, Inc.
- --------------------------------------------------------------------------------
SAN FRANCISCO COUNTY
2000 Post
Bayside Village
City Heights
Filmore Center
Fox Plaza
Golden Gateway Center
Oakwood
Post Street Towers
Portrero Court
RinconTowers
South Beach Marina
St. Francis Place
South Beach Marina
Village Square
- --------------------------------------------------------------------------------
Ann Roulac and Company
<PAGE> 18
Bay Apartment Communities, Inc.
- --------------------------------------------------------------------------------
SAN MATEO COUNTY
DALY CITY Seramonte Ridge
FOSTER CITY Beach Cove
Foster's Landing
Franciscan, The
Harbor Cove
Lantern Cove
Sand Cove
Schooner Bay
Shadow Cove
PACIFICA Fairmont, The
Lands End
Sea Ridge
REDWOOD CITY Harborside
Redwood Shores
REDWOOD SHORES Indian Creek
SAN BRUNO Evergreen Ridge
Skycrest
Treetops
SAN MATEO Creekside
Lakeshore Landing
- --------------------------------------------------------------------------------
Ann Roulac and Company
<PAGE> 19
Bay Apartment Communities, Inc.
- --------------------------------------------------------------------------------
SANTA CLARA COUNTY
CAMPBELL Canyon Creek
Cedar Glen
MOUNTAIN VIEW Brookside Park
Greendale
Heatherstone
Park Place
South Park
Villa Mariposa
SAN JOSE Bramblewood
Carriage Square
Colonnade
Countrybrook
E'lan at River Oaks
Ellmar Oaks
Fairway Glen
Fountains at River Oaks
Foxchase
Greentree
Kimberly Woods
The Redwoods
San Marino
Willow Lake
SANTA CLARA Alderwood
Bella Vista
Boardwalk Lakeside
Los Padres Village
Mansion Grove
Marina Cove
Marina Playa
Park Central
Timberleaf
- --------------------------------------------------------------------------------
Ann Roulac and Company
<PAGE> 20
Bay Apartment Communities, Inc.
- --------------------------------------------------------------------------------
SUNNYVALE Briarwood
Bristol Commons
The Cascades
The Grove
Kensington Place
Lincoln Green
Macara Gardents
The Meadows
Mission Pointe
Parkside Commons
Shadowbrook
Summerhill Park
Trellis Square
- --------------------------------------------------------------------------------
Ann Roulac and Company
<PAGE> 21
Bay Apartment Communities, Inc.
- --------------------------------------------------------------------------------
Exhibit III
Rental Surveys
- --------------------------------------------------------------------------------
Ann Roulac and Company
<PAGE> 22
Bay Apartment Communities, Inc.
- --------------------------------------------------------------------------------
Exhibit III
Alameda County
Rental Surveys
- --------------------------------------------------------------------------------
Ann Roulac and Company
<PAGE> 23
Bay Apartment Communities, Inc.
- --------------------------------------------------------------------------------
Exhibit III
San Francisco County
Rental Surveys
- --------------------------------------------------------------------------------
Ann Roulac and Company
<PAGE> 24
Bay Apartment Communities, Inc.
- --------------------------------------------------------------------------------
Exhibit III
San Mateo County
Rental Surveys
- --------------------------------------------------------------------------------
Ann Roulac and Company
<PAGE> 25
Bay Apartment Communities, Inc.
- --------------------------------------------------------------------------------
Exhibit III
Santa Clara County
Rental Surveys
- --------------------------------------------------------------------------------
Ann Roulac and Company
<PAGE> 1
Exhibit 99.2
Addendum to Report Dated June 28, 1996
<TABLE>
- --------------------------------------------------------------------------------------------------------------
PRIMARY MARKETS POPULATION
<CAPTION>
Comp Ann Growth Rate
------------------------
County 1980 1990 1995 2000 1980-1990 1990-2000
------ ---- ---- ---- ---- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Santa Clara 1,295,073 1,497,577 1,594,900 1,711,988 1.5% 1.3%
Alameda 1,105,379 1,276,702 1,349,600 1,403,233 1.5% 1.1%
San Francisco 678,974 723,959 750,984 756,561 0.6% 0.7%
San Mateo 587,329 649,623 681,200 714,625 1.0% 1.0%
Total 3,666,755 4,147,861 4,376,684 4,586,406 1.2% 1.1%
Absolute Change 481,106 479,739
% Change 13.1% 11.6%
Sources: Historical-U.S. Census Bureau, Calculations & Forecasts-Rosen Consulting Group
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
- --------------------------------------------------------------------------------------------------------------
MEAN HOUSEHOLD INCOME
BAY AREA VS. U.S.
<CAPTION>
1995e 1996e 1996 1997f
----- ----- ---- -----
<S> <C> <C> <C> <C>
Primary Markets n.a. 87,354 88,097 92,159
San Francisco Bay Area 80,432 84,040 84,185 88,524
U.S. 44,589 46,027 46,671 48,403
- --------------------------------------------------------------------------------------------------------------
Sources: historical data U.S. Census Bureau, forecasts and
calculations Rosen Consulting Group
</TABLE>
Rosen Consulting Group 1
<PAGE> 2
<TABLE>
- --------------------------------------------------------------------------------
LIMITED SUPPLY
MULTIFAMILY PERMITS ISSUED
NINE-COUNTY BAY AREA
<CAPTION>
Year Permits, Units
---- --------------
<S> <C>
1986 25,197
1987 18,452
1988 12,499
1989 11,924
1990 8,596
1991 6,738
1992 4,265
1993 4,158
1994 4,521
1995 4,098
1996 7,062
1997f 7,999
Sources: Historical data-U.S. Census
Bureau, 1996e-RCG.
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
- --------------------------------------------------------------------------------
PRIMARY MARKETS MULTIFAMILY
PERMITS
<CAPTION>
Year Multifamily Permits
---- -------------------
<S> <C>
80 6,915
81 4,810
82 4,639
83 7,540
84 9,366
85 12,031
86 14,548
87 13,391
88 8,224
89 7,723
90 5,404
91 4,750
92 3,171
93 3,206
94 4,158
95 2,798
96 5,743
97f 6,571
Sources: Historical-U.S. Census Bureau;
1996e-Rosen Consulting Group
- --------------------------------------------------------------------------------
</TABLE>
Rosen Consulting Group 2
<PAGE> 3
<TABLE>
- --------------------------------------------------------------------------------
RENTAL TENURE
PERCENTAGE OF HOUSEHOLDS WHICH RENT
<CAPTION>
1990
----
<S> <C>
Primary Markets 47%
9-County Bay Area 44%
U.S. 36%
Sources: 1990 Census, calculations Rosen Consulting Group
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
- --------------------------------------------------------------------------------
LIMITED HOME AFFORDABILITY
PERCENTAGE OF HOUSEHOLDS ABLE TO AFFORD
THE MEDIAN-PRICED HOME
<CAPTION>
1996
----
<S> <C>
Primary Markets 42%
9-County Bay Area 38%
U.S. 55%
Sources: U.S. Census Bureau, California Association of Realtors,
Rosen Consulting Group
- --------------------------------------------------------------------------------
</TABLE>
Rosen Consulting Group 3
<PAGE> 4
<TABLE>
Existing Median Home Price
<CAPTION>
MSA 1990 1991 1992 1993 1994 1995 Upd. 9/96 1996 1997f
- --- ---- ---- ---- ---- ---- ---- --------- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Oakland
Price 259,000 262,420 259,250 256,200 255,600 254,400 263,050 265,258 277,051
Stock 534.7 538.7 544.3 549.0 554.9 560.3 566.3 566.2 573.1
San Francisco
Price 259,000 262,420 259,250 256,200 255,600 254,400 263,813 265,258 276,134
Stock 340.5 341.5 342.2 342.9 343.9 345.1 346.1 346.2 347.4
San Jose
Price 268,890 256,640 248,260 246,510 254,390 253,372 265,534 274,732 303,853
Stock 353.6 355.3 357.1 358.9 361.0 363.2 366.9 367.2 371.4
Santa Rosa
Price 201,400 208,776 218,094 214,284 212,170 214,749 215,823 202,944 204,367
Stock 122.1 124.1 125.9 127.6 129.8 131.5 133.1 133.0 134.7
Vallejo-Fairfield-Napa
Price 179,178 185,740 194,030 190,640 188,760 192,743 188,695 183,106 182,556
Stock 120.9 122.7 124.7 126.4 128.2 129.5 131.1 131.0 132.4
Total Bay Area-3 MSA 261,846 260,758 256,095 253,420 255,253 254,106 263,969 267,977 284,510
Total Bay Area-5 MSA 250,041 250,196 247,713 244,828 245,953 245,527 253,424 255,171 268,927
Note: Total Bay Area is a weighted average calculation based on single family
stock for each of three or five metropolitan areas: Oakland (Alameda,
Contra Costa Counties); San Francisco (Marin, SF, San Mateo Counties); San
Jose (Santa Clara County); Santa Rosa (Sonoma County);
Vallejo-Fairfield-Napa (Napa, Solano Counties)
Sources: U.S. Census Bureau, National Association of Realtors,
Rosen Consulting Group
</TABLE>
