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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended DECEMBER 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-24920
ERP OPERATING LIMITED PARTNERSHIP
(Exact Name of Registrant as Specified in Its Charter)
Illinois 36-3894853
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
Two North Riverside Plaza, Chicago, Illinois 60606
(Address of Principal Executive Offices) (Zip Code)
(312) 474-1300
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
7.57% Notes due August 15, 2026 New York Stock Exchange
(Title of Class) (Name of Each Exchange on Which Registered)
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
(Title of Class)
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
------- -------
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [_]
DOCUMENTS INCORPORATED BY REFERENCE
Part II incorporates by reference the Registrant's Current Report on Form 8-K
dated March 1, 1996 and filed on March 7, 1996.
Part III incorporates by reference the Equity Residential Properties Trust
definitive proxy statement relating to Part III, Item 11. Executive
Compensation.
Part IV incorporates by reference the following exhibit as filed with Equity
Residential Properties Trust's Form S-11 on May 21, 1993 (Registration No. 33-
63158) and as amended thereafter: Exhibit 10.2.
Part IV incorporates by reference the following exhibits as filed with the
Registrant's Form 10 on October 7, 1994 (Registration No. 0-24920) and as
amended thereafter: Exhibits 4.1, 4.2 and 10.3.
Part IV incorporates by reference the following exhibit as filed with the
Registrant's Form 10-Q for the quarter ended September 30, 1995 on November 9,
1995 and as amended thereafter: Exhibit 10.1.
Part IV incorporates by reference the following exhibit as filed with the
Registrant's Form 10-K for the year ended December 31, 1996 filed on March 20,
1997: Exhibit 10.4.
Part IV incorporates by reference the following exhibit as filed with the
Registrant's Form 8-K dated October 9, 1997 filed on October 9, 1997: Exhibit
10.5.
2
ERP OPERATING LIMITED PARTNERSHIP
TABLE OF CONTENTS
PART I. PAGE
----
Item 1. Business 4
Item 2. Properties 16
Item 3. Legal Proceedings 45
Item 4. Submission of Matters to a Vote of Security Holders 45
PART II.
Item 5. Market for the Registrant's Common Equity and Related
Shareholder Matters 46
Item 6. Selected Financial Data 46
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations 49
Item 8. Financial Statements and Supplementary Data 61
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure 61
PART III.
Item 10. Trustees and Executive Officers of the Registrant 62
Item 11. Executive Compensation 66
Item 12. Security Ownership of Certain Beneficial Owners and Management 67
Item 13. Certain Relationships and Related Transactions 69
PART IV.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K 72
3
PART I
Item 1. Business
General
ERP Operating Limited Partnership, an Illinois limited partnership formed
in May 1993 (the "Operating Partnership"), is managed by Equity Residential
Properties Trust ("EQR"), a Maryland real estate investment trust (the
"Company"), its general partner. The Company is a self-administered and self-
managed equity real estate investment trust ("REIT"). EQR was organized in March
1993 and commenced operations on August 18, 1993 upon completion of its initial
public offering (the "EQR IPO") of 13,225,000 common shares of beneficial
interest, $0.01 par value per share ("Common Shares"). EQR was formed to
continue the multifamily residential business objectives and acquisition
strategies of certain affiliated entities controlled by Mr. Samuel Zell,
Chairman of the Board of Trustees of the Company. These entities had been
engaged in the acquisition, ownership and operation of multifamily residential
properties since 1969. As used herein, the term "Company" includes EQR and those
entities owned or controlled by it, as the survivor of the mergers between EQR
and each of Wellsford Residential Property Trust ("Wellsford") (the "Wellsford
Merger") and Evans Withycombe Residential, Inc. ("EWR") (the "EWR Merger").
The Company's subsidiaries include the Operating Partnership, Evans
Withycombe Residential, L.P. (the "EWR Operating Partnership"), Equity
Residential Properties Management Limited Partnership and Equity Residential
Properties Management Limited Partnership II (collectively, the "Management
Partnerships"), a series of partnerships (the "Financing Partnerships") and
limited liability companies ("LLCs") which beneficially own certain properties
encumbered by mortgage indebtedness.
As of December 31, 1997, the Operating Partnership owned or had interests
in 489 multifamily properties of which it controlled a portfolio of 463
multifamily properties (individually, a "Property" and collectively, the
"Properties") containing 135,200 units. The remaining 26 properties represent an
investment in partnership interests and subordinated mortgages collateralized by
21 properties and mortgage loans collateralized by five properties
(collectively, the "Additional Properties") containing 5,267 units. Of the 5,267
units, 1,371 units are property managed by third party unaffiliated entities.
The Operating Partnership's Properties and the Additional Properties are located
throughout the United States in the following states: Alabama, Arizona,
Arkansas, California, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois,
Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan,
Minnesota, Missouri, Nevada, New Hampshire, New Jersey, New Mexico, North
Carolina, Ohio, Oklahoma, Oregon, South Carolina, Tennessee, Texas, Utah,
Virginia, Washington and Wisconsin. In addition, Equity Residential Properties
Management Corp. ("Management Corp.") and Equity Residential Properties
Management Corp. II ("Management Corp. II") also provide residential property
and asset management services to 29 properties containing 9,295 units owned by
affiliated entities. The Company is, together with the Operating Partnership,
one of the largest publicly traded REITs (based on the aggregate market value of
its outstanding Common Shares) and is the largest publicly traded REIT owner of
multifamily properties (based on the number of apartment units owned and total
revenues earned).
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PART I
Since the EQR IPO and through December 31, 1997, the Operating Partnership
has acquired direct or indirect interests in 412 properties (which included the
debt collateralized by six Properties) containing 118,510 units in the aggregate
for a total purchase price of approximately $6.5 billion, including the
assumption of approximately $1.5 billion of mortgage indebtedness. The Operating
Partnership also made an $89 million investment in partnership interests and
subordinated mortgages collateralized by 21 of the Additional Properties (its
"$89 Million Mortgage Note Investment") and an $88 million investment in
mortgage loans collateralized by five of the Additional Properties (its "$88
Million Mortgage Note Investment"). Since the EQR IPO and through December 31,
1997, the Operating Partnership has disposed of 18 properties and a portion of
one Property, containing 5,035 units, and a vacant land parcel for a total sales
price of approximately $129.8 million and the release of mortgage indebtedness
in the amount of $20.5 million.
The Company's corporate headquarters and executive offices are located in
Chicago, Illinois. In addition, the Company has 29 management offices in the
following cities: Chicago, Illinois; Dallas, Houston and San Antonio, Texas;
Denver, Colorado; Bethesda, Maryland; Atlanta, Georgia; Las Vegas, Nevada;
Scottsdale and Tucson, Arizona; Portland, Oregon; Ypsilanti, Michigan; Charlotte
and Raleigh, North Carolina; Tampa, Jacksonville and Ft. Lauderdale, Florida;
Irvine, Pleasant Hill and Stockton, California; Kansas City, Kansas;
Minneapolis, Minnesota; Louisville, Kentucky; Tulsa, Oklahoma; Boston,
Massachusetts; Federal Way, Redmond and Seattle, Washington; and Nashville and
Memphis, Tennessee. The Company has approximately 4,200 employees. Each of the
Operating Partnership's Properties is directed by an on-site manager, who
supervises the on-site employees and is responsible for the day-to-day
operations of the Property. The manager is generally assisted by a leasing
administrator and/or property administrator. In addition, a maintenance director
at each Property supervises a maintenance staff whose responsibilities include a
variety of tasks, including responding to service requests, preparing vacant
apartments for the next resident and performing preventive maintenance
procedures year-round.
Business Objectives and Operating Strategies
The Operating Partnership seeks to maximize both current income and long-
term growth in income, thereby increasing: (i) the value of the Properties; (ii)
distributions on a per limited partnership interest ("OP Unit") basis; and (iii)
partners' value.
The Operating Partnership's strategies for accomplishing these objectives
are:
. maintaining and increasing Property occupancy while increasing rental rates;
. controlling expenses, providing regular preventive maintenance, making
periodic renovations and enhancing amenities;
. pursuing acquisitions that: (i) are available at prices below estimated
replacement costs; (ii) have potential for rental rate and/or occupancy
increases; (iii) have attractive locations in their
5
PART I
respective markets; and (iv) provide anticipated total returns that will
increase the Operating Partnership's distributions per OP Unit.
. purchasing newly developed as well as co-investing in the development of
multifamily communities in the Operating Partnership's existing target markets
where the market conditions warrant such development.
The Operating Partnership is committed to tenant satisfaction by striving
to anticipate industry trends and implementing strategies and policies
consistent with providing quality tenant services. In addition, the Operating
Partnership continuously surveys rental rates of competing properties and
conducts satisfaction surveys of residents to determine the factors they
consider most important in choosing a particular apartment unit.
Acquisition Strategies
The Operating Partnership anticipates that future property acquisitions
will be located in the continental United States. Management will continue to
use market information to evaluate acquisition opportunities. The Operating
Partnership's market data base allows it to review the primary economic
indicators of the markets where the Operating Partnership currently manages
Properties and where it expects to expand its operations. Acquisitions may be
financed from various sources of capital, which may include undistributed funds
from operations ("FFO"), issuances of additional equity securities by the
Company and debt securities by the Operating Partnership, sales of Properties
and collateralized and uncollateralized borrowings. In addition, the Operating
Partnership may acquire additional multifamily properties in transactions that
include the issuance of OP Units as consideration for the acquired properties.
Such transactions may, in certain circumstances, partially defer the sellers'
tax consequences.
When evaluating potential acquisitions, the Operating Partnership will
consider: (i) the geographic area and type of community; (ii) the location,
construction quality, condition and design of the property; (iii) the current
and projected cash flow of the property and the ability to increase cash flow;
(iv) the potential for capital appreciation of the property; (v) the terms of
resident leases, including the potential for rent increases; (vi) the potential
for economic growth and the tax and regulatory environment of the community in
which the property is located; (vii) the occupancy and demand by residents for
properties of a similar type in the vicinity (the overall market and submarket);
(viii) the prospects for liquidity through sale, financing or refinancing of the
property; and (ix) competition from existing multifamily properties and the
potential for the construction of new multifamily properties in the area. The
Operating Partnership expects to purchase multifamily properties with physical
and market characteristics similar to the Properties.
Development Strategies
The Operating Partnership seeks to acquire newly constructed properties and
make investments towards the development of properties in markets where it
discerns strong demand, which the Operating Partnership believes will enable it
to achieve superior rates of return. The Operating Partnership's current
communities under development and future developments are in
6
PART I
markets or will be in markets where certain market demographics justify the
development of high quality multifamily communities. In evaluating whether to
develop an apartment community in a particular location, the Operating
Partnership analyzes relevant demographic, economic and financial data.
Specifically, the Operating Partnership considers the following factors, among
others, in determining the viability of a potential new apartment community: (i)
income levels and employment growth trends in the relevant market, (ii)
uniqueness of location, (iii) household growth and net migration of the relevant
market's population, (iv) supply/demand ratio, competitive housing alternatives,
sub-market occupancy and rent levels (v) barriers to entry that would limit
competition, and (vi) the purchase price and yields of available existing
stabilized communities, if any.
Disposition Strategies
Management will use market information to evaluate potential dispositions.
Factors the Operating Partnership considers in deciding whether to dispose of
its Properties include the following: (i) potential increases in new
construction; (ii) areas where the economy is expected to decline substantially;
and (iii) markets where the Operating Partnership does not intend to establish
long-term concentrations. The Operating Partnership will reinvest the proceeds
received from property dispositions to fund property acquisitions. In addition,
when feasible the Operating Partnership will structure these transactions as tax
deferred exchanges.
Financing Strategies
It is the Company's policy that EQR shall not incur indebtedness other than
short-term trade, employee compensation, dividends payable or similar
indebtedness that will be paid in the ordinary course of business, and that
indebtedness shall instead be incurred by the Operating Partnership to the
extent necessary to fund the Operating Partnership and its subsidiaries.
Equity Offerings For the Years Ended December 31, 1997, 1996 and 1995
In June 1995, the Company sold 6,120,000 of its 9 3/8% Series A Cumulative
Redeemable Preferred Shares of Beneficial Interest, $0.01 par value per share
(liquidation preference $25 per share) (the "Series A Preferred Shares"), at $25
per share. The Company raised gross proceeds of $153 million from this offering
(the "Series A Preferred Share Offering"). The net proceeds of approximately
$148.2 million from the Series A Preferred Share Offering have been contributed
by the Company to the Operating Partnership in exchange for 6,120,000 of the
Operating Partnership's 9 3/8% cumulative redeemable preference units (the
"Series A Cumulative Redeemable Preference Units").
In November 1995, the Company sold 5,000,000 depositary shares (the "Series
B Depositary Shares"). Each Series B Depositary Share represents a 1/10
fractional interest in a 9 1/8% Series B Cumulative Redeemable Preferred Share
of Beneficial Interest, $0.01 par value per share (the "Series B Preferred
Shares"). The liquidation preference of each of the Series B Preferred Shares is
$250.00 (equivalent to $25 per Series B Depositary Share). The Company raised
gross proceeds of $125 million from the sale of the Series B Depositary Shares.
The net proceeds of approximately $121 million have been contributed by the
Company to the Operating Partnership in exchange for 500,000 of the Operating
Partnership's 9 1/8% cumulative redeemable preference units (the "Series B
Cumulative Redeemable Preference Units").
7
PART I
In January 1996, the Company completed an offering of 1,725,000 registered
Common Shares, which were sold at a net price of $29.375 per share (the "January
1996 Common Share Offering"), and contributed to the Operating Partnership net
proceeds of approximately $50.7 million in connection therewith in exchange for
OP Units. In February 1996, the Company completed an offering of 2,300,000
registered Common Shares, which were sold at a net price of $29.50 per share
(the "February 1996 Common Share Offering"), and contributed to the Operating
Partnership net proceeds of approximately $67.8 million in connection therewith
in exchange for OP Units.
On May 21, 1996, the Company completed an offering of 2,300,000 publicly
registered Common Shares, which were sold at a net price of $30.50 per share. On
May 28, 1996, the Company completed the sale of 73,287 publicly registered
Common Shares to employees of the Company and to employees of Equity Group
Investments, Inc. ("EGI") and certain of their respective affiliates and
consultants at a net price equal to $30.50 per share. On May 30, 1996, the
Company completed an offering of 1,264,400 publicly registered Common Shares,
which were sold at a net price of $30.75 per share. The Company contributed to
the Operating Partnership net proceeds of approximately $111.3 million in
connection with the sale of the 3,637,687 Common Shares mentioned above
(collectively, the "May 1996 Common Share Offerings") in exchange for OP Units.
In September 1996, the Company sold 4,600,000 depositary shares (the
"Series C Depositary Shares"). Each Series C Depositary Share represents a 1/10
fractional interest in a 9 1/8% Series C Cumulative Redeemable Preferred Share
of Beneficial Interest, $0.01 par value per share (the "Series C Preferred
Shares"). The liquidation preference of each of the Series C Preferred Shares is
$250.00 (equivalent to $25 per Series C Depositary Share). The Company raised
gross proceeds of $115 million from this offering (the "Series C Preferred Share
Offering"). The net proceeds of approximately $111.4 million from the Series C
Preferred Share Offering were contributed by the Company to the Operating
Partnership in exchange for 460,000 of the Operating Partnership's 9 1/8%
cumulative redeemable preference units (the "Series C Cumulative Redeemable
Preference Units").
Also in September 1996, the Company completed the sale of 2,272,728
publicly registered Common Shares which were sold at a net price of $33 per
share. The Company contributed to the Operating Partnership net proceeds of
approximately $75 million in connection with this offering (the "September 1996
Common Share Offering") in exchange for OP Units.
In November, 1996, the Company issued 39,458 Common Shares pursuant to the
1996 Nonqualified Employee Share Purchase Plan (the "Employee Share Purchase
Plan") at a net price of $30.44. The Company contributed to the Operating
Partnership net proceeds of approximately $1.2 million in exchange for OP Units.
In December 1996, the Company completed offerings of 4,440,000 publicly
registered Common Shares, which were sold to the public at a price of $41.25 per
share (the "December 1996 Common Share Offerings"). The Company contributed to
the Operating Partnership net proceeds of approximately $177.4 million in
exchange for OP Units.
8
PART I
In March 1997, the Company completed three separate public offerings
relating to an aggregate of 1,921,000 publicly registered Common Shares, which
were sold to the public at a price of $46 per share (the "March 1997 Common
Share Offerings"). The Company contributed to the Operating Partnership net
proceeds of approximately $88.3 million in exchange for OP Units.
On May 14, 1997, the Company filed with the SEC a Form S-3 Registration
Statement to register $500 million of equity securities (the "June 1997 Equity
Shelf Registration"). The SEC declared this registration statement effective on
June 5, 1997.
In May 1997, the Company sold 7,000,000 depositary shares (the "Series D
Depositary Shares") pursuant to the June 1997 Equity Shelf Registration. Each
Series D Depositary Share represents a 1/10 fractional interest in a 8.60%
Series D Cumulative Redeemable Preferred Share of Beneficial Interest, $0.01 par
value per share (the "Series D Preferred Shares"). The liquidation preference of
each of the Series D Preferred shares is $250.00 (equivalent to $25 per Series D
Depositary Share). The Company raised gross proceeds of approximately $175
million from this offering (the "Series D Preferred Share Offering"). The net
proceeds of approximately $169.5 million from the Series D Preferred Share
Offering were contributed by the Company to the Operating Partnership in
exchange for 700,000 of the Operating Partnership's 8.60% cumulative redeemable
preference units (the "Series D Cumulative Redeemable Preference Units").
In June 1997, the Company completed five separate public offerings
comprising an aggregate of 8,992,023 publicly registered Common Shares, which
were sold to the public at prices ranging from $44.06 to $45.88 per share (the
"June 1997 Common Share Offerings"). The Company contributed to the Operating
Partnership net proceeds of approximately $398.9 million therewith in exchange
for additional OP Units.
On July 28, 1997, the Company filed with the SEC a Form S-3 Registration
Statement to register $750 million of equity securities (the "August 1997 Equity
Shelf Registration"). The SEC declared this registration statement effective on
August 4, 1997.
In September 1997, the Company completed the sale of 498,000 publicly
registered Common Shares which were sold to the public at a price of $51.125 per
share. The Company contributed to the Operating Partnership net proceeds of
approximately $24.2 million in connection with this offering (the "September
1997 Common Share Offering") in exchange for OP Units.
In September 1997, the Company sold 11,000,000 depositary shares (the
"Series G Depositary Shares") pursuant to the August 1997 Equity Shelf
Registration. Each Series G Depositary Share represents a 1/10 fractional
interest in a 7 1/4% Series G Convertible Cumulative Preferred Share of
Beneficial Interest, $0.01 par value per share (the "Series G Preferred
Shares"). Series G Depositary Shares representing Series G Preferred Shares are
convertible at the option of the holder thereof at any time into Common Shares
at a conversion price of $58.58 per Common Share (equivalent to a conversion
rate of approximately .4268 Common Shares for each Series G Depositary Share).
The liquidation preference of each of the Series G Preferred Shares is $250.00
per share (equivalent to $25 per Series G Depositary Share). In addition, in
October 1997, the Company sold 1,650,000 additional Series G Depositary Shares
pursuant to an
9
PART I
over-allotment option granted to the underwriters. The Company contributed to
the Operating Partnership the net proceeds of approximately $303.6 million in
connection with this offering (the "Series G Preferred Share Offering") in
exchange for 1,265,000 of the Operating Partnership's 7 1/4% convertible
cumulative preference units (the "Series G Convertible Cumulative Preference
Units").
In October 1997, in connection with the acquisition of a portfolio of
Properties, the Company issued 3,315,500 publicly registered Common Shares,
which were issued at a price of $45.25 per share with a value of approximately
$150 million (the "October 1997 Common Share Offering"). The Company contributed
its interest in the portfolio of Properties acquired with Common Shares to the
Operating Partnership in exchange for additional OP Units.
On November 3, 1997, the Company filed with the SEC a Form S-3 Registration
Statement to register 7,000,000 Common Shares pursuant to a Distribution
Reinvestment and Share Purchase Plan. This registration statement was declared
effective on November 25, 1997. The Distribution Reinvestment and Share
Purchase Plan (the "DRIP Plan") of the Company provides holders of record and
beneficial owners of Common Shares, Preferred Shares, and limited partnership
interests in the Operating Partnership with a simple and convenient method of
investing cash distributions in additional Common Shares. Common Shares may
also be purchased on a monthly basis with optional cash payments made by
participants in the Plan and interested new investors, not currently
shareholders of the Company, at the market price of the Common Shares less a
discount ranging between 0% and 5% (as determined in accordance with the DRIP
Plan).
In December 1997, in connection with an acquisition of a Property, the
Company issued 736,296 publicly registered Common Shares, which were issued at a
price of $48.85 per share with a value of approximately $36 million. The Company
contributed the Property acquired with Common Shares to the Operating
Partnership in exchange for additional OP Units.
Also in December 1997, the Company completed the sale of 467,722 publicly
registered Common Shares, which were sold at a price of $51.3125 per share. The
Company contributed to the Operating Partnership net proceeds of approximately
$22.8 million in connection with this offering (the "December 1997 Common Share
Offering") in exchange for additional OP Units.
During 1997, the Company issued 84,183 Common Shares pursuant to the
Employee Share Purchase Plan at net prices which ranged from $35.63 per share to
$42.08 per share and contributed to the Operating Partnership proceeds in the
amount of approximately $3.2 million in connection therewith in exchange for
additional OP Units.
Debt Offerings For the Years Ended December 31, 1997, 1996 and 1995
- -------------------------------------------------------------------
In April 1995, the Operating Partnership issued $125 million of 7.95%
unsecured fixed rate notes (the "2002 Notes") in a public debt offering (the
"Second Public Debt Offering"). The Operating Partnership received net proceeds
of approximately $123.1 million in connection with the Second Public Debt
Offering.
In August 1996, the Operating Partnership issued $150 million of 7.57%
unsecured fixed rate notes (the "2026 Notes") in a public debt offering (the
"Third Public Debt Offering"). The
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PART I
Operating Partnership received net proceeds of approximately $149 million in
connection with this issuance.
On September 18, 1996, the Operating Partnership filed with the SEC a Form
S-3 Registration Statement to register $500 million of debt securities (the
"1996 Debt Shelf Registration").
In October 1997, the Operating Partnership issued $150 million of unsecured
fixed rate notes (the "2017 Notes") pursuant to the 1996 Debt Shelf Registration
in a public debt offering (the "October 1997 Public Debt Offering"). The 2017
Notes are due on October 15, 2017 and bear interest at 7.125%, which is payable
semiannually in arrears on April 15 and October 15, commencing April 15, 1998.
The 2017 Notes are redeemable at any time by the Operating Partnership pursuant
to the terms thereof. The Operating Partnership received net proceeds of
approximately $147.4 million in connection with this issuance.
In November 1997, the Operating Partnership issued $200 million of
unsecured fixed rate notes pursuant to the 1996 Debt Shelf Registration in a
public debt offering (the "November 1997 Public Debt Offering"). Of the $200
million issued, $150 million of these notes are due November 15, 2001 (the "2001
Notes") and bear interest at a rate of 6.55%, which is payable semiannually in
arrears on May 15 and November 15, commencing on May 15, 1998. The remaining $50
million of these notes are due November 15, 2003 (the "2003 Notes") and bear
interest at a rate of 6.65%, which is payable semiannually in arrears on May 15
and November 15, commencing on May 15, 1998. The Operating Partnership received
net proceeds of approximately $198.5 million in connection with the 2001 Notes
and the 2003 Notes.
Credit Facility
On November 15, 1996, the Operating Partnership completed an agreement with
Morgan Guaranty Trust Company of New York ("Morgan Guaranty") and Bank of
America Illinois ("Bank of America") to provide the Operating Partnership a $250
million unsecured line of credit. In September 1997, this agreement was amended
to increase the potential borrowings to $500 million. This line of credit
matures in November 1999 and borrowings generally will bear interest at a per
annum rate of one, two, three or six month London Interbank Offered Rate
("LIBOR"), plus a certain rate dependent upon the Operating Partnership's credit
rating, which rate is currently at 0.45%, and is subject to an annual facility
fee of $750,000. As of December 31, 1997, $235 million of borrowings were
outstanding on this line of credit, bearing interest at a weighted average rate
of 6.46%.
Business Combinations
On May 30, 1997, the Company completed the acquisition of the multifamily
property business of Wellsford through the tax-free Wellsford Merger. The
transaction was valued at approximately $1 billion and included 72 Properties of
Wellsford containing 19,004 units which were contributed to the Operating
Partnership. The purchase price consisted of 10.8 million Common Shares issued
by the Company with a market value of $443.7 million, the liquidation value of
$157.5 million for the Wellsford Series A Cumulative Convertible Preferred
Shares of Beneficial Interest and the Wellsford Series B
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PART I
Cumulative Redeemable Preferred Shares of Beneficial Interest, the assumption of
mortgage indebtedness and unsecured notes in the amount of $345 million, the
assumption of other liabilities of approximately $33.5 million and other merger
related costs of approximately $23.4 million. In the Wellsford Merger, each
outstanding common share of beneficial interest of Wellsford was converted into
.625 of a Common Share. In addition, Wellsford Series A Cumulative Convertible
Preferred Shares of Beneficial Interest were redesignated as the Company's
3,999,800 Series E Cumulative Convertible Preferred Shares of Beneficial
Interest, $0.01 par value per share (the "Series E Preferred Shares") and
Wellsford's Series B Cumulative Redeemable Preferred Shares of Beneficial
Interest were redesignated as the Company's 2,300,000 9.65% Series F Cumulative
Redeemable Preferred Shares of Beneficial Interest, $0.01 par value per share
(the "Series F Preferred Shares").
On December 23, 1997, the Company completed the acquisition of the
multifamily property business of EWR, through the tax-free EWR Merger. The
transaction was valued at approximately $1.2 billion and included 53 Properties
of EWR containing 15,331 units and three Properties under construction expected
to contain 953 units. The purchase price consisted of the Company's contribution
of the EWR Operating Partnership OP Units to the Operating Partnership at a
market value of approximately $501.6 million, issuance of approximately 2.2
million Operating Partnership OP Units in exchange for approximately 4.4 million
EWR Operating Partnership OP Units at a market value of approximately $107.3
million, the assumption of mortgage indebtedness and unsecured notes in the
amount of $498 million, the assumption of other liabilities of approximately
$28.2 million and other EWR Merger related costs of approximately $16.7 million.
In the EWR Merger, each outstanding common share of beneficial interest of EWR
was converted into .50 of a Common Share.
Recent Transactions
From January 1, 1998 through March 13, 1998, the Operating Partnership
acquired 12 properties from unaffiliated third parties for a total purchase
price of approximately $158.2 million, which included the assumption of mortgage
indebtedness of approximately $50.8 million. These properties were Cityscape, a
156-unit property located in St. Louis Park, Minnesota; 740 River Drive, a 162-
unit property located in St. Paul, Minnesota; Prospect Towers, a 157-unit
property located in Hackensack, New Jersey; Park Westend, a 312-unit property
located in Richmond, Virginia; Park Place, a 229-unit property located in
Houston, Texas; Emerald Bay at Winter Park, a 431-unit property located in
Winter Park, Florida; Farnham Park, a 216-unit property located in Houston,
Texas; Plantation, a 232-unit property located in Houston, Texas; Balcones Club,
a 312-unit property located in Austin, Texas; Coach Lantern, a 90-unit property
located in Scarborough, Maine; Foxcroft, a 104-unit property located in
Scarborough, Maine; and Yarmouth Woods, a 138-unit property located in Yarmouth,
Maine.
In January 1998, the Company completed the sale of 4,000,000 publicly
registered Common Shares which were sold to the public at a price of $50.4375
per share. The Company contributed to the Operating Partnership net proceeds of
approximately $195.3 million in connection with this offering (the "January 1998
Common Share Offering") in exchange for additional OP Units.
In February 1998, the Company completed offerings in the aggregate of
1,988,340 publicly registered Common Shares which were sold to the public at
prices ranging from $48 to $50.625
12
PART I
per share (the "February 1998 Common Share Offerings"). The Company contributed
to the Operating Partnership net proceeds of approximately $95 million
therefrom in exchange for additional OP Units.
Through February 1998, the Company sold approximately 639,000 Common Shares
pursuant to the DRIP Plan and contributed to the Operating Partnership proceeds
of approximately $31.7 million therefrom in exchange for additional OP Units.
On February 3, 1998, the Company filed with the SEC a Form S-3 Registration
Statement to register $1 billion of equity securities. The SEC declared this
registration statement effective on February 27, 1998.
On February 3, 1998, the Operating Partnership filed a Form S-3
Registration Statement to register $1 billion of debt securities. The SEC
declared this registration statement effective on February 27, 1998.
On March 12, 1998, the Operating Partnership disposed of two Properties for
a total sales price of $16.7 million.
Competition
All of the Properties are located in developed areas that include other
multifamily properties. The number of competitive multifamily properties in a
particular area could have a material effect on the Operating Partnership's
ability to lease units at the Properties or at any newly acquired properties and
on the rents charged. The Operating Partnership may be competing with other
entities that have greater resources than the Operating Partnership and whose
managers have more experience than the Operating Partnership's officers and
trustees. In addition, other forms of multifamily properties, including
multifamily properties and manufactured housing controlled by Mr. Zell, and
single-family housing, provide housing alternatives to potential residents of
multifamily properties.
Risk Factors
The Operating Partnership's results of operations are subject to certain
risks and uncertainties relating to the operations of its Properties. Investors
should carefully consider, among other factors, the matters described below
prior to making an investment decision regarding the securities of the Operating
Partnership.
Adverse Consequences of Debt Financing and Preferred Shares
General Risks. As of December 31, 1997, the Properties were subject to
approximately $1.6 billion of mortgage indebtedness and the Operating
Partnership's total debt equaled approximately $2.9 billion. Of the total debt
outstanding, $912.7 million, including the line of credit balance of $235
million, represented floating rate debt, of which approximately $611 million was
issued at tax exempt rates. In addition, from June 1995 through October 1997,
the Company issued Preferred Shares and Depositary Shares pursuant to offerings
previously mentioned and utilized the proceeds to repay indebtedness and to
acquire additional Properties. The Operating Partnership is subject to
13
PART I
the risks normally associated with debt or preferred equity financing, including
the risk that the Operating Partnership's cash flow will be insufficient to meet
required payments of principal and interest, the risk that existing indebtedness
may not be refinanced or that the terms of such refinancing will not be as
favorable as the terms of current indebtedness and the risk that necessary
capital expenditures for such purposes as renovations and other improvements may
not be financed on favorable terms or at all. If the Operating Partnership were
unable to refinance its indebtedness on acceptable terms, or at all, the
Operating Partnership might be forced to dispose of one or more of the
Properties on disadvantageous terms, which might result in losses to the
Operating Partnership and might adversely affect the cash available to meet
required payments of principal and interest and for distributions to
unitholders. If interest rates or other factors at the time of the refinancing
result in higher interest rates upon refinancing, the Operating Partnership's
interest expense would increase, which would affect the Operating Partnership's
ability to meet required payments of principal and interest and to make
distributions to its unitholders. Furthermore, if a Property is mortgaged to
secure payment of indebtedness and the Operating Partnership is unable to meet
mortgage payments, the mortgagee could foreclose upon the Property, appoint a
receiver and receive an assignment of rents and leases or pursue other remedies,
all with a consequent loss of income and asset value to the Operating
Partnership. Foreclosures could also create taxable income without accompanying
cash proceeds, thereby hindering the Company's ability to meet the REIT
distribution requirements of the Internal Revenue Code of 1986, as amended (the
"Code").
Restrictions on the Operating Partnership's Activities. A substantial
portion of the Operating Partnership's debt has been issued pursuant to certain
indentures (the "Indentures") which restrict the amount of indebtedness
(including acquisition financing) the Operating Partnership may incur.
Accordingly, if the Company or the Operating Partnership is unable to raise
additional equity or borrow money, respectively, because of the debt
restrictions in the Indentures, the Operating Partnership's ability to acquire
additional properties may be limited. If the Operating Partnership is unable to
acquire additional properties, its ability to increase funds from operations,
and thereby cash available to meet required payments of principal and interest,
will be limited to increasing funds from operations of the existing Properties
in the Operating Partnership's portfolio at such time.
Bond Compliance Requirements. Certain of the Operating Partnership's
Properties are subject to restrictive covenants or deed restrictions relating to
current or previous tax-exempt bond financing and owns the bonds collateralized
by several additional Properties. The Operating Partnership has retained an
independent outside consultant to monitor compliance with the restrictive
covenants and deed restrictions that affect these Properties. The bond
compliance requirements may have the effect of limiting the Operating
Partnership's income from these Properties if the Operating Partnership is
required to lower its rental rates to attract low or moderate income tenants, or
eligible/qualified tenants.
Potential Environmental Liability Affecting the Operating Partnership
Under various federal, state and local environmental laws, ordinances and
regulations, an owner of real estate may be liable for the costs of removal or
remediation of certain hazardous or toxic substances on such property. These
laws often impose environmental liability without regard
14
PART I
to whether the owner knew of, or was responsible for, the presence of such
hazardous or toxic substances. The presence of such substances, or the failure
properly to remediate such substances, may adversely affect the owner's ability
to sell or rent the property or to borrow using the property as collateral.
Persons who arrange for the disposal or treatment of hazardous or toxic
substances may also be liable for the costs of removal or remediation of such
substances at a disposal or treatment facility, whether or not such facility is
owned or operated by such person. Certain laws impose liability for release of
asbestos-containing materials ("ACMs") into the air and third parties may seek
recovery from owners or operators of real properties for personal injury
associated with ACMs. In connection with the ownership (direct or indirect),
operation, management and development of real properties, the Operating
Partnership or the Subsidiaries, as the case may be, may be considered an owner
or operator of such properties or as having arranged for the disposal or
treatment of hazardous or toxic substances and, therefore, potentially liable
for removal or remediation costs, as well as certain other related costs,
including governmental fines and injuries to persons and property.
All of the Properties have been the subject of a Phase I, and in certain
cases a supplemental, environmental assessment completed by qualified
independent environmental consultant companies. The most recent environmental
assessments for each of the Properties were conducted within the last five
years. Environmental assessments were obtained prior to the acquisition by the
Operating Partnership of each of the Properties. These environmental assessments
have not revealed, nor is the Operating Partnership aware of, any environmental
liability that the Operating Partnership's management believes would have a
material adverse effect on the Operating Partnership's business, results of
operations, financial condition or liquidity.
No assurance can be given that existing environmental assessments with
respect to any of the Properties reveal all environmental liabilities, that any
prior owner of a Property did not create any material environmental condition
not known to the Operating Partnership, or that a material environmental
condition does not otherwise exist as to any one or more Properties.
General Real Estate Investment Considerations, Changes in Laws
General. Real property investments are subject to varying degrees of risk
and are relatively illiquid. Income from real property investments and the
Operating Partnership's resulting ability to make expected interest payments on
debt securities may be adversely affected by the general economic climate, local
conditions such as oversupply of apartment units or a reduction in demand for
apartment units in the area, the attractiveness of the Properties to tenants,
zoning or other regulatory restrictions, the ability of the Operating
Partnership to provide adequate maintenance and insurance, and increased
operating costs (including insurance premiums and real estate taxes). The
Operating Partnership's income would also be adversely affected if tenants were
unable to pay rent or the Operating Partnership were unable to rent apartment
units on favorable terms. If the Operating Partnership were unable to promptly
relet or renew the leases for a significant number of apartment units, or if the
rental rates upon such renewal or reletting were significantly lower than
expected rates, then the Operating Partnership's income and ability to meet
required payments of principal and interest and to make expected distributions
to unitholders may be adversely affected. In addition, certain expenditures
associated with each equity investment
15
PART I
(such as real estate taxes and maintenance costs) generally are not reduced when
circumstances cause a reduction in income from the investment. The Operating
Partnership intends to purchase newly developed, as well as invest in the
development of multifamily communities. Such projects generally require the
expenditure of capital, and consequently there can be no assurance that any of
such projects will be completed or that such projects will prove to be
profitable. The failure of the Operating Partnership to complete or to
profitably operate planned development projects may have an adverse affect on
the Operating Partnership's results of operations and financial position.
Furthermore, real estate investments are relatively illiquid and, therefore,
will tend to limit the ability of the Operating Partnership to vary its
portfolio promptly in response to changes in economic or other conditions.
Changes in Laws. Increases in real estate taxes, income taxes and service
or other taxes generally are not passed through to tenants under existing leases
and may adversely affect the Operating Partnership's cash provided by operations
and its ability to make interest payments on debt securities. Similarly, changes
in laws increasing the potential liability for environmental conditions existing
on properties or increasing the restrictions on discharges or other conditions
may result in significant unanticipated expenditures, which would adversely
affect the Operating Partnership's income and its ability to make interest
payments on debt securities.
Dependence on Key Personnel
The Operating Partnership is dependent on the efforts of the Company's
executive officers. While the Operating Partnership believes that it could find
replacements for these key personnel, the loss of their services could have a
temporary adverse effect on the operations of the Operating Partnership. Only
one of these officers has entered into an employment agreement with the Company.
Distribution Requirements Potentially Increasing Indebtedness of the Operating
Partnership
The Operating Partnership may be required from time to time, under certain
circumstances, to accrue as income for tax purposes, interest and rent earned
but not yet received. In such event, or upon the repayment by the Operating
Partnership or its subsidiaries of principal on debt, the Company could have
taxable income without sufficient cash to enable the Company to meet the
distribution requirements of a REIT. Accordingly, the Operating Partnership
could be required to borrow funds or liquidate investments on adverse terms in
order to allow the Company to meet such distribution requirements.
Item 2. The Properties
As of December 31, 1997, the Operating Partnership controlled a portfolio
of 463 multifamily properties located in 34 states containing 135,200 apartment
units. The average number of units per Property was approximately 293. The units
are typically contained in a series of two-story buildings. The Properties
contain an aggregate of approximately 118.9 million rentable square feet, with
an average unit size of 886 square feet. The average rent per unit was $696, and
the average rent per square foot was $0.79.
As of December 31, 1997, the Properties had an average occupancy rate of
95%. Tenant leases are generally year-to-year and require security deposits. The
Properties typically provide residents with attractive amenities, which may
include a clubhouse, swimming pool, laundry facilities and cable television
access. Certain Properties offer additional amenities such as saunas,
whirlpools, spas, sports courts and exercise rooms.
16
PART I
The Operating Partnership believes that the Properties provide amenities
and common facilities that create an attractive residence for tenants. It is
management's role to monitor compliance with Property policies and to provide
preventive maintenance of the Properties including common areas, facilities and
amenities. The Operating Partnership holds periodic meetings of its Property
management personnel for training and implementation of the Operating
Partnership's strategies. The Operating Partnership believes that, due in part
to this strategy, the Properties historically have had high occupancy rates.
The distribution of the Properties throughout the United States reflects
the Operating Partnership's belief that geographic diversification helps
insulate the portfolio from regional and economic influences. At the same time,
the Operating Partnership has sought to create clusters of Properties within
each of its primary markets in order to achieve economies of scale in management
and operation; however, the Operating Partnership may acquire additional
multifamily properties located anywhere in the United States.
The Operating Partnership beneficially owns fee simple title to 456 of the
Properties and holds a 73-year leasehold interest with respect to one Property
(Mallgate). Direct fee simple title for certain of the Properties is owned by
single-purpose nominee corporations or land trusts that engage in no business
other than holding title to the Property for the Operating Partnership. Holding
title in such a manner is expected to make it less costly to transfer such
Property in the future in the event of a sale and should facilitate financing
since lenders often require title to a Property to be held in a single purpose
entity in order to isolate that Property from potential liabilities of other
Properties. Direct fee simple title for certain other Properties is owned by an
LLC. In addition, with respect to two Properties, the Operating Partnership owns
the debt collateralized by such Properties and with respect to four Properties,
the Operating Partnership owns an interest in the debt collateralized by the
properties.
As of December 31, 1997, the Operating Partnership had an investment in
partnership interests and subordinated mortgages and mortgage loans
collateralized by the Additional Properties. The Additional Properties contain
5,267 units, located in seven states.
The following two tables set forth certain information relating to the
Properties and the Additional Properties:
17
Item 2. Properties
PROPERTIES- Continued
Acreage Average
Year(s) (approx- Square Square Footage
Property Constructed imate) Units Footage Per Unit
- ------------------------------------------------------------------------------------------------------------------------------------
ALABAMA
Meadows on the Lake/Park, Birmingham (2 properties) 1986/1987 37 400 418,452 1,046
ARIZONA
Bay Club, Phoenix 1976 13 420 257,790 614
Camellero, Scottsdale (1) 1979 15 344 311,526 906
Canyon Creek, Tucson 1986 10 242 169,946 702
Canyon Sands, Phoenix (1) 1983 20 412 353,592 858
Chandler Court, Chandler 1987 20 311 263,338 847
Crystal Creek, Phoenix 1985 10 273 190,140 696
Del Coronado, Mesa (1) 1985 19 419 394,062 940
Desert Sands, Phoenix (1) 1982 20 412 353,592 858
Flying Sun, Phoenix 1983 4 108 93,708 868
Fountain Creek, Phoenix 1984 9 186 144,374 776
Indian Bend, Scottsdale 1973 14 275 226,444 823
Southbank, Mesa 1985 5 113 99,448 880
Southcreek, Mesa (1) 1986-89 23 528 472,152 894
Via Ventura, Scottsdale 1980 19 320 279,187 872
Villa Madeira, Scottsdale 1971 17 332 291,280 877
Villa Manana, Phoenix 1971-85 8 260 212,150 816
Copper Creek, Phoenix 1984 8 144 146,024 1,014
Crown Court, Phoenix 1987 27 416 464,582 1,117
Occupancy December, 1997
As of Avg. Monthly
Year(s) December 31, Rental Rate Per
Property Constructed 1997 Unit Square Foot
- ---------------------------------------------------------------------------------------------------------------------------------
ALABAMA
Meadows on the Lake/Park, Birmingham (2 properties) 1986/1987 94% $570 $0.54
ARIZONA
Bay Club, Phoenix 1976 95% $526 $0.86
Camellero, Scottsdale (1) 1979 95% $723 $0.80
Canyon Creek, Tucson 1986 96% $488 $0.69
Canyon Sands, Phoenix (1) 1983 92% $557 $0.65
Chandler Court, Chandler 1987 92% $641 $0.76
Crystal Creek, Phoenix 1985 96% $571 $0.82
Del Coronado, Mesa (1) 1985 93% $671 $0.71
Desert Sands, Phoenix (1) 1982 92% $557 $0.65
Flying Sun, Phoenix 1983 98% $590 $0.68
Fountain Creek, Phoenix 1984 96% $603 $0.78
Indian Bend, Scottsdale 1973 93% $692 $0.84
Southbank, Mesa 1985 96% $573 $0.65
Southcreek, Mesa (1) 1986-89 93% $663 $0.74
Via Ventura, Scottsdale 1980 97% $728 $0.83
Villa Madeira, Scottsdale 1971 95% $700 $0.80
Villa Manana, Phoenix 1971-85 93% $619 $0.76
Copper Creek, Phoenix 1984 97% $789 $0.78
Crown Court, Phoenix 1987 99% $857 $0.77
18
Item 2. Properties
PROPERTIES- Continued
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ------------------------------------------------------------------------------------------------------------------------------------
ARIZONA, continued
Dos Caminos, Phoenix 1983 16 264 265,884 1,007 98% $781 $0.78
The Pointe ASM, Phoenix 1988 14 364 309,548 850 93% $666 $0.78
San Tropez, Phoenix 1989 13 316 332,080 1,051 98% $886 $0.84
Misson Palms, Tucson 1980 35 360 372,918 1,036 99% $669 $0.65
Skyline Gateway, Tucson 1985 8 246 179,422 729 98% $568 $0.78
Sedona Ridge, Phoenix 1988 17 250 235,345 941 95% $728 $0.77
Windemere, Mesa (1) 1986 18 224 187,192 836 95% $591 $0.71
Sycamore Creek, Scottsdale (1) 1984 19 350 335,420 958 91% $759 $0.79
Villa Serenas, Tucson (1) 1973 18 611 452,751 741 87% $506 $0.68
Acacia Creek, Scottsdale 1988-1994 20 508 462,280 910 95% $765 $0.84
Bayside at the Islands, Gilbert (1) 1989 15 272 236,640 870 93% $736 $0.85
Country Brook, Chandler (1) 1986-1996 24 396 380,556 961 95% $739 $0.77
Gateway Villas, Scottsdale 1995 18 180 179,664 998 97% $836 $0.84
Greenwood Village, Tempe (1) 1984 13 270 238,768 884 92% $670 $0.76
Superstition Vista, Mesa 1987 16 316 300,510 951 93% $649 $0.68
Heritage Point, Mesa 1986 7 148 114,436 773 91% $797 $1.03
La Mariposa, Mesa (1) 1986 11 222 206,052 928 96% $645 $0.69
Little Cottonwoods, Tempe (1) 1984 20 379 389,012 1,026 94% $766 $0.75
Miramonte, Scottsdale 1983 4 151 118,568 785 96% $666 $0.85
19
Item 2. Properties
PROPERTIES- Continued
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ------------------------------------------------------------------------------------------------------------------------------------
ARIZONA, continued
Morningside, Scottsdale (1) 1989 10 160 163,116 1,019 98% $802 $0.79
Mountain Park, Phoenix (1) 1994 12 240 230,560 961 92% $800 $0.83
Park Meadow, Gilbert (1) 1986 7 224 197,120 880 97% $691 $0.79
Rancho Murietta, Tempe 1983 14 292 253,016 866 95% $698 $0.81
Scottsdale Courtyards, Scottsdale (1) 1993 18 274 284,175 1,037 99% $895 $0.86
Scottsdale Meadows, Scottsdale 1984 7 168 149,520 890 95% $727 $0.82
Shadow Brook, Scottsdale (1) 1984 17 224 226,296 1,010 98% $863 $0.85
Shores at Andersen Springs, Chandler (1) 1989 11 299 265,218 887 95% $776 $0.87
Sonoran, Phoenix (1) 1995 15 429 413,344 964 93% $770 $0.80
The Enclave, Tempe (1) 1994 25 204 194,142 952 98% $850 $0.89
The Meadows, Mesa 1984 15 306 247,378 808 92% $575 $0.71
Towne Square, Chandler 1987-1996 16 584 560,640 960 96% $683 $0.71
Villa Encanto, Phoenix 1983 21 382 309,982 811 93% $631 $0.78
Village at Lakewood, Phoenix (1) 1988 12 240 205,752 857 95% $754 $0.88
Harrison Park, Tucson (1) 1985 6 360 291,240 809 90% $623 $0.77
La Reserve Villas, Tucson (1) 1988 12 240 216,008 900 97% $619 $0.69
Orange Grove Village, Tucson (1) 1986-1995 17 400 285,600 714 90% $561 $0.79
Suntree Village, Tucson (1) 1986 16 424 345,761 815 92% $529 $0.65
Arboretum, Tucson (1) 1987 14 496 439,456 886 97% $569 $0.64
20
Item 2. Properties
PROPERTIES- Continued
Average Occupancy December, 1997
Acreage Square As of Avg. Monthly
Year(s) (approx- Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- -------------------------------------------------------------------------------------------------------------------------------
ARIZONA, continued
Village at Tanque Verde, Tucson (1) 1984-1994 9 217 174,668 805 91% $571 $0.71
Legends at La Paloma, Tucson 1995 20 312 325,648 1,044 95% $783 $0.75
Bear Canyon, Tucson 1996 14 238 231,640 973 92% $726 $0.75
Promontory Pointe I&II, Phoenix (1) 1984-1996 27 424 421,446 994 96% $772 $0.78
The Hawthorne, Phoenix 1996 10 276 259,784 941 91% $782 $0.83
Isle at Arrowhead Ranch, Glendale 1996 18 256 244,608 956 95% $839 $0.88
Ladera, Phoenix 1995 15 248 243,312 981 96% $832 $0.85
Ingleside, Phoenix 1995 5 120 118,664 989 98% $865 $0.87
The Heritage, Phoenix (1) 1995 8 204 198,276 972 91% $797 $0.82
Sun Creek, Glendale (1) 1985 7 175 129,661 741 94% $601 $0.81
Silver Creek, Phoenix (1) 1986 5 174 134,820 775 95% $614 $0.79
Preserve at Squaw Park, Phoenix (1) 1990 4 108 92,168 853 94% $836 $0.98
The Palms, Phoenix (1) 1990 5 132 135,460 1,026 98% $924 $0.90
Mirador, Phoenix 1995 16 316 311,928 987 92% $817 $0.83
La Valencia, Mesa 1997 18 361 342,946 950 94% $664 $0.70
ARKANSAS
Combined Little Rock Properties (1)(3) 1974-1975 44 1,039 889,416 856 93% $520 $0.61
CALIFORNIA
Carmel Terrace, San Diego 1988-89 20 384 298,588 778 97% $816 $1.05
Casa Capricorn & Pardee Casas, San Diego 1976-1986 19 388 346,720 894 97% $800 $0.90
Creekside Oaks, Walnut Creek (1) 1974 7 316 237,952 753 92% $850 $1.13
Item 2. Properties
PROPERTIES-Continued
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA, continued
Deerwood, San Diego 1990 29 316 333,079 1,054 95% $1,072 $1.02
Eagle Canyon, Chino Hills 1985 32 252 252,493 1,002 93% $975 $0.97
Emerald Place, Bermuda Dunes 1988 17 240 214,072 892 97% $622 $0.70
Hathaway, Long Beach 1987 17 385 266,805 693 95% $885 $1.28
Lakeville Resort, Petaluma (1) 1984 45 492 461,798 939 98% $806 $0.86
Lands End, Pacifica 1974 7 260 161,121 620 97% $1,062 $1.71
Merrimac Woods, Costa Mesa 1970 39 123 88,160 717 98% $807 $1.13
Mountain Terrace, Stevenson Ranch 1992 39 510 425,612 835 93% $878 $1.05
Oak Park North & South, Agoura (1) 1989-1990 24 444 368,600 830 96% $1,078 $1.30
Park West, Los Angeles 1990 4 444 315,588 711 95% $1,015 $1.43
Promenade Terrace, Corona Hills (1) 1990 27 330 360,838 1,093 99% $882 $0.81
Regency Palms, Huntington Beach 1969 14 310 261,634 844 91% $866 $1.03
Summer Ridge, Riverside 1985 6 136 104,832 771 99% $695 $0.90
Summerset Village, Chatsworth 1985 29 280 286,752 1,024 96% $1,098 $1.07
Villa Solana, Laguna Hills 1984 13 272 245,104 901 97% $915 $1.02
Vista Del Lago, Mission Viejo (1) 1986-88 29 608 512,200 842 92% $941 $1.12
Windridge, Laguna Niguel (1) 1989 19 344 375,312 1,091 95% $1,046 $0.96
Bay Ridge, San Pedro 1987 2 60 46,836 781 95% $908 $1.16
La Mirage, San Diego 1988-1992 75 1,070 972,689 909 94% $1,094 $1.20
Item 2. Properties
PROPERTIES-Continued
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA, continued
Harborview, San Pedro (1) 1985 7 160 171,800 1,074 89% $1,351 $1.26
Wood Creek, Pleasant Hill 1987 16 256 257,632 1,006 95% $1,253 $1.25
Geary Courtyard, San Francisco (1) 1990 0.4 164 85,675 522 86% $1,123 $2.15
Deerwood, Corona 1992 15 316 338,345 1,071 94% $871 $0.81
Larkspur Woods, Sacramento (1) 1989/1993 16 232 253,134 1,091 95% $959 $0.88
Ridgewood Village, San Diego 1997 9 192 163,336 851 95% $907 $1.07
The Ashton, Corona (1) 1986 24 492 457,184 929 90% $717 $0.77
Canyon Crest Views, Riverside 1982-1983 11 178 212,292 1,193 97% $945 $0.79
Canyon Ridge, San Diego 1989 8 162 126,000 778 99% $854 $1.10
Marquessa, Corona (1) 1992 14 336 299,744 892 94% $770 $0.86
Portofino, Chino Hills 1989 11 176 153,708 873 99% $860 $0.98
Parkview Terrace, Redlands (1) 1986 32 558 446,856 801 96% $699 $0.87
Redlands Lawn and Tennis Club, Redland (1) 1986 27 496 394,560 795 93% $658 $0.83
COLORADO
Cheyenne Crest, Colorado Springs 1984 9 208 175,424 843 96% $659 $0.78
Glenridge, Colorado Springs (1) 1985 8 220 176,792 804 96% $648 $0.81
Indian Tree, Arvada 1983 8 168 140,000 833 95% $666 $0.80
Trails, Aurora 1986 11 351 286,964 818 93% $633 $0.77
Willow Glen, Aurora 1983 20 384 302,944 789 94% $614 $0.78
Item 2. Properties
PROPERTIES--Continued
Average Occupancy December, 1997
Acreage Square As of Avg. Monthly
Year(s) (approx- Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- -----------------------------------------------------------------------------------------------------------------------------
COLORADO, continued
Windmill, Colorado Springs 1985 11 304 180,640 594 97% $523 $0.88
Yuma Court, Colorado Springs 1985 5 40 37,400 935 100% $620 $0.66
Village at Bear Creek, Denver 1987-1996 31 472 464,558 984 93% $848 $0.86
Cimmaron Ridge, Denver 1984 10 296 229,048 774 93% $586 $0.76
Colinas Pointe, Denver 1986 13 272 213,984 787 92% $647 $0.82
Highland Pointe, Denver 1984 14 318 237,886 748 97% $568 $0.76
Ironwood at the Ranch, Denver (1) 1986 9 226 184,081 815 97% $732 $0.90
The Marks, Denver (1) 1987-1996 24 616 520,712 845 93% $741 $0.88
The Registry, Denver 1987 9 208 156,558 753 98% $695 $0.92
Sterling Point, Denver 1979 9 143 130,120 910 94% $732 $0.80
Warwick Station, Denver (1) 1986 18 332 250,432 754 96% $689 $0.91
Parkwood East, Fort Collins 1986 25 259 215,064 830 92% $676 $0.81
Dartmouth Woods, Lakewood (1) 1990 13 201 165,777 825 97% $708 $0.86
Highline Oaks, Denver (1) 1986 10 220 170,756 776 94% $679 $0.88
Crescent at Cherry Creek, Denver (1) 1994 6 216 189,191 876 94% $821 $0.94
Cierra Crest, Denver 1996 22 480 439,498 916 95% $808 $0.88
CONNECTICUT
The Classic, Stamford 1990 1 144 165,727 1,151 97% $1,981 $1.72
FLORIDA
Brierwood, Jacksonville 1974 17 196 263,052 1,342 99% $642 $0.48
Item 2. Properties
PROPERTIES--Continued
Average Occupancy December, 1997
Acreage Square As of Avg. Monthly
Year(s) (approx- Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ------------------------------------------------------------------------------------------------------------------------------------
FLORIDA, continued
Casa Cordoba, Tallahassee 1972-73 12 168 164,336 978 95% $605 $0.62
Casa Cortez, Tallahassee 1970 4 66 74,916 1,135 94% $628 $0.55
Chaparral, Largo 1976 23 444 451,420 1,017 95% $613 $0.60
Gatehouse on the Green, Pembroke Pines 1990 21 312 310,140 994 90% $944 $0.95
Gatehouse at Pine Lake, Plantation 1990 25 296 293,792 993 97% $861 $0.87
Habitat, Orlando 1974 17 344 334,352 972 93% $589 $0.61
Hammock's Place, Miami (1) 1986 15 296 307,900 1,040 93% $740 $0.71
Heron Cove, Coral Springs 1987 12 198 189,932 959 98% $786 $0.82
Heron Landing, Lauderhill 1988 11 144 151,684 1,053 94% $771 $0.73
Heron Run, Plantation 1987 13 198 185,504 937 93% $814 $0.87
La Costa Brava, Orlando 1967 10 194 190,780 983 98% $639 $0.65
La Costa Brava, Jacksonville (2) 1970-73 30 464 441,268 951 92% $556 $0.58
Marbrisa, Tampa 1984 37 224 188,544 842 97% $589 $0.70
Oaks of Lakebridge, Ormond Beach 1984 12 170 120,792 711 99% $598 $0.84
Paradise Point, Dania 1987-90 13 260 226,980 873 99% $832 $0.95
Pine Harbour, Orlando 1991 20 366 344,204 940 95% $690 $0.73
Pines of Springdale, W. Palm Beach 1986 5 151 126,975 841 95% $632 $0.75
The Place, Fort Meyers 1986 9 230 183,588 798 96% $556 $0.70
Combined Ft. Lauderdale Properties (4) 1988-1991 36 737 528,591 717 97% $878 $1.22
Item 2. Properties
PROPERTIES--Continued
Average Occupancy December, 1997
Acreage Square As of Avg. Monthly
Year(s) (approx- Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
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FLORIDA, continued
River Bend, Tampa 1971 15 296 333,580 1,127 96% $565 $0.50
Sabal Pointe, Coral Springs 1995 14 275 355,575 1,293 96% $896 $0.69
Sawgrass Cove, Bradenton 1991 28 336 342,880 1,020 94% $678 $0.66
Springs Colony, Altamonte Springs (1) 1986 10 188 161,168 857 96% $589 $0.69
Stonelake Club, Ocala 1986 15 240 194,320 810 95% $511 $0.63
Woodlake at Killearn, Tallahassee 1986-90 25 352 305,480 868 91% $610 $0.70
Banyan Lake, Boynton Beach 1986 30 288 264,636 919 94% $712 $0.77
Boynton Place, Boynton Beach 1989 12 192 195,840 1,020 95% $715 $0.70
Crosswinds, St. Petersburg 1986 17 208 154,224 741 97% $567 $0.77
Sabal Palm, Pompano Beach 1989 23 416 384,032 923 96% $762 $0.83
Summit Chase, Coral Springs 1985 9 140 134,586 961 94% $714 $0.74
Mariners Wharf, Orange Park 1989 28 272 305,392 1,123 95% $753 $0.67
Northlake, Jacksonville 1989 20 240 193,832 808 94% $596 $0.74
Ocean Walk, Key West (1) 1990 16 296 208,256 704 97% $828 $1.18
Silver Springs, Jacksonville 1985 25 432 361,372 836 95% $547 $0.65
Tivoli Lakes, Deerfield Beach 1991 15 278 247,336 890 96% $789 $0.89
Westwood Pines, Tamarac 1991 15 208 204,460 983 96% $799 $0.81
Hidden Palms, Tampa (1) 1986 14 256 201,518 787 97% $542 $0.69
Vinings at Ashley Lake, Boynton Beach (1) 1990 36 440 432,756 984 93% $649 $0.66
Item 2. Properties
PROPERTIES--Continued
Average Occupancy December, 1997
Acreage Square As of Avg. Monthly
Year(s) (approx- Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
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GEORGIA
Frey, Atlanta (1) 1985 44 489 453,760 928 90% $704 $0.76
Governor's Place, Augusta 1972 9 190 191,580 1,008 91% $449 $0.45
Greengate, Marietta 1971 11 152 157,808 1,038 92% $646 $0.62
Holcomb Bridge, Atlanta (1) 1985 36 437 419,150 959 96% $703 $0.73
Ivy Place, Atlanta 1978 15 122 180,830 1,482 94% $919 $0.62
Longwood, Decatur 1992 9 268 216,970 810 96% $742 $0.92
Maxwell House, Augusta 1951 1 216 97,173 450 96% $371 $0.82
Park Knoll, Marietta 1983 41 484 587,250 1,213 97% $821 $0.68
Preston Lake, Tucker 1984-86 32 320 338,130 1,057 97% $698 $0.66
Roswell, Atlanta (1) 1985 30 236 225,598 956 98% $731 $0.76
Terraces at Peachtree, Atlanta 1987 1 96 86,800 904 98% $913 $1.01
Woodland Hills, Decatur 1985 19 228 266,304 1,168 97% $788 $0.67
Paces (combined), Atlanta (8) 1984-1989 41 610 592,936 972 94% $768 $0.79
North Hill, Atlanta (1) 1984 30 420 481,150 1,146 93% $764 $0.67
The Clarion, Decatur 1990 9 217 211,582 975 94% $756 $0.78
Garden Lake, Riverdale 1991 19 278 274,256 986 91% $645 $0.65
Highland Grove, Stone Mountain 1988 20 268 243,360 908 94% $671 $0.74
Governor's Point, Roswell (1) 1982/1986 34 468 587,176 1,255 94% $783 $0.62
The Arboretum, Atlanta 1970 18 312 301,139 965 94% $790 $0.82
Item 2. Properties
PROPERTIES--Continued
Average Occupancy December, 1997
Acreage Square As of Avg. Monthly
Year(s) (approx- Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
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IDAHO
The Seasons, Boise 1990 6 120 108,460 904 97% $631 $0.70
ILLINOIS
Bourbon Square, Palatine (1) 1984-87 47 612 875,160 1,430 98% $1,034 $0.72
Four Lakes III-V, Lisle (1) 1968-1988 107 1,420 1,108,45 781 93% $819 $1.05
Spice Run, Naperville 1988 32 400 396,320 991 98% $862 $0.87
Chantecleer Lakes, Naperville (1) 1986 19 304 280,536 923 97% $894 $0.97
Glenlake Club, Glendale Heights (1) 1988 17 336 268,560 799 91% $767 $0.96
INDIANA
Idlewood, Indianapolis (1) 1991 28 320 262,355 820 90% $621 $0.76
IOWA
3000 Grand, Des Moines 1970 6 186 199,530 1,073 94% $829 $0.77
Regency Woods, West Des Moines (1) 1986 11 200 165,880 829 97% $515 $0.62
KANSAS
Cedar Crest, Overland Park 1986 30 466 430,034 923 98% $632 $0.68
Essex Place, Overland Park 1970-84 34 352 429,048 1,219 96% $792 $0.65
Rosehill Pointe, Lenexa 1984 35 498 459,318 922 93% $611 $0.66
Silverwood, Mission (1) 1986 15 280 234,876 839 98% $632 $0.75
Sunnyoak Village, Overland Park 1984 46 548 492,700 899 98% $588 $0.65
Concorde Bridge, Overland Park 1973 26 248 403,808 1,628 94% $798 $0.49
KENTUCKY
Cloisters on the Green, Lexington 1974 12 228 196,560 862 97% $576 $0.67
Doral, Louisville 1972 10 228 293,106 1,286 95% $618 $0.48
Item 2. Properties
PROPERTIES- Continued
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
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KENTUCKY, continued
Mallgate, Louisville 1969 24 540 535,444 992 93% $551 $0.56
Sonnet Cove I-II, Lexington 1972-1974 14 331 346,675 1,047 94% $627 $0.60
Breckinridge Court, Lexington (1) 1986-1987 16 382 276,010 723 95% $464 $0.64
River Oak, Louisville 1989 16 268 200,056 746 95% $516 $0.69
MAINE
Junipers of Yarmouth, Yarmouth 1970 9 225 188,000 836 97% $662 $0.79
Tamarlane, Portland 1986 19 115 101,801 885 98% $716 $0.81
MARYLAND
Canterbury, Germantown (1) 1986 23 544 481,083 884 97% $719 $0.81
Country Club I & II, Silver Spring (1) 1980-1982 20 376 371,296 987 95% $770 $0.78
Georgian Woods II, Wheaton (1) 1967 17 371 305,693 824 98% $777 $0.94
Greenwich Woods & Hollyview,
Silver Springs (6) 1965-1967 14 606 546,518 902 97% $755 $0.84
Marymont, Laurel 1987-88 10 308 251,264 816 96% $771 $0.95
Northhampton I & II, Largo (1) 1977-1988 58 620 564,399 910 96% $806 $0.89
Oak Mill II, Germantown (1) 1985 8 192 165,611 863 96% $716 $0.83
Town Centre III & IV, Laurel (1) 1968-1969 30 562 553,083 984 98% $721 $0.73
Yorktowne at Olde Mill, Millersville 1974 21 216 195,100 903 97% $691 $0.77
MASSACHUSETTS
Lincoln Heights, Quincy 1991 16 336 266,590 793 93% $1,079 $1.36
Crystal Village, Attleboro 1974 7 91 92,880 1,021 100% $871 $0.85
Mill Village, Randolph 1971-77 11 310 237,755 767 97% $735 $0.96
Item 2. Properties
PROPERTIES- Continued
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
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MICHIGAN
Country Ridge, Farmington Hills 1986 18 252 278,060 1,103 92% $838 $0.76
Hidden Valley, Ann Arbor 1973 28 324 237,348 733 96% $717 $0.98
Lake in the Woods, Ypsilanti 1969 175 1,028 971,873 945 95% $736 $0.78
Pines of Cloverlane, Pittsfield Townsh 1975-79 63 582 471,966 811 96% $624 $0.77
Walden Wood, Southfield (1) 1972 20 210 295,080 1,405 95% $879 $0.63
Arbor Glen, Pittsfield Township 1990 22 220 195,996 891 95% $600 $0.67
Burwick Farms, Howell 1991 37 264 274,540 1,040 95% $786 $0.76
Woodcrest Villa, Westland 1970 26 458 425,200 928 93% $561 $0.60
Woodland Meadows, Ann Arbor 1987-1989 34 306 392,930 1,284 89% $1,075 $0.84
MINNESOTA
Park Place I & II, Plymouth (1) 1986 60 500 569,768 1,140 94% $800 $0.70
Fountain Place I, Eden Prairie (1)(7) 1989 22 332 382,170 1,151 97% $768 $0.67
Fountain Place II, Eden Prairie (1)(7) 1989 158 162,598 1,029 97% $771 $0.75
Royal Oaks, Eagan (1) 1989 20 231 209,384 906 98% $740 $0.82
Trailway Pond I, Burnsville (1)(7) 1988 21 75 70,283 937 95% $684 $0.73
Trailway Pond II, Burnsville (1)(7) 1988 165 155,395 942 95% $675 $0.72
Valley Creek I, Woodbury (1)(7) 1989 40 225 212,100 943 92% $713 $0.76
Valley Creek II, Woodbury (1)(7) 1990 177 168,258 951 96% $717 $0.75
White Bear Woods I, White Bear Lake (1) 1989 4 225 211,992 942 96% $736 $0.78
Woodlane Place I, Woodbury (1) 1989 32 216 297,902 1,379 95% $870 $0.63
Woodlands of Minnetonka, Minnetonka 1988 14 248 268,640 1,083 98% $880 $0.81
Item 2. Properties
PROPERTIES- Continued
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
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MISSOURI
Hunters Glen, Chesterfield 1985 19 192 156,489 815 98% $654 $0.80
Sleepy Hollow, Kansas City (1) 1987 33 388 325,486 839 93% $566 $0.67
Hunters Ridge, St. Louis (1) 1987 13 198 178,448 901 95% $616 $0.68
South Pointe, St. Louis (1) 1986 8 192 155,520 810 92% $602 $0.74
Ethan's Ridge I, Kansas City (1)(7) 1988 316 283,944 899 92% $542 $0.60
Ethan's Ridge II, Kansas City (1)(7) 1990 52 242 196,614 812 89% $534 $0.66
Ethan's Glen III, Kansas City (1)(7) 1990 48 33,600 700 88% $484 $0.69
NEVADA
Catalina Shores, Las Vegas 1989 13 240 211,200 880 93% $716 $0.81
Cypress Point, Las Vegas 1989 9 212 179,800 848 97% $698 $0.82
Desert Park, Las Vegas 1987 15 368 172,513 469 87% $519 $1.11
Fountains at Flamingo, Las Vegas 1989-91 30 521 417,870 802 94% $687 $0.86
Newport Cove, Henderson 1983 10 140 152,600 1,090 96% $777 $0.71
Silver Shadow, Las Vegas 1992 9 200 194,656 973 90% $716 $0.74
Sunrise Springs, Las Vegas 1989 10 192 164,424 856 94% $681 $0.80
Trails, Las Vegas 1988 28 440 453,656 1,031 94% $757 $0.73
Catalina Shores, Las Vegas (Wellsford) 1989 14 256 230,872 902 97% $651 $0.72
Crossing at Green Valley, Las Vegas 1986 15 384 330,714 861 96% $654 $0.76
Reflections at the Lakes, Las Vegas 1989 16 326 274,992 844 98% $669 $0.79
NEW HAMPSHIRE
Wellington Hill, Manchester (1) 1987 40 390 394,627 1,012 96% $753 $0.74
Item 2. Properties
PROPERTIES- Continued
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
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NEW JERSEY
Ravens Crest, Plainsboro (1) 1984 19 704 583,176 828 96% $854 $1.03
NEW MEXICO
Pueblo Villas, Albuquerque 1975 12 232 173,118 746 94% $557 $0.75
Mountain Run, Albuquerque 1985 16 472 335,744 711 95% $554 $0.78
NORTH CAROLINA
Bainbridge, Durham 1984 24 216 191,240 885 94% $705 $0.80
Bridgeport, Raleigh 1990 17 276 252,190 914 95% $724 $0.79
Deerwood Meadows, Greensboro 1986 44 297 217,757 733 94% $562 $0.77
East Pointe, Charlotte (1) 1987 29 310 301,560 973 97% $650 $0.67
Laurel Ridge, Chapel Hill 1975 13 160 158,964 994 98% $727 $0.73
McAlpine Ridge, Charlotte 1989-90 15 320 238,125 744 96% $580 $0.78
Pine Meadow, Greensboro (1) 1974 14 204 226,600 1,111 95% $633 $0.57
Rock Creek, Corrboro 1986 16 188 153,548 817 97% $682 $0.84
Winterwood, Charlotte (1) 1986 23 384 369,260 962 96% $675 $0.70
Woodbridge, Cary (1) 1993-95 28 344 315,624 918 95% $733 $0.80
Woodscape & Woods of North Bend,
Raleigh 1979-1983 55 475 430,167 906 96% $640 $0.71
The Cardinal, Greensboro (1) 1994 17 256 237,727 913 93% $574 $0.63
Willow Brook, Durham 1986 21 176 139,860 795 91% $681 $0.86
The Atrium, Durham 1989 16 208 196,596 945 95% $645 $0.68
The Cedars, Charlotte 1983 32 360 312,400 868 92% $548 $0.63
The Chimneys, Charlotte 1974 16 214 150,152 702 95% $505 $0.72
Creekwood, Charlotte 1987-1990 23 384 322,868 841 93% $792 $0.94
Hidden Oaks & Northwoods Village,
Cary (5) 1986-1988 26 444 345,358 778 95% $660 $0.85
Item 2. Properties
PROPERTIES- Continued
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
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OHIO
Olentangy Commons, Columbus 1972 76 827 981,190 1,186 99% $773 $0.65
Reserve Square, Cleveland 1973 4 765 631,803 826 86% $917 $1.11
University Park, Toledo 1965 2 99 49,950 505 95% $456 $0.90
Village of Hampshire Heights, Toledo 1950 10 304 187,624 617 83% $431 $0.70
Eastland on the Lake, Columbus 1973 32 376 274,704 724 90% $431 $0.60
Orchard of Landen, Maineville (1) 1985-1988 33 312 288,514 925 96% $695 $0.75
OKLAHOMA
Brittany Square, Tulsa 1982 8 212 170,516 804 92% $524 $0.65
The Lodge, Tulsa 1979 11 208 152,240 732 97% $432 $0.59
Augusta, Oklahoma City 1986 7 197 153,308 778 95% $531 $0.68
Heritage Park, Oklahoma City 1983 23 452 392,218 868 95% $410 $0.47
Invitational, Oklahoma City 1983 10 344 254,976 741 97% $440 $0.59
Raindance, Oklahoma City 1984 22 504 327,248 649 94% $358 $0.55
Windrush, Oklahoma City 1982 10 160 130,112 813 99% $501 $0.62
Wellsford Oaks, Tulsa 1991 9 300 216,368 721 96% $529 $0.73
Huntington Hollow, Tulsa 1981 9 288 180,648 627 96% $371 $0.59
One Eton Square, Tulsa 1985 17 448 313,904 701 95% $531 $0.76
Silver Springs & Woodland Oaks, Tulsa 1983-1984 24 428 323,977 757 99% $503 $0.66
Item 2. Properties
PROPERTIES-Continued
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
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OKLAHOMA, continued
Riverside Park, Tulsa (1) 1994 9 288 237,283 824 93% $576 $0.70
OREGON
Bridgecreek, Wilsonville 1987 22 315 274,236 871 92% $677 $0.78
Kempton Downs, Gresham 1990 12 278 277,536 998 88% $698 $0.70
Meadowcreek, Tigard (1) 1985 15 304 247,690 815 94% $661 $0.81
Tanasbourne Terrace, Hillsboro 1986-89 18 373 363,758 975 95% $747 $0.77
Tanglewood, Lake Oswego 1976 8 158 200,660 1,270 88% $847 $0.67
Woodcreek, Beaverton (1) 1982-84 22 440 335,120 762 95% $598 $0.79
Knight's Castle, Wilsonville 1991 22 296 251,627 850 92% $649 $0.76
Club at Tanasbourne, Hillsboro 1990 19 352 302,902 861 91% $698 $0.81
Club at the Green, Beaverton 1991 15 254 238,850 940 92% $692 $0.74
Country Gables, Beaverton (1) 1991 15 288 275,463 956 92% $720 $0.75
Watermark Square, Portland (1) 1990 12 390 350,945 900 95% $637 $0.71
SOUTH CAROLINA
Mallard Cove, Greenville 1983 14 211 264,187 1,252 99% $583 $0.47
Carolina Crossing, Greenville 1967 6 156 121,200 777 94% $432 $0.56
Gleneagle, Greenville 1990 14 192 177,264 923 94% $544 $0.59
Greyeagle, Greenville 1991 11 156 154,624 991 96% $549 $0.55
Hickory Ridge, Greenville 1968 4 90 72,392 804 98% $446 $0.55
Tamarind at Stoneridge, Columbia 1985 15 240 200,976 837 88% $534 $0.64
TENNESSEE
Arbors of Hickory Hollow, Nashville (1) 1986 31 336 337,260 1,004 95% $637 $0.63
Item 2. Properties
PROPERTIES--Continued
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
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TENNESSEE, continued
Arbors of Brentwood, Nashville (1) 1986-87 41 346 320,993 928 92% $690 $0.74
Brixworth, Nashville 1985 6 216 144,912 671 92% $745 $1.11
Canterchase, Nashville (1) 1985 22 235 170,140 724 97% $542 $0.75
Ridgemont, Chattanooga 1988 21 280 236,530 845 97% $506 $0.60
Mountain Brook, Chattanooga 1987 43 226 192,200 850 95% $476 $0.56
Spinnaker Cove, Nashville (1) 1986 21 278 238,524 858 95% $676 $0.79
Wyndridge II , Memphis (1)(7) 1988 59 284 263,962 929 95% $616 $0.66
Wyndridge III, Memphis (1)(7) 1988 284 263,962 929 94% $613 $0.66
The Willows, Knoxville (1) 1987-1988 19 250 219,760 879 91% $612 $0.70
Farmington Gates, Germantown 1976 11 182 192,428 1,057 93% $610 $0.58
Ridgeway Commons, Memphis 1970 12 127 168,650 1,328 87% $623 $0.47
Village of Sycamore Ridge, Memphis 1977 14 114 148,560 1,313 93% $624 $0.48
Cambridge at Hickory Hollow, Nashville 1997 24 360 358,776 997 73% $717 $0.72
Trinity Lakes & Autumn Creek, Cordova(1) 1985-1991 40 540 484,374 897 94% $603 $0.67
Preakness, Antioch (1) 1986 13 260 193,500 744 96% $548 $0.74
TEXAS
7979 Westheimer, Houston 1973 15 459 401,571 875 94% $646 $0.74
Altamonte, San Antonio (1) 1985 17 432 322,928 748 97% $527 $0.70
Arbors of Las Colinas, Irving 1985 15 408 334,556 820 99% $679 $0.83
Breton Mill, Houston (1) 1986 14 392 294,152 750 99% $564 $0.75
Celebration at Westchase, Houston 1979 13 367 305,609 833 98% $565 $0.68
Item 2. Properties
PROPERTIES-Continued
Occupancy December, 1997
Acreage Average As of Avg. Monthly
Year(s) (approx- Square Square Footage December Rental Rate Per
Property Constructed imate) Units Footage Per Unit 31, 1997 Unit Square Foot
- ----------------------------------------------------------------------------------------------------------------------------------
TEXAS, continued
Champion Oaks, Houston (1) 1984 10 252 190,628 756 97% $561 $0.74
Dawntree, Carrollton 1982 23 400 370,152 925 96% $604 $0.65
Forest Ridge, Arlington 1984-85 29 660 555,364 841 94% $614 $0.73
Fountainhead I-III, San Antonio (1) 1985-87 23 688 457,616 665 96% $515 $0.77
Harbour Landing, Corpus Christi 1985 11 284 193,288 681 96% $543 $0.80
Hampton Green, San Antonio 1979 11 293 222,341 759 94% $483 $0.64
Hearthstone, San Antonio 1982 11 252 167,464 665 95% $434 $0.65
Hunter's Green, Fort Worth (1) 1981 10 248 188,720 761 98% $491 $0.65
Keystone, Austin (1) 1981 6 166 111,440 671 97% $570 $0.85
Kingswood Manor, San Antonio 1983 6 129 109,996 853 91% $523 $0.61
Lakewood Oaks, Dallas 1987 12 352 257,606 732 97% $678 $0.93
Lincoln Green I-III, San Antonio 1984-86 24 680 465,664 685 98% $480 $0.70
Marina Club, Ft. Worth 1987 14 387 265,475 686 95% $477 $0.70
Northgate Village, San Antonio 1984 10 264 214,928 814 98% $509 $0.63
Parkwest, Austin 1985 15 196 179,046 914 97% $736 $0.81
Preston in Willow Bend, Plano 1985 13 229 233,893 1,021 95% $768 $0.75
Ridgetree, Dallas 1983 17 798 597,642 749 93% $527 $0.70