UNITED STATES 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 March 31, 1998
OR
|_| Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _________ to _________
Commission File Number 1-12928
Agree Realty Corporation
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 38-3148187
- -----------------------------------------------------------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
31850 Northwestern Highway, Farmington Hills, Michigan 48334
- -----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, included area code: (248) 737-4190
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 No
|X| |_|
4,346,313 Shares of Common Stock, $.0001 par value, were
outstanding as of May 12, 1998
<PAGE>
Agree Realty Corporation
Form 10-Q
Index
- -----------------------------------------------------------------------------
Part I: Financial Information Page
Item 1. Interim Consolidated Financial Statements 3
Consolidated Balance Sheets as of March 31, 1998 and
December 31, 1997. 4-5
Consolidated Statements of Operations for the three months
ended March 31, 1998 and 1997. 6
Consolidated Statement of Stockholders' Equity for the
three months ended March 31, 1998. 7
Consolidated Statements of Cash Flows for the three months
ended March 31, 1998 and 1997. 8
Notes to Consolidated Financial Statements 9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations. 10-15
Part II: Other Information
Item 1. Legal Proceedings 16
Item 2. Changes in Securities 16
Item 3. Defaults Upon Senior Securities 16
Item 4. Submission of Matters to a Vote of Security Holders 16
Item 5. Other Information 16
Item 6. Exhibits and Reports on Form 8-K 16
Signatures 17
2
<PAGE>
Agree Realty Corporation
Part I: Financial Information
- -----------------------------------------------------------------------------
ITEM 1. INTERIM CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE>
Agree Realty Corporation
Consolidated Balance Sheets (Unaudited)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Real Estate Investments
Land $ 33,197,481 $ 29,952,532
Buildings 112,518,295 112,307,266
Property under development 1,394,427 488,651
------------- -------------
147,110,203 142,748,449
Less accumulated depreciation (20,748,939) (20,043,235)
------------- -------------
Net Real Estate Investments 126,361,264 122,705,214
Cash and Cash Equivalents 1,165,103 1,785,968
Accounts Receivable - Tenants 359,457 473,918
Restricted Asset - Cash Held in Escrow 293,308 276,564
Investments In and Advances To Unconsolidated Entities 1,662,269 1,810,241
Unamortized Deferred Expenses
Financing costs 2,032,937 2,133,426
Leasing costs 226,072 236,151
Other Assets 1,295,821 1,070,022
------------- -------------
$ 133,396,231 $ 130,491,504
============= =============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
4
<PAGE>
Agree Realty Corporation
Consolidated Balance Sheets (Unaudited)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
- -------------------------------------------------------------------------------------
<S> <C> <C>
Liabilities and Stockholders' Equity
Mortgages Payable $ 50,865,529 $ 50,954,026
Construction Loans 6,487,058 5,575,091
Note Payable 11,673,944 8,641,016
Dividends and Distributions Payable 2,292,765 2,284,792
Accrued Interest Payable 281,975 248,742
Accounts Payable
Operating 409,494 602,862
Capital expenditures 883,988 1,516,379
Tenant Deposits 52,907 51,240
------------- -------------
Total Liabilities 72,947,660 69,874,148
------------- -------------
Minority Interest 5,584,270 5,651,347
------------- -------------
Stockholders' Equity
Common stock, $.0001 par value, 20,000,000
shares authorized, 4,346,313 and 4,328,980
shares issued and outstanding 435 433
Additional paid-in capital 62,873,987 62,503,487
Deficit (8,010,121) (7,537,911)
------------- -------------
Total Stockholders' Equity 54,864,301 54,966,009
------------- -------------
$ 133,396,231 $ 130,491,504
============= =============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
5
<PAGE>
Agree Realty Corporation
Consolidated Statements of Operations (Unaudited)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
March 31, 1998 March 31, 1997
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Revenues
Rental income $ 4,170,541 $ 4,029,153
Operating cost reimbursement 524,922 499,347
Management fees and other 24,257 26,150
----------- -----------
Total Revenues 4,719,720 4,554,650
----------- -----------
Operating Expenses
Real estate taxes 360,625 308,630
Property operating expenses 274,969 337,544
Land lease payments 141,921 111,500
General and administrative 277,996 295,742
Depreciation and amortization 726,706 693,406
----------- -----------
Total Operating Expenses 1,782,217 1,746,822
----------- -----------
Income From Operations 2,937,503 2,807,828
----------- -----------
Other Income (Expense)
Interest expense, net (1,240,673) (1,676,937)
Development fee income 59,647 --
Equity in net income (loss) of unconsolidated entities (2,999) 6,813
----------- -----------
Total Other Expense (1,184,025) (1,670,124)
----------- -----------
Income Before Minority Interest 1,753,478 1,137,704
Minority Interest 226,384 218,855
----------- -----------
Net Income $ 1,527,094 $ 918,849
=========== ===========
Earnings Per Share $ .35 $ .34
=========== ===========
Weighted Average Number of
Common Shares Outstanding 4,346,313 2,678,430
=========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
6
<PAGE>
Agree Realty Corporation
Consolidated Statement of Stockholders' Equity (Unaudited)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common Stock Additional
------------------------ Paid-In
Shares Amount Capital Deficit
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance, January 1, 1998 4,328,980 $ 433 $ 62,503,487 $ (7,537,911)
Issuance of shares under the Stock Incentive Plan 19,033 2 405,828 --
Shares redeemed under the Stock Incentive Plan (1,700) -- (35,328) --
Dividends declared for the period January 1, 1998
to March 31, 1998 -- -- -- (1,999,304)
Net income for the period January 1, 1998 to
March 31, 1998 -- -- -- 1,527,094
--------- ------ ------------ ------------
Balance, March 31, 1998 4,346,313 $ 435 $ 62,873,987 $ (8,010,121)
========= ====== ============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
7
<PAGE>
Agree Realty Corporation
Consolidated Statements of Cash Flows (Unaudited)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
March 31, 1998 March 31, 1997
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash Flows From Operating Activities
Net income $ 1,527,094 $ 918,849
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation 708,909 673,013
Amortization 126,285 122,113
Equity in net loss (income) of unconsolidated entities 2,999 (6,813)
Minority interests 226,384 218,855
Decrease in accounts receivable 114,461 11,791
Increase in other assets (6,060) (290,229)
Decrease in accounts payable (193,368) (389,335)
Increase in accrued interest 33,233 61,561
Increase in tenant deposits 1,667 12,333
----------- -----------
Net Cash Provided By Operating Activities 2,541,604 1,332,138
----------- -----------
Cash Flows From Investing Activities
Acquisition of real estate investments (including capitalized
interest of $64,671 in 1998 and $-0- in 1997) (4,361,754) (195,136)
Investments in and advances to unconsolidated entities 142,162 (954)
----------- -----------
Cash Flows Used In Investing Activities (4,219,592) (196,090)
----------- -----------
Cash Flows From Financing Activities
Line-of-credit proceeds 3,032,928 9,869,453
Dividends and limited partners' distributions paid (2,284,792) (1,479,345)
Construction loan proceeds 911,967 --
Net repayment of capital expenditure payables (454,411) (430,942)
Payments of mortgages payable (88,497) (80,976)
Redemption of restricted stock (35,328) --
Increase in escrow deposits (16,744) (15,584)
Payment of financing costs (8,000) (16,924)
Payment of construction loans -- (8,915,530)
Payment of leasing costs -- (7,289)
----------- -----------
Net Cash Provided By (Used In) Financing Activities 1,057,123 (1,077,137)
----------- -----------
Net Increase (Decrease) In Cash and Cash Equivalents (620,865) 58,911
Cash and Cash Equivalents, beginning of period 1,785,968 294,389
----------- -----------
Cash and Cash Equivalents, end of period $ 1,165,103 $ 353,300
=========== ===========
Supplemental Disclosure of Cash Flow Information
Cash paid for interest (net of amounts capitalized) $ 1,126,719 $ 1,519,602
=========== ===========
Supplemental Disclosure of Non-Cash Transactions
Dividends and limited partners' distributions declared and unpaid $ 2,292,765 $ 1,492,375
Shares issued under Stock Incentive Plan $ 405,830 $ 618,913
=========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
8
<PAGE>
Agree Realty Corporation
Notes to Consolidated Financial Statements
(Unaudited)
- -----------------------------------------------------------------------------
1. Basis of
Presentation The accompanying unaudited 1998 consolidated financial
statements have been prepared in accordance with
generally accepted accounting principles for interim
financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the
information and footnotes required by generally
accepted accounting principles for complete financial
statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been
included. The consolidated balance sheet at December
31, 1997 has been derived from the audited
consolidated financial statements at that date.
Operating results for the three months ended March 31,
1998 are not necessarily indicative of the results
that may be expected for the year ending December 31,
1998, or for any other interim period. For further
information, refer to the consolidated financial
statements and footnotes thereto included in the
Company's Annual Report for the year ended December
31, 1997.
2. Earnings Per
Share Earnings per share has been computed by dividing the
income by the weighted average number of common shares
outstanding. The per share amounts reflected in the
consolidated statements of income are presented in
accordance with Statement of Financial Accounting
Standards (SFAS) No. 128 "Earnings per Share"; the
amounts of the Company's "basic" and "diluted"
earnings per share (as defined in SFAS No. 128) are
the same.
3. Comprehensive
Income The amounts of the Company's net and comprehensive
income (as defined in SFAS No. 130, "Reporting
Comprehensive Income") are the same.
9
<PAGE>
Agree Realty Corporation
Part I
- -----------------------------------------------------------------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND RESULTS OF OPERATIONS
-------------------------
Overview
The Company was established to continue to operate and expand the retail
property business of its Predecessors. The Company commenced its operations
on April 22, 1994 with the sale of 2,500,000 shares of common stock in an
initial public offering. The net cash proceeds to the Company from the
completion of this offering were approximately $45.4 million, which were used
primarily to reduce outstanding indebtedness, pay stock issuance costs and
establish a working capital reserve. On May 21, 1997, the Company completed
an offering of 1,625,000 shares of common stock at $20.625 per share; on June
18, 1997 the underwriters exercised their overallotment option for an
additional 28,850 shares at the same per share price (collectively, "the 1997
Offering"). The net proceeds from the 1997 Offering of approximately $31.9
million were used to repay amounts outstanding under the Company's Credit
Facility.
The assets of the Company are held by, and all operations are conducted
through, Agree Limited Partnership (the "Operating Partnership"), of which
the Company is the sole general partner and held an 87.20% interest as of
March 31, 1998. The Company is operating so as to qualify as a real estate
investment trust ("REIT") for federal income tax purposes.
The following should be read in conjunction with the Consolidated Financial
Statements of Agree Realty Corporation, including the respective notes
thereto, which are included in this Form 10-Q.
Comparison of Three Months Ended March 31, 1998 to Three Months Ended March
31, 1997
Rental income increased $141,000, or 4%, to $4,170,000 in 1998, compared to
$4,029,000 in 1997. The increase is primarily the result of the development
and acquisition of two new properties in 1997.
Operating cost reimbursements, which represent additional rent required by
substantially all of the Company's leases to cover the tenants' proportionate
share of real estate taxes and property operating expenses, increased
$26,000, or 5%, to $525,000 in 1998, compared to $499,000 in 1997. Operating
cost reimbursement increased due to the increase in real estate taxes and was
partially offset by a decrease in property operating expenses from 1997 to
1998, as explained below.
10
<PAGE>
Agree Realty Corporation
Part I
- -----------------------------------------------------------------------------
Management fees and other income remained relatively constant at $24,000 in
1998 compared to $26,000 in 1997.
Real estate taxes increased $52,000, or 17%, to $361,000 in 1998 compared to
$309,000 in 1997. The increase is the result of the addition of new
properties.
Property operating expenses (shopping center maintenance, insurance and
utilities) decreased $63,000, or 19%, to $275,000 in 1998 compared to
$338,000 in 1997. The decrease was the result of decreased snow removal costs
of $39,000; a decrease in shopping center maintenance costs of $18,000; a
increase in utility costs of $10,000 and a decrease in insurance costs of
$16,000 in 1998 versus 1997.
Land lease payments increased $30,000 to $142,000 in 1998 compared to
$112,000 in 1997 as a result of the acquisition of a ground lease for the
free standing Property in Lawrence, Kansas.
General and administrative expenses decreased by $18,000, or 6%, to $278,000
in 1998 compared to $296,000 in 1997. The decrease was primarily the result
of decreased directors' and officers' liability insurance of $10,000 and
decreased expenses in connection with the management of the Company's
properties of $8,000. General and administrative expenses as a percentage of
rental income decreased from 7.3% for 1997 to 6.7% for 1998.
Depreciation and amortization increased $34,000, or 5%, to $727,000 in 1998
compared to $693,000 in 1997. The increase was the result of the completion
of two new properties in 1997.
Interest expense decreased $436,000, or 26%, to $1,241,000 in 1998, from
$1,677,000 in 1997. The decrease in interest expense was the result of the
Company using the proceeds of the 1997 Offering to reduce the Company's
indebtedness.
The Company received development fee income of $60,000 in 1998. There was no
development fee income in 1997. The above amount was not included in the
Company's calculation of Funds from Operations due to the non-recurring
nature of this type of income.
11
<PAGE>
Agree Realty Corporation
Part I
- -----------------------------------------------------------------------------
Equity in net income (loss) of unconsolidated entities decreased $10,000 to
($3,000) in 1998 compared to $7,000 in 1997 as a result of additional
expenses in 1998 related to certain of the Joint Venture Properties in which
the Company holds interests ranging from 8% to 20%.
The Company's income before minority interest increased $616,000 as a result
of the foregoing factors.
Funds from Operations
Management considers Funds from Operations ("FFO") to be a supplemental
measure of the Company's operating performance. FFO is defined by the
National Association of Real Estate Investments Trusts, Inc. ("NAREIT") to
mean net income computed in accordance with generally accepted accounting
principles ("GAAP"), excluding gains (or losses) from debt restructuring and
sales of property, plus real estate related depreciation and amortization,
and after adjustments for unconsolidated entities in which the REIT holds an
interest. FFO does not represent cash generated from operating activities in
accordance with GAAP and is not necessarily indicative of cash available to
fund cash needs. FFO should not be considered as an alternative to net income
as the primary indicator of the Company's operating performance or as an
alternative to cash flow as a measure of liquidity.
The following tables illustrate the calculation of FFO for the three months
ended March 31, 1998, 1997:
<TABLE>
<CAPTION>
Three Months Ended March 31, 1998 1997
- ---------------------------- ---- ----
<S> <C> <C>
Net income before minority interest $ 1,753,478 $ 1,137,704
Depreciation of real estate assets 703,534 668,872
Amortization of leasing costs 17,796 20,393
Amortization of stock awards 39,000 32,475
Depreciation of real estate assets held in
unconsolidated entities 175,219 167,996
Development fee income (59,647) --
----------- -----------
Funds from Operations $ 2,629,380 $ 2,027,440
=========== ===========
Funds from Operations Per Share $ .53 $ .61
=========== ===========
Weighted Average Shares and OP Units Outstanding 4,984,272 3,316,389
=========== ===========
</TABLE>
FFO increased $602,000, or 30%, for the three months ended March 31, 1998, to
$2,629,000. The increase in FFO is primarily the result of the reduction in
interest expense as a result of the completion of the 1997 Offering and the
development and acquisition of additional Properties.
12
<PAGE>
Agree Realty Corporation
Part I
- -----------------------------------------------------------------------------
Liquidity and Capital Resources
The Company's principal demands for liquidity are distributions to its
stockholders, debt repayment, development of new properties and future
property acquisitions.
During the quarter ended March 31, 1998, the Company declared a quarterly
dividend of $.46 per share. The dividend was paid on April 16, 1998 to
holders of record on March 31, 1998.
As of March 31, 1998, the Company had total mortgage indebtedness of
$50,865,529 with a weighted average interest rate of 7.54%. Future scheduled
annual maturities of mortgages payable for the years ending March 31 are as
follows: 1999 - $8,033,893; 2000 - $861,708; 2001 - $988,630; 2002 -
$1,067,065; 2003 - $1,151,911. This mortgage debt is all fixed rate debt.
In addition, the Operating Partnership has in place a $50 million line of
Credit Facility (the "Credit Facility") which is guaranteed by the Company.
The loan matures in August 2000 and can be extended by the Company for an
additional three years. Advances under the Credit Facility bear interest
within a range of one-month to six-month LIBOR plus 150 basis points to 213
basis points or the bank's prime rate less 50 basis points to plus 13 basis
points, at the option of the Company, based on certain factors such as debt
to property value and debt service coverage. The Credit Facility is used to
fund property acquisitions and development activities and is secured by most
of the Company's Properties which are not otherwise encumbered and properties
to be acquired or developed. As of March 31, 1998, $11,673,944 was
outstanding under the Credit Facility.
The Company also has in place a $5 million line of credit (the "Line of
Credit"), which matures September 1998, and which the Company expects to
renew for an additional 12-month period. The Line of Credit bears interest at
the bank's prime rate or 200 basis points in excess of the one-month LIBOR
rate, at the option of the Company. The purpose of the Line of Credit is to
provide working capital to the Company and fund land options and start-up
costs associated with new projects. As of March 31, 1998, there were no
outstanding borrowings under the Line of Credit.
The Company's two wholly-owned subsidiaries have obtained construction
financing of approximately $6,850,000 to fund the development of two retail
properties. The notes require quarterly interest payments, based on a
weighted average interest rate based on LIBOR, computed by the lender. The
notes mature on October 16, 2002 and are secured by the underlying land and
buildings. As of March 31, 1998, $4,756,568 was outstanding under these
notes.
13
<PAGE>
Agree Realty Corporation
Part I
- -----------------------------------------------------------------------------
The Company has received funding from an unaffiliated third party for the
construction of certain of its Properties. Advances under this agreement bear
no interest and are required to be repaid within sixty (60) days after the
date construction has been completed. The advances are secured by the
specific land and buildings being developed. As of March 31, 1998, $1,730,490
was outstanding under this arrangement.
The Company has three development projects under construction that will add
an additional 53,000 square feet of retail space to the Company's portfolio.
The projects are expected to be completed during the second and third
quarters of 1998. Additional Company funding required for this project is
estimated to be $5,200,000 and will come from available construction
financing and the Credit Facility. Management expects the development of
these projects to have a positive effect on cash generated by operating
activities and Funds from Operations.
The Company intends to meet its short-term liquidity requirements, including
capital expenditures related to the leasing and improvement of the
Properties, through its cash flow provided by operations and the Line of
Credit. Management believes that adequate cash flow will be available to fund
the Company's operations and pay dividends in accordance with REIT
requirements. The Company may obtain additional funds for future development
or acquisitions through other borrowings or the issuance of additional shares
of capital stock. The Company intends to incur additional debt in a manner
consistent with its policy of maintaining a ratio of total debt (including
construction and acquisition financing) to total market capitalization of 65%
or less.
The Company plans to begin construction of additional pre-leased developments
and may acquire additional properties, which will initially be financed by
the Credit Facility and Line of Credit. Management intends to periodically
refinance short-term construction and acquisition financing with long-term
debt and/or equity. Upon completion of refinancing, the Company intends to
lower the ratio of total debt to market capitalization to 50% or less.
Nevertheless, the Company may operate with debt levels or ratios which are in
excess of 50% for extended periods of time prior to such refinancing.
Year 2000 Costs
The Company, like most owners of computer software, will be required to
modify certain portions of its software so that it will function properly in
the year 2000. Maintenance or modification costs will be expensed as
incurred, while the costs of any new software will be capitalized and
amortized over the software's useful life. Management believes these "year
2000" costs will be immaterial.
14
<PAGE>
Agree Realty Corporation
Part I
- -----------------------------------------------------------------------------
Inflation
The Company's leases generally contain provisions designed to mitigate the
adverse impact of inflation on net income. These provisions include clauses
enabling the Company to pass through to tenants certain operating costs,
including real estate taxes, common area maintenance, utilities and
insurance, thereby reducing the Company's exposure to increases in costs and
operating expenses resulting from inflation. Certain of the Company's leases
contain clauses enabling the Company to receive percentage rents based on
tenants' gross sales, which generally increase as prices rise, and, in
certain cases, escalation clauses, which generally increase rental rates
during the terms of the leases. In addition, expiring tenant leases permit
the Company to seek increased rents upon re-lease at market rates if rents
are below the then existing market rates.
15
<PAGE>
Agree Realty Corporation
Part II
- -----------------------------------------------------------------------------
Other Information
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 Articles of Incorporation and Articles of Amendment
of the Company (incorporated by reference to Exhibit
3.1 to the Company's Registration Statement on Form
S-11 (Registration Statement No. 33-73858, as
amended ("Agree S-11"))
3.2 Bylaws of the Company (incorporated by reference to
Exhibit 3.3 to Agree S-11)
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
16
<PAGE>
Agree Realty Corporation
Signatures
- -----------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has fully caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Agree Realty Corporation
/s/ RICHARD AGREE
- -------------------------------------
Richard Agree
President and Chief Executive Officer
/s/ KENNETH R. HOWE
- --------------------------------------
Kenneth R. Howe
Vice President - Finance and Secretary
(Principal Financial Officer)
Date: May 12, 1998
------------
17
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-Mos
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> $ 1,165,103
<SECURITIES> 0
<RECEIVABLES> 359,457
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 147,110,203
<DEPRECIATION> 20,748,939
<TOTAL-ASSETS> 133,396,231
<CURRENT-LIABILITIES> 0
<BONDS> 69,026,531
<COMMON> 435
0
0
<OTHER-SE> 54,864,301
<TOTAL-LIABILITY-AND-EQUITY> 133,396,231
<SALES> 4,719,720
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 1,782,217
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,240,673
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,527,094
<EPS-PRIMARY> 0.35
<EPS-DILUTED> 0.00
</TABLE>
