<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: 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 1-11345
------------------------
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 requirements for
the past 90 days.
Yes X No
------- -------
As of March 12, 1998, 22,424,007 shares of the Registrant's Common Stock,
$.001 par value, were outstanding.
<PAGE> 2
CAPSTONE CAPITAL CORPORATION
FORM 10-Q
March 31, 1998
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Part I - Financial Information
Item 1. Condensed Consolidated Financial Statements
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 10
Part II - Other Information
Item 6. Exhibits 12
Signatures 13
</TABLE>
1
<PAGE> 3
Capstone Capital Corporation
Condensed Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
ASSETS Mar. 31, 1998 Dec. 31, 1997
------------- -------------
<S> <C> <C>
Real estate properties
Land $ 47,944,682 46,655,843
Land improvements 2,350,309 2,350,309
Buildings and improvements 475,568,347 435,836,254
Personal property 1,264,201 1,264,201
Construction in progress 44,549,453 59,864,216
------------- -------------
571,676,992 545,970,823
Less accumulated depreciation (22,743,222) (19,924,089)
------------- -------------
Real estate properties, net 548,933,770 526,046,734
Mortgage notes receivable 188,629,747 170,065,886
Cash 1,807,985 1,970,081
Accrued rental income 9,012,858 7,873,485
Other assets 22,785,930 17,334,741
------------- -------------
Total assets $ 771,170,290 $ 723,290,927
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Convertible subordinated debentures- 10.5% $ 3,943,000 $ 4,025,000
Convertible subordinated debentures- 6.55% 69,008,907 68,659,370
Bank credit facility 126,200,000 172,950,000
Mortgage notes payable 61,359,846 56,944,397
Short term credit facility -- 27,500,000
Accrued expenses and other liabilities 22,516,318 20,979,093
------------- -------------
Total liabilities 283,028,071 351,057,860
------------- -------------
Stockholders' equity
Preferred stock, $0.001 par value,
10,000,000 shares authorized;
3,000,000 shares issued 3,000 3,000
Common stock, $0.001 par value,
50,000,000 shares authorized;
22,420,587 shares and 17,337,608 shares
issued and outstanding, respectively 22,421 17,337
Additional paid-in-capital 494,355,836 376,891,745
Loans to officers to finance stock purchases (190,763) (190,763)
Cumulative net income 72,458,144 62,265,967
Cumulative dividends (72,897,260) (62,855,219)
Unearned restricted stock compensation (2,249,159) (539,000)
------------- -------------
491,502,219 375,593,067
Less Treasury stock; 140,000 shares (3,360,000) (3,360,000)
------------- -------------
Total stockholders' equity 488,142,219 372,233,067
------------- -------------
Total liabilities and stockholders' equity $ 771,170,290 $ 723,290,927
============= =============
</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>
Quarter Ended
March 31,
-----------------------------
1998 1997
----------- -----------
<S> <C> <C>
Revenues:
Rental income $15,487,710 $ 9,679,607
Mortgage interest income 4,716,537 1,363,648
Other income 433,031 240,815
----------- -----------
Total Income 20,637,278 11,284,070
----------- -----------
Expenses:
General and administrative 1,172,039 555,859
Depreciation 2,863,449 1,707,911
Amortization 217,852 153,377
Interest 4,987,134 2,476,202
Property operations 1,204,627 145,649
----------- -----------
Total expenses 10,445,101 5,038,998
----------- -----------
Net income $10,192,177 $ 6,245,072
=========== ===========
Net income per share (basic and diluted) $ 0.42 $ 0.43
=========== ===========
Weighted averages shares outstanding 20,349,445 14,522,041
=========== ===========
</TABLE>
The accompanying notes are an integral part of this financial statement
3
<PAGE> 5
Capstone Capital Corporation
Condensed Consolidated Statements of Cash Flow
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended
March 31,
----------------------------------
1998 1997
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 10,192,177 $ 6,245,072
Depreciation 2,863,449 1,707,911
Amortization 217,852 153,377
Amortization of debenture original issue discount 362,537 75,150
Earned compensation for restricted stock 210,396 -
Increase in accrued rental income (1,139,373) (653,734)
Increase in receivables and other assets (5,716,506) (2,327,067)
Increase in accrued expenses and
other liabilities 1,517,653 3,892,826
------------- -------------
Net cash provided by operating activities 8,508,185 9,093,535
------------- -------------
Cash flows from investing activities:
Acquisition of real estate properties (25,706,168) (39,881,707)
Investment in mortgage notes receivable (48,449,727) (28,249,594)
Collections on mortgage notes receivable 29,885,866 69,624
------------- -------------
Net cash used by investing activities (44,270,029) (68,061,677)
------------- -------------
Cash flows from financing activities:
Increase (decrease) in bank credit facilities (74,250,000) 300,000
Proceeds from mortgage note payable 4,617,490 -
Principal payments on mortgage notes payable (202,041) (43,969)
Proceeds from issuance of common stock 122,187,500 -
Proceeds from issuance of convertible
subordinated debentures - 67,235,025
Financing costs related to issuance
of convertible subordinated debentures - (1,836,650)
Financing costs related to stock offering (6,784,594) (10,829)
Payment of dividends (10,042,043) (6,643,663)
Capital contributions from minority interests 14,932 -
Proceeds from dividend reinvestment plan 58,504 24,711
------------- -------------
Net cash provided by financing activities 35,599,748 59,024,625
------------- -------------
Decrease in cash (162,096) 56,483
Cash, beginning of period 1,970,081 1,122,241
------------- -------------
Cash, end of period $ 1,807,985 $ 1,178,724
============= =============
</TABLE>
The accompanying notes are an integral part of this financial statement
4
<PAGE> 6
CAPSTONE CAPITAL CORPORATION
Notes to Condensed Consolidated Financial Statements
March 31, 1998
(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, 1997. 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, 1997.
The Company is an indefinite life real estate investment trust
("REIT") which commenced operations on June 30, 1994. 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. REAL ESTATE PROPERTIES
As of March 31, 1998 the Company had investments in 88 leased real
estate properties totaling $527.1 million. These real estate properties consist
of and include nineteen assisted living facilities, eighteen ancillary hospital
facilities, eighteen physician clinics, nine skilled nursing facilities, six
ambulatory surgery facilities, six inpatient rehabilitation facilities, five
integrated delivery facilities, three outpatient rehabilitation facilities, two
comprehensive mental health hospitals, and two sub-acute care facilities. The
properties are located in sixteen states and are leased to nineteen
healthcare-related entities or their subsidiaries pursuant to long-term leases.
In addition, the Company has invested approximately $44.5 million in fifteen
development projects at various stages of completion. The Company has remaining
commitments of approximately $55.1 million for development projects and expects
all projects to be completed by the fourth quarter of 1998.
The Company's properties are generally leased pursuant to fixed term
operating leases expiring from 2001 to 2012 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 acquire the Company's interest at
a fair market value.
5
<PAGE> 7
Substantially all of the leases are triple net leases which require the
lessees to pay, in addition to base rent, any additional rent and all additional
charges, including any fines, penalties, interest and costs which may be levied
for nonpayment or late payment thereof, all operating expenses, taxes,
environmental clean-up costs, association dues, insurance premiums, assessments,
levies, fees, water and sewer rents and charges and all governmental charges
with respect to the applicable leased property.
NOTE 3. MORTGAGE NOTES RECEIVABLE
As of March 31, 1998, the Company had provided $188.6 million in
mortgage financing for 71 properties located in 27 states. The mortgage notes
receivable are secured by the real estate of 36 assisted living facilities, 29
skilled nursing facilities, two ancillary hospital facilities, one integrated
delivery facility, one ambulatory surgery facility, one specialty hospital
facility and one acute care hospital which are operated by 36 healthcare
operators.
Twenty nine of the facilities are under construction, and the Company
has committed a total of $130.8 million in construction and term loans for these
projects. As of March 31, 1998, the Company had advanced a total of $86.9
million toward these financing commitments. The Company expects to disburse the
remainder of the committed funds during 1998.
The mortgage notes receivable for completed projects ("Permanent
Loans") require monthly installments of principal and interest with final
payment dates in or before 2009 and bear rates ranging from 9.25 percent to
13.79 percent at March 31, 1998. Each Permanent Loan provides for an initial
interest rate to be increased annually by either a set rate or upon an increase
in the consumer price index. For those projects under construction, the notes
receivable typically bear interest at a floating rate and require monthly
payments of interest only. Upon completion of construction, the outstanding
principal balance is converted to a Permanent Loan.
The Company had no impaired mortgage notes receivable at or during the
quarter ended March 31, 1998.
NOTE 4. MORTGAGE NOTES PAYABLE
The Company has a mortgage note payable to a life insurance company for
an original principal amount of $23.3 million ("$23.3 million Mortgage Note").
The $23.3 million Mortgage Note bears interest at 8.5% and is payable in monthly
installments of principal and interest based on a 30-year amortization with the
final payment due May 26, 2026. The $23.3 million Mortgage Note is
collateralized by an ancillary hospital facility purchased in January 1996 for
$30.0 million.
The Company has a non-recourse mortgage note payable to a bank for an
original principal amount of $17.0 million ("$17.0 million Mortgage Note"). The
$17.0 million Mortgage Note bears interest at 50 basis points in excess of the
prime rate, as such rate fluctuates from time to time and is payable in monthly
installments of principal and
6
<PAGE> 8
interest based on a 25-year amortization with the unpaid balance due in a
balloon payment on June 20, 2000. The interest rate as of March 31, 1998 was
9.0%. The $17.0 million Mortgage Note is collateralized by six skilled nursing
facilities purchased in June 1997 for $23.8 million.
The Company has three non-recourse mortgage notes payable to a life
insurance company for a combined original principal sum of $17.1 million ("$17.1
million Mortgage Notes"). The $17.1 million Mortgage Notes bear interest at
8.125% and are payable in monthly installments of principal and interest based
on a 25-year amortization with the remaining unpaid balance due in a balloon
payment on September 1, 2004. The $17.1 million Mortgage Notes are
collateralized by two ambulatory surgery facilities and one ancillary hospital
facility.
The Company has a non-recourse mortgage note payable to a life
insurance company for an original principal sum of $4.75 million ("$4.75 million
Mortgage Note). The $4.75 million Mortgage Note bears interest at 7.625% and is
payable in monthly installments of principal and interest based on a 20 year
amortization. The $4.75 million Mortgage Note was assumed by the Company with
the purchase of an ancillary hospital facility in March 1998.
NOTE 5. BANK CREDIT FACILITY
The Company has a $180 million unsecured line of credit ("Bank Credit
Facility") which is participated in by a consortium of eight banks. At March 31,
1998, the Company had drawn $126.2 million against the Bank Credit Facility for
the purchase of real estate properties and the funding of mortgage loans. The
Bank Credit Facility is available until June 24, 2000.
Borrowings under the Bank Credit Facility bear an interest rate chosen
by the Company from either the prime 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.
NOTE 6. CONVERTIBLE SUBORDINATED DEBENTURES
As of March 31, 1998, the Company had $3,943,000 aggregate principal
amount of 10.5% Convertible Subordinated Debentures (the "10.5% Debentures")
outstanding. The 10.5% Debentures are due on April 1, 2002, unless redeemed
earlier by the Company or converted by the holders. Payments of interest to the
holders of the 10.5% Debentures are required April 1 and October 1 of each year.
As of March 31, 1998, the Company had $69,008,907 aggregate principal
amount of 6.55% Convertible Subordinated Debentures (the "6.55% Debentures")
outstanding. The 6.55% Debentures are due March 14, 2002 and were issued at a
price of $903 per $1,000 principal amount at maturity, which represents an
original issue discount of 9.70% from the principal amount thereof which is
payable at maturity. Interest on the 6.55% Debentures is payable March 14 and
September 14 in each year. Such rate of interest and
7
<PAGE> 9
accrual of original issue discount represent a yield to maturity of 9.00% per
annum (computed on a semiannual bond equivalent basis).
The 6.55% Debentures are convertible into common stock of the Company
at any time before maturity at an initial conversion ratio of 39.4754 shares of
common stock for each $1,000 principal amount of 6.55% Debentures, subject to
adjustment in certain events. The 6.55% Debentures are redeemable at the option
of the Company, in whole or in part, after March 14, 2000 at redemption prices
of $989.48 in the year 2000, or $994.14 in the year 2001.
NOTE 7. SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental disclosure of cash flow information is as follows:
<TABLE>
<CAPTION>
For the Qtr. For the Qtr.
Ended Ended
March 31, 1998 March 31, 1997
-------------- --------------
<S> <C> <C>
Cash payments for bank credit facility
interest expense $ 2,896,661 $ 1,653,857
Cash payments for mortgage notes payable
interest expense 1,241,044 493,500
Cash payments for convertible subordinated
debenture interest expense 1,682,518 730,655
Non-cash distribution to minority interest 14,932 -
Convertible subordinated debentures converted into shares of common stock:
Convertible subordinated debentures (95,000) (657,000)
Financing costs (3,148) (249,941)
Shares of common stock 5,597 40,741
Additional paid in capital 91,846 407,018
</TABLE>
NOTE 8. RESTRICTED STOCK AWARDS
During the first quarter of 1998, the Company granted 274,500 shares
from a base price of $24.4375 per share of performance based restricted stock
under its 1994 stock incentive plan. The grants of shares are intended to reward
the grantees for past service and provide incentives to the grantees to continue
serving the Company. The shares vest in 25% increments related to the
performance of the Company's common stock.
8
<PAGE> 10
The vesting of shares can be deferred at the election of the grantee
over a three year period. Any grantee who elects to defer vesting will be
entitled to receive additional shares of restricted stock equal to 20% of the
number of shares of restricted stock that the grantee elects to defer.
Shares issued under the plan are initially recorded at their fair
market value on the date of grant with the corresponding charge to unearned
restricted stock compensation representing the unearned portion of the award.
Compensation under the plan is charged to earnings over the vesting period and
amounted to $205,788 for the first quarter.
NOTE 9. COMMITMENTS AND CONTINGENCIES
The Company has committed a total of $230.5 million towards the
acquisition and construction of real estate properties and providing mortgage
financing. As of March 31, 1998, the Company had funded approximately $131.5
million towards these commitments with the balance of $99.0 million expected to
be funded over the next 12 months.
NOTE 10. SUBSEQUENT EVENTS
On April 23, 1998, the Company declared a dividend of $0.49 per share
to the holders of common stock on May 4, 1998. The dividend will be paid in cash
on May 15, 1998. The dividend related to the quarter ended March 31, 1998.
For the period from April 1 through May 12, 1998, a total of $60,000 of
principal amount of 10.5% Debentures was 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 3,720 in the shares of common stock of the Company,
an increase of $60,000 in stockholders' equity and a decrease of $60,000 in the
outstanding balance of the 10.5% Debentures.
9
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
FIRST QUARTER 1998 COMPARED TO FIRST QUARTER 1997
For the quarter ended March 31, 1998 the Company reported basic net
income of $8.5 million (after preferred dividends paid of $1.7 million), or
$0.42 basic net income per common share, compared to $6.3 million, or $0.43
basic net income per common share at March 31, 1997.
Revenues for the quarter ended March 31, 1998 totaled $20.6 million,
increasing $9.3 million over March 31, 1997 revenues of $11.3 million. The
increase in revenues is primarily attributable to additional rental and mortgage
interest income from investments made since March 31, 1997. Specifically, the
Company's investments in real estate increased approximately $193.8 million with
the addition of 34 properties from $333.3 million at March 31, 1997 to $527.1
million at March 31, 1998. The Company's investments in mortgage loans increased
$121.1 million from $67.5 million at March 31, 1997 to $188.6 million at March
31, 1998. These amounts include the payoff of approximately $29.2 million in
short-term mortgage loans in February 1998.
Interest expense for the quarter ended March 31, 1998 totaled $4.9
million, increasing $2.3 million over March 31, 1997 interest expense of $2.6
million. The increase is primarily due to the addition of approximately $38.9
million in non-recourse property specific notes payable with interest rates from
7.63% to 9.00% and to additional amounts outstanding under the Bank Credit
Facility. In addition, the Company recognized a full quarter's interest on the
6.55% Debentures issued in March 1997 which was offset by the decrease in
interest on the 10.5% Debentures due to conversions into the Company's common
stock.
Depreciation for the quarter ended March 31, 1998 totaled $2.9 million
increasing $1.2 million over March 31, 1997 depreciation of $1.7 million. This
is due to the acquisition of the 34 real estate properties subsequent to March
31, 1997.
LIQUIDITY AND CAPITAL RESOURCES
On February 9, 1998, the Company issued 5,000,000 shares of common
stock at $24.4375 per share. Net proceeds from the sale of $115,787,500 were
used to reduce the Company's outstanding balance under the Bank Credit Facility
and to retire a short-term credit facility.
At March 31, 1998, the outstanding balance of the Bank Credit Facility
was $126.2 million, the entire balance of which was used for the acquisition of
real estate and the funding of mortgage loans. Due to acquisitions of real
estate and the funding of mortgage loans subsequent to March 31, 1998, the
balance of the Bank Credit Facility as of May 13, 1998 was $143,700,000.
10
<PAGE> 12
Borrowings under the Bank Credit Facility bear interest at a rate
chosen by the Company from either the Bank's base rate or the Eurodollar rate
plus a percentage ranging from 1.00 % to 1.625%, depending upon the Company's
senior debt to consolidated total capital ratio for the preceding quarter. The
Company has an interest rate swap ("Swap") agreement with NationsBank which
effectively fixes the base rate at 5.959% on a $50 million notional amount of
borrowings under the Bank Credit Facility. The Swap will be in effect from March
1998 until March 2003 unless NationsBank elects to cancel at the three year
anniversary of the Swap in March 2001.
Additionally, as discussed in Note 6, as of March 31, 1998 the Company
had $3,943,000 principal amount of 10.50% convertible subordinated debentures
outstanding. These Debentures are due April 2002 and interest is payable
semiannually.
On April 23, 1998, the Company declared a dividend of $0.49 per share
to the holders of common stock on May 4, 1998. The dividend will be paid in cash
on May 15, 1998. The dividend related to the quarter ended March 31, 1998.
COMMITMENTS
The Company has committed a total of approximately $230.5 million
towards the acquisition and construction of real estate properties and providing
mortgage financing. As of March 31, 1998, the Company had funded approximately
$131.5 million towards these commitments, with the balance of $99.1 million
expected to be funded during the next 12 months. Financing for these commitments
may be provided by funds from operations, borrowings under the Bank Credit
Facility or private or public offerings of debt or equity.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Any statement contained in this report which is not a historical fact,
or which might otherwise be considered an opinion or projection concerning the
Company or its business, whether expressed or implied, is meant as, and should
be considered, a forward- looking statement as that term is defined in the
Private Securities Litigation Reform Act of 1996. Forward-looking statements are
based on assumptions and opinions concerning a variety of known and unknown
risks, including but not necessarily limited to changes in market conditions,
natural disasters, and other catastrophic events, increased competition, changes
in availability and cost of reinsurance, changes in governmental regulations,
and general economic conditions, as well as other risks more completely
described in the Company's filings with the Securities and Exchange Commission.
If any of these assumptions or opinions may also prove materially incorrect, any
forward-looking statements made on the basis of such assumptions or opinions may
also prove materially incorrect in one or more respects.
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
A report on Form 8-K was filed by the Company on January 21, 1998
reporting the Company's 1997 results of operations and on February
9, 1998 in connection with the offering of 5 million shares of
common stock of the Company.
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/ MALCOLM E. McVAY
----------------------------
Malcolm E. McVay
Chief Financial Officer
Date: May 14, 1998
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF CAPSTONE CAPITAL CORPORATION FOR THE THREE MONTHS ENDED MARCH 31,
1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,807,985
<SECURITIES> 0
<RECEIVABLES> 4,448,637
<ALLOWANCES> 110,000
<INVENTORY> 0
<CURRENT-ASSETS> 25,490,545
<PP&E> 528,180,595
<DEPRECIATION> 22,926,065
<TOTAL-ASSETS> 771,170,290
<CURRENT-LIABILITIES> 17,711,798
<BONDS> 72,951,907
0
3,000
<COMMON> 22,421
<OTHER-SE> 488,116,795
<TOTAL-LIABILITY-AND-EQUITY> 771,170,290
<SALES> 0
<TOTAL-REVENUES> 20,637,278
<CGS> 0
<TOTAL-COSTS> 10,445,101
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,987,134
<INCOME-PRETAX> 10,192,177
<INCOME-TAX> 0
<INCOME-CONTINUING> 10,192,177
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,192,177
<EPS-PRIMARY> .042
<EPS-DILUTED> .042
</TABLE>
