SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 2005 Commission File Number 0-7716
CENTURY REALTY TRUST
(Exact name of Registrant as specified in its charter)
INDIANA 35-1284316
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
823 Chamber of Commerce Building 46204
Indianapolis, Indiana (ZipCode)
(Address of principal executive offices)
Registrant's telephone number, including area code (317)632-5467
Indicate by check mark whether this 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 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 checkmark whether the registrant is an accelerated
filer (as defined in Rule 12b-2 of the Exchange Act). YES NO X
Indicate the number of shares outstanding of each of the
issuer's classes of common stock as of the latest practicable
date.
Shares of Beneficial Interest, no par value 1,799,464
Part 1. Financial Information
Century Realty Trust and Subsidiaries
Consolidated Balance Sheets
March December
31, 2005 31, 2004
___________ ___________
Unaudited See Note 1
Assets
Real estate investments:
Land $3,140,029 $3,140,029
Buildings 44,566,664 44,531,489
Equipment 788,471 769,765
Allowances for depreciation (15,240,954) (14,903,389)
___________ ___________
33,254,210 33,537,894
Real estate held for sale, net of
allowances for depreciation of $1,861,117 5,834,086 5,834,086
Cash and cash equivalents 3,369,438 3,037,234
Restricted cash 2,127,511 1,885,865
Accounts and accrued income receivable 374,114 426,478
Unamortized management contracts 173,427 189,686
Unamortized mortgage costs 266,519 275,478
Undeveloped land 99,675 99,675
Other assets 88,685 185,075
Real estate held for sale, other assets 455,919 398,114
___________ ___________
$46,043,584 $45,869,585
___________ ___________
___________ ___________
Liabilities and shareholders' equity
Liabilities:
Mortgage notes payable $32,837,419 $33,026,470
Accounts payable and accrued liabilities 416,264 580,338
Accrued Interest 158,253 150,236
Accrued property taxes 1,646,022 1,386,978
Tenants' security deposits and unearned income 551,546 520,118
Real estate held for sale, other liabilities 424,211 405,074
___________ ___________
36,033,715 36,069,214
Minority interest in operating partnerships 312,258 315,004
Shareholders' equity:
Shares of Beneficial Interest, no par
value - authorized 5,000,000 shares,
issued 1,801,619 shares (1,795,909 shares
at December 31, 2004), including 3,507
shares in treasury (6,507 shares in
treasury at December 31, 2004) 9,604,480 9,599,697
Overdistributed income other
than from gain on the sale of real estate (1,999,549) (2,176,023)
Undistributed net realized gain from the
sale of real estate 2,128,905 2,128,905
Cost of treasury shares (36,225) (67,212)
___________ ___________
9,697,611 9,485,367
___________ ___________
$46,043,584 $45,869,585
___________ ___________
___________ ___________
See accompanying notes.
Century Realty Trust and Subsidiaries
Consolidated Statements of Operations
Unaudited
Three Months
Ended March 31
2005 2004
__________ __________
Income:
Real estate operations:
Rental Income $2,614,041 $2,549,627
Other income 50,653 41,625
__________ __________
2,664,694 2,591,252
Less:
Real estate operating expenses 1,201,682 1,243,329
Depreciation 355,473 356,422
Real estate taxes 314,298 337,905
__________ __________
1,871,453 1,937,656
__________ __________
793,241 653,596
Interest income 10,570 2,196
__________ __________
803,811 655,792
Expenses:
Interest 505,778 544,497
General and administrative 177,169 172,710
__________ __________
682,947 717,207
__________ __________
Income (loss) before minority interest
and discontinued operations 120,864 (61,415)
Minority interest in operating
partnerships (579) 12,608
__________ __________
Income (loss) before discontinued operations 120,285 (48,807)
Income (loss) from discontinued operations 56,189 (10,499)
__________ __________
Net income (loss) $176,474 (59,306)
__________ __________
__________ __________
Earnings (loss) per share -
basic and diluted:
Income (loss) before
discontinued operations $0.07 ($0.03)
Income (loss) from
discontinued operations $0.03 ($0.00)
__________ __________
Net income (loss) $0.10 ($0.03)
__________ __________
__________ __________
See accompanying notes.
Century Realty Trust and Subsidiaries
Consolidated Statements of Cash Flows
Unaudited
Three Months
Ended March 31
2005 2004
__________ __________
Operating Activities:
Net income (loss) $176,474 ($59,306)
Adjustments to reconcile net
income (loss) to cash provided by
operating activities:
Depreciation and amortization 365,506 453,523
Minority interest 579 (12,608)
Changes in operating assets
and liabilities:
Restricted cash (241,646) (367,262)
Accounts and accrued income receivable 52,364 (46,941)
Other assets 35,862 (7,928)
Accounts payable and accrued liabilities 122,169 218,956
Tenants' security deposits and
unearned rent 31,428 7,811
__________ __________
Net cash provided by operations 542,736 186,245
Investing Activities:
Purchase of property and improvements (53,881) (42,729)
Proceeds of eminent domain action - 16,860
Lease principal payments received - 14,108
__________ __________
Net cash used in investing activities (53,881) (11,761)
Financing Activities:
Principal payments on mortgage notes payable (189,051) (173,036)
Exercise of stock option 32,400 -
__________ __________
Net cash used in financing activities (156,651) (173,036)
__________ __________
Net increase in cash and cash equivalents 332,204 1,448
Balance at beginning of period 3,037,234 1,550,459
__________ __________
Balance at end of period $3,369,438 $1,551,907
__________ __________
__________ __________
See accompanying notes.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CENTURY REALTY TRUST
March 31, 2005
Unaudited
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements
have been prepared in accordance with accounting principles
generally accepted in the United States for interim financial
information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include
information and footnotes required by accounting principles
generally accepted in the United States 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 three months ended March 31, 2005 are not necessarily
indicative of the results that may be expected for the year
ended December 31, 2005.
The balance sheet at December 31, 2004 was derived from the
audited financial statements at that date but does not include
all of the information and footnotes required for complete
financial statements. For further information, refer to the
consolidated financial statements and footnotes thereto included
in the Trust's annual report on Form 10-K for the year ended
December 31, 2004.
NOTE 2 - INTEREST IN OPERATING PARTNERSHIPS
The Trust, through its wholly-owned subsidiary, CR Management,
Inc., is the general partner in five limited partnerships each
of which owns, as its principal asset, a single apartment
property. CR Management, Inc. owns 2,972 partnership units.
Effective January 1, 2000, the Trust granted to each of the
beneficial owners of the remaining 286,908 partnership units the
right to exchange their units for an equal number of shares of
the Trust. Exchanges are exercised effective on the first day
of each calendar quarter. At December 31, 2004 the Trust owned,
in the aggregate 242,381, or 84.6%, of the limited partnership
interests.
During the three months ended March 31, 2005, the Trust issued
5,710 shares of beneficial interest in exchange for partnership
units. Including the exchanges exercised in 2005, the Trust, as
of March 31, 2005, owned 248,091, or 86.5%, of the 286,908
limited partnership units. The equity interest that the Trust
does not own is described in the consolidated financial
statements as the minority interest in operating partnerships.
NOTE 3 - MORTGAGE NOTES PAYABLE
Thirteen of the 19 properties owned by the Trust, excluding
the Fox Run apartments classified as held for sale, are
encumbered by mortgage loans that are payable in monthly
installments totaling approximately $218,300 including interest
at rates ranging from 4.95% to 9% per annum, and which mature
from April 1, 2006 to July 31, 2037. Scheduled payments during
the three month period ended March 31, 2005 decreased mortgage
loan balances, in the aggregate, by $156,831.
At March 31, 2005 and December 31, 2004, the Fox Run
apartments, which was held for sale, had an outstanding mortgage
loan balance of $4,541,580 and $4,573,800, respectively. The
mortgage note payable, which provided for monthly principal
payments of $10,740 plus interest at the rate of 4% per annum
matured on March 30, 2005. In connection with the proposed sale
of Fox Run, the mortgagee agreed to extend the maturity date of
the note until December 31, 2005. Monthly principal payments of
$10,740 will continue during the extension period. The Trust
agreed to pay an extension fee of $11,327, and adjust the
interest rate on the unpaid balance to the lender's prime rate,
plus .5%.
NOTE 4 - REAL ESTATE HELD FOR SALE AND DISCONTINUED OPERATIONS
In April, 2004 the Trust sold the Park Plaza apartments, a
176-unit apartment community in Indianapolis, and in December,
2004 entered into contracts with separate unrelated parties to
sell the Fox Run apartments, a 256-unit apartment community in
Indianapolis, and a restaurant property formerly operated as the
Fortune House at 9106 Wesleyan Road in Indianapolis. Both the
Fox Run contract and the Fortune House contract contain a number
of contingencies to be resolved before the sales can be
consummated. Assuming both pending sales are completed in
accordance with the contract terms, which management believes
has a probability of occurring, the Trust will receive gross
proceeds of $6,975,000 for the Fox Run property and $850,000 for
the Fortune House property. The Trust will use a portion of the
proceeds to pay off the mortgage note payable on the Fox Run
property, which totaled $4,541,580 at March 31, 2005. The
Fortune House property is unencumbered.
In accordance with provisions of FASB Statement No. 144,
Accounting for the Impairment or Disposal of Long Lived Assets,
the two properties with sales pending are classified in the
balance sheets as Real Estate Held for Sale. The results of
operations with respect to those properties, and the Park Plaza
apartments sold in April, 2004 have been separately classified
for the periods presented as discontinued operations.
Following is a summary of the income (loss) from discontinued
operations for the three month periods ended March 31, 2005 and
2004:
2005 2004
____ ____
Rental income $ 359,695 $ 495,540
Other income 10,163 22,523
Income from financing leases - 2,415
_________ _________
369,858 520,478
Rental operating expenses 207,398 328,435
Depreciation - 85,245
Real estate taxes 59,673 69,975
Interest 46,598 47,322
_________ _________
313,669 530,977
_________ _________
Income (loss) from
discontinued operations $ 56,189 $ (10,499)
_________ _________
_________ _________
NOTE 5 - STOCK OPTIONS
In May, 2004, the Trust granted to a newly elected Trustee the
option to purchase 5,000 shares of beneficial interest
exercisable on or before May 4, 2007, at a price of $10.80 per
share, the fair market value at the date of the grant. Pursuant
to that option, the holder purchased 2,000 shares in December,
2004 and 3,000 shares in January, 2005. There were no
unexercised options at March 31, 2005.
NOTE 6 - EARNINGS (LOSS) PER SHARE
A reconciliation of the numerator and denominator of the
earnings (loss) per share computation for the three months ended
March 31, 2005 and 2004 is as follows:
2005 2004
____ ____
Numerator (net income/loss):
Numerator for basic and diluted
earnings (loss) per share $176,474 $(59,306)
________ _________
________ _________
Denominator:
Denominator for basic earnings (loss)
per share - weighted average shares 1,797,979 1,784,684
Effect of dilutive securities:
Stock options 361 -
_________ _________
Denominator for diluted earnings (loss)
per share - adjusted weighted average
shares and assumed conversions 1,798,340 1,784,684
_________ _________
_________ _________
Basic earnings (loss) per share $0.10 $(0.03)
_____ ______
_____ ______
Diluted earnings (loss) per $0.10 $(0.03)
_____ ______
_____ ______
NOTE 7 - FEDERAL INCOME TAXES
The Trust intends to continue as a real estate investment trust
as defined in the Internal Revenue Code and to distribute its
taxable income. Realized gains on the sale of investments are
distributed to shareholders if and when recognized for income
tax purposes.
The Trust initially intended to use the proceeds from the sale
of an apartment property in April, 2004 to acquire replacement
investment property in accordance with provisions of Internal
Revenue Code Section 1031. The Trust was unable to acquire a
suitable replacement, and subsequently in 2004 declared and paid
a special cash distribution of $1.05 per share, an amount that
management believed would approximate the otherwise taxable
income of the Trust for 2004. That distribution amount was
subsequently determined to have been insufficient by
approximately $.10 per share to offset all of the Trust's
otherwise taxable income for 2004. The Board of Trustees
intends to declare a dividend in 2005 that will include the 2004
distribution deficiency.
Assuming compliance with other requirements of the Code,
income, including recognized capital gain, that is distributed
to shareholders will not be taxable to the Trust. Accordingly,
no provision for federal income taxes is made in the
consolidated financial statements.
NOTE 8 - ANNUAL SHAREHOLDER MEETING
A shareholder proposal recommending that the Board of Trustees
undertake a plan to sell all of the Trust's assets and liquidate
the Trust was supported by 50.4% of the votes cast by
shareholders at the annual shareholder meeting on May 5, 2004.
The Board of Trustees has no plan of liquidation under
consideration at this time, but will consider liquidation, along
with other strategic options, in its efforts to maximize
shareholder value. No similar proposal was presented for
shareholder consideration at the most recent annual shareholder
meeting on May 4, 2005.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
Contained in this discussion and elsewhere in this quarterly
report are forward-looking statements which management believes
to be reasonable and informative. Such statements are based on
assumptions which may not prove to be correct for reasons
management cannot predict. Consequently, the inclusion of
forward-looking statements should not be considered as
representations by the Trust or its management that expected
results will be achieved or that stated objectives will be
attained. Several factors that might cause such a difference
are identified at the end of this discussion.
At March 31, 2005 and 2004, and throughout the quarters then
ended, the Trust owned or controlled, as continuing operations,
thirteen apartment communities containing 1,704 apartment units,
three multi-tenant commercial properties containing 89,000
rentable square feet, and one restaurant property leased to an
operator under a month to month net lease. A detailed listing
of the investment properties is contained on Page 2 of the
Trust's 2004 annual report. Comparative information related to
income and expenses contained in this discussion applies to
continuing operations, unless otherwise indicated.
Five apartment properties containing 586 units are owned by
five separate partnerships that are controlled by the Trust
through a wholly-owned subsidiary. Holders of operating
partnership units have the option to exchange them, one for one,
for shares of beneficial interest in the Trust at any time until
November, 2007. As of March 31, 2005 and 2004, holders of
86.5% and 83.5%, respectively of the outstanding units, had
exercised their exchange options. (See Note 2 to the financial
statements). Management anticipates that the increase in
outstanding shares and corresponding decrease in the minority
interest will not have a material impact on operating results
per share during the next year.
The apartment communities, which comprise 94% of the Trust's
investment property, also account for most of the rental income
and expenses reported. Management expects the real estate
portfolio, other than the possibility of selling one or both
properties currently designated as Held for Sale, will be
unchanged during the second quarter of 2005. Average apartment
occupancy rates in recent months has gradually increased, and
rental discounts offered to new tenants at certain locations
have gradually decreased. Consequently, management anticipates
a gradual increase in income from apartment operations through
the second quarter of 2005. Property tax assessment appeals
pending for four of the Trust's properties, if settled
favorably, could have a positive impact on earnings during the
balance of 2005.
Real Estate Held for Sale and Discontinued Operations
In April, 2004, the Trust sold the 176-unit Park Plaza
apartments, and in December, contracted to sell the 256-unit Fox
Run apartments. In a separate sale contract, the Trust agreed
to sell to an unrelated buyer, the restaurant property
previously operated as the Fortune House. Management expects to
complete the restaurant property sale during the second quarter
of 2005 and the Fox Run sale after the second quarter of 2005.
In accordance with the provisions of FASB Statement No. 144,
the net investments in the Fox Run and Fortune House properties
are presented in the consolidated balance sheets as real estate
held for sale. The results of operations for the Park Plaza
apartments in the first quarter of 2004 and the two properties
currently held for sale for the quarters ended March 31, 2005
and 2004, are summarized and shown in the consolidated
statements of operations as income or loss from discontinued
operations. The three sale transactions are described in Note 4
to the consolidated financial statements.
CRITICAL ACCOUNTING POLICIES
Amortization of Management Contracts. In 1997, the Trust paid
$650,350 for the general partner interest and absolute
management control over five partnerships, each of which owns
one apartment property as its principal asset. The accounts of
the partnerships are included in the consolidated financial
statements of the Trust. The Trust elected to amortize, on a
straight line basis, its cost to acquire its position over the
ten-year period during which the holders of limited partnership
units could elect to, or not elect to, exchange those units for
shares of beneficial interest of the Trust; consequently,
depreciation expense each quarter includes $16,258 for
amortization of the acquisition costs.
Carpet Replacement Policy. From its inception in 1973, the
Trust has consistently followed the practice of charging the
cost to replace carpets in its apartment units, as incurred, to
real estate operating expense. The costs to replace carpets
amounted to $74,612, and $76,816 in the quarters ended March 31,
2005 and 2004, respectively. An acceptable alternative method
of accounting would be the capitalization of costs as incurred,
followed by charges for depreciation over the estimated useful
life of the carpet. Management believes that, due to the
relatively short useful life of apartment carpets, the expense
for replacements is not materially greater than would be the
charges for depreciation had the carpets been capitalized when
purchased.
Impairment of Long-Lived Assets. When an event or change in
circumstance indicates that future undiscounted cash flows from
operations and from the ultimate disposition of the property
would be insufficient to recover the carrying value of a
long-lived asset, the asset value is reduced to fair market
value, and an impairment loss is recognized.
RESULTS OF OPERATIONS
For the quarter ended March 31, 2005, the Trust reported an
increase of 2.8% in rental and other operating income from
continuing real estate operations from the comparable period of
2004. Rental income from apartment operations increased by 3.3%
from the first quarter of the prior year as a result of higher
occupancy rates in spite of 2.1% lower average rental rates.
Economic apartment occupancy for the first quarter of 2005 was
91.1%, up from 86.3% during the prior year quarter. The
increasing trend in occupancy rates that commenced in the fourth
quarter of 2003 is due primarily to intensive marketing efforts
and the use of rental incentives and discounts. Rental
incentives and discounts are being phased out as occupancy
increases.
Rental properties other than apartments accounted for 5.7% of
income from rental operations in the first quarter of 2005.
Income from non-apartment properties decreased $7,900, or 5.4%,
due to lower occupancy rates. Occupancy rates for commercial
properties, exclusive of net-leased restaurant properties,
averaged 81.5% and 86% during the quarters of 2005 and 2004,
respectively.
Operating expenses of continuing operations, excluding interest
and depreciation, for all of the apartment properties amounted
to 52.9% of gross possible income for the first quarter of 2005,
down from 54.5% for the prior year period, and amounted to a
decrease of $76,600, or 5%, in total operating expenses. Most
operating and maintenance expenses decreased led by property
taxes, which decreased by $25,100. Property taxes decreased due
to the reduction in assessed values at some locations.
Management filed appeals for review at most locations following
the statewide reassessment of real estate for taxes payable in
2003 and subsequent years. Appeals are pending on four of the
Trust's properties, and management believes it is likely that
some additional reductions will be realized later in 2005.
Real estate taxes on Indiana property are assessed on March 1
each year and are payable in two installments in the following
calendar year. Real estate tax expense for each quarter should
represent one-fourth of the estimated real estate taxes payable
during the next calendar year. Estimates are based on actual
tax payments during the preceding year with allowances for
anticipated rate increases comparable with past experience.
Historically, real estate taxes on the Trust's properties have
increased about 4% each year.
Interest expense, nearly all of which is applicable to thirteen
mortgage loans outstanding during the quarters ended March 31,
2005 and 2004, decreased by $38,700 primarily because three
loans were refinanced after March 31, 2004 with new loans
bearing lower interest rates. The three loans that were
refinanced accounted for $31,700 of the reduction in interest
expense. The balance of the decrease is attributed primarily to
a reduction in mortgage loan balances that resulted from
scheduled monthly debt service.
Three loans contain provisions to reset rates, based on
lender-determined benchmarks, at intervals of two years or less.
Two of the loans, with unpaid balances that totaled $1.24
million at March 31, 2005, provide for interest rates to be
reset in February each year. The current interest rates
applicable to those loans is 6%, up from 4.25% that was in
effect for one year from February 1, 2004. The third adjustable
rate loan, with a current interest rate of 4.7%, had an unpaid
balance at March 31, 2005 of $0.7 million. The next interest
rate reset date for that loan is October 1, 2005.
At March 31, 2005 and December 31, 2004, the Fox Run apartments
had an outstanding mortgage loan balance of $4,541,580 and
$4,573,800, respectively. The mortgage note payable, which
provided for monthly principal payments of $10,740 plus interest
at the rate of 4% per annum matured on March 30, 2005. In
connection with the proposed sale of Fox Run, the mortgagee
agreed to extend the maturity date of the note until December
31, 2005. Monthly principal payments of $10,740 will continue
during the extension period. The Trust agreed to pay an
extension fee of $11,327, and adjust the interest rate on the
unpaid balance to the lender's prime rate, plus .5%.
General and administrative expenses amounted to 6.6% of income
from continuing real estate operations in the first quarter of
2005, compared with 6.7% in the comparable quarter of 2004.
Officer and employee compensation costs, including payroll taxes
and benefits that are included in administrative expenses,
amounted to $72,800 and $71,800 in the quarters ended March 31,
2005 and 2004, respectively.
The changes in income and expenses attributable to discontinued
operations are described in Note 4 to the consolidated financial
statements. During the three months ended March 31, 2005 and
2004, the Trust realized operating results from the three
properties so designated as follows:
2005 2004
_______ ________
Park Plaza apartments $ - $(10,637)
Fox Run apartments 62,226 (7,003)
Fortune House restaurant (6,037) 7,141
_______ ________
Total income (loss) $56,189 $(10,499)
During the three months ended March 31, 2005, Fox Run had
economic occupancy of 82.7% and operating expenses of 58.3% of
gross possible income, compared with economic occupancy of 73.4%
and operating expenses of 52.6% for the comparable period in
2004. Fox Run incurred a substantial increase in real estate
taxes as a result of reassessment for taxes payable in 2003 and
subsequent years. An appeal for a reduction of the increased
assessed value that was filed by the Trust was pending
resolution at March 31, 2005. Once a property is classified as
held for sale, depreciation is discontinued. Approximately
$61,000 of depreciation expense was incurred on the Fox Run
apartments during the three months ended March 31, 2004 while
there was no depreciation expense during the three months ended
March 31, 2005.
A 25-year lease of the Fortune House restaurant property
that began in 1979 expired in November, 2004. The lessee
elected not to renew the lease, and vacated the property. In
addition to the loss of revenue from the property, the Trust is
incurring expenses for utilities, grounds maintenance and real
estate taxes that were formerly absorbed by the lessee.
LIQUIDITY AND SOURCES OF CAPITAL
At March 31, 2005, the Trust held cash and cash equivalents of
approximately $2,881,000 in its own accounts and $488,000 in
partnership accounts which management believes is sufficient to
meet anticipated working capital requirements.
Other than cash that may be required for property improvements
and replacements which amounts may exceed funds generated by
operations, management is not aware of any significant
transactions or events which will require material expenditures
during the remainder of 2005, except for a deficiency cash distribution to
shareholders of approximately $182,000 related to the sale of the Park
Plaza apartments in 2004. In addition, management is
considering recommendations by the property managers, but has
not committed, to undertake significant exterior painting and
paving projects. While the recommended projects are considered
by management to be warranted, certain of them may be deferred
without negative impact on the physical integrity or
productivity of the assets.
From time to time the Trust will consider selling certain
properties due to operating performance, strategic or other
reasons. In addition, the Trust periodically receives
unsolicited offers for certain properties. In all situations,
the Trust evaluates offers and will only sell a property if the
Trust believes an appropriate sales price, based on an
assessment of market value, has been obtained.
INFLATION
Management believes that the direct effects of inflation on the
Trust's quarterly operations have been insignificant during the
three months ended March 31, 2005 and 2004.
BUSINESS RISK FACTORS AND PROSPECTS
Among the factors, some of which are beyond the control of
management, that could affect the Trust's business and results
of its operations in the future are the following:
* failure to generate sufficient marginal revenue to offset
the marginal costs to comply with internal control
documentation and related auditing requirements of the
Sarbanes-Oxley Act of 2002.
* failure by the Trust and its principal management agent to
attract and retain qualified management personnel in key
positions.
* long-term unfavorable apartment market and economic
conditions that adversely effect occupancy and rental rates.
* difficulty selling properties that no longer meet the
Trust's investment criteria.
* unforeseen impediments in closing sales of properties that
are under contract to be sold.
* competitive factors that may inhibit the Trust's ability to
lease apartments or to maintain or increase rental rates.
* inability to generate sufficient revenue to service debt.
* adverse changes in interest rates and real estate taxes
that could have a negative impact on the market price of
the Trust's shares.
* failure to qualify for REIT status that could result in the
imposition of income taxes.
PART II
Item 4(a) At the Trust's annual shareholder meeting held on May
4, 2005, one proposal was submitted to a vote. Proposal No. 1
related to the election of four trustees.
(b) The following incumbent trustees were re-elected
for the terms indicated:
Larry S. Boulet - for a term of three years; and
Francis M. Hapak - for a term of two years.
The following individuals nominated by management
for initial service as trustees were elected for
the terms indicated:
Michael W. Malafronte - for a term of three
years; and
Neil C. McKinnon - for a term of three years.
Members of the Board of Trustees whose terms have not
expired are as follows:
Terms expire in 2006 Terms expire in 2007
____________________ ____________________
John W. Adams John J. Dillon
John I. Bradshaw, Jr. Murray R. Wise
Marvin L. Hackman
(c) Proposal No. 1 - Election of Trustees - tabulation
of votes cast:
Larry S. Boulet For: 1,291,874 Withheld: 116,486
Francis M. Hapak For: 1,094,869 Withheld: 313,491
Michael W. Malafronte For: 1,301,887 Withheld: 106,473
Neil C McKinnon For: 1,302,322 Withheld: 106,038
Item 6(b) No events occurred during the three months ended
March 31, 2004, which would have necessitated the filing of a
report on Form 8K.
(c) Exhibits:
Rule 13a-14(a)/15d-14(a) Certifications:
31.1 - Certification by Principal Executive Officer
31.2 - Certification by Principal financial and
accounting officer
Sec. 906, Sarbanes-Oxley Act, Certifications:
32.1 - Certification by Chief Executive Officer
32.2 - Certification by Chief financial and
accounting officer
CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures. The Chief
Executive Officer serves as the principal operating officer and
in such capacity supervises, directly or indirectly, the daily
operation of the Trust and its investment properties. The
Controller serves as the chief financial officer and principal
accounting officer and in such capacity supervises, directly or
indirectly, the accounting and financial operations of the Trust
and its subsidiaries. The centralized and compact management
structure of the registrant provided, as of March 31, 2005,
adequate and effective disclosure control.
Changes in internal controls. During the quarter ended March
31, 2005, there was no change in the Trust's internal controls
over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Trust's internal
control over financial reporting.
MANAGEMENT REPRESENTATIONS
The information furnished in this report, while not
audited, includes all adjustments, in the opinion of management,
necessary for a fair representation of the financial position of
Century Realty Trust and subsidiaries at March 31, 2005, and
December 31, 2004, and the results of their operations and their
cash flow for the three months ended March 31, 2005, and March
31, 2004, in accordance with accounting principles generally
accepted in the United States consistently applied. The interim
results reported are not necessarily indicative of expected
results for the full year, and should be considered in
conjunction with the audited financial statements contained in
the Trust's 2004 annual report.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
CENTURY REALTY TRUST
Date_____________ By /S/John I. Bradshaw, Jr.
_________________________
President and Treasurer
Date_____________ By /S/David F. White
_________________________
Controller