UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14A-12
USP Real Estate Investment Trust
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
____________________________________________________________________
2) Aggregate number of securities to which transaction applies:
____________________________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
____________________________________________________________________
4) Proposed maximum aggregate value of transaction:
____________________________________________________________________
5) Total fee paid:
____________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
____________________________________________________________________
2) Form, Schedule or Registration Statement No.:
____________________________________________________________________
3) Filing Party:
____________________________________________________________________
4) Date Filed:
____________________________________________________________________
USP Real Estate Investment Trust
4333 Edgewood Road N.E. Cedar Rapids, Iowa 52499-5441
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held Friday, April 30, 1999
To the Shareholders:
The Annual Meeting of the Shareholders of USP Real Estate Investment
Trust will be held at the AEGON Financial Center, 4333 Edgewood Road N.E.,
Cedar Rapids, Iowa on Friday, April 30, 1999 at 11:30 a.m. (local time) for
the following purposes:
1. To elect four (4) Trustees to serve until the next Annual Meeting of
Shareholders or until their successors shall have been duly elected and
qualified.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on March 22, 1999 are
entitled to notice of and to vote at the meeting or at any adjournment
thereof. The Board of Trustees extends a cordial invitation to all
Shareholders to be present at and participate in the Annual Meeting.
Whether or not you plan to attend the meeting, please specify your vote on
the enclosed proxy card and sign, date and return it as promptly as
possible. No postage is required if the proxy card is mailed from within
the continental United States.
FOR THE BOARD OF TRUSTEES
Maureen DeWald
Vice President and Secretary
Cedar Rapids, Iowa
March 22, 1999
USP Real Estate Investment Trust
4333 Edgewood Road N.E. Cedar Rapids, Iowa 52499-5441
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of USP Real Estate Investment Trust, an
Iowa common law trust (the "Trust"), for use at the Annual Meeting of
Shareholders to be held at the AEGON Financial Center, 4333 Edgewood Road
N.E., Cedar Rapids, Iowa on Friday, April 30, 1999 at 11:30 a.m. (local
time) and at any adjournment thereof. This Proxy Statement and related
form of proxy are being sent to Shareholders on or about March 31, 1999.
SHARES OUTSTANDING AND VOTING RIGHTS
On March 22, 1999, the record date for determination of Shareholders
entitled to notice of and to vote at the Annual Meeting, the Trust had
outstanding 3,880,000 shares of beneficial interest (the "Shares"), which
is the only voting security of the Trust. Holders of the Shares are
entitled to one (1) vote on a non-cumulative basis for each Share held on
the record date for the election of Trustees and for any other matter
brought before the meeting or any adjournment thereof. There are no
appraisal or similar rights of dissenters applicable to any matter to be
voted upon at the meeting.
All Shares represented by valid proxies received by the Trust on the
enclosed form of proxy will be voted at the meeting or any adjournment
thereof in accordance with the instructions contained in such proxies. In
the absence of contrary instructions, Shares represented by proxies will be
voted FOR the election of the nominees for Trustees listed herein. A
majority (more than 50%) of the Shares voted at the meeting, represented in
person or by proxy, is necessary to elect each nominee for Trustee and to
approve such other business as may properly come before the meeting.
Shares voted to withhold authority or to abstain will be counted as such
and included in the total number of Shares represented at the meeting.
Shares not voted and broker non-votes will not be included in the
tabulation. Any proxy may be revoked at any time before it is voted by
giving written notice to the Secretary of the Trust, by submitting another
proxy bearing a later date to the Secretary of the Trust or by attending
the meeting and voting in person.
PRINCIPAL SHAREHOLDERS
The following table sets forth information with respect to each person
and group (as that term is used in Section 13(d)(3) of the Securities
Exchange Act of 1934) known by the Trust to be the beneficial owner of more
than five percent (5%) of the outstanding shares of the Trust as of March
5, 1999.
Name and Address Amount and Nature Percent
of Beneficial Owner of Beneficial Ownership of Class
AEGON USA, Inc. (1) 1,197,260 30.86%
4333 Edgewood Road N.E.
Cedar Rapids, Iowa 52499
Turkey Vulture Fund XIII, Ltd. (2) 551,081 14.20%
c/o Kohrman Jackson & Krantz P.L.L.
1375 East 9th Street
Cleveland, Ohio 44114
(1) AEGON USA, Inc. is an indirect, wholly-owned subsidiary of AEGON
N.V., a holding company organized under the laws of The Netherlands which
is controlled by Vereninging AEGON, an association organized under the laws
of The Netherlands. AEGON USA, Inc. has sole voting and investment powers
with respect to the above Shares.
(2) Turkey Vulture Fund XIII, Ltd. (the "Fund") is an Ohio limited
liability company, of which Richard M. Osborne is the sole Manager. As
sole Manager of the Fund, Mr. Osborne may be deemed to beneficially own all
of the Shares of beneficial interest of USP owned by the Fund. Mr. Osborne
also has sole power to vote, or to direct the voting of, and the sole power
to dispose or to direct the disposition of, any Shares owned by the Fund.
ELECTION OF TRUSTEES
Four (4) Trustees are to be elected at the Annual Meeting of Shareholders
on April 30, 1999. Unless otherwise indicated, the Shares represented by
the enclosed proxy will be voted FOR the election of the following four (4)
persons:
Patrick E. Falconio
Edwin L. Ingraham
Samuel L. Kaplan
Richard M. Osborne
Each person elected to serve as a Trustee shall serve until the next
Annual Meeting of Shareholders or until a successor shall have been elected
and qualified. If any nominee is unable or unwilling to accept nomination
or election for any reason, the enclosed proxy will be voted for such other
persons as may be determined by the holder of such proxy. The Board of
Trustees does not anticipate that any nominee will be unwilling or unable
to serve if elected.
INFORMATION ABOUT THE NOMINEES
Certain information about the nominees for Trustee appears below. (See
"Certain Agreements and Business Relationships" for a description of the
Trust's relationship with AEGON USA Realty Advisors, Inc. and other
subsidiaries of AEGON USA, Inc.) On January 22, 1999, at a meeting of the
USP Board of Trustees, Richard M. Osborne was elected to serve as a
Trustee. Gary A. Downing, a Trustee and member of the Audit Committee, has
decided not to stand for re-election at the Annual Meeting.
PATRICK E. FALCONIO, age 57, has served as a Trustee and Chairman of the
Board since 1988. He retired on February 1, 1999 as an Executive Vice
President of AEGON USA, Inc. (insurance and financial services), Cedar
Rapids, Iowa, where he had been employed since 1987. He was also a
Director of AEGON USA Realty Advisors, Inc. and various other subsidiaries
of AEGON USA, Inc. until his retirement.
EDWIN L. INGRAHAM, age 72, has served as a Trustee of the Trust since 1984,
and as Vice Chairman of the Board of Trustees since 1990. He retired in
1988 as Executive Vice President, Treasurer and Chief Investment Officer of
AEGON USA, Inc., where he had been employed since 1982. Mr. Ingraham is a
member of the Audit Committee.
SAMUEL L. KAPLAN, age 62, has served as a Trustee of the Trust since 1983.
He has been engaged in the practice of law in Minneapolis, Minnesota as a
member of the firm of Kaplan, Strangis and Kaplan, P.A. since 1978. Mr.
Kaplan is a member of the Audit Committee.
RICHARD M. OSBORNE, age 53, has served as a Trustee of the Trust since
January 1999. He is President and Chief Executive Officer of OsAir, Inc.,
a company he founded in 1963. OsAir, Inc. is a manufacturer of industrial
gases for pipeline delivery and a real property developer. Mr. Osborne is
the sole Manager of Turkey Vulture Fund XIII, Ltd. which acquires, holds,
sells or otherwise invests in all types of securities and other
instruments. Mr. Osborne is a Director and Chairman of the Board of
Meridian Point Realty Trust '83, a publicly-held real estate investment
trust, a Director of Central Reserve Life Corporation, a publicly-held
insurance holding company, a Director and Chairman of the Board of Pacific
Gateway Properties, Inc., a publicly-held real estate company and a
Director and Vice Chairman of the Board of GLB Bancorp, Inc., a bank
holding company.
INFORMATION ABOUT EXECUTIVE OFFICERS
Certain information about the executive officers of the Trust who are not
also nominees appears below. The term of office of each executive officer
will expire at the Annual Meeting of the Board of Trustees, which will
follow the Annual Meeting of Shareholders. (See "Certain Agreements and
Business Relationships" for a description of the Trust's relationship with
AEGON USA Realty Advisors, Inc. and other subsidiaries of AEGON USA, Inc.)
DAVID L. BLANKENSHIP, age 48, has served as President of the Trust since
1985. He has been employed by AEGON USA, Inc. since 1977 in various
administrative and management positions related to real estate investment
activities and is Chairman of the Board and President of AEGON USA Realty
Advisors, Inc.
MAUREEN DEWALD, age 48, has served as Vice President of the Trust since
1986 and Secretary since 1985. She has been employed by AEGON USA, Inc.
since 1983 as an attorney for real estate investment activities and is
Senior Vice President, Secretary and General Counsel of AEGON USA Realty
Advisors, Inc.
ALAN F. FLETCHER, age 49, has served as Treasurer of the Trust since 1986,
as Vice President since 1985, as Assistant Secretary since 1982 and as
principal financial officer since 1981. He has been employed by AEGON USA,
Inc. since 1981 in various financial and administrative positions related
to investment activities and is Senior Vice President and Chief Financial
Officer of AEGON USA Realty Advisors, Inc.
ROGER L. SCHULZ, age 37, has served as Controller and Assistant Secretary
of the Trust since 1995. He has been employed by AEGON USA, Inc. since
1985 in various accounting and financial reporting positions related to
real estate investment activities and is Manager - Financial Reporting for
AEGON USA Realty Advisors, Inc.
OWNERSHIP OF SHARES BY TRUSTEES, NOMINEES, AND OFFICERS
The following table sets forth the number of Shares of the Trust
beneficially owned as of March 5, 1999 by each Trustee, nominee, and
officer and by all Trustees, nominees and officers as a group (9 persons).
Except as otherwise indicated by footnote, the individuals have direct
ownership of, and sole voting and investment power with respect to, any
Shares beneficially owned by them. Under rules adopted by the Securities
and Exchange Commission, transactions in Shares of the Trust are reportable
by Trustees and officers on specified forms, and the Trust is required to
disclose any known delinquent filings. A report on Form 5 was filed late
for Mr. Downing, reporting 36 Shares acquired through the Trust's
distribution reinvestment plan.
Name of Amount and Nature Percent
Beneficial Owner of Beneficial Ownership of Class
Gary A. Downing(1) 577 *
Patrick E. Falconio(2) 2,000 *
Edwin L. Ingraham 1,500 *
Samuel L. Kaplan(3) 10,000 *
Richard M. Osborne(4) 551,081 14.20%
David L. Blankenship(5) 1,199,078 30.90%
Maureen DeWald 0 *
Alan F. Fletcher(6) 2,200 *
Roger L. Schulz 100 *
Trustees, nominees and officers as a group 1,766,536 45.53%
(1) Mr. Downing is the beneficial owner of 577 Shares held in an individual
retirement account.
(2) Mr. Falconio may be deemed to be the beneficial owner of 2,000 Shares
owned by his wife.
(3) Mr. Kaplan is the direct owner of 8,500 Shares and may be deemed to be
the beneficial owner of 1,500 Shares held in a profit sharing trust for
his account.
(4) Mr. Osborne may be deemed to be the beneficial owner of 551,081
Shares beneficially owned by Turkey Vulture Fund, XIII, Ltd., an Ohio
limited liability company, of which Mr. Osborne is the sole Manager.
(5) Mr. Blankenship may be deemed to be the beneficial owner of 1,197,260
Shares beneficially owned by AEGON USA, Inc. with respect to which he
shares voting and investment powers (see "Principal Shareholders" and
"Information About Executive Officers"). Mr. Blankenship disclaims
beneficial ownership of such Shares. He may also be deemed to be the
beneficial owner of 1,818 Shares held in custodial accounts for
his children.
(6) Mr. Fletcher is the direct owner of 600 Shares and is the beneficial
owner of 1,600 Shares held in an individual retirement account.
* Such holdings represent less than one percent of the outstanding Shares.
THE BOARD OF TRUSTEES AND COMMITTEES OF THE BOARD
The powers of the Trust are exercised and its business and affairs are
directed by the Board of Trustees. In carrying out its responsibilities,
the Board of Trustees established an Audit Committee, the members of which
are Messrs. Gary A. Downing, Edwin L. Ingraham, and Samuel L. Kaplan. The
principal functions of the Audit Committee include recommending to the
Board of Trustees the selection of the independent auditors; consulting
with the independent auditors with respect to matters of interest to the
Committee; approving the type, scope and costs of services to be performed
by the independent auditors; and reviewing the work of those persons
responsible for the Trust's day-to-day compliance with accounting
principles, financial disclosure, income tax laws, internal controls and
recordkeeping requirements. The Board of Trustees does not have standing
nominating or compensation committees. Special committees of the Board have
been appointed from time to time to consider and address specific matters
of interest to the Board. During 1998, the Board of Trustees held six (6)
meetings and the Audit Committee held two (2) meetings. Each Trustee
attended at least 75% of the combined number of meetings of the Board of
Trustees and of the committees on which he served. Gary A. Downing has
decided not to stand for re-election at the Annual Meeting.
COMPENSATION OF TRUSTEES AND EXECUTIVE OFFICERS
During 1998, each Trustee, with the exception of Mr. Falconio, received
an annual fee of $6,000 plus $750 for each regular or special meeting
attended, as well as $400 per day for inspecting properties owned by the
Trust and $400 for attendance at each committee meeting as a member, unless
held in conjunction with a meeting of the Board of Trustees. Mr. Falconio
has waived all fees for his services as a Trustee so long as he continues
to be affiliated as an officer or director of AEGON USA, Inc. (see
"Information About the Nominees"). Total fees paid to all Trustees as a
group were $27,000 for 1998.
The executive officers of the Trust receive no cash or deferred
compensation in their capacities as such.
OTHER BUSINESS
The Board of Trustees of the Trust is not aware of any other business
which will come before the meeting. If any other business should come
before the meeting, the persons named in the enclosed proxy will vote on it
according to their best judgment.
CERTAIN AGREEMENTS AND BUSINESS RELATIONSHIPS
The Trust has no employees and has contracted with various subsidiaries
of AEGON USA, Inc. (see "Principal Shareholders") to provide
administrative, advisory, acquisition, divestiture, property management and
shareholder services. A description of the relationships between AEGON
USA, Inc. and its various subsidiaries and of such subsidiaries' agreements
with the Trust follows. The description of the agreements which follows is
qualified in its entirety by reference to the terms and provisions of such
agreements. (See "Principal Shareholders" for a description of the
relationship between AEGON USA, Inc. and AEGON N.V.)
Administrative, Advisory and Acquisition Services
AEGON USA Realty Advisors, Inc. ("AEGON Advisors"), is a wholly-owned
subsidiary of AEGON USA, Inc. AEGON Advisors provides administrative,
advisory, acquisition and divestiture services to the Trust pursuant to an
Administrative Agreement. The term of the Administrative Agreement is for
one (1) year and is automatically renewable each year for an additional
year subject to the right of either party to cancel the Agreement upon 90
days written notice. The performance of AEGON Advisors' duties and
obligations under the Administrative Agreement has been guaranteed by AEGON
USA, Inc.
Under the Administrative Agreement, AEGON Advisors (a) provides clerical,
administrative and data processing services, office space, equipment and
other general office services necessary for the Trust's day-to-day
operations, (b) provides legal, tax and accounting services to maintain all
necessary books and records of the Trust and to ensure Trust compliance
with all applicable federal, state and local laws, regulatory reporting
requirements and tax codes, (c) arranges financing for the Trust, including
but not limited to mortgage financing for property acquisition, (d) obtains
property management services for the Trust's properties and supervises the
activities of persons performing such services, (e) provides monthly
reports summarizing the results of operations and financial conditions of
the Trust, (f) prepares and files all reports to shareholders and
regulatory authorities on behalf of the Trust, (h) prepares and files all
tax returns of the Trust and (i) provides the Trust with property
acquisition and divestiture services.
AEGON Advisors receives fees for its administrative and advisory services
as follows: (a) a base fee, payable monthly, equal to 5/8% per annum of the
average monthly gross real estate investments of the Trust plus 1/4% per
annum of the monthly outstanding principal balance of mortgage loans
receivable; and (b) an incentive fee, payable annually, equal to 20% of the
annual adjusted cash flow from operations in excess of $.72 per share. If
the annual adjusted cash flow from operations is less than $.72 per share,
then the payment of so much of the base fee is to be deferred so that
revised cash flow from operations will be equal to $.72 per share;
provided, however, in no event shall the amount deferred exceed 20% of the
previously determined base fee. Any deferred fees may be paid in a
subsequent year, up to a maximum of 30% of that year's revised cash flow
from operations in excess of $.72 per share. Annual adjusted cash flow
from operations, as defined for purposes of the incentive fee, includes the
net realized gain (or loss) from the disposition of property, adjusted to
exclude accumulated depreciation (otherwise stated as gain in excess of
cost without reduction for allowable depreciation). Notwithstanding the
foregoing, the combined base and incentive fees cannot exceed the amount
permitted by the limitation on operating expenses as provided in the
Trust's Declaration of Trust, which limitation is essentially
1 1/2% of the Trust's average quarterly invested assets, net of
depreciation. In addition, AEGON Advisors is to be paid a separately
negotiated fee of not less than 2% nor more than 4% of the cost of each
property acquired by the Trust as compensation for acquisition services
furnished by it to the Trust. Administrative fees paid to AEGON Advisors
for 1998 were $204,587. No acquisition fees were paid in 1998.
Management Services
AEGON Advisors provides management services to the Trust pursuant to a
Property Management Agreement. The term of the Agreement is for one (1)
year and is automatically renewable each year for an additional year
subject to the right of either party to cancel the Agreement upon 30 days
written notice. Under the Management Agreement, AEGON Advisors is
obligated to (a) procure tenants and execute leases with respect to Trust
properties which are not leased under net lease arrangements (the "Managed
Properties"), (b) maintain and repair (at the Trust's expense) the Managed
Properties, (c) maintain complete and accurate books and records of the
operations of the Managed Properties, (d) maintain the Managed Properties
in accordance with applicable government rules and regulations, licensing
requirements and building codes, (e) collect all rents and (f) carry (at
the Trust's expense) general liability, accident, fire and other property
damage insurance. For these services, AEGON Advisors receives 5% of the
gross income derived from the operation of the Managed Properties.
Management fees paid to AEGON Advisors for 1998 were $241,877. These
services were previously provided by AEGON USA Realty Management, Inc., a
wholly-owned subsidiary of AEGON Advisors, which was merged into AEGON
Advisors in December 1998.
Shareholder Services
AEGON Advisors provides shareholder services to the Trust pursuant to a
Shareholder Services Agreement (the "Agreement"). Under the Agreement,
AEGON Advisors is obligated to provide dividend disbursement, stock
certificate preparation, recordkeeping and other shareholder services for
which AEGON Advisors receives the following fees: a quarterly fee of $1.25
per shareholder account based on the number of shareholder accounts
(minimum $1,000 per quarter), a fee of $.75 per shareholder account for
each dividend processed, a fee of $.50 per shareholder account for proxy
tabulation, and such other compensation as from time to time agreed upon by
the Trust and AEGON Advisors. Shareholder service fees paid to AEGON
Advisors for 1998 were $21,376. AEGON Advisors has subcontracted for stock
transfer and dividend disbursement services with Boston EquiServe, L.P., a
subsidiary of State Street Bank and Trust Company. Effective January 1,
1999, the Trust contracted directly with Boston EquiServe, L.P. and
terminated the agreement with AEGON Advisors.
Other
On December 31, 1993, the mortgage loan on the Trust's Presidential Drive
property was acquired from the lender by AUSA Life Insurance Company, Inc.,
a wholly-owned subsidiary of AEGON USA, Inc., as part of a large
transaction involving the transfer of loans and securities. The terms of
the mortgage loan remained the same. On February 1, 1999, the Trust
prepaid the mortgage loan on Presidential Drive Business Park. The
prepayment amount, including a 1% prepayment fee of $7,065 to the lender,
was $713,548. In February 1994, the Trust refinanced the existing mortgage
loan on its Geneva Square property with a new mortgage loan from PFL Life
Insurance Company ("PFL"), a wholly-owned subsidiary of AEGON USA, Inc.
This $3,000,000 loan was obtained by the Trust on commercially competitive
terms at a fixed interest rate of 8% and a 1% origination fee ($30,000) was
paid to PFL in connection with the loan. The loan matured on March 1, 1996,
and the Trust exercised an option to extend the loan for eight years at
8.30% based on commercially competitive terms offered for comparable loans
by PFL. On December 22, 1998, the Trust sold Geneva Square and the
mortgage balance of $2,803,790 was repaid. On March 1, 1999, the mortgage
loans on Mendenhall Commons and North Park Plaza matured, requiring
principal repayment. On March 15, 1999, the Trust refinanced these
mortgage loans with Monumental Life Insurance Company, a wholly-owned
subsidiary of AEGON USA, Inc. The new loans are for a period of one year,
carry an initial interest rate of 7%, and may be prepaid at any time
without penalty. The maximum principal amount of the Presidential Drive
and Geneva Square mortgage indebtedness outstanding during 1998 was
$3,570,474. The Trust paid $57,293 in principal and $303,137 in interest
on such mortgage indebtedness for 1998.
SELECTION OF INDEPENDENT AUDITORS
The Board of Trustees has selected Ernst & Young LLP, Des Moines, Iowa as
independent auditors to provide auditing services for the year 1999. This
firm has provided auditing services to the Trust since 1992. A
representative of Ernst & Young LLP is expected to be present at the
meeting and will have the opportunity to make a statement and will be
available to respond to appropriate shareholder questions.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 2000 Annual Meeting
must be received by the Trust for inclusion in the Trust's proxy statement
and form of proxy no later than November 24, 1999.
COST AND METHOD OF PROXY SOLICITATION
The cost of preparing, assembling and mailing the proxy materials and of
soliciting proxies by the Board of Trustees will be borne by the Trust. In
addition to the use of mails, proxies may be solicited on behalf of the
Board of Trustees by personal interview, telephone and telegram by certain
Trustees or employees of AEGON USA Realty Advisors, Inc. who will not be
separately compensated for such services. The Trust does not presently
intend to use specially engaged employees or paid solicitors for the
solicitation of proxies, but has retained Boston EquiServe, L.P., a
subsidiary of State Street Bank and Trust Company, for proxy tabulation.
The Trust has made arrangements with brokerage houses and nominees to send
proxy materials to their principals and the Trust will reimburse them for
their reasonable out-of-pocket expenses incurred in doing so.
FOR THE BOARD OF TRUSTEES
Maureen DeWald
Vice President and Secretary
Cedar Rapids, Iowa
March 22, 1999
PROXY
USP REAL ESTATE INVESTMENT TRUST
Proxy Solicited on Behalf of the Board of Trustees
The undersigned hereby appoints Maureen DeWald and Alan F. Fletcher, or
either of them, with full power of substitution, proxies to represent the
undersigned at the Annual Meeting of Shareholders of USP REAL ESTATE
INVESTMENT TRUST to be held at the AEGON Financial Center, 4333 Edgewood
Road N.E., Cedar Rapids, Iowa, on Friday, April 30, 1999, and at any
adjournment thereof, with all power which the undersigned would possess if
personally present, and to vote all shares which the undersigned may be
entitled to vote, as designated hereon. This proxy, when properly
executed, will be voted in the manner directed herein by the undersigned.
If no direction is made, this proxy will be voted FOR the election of all
the nominees listed hereon.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign exactly as your name(s) appear(s) on the books of the Trust.
Joint owners should each sign personally. Trustees and other fiduciaries
should indicate the capacity in which they sign, and where more than one
name appears, a majority must sign. If a corporation, this signature
should be that of an authorized officer who should state his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
_________________________ _________________________
_________________________ _________________________
_________________________ _________________________
_________________________ _________________________
_________________________ _________________________
_________________________ _________________________
PLEASE MARK VOTE
X AS IN THIS EXAMPLE
USP REAL ESTATE 1. Election of Trustees
INVESTMENT TRUST
For All With- For All
Nominees hold Except
Patrick E. Falconio
Edwin L. Ingraham
Samuel L. Kaplan
Richard M. Osborne
NOTE: If you do not wish your shares
voted "For" a particular nominee, mark
the "For All Except" box and strike a
line through the nominee(s) name(s).
Your shares will be voted "For" the
remaining nominee(s).
CONTROL NUMBER:
RECORD DATE SHARES:
In their discretion, the Proxies are authorized
to vote upon such other business as may properly
come before the meeting.
Mark box at right if an address change or
comment has been noted on the reverse side
of this card.
Please be sure to sign and date this Proxy. Date:
_____________________ __________________
Shareholder sign here Co-owner sign here
DETACH CARD
USP REAL ESTATE INVESTMENT TRUST
Dear Shareholder:
Please take note of the important information enclosed with this
Proxy Ballot. The election of Trustees requires your immediate
attention and approval. This is discussed in detail in the
enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise
your right to vote your shares.
Please mark the box on this proxy card to indicate how your
shares will be voted. Then sign the card, detach it and return
your proxy vote in the enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of
Shareholders, April 30, 1999.
Thank you in advance for your prompt consideration of these
matters.
Sincerely,
USP Real Estate Investment Trust