<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
--- THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 1996
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 1-11345
-------------
CAPSTONE CAPITAL CORPORATION
(Exact name of Registrant as specified in its charter)
Maryland 63-1115479
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1000 Urban Center Drive
Suite 630
Birmingham, Alabama 35242
(Address of principal executive offices)
(205) 967-2092
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant(1) has filed all reports
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 Registrant was
required to file such reports), and (2) has been subject to such filing
requirement for the past 90 days.
Yes X No
---- ---
As of August 12, 1996, 10,657,760 shares of the Registrant's Common Stock
$.001 par value, were outstanding.
<PAGE> 2
CAPSTONE CAPITAL CORPORATION
FORM 10-Q
June 30, 1996
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
Part I - Financial Information
Item 1. Condensed Consolidated Financial Statements Page
Condensed Consolidated Balance Sheets 2
Condensed Consolidated Statements of Income 3
Condensed Consolidated Statements of Cash Flows 4
Notes to Condensed Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Part II -Other Information
Item 6. Exhibits 12
Signatures 13
</TABLE>
1
<PAGE> 3
Capstone Capital Corporation
Condensed Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------ ------------
<S> <C> <C>
Real estate properties
Land $ 29,747,440 $ 24,669,023
Land improvements 2,350,308 2,350,309
Buildings and improvements 249,833,441 185,771,380
Construction in progress 264,182 37,409
------------ ------------
282,195,371 212,828,121
Less accumulated depreciation (7,868,747) (5,570,953)
------------ ------------
Real estate properties, net 274,326,624 207,257,168
Mortgage notes receivable 30,365,914 24,988,753
Cash 1,507,591 675,568
Other assets 9,888,310 7,703,394
------------ ------------
Total assets $316,088,439 $240,624,883
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Convertible subordinated debentures $ 33,797,000 $ 43,947,000
Bank credit facility 81,200,000 30,225,000
Mortgage note payable 23,300,000 -
Accrued expenses and other liabilities 4,693,871 2,706,228
------------ ------------
Total liabilities 142,990,871 76,878,228
------------ ------------
Stockholders' equity
Preferred stock, $.001 par value,
10,000,000 shares authorized;
none issued - -
Common stock, $0.001 par value,
50,000,000 shares authorized;
10,560,339 shares and 9,929,732 shares
issued and outstanding, respectively 10,560 9,929
Additional paid-in-capital 172,460,426 162,735,711
Loans to officers to finance stock purchases (286,944) (286,944)
Cumulative net income 23,209,057 14,471,125
Cumulative dividends (22,295,531) (13,183,166)
------------ ------------
Total stockholders' equity 173,097,568 163,746,655
------------ ------------
Total liabilities and stockholders' equity $316,088,439 $240,624,883
============ ============
</TABLE>
(The accompanying notes are an integral part of this financial statement)
2
<PAGE> 4
Capstone Capital Corporation
Condensed Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------- ------------------------
1996 1995 1996 1995
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 7,832,186 $5,476,767 $14,351,014 $ 9,956,871
Mortgage interest income 750,374 394,996 1,487,199 765,075
Gain from sale of property 193,672 - 193,672 -
Other income 109,015 44,591 288,433 57,387
----------- ---------- ----------- -----------
Total income 8,885,247 5,916,354 16,320,318 10,779,333
----------- ---------- ----------- -----------
Expenses:
General and administrative 480,278 338,932 808,906 635,598
Depreciation 1,467,705 1,002,788 2,658,473 1,814,853
Amortization 65,121 148,798 226,461 211,449
Interest 2,271,702 2,223,968 3,886,389 3,513,090
Property operations 2,157 - 2,157 -
----------- ---------- ----------- -----------
Total expenses 4,286,963 3,714,486 7,582,386 6,174,990
----------- ---------- ----------- -----------
Net income $ 4,598,284 $2,201,868 $ 8,737,932 $ 4,604,343
=========== ========== =========== ===========
Net Income Per Share $ 0.42 $ 0.37 $ 0.84 $ 0.77
=========== ========== =========== ===========
Weighted Averages Shares
Outstanding
Primary 10,667,440 5,992,297 10,368,160 5,986,183
Fully Diluted 12,798,994 9,204,806 12,798,701 7,636,945
</TABLE>
(The accompanying notes are an integral part of this financial statement)
3
<PAGE> 5
Capstone Capital Corporation
Condensed Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30
-------------------------
1996 1995
----------- ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 8,737,932 $ 4,604,343
Gain from sale of property (193,672) -
Depreciation of real estate 2,645,878 1,802,957
Other depreciation 12,595 11,896
Amortization of convertible debenture
issuance costs 48,917 67,422
Other amortization 177,544 144,027
Increase in accrued rental income (1,132,812) (793,253)
(Increase) decrease in receivables and other assets (322,633) 108,229
(Decrease) increase in accrued expenses and
other liabilities (1,104,972) 1,400,989
----------- -----------
Net cash provided by operating activities 8,868,777 7,346,610
----------- -----------
Cash flows from investing activities:
Acquisition of real estate properties (76,157,224) (41,648,402)
Proceeds from sale of property 7,300,000 -
Investment in mortgage notes receivable (1,213,044) (1,569,989)
Collections on mortgage notes receivable 131,614 -
----------- -----------
Net cash used in investing activities (69,938,654) (43,218,391)
----------- -----------
Cash flows from financing activities:
Increase (decrease) in long-term notes payable 50,975,000 (8,600,000)
Proceeds from mortgage note payable 19,376,640 -
Proceeds from issuance of convertible
subordinated debentures - 52,000,000
Financing costs related to issuance of
convertible subordinated debentures - (2,191,456)
Capital contributions from minority interests 684,480 -
Payment of dividends (9,112,365) (5,084,977)
Costs related to common stock offering (51,713) -
Proceeds from dividend reinvestment plan 29,858 -
Increase in loans to finance stock purchases - (92,467)
----------- -----------
Net cash from financing activities 61,901,900 36,031,100
----------- -----------
Increase in cash 832,023 159,319
Cash, beginning of period 675,568 330,654
----------- -----------
Cash, end of period $ 1,507,591 $ 489,973
=========== ===========
</TABLE>
(The accompanying notes are an integral part of this financial statement)
4
<PAGE> 6
CAPSTONE CAPITAL CORPORATION
Notes to Condensed Consolidated Financial Statements
June 30, 1996
(Unaudited)
NOTE 1. BASIS OF PRESENTATION AND ORGANIZATION
The accompanying unaudited condensed 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 which are included in the Capstone Capital
Corporation (the "Company") Annual Report on Form 10-K for the period ended
December 31, 1995. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. These financial statements should be read in conjunction with
the financial statements included in the Company's Annual Report on Form 10-K
for the year ended December 31, 1995.
Certain classifications have been made for the period January 1, 1995
through June 30, 1995 to conform to the 1996 presentation. These
reclassifications had no effect on the results of operations as previously
reported.
The Company is an indefinite life real estate investment trust ("REIT")
which was incorporated in Maryland on March 31, 1994. The Company commenced
operations on June 30, 1994 with the receipt of proceeds from the sale of
5,980,000 shares of common stock. The Company invests in income-producing,
healthcare-related properties through acquisition or development of facilities
for lease or by provision of mortgage financing to healthcare operators.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries and its
majority-owned partnerships. Intercompany accounts and transactions have been
eliminated.
Real Estate Properties - Real estate properties are recorded at cost.
Acquisition costs and transaction fees are added to the purchase price. No
allowance for investment losses is considered necessary. The cost of real
estate properties acquired is allocated among land, land improvements, and
buildings and improvements based upon estimated market values at the time of
acquisition. Depreciation is provided for on a straight-line basis over the
following estimated useful life:
<TABLE>
<S> <C>
Building and improvements 40.0 years
Land improvements 20.0 years
</TABLE>
Federal Income Taxes - No provision has been made for federal income taxes.
The Company intends at all times to qualify as a real estate investment trust
under sections 856 through 860 of the Internal Revenue Code of 1986, as
amended. The Company must distribute at least 95% of its real estate
5
<PAGE> 7
investment trust taxable income to its stockholders and meet other requirements
to continue to qualify as a real estate investment trust.
Rental Income - Rental income is recognized as earned over the life of the
lease agreements. Certain of the leases provide for scheduled annual rent
increases. These rent increases are recognized on a straight-line basis over
the term of the lease.
Mortgage Interest Income - Mortgage interest income is recognized based on the
interest rates and the outstanding principal amounts of the mortgage notes
receivable. Certain of the mortgage notes receivable provide for scheduled
annual interest rate increases.
Net Income Per Share - Net income per share is computed using the weighted
average number of shares outstanding during the period.
Funds From Operations - Funds from operations is computed as net income
(determined in accordance with generally accepted accounting principles),
excluding rent income recognized on a straight-line basis on those leases with
scheduled rent increases and gains (or losses) from debt restructuring and
sales of properties, plus depreciation and amortization.
<TABLE>
<CAPTION>
For the For the For the For the
Three Months Three Months Six Months Six Months
Reconciliation of net income to Ended Ended Ended Ended
funds from operations June 30, 1996 June 30, 1995 June 30, 1996 June 30, 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net income $4,598,284 $2,201,868 $ 8,737,932 $4,604,343
Less: Depreciation & amortization 1,532,826 1,151,586 2,884,934 2,026,302
Add: Gain on sale of asset (193,672) - (193,672) -
Less: Straight-line rental income (601,700) (432,168) (1,127,312) (793,253)
---------- ---------- ----------- ----------
Funds from operations $5,335,738 $2,921,286 $10,301,882 $5,837,392
========== ========== =========== ==========
</TABLE>
NOTE 3. REAL ESTATE PROPERTIES
Real estate properties as of June 30, 1996 total $282,195,371 and include
fifteen ancillary hospital facilities, nine physician clinics, five ambulatory
surgery facilities, three outpatient rehabilitation facilities, two
comprehensive mental health hospitals, four inpatient rehabilitation
facilities, two sub-acute care facilities, and one long-term care facility.
The properties are located in thirteen states and are leased to fifteen
healthcare-related entities or their subsidiaries pursuant to long-term leases.
The Company's properties are generally leased pursuant to fixed term
operating leases expiring from 2004 to 2011 and provide for options to extend
the lease terms for at least ten years. The leases generally provide the
lessees, during the terms of the leases and for a short period of time
following expiration, with the right of first refusal to purchase the leased
property on the same terms and conditions as the Company may propose to a third
party.
Each lease generally requires the lessee to pay base rent, additional rent
commencing after the first year based either on either a set percentage
increase or on a percentage increase in the consumer price index, and all
taxes (including property taxes), maintenance and other operating costs
associated with the leased property.
6
<PAGE> 8
NOTE 4. MORTGAGE NOTES RECEIVABLE
As of June 30, 1996, the Company had provided $30,365,914 in mortgage
financing for eight properties located in four states. The mortgage notes
receivable are secured by the real estate of five long-term care facilities,
one acute-care hospital facility and two ancillary hospital facilities which
are operated by five healthcare operators.
The mortgage notes receivable require monthly installments of principal
and interest with final payment dates in or before 2010 and bear rates ranging
from 9.5 percent to 13.0 percent at June 30, 1996. Substantially all the
mortgage notes receivable provide for an initial interest rate to be increased
annually by either a set rate or upon an increase in the consumer price index.
The Company had no impaired mortgage notes receivable at or during the
quarter ended June 30, 1996.
NOTE 5. MORTGAGE NOTE PAYABLE
On June 26, 1996, the Company entered into a mortgage note with a life
insurance company for a principal amount of $23.3 million ("Mortgage Note").
The Mortgage Note bears interest at 8.5% and is payable in 360 monthly payments
of principal and interest. The Mortgage Note is collateralized by an ancillary
hospital facility purchased in January 1996 for $30 million.
NOTE 6. BANK CREDIT FACILITY
On June 24, 1996, the Company completed an amendment to and restatement of
its unsecured line of credit ("Bank Credit Facility") which provides for an
increase to $150 million from its previous principal amount of $100 million, an
extension of the term to June 24, 1999, from June 22, 1997, and an adjustment
in the determination of the interest rate. The Bank Credit Facility is agented
by NationsBank, National Association (South), and is participated in by a
consortium of seven other banks. At June 30, 1996, the Company had drawn
$81,200,000 against the Bank Credit Facility for the purchase of real estate
properties and the funding of mortgage loans.
Prior to the amendment and restatement of the Bank Credit Facility,
borrowing under the Bank Credit Facility bore interest at a rate chosen by the
Company from either the Bank's base rate or LIBOR plus a percentage rate
ranging from 1.25 percent to 2.00 percent depending upon the Company's senior
debt to consolidated tangible net worth ratio for the preceding fiscal quarter.
In addition, the Company paid a commitment fee of either 0.25 percent to 0.38
percent per annum on the unused portion of funds available for borrowing under
the Bank Credit Facility. The commitment fee percentage was based on the
Company's senior debt to consolidated tangible net worth ratio.
Borrowing under the amended and restated Bank Credit Facility bears
interest at a rate chosen by the Company from either the Bank's base rate or
the Eurodollar rate plus a percentage rate ranging from 1.00 percent to 1.625
percent depending upon the Company's senior debt to consolidated total capital
ratio for the preceding fiscal quarter. In addition, the Company pays a
commitment fee of either 0.20 percent to 0.25 percent per annum on the unused
portion of funds available for borrowing under the Bank Credit Facility. The
commitment fee percentage is based on the Company's senior debt to total
capital ratio.
7
<PAGE> 9
The Bank Credit Facility contains certain representations, warranties and
financial and other covenants customary in such loan agreements.
NOTE 7. CONVERTIBLE SUBORDINATED DEBENTURES
As of June 30, 1996 the Company had $33,797,000 aggregate principal amount
of 10.50% convertible subordinated debentures (the "Debentures") outstanding.
The Debentures are due on April 1, 2002 and interest is payable semiannually on
April 1 and October 1 of each year. During the quarter ended June 30, 1996, a
total of $10,008,000 of principal amount of Debentures was converted into
shares of common stock of the Company at the conversion price of $16.125 per
share. These conversions resulted in an increase of 621,341 in the outstanding
shares of the common stock of the Company, an increase of $10,008,000 in
stockholders' equity and a decrease of $10,008,000 in the outstanding balance
of the Debentures. For the six months ended June 30, 1996, a total of
$10,150,000 of principal amount of Debentures was converted into shares of
common stock of the Company resulting in an increase of 630,147 in the
outstanding shares of the common stock of the Company, an increase of
$10,150,000 in stockholder's equity and a decrease of $10,150,000 in the
outstanding balance of the Debentures.
NOTE 8. COMMITMENTS AND CONTINGENCIES
The Company is developing a $2.68 million expansion to an existing
ambulatory surgery facility owned by the Company. As of June 30, 1996, the
Company had funded $264,182 toward the construction of the expansion. The
remaining balance is expected to be funded during 1996.
The Company believes it has sufficient liquidity and financing
capabilities to finance the commitments.
NOTE 9. SUBSEQUENT EVENTS
On July 9, 1996, the Company entered into a definitive agreement, subject
to due diligence, to develop up to eight integrated healthcare facilities. The
facilities, the total cost of which will not exceed $25 million, will be
developed over a 24 month period. Upon completion, the facilities will be
leased to a healthcare-related entity pursuant to long-term operating leases.
On July 18, 1996, the Company funded $0.7 million and committed another
$17.1 million for a construction and term loan for an acute-care hospital. The
loan is secured by a mortgage on the facility.
On July 22, 1996, the Company declared a dividend of $0.455 per share to
the holders of common stock on August 1, 1996. The dividend will be paid in
cash on August 15, 1996. The dividend related to the quarter ended June 30,
1996.
For the period from July 1 through August 8, 1996, a total of $1,571,000
of principal amount of Debentures has been converted into shares of common
stock of the Company at the conversion price of $16.125 per share. The
conversions resulted in an increase of 97,424 in the shares of common stock of
the Company, an increase of $1,571,000 in stockholder's equity and a decrease
of $1,571,000 in the outstanding balance of the Debentures.
8
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
SECOND QUARTER 1996 COMPARED TO SECOND QUARTER 1995
Revenues for the quarter ended June 30, 1996 totaled $8.9 million,
increasing $3.0 million over June 30, 1995 revenues of $5.9 million. The
increase in revenues is primarily attributable to additional rental and
mortgage interest income from the acquisition and financing of properties
subsequent to June 30, 1995. Specifically, investments in properties increased
from $194 million at June 30, 1995 to $282 million at June 30, 1996 and
mortgage loans increased from $13.7 million at June 30, 1995 to $28.3 million
at June 30, 1996. In addition, during the quarter ended June 30, 1996, the
Company recognized a gain of $193,672 from the sale of an ancillary hospital
facility located in Philadelphia, Pennsylvania.
Depreciation for the quarter ended June 30, 1996 totaled $1,467,705
increasing $464,917 over June 30, 1995 depreciation of $1,002,788, primarily
due to the acquisition of properties subsequent to June 30, 1995. General and
administrative expenses for the quarter ended June 30, 1996 totaled $480,278
increasing $141,346 over June 30, 1995 general and administrative expenses of
$338,932. The increase is due primarily to additional administrative and
professional services related to the additional investments made since June 30,
1995.
For the foregoing reasons, net income for the quarter ended June 30, 1996
increased to $4.6 million compared to $2.2 million for the quarter ended June
30, 1995. Net income per share was $0.42 at June 30, 1996 as compared to $0.37
at June 30, 1995.
SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995
Revenues for the six months ended June 30, 1996 were $16.3 million,
increasing $5.5 million over June 30, 1995 revenues of $10.8 million. The
increase in revenues is primarily attributable to additional rental and
mortgage interest income from the acquisition and financing of properties
subsequent to June 30, 1995. In addition, during the six months ended June 30,
1996, the Company recognized a gain of $193,672 from the sale of an ancillary
hospital facility located in Philadelphia, Pennsylvania.
Depreciation and amortization for the six months ended June 30, 1996
totaled $2.9 million, increasing $0.9 million over depreciation and
amortization of $2.0 million for the six months ended June 30, 1995.
Depreciation expense increased $0.8 million, primarily due to the acquisition
of additional properties subsequent to June 30, 1995.
General and administrative expenses for the six months ended June 30, 1996
totaled $808,906, increasing $173,308 over June 30, 1995 general and
administrative expenses of $635,598. The increase is due primarily to
additional administrative and professional services related to the additional
investments made since June 30, 1995.
9
<PAGE> 11
For the foregoing reasons, net income for the six months ended June 30,
1996 increased to $8.7 million compared to $4.6 million for the six months
ended June 30, 1995. Net income per share was $0.84 at June 30, 1996 as
compared to $0.77 at June 30, 1995.
LIQUIDITY AND CAPITAL RESOURCES
On June 24, 1996, the Company completed an amendment to and restatement of
its unsecured line of credit ("Bank Credit Facility") which provides for an
increase to $150 million from its previous principal amount of $100 million, an
extension of the term to June 24, 1999, from June 22, 1997, and an adjustment
in the determination of the interest rate. The Bank Credit Facility is agented
by NationsBank, National Association (South), and is participated in by a
consortium of seven other banks. At June 30, 1996, the Company had drawn
$81,200,000 against the Bank Credit Facility for the purchase of real estate
properties and the funding of mortgage loans.
Prior to the amendment and restatement of the Bank Credit Facility,
borrowing under the Bank Credit Facility bore interest at a rate chosen by the
Company from either the Bank's base rate or Eurodollar plus a percentage rate
ranging from 1.25 percent to 2.00 percent depending upon the Company's senior
debt to consolidated tangible net worth ratio for the preceding fiscal quarter.
In addition, the Company paid a commitment fee of either 0.25 percent to 0.38
percent per annum on the unused portion of funds available for borrowing under
the Bank Credit Facility. The commitment fee percentage was based on the
Company's senior debt to consolidated tangible net worth ratio.
Borrowing under the amended and restated Bank Credit Facility bears
interest at a rate chosen by the Company from either the Bank's base rate or
the Eurodollar rate plus a percentage rate ranging from 1.00 percent to 1.625
percent depending upon the Company's senior debt to consolidated total capital
ratio for the preceding fiscal quarter. In addition, the Company pays a
commitment fee of either .20 percent to .25 percent per annum on the unused
portion of funds available for borrowing under the Bank Credit Facility. The
commitment fee percentage is based on the Company's senior debt to total
capital ratio.
The Bank Credit Facility contains certain representations, warranties and
financial and other covenants customary in such loan agreements.
Effective April 1, 1996 the Company sold an ancillary hospital facility
located in Pennsylvania to an unrelated healthcare operator. Total sales price
of $9,340,000 included $7,300,000 in cash and a note for $2,040,000. Cash
proceeds from the sale were used to reduce the outstanding balance of the Bank
Credit Facility.
The Company's current intention is to utilize the Bank Credit Facility on
a short-term basis to finance future investments in property acquisitions and
mortgage financing. The Company is currently evaluating various alternatives
for additional equity and debt financing with which to finance those
investments on a long-term basis.
During the second quarter of 1996, the Company received approximately
$14,224 from the sale of its shares under the dividend reinvestment plan.
10
<PAGE> 12
On July 22, 1996, the Company declared a dividend of $0.455 per share to
the holders of common stock on August 1, 1996. The dividend will be paid in
cash on August 15, 1996. The dividend related to the quarter ended June 30,
1996.
11
<PAGE> 13
PART II - OTHER INFORMATION
Item 6. Exhibits and Report on Form 8-K
(a) Exhibits
27 -- Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the
three months ended June 30, 1996.
12
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
CAPSTONE CAPITAL CORPORATION
By /s/ Andrew L. Kizer
-------------------------
Andrew L. Kizer
Vice President - Finance and
Chief Financial Officer
Date: August 12, 1996
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF CAPSTONE CAPITAL CORPORATION FOR THE QUARTER ENDED JUNE 31, 1996,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,507,591
<SECURITIES> 0
<RECEIVABLES> 414,624
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9,344,794
<PP&E> 282,101,261
<DEPRECIATION> 7,910,222
<TOTAL-ASSETS> 316,284,182
<CURRENT-LIABILITIES> 1,069,766
<BONDS> 33,797,000
0
0
<COMMON> 10,560
<OTHER-SE> 172,460,426
<TOTAL-LIABILITY-AND-EQUITY> 316,284,182
<SALES> 0
<TOTAL-REVENUES> 8,885,247
<CGS> 0
<TOTAL-COSTS> 4,286,963
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,271,702
<INCOME-PRETAX> 4,598,284
<INCOME-TAX> 0
<INCOME-CONTINUING> 4,598,284
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,598,284
<EPS-PRIMARY> 0.42
<EPS-DILUTED> 0.42
</TABLE>
