<PAGE>
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, 1996
------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period to
-----------------------------------------------------
Commission File Number 1-13232
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 84-1259577
- - --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1873 S. Bellaire Street, Suite 1700, Denver, Colorado 80222-4348
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(303) 757-8101
- - --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not applicable
- - --------------------------------------------------------------------------------
(Former name, former address, and former fiscal year, if changed since last
report)
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 X No
----------- ----------
The number of shares of Class A Common Stock outstanding as of April 29, 1996:
11,973,832
The number of shares of Class B Common Stock outstanding as of April 29, 1996:
585,000
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
FORM 10-Q
INDEX
PAGE
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 1996
(unaudited) and December 31, 1995 3
Consolidated Statements of Income for the Three Months
Ended March 31, 1996 and 1995 (unaudited) 4
Consolidated Statement of Cash Flows for the Three Months
Ended March 31, 1996 and 1995 (unaudited) 5
Notes to Consolidated Financial Statements
(unaudited) 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 20
Item 5. Other Information 21
Item 6. Exhibits and Reports on Form 8-K 22
Signatures 26
Schedule 1 27
<PAGE>
PART I. FINANCIAL INFORMATION.
ITEM 1. FINANCIAL STATEMENTS.
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
---------- ------------
(Unaudited)
ASSETS
<S> <C> <C>
Real estate - net of accumulated depreciation of
$33,207 and $28,737 $473,641 $448,425
Cash and cash equivalents 713 1,650
Restricted cash 17,902 17,747
Investment in unconsolidated service business
subsidiaries 4,248 3,674
Accounts receivable and other assets 7,195 7,175
-------- --------
$503,699 $478,671
-------- --------
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Secured tax-exempt bond financing $66,190 $66,190
Secured notes payable 191,552 173,502
Secured short-term financing 37,500 29,000
Accounts payable, accrued and other liabilities 7,438 8,007
Resident security deposits and prepaid rents 2,770 2,646
-------- --------
305,450 279,345
-------- --------
Commitments and contingencies - -
Minority interest in Operating Partnership 31,576 30,376
-------- --------
Stockholders' equity:
Class A Common Stock, $.01 par value, 150,000,000
shares authorized, 11,847,568 shares issued and
outstanding 118 118
Class B Common Stock, $.01 par value, 685,000
shares authorized, 585,000 shares issued and
outstanding 6 6
Non-voting preferred stock, $.01 par value,
10,000,000 authorized, none issued and
outstanding - -
Additional paid-in capital 175,078 175,129
Accumulated deficit (8,529) (6,303)
-------- --------
166,673 168,950
-------- --------
$503,699 $478,671
-------- --------
-------- --------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, 1996 MARCH 31, 1995
------------------ ------------------
<S> <C> <C>
RENTAL PROPERTY OPERATIONS
Rental and other property revenues $22,451 $18,366
Property operating expenses (8,704) (7,202)
Owned property management expense (660) (569)
------------------ ------------------
Income from property operations before
depreciation and amortization 13,087 10,595
Depreciation and amortization (4,470) (3,649)
------------------ ------------------
Income from property operations 8,617 6,946
INCOME FROM UNCONSOLIDATED SERVICE
BUSINESS SUBSIDIARIES 291 450
GENERAL AND ADMINISTRATIVE EXPENSES (323) (646)
INTEREST EXPENSE (5,395) (2,504)
INTEREST INCOME 114 179
------------------ ------------------
INCOME BEFORE MINORITY INTEREST IN
OPERATING PARTNERSHIP 3,304 4,425
Minority interest in Operating
Partnership (494) (420)
------------------ ------------------
NET INCOME $ 2,810 $ 4,005
------------------ ------------------
------------------ ------------------
Net income allocable to preferred
stockholder $ 0 $ 1,836
------------------ ------------------
------------------ ------------------
Net income allocable to common
stockholders $ 2,810 $ 2,169
------------------ ------------------
------------------ ------------------
Weighted average common shares and
common share equivalents
outstanding 11,860 9,589
------------------ ------------------
------------------ ------------------
Net income per common share and common
share equivalent $ 0.24 $ 0.23
------------------ ------------------
------------------ ------------------
Dividends paid per common share $ 0.425 $ 0.415
------------------ ------------------
------------------ ------------------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, 1996 MARCH 31, 1995
------------------ ------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $2,810 $4,005
------------------ ------------------
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 4,632 3,681
Income from unconsolidated service business subsidiaries (291) (450)
Minority interest in earnings 494 420
Changes in operating assets and liabilities:
(Increase) decrease in restricted cash (155) 306
Increase in accounts receivable and other assets (175) (1,054)
Decrease in accounts receivable from affiliates - 205
Increase (decrease) in accounts payable, accrued and
other liabilities (568) 103
Increase (decrease) in resident security deposits and
prepaid rents 124 (45)
------------------ ------------------
Total adjustments 4,061 3,166
------------------ ------------------
Net cash provided by operating activities 6,871 7,171
------------------ ------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of real estate (6,711) -
Capital replacements (827) (619)
Initial capital expenditures (261) (932)
Capital enhancements (9) -
Construction in progress (1,428) (16)
Increase in investment in unconsolidated service
business subsidiaries (160) -
Increase in office equipment and leasehold improvements (7) -
------------------ ------------------
Net cash used in investing activities (9,403) (1,567)
------------------ ------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal paydowns on secured notes payable (926) (27)
Borrowings on secured notes payable 56 -
Borrowings on secured line of credit 8,500 -
Net advances to unconsolidated service business
subsidiaries (123) (228)
Payment of dividend on mandatorily redeemable 1994
Cumulative Convertible Senior Preferred Stock - (1,836)
Payment of common stock dividend (5,037) (3,979)
Payment of distributions to minority interest in
Operating Partnership (824) (592)
Payment of additional offering costs related to 1995
common stock offering (51) -
------------------ ------------------
Net cash provided by (used in) financing activities 1,595 (6,662)
------------------ ------------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (937) (1,058)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,650 5,852
------------------ ------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $713 $4,794
------------------ ------------------
------------------ ------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest $5,227 $2,472
------------------ ------------------
------------------ ------------------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands except unit data)
(Unaudited)
NON CASH INVESTING AND FINANCING ACTIVITIES
In January 1996, the Company assumed $12,980 of notes payable secured by first
and second deeds of trust and issued 82,703 Operating Partnership Units with a
recorded value of $1,530 when the Company exercised its option to purchase the
Peachtree Park Apartments.
In January 1996, the Company assumed $5,940 of secured notes payable for the
purchase of the Villa Ladera Apartments.
(See Notes 3 and 4)
See accompanying notes to consolidated financial statements.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
Notes to Consolidated Financial Statements
March 31, 1996
(Unaudited)
NOTE 1 - ORGANIZATION
Apartment Investment and Management Company, a Maryland corporation
incorporated on January 10, 1994, ( the "Company") acts as sole
general partner of AIMCO Properties, L.P. (the "Operating
Partnership"), through AIMCO-GP, Inc. and AIMCO-LP, Inc., wholly-owned
subsidiaries which hold all of the Company's partnership interests in,
and majority ownership of, the Operating Partnership.
On July 29, 1994, the Company completed its initial public offering
("IPO") of 9,075,000 shares of Class A Common Stock, issued 966,000
shares of mandatorily redeemable 1994 Cumulative Convertible Senior
Convertible Preferred Stock ("Convertible Preferred Stock") and
513,514 unregistered shares of Class A Common Stock. Concurrently,
the Company engaged in a business combination and consummated a series
of related transactions which enabled the Company to continue and
expand the property management and related businesses of Property
Asset Management, L.L.C., Limited Liability Company and its affiliated
companies and PDI Realty Enterprises, Inc. (the "AIMCO Predecessors").
The AIMCO Predecessors received limited partnership interests in the
Operating Partnership ("OP Units") totaling 1,193,695 OP Units in
connection with these formation transactions. The Company has also
issued OP Units as consideration for the acquisition of certain
properties and property management businesses since the IPO.
Concurrent with the IPO, 650,000 shares of common stock held by four
of the Company's executive officers were reclassified as Class B
Common Stock. The Class B Common Stock is convertible into Class A
Common Stock, subject to certain conditions. In July 1995, 65,000
shares of Class B Common Stock were converted into Class A Common
Stock upon the satisfaction of the requisite conditions.
In September 1995, the Company repurchased all 966,000 outstanding
shares of its Convertible Preferred Stock and 513,514 unregistered
shares of Class A Common Stock.
In December 1995, the Company completed a public offering of 2,706,423
shares of Class A Common Stock.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
Notes to Consolidated Financial Statements
NOTE 1 - ORGANIZATION (CONTINUED)
At March 31, 1996, 11,847,568 shares of Class A Common Stock and
2,081,684 OP Units were outstanding, for a combined total of
13,929,252 common shares and OP Units.
At March 31, 1996, the Company owned and managed 15,028 apartment
units in 58 properties and managed an additional 16,423 apartment
units in 122 properties for 78 third party owners and 3,561 apartment
units in 15 properties for affiliates, bringing the total managed
portfolio to 195 properties containing 35,012 apartment units located
in the Southwestern, Southcentral and Southeastern regions of the
United States.
NOTE 2 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of the
Company as of March 31, 1996 and for the three months ended March 31,
1996 and 1995 have been prepared in accordance with generally accepted
accounting principles for interim financial information. 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 considered
necessary for a fair presentation have been included and all such
adjustments are of a recurring nature. The consolidated financial
statements should be read in conjunction with the audited consolidated
financial statements and notes thereto included in the Annual Report
on Form 10-K for the year ended December 31, 1995. It should be
understood that accounting measurements at interim dates inherently
involve greater reliance on estimates than at year end. The results
of operations for the interim periods presented are not necessarily
indicative of the results for the entire year.
As a result of a restructuring completed in September 1995, the
Company's interests in its service business subsidiaries are accounted
for under the equity method. For comparative purposes, consolidated
financial statements presented at March 31, 1995 have been restated to
reflect the restructuring.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
Notes to Consolidated Financial Statements
NOTE 3- REAL ESTATE
Effective January 1, 1996, the Company exercised its option to acquire
the ownership interest of the Company's Chairman in Peachtree Park, a
295 apartment unit property located in Atlanta, Georgia. The option
was acquired in conjunction with the IPO in July 1994. The Company
issued 82,703 OP Units with a recorded value of $1,530,000, paid
$287,000 in cash and assumed $12,980,000 of indebtedness for the
total purchase price of $14,797,000. A major refurbishment of the
property was completed in 1995, with more than $6.5 million ($22,000
per unit) spent to refurbish the property.
In January 1996, the Company acquired the Villa Ladera Apartments, a
280 apartment unit property located in Albuquerque, New Mexico for a
purchase price of $11,825,000. The consideration consisted of
$5,885,000 in cash and the assumption of $5,940,000 of indebtedness
secured by a first trust deed. In addition, the Company purchased a
parcel of vacant land adjacent to the Villa Ladera Apartments for
$425,000 in cash in March 1996.
NOTE 4 - SECURED NOTES PAYABLE
In January 1996, the Company assumed $12,980,000 in secured notes
payable in connection with the purchase of Peachtree Park. The
Peachtree Park indebtedness includes a $8,730,000 first mortgage loan
which bears interest at 7.1% and matures in May 1997 and a $4,250,000
second participating mortgage loan, maturing May 1999, which bears
interest at a fixed rate of 10% plus 50% of the property's available
cash flow after debt service and payment of a preferred return to the
Company of $100,000 per year.
In January 1996, the Company assumed a $5,940,000 secured note payable
with an interest rate of 7.125%, maturing in December 2016, in
connection with the purchase of the Villa Ladera apartments.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
Notes to Consolidated Financial Statements
NOTE 5 - SECURED SHORT-TERM FINANCING
During the three months ended March 31, 1996, the Company borrowed
$8,500,000 under its Credit Facility to fund the cash portion of the
Peachtree Park and Villa Ladera purchases and the construction in
progress at certain properties owned by the Company.
NOTE 6 - DIVIDEND DECLARED
On April 25, 1996, the Board of Directors declared a cash dividend of
$.425 per share of Class A Common Stock for the quarter ended March
31, 1996, payable on May 15, 1996 to stockholders of record on May 8,
1996.
NOTE 7 - REGISTRATION STATEMENT
In February 1996, the Company filed a registration statement with the
Securities and Exchange Commission relating to the resale of certain
shares of Class A Common Stock of the Company which may be issued in
exchange for OP Units which may be tendered for redemption by OP
Unitholders. The registration statement relates to OP Units issued
from inception through January 15, 1996 with the exception of the OP
Units held by executive officers of the Company. The registration
statement was declared effective by the Securities and Exchange
Commission on April 2, 1996.
NOTE 8 - SUBSEQUENT EVENT
On April 22, 1996, the Company purchased Sycamore Creek, a 336
apartment unit property located in Tustin, California for a purchase
price of $16,669,000. The consideration included $1,450,000 cash and
the issuance of 623,736 OP units and 126,264 shares of Class A Common
Stock for an aggregate recorded value of $15,219,000. The Company has
budgeted an additional $1.2 million for initial capital expenditures.
On May 3, 1996, the Company filed a Registration Statement on Form S-3
relating to the resale of the 126,264 shares of Class A Common Stock
issued in this transaction.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
OVERVIEW
On July 29, 1994, the Company completed its IPO of 9,075,000 shares of
Common Stock at $18.50 per share and issued 966,000 shares of Convertible
Preferred Stock and 513,514 unregistered shares of Class A Common Stock. In
addition, the Company acquired its initial interest in the Operating
Partnership, certain of the service business subsidiaries, acquired four
properties and the businesses of the AIMCO Predecessors and acquired 33
additional properties. Since the IPO, the Company has completed an offering of
an additional 2,706,423 shares of Common Stock at $19.125 per share, acquired 22
additional properties, repurchased 966,000 shares of Convertible Preferred Stock
and 513,514 shares of unregistered Common Stock and financed $155.4 million
of long-term, fixed rate, fully amortizing debt.
The following discussion and analysis of the results of operations and
financial condition of the Company should be read in conjunction with the
Consolidated Financial Statements and notes thereto.
RESULTS OF OPERATIONS
COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 1996 TO THE THREE MONTHS ENDED
MARCH 31, 1995
The Company recognized net income of $2,810,000 for the three months ended
March 31, 1996. For the three months ended March 31, 1995, the Company
recognized net income of $4,005,000, of which $1,836,000 was allocable to the
holder of the Convertible Preferred Stock and $2,169,000 was allocable to the
Class A common stockholders. The increase in net income in 1996 was primarily
the result of the acquisition of ten additional properties in December 1995 and
January 1996 offset by increased interest expense associated with debt which was
financed following the first quarter of 1995. These factors are discussed in
more detail in the following paragraphs.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
RENTAL PROPERTY OPERATIONS
Rental and other property revenues from the Company's 58 apartment
properties totaled $22,451,000 for the three months ended March 31, 1996,
consisting of $18,820,000 for the 48 properties owned for all of 1995 and
$3,631,000 for the 10 properties acquired in December 1995 and in January 1996.
Rental and other property revenues of $18,820,000 for the 48 properties for the
first quarter of 1996 compares to $18,366,000 for the same period in 1995,
reflecting an increase of $454,000, or 2.5%. Average monthly rent per occupied
unit for the 48 properties owned at both March 31, 1996 and March 31, 1995 was
$518 and $500, respectively, an increase of 3.6%. Weighted average physical
occupancy was 94% at March 31, 1996 compared to 95% at March 31, 1995.
Operating expenses, consisting of on-site payroll costs, utilities (net of
reimbursements received from tenants), contract services, turnover costs,
repairs and maintenance, advertising and marketing and taxes and insurance
totaled $8,704,000 from 58 properties for the three months ended March 31, 1996,
consisting of $7,325,000 for the 48 properties owned for all of 1995 and
$1,379,000 for the 10 properties acquired in December 1995 and January 1996.
Operating expenses of $7,325,000 for the 48 properties for the first quarter of
1996 compares to $7,202,000 for the same period in 1995, reflecting an increase
of $123,000, or 1.7%.
Property operations on a "same store" basis are comparable for 46 of the 48
properties owned during both the first quarter of 1995 and the first quarter of
1996 due to the revision of the rental structure of two of the 48 properties in
the third quarter of 1995 in conjunction with the completion of the Company's
tax restructuring. The rental and other revenue for the three months ended March
31, 1996 for these 46 properties was $18,456,000 compared to $17,794,000 for the
three months ended March 31, 1995, representing an increase of $662,000, or
3.7%. Average monthly rent per occupied unit for these 46 properties was $517
and $495, respectively, an increase of 4.4%. The increase results from higher
rental rates charged upon renewal of existing tenant leases or upon the
execution of new tenant leases. Comparative operating expenses for the 46
properties were $7,127,000 for the three months ended March 31, 1996 compared to
$6,906,000 for the same period in 1995, reflecting an increase of $221,000, or
3.2%, primarily in utility and turnover costs.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
Owned property management expenses, representing the costs of managing the
Company's properties, totaled $660,000 for 58 properties for the three months
ended March 31, 1996, consisting of $540,000 for the 48 properties owned for all
of 1995 and $120,000 for the properties purchased in December 1995 and January
1996. The owned property management expenses for the 48 properties for the
three months ended March 31, 1995 was $569,000.
PROPERTY MANAGEMENT
Income from unconsolidated service business subsidiaries is accounted for
on the equity method. For informational purposes, the Company's share of income
from the unconsolidated service business subsidiaries for the three months ended
March 31, 1996 and 1995 are described below for each major category of revenue
and expense.
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, 1996 MARCH 31, 1995
------------------ ------------------
(in thousands)
<S> <C> <C>
Management fees and other income $ 1,848 $ 1,905
Management expenses (1,260) (1,336)
Corporate overhead allocation (149) 0
Management company goodwill amortization (114) (80)
Depreciation of other assets (48) (39)
-------- --------
Income from property management 277 450
Minority interest 14 -
-------- --------
Company's share of income from property
management $ 291 $ 450
-------- --------
-------- --------
</TABLE>
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
The net contribution from the property management business, before
amortization of management company goodwill, corporate overhead allocation,
depreciation and amortization and minority interest, was $588,000 for the three
months ended March 31, 1996 and $569,000 for the three months ended March 31,
1995. Details by source of revenues follow:
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, 1996 MARCH 31, 1995
------------------ ------------------
(in thousands)
<S> <C> <C>
Properties managed for third parties and
affiliates
Revenues from properties owned by third
parties $ 803 $ 742
Revenues from properties owned by
affiliates 282 347
Management and other expenses (972) (943)
-------- --------
113 146
-------- --------
Commercial asset management
Management and other income 363 433
Management and other expenses (95) (166)
-------- --------
268 267
-------- --------
Reinsurance operations
Revenues 308 284
Expenses (49) (141)
-------- --------
259 143
-------- --------
Other
Revenues 92 99
Expenses (144) (86)
-------- --------
(52) 13
-------- --------
$ 588 $ 569
-------- --------
-------- --------
</TABLE>
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
Net income from the management of properties for third parties and
affiliates was $113,000 for the three months ended March 31, 1996, compared to
$146,000 for the three months ended March 31, 1995, a decrease of $33,000, or
22.6%. The decrease in net income is due primarily to increased payroll costs
partially offset by an increase of $91,000 in the allocation of management costs
to owned property management expense.
Net income from commercial asset management remained constant for the
three months ended March 31, 1996 compared to the same period in 1995,
however, revenues decreased by $70,000, or 16.2% for the three months ended
March 31, 1996 compared to the three months ended March 31, 1995 as a result
of a reduction in the number of commercial properties under management. The
decline in revenues from commercial asset management was offset by a decrease
in related management and other expenses of $71,000, or 42.8%, primarily due
to a reduction in personnel.
Net income from the reinsurance operations increased by $116,000, or 81.1%
due to increased premiums collected from a larger work force, improved loss
experience and the closure of claims for less than the amounts previously
reserved.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses totaled $323,000 for the three months
ended March 31, 1996 compared to $646,000 for the same period in 1995. The
amount presented for the three months in 1996 included $277,000 for payroll,
overhead and other costs associated with operating a public company and $195,000
for payroll and other costs incurred in the development of new business offset
by a corporate overhead allocation of $149,000 to the service business
subsidiaries. The amount presented for the three months in 1995 included
$355,000 for payroll, overhead and other costs associated with operating a
public company, and $291,000 for payroll and other costs incurred in the
development of new business. The combined general & administrative decrease of
$174,000, or 26.9% in 1996 before the allocation of corporate overhead is
attributable to fewer personnel and a decrease in abandoned acquisition costs.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
INTEREST EXPENSE
Interest expense totaled $5,395,000 for the three months ended March 31,
1996 compared to $2,504,000 for the three months ended March 31, 1995.
Interest expense, which includes amortization of deferred financing costs and
unused commitment fees associated with the Company's Credit Facility,
increased by $2,891,000, or 115.4% in 1996. The increase was due primarily
to an increase of $3,088,000 in interest expense on secured notes payable
from: (1) $57 million borrowed in June 1995 to repay certain floating rate
debt and amounts borrowed under the Credit Facility; (2) $98 million borrowed
in September 1995 to repurchase all 966,000 outstanding shares of Convertible
Preferred Stock and 513,514 shares of unregistered Class A Common Stock; (3)
$25 million borrowed in connection with the purchase of five properties in
December 1995; and (4) $24 million assumed in connection with the purchase of
three properties in December 1995 and January 1996. In addition, interest
expense, amortization of deferred financing costs and unused commitment fees
on the Credit Facility was $267,000 for the three months ended March 31, 1996
compared to $464,000 for the three months ended March 31, 1995, a decrease of
$197,000, or 42.4% as a result of lower amounts outstanding under the Credit
Facility in 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal demands for liquidity include normal operating
activities, payments of principal and interest on outstanding debt, capital
improvements, acquisitions of or investments in properties, dividends paid to
its stockholders and distributions paid to minority limited partners in the
Operating Partnership. The Company considers its cash provided by operating
activities to be adequate to meet normal operating requirements, principal and
interest payments on outstanding debt, dividends to stockholders and
distributions to minority limited partners. As of March 31, 1996, $827,000 in
capital replacements and $261,000 in initial capital expenditures were spent.
These expenditures were funded from working capital reserves and net cash
provided by operating activities. The Company expects to incur an additional
$3.7 million in capital replacements and $7.2 million in initial capital
expenditures during the balance of 1996, which will be funded by cash from
operating activities and borrowings under the Credit Facility. In addition,
during the quarter ended March 31, 1996, the Company incurred $1,428,000 in
costs related to the construction and renovation of certain properties. These
expenditures were funded by borrowings under the Credit Facility.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
As of March 31, 1996, the maximum amount available under the Credit
Facility was $32 million and the Company had outstanding borrowings thereunder
of $12.5 million, leaving a remaining availability of $19.5 million. The
interest rate at March 31, 1996 was 7.1%. If the Company sells any properties
that are used to secure the Credit Facility, the amount available under the
Credit Facility will be reduced unless substitute collateral is provided.
The Company has entered into an agreement to sell four of its properties
located in Texas (the Dakota Apartments, Sterling Point Apartments and Woodcreek
Apartments in Dallas and the Ridgmar Park Apartments in Fort Worth) in a single
transaction for aggregate consideration of $17.9 million in cash ($17.3 million
net to the Company). Proceeds of the sale will be used to pay amounts
outstanding under the Credit Facility and to provide working capital. The
Company expects to complete the transaction during the second quarter of 1996.
The four properties partially secure the amount available under the Credit
Facility and if sold, the maximum available under the Credit Facility will be
reduced to approximately $20 million.
The Company expects to meet its long-term liquidity requirements, such as
refinancing debt and property acquisitions, through long-term borrowings, both
secured and unsecured, the issuance of debt or equity securities and cash
generated from operations. On October 18, 1995, the Company filed a shelf
registration statement with the Securities and Exchange Commission with respect
to an aggregate of $200 million of debt and equity securities. In December
1995, the Company sold 2,706,423 shares of Class A Common Stock for $19.125 per
share (for aggregate gross proceeds of $51.8 million) in a public offering.
In April 1996, the Company issued 126,264 shares of Class A Common Stock with
a recorded value of $2.6 million in connection with the purchase of a property.
The amount remaining under the shelf registration is $145.6 million.
As of March 31, 1996, the Company had outstanding indebtedness totaling
$295 million: $191.5 million of secured notes payable; $66 million of secured
tax-exempt debt ($48.1 million of which is floating rate debt); a secured one-
year floating rate bridge loan of $25 million; and $12.5 million outstanding
under its Credit Facility. The Company's outstanding debt is secured by
substantially all of the properties owned by the Company.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
CONTINGENCIES
The Company has filed a request with the IRS for a private letter ruling
regarding the characterization of certain advances paid to the service business
subsidiaries with respect to property management services provided to properties
managed by the Company for third parties and affiliates. The Company believes
and is seeking a determination that such amounts are not includable in gross
income for purposes of the REIT qualification tests for the Company's 1994 and
1995 taxable years. Although the Company intends to vigorously dispute any
determination that such amounts are includable in gross income, such a
determination, if ultimately upheld, would result in potential tax liability to
the Company of up to $1.4 million, plus interest. A determination by the IRS
that the advances paid to the service business subsidiaries in 1994 and 1995 are
includable in gross income will not affect the Company's status as a REIT.
Certain of the Company's properties are, and some of the properties managed
by the Company for others may be, located on or near properties that have
contained underground storage tanks or on which activities have occurred which
could have released hazardous substances into the soil or groundwater. There
can be no assurances that such hazardous substances have not been released or
have not migrated, or in the future will not be released or will not migrate
onto the properties. In addition, the Company's Montecito property in Austin,
Texas, is located adjacent to, and may be partially on, land that was used as a
landfill. Low levels of methane and other landfill gas have been detected at
Montecito. The remediation of the landfill gas is now substantially complete.
The environmental authorities have preliminarily approved the methane gas
remediation efforts. Final approval of the site and the remediation process is
contingent upon the results of continued methane gas monitors to confirm the
effectiveness of the remediation efforts. Should further actionable levels of
methane gas be detected, a proposed contingent plan of passive methane gas
venting may be implemented. The Company believes the costs of such further
limited action, if any, will not be material. Testing has also been conducted
on Montecito to determine whether, and to what extent, groundwater has been
impacted. Test reports have indicated that the groundwater is not contaminated
at actionable levels.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
INFLATION
Substantially all of the leases at the Company's apartment properties are
for a period of one year or less, allowing, at the time of renewal, for
adjustments in the rental rate and the opportunity to re-lease the apartment
unit at the prevailing market rate. The short term nature of these leases
generally serves to minimize the risk to the Company of the adverse effect of
inflation and the Company does not believe that inflation has had a material
adverse impact on its revenues.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company held its annual meeting of stockholders on April 25, 1996. At
the meeting, the stockholders approved the four proposals set forth below:
1. Proposal to elect six directors, for a term of one year each, until the next
annual meeting of stockholders and until their successors are elected and
qualify:
Votes Votes Votes
For Against Withheld
--- ------- --------
Terry Considine 10,054,185 0 54,460
Richard S. Ellwood 10,053,425 0 55,220
Peter K. Kompaniez 10,053,185 0 55,460
J. Landis Martin 10,054,185 0 54,460
Thomas L. Rhodes 10,054,185 0 54,460
John D. Smith 10,053,910 0 54,735
2. Proposal to ratify the selection of Ernst & Young LLP, as successor to
Kenneth Leventhal & Company, to serve as independent auditors for the Company
for the calendar year ending December 31, 1996:
Votes Votes Votes
For Against Withheld
--- ------- --------
10,034,037 19,004 55,354
3. Proposal to approve an amendment to The 1994 Stock Option Plan of Apartment
Investment and Management Company and Affiliates to make the holders of the
Company's Class B Common Stock eligible to receive options thereunder:
Votes Votes Votes
For Against Withheld
--- ------- --------
5,644,010 364,610 4,100,025
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PART II. OTHER INFORMATION (CONTINUED)
4. Proposal to approve the Apartment Investment and Management Company 1996
Stock Award and Incentive Plan:
Votes Votes Votes Broker
For Against Withheld Non Vote
--- ------- -------- --------
5,369,080 634,697 165,461 3,939,407
ITEM 5. OTHER INFORMATION.
Prior to February 1996, in order to accommodate the qualification of the
Company as a REIT, four of the Company's executive officers, Terry Considine,
Peter Kompaniez, Steven Ira and Robert Lacy, collectively, held a 5% beneficial
interest in each of four regional business trusts (the "Service Trusts") that
owned four corresponding regional limited liability companies (the "Service
LLCs") through which the Company's third-party property and asset management
business was then principally conducted. In February 1996, the Operating
Partnership and Messrs. Considine, Kompaniez, Ira and Lacy contributed their
respective interests in the Service Trusts to Property Asset Management
Services, Inc., a Delaware corporation ("PAMS Inc.") in exchange for 950,000
shares of non-voting preferred stock of PAMS Inc., in the case of the Operating
Partnership, and 50,000 shares of common stock of PAMS Inc., in the case of
Messrs. Considine, Kompaniez, Ira and Lacy. In April 1996, the Service Trusts
were dissolved and their interests in the Service LLCs were distributed to PAMS
Inc. On May 2, 1996, the four Service LLCs were merged into Property Asset
Management Services, L.P., a Delaware limited partnership ("PAMS LP"), with PAMS
LP as the surviving entity. Consequently, the Company's property management and
asset management business is now conducted principally through PAMS Inc. and
PAMS LP.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
Exhibit
Number Description
- - ------- -----------
3.1 Restated Articles of Incorporation of the Company (1)
3.2 Bylaws of the Company (1)
10.1 Agreement of Purchase and Sale, dated as of December 27, 1995, by and
among General Electric Credit Equities, Inc., AIMCO/RALS, L.P. and
Stewart Title Guarantee Company (2)
10.2 Contribution Agreement, dated as of December 27, 1995, by and among
AIMCO Properties, L.P., Home Ventures Associates I, Ltd. and Home
Ventures Associates II, Ltd. (2)
10.3 Agreement of Purchase and Sale, dated as of December 27, 1995, by and
among Riverwalk Village Associates, L.P., AIMCO/RALS, L.P. and Stewart
Title Guarantee Company (2)
10.4 Assignment of Management Agreement, dated as of December 29, 1995, by
and among AIMCO/RALS, L.P., GMAC Commercial Mortgage Corporation and
the Manager named therein (Ashford Plantation Apartments, Dekalb
County, Georgia) (2)
10.5 Guaranty and Surety Agreement, dated as of December 29, 1995, by
Apartment Investment and Management Company in favor of GMAC
Commercial Mortgage Corporation (Ashford Plantation Apartments, Dekalb
County, Georgia) (2)
10.6 Multifamily Note, dated as of December 29, 1995, by AIMCO/RALS, L.P.
in favor of GMAC Commercial Mortgage Corporation in the amount of
$6,800,000 (Ashford Plantation Apartments, Dekalb County, Georgia) (2)
10.7 Multifamily Deed to Secure Debt, Assignment of Rents and Security
Agreement, dated as of December 29, 1995, by AIMCO/RALS, L.P. and GMAC
Commercial Mortgage Corporation (Ashford Plantation Apartments, Dekalb
County, Georgia) (2)
10.8 Rider to Multifamily Instrument, dated as of December 29,
<PAGE>
1995, by AIMCO/RALS, L.P. (Ashford Plantation Apartments, Dekalb
County, Georgia) (2)
10.9 Supplemental Rider to Multifamily Instrument, dated as of December 29,
1995, by AIMCO/RALS, L.P. (Ashford Plantation Apartments, Dekalb
County, Georgia) (2)
10.10 Replacement Reserve and Security Agreement, dated as of December 29,
1995, by AIMCO/RALS, L.P. and GMAC Commercial Mortgage Corporation
(Ashford Plantation Apartments, Dekalb County, Georgia) (2)
10.11 Completion/Repair and Security Agreement, dated as of December 29,
1995, by AIMCO/RALS, L.P. and GMAC Commercial Mortgage Corporation
(Ashford Plantation Apartments, Dekalb County, Georgia) (2)
10.12 Note, dated as of December 29, 1995, by AIMCO/Boardwalk Finance, L.P.
in favor of GMAC Commercial Mortgage Corporation in the amount of
$6,200,000 (2)
10.13 Guaranty and Surety Agreement, dated as of December 29, 1995, by
Apartment Investment and Management Company in favor of GMAC
Commercial Mortgage Corporation (2)
10.14 Pledge and Security Agreement, dated as of December 29, 1995, by
AIMCO/Boardwalk Finance, L.P. and GMAC Commercial Mortgage Corporation
(2)
10.15 Contribution Agreement and Joint Escrow Instructions, dated as of
January 1, 1996, by and between AIMCO Properties, L.P. and Peachtree
Park 94, L.P. (3)
10.16 The 1994 Stock Option Plan of Apartment Investment and Management
Company and Affiliates (4)
10.17 Amendment No. 1 to The 1994 Stock Option Plan of Apartment Investment
and Management Company and Affiliates
10.18 Apartment Investment and Management Company 1996 Stock Award and
Incentive Plan (5)
27.1 Financial Data Schedule
------------------------------------
<PAGE>
(1) Incorporated by reference to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1995.
(2) Incorporated by reference to the Company's Current Report on Form 8-K,
dated December 29, 1995.
(3) Incorporated by reference to the Company's Current Report on Form 8-K,
dated January 1, 1996.
(4) Incorporated by reference to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1994.
(5) Incorporated by reference to Annex A to the Company's Proxy Statement
for the 1996 Annual Meeting of Stockholders.
Documents substantially identical to Exhibits 10.4 through 10.11, except as
to the loan amount and the subject property, have been omitted in reliance on
Rule 12b-31 under the Securities Exchange Act of 1934. See Schedule 1 hereto
for the material details in which such documents differ from Exhibits 10.4
through 10.11.
(b) Reports on Form 8-K
During the quarter for which this report is filed, the Company filed the
following Reports on Form 8-K:
(1) Current Report on Form 8-K, dated December 29, 1995, relating to the
acquisition of the Ashford Plantation Apartments, the Riverwalk Apartments and
the Las Brisas Apartments (collectively, the "GECC Properties"), the Snug Harbor
Apartments, the Boardwalk Apartments, the Seasons Apartments, the Timbermill
Apartments and the Sun Katcher Apartments, including the Combined Statement of
Revenues and Certain Expenses of the GECC Properties for the year ended December
31, 1994, as well as certain pro forma financial information.
<PAGE>
(2) Current Report on Form 8-K, dated January 1, 1996, relating to the
acquisition of the Peachtree Park Apartments and the Villa Ladera Apartments,
the formation of Property Asset Management Services, Inc. and the appointment of
Thomas Toomey as Senior Vice President of Finance and Administration, including
the Statement of Revenues and Certain Expenses of Peachtree Park Apartments for
the nine months ended September 30, 1995 and the years ended December 31, 1994
and 1993.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
Date: May 13, 1996 By: /s/ LEEANN MOREIN
-------------------------------------------------
Leeann Morein
Senior Vice President and
Chief Financial Officer
Date: May 13, 1996 By: /s/ PATRICIA K. HEATH
-------------------------------------------------
Patricia K. Heath
Vice President and
Chief Accounting Officer
<PAGE>
SCHEDULE 1
Documents substantially identical to Exhibits 10.4 through 10.11,
except as to the loan amount and the subject property, have been omitted in
reliance on Rule 12b-31 under the Securities Exchange Act of 1934. Set forth
below are the material details in which such documents differ from Exhibits 10.4
through 10.11.
SUBJECT PROPERTY LOAN AMOUNT
1. Las Brisas Apartments $3,800,000
San Antonio, Texas
2. Riverwalk Apartments $6,200,000
Little Rock, Arkansas
3. Snug Harbor Apartments $2,000,000
Las Vegas, Nevada
<PAGE>
EXHIBIT INDEX TO FORM 10-Q
Sequentially
Exhibit Numbered
Number Description Page
- - ------- ----------- ----
3.1 Restated Articles of Incorporation of the Company (1)
3.2 Bylaws of the Company (1)
10.1 Agreement of Purchase and Sale, dated as of December 27, 1995, by and
among General Electric Credit Equities, Inc., AIMCO/RALS, L.P. and
Stewart Title Guarantee Company (2)
10.2 Contribution Agreement, dated as of December 27, 1995, by and among
AIMCO Properties, L.P., Home Ventures Associates I, Ltd. and Home
Ventures Associates II, Ltd. (2)
10.3 Agreement of Purchase and Sale, dated as of December 27, 1995, by and
among Riverwalk Village Associates, L.P., AIMCO/RALS, L.P. and Stewart
Title Guarantee Company (2)
10.4 Assignment of Management Agreement, dated as of December 29, 1995, by
and among AIMCO/RALS, L.P., GMAC Commercial Mortgage Corporation and
the Manager named therein (Ashford Plantation Apartments, Dekalb
County, Georgia) (2)
0.5 Guaranty and Surety Agreement, dated as of December 29, 1995, by
Apartment Investment and Management Company in favor of GMAC
Commercial Mortgage Corporation (Ashford Plantation Apartments, Dekalb
County, Georgia) (2)
10.6 Multifamily Note, dated as of December 29, 1995, by AIMCO/RALS, L.P.
in favor of GMAC Commercial Mortgage Corporation in the amount of
$6,800,000 (Ashford Plantation Apartments, Dekalb County, Georgia) (2)
<PAGE>
10.7 Multifamily Deed to Secure Debt, Assignment of Rents and Security
Agreement, dated as of December 29, 1995, by AIMCO/RALS, L.P. and GMAC
Commercial Mortgage Corporation (Ashford Plantation Apartments, Dekalb
County, Georgia) (2)
10.8 Rider to Multifamily Instrument, dated as of December 29, 1995, by
AIMCO/RALS, L.P. (Ashford Plantation Apartments, Dekalb County,
Georgia) (2)
10.9 Supplemental Rider to Multifamily Instrument, dated as of December 29,
1995, by AIMCO/RALS, L.P. (Ashford Plantation Apartments, Dekalb
County, Georgia) (2)
10.10 Replacement Reserve and Security Agreement, dated as of December 29,
1995, by AIMCO/RALS, L.P. and GMAC Commercial Mortgage Corporation
(Ashford Plantation Apartments, Dekalb County, Georgia) (2)
10.11 Completion/Repair and Security Agreement, dated as of December 29,
1995, by AIMCO/RALS, L.P. and GMAC Commercial Mortgage Corporation
(Ashford Plantation Apartments, Dekalb County, Georgia) (2)
10.12 Note, dated as of December 29, 1995, by AIMCO/Boardwalk Finance, L.P.
in favor of GMAC Commercial Mortgage Corporation in the amount of
$6,200,000 (2)
10.13 Guaranty and Surety Agreement, dated as of December 29, 1995, by
Apartment Investment and Management Company in favor of GMAC
Commercial Mortgage Corporation (2)
10.14 Pledge and Security Agreement, dated as of December 29, 1995, by
AIMCO/Boardwalk Finance, L.P. and GMAC Commercial Mortgage Corporation
(2)
10.15 Contribution Agreement and Joint Escrow Instructions, dated as of
January 1, 1996, by and between AIMCO Properties, L.P. and Peachtree
Park 94, L.P. (3)
<PAGE>
10.16 The 1994 Stock Option Plan of Apartment Investment and Management
Company and Affiliates (4)
10.17 Amendment No. 1 to The 1994 Stock Option Plan of Apartment Investment
and Management Company and Affiliates
10.18 Apartment Investment and Management Company 1996 Stock Award and
Incentive Plan (5)
27.1 Financial Data Schedule
- - ------------------------------------
(1) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1995.
(2) Incorporated by reference to the Company's Current Report on Form 8-K,
dated December 29, 1995.
(3) Incorporated by reference to the Company's Current Report on Form 8-K,
dated January 1, 1996.
(4) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994.
(5) Incorporated by reference to Annex A to the Company's Proxy Statement for
the 1996 Annual Meeting of Stockholders.
<PAGE>
EXHIBIT 10.17
AMENDMENT NO. 1 TO THE 1994 STOCK OPTION PLAN
OF APARTMENT INVESTMENT AND MANAGEMENT COMPANY AND AFFILIATES
Section 3.1 of The 1994 Stock Option Plan of Apartment Investment and
Management Company and Affiliates is hereby amended to read as follows:
"3.1 ELIGIBILITY
Subject to Section 2.1 and the Common Stock Ownership Limit, any key
Employee selected by the Committee pursuant to Section 3.4(a)(1) shall be
eligible to be granted an Option. Subject to the Common Stock Ownership
Limit, each of the Company's Independent Directors shall be eligible to
receive Options at the times and in the manner set forth in Section
3.4(d)."
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 713
<SECURITIES> 0
<RECEIVABLES> 7,195<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 18,615<F2>
<PP&E> 506,848
<DEPRECIATION> 33,207
<TOTAL-ASSETS> 503,699
<CURRENT-LIABILITIES> 47,708<F3>
<BONDS> 257,742
0
0
<COMMON> 124
<OTHER-SE> 166,549
<TOTAL-LIABILITY-AND-EQUITY> 503,699
<SALES> 22,451
<TOTAL-REVENUES> 22,856<F4>
<CGS> 9,364
<TOTAL-COSTS> 13,834<F5>
<OTHER-EXPENSES> 323
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,395
<INCOME-PRETAX> 2,810
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,810
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,810
<EPS-PRIMARY> 0.24
<EPS-DILUTED> 0.24
<FN>
<F1>Includes Accounts recivable and other assets.
<F2>Includes cash & restricted cash.
<F3>Includes secured short term financing accts payable and accrued liabilities
resident security deposits and prepaid rents.
<F4>Includes Rental and other property revenues and income from unconsolidated
service business subsidiaries
<F5>Includes CGS and depreciation.
</FN>
</TABLE>
