FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1997
OR
o 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: 1-13820
Sovran Self Storage, Inc.
(Exact name of Registrant as specified in its charter)
Maryland 16-1194043
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5166 Main Street
Williamsville, NY 14221
(Address of principal executive offices) (Zip code)
(716) 633-1850
(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 ____
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes ____ No ____
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
Title Outstanding
Common Stock, $.01 par value per share. 12,220,921 shares
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
SOVRAN SELF STORAGE, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
.................................................... September 30 December 31
(dollars in thousands, except share data) ............ 1997 1996
---------- ----------
<S> <C> <C>
Assets
Investment in storage facilities:
Land ............................................. $ 69,885 $ 49,591
Building and equipment ........................... 254,058 171,120
---------- ----------
323,943 220,711
Less: accumulated depreciation ................... (9,898) (5,457)
---------- ----------
Investments in storage facilities, net ............. 314,045 215,254
Cash and cash equivalents .......................... 2,131 16,687
Accounts receivable ................................ 771 482
Prepaid expenses and other assets .................. 2,389 2,992
---------- ----------
Total Assets ..................................... $ 319,336 $ 235,415
========== ==========
Liabilities
Line of credit ..................................... $ 28,000 $ -
Accounts payable and accrued liabilities ........... 3,492 1,197
Deferred revenue ................................... 2,060 1,367
Accrued dividends .................................. 6,599 5,567
Mortgage payable ................................... 3,559 -
---------- ----------
Total Liabilities ................................ 43,710 8,131
Minority interest .................................. 10,939 3,655
Shareholders' Equity
Common stock $.01 par value, 100,000,000
shares authorized, 12,220,921 shares
issued and outstanding
(10,706,671 at December 31, 1996) ................ 122 107
Preferred stock, 10,000,000 shares
authorized, none issued and out-
standing, 250,000 shares designated
as Series A Junior Participating
Preferred Stock, $.01 par value .................. - -
Additional paid-in capital ......................... 270,044 227,719
Unearned restricted stock .......................... (30) (39)
Dividends in excess of net income .................. (5,449) (4,158)
---------- ----------
Total shareholders' equity ....................... 264,687 223,629
---------- ----------
Total Liabilities and Shareholders' Equity ...... $ 319,336 $ 235,415
========== ==========
See notes to financial statements
</TABLE>
<PAGE>
SOVRAN SELF STORAGE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
.................................................. .July 1, July 1,
.................................................... to to
(dollars in thousands, except per share data) . September 30, September 30,
1997 1996
------------ -----------
<S> <C> <C>
Revenues:
Rental income ...................................... $ 13,161 $ 8,911
Interest and other income .......................... 159 123
--- ---
Total revenues .................................. 13,320 9,034
Expenses:
Property operations & maintenance .................. 2,571 1,806
Real estate taxes .................................. 1,056 704
General and administrative ......................... 697 710
Interest ........................................... 592 956
Depreciation and amortization ...................... 1,845 1,207
----- -----
Total expenses .................................. 6,761 5,383
Income before minority interest ...................... 6,559 3,651
Minority interest .................................. (200) (7)
---- --
Net Income ........................................... $ 6,359 $ 3,644
========== ==========
Earnings per share ................................... $ 0.52 $ 0.48
========== ==========
Common shares used in earnings per ...................
share calculation .................................. 12,220,921 7,544,171
Dividends declared per share ......................... $ 0.54 $ 0.52
========== ==========
See notes to financial statements ....................
</TABLE>
<PAGE>
SOVRAN SELF STORAGE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
January 1, January 1,
(dollars in thousands, except to to
per share data) ........ ................. September 30, September 30,
1997 1996
------------ ------------
<S> <C> <C>
Revenues:
Rental income ...................................... $ 35,464 $ 23,582
Interest and other income .......................... 527 357
---------- ----------
Total revenues .................................. 35,991 23,939
Expenses:
Property operations & maintena ..................... 6,979 4,820
Real estate taxes .................................. 2,832 1,783
General and administrative ......................... 2,027 1,825
Interest ........................................... 1,410 1,846
Depreciation and amortization ...................... 5,061 3,252
---------- ----------
Total expenses .................................. 18,309 13,526
Income before minority interest ...................... 17,682 10,413
Minority interest .................................. (450) (7)
---------- ----------
Net Income ........................................... $ 17,232 $ 10,406
========== ==========
Earnings per share ................................... $ 1.49 $ 1.38
========== ==========
Common shares used in earnings per
share calculation .................................. 11,602,877 7,544,053
Dividends declared per share ......................... $ 1.58 $ 1.53
========== ==========
See notes to financial statements
</TABLE>
<PAGE>
SOVRAN SELF STORAGE, INC.
STATEMENT OF CASH FLOW
<TABLE>
<CAPTION>
.............................................. January 1, January 1,
............................................... to to
(dollars in thousands, except per share data) ..... September 30, September 30,
1997 1996
---- ----
<S> <C> <C>
Operating Activities
Net income ........................................... $ 17,232 $ 10,406
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization ...................... 5,061 3,252
Minority interest .................................. 450 7
Restricted stock earned ............................ 10 -
Changes in assets and liabilities:
Accounts receivable ............................. (289) (149)
Prepaid expenses and other assets ............... 17 (479)
Accounts payable and other liabilities .......... 3,325 1,679
Deferred revenue ................................ 693 301
----- -----
Net cash provided by operating activities ............ $ 26,499 $ 15,017
---------- ----------
Investing Activities
Additions to storage facilities .................... (92,386) (55,124)
Additions to other assets .......................... (10) (1,252)
Restricted cash .................................... - -
------ ------
Net cash used in investing activities ................ $ (92,396) $ (56,376)
---------- ----------
Financing Activities
Net proceeds from sale of common stock ............. $ 42,340 $ -
Proceeds from line of credit draw down ............. 28,000 54,310
Dividends paid ..................................... (18,522) (11,428)
Minority interest distributions .................... (477) -
------ -----
Net cash provided by financing activities ............ $ 51,341 $ 42,882
---------- ----------
Net increase (decrease) in cash ...................... (14,556) 1,523
Cash at beginning of period .......................... 16,687 732
------ ---
Cash at end of period ................................ $ 2,131 $ 2,255
========== ==========
Supplemental cash flow information
Cash paid for interest .......................... $ 1,410 $ 1,846
</TABLE>
See notes to financial statements ....................
<PAGE>
SOVRAN SELF STORAGE, INC.
STATEMENT OF CASH FLOW
<TABLE>
<CAPTION>
<S> <C>
Supplemental cash-flow information for the nine months
ended September 30, 1997
(dollars in thousands)
- --------------------------------------------------------------------------------
Storage facilities acquired through the issuance of
minority interest in the operating partnership $ 7,313
Fair value of net liabilities assumed on the acquisition
of storage facilities 3,559
- --------------------------------------------------------------------------------
Dividends declared but unpaid were $6,599 at
September 30, 1997 and $5,567 at December 31, 1996.
</TABLE>
See notes to financial statements
<PAGE>
Notes to Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
The accompanying unaudited financial statements of Sovran Self Storage,
Inc. (the Company) 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 information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
nine month period ended September 30, 1997 and September 30, 1996 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1997.
2. Organization
Sovran Self Storage, Inc. (the Company), a self-administered and
self-managed real estate investment trust (a REIT), was formed on April 19, 1995
to own and operate self-storage facilities throughout the United States. On June
26, 1995, the Company commenced operations effective with the completion of its
initial public offering of 5,890,000 shares (the Offering). The Offering price
per share was $23.00, resulting in net proceeds to the Company, after
underwriting discount and other expenses, of $124.3 million. On July 25, 1995,
the underwriters exercised their over-allotment option granted in connection
with the Company's initial public offering and purchased 750,000 shares of the
Company's common stock at $23.00 per share, resulting in net proceeds to the
Company of approximately $16 million. Additionally, the Company received $10.1
million in proceeds from a private placement of 422,171 shares of its common
stock.
Contemporaneously with the closing of the Offering, Sovran Self
Storage, Inc. acquired, in a transaction accounted for as a purchase, 62
self-storage facilities (the Original Properties) which had been owned and
managed by Sovran Capital, Inc. and the Sovran Partnerships (Predecessors to the
Company). Purchase accounting was applied to the acquisition of the Original
Properties to the extent cash was paid to purchase 100% of the limited
partnership interests in the Sovran Partnerships, prepay outstanding mortgages
at the time of acquisition and for related transaction costs. Additionally, the
Company acquired on that date 12 self-storage properties (the Acquisition
Properties) from unaffiliated third parties. The Company has since purchased a
total of 78 (41 in 1997, 29 in 1996 and 8 in 1995) self-storage properties from
unaffiliated third parties, increasing the total number of self-storage
properties owned at September 30, 1997 to 152 properties.
On October 1, 1996, the Company completed a public offering of
2,750,000 common shares at $26.00 per share. On October 8, 1996 the over
allotment of the public offering of 412,500 common shares was exercised at
$26.00 per share. Net of underwriting discounts and offering costs, the Company
received $77 million in proceeds from this offering. The net proceeds have been
used to repay indebtedness under the line of credit, which was incurred in
property acquisitions, and to acquire additional self storage facilities.
On April 16, 1997, the Company completed the offering of 1.5 million
shares of its common stock. The offering was priced at $29.625 per share
resulting in gross proceeds of $44.44 million. Net proceeds were approximately
$42.2 million, which will be used to reduce outstanding indebtedness incurred
under the Company's $75 million credit facility.
<PAGE>
3. Commitments and Contingencies
The Company's current practice is to conduct environmental
investigations in connection with of its facilities which individually or in the
aggregate would be material to the Company's overall business, financial
condition, or results of operations.
As of September 30, 1997, the Company had entered into contract for the
purchase of five self-storage facilities for a total cost of $12.5 million .
4. Pro Forma Financial Information
The following unaudited pro forma Condensed Statement of Operations is
presented as if the 1997 offering and the purchase of 41 additional storage
facilities had occurred at the beginning of the periods presented. Such
unaudited pro forma information is based upon the historical combined statements
of operations of the Company. It should be read in conjunction with the
financial statements of the Company and notes thereto included elsewhere herein.
In management's opinion, all adjustments necessary to reflect the effects of
these transactions have been made. This unaudited pro forma statement does not
purport to represent what the actual results of operations of the Company would
have been assuming such transactions had been completed as set forth above nor
does it purport to represent the results of operations for future periods.
(in thousands, except per share data)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1997 1996
---------------- ---------------
<S> <C> <C>
Revenues:
Total revenues $ 39,814 $ 37,788
Expenses:
Property operations & maintenance 7,816 7,817
Real estate taxes 3,183 2,955
General and administrative 2,100 1,995
Interest 1,942 1,942
Depreciation and amortization 5,638 5,638
----- ------
Total Expenses 20,679 20,347
------ ------
-
Income before minority interest 19,135 17,441
Minority interest (583) (531)
---- ----
Net Income $ 18,552 $ 16,910
================ ==============
Earnings per share $ 1.52 $ 1.38
================ ==============
Common shares used in earnings
per share calculation 12,220,921 12,220,921
</TABLE>
5. Recent Accounting Developments
In February of 1997, Statement of Financial Accounting Standards (SFAS)
No.128, "Net Income Per Sare" was issued and is effective for fiscal years
ending after December 15, 1997. The statement establishes standards for
computing and presenting net income per share. Upon adoption, all prior period
data presented will be restated to conform to the provisions of SFAS No.128. The
adoption of SFAS No.128 is not expected to have a material impact on the
financial statements of the Company.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operation
The following discussion and analysis of the consolidated financial
condition and results of operations should be read in conjunction with the
financial statements and notes thereto included elsewhere in this report.
The Company operates as a Real Estate Investment Trust ("REIT") and
owns and operates a portfolio of 152 self-storage facilities, providing storage
space for business and personal use to some 62,000 customers in 16 states. The
Company's investment objective is to increase cash flow and enhance shareholder
value by aggressively managing its portfolio, to expand and enhance the
facilities in that portfolio and to selectively acquire new properties in
geographic areas that will either complement or efficiently grow the portfolio.
Liquidity and Capital Resources
Revolving Credit Facility
In June, 1995, the Company entered into an agreement with a financial
institution to establish a revolving credit facility for up to $60 million,
secured by real estate. In August, 1996, the Company executed a modification of
the credit facility which increased the amount available to $75 million.
Interest on outstanding balances is payable monthly at 190 basis points above
LIBOR. The term of the agreement is for two years, expiring August 1998. The
Company intends to use funds available from this credit facility to finance
future acquisition and development plans described below. At September 30, 1997,
the Company had remaining borrowing capacity of $47 million on the line.
Umbrella Partnership REIT
The Company was formed as an Umbrella Partnership Real Estate Trust
("UPREIT") and, as such, has the ability to issue operating partnership ("OP")
units in exchange for properties sold by independent owners. By utilizing such
OP units as currency in facility acquisitions, the Company may partially defer
the seller's income-tax liability and obtain more favorable pricing or terms. As
of September 30, 1997, units totaling 383,858.54 have been issued in exchange
for property.
Acquisition of Properties
The Company's external growth strategy is to increase the number of
facilities it owns by acquiring suitable facilities in markets in which it
already has an operating presence or to expand into new markets by acquiring
several facilities at once in those new markets. In the three months ended
September 30, 1997, the Company acquired five properties in existing markets.
Three of the properties are located in Atlanta, Georgia and two properties are
located in Greensboro, North Carolina. Total acquisitions in the three months
ended September 30, 1997 added 249,368 square feet of space and 2,042 rental
units to the Company's portfolio.
Future Acquisition and Development Plans
The Company continued its external growth strategy by increasing the
number of facilities it owns in Georgia and North Carolina.
The Company also intends to improve certain of its existing facilities
by building additional storage buildings on presently vacant land and by
installing climate control and enhanced security systems at selected sites.
Liquidity
At September 30, 1997, the Company's debt to equity ratio was 12%,
providing considerable room for growth. Continued acquisition of existing
properties represents the Company's principal liquidity requirement. As most of
the Company's operating cash flow is expected to be used to pay dividends, (see
REIT Qualification and Distribution Requirements), the funds required to acquire
these additional properties will be provided by borrowings pursuant to the
revolving line of credit or other debt instruments and the issuance of UPREIT
units. The Company intends to incur additional borrowings for such purposes in a
manner consistent with its policy of limiting the Company's indebtedness at the
time of incurring to not more than 50% of market capitalization.
REIT Qualification and Distribution Requirements
As a REIT, the Company is not required to pay federal income tax on
income that it distributes to its shareholders, provided that the amount
distributed is equal to at least 95% of taxable income. These distributions must
be made in the year to which they relate or in the following year if declared
before the Company files its federal income-tax return and if it is paid before
the first regular dividend of the following year.
As a REIT, the Company must derive at least 95% of its total gross
income from income related to real property, interest and dividends. In the
three months ended September 30, 1997, the Company's percentage of revenue from
such sources exceeded 98%, thereby passing the 95% test, and no special measures
are expected to be required to enable the Company to maintain its REIT
designation.
<PAGE>
Results of Operations
The following discussion is based on the financial statements of the
Company as of September 30, 1997 and September 30, 1996.
For the period January 1, 1997 through September 30, 1997
The Company reported revenues of $35,990,701 during the period and
incurred $9,810,380 in operating expenses, resulting in net operating income of
$26,180,321. The gross operating margin of 73% is one of the highest in the
industry and reflects a corporate-wide effort to operate the business
efficiently. General and administrative expenses of $2,026,949, interest expense
of $1,410,300 and depreciation and amortization expenses of $5,060,848 were
incurred during the period, resulting in an income of $17,682,223 before
minority interest deduction. Net Income after minority interest amounted to
$17,232,005.
Three months ended September 30, 1997, compared to Three months ended September
30, 1996
The following discussion compares the activities of the Company for the
three months ended September 30, 1997 with the activities of the Company for the
three months ended September 30, 1996.
Total revenues increased from $9,034,448 for the three months ended
September 30, 1996 to $13,319,997 for the three months ended September 30, 1997,
an increase of $4,285,549, or 47%. Of this,$3,924,413 resulted from the
acquisition of 52 properties during the period July 1, 1996 through September
30, 1997 and $354,409 was realized as a result of increased rental rates and
occupancy levels at the 100 properties owned by the Company at June 30, 1995.
Overall, same-store revenues grew 4.14% for the three month period ended
September 30, 1997 as compared to the same period in 1996.
Property operating and real estate tax expense increased $1,117,307 or
44.5%, during the period. $1,072,394 was a result of absorbing additional
expenses from operating the newly acquired properties and $44,913 from the
operations of its sites operated more than one year. General and administrative
expenses decreased $12,986.
Interest expense decreased $364,344 as a result of the Company's
application of $42.2 million of net proceeds from the sale of common stock
toward the total repayment of its line of credit balance outstanding. The
Company's balance outstanding on the line increased by $13,000,000 for the
period July 1 through September 30 representing funds borrowed to finance
acquisitions.
Earnings before interest, depreciation, and amortization increased from
$5,814,315 to $8,995,542, an increase of $3,181,227, or 54.7%.
Pro Forma Nine Months Ended September 30, 1997 Compared to Pro Forma Nine Months
Ended September 30, 1996.
The Company believes that pro forma results of operations are important
to provide an understanding of results of operations in its first year of
property operation. The pro forma information includes the results of the 41
properties acquired in 1997 as if they had been acquired on January 1, 1996.
Revenues for the three months ended September 30, 1997 were $39,814,000
compared to revenues of $37,788,000 for the same period in 1996, an increase of
5%. This improvement is primarily due to an increase in overall occupancy, and
from rental rate increases ranging from 2% to 8% at the properties.
Property operating costs and property tax expense were $10,999,000 or
28% of revenues for the nine month period ended September 30, 1997 and
$10,772,000 or 29% of revenues for the period ended September 30, 1996. The
Company believes the efficiencies it obtains by "clustering" its properties in
market areas, its attention to cost saving measures and its persistence in
protesting property tax increases has enabled it to effectively contain its
costs.
Operating income increased from $27,016,000 to $28,815,000, an
improvement of 6.7% as a result of the above.
Inflation
The Company does not believe that inflation has had or will have a
direct adverse effect on its operations. Substantially all of the leases at the
facilities allow for monthly rent increases, which provide the Company with the
opportunity to achieve increases in rental income as each lease matures.
Seasonality
The Company's revenues typically have been higher in the third and
fourth quarters, primarily because the Company increases its rental rates on
most of its storage units at the beginning of May and, to a lesser extent,
because self-storage facilities tend to experience greater occupancy during the
late spring, summer and early fall months due to the greater incidence of
residential moves during these periods. However, the Company believes that its
tenant mix, diverse geographical locations, rental structure and expense
structure provide adequate protection against undue fluctuations in cash flows
and net revenues during off-peak seasons. Thus, the Company does not expect
seasonality to affect materially distributions to shareholders.
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
The Company is a party to proceedings arising in the ordinary course of
operation of self-storage facilities. However, the Company does not believe that
these matters, individually or in the aggregate, will have a material adverse
effect on the Company.
Robert J. Amsdell, a former business associate of certain officers and
directors of the Company, including Robert J. Attea, Kenneth F. Myszka, David L.
Rogers and Charles E. Lannon filed a lawsuit against the Company on June 13,
1995 in the United States District Court for the Northern District of Ohio, in
connection with the formation of the Company as a REIT and related transactions
, as well as the Initial Offering. On April 29, 1996, Mr. Amsdell filed a first
amended complaint in the lawsuit alleging breach of fiduciary duty, breach of
contract, breach of general partnership/joint venture arrangement, statutory
violations regarding dissolution of general partnership or joint venture, breach
of duty of good faith and fair dealing, fraud and deceit, interference with
prospective advantage, and violation of trademark/trade name rights. Mr. Amsdell
is seeking money damages in excess of $25 million, as well as punitive damages
and declaratory and injunctive relief (including the imposition of a
constructive trust on assets of the Company in which Mr. Amsdell claims to have
a continuing interest) and an accounting. The first amended complaint also added
Messrs. Attea, Myszka, Rogers and Lannon as additional defendants. The parties
are currently involved in discovery. The Company intends to vigorously defend
the lawsuit. Messrs. Attea, Myszka, Rogers and Lannon have agreed to idemnify
the Company for any loss arising from the lawsuit. The Company believes that the
actual amount of Mr. Amsdell's recovery in this matter, if any, would be within
the ability of these individuals to provide idemnification. The Company does not
believe that the lawsuit will have a material adverse effect upon the Company.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: None required
(b) Report on Form 8-K
Acquisition of 42 facilities
Financial Statements:
Report of Independent Auditors
Acquistition Facilities Historical Summaries of Combined Gross Revenue
and Direct Operating Expenses for the year ended December 31, 1996 and
the six months ended June 30, 1997. Acquisition Facilities Notes to
Historical Summaries of Combined Gross Revenue and Direct Operating
Expenses for the year ended December 31, 1996 and the six months ended
June 30, 1997.
Pro Forma Financial Information
Sovran Self Storage, Inc., Pro Forma Combined Financial Information
Sovran Self Storage, Inc., Pro Forma Combined Balance Sheet as of June
30, 1997 Sovran Self Storage, Inc., Pro Forma Combined Statement of
Operations For the Six months ended June 30, 1997 Sovran Self Storage,
Inc., Pro Forma Combined Statement of Operations For the Year ended
December 31, 1996 Sovran Self Storage, Inc., Notes to Pro Forma
Combined Financial Statements
Exhibits:
Consent of Independent Auditors, Ernst & Young LLP.
Date of Filing: October 24, 1997
<PAGE>
SIGNATURES
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.
Sovran Self Storage, Inc.
November 13, 1997 By:__/S/ David L. Rogers_______________________
Date David L. Rogers, Chief Financial Officer and Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000944314
<NAME> SOVRAN SELF STORAGE, INC.
<MULTIPLIER> 1,000
<CURRENCY> U.S DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1.000
<CASH> 2,131
<SECURITIES> 0
<RECEIVABLES> 771
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,291
<PP&E> 323,943
<DEPRECIATION> 9,898
<TOTAL-ASSETS> 319,336
<CURRENT-LIABILITIES> 54,649
<BONDS> 0
0
0
<COMMON> 122
<OTHER-SE> 264,565
<TOTAL-LIABILITY-AND-EQUITY> 319,336
<SALES> 0
<TOTAL-REVENUES> 35,991
<CGS> 0
<TOTAL-COSTS> 9,811
<OTHER-EXPENSES> 7,538
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,410
<INCOME-PRETAX> 17,232
<INCOME-TAX> 0
<INCOME-CONTINUING> 17,232
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,232
<EPS-PRIMARY> 1.49
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</TABLE>
