<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): APRIL 18, 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 5. OTHER EVENTS.
PROPERTY ACQUISITIONS.
From January 3, 1997 through April 18, 1997, Bay Apartment Communities,
Inc. (the "Company") acquired six additional properties (consisting of four
apartment home communities and two land sites) for an aggregate purchase price
of approximately $73.81 million. As of April 18, 1997 the Company's portfolio
consisted of 38 apartment home communities and 3 communities under development.
The properties acquired from January 3, 1997 through April 18, 1997 are
described below. Except as noted 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 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.
Rancho Penasquitos Racquet Club Apartments. On January 3, 1997, the
Company purchased a 176 apartment home community located in San Diego,
California ("Rancho Penasquitos") from First Allmerica Life Insurance Company
for approximately $10.8 million. The Company intends to repair the community's
roofs, refurbish its stucco exteriors, construct approximately 100 enclosed
carports, renovate the community's leasing office and upgrade its landscaping
and site drainage. In addition, the Company intends to add air conditioning
units and upgrade the bathroom lighting in all of the community's apartment
homes, install new kitchen appliances in approximately half of the apartment
homes and install washers and dryers in the approximately one-third of the
apartment homes that do not currently have them.
The Village Apartments. On March 13, 1997, the Company purchased a 209
apartment home community located in West Covina, California ("The Village
Apartments") from Tara Apartments, Ltd. for approximately $9.73 million. The
Company intends to repair water intrusion to the community's roofs, wood
exteriors, decks and patios, repaint its wood exteriors, improve the interiors
of the community's apartment homes, renovate the leasing office and recreation
facilities, upgrade the landscaping and install security gates.
Banbury Cross Apartments. On April 1, 1997, the Company purchased a 400
apartment home community located in Huntington Beach, California ("Banbury
Cross") from Hambly Company N.V. for approximately $28.0 million. The Company
intends to replace the community's roofs and roof drainage, repaint the
community's interiors and exterior, repair second floor decks, replace window
trims, make structural seismic upgrades, create 230 new garages with automatic
garage door openers through the conversion of existing carports, repair and
repaint all kitchen and bath cabinets, and install new floor coverings,
electrical fixtures and switch plates, appliances, countertops and plumbing in a
number of units. Other improvements planned at the community include an upgraded
gating system, a new fitness center, an expanded leasing facility, improvements
to the pool areas and new landscaping and drainage.
2
<PAGE> 3
Cardiff Gardens. On April 18, 1997, the Company purchased a 252
apartment home community located in Campbell, California ("Cardiff Gardens")
from Stanford H. Atwood, Jr., Walter Donald Head, Trustee of The Walter Donald
Head Revocable Living Trust, and Walter Donald Head, Trustee of The David Drake
Hunt Living Trust dated 10/12/93, for approximately $18.9 million, which
includes approximately $12.9 million of seller financing. The Company plans to
reposition the community by installing new roofs and siding, making walkway
repairs, repainting the exterior and adding private patios and balconies. In
addition, the Company plans interior upgrades, such as renovating kitchens and
bathrooms, installing new appliances and carpets and painting existing
cabinetry. The Company also plans to add fitness and business centers, remodel
existing carports, upgrade the entry and leasing office areas and make extensive
courtyard landscape renovations.
The Alameda Land Sites. The Company purchased a 7.44 acre land site on
February 3, 1997 and a 1.43 acre adjacent land site on April 4, 1997. The two
land sites (together, "The Alameda Land Sites") are both located on The Alameda
in downtown San Jose, California, and were purchased from the S&P Company and J.
Lohr Properties, respectively, for an aggregate purchase price of approximately
$6.38 million. The Company plans to develop an apartment home community, to be
known as Paseo Alameda, with approximately 305 apartment homes on The Alameda
Land Sites.
PROPOSED ACQUISITIONS.
Villa Serena Acquisition Community. On April 18, 1997, the Company
agreed to purchase a 301 apartment home community located in Rancho Santa
Margarita, California from Tijeras Partnership. The purchase price for this
community is anticipated to be approximately $17.9 million. This acquisition is
expected to close in April, 1997.
San Diego Acquisition Community. On March 24, 1997, the Company agreed
to purchase a 200 apartment home community located in San Diego, California. The
purchase price for this community is anticipated to be approximately $13.8
million. This acquisition is expected to close in May, 1997.
Because the purchases of the proposed acquisition communities are still
pending, there can be no assurance that the Company will consummate the
acquisition of either or both of the proposed acquisition communities or, if
acquired, that they will be purchased on the terms currently contemplated.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Pro Forma Financial Statements
(b) Financial Statements under Rule 3-14 of Regulation S-X
3
<PAGE> 4
(c) Exhibits
23.1 Consent of Coopers & Lybrand L.L.P., Independent Accountants.
4
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be filed on its behalf by the
undersigned thereunto duly authorized.
BAY APARTMENT COMMUNITIES, INC.
Dated: April ___, 1997 By:
-----------------------------------------
Gilbert M. Meyer
Chairman of the Board and President
5
<PAGE> 6
BAY APARTMENT COMMUNITIES, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1996
(In thousands, except share and per share data)
(Unaudited)
<TABLE>
<CAPTION>
1997 Other
Historical Acquisitions Transactions Pro Forma
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Real Estate Assets:
Land $152,277 $15,150 A - $167,427
Buildings and Improvements 511,583 48,276 A - 559,859
Furniture, fixtures & equipment 35,542 3,058 A - 38,600
------------- ------------- ------------- -------------
699,402 66,484 - 765,886
Less Accumulated Depreciation (52,554) 0 - (52,554)
------------- ------------- ------------- -------------
Operating Real Estate Assets 646,848 66,484 - 713,332
Construction in progress 50,945 0 - 50,945
------------- ------------- ------------- -------------
697,793 66,484 - 764,277
Cash & cash equivalents 920 0 D 920
Restricted cash 960 0 - 960
Other assets, net 12,236 0 - 12,236
------------- ------------- ------------- -------------
Total Assets $711,909 $66,484 0 $778,393
============= ============= ============= =============
Liabilities and Shareholders' Equity
Notes payable 273,688 66,182 B (108,110) E 231,760
Accounts payable and accrued expenses 5,450 0 - 5,450
Dividends payable 8,939 0 - 8,939
Other liabilities 4,553 302 C - 4,855
------------- ------------- ------------- -------------
Total Liabilities 292,630 66,484 (108,110) 251,004
Minority Interest 7,002 - - 7,002
Preferred stock 27 0 - 27
Common stock 190 0 31 F 221
Paid in capital 435,723 0 108,079 G 543,802
Dividends in excess of accumulated earnings (23,663) 0 - (23,663)
------------- ------------- ------------- -------------
Total shareholders' equity 412,277 0 108,110 520,387
------------- ------------- ------------- -------------
Total liabilities and shareholders' equity $711,909 $66,484 $0 $778,393
============= ============= ============= =============
</TABLE>
F-1
<PAGE> 7
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 Other
Historical Acquisitions Transactions Pro Forma
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues
Rental $80,377 $9,084 H - $89,461
Other 2,216 183 H - 2,399
------------- ------------- ------------- -------------
82,593 9,267 - 91,860
------------- ------------- ------------- -------------
Expenses
Property operation 18,924 2,947 I - 21,871
Property taxes 6,353 841 I - 7,194
General and Administrative 3,895 389 I - 4,284
Interest and Financing 14,276 4,666 J (3,474) L 15,468
(4,148) M (4,148)
Depreciation and Amortization 18,689 2,046 K - 20,735
------------- ------------- ------------- -------------
62,137 10,889 (7,622) 65,404
------------- ------------- ------------- -------------
Income before minority interest and 20,456 (1,622) 7,622 26,456
extraordinary item
Minority Interest (319) - - (319)
------------- ------------- ------------- -------------
Income before extraordinary item 20,137 (1,622) 7,622 26,137
Extraordinary Item (511) - - (511)
------------- ------------- ------------- -------------
Net Income 19,626 (1,622) 7,622 25,626
Preferred Dividend Requirement (4,264) - - (4,264)
------------- ------------- ------------- -------------
Earnings Available to common shares $15,362 ($1,622) $7,622 $21,362
============= ============= ============= =============
Weighted average shares outstanding 15,126,242 18,188,242
Per share $1.02 $1.17
</TABLE>
F-2
<PAGE> 8
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 four apartment communities during
the period from January 3, 1997 to April 18, 1997 (the "1997 Acquisition
Communities"), an underwritten public offering in January 1997 (the "January
Offering"), the offering to institutional investors in April 1997 (the "April
Offering"), and related paydowns on the $200 million unsecured line of credit
(the "Credit Facility"), had occurred on December 31, 1996. 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 $9.73 million acquisition of the Village
Apartments, the $28 million acquisition of the Banbury Cross Apartments,
the $10.8 acquisition of the Rancho Penasquitos Racquet Club, and the
$17.9 million probable acquisition of Villa Serena 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 - There is no change in cash which is attributable to the $49.27 million in
net proceeds from the January Offering and the $58.84 million in net
proceeds from the April Offering which were used to paydown the Credit
Facility by $108.11 million.
E - Decrease in notes payable is attributable to the paydown of the Credit
Facility.
F - Increase in common stock is attributable to the issuance of shares in the
January and April Offerings.
G - Additional paid in capital is attributable to the net proceeds from the
January and April Offerings.
H - Additional rental and other revenue is attributable to the 1997
Acquisition Communities.
F-3
<PAGE> 9
I - Additional property operating expense, property tax expense, and general
and administrative expense are attributable to the 1997 Acquisition
Communities.
J - 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.
K - 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.
L - Decrease in Interest and Financing is attributable to the net proceeds
from the January Offering used to paydown the Credit Facility.
M - Decrease in Interest and Financing is attributable to the net proceeds
from the April Offering used to paydown the Credit Facility.
F-4
<PAGE> 10
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 Rancho Penasquitos Racquet Club,
San Diego, 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 Rancho Penasquitos Racquet Club, San Diego, California, for the year ended
December 31, 1996, in conformity with generally accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
San Francisco, California
February 5, 1997
F-5
<PAGE> 11
RANCHO PENASQUITOS RACQUET CLUB
HISTORICAL SUMMARY OF REVENUES AND
DIRECT OPERATING EXPENSES
for the year ended December 31, 1996
-------
<TABLE>
<S> <C>
Revenues:
Rental income $ 1,423,223
Other 7,337
---------------
1,430,560
---------------
Direct operating expenses:
On-site management 162,379
Real property tax 88,369
Utilities 103,864
Repairs and maintenance 158,919
Other 102,324
---------------
615,855
Revenues in excess of direct ---------------
operating expenses $ 814,705
===============
</TABLE>
The accompanying note is an integral part of this
Historical Summary.
F-6
<PAGE> 12
RANCHO PENASQUITOS RACQUET CLUB
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
Rancho Penasquitos Racquet Club, San Diego, California with 176 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-7
<PAGE> 13
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 Village Apartments, West
Covina, 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 Village Apartments, West Covina, California, for the year ended
December 31, 1996, in conformity with generally accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
San Francisco, California
April 7, 1997
F-8
<PAGE> 14
THE VILLAGE APARTMENTS
HISTORICAL SUMMARY OF REVENUES AND
DIRECT OPERATING EXPENSES
for the year ended December 31, 1996
-------
<TABLE>
<S> <C>
Revenues:
Rental income $1,607,212
Other 51,293
----------
1,658,505
----------
Direct operating expenses:
On-site management and administration 173,420
Real property tax 68,855
Utilities 147,018
Repairs and maintenance 253,774
Other 45,763
----------
688,830
Revenues in excess of direct ----------
operating expenses $ 969,675
==========
</TABLE>
The accompanying note is an integral
part of this Historical Summary.
F-9
<PAGE> 15
THE VILLAGE 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 Village Apartments, an apartment community, located in West Covina,
California with 209 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-10
<PAGE> 16
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 Banbury Cross Apartments,
Huntington Beach, 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 Banbury Cross Apartments, Huntington Beach, California, for the year ended
December 31, 1996, in conformity with generally accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
San Francisco, California
January 3, 1997
F-11
<PAGE> 17
BANBURY CROSS APARTMENTS
HISTORICAL SUMMARY OF REVENUES AND
DIRECT OPERATING EXPENSES
for the year ended December 31, 1996
-------
<TABLE>
<S> <C>
Revenues:
Rental income $3,380,680
Other 121,537
----------
3,502,217
----------
Direct operating expenses:
On-site management and administration 359,105
Real property tax 230,814
Utilities 124,785
Repairs and maintenance 586,064
Landscaping 96,655
Other 91,594
----------
1,489,017
Revenues in excess of direct ----------
operating expenses $2,013,200
==========
</TABLE>
The accompanying note is an integral
part of this Historical Summary.
F-12
<PAGE> 18
BANBURY CROSS 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
Banbury Cross Apartments, an apartment community, located in Huntington
Beach, California with 400 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-13
<PAGE> 19
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 Villa Serena Apartments, Rancho
Santa Margarita, 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 Villa Serena Apartments, Rancho Santa Margarita, California, for the year
ended December 31, 1996, in conformity with generally accepted accounting
principles.
/s/ Coopers & Lybrand L.L.P.
San Francisco, California
March 14, 1997
F-14
<PAGE> 20
VILLA SERENA APARTMENTS
HISTORICAL SUMMARY OF REVENUES AND
DIRECT OPERATING EXPENSES
for the year ended December 31, 1996
-------
<TABLE>
<S> <C>
Revenues:
Rental income $ 2,673,293
Other 3,082
---------------
2,676,375
Direct operating expenses:
On-site management and administration 198,084
Real property tax 453,377
Utilities 193,314
Repairs and maintenance 389,811
Advertising 69,086
Insurance 80,609
---------------
1,384,281
---------------
Revenues in excess of direct
operating expenses $ 1,292,094
===============
</TABLE>
The accompanying note is an integral
part of this Historical Summary.
F-15
<PAGE> 21
VILLA SERENA 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
Villa Serena Apartments, an apartment community, located in Rancho Santa
Margarita, California with 301 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-16
<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 February 5, 1997, on our
audit of the Historical Summary of Revenues and Direct Operating Expenses of
Rancho Penasquitos Racquet Club for the year ended December 31, 1996, of our
report dated April 7, 1997, on our audit of the Historical Summary of Revenues
and Direct Operating Expenses of The Village Apartments for the year ended
December 31, 1996, of our report dated January 3, 1997, on our audit of the
Historical Summary of Revenues and Direct Operating Expenses of Banbury Cross
Apartments for the year ended December 31, 1996, and of our report dated March
14, 1997, on our audit of the Historical Summary of Revenues and Direct
Operating Expenses of Villa Serena Apartments for the year ended December 31,
1996, which reports are included in this Current Report on Form 8-K.
COOPERS & LYBRAND L.L.P.
San Francisco, California
April 18, 1997
