SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10 - K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-13693
VININGS INVESTMENT PROPERTIES TRUST
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 13-6850434
------------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3111 PACES MILL ROAD, SUITE A-200, ATLANTA, GA 30339
- ---------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (770) 984-9500
--------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
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None
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
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Common Shares of Beneficial Interest without par value
(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 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. __
Based on the average bid and asking price on March 7, 2001 the aggregate market
value of the Registrant's common shares of beneficial interest held by
non-affiliates of the Registrant was $734,839.
The number of shares outstanding as of March 7, 2001 was 1,100,486.
DOCUMENTS INCORPORATED BY REFERENCE
None
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
INDEX TO FORM 10-K
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PART I........................................................................3
ITEM 1 - Business......................................................3
ITEM 2 - Properties....................................................6
ITEM 3 - Legal Proceedings.............................................7
ITEM 4 - Submission of Matters to a Vote of Shareholders...............7
PART II.......................................................................8
ITEM 5 - Market for Registrant's Shares of Beneficial Interest.........8
ITEM 6 - Selected Financial Information................................9
ITEM 7 - Management's Discussion and Analysis of Financial
Condition and Results of Operations...........................10
ITEM 7A - Quantitative and Qualitative Disclosures About Market Risk ...14
ITEM 8 - Financial Statements and Supplementary Data...................14
ITEM 9 - Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure...........................14
PART III......................................................................15
ITEM 10 - Directors and Executive Officers of the Registrant.............15
ITEM 11 - Executive Compensation.........................................17
ITEM 12 - Security Ownership of Certain Beneficial Owners
and Management.................................................18
ITEM 13 - Certain Relationships and Related Transactions.................21
PART IV.......................................................................23
ITEM 14 - Exhibits, Financial Statements and Schedule and
Reports on Form 8-K............................................23
Signatures ...................................................................27
This Form 10-K contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. The Trust's actual results could differ materially from those projected
in the forward-looking statements. Certain factors that might cause such a
difference are set forth in the section entitled "Certain Factors Affecting
Future Operating Results," in the relevant paragraphs of "Management's
Discussion and Analysis of Results of Operations and Financial Condition," and
elsewhere in this report.
PART I
ITEM 1 - BUSINESS
General Development of Business
- -------------------------------
Vinings Investment Properties Trust ("Vinings" or the "Trust") was organized on
December 7, 1984 as a mortgage real estate investment trust ("REIT") whose
original plan was to liquidate within approximately ten years. On February 28,
1996, Vinings Investment Properties, Inc. completed a tender offer to acquire
control of the Trust in order to rebuild Vinings' assets by expanding into the
multifamily real estate markets through the acquisition of garden style
apartment communities that are leased to middle-income residents.
Vinings currently conducts all of its operations through Vinings Investment
Properties, L.P. (the "Operating Partnership"), a Delaware limited partnership.
As of December 31, 2000, the Trust was the sole 1% general partner and a 92.72%
limited partner in the Operating Partnership, controlling 80.94% of the common
partnership interests and 100% of the preferred partnership interests (See Note
5 to Vinings' December 31, 2000 Consolidated Financial Statements.)
On April 29, 1999, the Operating Partnership offered, in a private transaction
pursuant to a Securities Purchase Agreement (the "Purchase Agreement"), Series A
Convertible Preferred Partnership Units (the "Preferred Units"), the proceeds
from which were used to acquire thirteen multifamily communities (collectively,
the "Portfolio Properties") from seventeen limited partnerships and limited
liability companies. Eight of the Portfolio Properties (the "Mississippi
Properties") were purchased through subsidiary partnerships of the Operating
Partnership. The remaining Portfolio Properties were purchased through a joint
venture structure. (See Notes 3 and 4 to Vinings' December 31, 2000 Consolidated
Financial Statements.) A total of 1,988,235 Preferred Units were issued for an
aggregate purchase price of $8,450,000. Effective April 1, 2000, 100% of the
Preferred Units were exchanged for an equivalent number of shares of a newly
created class of preferred shares of beneficial interest in Vinings having
substantially the same rights, preferences and privileges as the Preferred Units
(the "Preferred Shares"). (See Note 5 to Vinings' December 31, 2000 Consolidated
Financial Statements.)
Vinings currently owns, through wholly owned subsidiaries, ten apartment
communities totaling 1,520 units and a 75,000 square foot, single story business
park. In addition, Vinings holds a 20% interest in and is the general partner of
an unconsolidated joint venture formed as a limited partnership (the "Joint
Venture"), which owns through subsidiary partnerships five additional apartment
communities totaling 968 units. (See Note 4 to Vinings' December 31, 2000
Consolidated Financial Statements.) At December 31, 2000, the average occupancy
of Vinings' portfolio was 90%.
Effective March 1, 2000, 628,927 common shares of Vinings were purchased in a
privately negotiated transaction by the officers, one of their affiliates and an
affiliate of one of the Trustees from a limited number of shareholders, which
included three of the Trustees and certain of their affiliates (the "Stock
Transaction"). In connection with the Stock Transaction, the three selling
Trustees--James D. Ross, Martin H. Petersen and Gilbert H. Watts, Jr.--resigned
from the Board of Trustees.
As a result of the Stock Transaction, fewer than five shareholders own in excess
of 50% of the equity in Vinings. On March 15, 2000, the Board of Trustees voted
to waive the ownership limitations in Vinings' Declaration of Trust with respect
to shareholders acquiring shares in the Stock Transaction as well as with
respect to certain holders of Preferred Units who acquired Preferred Shares.
Effective July 1, 2000, Vinings no longer qualifies as a REIT for federal income
tax purposes and will be taxed as a corporation. (See Note 2 to Vinings'
December 31, 2000 Consolidated Financial Statements.)
Vinings' executive offices are located at 2839 Paces Ferry Road, Suite 1170,
Atlanta, Georgia 30339, and its phone number is (770) 984-9500.
Financial Information About Industry Segments
- ---------------------------------------------
Vinings' operations and identifiable long-term assets have been attributed to
the real estate industry for the entirety of its existence. While investments
prior to the tender offer were primarily mortgage loans, currently Vinings'
assets are equity investments. Management plans to continue making equity
investments in the multifamily real estate markets from time to time when
attractive opportunities arise.
Narrative Description of Business
- ---------------------------------
Vinings' primary objective is to continue to expand into the multifamily real
estate markets through the acquisition of garden style apartment communities
that are leased to middle-income residents. The middle-income resident is a more
stable and broader based market, often referred to as "the renter by necessity."
Management believes that middle market properties provide greater potential for
appreciation through increased revenues and cash flows than the more expensive
high-end apartment communities, which cater to "the renter by choice."
Management believes that these investments will provide attractive sources of
income to Vinings, which will not only provide cash available for future
distributions, but will increase the value of Vinings' real estate portfolio as
well.
In the past, Vinings has reviewed each real estate investment in its portfolio
on a quarterly basis. Management plans to continue this review as well as to
carefully review each acquisition to insure that Vinings makes sound investments
on behalf of its shareholders. In this regard, Vinings' Board has established an
Acquisition Committee that must review and approve each potential acquisition
based on certain investment criteria before it is presented to the Board for
final approval.
Growth and Expansion Strategy
- -----------------------------
Management intends to implement its growth and expansion strategy by targeting
properties that have been under managed and/or under maintained, and purchase
such properties at prices which are below replacement cost. Through strategic
value added and return oriented capital improvements and intensive property
management, the Trust believes that cash flow, and in turn value, will be
increased. These properties may be acquired either for cash, through debt
financing, in exchange for shares of beneficial interest in the Trust or for
units of limited partnership interest in its Operating Partnership or any
combination thereof. In addition, the Trust may seek to raise capital through
private offerings for specific acquisitions or may seek to grow through mergers
or combinations with other real estate companies whose objectives and goals are
similar to its own.
Competition
- -----------
Vinings competes with a number of housing alternatives for its residents
including other multifamily communities and single family homes available for
rent as well as purchase. This competition varies greatly from market to market
depending on the location of each community and the alternative housing
available in that particular area. This competition could have an effect not
only on the Trust's ability to lease rental units but also on the rents charged.
Vinings also competes with other investors for potential acquisitions, including
REITs as well as other private real estate companies, some of which may have
greater resources with which to purchase projects that the Trust may be
interested in acquiring. Vinings also competes with these companies for its
sources of equity, whether from the public markets or from private investors,
which could have an impact on Vinings' ability to acquire property in the
future.
Advisory and Property Management Services
- -----------------------------------------
On January 1, 1999, Vinings entered into management agreements with VIP
Management, LLC ("VIP"), an affiliate of the officers of Vinings who are also
Trustees, to provide property management services for a fee equal to varying
percentages ranging from three and one half to six percent of gross revenues,
plus a fee for data processing. Effective January 1, 2000, the management fee
percentages were reduced to three and one half percent on all of the multifamily
communities. Prior to January 1, 1999, Vinings had entered into management
agreements with Vinings Properties, Inc., also an affiliate of the officers of
Vinings who are also Trustees, to provide property management services on
substantially the same terms as the current agreements.
In addition, as a commitment to the rebuilding of Vinings, prior to 1998 The
Vinings Group, Inc., the parent corporation of Vinings Properties, Inc.
(collectively with VIP, "The Vinings Group"), provided numerous services at no
cost to Vinings relating to administration, acquisition, and capital and asset
advisory services. Certain direct costs paid on Vinings' behalf were reimbursed
to The Vinings Group. Beginning January 1, 1998, The Vinings Group has charged
Vinings for certain overhead charges. Beginning August 1, 1999, the Trust has
also paid for its pro-rata share of rent, administrative and other overhead
charges, which include reimbursing The Vinings Group for a pro-rata portion of
salaries and benefits for the officers and other employees providing services to
Vinings. Effective July 1, 2000, Vinings restructured its relationship with VIP
such that VIP will administer the Trust for an advisory fee equal to 1 1/2% of
gross revenues, including the revenues from the Joint Venture Properties. The
advisory fee is in lieu of reimbursing VIP for all overhead, salaries and other
indirect costs attributable to the Trust's operations.
Employees
- ---------
Vinings does not currently hire its own employees, as The Vinings Group has been
providing services to the Trust as described above. In connection with these
services the Trust paid to The Vinings Group during fiscal 2000 a total of
$328,933. In addition, The Vinings Group, as managing agent, provides on-site
property management services for the Trust. At December 31, 2000, Vinings,
through its managing agent, had engaged 38 associates who performed on-site
management services for the communities and were paid with funds generated from
the properties.
Environmental Policy
- --------------------
Investments in real property create a potential for environmental liability on
the part of the Trust. Owners of real property may be held liable for all costs
and liabilities relating to hazardous substances present on or emanating from
their properties. Current management assesses on an as needed basis, measures
that may need to be taken to comply with environmental laws and regulations. In
the event that there is potential environmental responsibility, the costs to
comply with environmental laws and regulations would be estimated at that time.
At December 31, 2000, Vinings was not aware of any potential environmental
contamination relating to investments in its portfolio.
ITEM 2 - PROPERTIES
As of December 31, 2000, Vinings directly owned ten apartment communities and a
single-story business park, Peachtree Business Center ("Peachtree"). While
Vinings still owns Peachtree, it intends to continue investing only in
multifamily communities. Vinings' directly owned real estate investments are
summarized below by property:
OWNED PROPERTIES Date No. Amount of Occupancy at
Acquired Units Investment 12/31/00
-------- ----- ---------- ------------
Cottonwood Apartments 05/01/99 120 $ 4,771,434 98%
Delta Bluff Apartments 05/01/99 152 6,932,190 80%
Foxgate Apartments 05/01/99 160 7,294,638 98%
Hampton House Apartments 05/01/99 128 5,692,691 81%
Heritage Place Apartments 05/01/99 80 3,215,464 95%
Northwood Place Apartments 05/01/99 136 5,573,285 80%
River Pointe Apartments 05/01/99 152 6,946,478 97%
Trace Ridge Apartments 05/01/99 136 5,305,769 89%
The Thicket Apartments 06/28/96 254 7,393,891 93%
Windrush Apartments 12/19/97 202 7,246,917 91%
Peachtree Business Center 04/12/90 N/A 2,101,094 84%
------- ------------ ------
Totals 1,520 $62,473,851 90%
======= ============ ======
In addition, as of December 31, 2000, Vinings was the general partner of and
owned a 20% interest in an unconsolidated Joint Venture, which owned five
apartment communities summarized as follows:
JOINT VENTURE PROPERTIES Date No. Amount of Occupancy at
Acquired Units Investment 12/31/00
-------- ----- ---------- ------------
Bradford Place Apartments 05/01/99 240 $10,925,054 83%
Cambridge Apartments 05/01/99 120 5,615,672 72%
The Landings Apartments 05/01/99 120 6,056,638 79%
Riverchase Apartments 05/01/99 280 14,001,736 85%
Southwind Apartments 05/01/99 208 8,277,594 85%
------- ------------ ------
Totals 968 $44,876,694 82%
======= ============ ======
The above investment amounts are net of accumulated depreciation. All of the
properties are encumbered by fixed rate mortgage loans, except for Peachtree
Business Center, which serves as security for the line of credit. Vinings
incorporates herein by reference the description of owned real property on
Schedule III and the notes thereto.
ITEM 3 - LEGAL PROCEEDINGS
None of Vinings' properties are presently subject to any material litigation
nor, to Vinings' knowledge, is any material litigation threatened against the
Trust or any of its properties, other than routine actions or claims and
administrative proceedings arising in the ordinary course of business. Some of
these claims are expected to be covered by insurance, all of which collectively
are not expected to have a material adverse effect on the business, financial
condition, or results of operations of Vinings.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
No matters were submitted to a vote of the Trust's shareholders during the
fourth quarter of fiscal 2000.
PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON SHARES OF BENEFICIAL INTEREST
Stock Quotation
- ---------------
Vinings' common shares of beneficial interest are currently traded on the
over-the-counter Bulletin Board under the symbol "VIPIS." On March 8, 2001, the
closing sale price for Vinings' common shares, as reported on the
over-the-counter Bulletin Board, was $ 2.375 per share.
Market Information
- ------------------
The high and low sales prices for each quarterly period during fiscal 2000 and
fiscal 1999, which reflect inter-dealer prices, without retail mark-up,
mark-down or commission and may not necessarily represent actual transactions,
are as follows:
------------------- ---------------------
2000 1999
------------------- ---------------------
QUARTER ENDED HIGH LOW HIGH LOW
------- ------- ------- -------
March 31 5 3 3/8 4 5/16 3 1/2
June 30 3 1/2 2 1/2 4 3/8 3 9/16
September 30 3 1 7/8 4 3/8 4
December 31 2 1/2 1 15/16 4 5/8 4
Dividends
- ---------
For fiscal year 1999, the Trust declared cash distributions per common share as
shown below. Vinings did not declare or pay any cash distributions on common
shares during fiscal 2000. For a discussion of the federal income tax
consequences of these distributions, refer to Note 8 of Vinings' December 31,
2000, Consolidated Financial Statements. Vinings intends to pay distributions
when operating cash flow permits.
-------------- -------------- ----------
RECORD PAYMENT DIVIDEND
DATE DATE AMOUNT
-------------- -------------- ----------
8/16/99 9/1/99 $0.05
11/26/99 12/8/99 $0.05
Sales of Unregistered Securities
- --------------------------------
On April 29, 1999, the Operating Partnership offered Preferred Units in a
private transaction. A total of 1,988,235 Preferred Units were issued for an
aggregate purchase price of $8,450,000. The securities were issued in reliance
on the exemption in Section 4(2) of the Securities Act. The Trust is relying on
the exemption in Section 4(2) based upon factual representations received from
the acquirors of such securities. Effective April 1, 2000 the Preferred Units
were exchanged for Preferred Shares. The holders of Preferred Shares are
entitled to receive cumulative preferential cash distributions at the per annum
rate of $0.4675 per Preferred Share. Under certain circumstances, the holders of
Preferred Shares may convert any part or all of such Preferred Shares into
common shares of Vinings. As of December 31, 2000, a total of 1,988,235
Preferred Shares were outstanding. (See Note 5 to Vinings' December 31, 2000,
Consolidated Financial Statements.)
Holders
- -------
Vinings had 662 holders of record of its common shares of beneficial interest as
of March 8, 2001.
ITEM 6 - SELECTED FINANCIAL DATA
The following table sets forth selected financial information for Vinings and
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations," as well as Vinings' December 31,
2000 Consolidated Financial Statements, which are made a part of this report.
All share and per share information have been restated to reflect the 1-for-8
reverse share split on July 1, 1996.
For the year ended December 31,
------------------------------------------------------------------------
2000 1999 1998 1997 1996
------------- ------------- ------------- ------------- -------------
Revenues $ 11,770,199 $ 9,341,144 $ 4,102,003 $ 2,478,824 $ 1,796,917
Expenses 12,664,437 9,898,237 3,998,110 3,146,005 2,580,195
------------- ------------- ------------- ------------- -------------
Income (loss) before loss on
real estate investments (894,238) (557,093) 103,893 (667,181) (783,278)
Loss on real estate investments - - - - (26,800)
------------- ------------- ------------- ------------- -------------
Income (loss) before equity in loss of unconsolidated
Joint Venture and minority interests (894,238) (557,093) 103,893 (667,181) (810,078)
Equity in loss of unconsolidated Joint Venture (220,452) (137,366) - - -
------------- ------------- ------------- ------------- -------------
Income (loss) before minority interests (1,114,690) (694,459) 103,893 (667,181) (810,078)
Less Minority interests in Operating Partnership:
Preferred partnership interests (336,758) (903,344) - - -
Common partnership interests 394,020 288,553 (18,900) 5,464 -
------------- ------------- ------------- ------------- -------------
Net income (loss) (1,057,428) (1,309,250) 84,993 (661,717) (810,078)
------------- ------------- ------------- ------------- -------------
Distributions to preferred shareholders 697,125 - - - -
Accretion to preferred shareholders 33,144 - - - -
------------- ------------- ------------- ------------- -------------
Net income (loss) available to common
shareholders (1,787,697) $ (1,309,250) $ 84,993 $ (661,717) $ (810,078)
============= ============= ============= ============= =============
Net income (loss) per share - basic and diluted $ (1.62) $ (1.19) $ 0.08 $ (0.61) $ (0.75)
============= ============= ============= ============= =============
Weighted average shares outstanding - basic 1,100,490 1,100,501 1,090,701 1,080,513 1,080,528
============= ============= ============= ============= =============
Weighted average shares outstanding - diluted 1,343,036 1,343,036 1,336,391 1,089,435 1,080,528
============= ============= ============= ============= =============
Dividends declared and paid:
Ordinary income $ - $ - $ - $ - $ -
Return of capital - 0.10 - - 16.88
------------- ------------- ------------- ------------- -------------
Total dividends declared and paid $ - $ 0.10 $ - $ - $ 16.88
============= ============= ============= ============= =============
Total assets $ 66,901,276 $ 69,114,314 $19,148,178 $18,989,558 $11,519,469
============= ============= ============= ============= =============
Shareholders' equity $ 8,087,418 $ 1,007,617 $ 2,426,972 $ 2,268,803 $ 2,232,548
============= ============= ============= ============= =============
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Overview
- --------
Vinings Investment Properties Trust ("Vinings" or the "Trust") was organized on
December 7, 1984 as a mortgage real estate investment trust ("REIT") whose
original plan was to liquidate within approximately ten years. On February 28,
1996, Vinings Investment Properties, Inc. completed a tender offer to acquire
control of the Trust and to rebuild Vinings' assets by expanding into the
multifamily real estate markets through the acquisition of garden style
apartment communities that are leased to middle-income residents. Effective July
1, 2000, Vinings no longer qualifies as a REIT for federal income tax purposes
and will be taxed as a corporation.
Vinings currently conducts all of its operations through Vinings Investment
Properties, L.P. (the "Operating Partnership"). As of December 31, 2000, the
Trust was the sole 1% general partner and a 92.72% limited partner in the
Operating Partnership, controlling 80.94% of the common partnership interests
and 100% of the preferred partnership interests. (See Note 5 Vinings' December
31, 2000 Consolidated Financial Statements.)
The following discussion and analysis of the financial condition and results of
operations should be read in conjunction with the accompanying consolidated
financial statements of Vinings and the notes thereto.
Results of Operations
- ---------------------
Comparison of Operating Results of 2000 to Operating Results of 1999
- --------------------------------------------------------------------
Rental and other property revenues increased $2,392,204, or 26%, from $9,309,207
to $11,701,411 due primarily to the revenues generated in connection with the
Trust's ownership of the Mississippi Properties for twelve months during fiscal
year ended December 31, 2000 ("Fiscal 2000") versus only eight months during
fiscal year end December 31, 1999 ("Fiscal 1999"). The revenues at Windrush also
increased slightly during Fiscal 2000.
Interest and other income increased $36,851, or 115%, from $31,937 to $68,788.
This increase was due primarily to interest earned on replacement reserve
accounts.
Property operating and maintenance expense increased by $926,825, or 26%, from
$3,613,379 to $4,540,204 due primarily to the expenses generated in connection
with the Trust's ownership of the Mississippi Properties for twelve months
during Fiscal 2000 versus only eight months during Fiscal 1999. Property
operating and maintenance expenses decreased slightly at Peachtree, Windrush,
and Thicket.
Depreciation and amortization increased by $547,062, or 32%, from $1,713,513 to
$2,260,575. This increase is due primarily to depreciation generated in
connection with Vinings' ownership of the Mississippi Properties for the twelve
months during Fiscal 2000 versus only eight months during Fiscal 1999. There was
also a slight increase in depreciation for Windrush and Thicket due to capital
improvements.
Amortization of deferred financing costs increased by $5,253, or 10%, from
$50,398 to $55,651, due to costs incurred in connection with the refinancing of
the line of credit.
Interest expense increased $1,333,281, or 35%, from $3,832,518 to $5,165,799,
due primarily to the mortgage interest generated in connection with Vinings'
ownership of the Mississippi Properties for twelve months during Fiscal 2000
versus only eight months during Fiscal 1999. In addition, interest on Vinings'
line of credit increased due to the increase in the prime rate during 2000.
Windrush and Thicket had slight decreases in interest expense due to principal
amortization.
General and administrative expense decreased $46,221, or 7%, from $688,429 to
$642,208. This decrease consists of: (1) corporate communications expense
totaling $21,285; (2) professional fees totaling $18,364; (3) office expense
totaling $15,080; (4) trustee expense totaling $17,638; (5) travel expense
totaling $5,892; and (6) investor relations expense totaling $3,175. These
decreases are offset by an increase of $36,829 in payments made to The Vinings
Group for advisory fees and overhead allocations.
Vinings had a loss before equity in loss of unconsolidated Joint Venture and
minority interests of $894,238 for Fiscal 2000, as compared to a loss of
$557,093 for Fiscal 1999, representing an increased loss of $337,145. The
majority of this increase is due to the loss generated in connection with
Vinings' ownership of the Mississippi Properties for twelve months during Fiscal
2000 versus only eight months during Fiscal 1999.
Vinings had equity in loss of unconsolidated Joint Venture of $220,452 for
Fiscal 2000 as compared to a loss of $137,366 for Fiscal 1999. This increased
loss is due to the Trust's equity ownership in the unconsolidated Joint Venture
for twelve months during Fiscal 2000 versus only eight months during Fiscal
1999. (See Note 4 to Vinings' December 31, 2000 Consolidated Financial
Statements.)
The minority interest of common partnership interests for Fiscal 2000 totals
($394,020), as compared to ($288,553) for Fiscal 1999. The minority interest of
preferred partnership interests for Fiscal 2000 of ($336,758) represents the
accrued preferred 11% return on the Preferred Units for three months of
($232,375) and the accrued pro rata liquidation preference of $0.21 per
Preferred Unit for three months of ($104,383) versus ($623,341) and ($280,003),
respectively, for Fiscal 1999. The Preferred Units were converted to Preferred
Shares on April 1, 2000. (See Note 5 to Vinings' December 31, 2000 Consolidated
Financial Statements.)
Comparison of Operating Results of 1999 to Operating Results of 1998
- --------------------------------------------------------------------
Total revenues increased $5,239,141 or 128%, from $4,102,003 to $9,341,144, due
primarily to the fact that Vinings continued its growth and expansion with the
acquisition of the Mississippi Properties on May 1, 1999.
Rental and other property revenues increased $5,209,287, or 127%, from
$4,099,920 to $9,309,207. $5,123,614 of this increase was due to the revenues
generated in connection with the Trust's ownership of the Mississippi Properties
for the eight months ended December 31, 1999, which were not in Vinings'
portfolio during 1998. There were also increases to Windrush and Thicket's
rental and other property revenues of $56,616 and $26,068, respectively.
Interest and other income increased $29,854 from $2,083 to $31,937. This
increase was due primarily to interest earned on earnest money deposits held in
escrow in connection with the acquisition of the Mississippi Properties, and
interest earned on replacement reserve accounts.
Property operating and maintenance expense increased by $1,961,172, or 119%,
from $1,652,207 to $3,613,379. Of this increase, $2,037,188 was due to expenses
generated in connection with the Trust's ownership of the Mississippi Properties
for the eight months ended December 31, 1999, which were not in Vinings'
portfolio during 1998. This increase was offset by decreases in operating
expenses totaling $76,016, of which $47,651 was due primarily to savings in
Thicket's cable TV expense and salary and benefits expense and $23,736 was due
to reduced maintenance expense, utilities and commissions at Peachtree.
Depreciation and amortization increased by $1,065,753, or 165%, from $647,760 to
$1,713,513. This increase is due primarily to depreciation generated in
connection with the Trust's ownership of the Mississippi Properties for the
eight months ended December 31, 1999, which were not in Vinings' portfolio
during 1998. There was a slight increase in Windrush and Thicket's depreciation
due to capital additions.
Amortization of deferred financing costs increased by $19,495, or 63%, from
$30,903 to $50,398, due to costs incurred in connection with the refinancing of
the line of credit.
Interest expense increased $2,503,241, or 188%, from $1,329,277 to $3,832,518,
due primarily to the mortgage interest generated in connection with the Trust's
ownership of the Mississippi Properties for the eight months ended December 31,
1999, which were not in the Vinings' portfolio during 1998. In addition,
interest on Vinings' line of credit decreased slightly due to the reduced
balance on the line of credit during fiscal 1999. Windrush and Thicket had
slight decreases in interest expense due to principal amortization.
General and administrative expense increased $89,556, or 15%, from $598,873 to
$688,429. This increase consists of: (1) overhead allocations paid to The
Vinings Group totaling $58,902; (2) accounting and audit fees totaling $45,624;
(3) office expense totaling $23,750; (3) legal expense totaling $7,769; and (4)
trustee expense totaling $5,866. These increases are offset by the following
decreases: (1) abandoned project expense totaling $34,531; (2) travel expense
totaling $11,285; and (3) investor relations expense totaling $5,866.
The Unusual item, net totaling ($260,910) in 1998, relates to costs incurred,
net of settlement proceeds, in connection with litigation involving an
acquisition in which the seller breached its contract with the Trust. There were
no costs incurred in this regard during 1999.
Vinings had a loss before equity in loss of unconsolidated Joint Venture and
minority interests of $557,903 for Fiscal 1999, as compared to income of
$103,893 for Fiscal 1998 representing a decrease of $661,796. The majority of
this decrease is due to the loss generated in connection with the Trusts'
ownership of the Mississippi Properties for the eight months ended December 31,
1999, which were not in the Vinings' portfolio during 1998.
Vinings had equity in loss of unconsolidated Joint Venture of $137,366 for
Fiscal 1999. This loss is due to the Trust's equity ownership in the
unconsolidated Joint Venture for the eight months ended December 31, 1999, which
was not held by Vinings' portfolio during 1998. (See Note 4 to Vinings' December
31, 1999 Consolidated Financial Statements.)
The minority interest of common partnership interests for Fiscal 1999 totals
($288,553), as compared to ($18,900) for Fiscal 1998. The minority interest of
preferred partnership interests represents the accrued preferred 11% return on
the Preferred Units ($623,341) and the accrued pro rata liquidation preference
of $0.21 per Preferred Unit ($280,003) for Fiscal 1999. The Preferred Units had
not been issued during Fiscal 1998 (See Note 5).
Liquidity and Capital Resources
- -------------------------------
Net cash provided by operating activities decreased $510,797, or 45%, from
$1,139,090 for Fiscal 1999 to $628,293 for Fiscal 2000. This change is due
primarily to the increased distributions paid to the holders of Preferred Units
made by the Operating Partnership. The distributions paid during Fiscal 2000
were for a nine month period from July 1, 1999 to March 31, 2000, while the
distributions paid during Fiscal 1999 were for a three month period from April
1, 1999 to June 30, 1999.
Net cash used in investing activities decreased $7,853,784 from $8,149,185 for
Fiscal 1999 to $295,401 for Fiscal 2000. This decrease is due primarily to the
cash invested in Vinings' purchase of the Mississippi Properties and its
interest in the Joint Venture during Fiscal 1999.
Net cash used by financing activities was $435,135 for Fiscal 2000, as compared
to net cash provided by investing activities of $7,768,008 for Fiscal 1999. This
difference is due primarily to the issuance of Preferred Units totaling
$8,450,000 during Fiscal 1999. In addition, principal repayments on mortgage
notes payable increased $75,069 from Fiscal 1999 to Fiscal 2000 due to Vinings'
ownership of the Mississippi Properties for twelve months during Fiscal 2000
versus only eight months during Fiscal 1999. Proceeds of $149,990 were drawn
from the Trust's line of credit during Fiscal 2000 versus repayments of $285,000
during Fiscal 1999. Distributions totaling $232,376 were paid to holders of
Preferred Shares during Fiscal 2000 versus distributions totaling $110,042 paid
to common shareholders during Fiscal 1999.
The cash held by Vinings at December 31, 2000, plus the cash flow from Vinings'
assets, is expected to provide sources of liquidity to allow Vinings to meet
current operating obligations excluding the distributions on the Preferred
Shares. While Vinings has been able to pay currently the preferred distributions
from the Trust's cash flow, Vinings may not have sufficient cash flow from
operations to make future distributions on the Preferred Shares without drawing
on the line of credit. For more information regarding the Trust's line of
credit, see Note 6 to Vinings' December 31, 2000 Consolidated Financial
Statements. This is due to a slight decline in occupancy at the Mississippi
Properties and the less than anticipated distributions from the Joint Venture.
However, Vinings continues its efforts to increase revenues as well as decrease
its general and administrative expenses. There can be no assurance however, that
sufficient cash flow will be generated from the Trust's operations. In addition,
management plans to continue ongoing discussions with capital sources, both
public and private, as well as explore financing alternatives, so as to allow
the Trust to continue to grow its income producing investments.
Recent Accounting Pronouncements
- --------------------------------
On June 15, 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (FAS 133). FAS 133, as amended by FAS 137,
"Deferral of the Effective Date of FAS 133," is effective for all fiscal
quarters of all fiscal years beginning after June 15, 2000. FAS 133 requires
that all derivative instruments be recorded on the balance sheet at their fair
value. Changes in the fair value of derivatives are recorded each period in
current earnings or other comprehensive income, depending on whether a
derivative is designated as part of a hedge transaction and, if it is the type
of hedge transaction. The adoption of FAS 133 will not have a significant effect
on the Company's results of operations or its financial position.
On December 3, 1999, The Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin No. 101 (SAB 101), Revenue Recognition, which provides
guidance on the recognition, presentation, and disclosure of revenue in
financial statements. SAB 101 is required to be implemented in the fourth fiscal
quarter of 2000. SAB 101 will not have a significant effect on the Company's
results of operations or its financial position.
Other Matters
- -------------
This Form 10-K contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. Vinings' actual results could differ materially from those set forth in
the forward-looking statements. Certain factors that might cause such a
difference include the following: the inability of Vinings to identify
properties for acquisition; the inability of Vinings to continue to acquire
properties in the future; the less than satisfactory performance of any property
which might be acquired by Vinings; the inability to access the capital markets
in order to fund Vinings' growth and expansion strategy; the cyclical nature of
the real estate market generally and locally in Georgia, Mississippi and the
surrounding southeastern states; the national economic climate; the local
economic climate in Georgia, Mississippi and the surrounding southeastern
states; the local real estate conditions and competition in Georgia, Mississippi
and the surrounding southeastern states; and the ability of Vinings to generate
sufficient cash flow or borrow funds to pay the full distributions on the
Preferred Shares. There can be no assurance that, as a result of the foregoing
factors, Vinings' growth and expansion strategy will be successful or that the
business and operations of Vinings will not be adversely affected thereby.
ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Vinings is exposed to market risk from changes in interest rates, which may
adversely affect its financial position, results of operations and cash flows.
In seeking to minimize the risks from interest rate fluctuations, Vinings
manages exposures through its regular operating and financing activities.
Vinings does not use financial instruments for trading or other speculative
purposes. Vinings is exposed to interest rate risk primarily through its
borrowing activities, which are described in Note 6 to Vinings' December 31,
2000 Consolidated Financial Statements. All of Vinings' borrowings are under
fixed rate instruments, except the line of credit, which is at prime plus 1%.
However, Vinings has determined that there is no material market risk exposure
to its consolidated financial position, results of operations or cash flows due
to changes in interest rates because of the fixed rate nature of its long-term
debt.
The following table presents principal reductions and related weighted average
interest rates by year of expected maturity for Vinings' debt obligations as of
December 31, 2000:
Fair Value
There- December
(In Thousands) 2001 2002 2003 2004 2005 after Total 31, 2000
- -------------------------------------------------------------------------------------------------------
Principal Reductions
In Mortgage Notes $ 362 $393 $7,315 $367 $399 $45,906 $54,742 $54,742
Average Interest Rates 8.63% 8.63% 8.63% 8.58% 8.58% 8.58% 8.63% 8.63%
Line Of Credit $1,865 - - - - - $ 1,865 $ 1,865
Interest Rate 9.50% - - - - - 9.50% 9.50%
- -------------------------------------------------------------------------------------------------------
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements and supplementary data are listed under
Item 14(a) and filed as part of this report on the pages indicated.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The information required by this Item 9 was previously reported in a Current
Report on Form 8-K filed with the Securities and Exchange Commission on February
23, 2000 and is incorporated herein by reference.
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information Regarding Trustees
Set forth below is certain information regarding the current five Trustees of
Vinings who are elected by the Trust's shareholders at each annual meeting of
the Trust.
TRUSTEE
NAME SINCE
-------------------- -------
Peter D. Anzo 1996
Stephanie A. Reed 1996
John A. Christy 2000
Phill D. Greenblatt 1996
Henry Hirsch 1996
Peter D. Anzo, age 47, has been Chief Executive Officer, President and Chairman
of the Board of Trustees since 1996. He has also been Chief Executive Officer
and a director of The Vinings Group, Inc. and affiliates since 1987. From 1990
through 1997 Mr. Anzo was Chief Executive Officer and a director of A&P
Investors, Inc. Mr. Anzo has been a delegate of the National Apartment
Association ("NAA") since 1995. He has been on the Legislative Committee of NAA
since 1991 and is the current Chairman. He is also past Chairman of the
Political Action Committee of NAA. He has been past Co-Chairman of the
Government Affairs Committee since 1995, Co-Chairman of the Affordable Housing
Task Force and was a director from 1992 until 1998 of the Atlanta Apartment
Association. He was a director of the Georgia Apartment Association from 1993 to
1998. From 1983 until 1986, Mr. Anzo served as Vice President of Acquisitions of
First Investment Companies, where he was involved in the management and
acquisition of commercial apartment properties throughout the United States. Mr.
Anzo was Vice President, Dispositions of Balcor/American Express from 1981 until
1983, where he was involved in the sale of apartment communities and commercial
properties in the United States. Prior to 1981, Mr. Anzo was involved in the
management, leasing, purchase and construction of real property with The
Beaumont Company and Linkletter Properties.
Stephanie A. Reed, age 42, has been Vice President, Secretary, Treasurer and a
Trustee since 1996. Since 1991, Ms. Reed has been Vice President and a director
of The Vinings Group, Inc. and affiliates. From 1987 to 1991, Ms. Reed was Vice
President-Development of The Sterling Group, Inc., a multifamily development
company located in Atlanta, Georgia where she was responsible for all phases of
development for multifamily projects. Prior to 1987, she served as Vice
President-Finance of The Sterling Group, Inc., in the syndication and management
of multifamily projects. Prior to joining The Sterling Group, Inc., she was a
certified public accountant for independent public accounting firms in Atlanta,
Georgia and Orlando, Florida.
John A. Christy, age 45, has been a Trustee since May 1, 2000. Mr. Christy is
currently a partner of Schreeder, Wheeler & Flint, LLP, an Atlanta law firm,
where he focuses his law practice in the areas of real estate, litigation and
bankruptcy. He graduated from Duke University in 1977 and Emory University
School of Law in 1980. Mr. Christy is a member of the Atlanta Bar Association.
Phill D. Greenblatt, age 55, has been a Trustee since 1996. Since 1975, Mr.
Greenblatt has been President of p.d.g. Real Estate Co., Inc., a real estate
brokerage and investment firm which invests in multifamily, retail and
industrial properties in Colorado, Arizona and Florida. From 1971 through 1974,
Mr. Greenblatt was a commercial sales associate with Heller-Mark Realty. He also
served as an investment banking officer for the First National Bank of Denver
from 1968 to 1971.
Henry Hirsch, age 64, has been a Trustee since 1996. Mr. Hirsch is Chairman of
the Board of Engineered Concepts, Inc., ECI Management Corporation and ECI
Realty, and is President of ECI Properties, positions which he has held for over
ten years. Mr. Hirsch has been involved in the real estate business since 1968,
specializing in multifamily apartment development. He and his related entities
currently own and/or manage over 3,500 apartment units, as well as office
buildings. The construction arm of his related entities has completed over
$300,000,000 of new construction and rehabilitation. Mr. Hirsch is a Certified
Apartment Property Supervisor with the National Apartment Association. He has
served on the Hotpoint Builders Advisory Council and National Association of
Home Builders, and has served as a director and past President of the Atlanta
Apartment Association. He has also served as a Regional Vice President of the
National Apartment Association.
Information Regarding Executive Officers
- ----------------------------------------
Listed below are the names of Vinings' executive officers. The names and ages of
all executive officers of the Trust and principal occupation and business
experience during at least the last five years is discussed above in
"Information Regarding Trustees."
NAME POSITION
------------------ --------------------------------------
Peter D. Anzo President, Chief Executive Officer
and Chairman of the Board of Trustees
Stephanie A. Reed Vice President, Secretary and Treasurer
Section 16(a) Beneficial Ownership Reporting Compliance
- -------------------------------------------------------
Vinings' officers, Trustees and beneficial owners of more than 10% of the
Trust's shares are required under Section 16(a) of the Exchange Act to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission. Copies of those reports must also be furnished to the Trust. Based
solely on a review of the copies of reports and amendments thereto furnished to
Vinings, the Trust believes that during Fiscal 2000, no person who was a
Trustee, officer or greater than 10% beneficial owner of the Trust's Shares
failed to file on a timely basis any report required by Section 16(a), except
that the following had late filings during Fiscal 2000: Peter D. Anzo (Form 5
for the purchase of common units in the Operating Partnership); Phill D.
Greenblatt (Form 5 for the purchase of Preferred Units in the Operating
Partnership); Henry Hirsch (Form 5 for the purchase of Preferred Units in the
Operating Partnership); Martin H. Petersen (Form 5 for purchase of common units
in the Operating Partnership and Form 4 for the disposition of common units in
the Operating Partnership and the disposition of common shares); Stephanie Reed
(Form 5 for the purchase of Preferred Units in the Operating Partnership);
Gilbert H. Watts, Jr. (Form 5 for the purchase of Preferred Units in the
Operating Partnership and Form 4 for the disposition of common shares); and
James D. Ross (Form 4 for the disposition of common shares). In addition,
because Vinings did not receive a Form 4 from each of Strico Vinings, LLC and
Lawrence Cooper, who are beneficial owners of more than 10% of the Trust's
shares, the Trust believes that they did not timely file these required reports,
disclosing the acquisition by each of them of Preferred Units, under Section
16(a) of the Exchange Act.
ITEM 11 - EXECUTIVE AND TRUSTEE COMPENSATION
The following sections set forth and discuss the compensation paid or awarded
during the last three years to the Trust's Chief Executive Officer. Vinings had
no executive officers who earned in excess of $100,000 during fiscal 2000.
Summary Compensation Table
- --------------------------
The following table shows for the fiscal years ended December 31, 2000, 1999 and
1998 the annual compensation paid by Vinings to the Chief Executive Officer and
the four most highly compensated executive officers who earned in excess of
$100,000 during fiscal year 2000.
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------------ -----------------------------------
AWARDS PAYOUTS
------ ------- ----------- -------------- ----------------------- ----------- ---------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
RESTRICTED SECURITIES ALL
OTHER ANNUAL STOCK UNDERLYING LTIP OTHER
SALARY BONUS COMPENSATION AWARD WARRANTS/ PAYOUTS COMPENSATION
OPTIONS
Name Year ($) ($) ($) ($) (#) ($) ($)
- ------------------------ ------ ------- ----------- ----------------- ----------- ------------- ---------- -----------------
Peter D. Anzo (1) 2000 - - - - - - -
President, Chief 1999 - - - - - - -
Executive Officer 1998 - 40,000(2) - - 35,000(3) - -
and Chairman of
the Board
- ----------------------------------------------------------------------------------------------------------------------------
(1) Mr. Anzo did not receive any salary compensation from the Trust for
services rendered in his capacity as President, Chief Executive
Officer and Chairman of the Board of Trustees of the Trust during the
fiscal years ended December 31, 2000, 1999 or 1998.
(2) Represents a bonus in the form of 10,000 common shares that had an
aggregate market value as of July 1, 1998, the date of the grant, of
$40,000.
(3) Represents stock options granted pursuant to the Trust's 1997 Stock
Option and Incentive Plan.
Option Grants in Last Fiscal Year
- ---------------------------------
No stock options were granted during fiscal 2000.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Values
- --------------------------------------------------------------------------
The following table sets forth the common shares acquired and the value realized
upon exercise of stock options during Fiscal 2000 by the Chief Executive Officer
(who is the only executive officer named in the Summary Compensation Table) and
certain information concerning the number and value of unexercised stock
options. There are currently no outstanding SARs.
(a) (b) (c) (d) (e)
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES ACQUIRED VALUE UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/
NAME ON EXERCISE(#) REALIZED($) OPTIONS/WARRANTS AT FY-END(#) WARRANTS AT FY-END (#) (1)
-------------- ---------------- ------------ ------------------------------ ---------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- --------------
Peter D. Anzo - - 40,000 - - (1) -
(1) As of December 31, 2000, Mr. Anzo's stock options were not in the
money because the market value of the Shares was less than or equal to
the exercise price of the options.
Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------
With the resignation of Mr. Watts and Mr. Ross in March 2000, both of whom were
members of the Compensation Committee, and given that there are no executives
other than Mr. Anzo, the President, Chief Executive Officer and Chairman of the
Board of Trustees and Ms. Reed, Vice President, Secretary, Treasurer and a
Trustee, the Trust no longer has a formal Compensation Committee. However, Mr.
Anzo and Ms. Reed will make general recommendations to and review with the Board
of Trustees any compensation that may be granted to anyone other than
themselves.
Effective March 1, 2000, 628,927 common shares of Vinings were purchased in a
privately negotiated transaction by the Officers, one of their affiliates and an
affiliate of one of the Trustees from a limited number of shareholders, which
included three of the Trustees and certain of their affiliates (the "Stock
Transaction"). In connection with the Stock Transaction, the three selling
Trustees--James D. Ross, Martin H. Petersen and Gilbert H. Watts, Jr.--resigned
from the Board of Trustees.
On March 15, 2000, the Board of Trustees voted to waive the ownership
limitations in Vinings' Declaration of Trust with respect to shareholders
acquiring shares in the Stock Transaction, as well as with respect to certain
holders of Preferred Shares.
Compensation of the Board of Trustees
- -------------------------------------
Trustees who are officers of the Trust do not receive compensation for their
services as Trustees. Trustees who are not officers of the Trust (each a
"Non-Employee Trustee") receive compensation for their services as the Board of
Trustees may from time to time determine. During fiscal 2000, the Non-Employee
Trustees did not receive any compensation for their services.
In addition, the Non-Employee Trustees are eligible to participate in the
Trust's 1997 Stock Option and Incentive Plan (the "1997 Incentive Plan"). No
awards were made or granted during fiscal 2000.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Principal and Management Shareholders
- -------------------------------------
The following table sets forth, to the best knowledge and belief of the Trust,
certain information regarding the beneficial ownership of the Trust's Shares as
of March 12, 2000 by (i) each person known by the Trust to be the beneficial
owner of more than 5% of the outstanding common shares, (ii) each of the
Trustees, (iii) each of the executive officers of the Trust and (iv) all of the
Trust's executive officers and Trustees as a group. Unless otherwise indicated,
the address for those listed below is c/o Vinings Investment Properties Trust,
2839 Paces Ferry Road, Suite 1170, Atlanta, GA 30339.
Amount and Nature
Trustees, Executive Officers of Beneficial Percent of
and 5% Shareholders Ownership (1) Class (2)
- ---------------------------- ----------------- ----------
Kinder Gelt, L.P......................................588,235 (3) 34.83%
2700 Delk Road
Suite 100
Marietta, GA 30067
Strico Vinings, LLC ..................................470,588 (3) 29.95%
6065 Roswell Road
Suite 800
Atlanta, GA 30328
Watts Agent, L.P......................................470,588 (3) 29.95%
1006 Trammel Street
Dalton, GA 30720
Lawrence E. Cooper....................................235,294 (3) 17.61%
1150 Lake Hearn Drive
Suite 650
Atlanta, GA 30342
Sylco, L.P............................................117,647 (3) 9.66%
1150 Lake Hearn Drive
Suite 650
Atlanta, GA 30342
VIP Management, LLC...................................100,000 9.09%
Hirsch Investments, LLC............................... 84,500 7.68%
2700 Delk Road
Suite 100
Marietta, GA 30067
Peter D. Anzo.........................................716,640 (4) 61.67%
Stephanie A. Reed..................................... 51,983 (5) 4.62%
John A. Christy....................................... 600 (6) *
Phill D. Greenblatt................................... 61,917 (7) 5.44%
Henry Hirsch..........................................676,274 (8) 39.85%
All Trustees and officers as a group (5 persons)...1,507,414 (9) 82. 78%
- ----------------------
* Less than 1%
(1) Beneficial share ownership is determined pursuant to Rule 13d-3 under
the Securities Exchange Act of 1934, as amended. Accordingly, a
beneficial owner of a security includes any person who, directly or
indirectly, through any contract, arrangement, understanding,
relationship or otherwise has or shares the power to vote such
security or the power to dispose of such security. The amounts set
forth above as beneficially owned include Shares owned or controlled,
if any, by spouses and relatives living in the same home as to which
beneficial ownership may be disclaimed. For purposes of Rule 13d-3, a
person is deemed to be the beneficial owner of a security if such
person has the right to acquire voting or investment power with
respect to such security within 60 days.
(2) Percentages are calculated on the basis of 1,100,487 common shares
outstanding as of March 12, 2000, together with applicable options or
convertible securities of each shareholder exercisable for common
shares within 60 days of March 12, 2001.
(3) The Shares reported may be acquired within 60 days of March 12, 2001
upon conversion of the Preferred Shares into Shares on a one-for-one
basis at the option of the shareholder, or at the election of the
Trust into an amount of cash equal to the fair market value of the
Shares at the time of the conversion.
(4) Mr. Anzo's holdings can be summarized as follows: (a) 555,125 Shares
held directly; (b) 100,000 Shares held indirectly through entities
that he currently controls; (c) 40,000 vested stock options; (d)
10,758 common units of the Operating Partnership held indirectly
through an entity that he controls; and (e) 10,757 common units of the
Operating Partnership held directly. Mr. Anzo's stock options and
common units may be exercised or exchanged, respectively, for common
shares on a one-for-one basis within 60 days of March 12, 2001.
(5) Ms. Reed's holdings can be summarized as follows: (a) 27,718 common
shares held directly; (b) 12,500 vested stock options; and (c) 11,765
Preferred Shares held directly. Ms. Reed's stock options may be
exercised within 60 days of the date of this report. Ms. Reed's
Preferred Shares may be converted into common shares on a one-for-one
basis at her option, or at the election of the Trust, into an amount
of cash equal to the fair market value of the common shares at the
time of the conversion, within 60 days of March 12, 2001.
(6) Mr. Christy disclaims beneficial ownership of the 600 common shares,
as these shares are owned by his wife.
(7) Mr. Greenblatt's holdings can be summarized as follows: (a) 24,005
Shares held directly; (b) 8,500 vested stock options; and (c) 29,412
Preferred Shares held directly. Mr. Greenblatt's stock options may be
exercised within 60 days of the date of this report. Mr. Greenblatt's
Preferred Shares may be converted into common shares on a one-for-one
basis at his option, or at the election of the Trust, into an amount
of cash equal to the fair market value of the common shares at the
time of the conversion, within 60 days of March 12, 2001.
(8) Mr. Hirsch's holdings may be summarized as follows: (a) 60,012 common
shares held directly; (b) 8,500 vested stock options; (b) 588,235
Preferred Shares held indirectly through an entity that he currently
controls; (c) 7,525 common shares held indirectly through an entity
that he currently controls; and (d) 12,002 common shares held in trust
for the benefit of others, of which Mr. Hirsch's wife is a trustee.
Mr. Hirsch may be deemed to beneficially own the 12,002 common shares
by virtue of the fact that his wife is a co-trustee. Mr. Hirsch
expressly disclaims beneficial ownership of the 12,002 common shares
held in trust and the filing of this proxy statement shall not be
deemed an admission that Mr. Hirsch is the beneficial owner of such
common shares. Mr. Hirsch's stock options may be exercised within 60
days of the date of this report. Mr. Hirsch's Preferred Shares may be
converted into common shares on a one-for-one basis at his option, or
at the election of the Trust, into an amount of cash equal to the fair
market value of the common shares at the time of the conversion within
60 days of March 12, 2001.
(9) The Trustees' and officers' holdings, as a group, may be summarized as
follows: (a) 666,860 common shares held directly; (b) 120,127 common
shares held indirectly through currently controlled entities; (c)
69,500 vested stock options; (d) 10,757 common units of the Operating
Partnership held directly; (e) 10,758 common units of the Operating
Partnership held indirectly; (f) 41,177 Preferred Shares held
directly; and (g) 588,235 Preferred Shares held indirectly. The
Trustees' and officers' stock options, common units and Preferred
Units, may be exercisable or exchanged, respectively, for an equal
number of common shares within 60 days of March 12, 2001.
Change of Control
- -----------------
The Trust has experienced a change of control since the beginning of Fiscal
1999. As of January 1, 1999, the Trust had four significant beneficial owners of
its common shares: Financial & Investment Management Group, Ltd. - 28.24%, Peter
D. Anzo - 12.13%, Martin H. Petersen - 8.73% and Clifford K. Watts - 8.18%. As a
result of the transactions described below, Mr. Anzo now is the beneficial owner
of a majority of the Trust's common shares, holding 61.67% of the common shares
as of the date of this report. All information regarding share ownership has
been derived from the most recently filed Schedule 13D for such person.
Effective March 1, 2000, in a private transaction that was completed on or about
March 17, 2000, Mr. Anzo acquired beneficial ownership of an additional 547,982
common shares of the Trust.
Of the 547,982 common shares acquired by Mr. Anzo, 437,225 shares were acquired
directly by Mr. Anzo for an aggregate purchase price of $2,382,876. The
consideration for the purchase of the 437,225 shares was comprised of four
sources: (1) a personal loan to Mr. Anzo from Watts Agent, L.P. dated March 1,
2000 in the amount of $1,285,000, which is secured by a pledge of 566,966 of Mr.
Anzo's shares, evidenced by the Margin Stock Pledge Agreement and the Amendment
to the Margin Stock Pledge Agreement both dated as of March 1, 2000 and which
have been filed as exhibits to Mr. Anzo's Amendment No. 4 to Schedule 13D filed
on May 2, 2000 and which are incorporated herein by reference, (2) a draw on a
home-equity line of credit from Regions Bank in the amount of $500,000 which has
also been filed as an exhibit to Mr. Anzo's Amendment No. 4 to Schedule 13D
filed on May 2, 2000 and which is incorporated herein by reference, (3) an
exchange of certain partnership interests and other economic interests held by
Mr. Anzo in certain real estate investments with one of the sellers of shares
totaling $400,003, and (4) certain personal funds of Mr. Anzo.
100,000 of these shares were acquired for an aggregate purchase price of
$545,000 by VIP. By virtue of his ownership interest in VIP, Mr. Anzo may be
deemed the beneficial owner of the securities over which VIP has voting and
dispositive power.
Mr. Anzo has the right to acquire the remaining 10,757 shares upon conversion of
an equal number of common units in the Operating Partnership. The common units
were acquired for an aggregate purchase price of $58,626. The consideration for
the purchase of the 10,757 common units was the exchange of certain partnership
interests and other economic interests held by Mr. Anzo in certain real estate
investments with the seller of the common units.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Vinings is a party to certain management agreements with VIP, an affiliate of
Mr. Anzo and Ms. Reed, to provide management services to the properties owned by
the Trust. A total of $484,794 in management and data processing fees was
incurred by the Trust during 2000. In addition, during 2000 VIP provided a
number of services to the Trust relating to administrative, acquisition and
capital and asset advisory services. Certain direct costs paid on Vinings'
behalf were reimbursed to VIP and VIP has charged Vinings for certain overhead
charges, including the Trust's pro-rata share of rent and administrative charges
and a pro-rata portion of salaries and benefits for the officers and other
employees providing services to the Trust.
Effective July 1, 2000, Vinings restructured its relationship with VIP who will
administer the Trust for an advisory fee equal to 1 1/2% of gross revenues,
including the revenues from the Joint Venture Properties. The advisory fee is in
lieu of reimbursing VIP for all overhead, salaries and other indirect costs
attributable to Vinings' operations. The total paid to VIP for these services
during 2000 was $328,933. These payments to VIP represent greater than 5% of
VIP's gross revenues for its last full fiscal year. Mr. Anzo may be deemed to
have an indirect material interest in these transactions because he is a
managing member of VIP and currently owns 90% of its membership interests. Ms.
Reed may also be deemed to have an indirect material interest in these
transactions because she is also a managing member of VIP and currently owns the
remaining 10% of VIP's membership interests. The Trust expects that VIP will
continue to provide management and asset advisory services to the Trust in the
current fiscal year.
In connection with Vinings' acquisition of eight multifamily communities in
Mississippi on May 1, 1999, MFI Realty, Inc., ("MFI"), an affiliate of Mr. Anzo
and Ms. Reed, received an acquisition fee from Vinings totaling $400,276, which
represents greater than 5% of MFI's gross revenues for its last full fiscal
year. Mr. Anzo is an officer of MFI and may be deemed to have an indirect
material interest in this transaction as a result of his majority ownership
interest in the parent company that owns MFI. Ms. Reed is also an officer of MFI
and may be deemed to have an indirect material interest in this transaction as a
result of her minority ownership interest in the parent company that owns MFI.
The Trust does not expect to pay any additional fees to MFI in its current
fiscal year unless MFI presents the Trust with another acquisition opportunity.
The Trust believes that all of the above relationships and transactions are fair
and reasonable and are on terms at least as favorable to the Trust as those
which might have been obtained with unrelated third parties. A majority of the
disinterested Trustees at the time approved all of the above transactions.
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULE AND REPORTS ON FORM 8-K
14(a) (1) and (2) Index to Consolidated Financial Statements and Schedule
Page
Report of Independent Public Accountants 28
Report of Independent Public Accountants 29
Consolidated Balance Sheets--As of December 31, 2000 and 1999 30
Consolidated Statements of Operations--For the years ended
December 31, 2000, 1999 and 1998 31
Consolidated Statements of Shareholders' Equity--For the years ended
December 31, 2000, 1999 and 1998 32
Consolidated Statements of Cash Flows--For the years ended
December 31, 2000, 1999 and 1998 33
Notes to Consolidated Financial Statements--For the years ended
December 31, 2000, 1999 and 1998 34
Schedule III - Real Estate and Accumulated Depreciation 46
14(a) (3) Exhibits
EXHIBIT NO. DESCRIPTION
- ----------- ------------
3.1 --- Third Amended and Restated Declaration of Trust of Vinings (incorporated by reference as
Exhibit 3.1 to Vinings' Quarterly Report on Form 10-Q for the quarter ended September 30,
1999, No. 0-13693).
3.2 --- Amended and Restated Bylaws of the Trust (incorporated by reference as Exhibit 3.2 to
Vinings' Registration Statement on Form S-11, No. 2-94776).
3.3 --- Certificate of Designation Classifying and designating a series of Preferred Shares as
Series A Convertible Preferred Shares of the Trust (incorporated by reference as Exhibit 3.3
to Vinings' Quarterly Report on Form 10-Q for the quarter ended March 31, 2000, No. 0-13693).
10.1 --- Vinings Investment Properties Trust 1997 Stock Option and Incentive Plan as approved by the
Shareholders on July 1, 1997 (incorporated by reference as Exhibit A to Vinings' report on
Form Schedule 14A filed on May 28, 1997).
10.2 --- Amended and Restated Agreement of Limited Partnership of Vinings Investment Properties, L.P.
(incorporated by reference as Exhibit 10.1 to Vinings' Annual Report on Form 10-K for the
fiscal year ended December 31, 1997, No. 0-13693).
10.3 --- First Amendment to the Amended and Restated Agreement of Limited Partnership of Vinings
Investment Properties, L.P. (incorporated by reference as Exhibit 10.2 to the Vinings'
Annual Report on Form 10-K for the fiscal year ended December 31, 1997, No. 0-13693).
10.4 --- Second Amendment to the Amended and Restated Agreement of Limited Partnership of Vinings
Investment Properties, L.P. (incorporated by reference as Exhibit 10.3 to the Vinings'
Annual Report on Form 10-K for the fiscal year ended December 31, 1997, No. 0-13693).
10.5 --- Third Amendment to the Amended and Restated Agreement of Limited Partnership of Vinings
Investment Properties, L.P. (incorporated by reference as Exhibit 10.4 on Vinings' Annual
Report on Form 10-K for year ended December 31, 1998 No. 0-13693).
10.6 --- Fourth Amendment to the Amended and Restated Agreement of Limited Partnership of Vinings
Investment Properties, L.P. (incorporated by reference as Exhibit 10.5 on Vinings' Annual
Report on Form 10-K for year ended December 31, 1998, No. 0-13693).
10.7 --- Fifth Amendment to the Amended and Restated Agreement of Limited Partnership of Vinings
Investment Properties, L.P. (incorporated by reference as Exhibit 10.6 on Vinings' Annual
Report on Form 10-K for year ended December 31, 1998, No. 0-13693).
10.8 --- Sixth Amendment to the Amended and Restated Agreement of Limited Partnership of Vinings
Investment Properties, L.P., dated as of April 29, 1999 (incorporated by reference as
Exhibit 4.1 to Vinings' report on Form 8-K filed on May 7, 1999).
10.9 --- Seventh Amendment to the Amended and Restated Agreement of Limited Partnership of Vinings
Investment Properties, L.P. (incorporated by reference as Exhibit 3.2 to Vinings' Quarterly
Report on Form 10-Q for the quarter ended September 30, 2000, No. 0-13693).
10.10 --- Eighth Amendment to the Amended and Restated Agreement of Limited Partnership of Vinings
Investment Properties, L.P. (incorporated by reference as Exhibit 3.2 to Vinings' Quarterly
Report on Form 10-Q for the quarter ended March 31, 2000, No. 0-13693).
10.11 --- Ninth Amendment to the Amended and Restated Agreement of Limited Partnership of Vinings
Investment Properties, L.P. (incorporated by reference as Exhibit 3.3 to Vinings' Quarterly
Report on Form 10-Q for the quarter ended June 30, 2000, No. 0-13693).
10.12 --- Promissory Note dated April 27, 1999 between Vinings Investment Properties, L.P., and Bank
Atlanta (incorporated by reference as Exhibit 10.9 to the Vinings' Annual Report on Form
10-K for the fiscal year ended December 31, 1999, No. 0-13693).
10.13 --- Deed to Secure Debt and Security Agreement dated April 27, 1999 between Vinings Investment
Properties, L.P. and Bank Atlanta (incorporated by reference as Exhibit 10.10 to the
Vinings' Annual Report on Form 10-K for the fiscal year ended December 31, 1999, No.
0-13693).
10.14 --- Form of Management Contract dated May 1, 1999 between certain subsidiaries of Vinings and
VIP Management, LLC for the Mississippi Properties (incorporated by reference as Exhibit
10.11 to the Vinings' Annual Report on Form 10-K for the fiscal year ended December 31,
1999, No. 0-13693).
10.15 --- Management Contract dated January 1, 1999, between Thicket Apartments, L.P. and VIP
Management, LLC (incorporated by reference as Exhibit 10.11 on Vinings' Annual Report on
Form 10-K for the year ended December 31, 1998, No. 0-13693).
10.16 --- Management Contract dated January 1, 1999, between Vinings Communities, L.P. and VIP
Management, LLC (incorporated by reference as Exhibit 10.12 on Vinings' Annual Report on
Form 10-K for the year ended December 31, 1998, No. 0-13693).
10.17 --- Management Contract dated January 1, 1999, between Vinings Investment Properties, L.P. and
VIP Management, LLC (incorporated by reference as Exhibit 10.13 on Vinings' Annual Report on
Form 10-K for the year ended December 31, 1998, No. 0-13693).
10.18 -- Form of Amended and Restated Agreement of Purchase and Sale with attached Revised Schedule
of Material Differences For Properties Acquired May 1, 1999 (incorporated by reference as
Exhibit 10.15 to the Vinings' Annual Report on Form 10-K for the fiscal year ended December
31, 1999, No. 0-13693).
10.19 --- Securities Purchase Agreement, dated as of April 29, 1999, Relating to Series A Convertible
Preferred Units of Vinings Investment Properties, L.P., by and among Vinings Investment
Properties Trust, Vinings Investment Properties, L.P. and the Purchasers named therein
(incorporated by reference as Exhibit 10.1 to Vinings' report on Form 8-K filed on May 7,
1999).
10.20 --- Form of Registration Rights and Lock Up Agreement, dated as of April 29, 1999 (incorporated
by reference as Exhibit 10.2 to Vinings' report on Form 8-K filed on May 7, 1999).
10.21 --- Vinings/CMS Master Partnership, L.P., Agreement of Limited Partnership (incorporated by
reference as Exhibit 10.1 to Vinings' report on Form 8-K/A filed on July 15, 1999).
21.1 --- Subsidiaries of the Trust (filed herewith).
23.1 --- Consent of Independent Public Accountants (filed herewith).
23.2 --- Consent of Independent Public Accountants (filed herewith).
14(b) Reports on Form 8-K
- -------------------------
Vinings did not file any current reports on Form 8-K during the fourth quarter
of 2000.
14(c) Index to Exhibits
- -----------------------
See Item 14(a)(3) above.
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Vinings Investment Properties Trust
By: /s/ Peter D. Anzo
---------------------
Peter D. Anzo
President and
Chief Executive Officer
Dated: March 30, 2001
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Peter D. Anzo Chief Executive Officer, March 30, 2001
- ----------------- President and Trustee
Peter D. Anzo
/s/ Stephanie A. Reed Vice President, Treasurer, March 30, 2001
- --------------------- (Principal Financial and
Stephanie A. Reed Accounting Officer)
/s/ Phill D. Greenblatt Trustee March 30, 2001
- -----------------------
Phill D. Greenblatt
/s/ Henry Hirsch Trustee March 30, 2001
- -----------------
Henry Hirsch
/s/ John A. Christy Trustee March 30, 2001
- -------------------
John A. Christy
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Vinings Investment Properties Trust:
We have audited the accompanying consolidated balance sheets of Vinings
Investment Properties Trust and subsidiaries (the "Trust") as of December 31,
2000 and 1999, and the related consolidated statements of operations,
shareholders' equity, and cash flows for the years ended December 31, 2000 and
1999. These consolidated financial statements and the schedule referred to below
are the responsibility of the Trust's management. Our responsibility is to
express an opinion on these consolidated financial statements and schedule based
on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Vinings Investment
Properties Trust and subsidiaries as of December 31, 2000 and 1999, and the
results of their operations and their cash flows for the years ended December
31, 2000 and 1999 in conformity with accounting principles generally accepted in
the United States.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index to
financial statements is presented for purposes of complying with the Securities
and Exchange Commission's rules and is not part of the basic financial
statements. This schedule has been subjected to the auditing procedures applied
in the audit of the basic financial statements and, in our opinion, fairly
states in all material respects the financial data required to be set forth
therein in relation to the basic financial statements taken as a whole.
HABIF, AROGETI & WYNNE, LLP
/s/ HABIF, AROTETI & WYNNE, LLP
Atlanta, Georgia
March 7, 2001
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Vinings Investment Properties Trust:
We have audited the accompanying consolidated statements of operations,
shareholders' equity and cash flows of Vinings Investment Properties Trust and
subsidiaries (the "Trust") for the year ended December 31, 1998. These
consolidated financial statements and the schedule referred to below are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these consolidated financial statements and schedule based on our
audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the results of operations and cash flows of
Vinings Investment Properties Trust and subsidiaries for the year ended December
31, 1998 in conformity with accounting principles generally accepted in the
United States.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The schedule listed in the index to financial
statements is presented for purposes of complying with the Securities and
Exchange Commission's rules and is not part of the basic financial statements.
This schedule, as it relates to the financial data for the year ended December
31, 1998, has been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
/s/ ARTHUR ANDERSEN LLP
Atlanta, Georgia
February 26, 1999
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31,
2000 1999
------------ -------------
ASSETS
Real estate assets:
Land $ 8,247,900 $ 8,247,900
Buildings and improvements 55,664,805 55,545,257
Furniture, fixtures & equipment 4,154,701 3,968,848
Less: accumulated depreciation (5,593,555) (3,351,811)
------------- -------------
Net real estate assets 62,473,851 64,410,194
Investment in unconsolidated Joint Venture 1,321,522 1,551,974
Cash and cash equivalents 813,975 916,215
Restricted cash 1,892,288 1,816,102
Receivable from Joint Venture 12,141 27,356
Receivables and other assets 286,407 236,900
Deferred financing costs, less accumulated amortization of $183,307 and
$127,656 at December 31, 2000 and December 31, 1999, respectively 82,258 117,908
Deferred leasing costs, less accumulated amortization of $78,071 and
$59,240 at December 31, 2000 and December 31, 1999, respectively 18,834 37,665
------------- --------------
Total assets $ 66,901,276 $ 69,114,314
============= ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgage notes payable $ 54,742,209 $ 55,074,923
Line of credit 1,864,990 1,715,000
Accounts payable and accrued liabilities 1,913,845 1,899,937
Distributions payable to Preferred Unitholders - 464,750
Dividends payable to Preferred Shareholders 464,750 -
------------- --------------
Total liabilities 58,985,794 59,154,610
------------- --------------
Minority interests of unitholders in Operating Partnership:
Preferred partnership interests - 8,730,003
Common partnership interests (171,935) 222,084
------------- --------------
Total minority interests (171,935) 8,952,087
------------- --------------
Shareholders' equity:
Series A convertible preferred shares of beneficial interest, (par value
$.01 per share) 2,050,000 authorized, 1,988,235 and 0 shares issued and
outstanding at December 31, 2000 and December 31, 1999, respectively 8,867,529 -
Common shares of beneficial interest, without par or stated value, 25,000,000
authorized, 1,100,488 and 1,100,493 shares issued and outstanding at
December 31, 2000 and December 31, 1999, respectively - -
Additional paid in capital 3,295,966 3,295,998
Accumulated deficit (4,076,078) (2,288,381)
------------- --------------
Total shareholders' equity 8,087,417 1,007,617
------------- --------------
Total liabilities and shareholders' equity $ 66,901,276 $ 69,114,314
============= ==============
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 31,
2000 1999 1998
-------------- -------------- -------------
REVENUES
Rental revenues $ 11,071,541 $ 8,815,240 $ 3,946,828
Other property revenues 629,870 493,967 153,092
Other income 68,788 31,937 2,083
-------------- -------------- -------------
11,770,199 9,341,144 4,102,003
-------------- -------------- -------------
EXPENSES
Property operating and maintenance 4,540,204 3,613,379 1,652,207
Depreciation and amortization 2,260,575 1,713,513 647,760
Amortization of deferred financing costs 55,651 50,398 30,903
Interest expense 5,165,799 3,832,518 1,329,277
General and administrative 642,208 688,429 598,873
Unusual item, net - - (260,910)
-------------- -------------- -------------
12,664,437 9,898,237 3,998,110
-------------- -------------- -------------
Income (loss) before equity in loss of unconsolidated
Joint Venture and minority interests (894,238) (557,093) 103,893
Equity in loss of unconsolidated Joint Venture (220,452) (137,366) -
-------------- -------------- -------------
Income (loss) before minority interests (1,114,690) (694,459) 103,893
Less Minority interests in Operating Partnership:
Preferred partnership interests (336,758) (903,344) -
Common partnership interests 394,020 288,553 (18,900)
-------------- -------------- -------------
Net income (loss) (1,057,428) (1,309,250) 84,993
-------------- -------------- -------------
Distributions to preferred shareholders 697,125 - -
Accretion to preferred shareholders 33,144 - -
-------------- -------------- -------------
Net income (loss) available to common shareholders' $ (1,787,697) $ (1,309,250) $ 84,993
============== ============== =============
NET INCOME (LOSS) PER SHARE - BASIC $ (1.62) $ (1.19) $ 0.08
============== ============== =============
NET INCOME (LOSS) PER SHARE - DILUTED $ (1.62) $ (1.19) $ 0.08
============== ============== =============
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 1,100,490 1,100,501 1,090,701
============== ============== =============
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED 1,343,036 1,343,047 1,336,391
============== ============== =============
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
For the three years ended December 31, 1998, 1999, and 2000
Series A Shares of Total
Convertible beneficial Accumulated shareholders'
Preferred Shares interest deficit equity
---------------- ------------- ------------- --------------
BALANCE AT JANUARY 1, 1998 $ - $3,332,927 $(1,064,124) $2,268,803
Net Income - - 84,993 84,993
Retirement of shares - (43) - (43)
Adjustment for minority interest of
unitholders in Operating Partnership - (6,781) - (6,781)
Issuance of shares to officers and directors - 80,000 - 80,000
---------------- ------------- ------------- --------------
BALANCE AT DECEMBER 31, 1998 - 3,406,103 (979,131) 2,426,972
Net loss - - (1,309,250) (1,309,250)
Retirement of shares - (63) - (63)
Distributions - (110,042) - (110,042)
---------------- ------------- ------------- --------------
BALANCE AT DECEMBER 31, 1999 - 3,295,998 (2,288,381) 1,007,617
Net loss - - (1,787,697) (1,787,697)
Conversion of preferred units to
preferred shares 8,867,529 - - 8,867,529
Retirement of shares - (32) - (32)
---------------- ------------- ------------- --------------
BALANCE AT DECEMBER 31, 2000 $ 8,867,529 $3,295,966 $(4,076,078) $8,087,417
================ ============= ============= ==============
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the twelve months ended December 31,
2000 1999 1998
------------- ------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(1,057,428) $(1,309,250) $ 84,993
------------- ------------ ----------
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 2,260,575 1,713,513 647,760
Amortization of deferred financing costs 55,651 50,398 30,903
Equity in loss of unconsolidated Joint Venture 220,452 137,366 -
Minority interests in Operating Partnership:
Preferred partnership interests 336,758 903,344 -
Common partnership interests (394,020) (288,553) 18,900
Distributions to common unitholders - (24,255) -
Distributions to preferred unitholders (697,125) (158,591) -
Noncash compensation expense - - 80,000
Changes in assets and liabilities, net of the effect
of real estate assets acquired
Restricted cash (76,186) (331,754) (26,185)
Receivable from Joint Venture 15,215 (27,356) -
Receivables and other assets (49,507) (68,493) (19,511)
Capitalized leasing costs - (11,842) (39,621)
Accounts payable and accrued liabilities 13,908 554,563 (162,627)
------------- ------------ ----------
Total adjustments 1,685,721 2,448,340 529,619
------------- ------------ ----------
Net cash provided by operating activities 628,293 1,139,090 614,612
------------- ------------ ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of real estate assets - (6,066,073) -
Capital expenditures (305,401) (393,772) (146,420)
Investment in unconsolidated Joint Venture - (1,705,100) -
Refundable deposits and acquisition costs - - (612,085)
Distributions from Joint Venture 10,000 15,760 -
------------- ------------ ----------
Net cash used in investing activities (295,401) (8,149,185) (758,505)
------------- ------------ ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred financing costs (20,000) (29,242) -
Net proceeds (repayments) from/to line of credit 149,990 (285,000) 281,896
Principal repayments on mortgage notes payable (332,714) (257,645) (144,501)
Purchase of retired shares (32) (63) (43)
Proceeds from issuance of preferred partnership interests - 8,450,000 -
Distributions to preferred shareholders (232,376) - -
Distributions to shareholders - (110,042) -
------------- ------------ ----------
Net cash provided (used) by financing activities (435,132) 7,768,008 137,352
------------- ------------ ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (102,240) 757,913 (6,541)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 916,215 158,302 164,843
------------- ------------ ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 813,975 $ 916,215 $ 158,302
============= ============ ==========
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000, 1999, and 1998
NOTE 1 - BUSINESS AND ORGANIZATION
Vinings Investment Properties Trust ("Vinings" or the "Trust") was
organized on December 7, 1984 as a mortgage real estate investment
trust ("REIT") whose original plan was to liquidate within
approximately ten years. On February 28, 1996, Vinings Investment
Properties, Inc. completed a tender offer to acquire control of the
Trust in order to rebuild Vinings' assets by expanding into the
multifamily real estate markets through the acquisition of garden style
apartment communities that are leased to middle-income residents.
Effective July 1, 2000, Vinings no longer qualifies as a REIT for
federal income tax purposes and will be taxed as a corporation (See
Note 2).
Vinings currently conducts all of its operations through Vinings
Investment Properties, L.P. (the "Operating Partnership"), a Delaware
limited partnership. As of December 31, 2000, the Trust was the sole 1%
general partner and a 92.72% limited partner in the Operating
Partnership, controlling 80.94% of the common partnership interests and
100% of the preferred partnership interests (See Note 5).
On April 29, 1999, the Operating Partnership offered, in a private
transaction pursuant to a Securities Purchase Agreement (the "Purchase
Agreement"), Series A Convertible Preferred Partnership interests (the
"Preferred Units"), the proceeds from which were used to acquire
thirteen multifamily communities (collectively, the "Portfolio
Properties") from seventeen limited partnerships and limited liability
companies. Eight of the Portfolio Properties were purchased through
subsidiary partnerships of the Operating Partnership. The remaining
Portfolio Properties were purchased through a joint venture structure.
Effective April 1, 2000, 100% of the 1,988,235 Preferred Units were
exchanged for an equivalent number of shares of Series A Convertible
Preferred Shares of the Trust (the "Preferred Shares") with the same
rights, preferences and privileges as the Preferred Units (See Note 5).
Vinings currently owns, through wholly owned subsidiaries, ten
apartment communities totaling 1,520 units and a 75,000 square foot,
single story business park. In addition, Vinings holds a 20% interest
in and is the general partner of an unconsolidated joint venture, which
owns through subsidiary partnerships five additional apartment
communities totaling 968 units (See Note 4). At December 31, 2000, the
average occupancy of Vinings' portfolio was 90%.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
---------------------
The consolidated financial statements have been prepared in accordance
with generally accepted accounting principles and with the instructions
to Form 10-K and Article 10 of Regulation S-X.
The accompanying consolidated financial statements of Vinings include
the consolidated accounts of the Trust and its subsidiaries. All
significant intercompany balances and transactions have been eliminated
in consolidation. Vinings accounts for its investment in the
unconsolidated joint venture using the equity method of accounting. The
term "Vinings" or "Trust" hereinafter refers to Vinings Investment
Properties Trust and its subsidiaries, including the Operating
Partnership.
The minority interests of the common unitholders in the Operating
Partnership (the "Common Units") reflected on the accompanying balance
sheets are calculated based on the common unitholders' minority
interest ownership percentage as compared to the total common
unitholders' interest (18.06% as of December 31, 2000 and 1999)
multiplied by the Operating Partnership's net assets. The minority
interests of the preferred unitholders at December 31, 1999 on the
accompanying balance sheet represents cash contributed of $8,450,000 in
exchange for those units and the accrued liquidation preference of
$0.21 per Preferred Unit ($280,003 at December 31, 1999). The Preferred
Units were exchanged for Preferred Shares effective April 1, 2000 and
are reflected on the accompanying balance sheet as the cash contributed
and the accrued liquidation preference of $0.21 per Preferred Share
($417,529 at December 31, 2000).
The minority interests of the common unitholders in the income or loss
of the Operating Partnership on the accompanying statements of
operations is calculated based on the weighted average minority
interest ownership percentage (approximately 18% for all periods
presented) multiplied by income (loss) before minority interests after
subtracting income allocated to the preferred partnership interests.
The minority interests of the preferred unitholders on the statements
of operations for the twelve months ended December 31, 1999 and 2000
($903,344 and $336,758 respectively) represents the accrued preferred
11% return on the Preferred Units and the accrued pro rata liquidation
preference of $0.21 per Preferred Unit.
Income Taxes
------------
Prior to June 30, 2000, Vinings had elected to be taxed as a REIT under
the Internal Revenue Code of 1986, as amended (the "Code"). As a
result, Vinings was generally not subject to federal income taxation on
that portion of its income that qualified as REIT taxable income to the
extent that Vinings distributed at least 95% of its taxable income to
its shareholders and satisfied certain other requirements. Effective
July 1, 2000, Vinings no longer qualifies as a REIT for federal income
tax purposes and will be taxed as a corporation. The Trust however is
not currently generating taxable income and, accordingly, no provisions
for federal income taxes and deferred income taxes have been included
in the accompanying consolidated financial statements.
Cash and Cash Equivalents
-------------------------
Vinings considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.
Restricted Cash
---------------
Restricted cash consists of real estate tax, insurance and replacement
reserve escrows held by mortgagees, which are funded monthly from
property operations and released solely for the purpose for which they
were established. Restricted cash also includes security deposits
collected and held on behalf of the residents and tenants.
Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make certain
estimates and assumptions that affect the reported amounts of assets
and liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Real Estate Assets
------------------
Real estate assets are stated at depreciated cost less reductions for
impairment, if any. In identifying potential impairment, management
considers such factors as declines in a property's operating
performance or market value, a change in use, or adverse changes in
general market conditions. In determining whether an asset is impaired,
management estimates the future cash flows expected to be generated
from the asset's use and its eventual disposition. If the sum of these
estimated future cash flows on an undiscounted basis is less than the
asset's carrying cost, the asset is written down to its fair value. In
management's opinion, there has been no impairment of Vinings' real
estate assets as of December 31, 2000.
Ordinary repairs and maintenance are expensed as incurred. Major
improvements and replacements are capitalized and depreciated over
their estimated useful lives when they extend the useful life, increase
capacity or improve efficiency of the related asset. Depreciation is
computed on a straight-line basis over the useful lives of the real
estate assets (buildings and improvements, 5-40 years; furniture,
fixtures and equipment, 3-10 years; and tenant improvements, generally
over the life of the related lease).
Revenue Recognition
-------------------
All leases are classified as operating leases and rental income is
recognized when earned, which materially approximates revenue
recognition on a straight-line basis.
Deferred Financing Costs and Amortization
-----------------------------------------
Deferred financing costs include fees and costs incurred to obtain
financing and are capitalized and amortized over the term of the
related debt.
Net Income (Loss) Per Share
---------------------------
The following is a reconciliation of net income (loss) available to the
common shareholders and the weighted average shares used in Vinings'
basic and diluted net income (loss) per share computations:
DECEMBER 31,
2000 1999 1998
----------------------------------------------
Net income (loss) - basic $(1,787,697) $(1,309,250) $ 84,993
Minority interests in Operating Partnership:
Preferred partnership interests - - -
Common partnership interests (394,020) (288,553) 18,900
----------------------------------------------
Total minority interest (394,020) (288,553) 18,900
Net income (loss) - diluted $(2,181,717) $(1,597,803) $103,893
==============================================
Weighted average shares - basic 1,100,490 1,100,501 1,090,701
Dilutive Securities
Weighted average Common Units 242,546 242,546 242,546
Weighted average Preferred Units/Shares - - -
Share options - - 3,144
----------------------------------------------
Weighted average shares - diluted 1,343,036 1,343,047 1,336,391
==============================================
Both common units and Preferred Units in the Operating Partnership held
by the minority unitholders and Preferred Shares of the Trust are,
subject to certain conditions, redeemable for common shares of
beneficial interest of the Trust ("Shares") on a one-for-one basis, or
for cash, at the option of the Trust. For the twelve months ended
December 31, 1998, 1999 and 2000, options to purchase 27,500 shares,
107,750 shares and 102,750 shares, respectively, were excluded as the
impact of such options was antidilutive. For the twelve months ended
December 31, 1999 Preferred Units totaling 1,988,235 and for the twelve
months ended December 31, 2000 Preferred Shares totaling 1,988,235 were
also excluded as the impact of such units and shares, respectively, was
antidilutive.
Recent Accounting Pronouncement
-------------------------------
On June 15, 1998, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities" (FAS 133). FAS 133,
as amended by FAS 137, "Deferral of the Effective Date of FAS 133," is
effective for all fiscal quarters of all fiscal years beginning after
June 15, 2000. FAS 133 requires that all derivative instruments be
recorded on the balance sheet at their fair value. Changes in the fair
value of derivatives are recorded each period in current earnings or
other comprehensive income, depending on whether a derivative is
designated as part of a hedge transaction and, if it is the type of
hedge transaction. The adoption of FAS 133 will not have a significant
effect on the Company's results of operations or its financial
position.
On December 3, 1999, The Securities and Exchange Commission (SEC)
issued Staff Accounting Bulletin No. 101 (SAB 101), Revenue
Recognition, which provides guidance on the recognition, presentation,
and disclosure of revenue in financial statements. SAB 101 is required
to be implemented in the fourth fiscal quarter of 2000. SAB 101 will
not have a significant effect on the Company's results of operations or
its financial position.
Reclassifications
-----------------
Certain 1999 and 1998 financial statement amounts have been
reclassified to conform to the current year presentation.
NOTE 3 - REAL ESTATE ASSETS
On May 1, 1999, Vinings, through its subsidiaries, completed the
acquisition of the Portfolio Properties from seventeen limited
partnerships and limited liability companies. Eight of the Portfolio
Properties (the "Mississippi Properties") were purchased through
subsidiary partnerships of the Operating Partnership. The remaining
Portfolio Properties (the "Joint Venture Properties") were purchased
through a joint venture structure. (See Note 4.)
The Mississippi Properties, totaling 1,064 units, were purchased by
eight individual partnerships in each of which Vinings Holdings, Inc.,
a wholly owned subsidiary of the Trust, owns a .1% general partnership
interest and the Operating Partnership owns a 99.9% limited partnership
interest. The aggregate purchase price for the Mississippi Properties
was $47,665,396 (excluding closing costs), which included the
assumption of debt of approximately $41,693,000 with the balance paid
in cash. The acquisition was funded by the issuance of the Preferred
Units, which effective April 1, 2000 were exchanged for Preferred
Shares (See Note 5). A total of approximately $749,200 in escrows held
by the mortgagees was also purchased.
In addition, Vinings owns, also through subsidiary partnerships of the
Operating Partnership, two additional multifamily communities in the
metropolitan Atlanta area with a total of 1,520 units in ten
communities, as well as a 75,000 square foot business center. All of
the multifamily communities are encumbered by fixed rate mortgage
financing and the business center is security for the line of credit.
NOTE 4 - INVESTMENT IN UNCONSOLIDATED JOINT VENTURE
On May 1, 1999, Vinings purchased, through a joint venture structure,
five apartment communities, totaling 968 units (the "Joint Venture
Properties"). The Joint Venture Properties were purchased by nine
individual partnerships in each of which Vinings Holdings, Inc., a
wholly owned subsidiary of the Trust, owns a .1% general partnership
interest and Vinings/CMS Master Partnership, L.P. (collectively, the
"Joint Venture"), a Delaware limited partnership, owns a 99.9% limited
partnership interest. The Operating Partnership has a .1% general
partner interest and a 19.98% limited partner interest in the Joint
Venture, for which it paid $1,705,100. This investment was funded by
the issuance of the Preferred Units, which effective April 1, 2000 were
exchanged for Preferred Shares (See Note 5). The remaining limited
partnership interests in the Joint Venture are held by an unaffiliated
third party. The Joint Venture was formed on March 22, 1999, primarily
to acquire the limited partner interest in limited partnerships that
acquire, operate, manage, hold and sell certain real property,
specifically the Joint Venture Properties. The aggregate purchase price
paid by the property partnerships for the Joint Venture Properties was
$46,634,603 (excluding closing costs), which included the assumption of
approximately $39,265,000 of debt with the balance paid in cash. A
total of approximately $716,400 in escrows held by the mortgagees was
also purchased.
Vinings accounts for its investment in the Joint Venture using the
equity method of accounting. The following is a summary of the results
of operations of the Joint Venture and Vinings' share of the equity in
the loss from the Joint Venture for the eight months ended December 31,
1999 and twelve months ended December 31, 2000:
FOR THE TWELVE FOR THE EIGHT
MONTHS ENDED MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2000 1999
-------------- --------------
Revenues $6,755,523 $ 4,642,957
Expenses:
Property operating and maintenance 2,846,624 1,971,574
General and administrative 43,930 55,894
Depreciation and amortization 1,519,356 995,872
Interest expense 3,447,875 2,306,447
-------------- --------------
Total Expenses 7,857,785 5,329,787
-------------- --------------
Net loss (1,102,262) (686,830)
Vinings' equity percentage 20% 20%
-------------- --------------
Vinings' equity in loss of unconsolidated Joint Venture (220,452) $ (137,366)
============== ==============
Distributions received by Vinings from Joint Venture - $ 15,760
============== ==============
Cash flows provided by operating activities $ 294,595 $ 441,635
============= ==============
Cash flows used in investing activities $ (177,725) $(8,251,050)
============= ==============
Cash flows used in financing activities $ (247,874) $ 8,315,729
============= ==============
The following summarizes the balance sheet of the Joint Venture as of
December 31:
2000 1999
------------- -------------
Real estates assets, net of accumulated depreciation $44,876,694 $46,215,888
Cash and other assets 1,936,928 2,066,983
------------- -------------
Total assets $46,813,622 $48,282,871
============= =============
Mortgage notes payable $38,928,824 $39,136,338
Other liabilities 1,277,590 1,387,062
------------- -------------
Total liabilities 40,206,414 40,523,400
============= =============
Capital - Vinings 1,321,522 1,551,974
Capital - Other 5,285,686 6,207,497
------------- -------------
Total capital 6,607,208 7,759,471
------------- -------------
Total liabilities and capital $46,813,622 $48,282,871
============= =============
Mortgage notes payable held by the Joint Venture are non-recourse fixed
rate notes secured by the individual properties. All of the notes
except one are insured by the U.S. Department of Housing and Urban
Development ("HUD") and, therefore, distributions from the properties
are subject to "surplus cash" as defined by HUD. The maturity dates of
the notes payable range from June 2007 to November 2037 and interest
rates range from 8.00% to 8.75%.
NOTE 5 - SHAREHOLDERS' EQUITY AND PREFERRED PARTNERSHIP INTERESTS
On April 29, 1999, the Operating Partnership offered in a private
transaction Preferred Units pursuant to the Purchase Agreement. A total
of 1,988,235 Preferred Units were issued for an aggregate purchase
price of $8,450,000. The Operating Partnership used the proceeds of the
sales of the Preferred Units to pay the cash consideration for the
Operating Partnership's interests in the property partnerships that
acquired the Mississippi Properties, and its interest in the Joint
Venture. (See Notes 3 and 4.)
Effective April 1, 2000, Vinings exchanged all of the Preferred Units
for Preferred Shares, which have substantially the same rights,
preferences and privileges as the Preferred Units. The holders of
Preferred Shares are entitled to receive cumulative preferential cash
distributions at the per annum rate of $0.4675 per Preferred Share.
Upon the occurrence of certain triggering events, the holders of
Preferred Shares are entitled to receive, in addition to an amount
equal to any accumulated and unpaid distributions on such holder's
Preferred Shares, a liquidation preference of $4.46 per Preferred
Share.
Under certain circumstances, the holders of Preferred Shares may
convert any or all of such Preferred Shares into common shares. In lieu
of converting Preferred Shares into common shares, the Trust, in its
sole discretion, may satisfy its conversion obligations through certain
cash payments, as further set forth in the Declaration of Trust.
Generally, the holders of Preferred Shares do not have the right to
vote on any matter on which any of the holders of common shares may
vote. The holders of Preferred Shares do, however, have the right to
vote as a separate class of shareholders on certain transactions
including, without limitation, certain authorizations and issuances of
preferred shares designated as ranking senior to the Preferred Shares,
certain amendments to the Declaration of Trust, and certain sales or
other dispositions of assets of the Trust or the Operating Partnership,
certain mergers or consolidations of the Trust or the Operating
Partnership, and transactions that result in the liquidation of the
Trust or the Operating Partnership.
As of December 31, 2000, a total of 1,988,235 Preferred Shares were
outstanding. In addition, as of December 31, 2000 a total of $417,529
had been accrued as a liquidation preference on the Preferred Shares.
NOTE 6 - NOTES PAYABLE
Mortgage Notes Payable
----------------------
Mortgage notes payable were secured by the following apartment
communities at December 31, 2000 and December 31, 1999, as follows:
FIXED INTEREST
RATE AS OF PRINCIPAL BALANCE AS OF
MATURITY 12/31/99 12/31/00 12/31/99
--------------------------------------------------------------------------
Cottonwood 10/01/2036 8.875% $ 4,666,546 $ 4,683,888
Delta Bluff 08/01/2036 9.25 % 6,182,456 6,203,591
Foxgate I 06/01/2037 8.50 % 6,573,142 6,598,549
Hampton House 08/01/2037 8.50 % 5,148,819 5,169,167
Heritage Place 10/01/2036 8.75 % 3,129,845 3,141,865
Northwood 06/01/2034 8.75 % 4,461,640 4,482,862
River Pointe 01/01/2037 8.625% 5,958,353 5,981,475
Trace Ridge 07/01/2036 8.50 % 5,307,867 5,330,125
The Thicket 07/01/2003 9.04 % 7,132,347 7,200,487
Windrush 07/01/2024 7.50 % 6,181,194 6,282,914
------------- ------------
Total $54,742,209 $55,074,923
============= ============
All of the notes except with respect to The Thicket are insured by HUD
and, therefore, distributions from the properties are subject to
"surplus cash" as defined by HUD.
Scheduled maturities of the mortgage notes payable as of December 31,
2000 are as follows:
2001 $ 361,792
2002 393,425
2003 7,314,761
2004 367,596
2005 399,133
Thereafter 45,905,502
--------------
Total $54,742,209
==============
Line of Credit
- --------------
On April 27, 1999 Vinings obtained a line of credit in the amount of
$2,000,000 from a financial institution. The line of credit is secured
by Peachtree Business Center. The interest rate on the line of credit
is one percent over prime as posted in The Wall Street Journal, which
was 9.00% at December 31, 2000. The principal balance of the line of
credit as of December 31, 2000 and December 31, 1999 was $1,864,990 and
$1,715,000, respectively. The line of credit expired on April 27, 2000
and was renewed until April 30, 2001. Vinings has received a commitment
to renew the line of credit for another year.
NOTE 7 - RELATED PARTY TRANSACTIONS
On January 1, 1999, Vinings entered into management agreements with VIP
Management, LLC ("VIP"), an affiliate of the officers, who are also
Trustees of Vinings, to provide property management services for a fee
equal to varying percentages ranging from three and one half to six
percent of gross revenues, plus a fee for data processing. Effective
January 1, 2000, the management fee percentages were reduced to three
and one half percent on all of the multifamily communities. Prior to
January 1, 1999, Vinings had entered into management agreements with
Vinings Properties, Inc., also an affiliate of the officers of Vinings,
to provide property management services on substantially the same terms
as the current agreements.
In addition, as a commitment to the rebuilding of Vinings, prior to
1998 The Vinings Group, Inc., the parent corporation of Vinings
Properties, Inc. (collectively with VIP, "The Vinings Group"), provided
numerous services at no cost to Vinings relating to administration,
acquisition, and capital and asset advisory services. Certain direct
costs paid on Vinings' behalf were reimbursed to The Vinings Group.
Beginning January 1, 1998, The Vinings Group has charged Vinings for
certain overhead charges. Beginning August 1, 1999, the Trust has also
paid for its pro-rata share of rent, administrative and other overhead
charges, which includes reimbursing The Vinings Group for a pro-rata
portion of salaries and benefits for the officers and other employees
providing services to Vinings. Effective July 1, 2000, Vinings
restructured its relationship with VIP who will administer the Trust
for an advisory fee equal to 1 1/2% of gross revenues, including the
revenues from the Joint Venture Properties. The advisory fee is in lieu
of reimbursing VIP for all overhead, salaries and other indirect costs
attributable to the Trust's operations.
The following table reflects payments made to The Vinings Group:
Twelve months ended
2000 1999 1998
------------ ----------- ------------
Vinings
Management fees $419,130 $402,551 $188,032
Data processing fees 65,664 52,896 27,360
Overhead reimbursements 189,219 292,147 150,000
Advisory fee 139,714 - -
------------ ----------- ------------
Total $813,727 $747,594 $365,392
============ =========== ============
Joint Venture
Management fees $144,131 $197,539 $ -
Data processing fees 58,080 38,720 -
------------ ----------- ------------
Total $202,211 $236,259 $ -
============ =========== ============
On February 4, 1999, one of the independent Trustees purchased the
Trust's line of credit, which expired on December 28, 1998 and Vinings
paid interest to the Trustee monthly at the annual rate of 8.50%
through April 27, 1999, at which time the Trustee was repaid in full.
In connection with the acquisition of the Portfolio Properties on May
1, 1999, MFI Realty, Inc., an affiliate of the officers of Vinings,
received fees totaling $400,276 of which $167,103 was paid by the
Operating Partnership and $233,173 was paid by the Joint Venture.
Effective March 1, 2000, 628,927 shares of Vinings were purchased in a
privately negotiated transaction by the Officers, one of their
affiliates and an affiliate of one of the Trustees from a limited
number of shareholders, which included three of the Trustees and
certain of their affiliates (the "Stock Transaction"). In connection
with the Stock Transaction, the three selling Trustees--James D. Ross,
Martin H. Petersen and Gilbert H. Watts, Jr.--resigned from the Board
of Trustees.
On March 15, 2000, the Board of Trustees voted to waive the ownership
limitations in Vinings' Declaration of Trust with respect to
shareholders acquiring shares in the Stock Transaction, as well as with
respect to certain holders of Preferred Shares.
NOTE 8 - DISTRIBUTIONS
Vinings has not declared or paid any common dividends during the twelve
months ended December 31, 2000. Vinings declared two common dividends
of five cents per share each, which were paid September 1, 1999 and
December 8, 1999, respectively to shareholders of record on August 16,
1999 and November 26, 1999, respectively. For federal income tax
purposes these distributions represented a return of capital.
Effective April 1, 2000, Vinings exchanged all of the Preferred Units
for Preferred Shares. (See Note 5). The holders of Preferred Shares are
entitled to receive cumulative preferential cash distributions at the
per annum rate of $0.4675 per Preferred Share. For the twelve months
ended December 31, 2000, Vinings paid distributions totaling $697,126
to Preferred Shareholders.
NOTE 9 - LEASING ACTIVITY
The following is a schedule of future minimum rents due under operating
leases that have initial or remaining noncancellable lease terms in
excess of one year as of December 31, 2000, at Peachtree:
2001 $439,389
2002 218,124
2003 45,018
-------------
Total $702,531
=============
One tenant generated 48% of Peachtree's revenues for the period ended
December 31, 2000. The same tenant accounts for 58% of the future
minimum lease payments.
NOTE 10 - CONTINGENCIES
Vinings is, from time to time, subject to various claims that arise in
the ordinary course of business. These matters are generally covered by
insurance. While the resolution of these matters cannot be predicted
with certainty, management believes that the final outcome of such
matters will not have a material adverse effect on the financial
position or results of operations of Vinings.
NOTE 11 - SUPPLEMENTAL CASH FLOW INFORMATION
Vinings paid interest of $4,931,050, $3,667,542 and $1,299,005 during
2000, 1999 and 1998, respectively. In connection with the acquisition
of the Mississippi Properties, Vinings assumed mortgage indebtedness
totaling $41,692,503 and related cash escrow accounts.
NOTE 12 - DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
Based on interest rates and other pertinent information available to
Vinings as of December 31, 2000 and December 31, 1999, Vinings
estimates that the carrying value of cash and cash equivalents, the
mortgage notes payable, the line of credit, and other liabilities
approximate their fair values when compared to instruments of similar
type, terms and maturity.
Disclosure about fair value of financial instruments is based on
pertinent information available to management as of December 31, 2000
and December 31, 1999. Although management is not aware of any factors
that would significantly affect its estimated fair value amounts, such
amounts have not been comprehensively revalued for purposes of these
financial statements since December 31, 2000.
NOTE 13 - 1997 STOCK OPTION AND INCENTIVE PLAN
Vinings' 1997 Stock Option and Incentive Plan (the "Plan") provides
incentives to officers, employees, Trustees, and other key persons
including the grant of share options, share appreciation rights,
restricted and unrestricted share awards, performance share awards, and
dividend equivalent rights. Under the Plan, the maximum number of
shares that may be reserved and available for issuance is 10% of the
total number of outstanding shares at any time plus 10% of the number
of Units outstanding at any time that are subject to redemption rights.
As of December 31, 2000, the total number of shares authorized for
issuance under the Plan was 134,305. Options granted under the Plan
expire ten years from the date of grant.
During 1998 and 1997, Vinings granted non-qualified share options to
the officers, Trustees and certain key persons. The options became
fully exercisable one year after the date of the grant. A total of
26,000 options were granted in 1997, which have an exercise price of
$5.00 per share as compared to a fair value of $4.56 per share on the
date of the grant. Of the options granted in 1998, 75,250 have an
exercise price of $4.00 per share as compared to a fair value of $3.63
on the date of the grant and 1,500 have an exercise price of $4.75 per
share, which was equal to the fair value on the date of grant. There
were no options granted during 1999 or 2000.
On July 1, 1998, Vinings awarded 20,000 shares of restricted stock to
the officers and certain Trustees (the "Restricted Stock"),
representing a total value of $80,000 (based on the fair market value
of a share of the Trust on the award date) which was reflected in
compensation expense and shareholders' equity in 1998. The Restricted
Stock was awarded as compensation for services to the Trust provided by
such officers and Trustees as well as by The Vinings Group.
The Trust accounts for share options issued under the Plan in
accordance with APB Opinion No. 25, "Accounting for Stock Issued to
Employees," under which no compensation cost has been recognized since
all options have been granted with an exercise price equal to or above
the fair value of the Trust's shares on the date of grant.
In accordance with SFAS No. 123 "Accounting for Stock-Based
Compensation," the Trust has estimated the fair value of the options
using a binomial option pricing model with the following weighted
average assumptions:
2000 1999 1998
-------- ------- ------
Risk free rate 5.78% 5.36% 5.50%
Expected life 5 years 5 years 5 years
Expected volatility 30% 30% 30%
Expected dividend yield 3.6% 3.6% 3.6%
Using these assumptions, the estimated fair values of the options
granted were $0, $0, and $87,112 for 2000, 1999 and 1998, respectively,
which would be included in compensation expense over the life of the
vesting period. Accordingly, had Vinings accounted for the Plan under
SFAS 123, Vinings' pro forma net income (loss) and net income (loss)
per share for the year ended December 31, 2000, 1999 and 1998 would
have been as follows:
2000 1999 1998
------------- ------------- ---------
Net income:
As reported ($1,787,697) ($1,309,250) $84,993
============= ============= =========
Pro forma ($1,787,697) ($1,341,004) $29,799
============= ============= =========
Net income per share:
As reported ($1.62) ($1.19) $0.08
============= ============= =========
Pro forma ($1.62) ($1.22) $0.03
============= == ============ =========
The pro forma annual compensation cost included in determining pro
forma net income may not be representative of future pro forma annual
compensation cost since the estimated fair value of stock options is
included in compensation expense over the vesting period, and
additional stock options may be granted in future years.
A summary of stock option activity under the Plan is presented in the
following table:
2000 1999 1998
----------------------------- ----------- ------------------ ----------- ------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
------ -------------- ------ ------------- -------- ----------
Options outstanding,
Beginning of year 107,750 $4.25 108,750 $4.25 26,000 $5.00
Granted - - - - 82,750 $4.01
----------- ------------------ ----------- ------------------ ----------- ------------------
Options outstanding,
End of year 102,750 $4.26 107,750 $4.25 108,750 $4.25
=========== ================== =========== ================== =========== ==================
Options exercisable,
End of year 102,750 $4.26 107,750 $4.25 26,000 $5.00
=========== ================== ============================== =========== ==================
Weighted average per
Share value of
Options granted - - $1.05
================== ================== ==================
Options outstanding:
Exercise price range $4.00-$5.00 $4.00-$5.00 $4.00-$5.00
================== ================== ==================
Weighted average
Remaining life 7.11 8.11 9.11
================== ================== ==================
NOTE 14 - UNUSUAL ITEM
In August 1997, Vinings, through the Operating Partnership, began
contract negotiations for the acquisition of a 2,365-unit portfolio of
16 multifamily properties. The sellers, which were 16 individual
partnerships (the "Sellers"), were to contribute the properties to the
Operating Partnership in exchange for a combination of Units and/or
cash and the assumption of existing mortgage indebtedness (the
"Portfolio Transaction"). The officers of Vinings spent substantial
amounts of time and the Trust spent substantial amounts of money in its
due diligence on the properties and in contract negotiations
specifically for this portfolio. Vinings believes that it secured a
binding commitment from the Sellers for the Portfolio Transaction.
Conditional commitments for equity financing were obtained and Vinings
was prepared to close on the transaction in early 1998. Within thirty
days of closing, the general partner of the Sellers terminated the
contract for reasons Vinings believes to be pretextual, in breach of
the contract and not in the best interests of the partners of the
selling partnerships or the shareholders of the Trust.
On February 3, 1998, Vinings commenced an action against the Sellers,
their general partners and a related property management company
seeking specific enforcement of the contract and damages for the
defendant's willful breach of contract, lack of good faith negotiation
and tortious interference in connection with the breach and termination
of the contract. In a related case, the Sellers filed an action on
January 29, 1998 seeking a declaratory judgement that the contract was
not valid, binding and enforceable against them. Because of the
uncertainty of the legal action at December 31, 1997, Vinings expensed
as unrecoverable due diligence, contract negotiation and other
acquisition costs totaling $532,185.
On June 3, 1998, a settlement was agreed to between the parties
pursuant to a Settlement Agreement and Mutual Release, the terms of
which are confidential. All pending claims have been dismissed. Amounts
received under the Settlement Agreement and Mutual Release, net of
legal fees incurred in connection with the litigation, totaled
$260,910, which has been shown as Unusual item, net on the Statement of
Operations for 1998.
VININGS INVESTMENT PROPERTIES TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1999
Initial Cost to Trust Improvements
--------------------------- Capitalized
Buildings and Subsequent to
Description Encumbrance Land Improvements Acquisition
- -------------------------------------------------------------------------------------------
Cottonwood Apartments $ 4,666,546 $ 605,300 $ 4,401,715 $ 42,214
Delta Bluff Apartments 6,182,456 765,700 6,519,178 36,390
Foxgate Apartments 6,573,143 805,700 6,872,119 25,000
Hampton House Apartments 5,148,819 645,200 5,334,988 34,680
Heritage Place Apartments 3,129,844 404,100 2,971,124 27,467
Northwood Place Apartments 4,461,640 685,700 5,171,264 36,437
River Pointe Apartments 5,958,353 765,700 6,516,567 56,283
Trace Ridge Apartments 5,307,867 686,000 4,908,464 17,404
The Thicket Apartments 7,132,347 1,070,500 7,590,400 354,577
Windrush Apartments 6,181,194 1,414,000 6,141,000 317,751
Peachtree Business Center 1,864,990 400,000 1,300,000 1,144,484
---------------------------------------------------------
$ 56,607,199 $ 8,247,900 $57,726,819 $ 2,092,687
=========================================================
Gross amounts at which
carried at close of period Life on
-------------------------------------------------------- which Date of
Buildings and Accumulated Depreciation Date Original
Description Land Improvements Total Depreciation is Computed Acquired Construction
- ------------------------------------------------------------------------------------------------------------------------------------
Cottonwood Apartments $ 605,300 $ 4,443,929 $ 5,049,229 $ 277,795 5-40 Years 5/99 1997
Delta Bluff Apartments 765,700 6,555,568 7,321,268 389,078 5-40 Years 5/99 1996
Foxgate Apartments 805,700 6,897,119 7,702,819 408,181 5-40 Years 5/99 1997
Hampton House Apartments 645,200 5,369,668 6,014,868 322,177 5-40 Years 5/99 1997
Heritage Place Apartments 404,100 2,998,591 3,402,691 187,227 5-40 Years 5/99 1996
Northwood Place Apartments 685,700 5,207,701 5,893,401 320,116 5-40 Years 5/99 1994
River Pointe Apartments 765,700 6,572,850 7,338,550 392,072 5-40 Years 5/99 1996
Trace Ridge Apartments 686,000 4,925,868 5,611,868 306,099 5-40 Years 5/99 1996
The Thicket Apartments 1,070,500 7,944,977 9,015,477 1,621,586 5-40 Years 6/96 1989
Windrush Apartments 1,414,000 6,458,751 7,872,751 625,834 5-40 Years 12/97 1983
Peachtree Business Center 400,000 2,444,484 2,844,484 743,390 5-40 Years 4/90 1982
---------------------------------------------------------------------------------------------------
$8,247,900 $59,819,506 $68,067,406 $5,593,555
=========================================================
<FN>
The accompanying notes are an integral part of this schedule.
</FN>
VININGS INVESTMENT PROPERTIES TRUST
NOTES TO SCHEDULE III
December 31, 2000
(A) The Peachtree investment was acquired through a deed in-lieu of
foreclosure of an original mortgage note investment. Peachtree is
collateral for a $2,000,000 line of credit held by the Trust. At
December 31, 2000, $1,864,990 was outstanding on the line.
(B) The Thicket Apartments was acquired on June 28, 1996 for a purchase
price of $8,650,000. It was financed by a mortgage loan in the
original amount of $7,392,000 and borrowings from the Trust's line of
credit, which is secured by Peachtree.
(C) Windrush Apartments was acquired on December 19, 1997, for a purchase
price of $7,555,000 consisting of the assumption of an existing
mortgage loan in the amount of $6,464,898 and other liabilities and
the issuance of 224,330 limited partnership units in the Operating
Partnership.
(D) The Mississippi Properties were acquired on May 1, 1999, for an
aggregate purchase price $47,665,396 (excluding closing costs), which
included the assumption of debt of approximately $41,693,000 and the
balance being paid in cash, which was funded by the issuance of the
Preferred Units.
(E) Gross capitalized costs of real estate assets are summarized as
follows:
-----------------------------------------------------------
2000 1999 1998
-----------------------------------------------------------
Balance at beginning of period $67,762,005 $19,309,412 $19,162,992
----------------- ---------------- -----------------
Additions during period:
Additions - 48,058,819 -
Improvements 305,401 393,774 146,420
----------------- ---------------- -----------------
305,401 48,452,593 146,420
----------------- ---------------- -----------------
Balance at close of period $68,067,406 $67,762,005 $19,309,412
================= ================ =================
(F) Accumulated depreciation on real estate assets is as follows:
--------------- ----- -------------- ------ --------------
2000 1999 1998
--------------- ----- -------------- ------ --------------
Balance at beginning of period $3,351,811 $1,664,678 $ 1,036,311
Additions during period 2,241,744 1,687,133 628,367
--------------- ---------------- ----------------
Balance at close of period $5,593,555 $3,351,811 $1,664,678
================= ================ ================
Index to Exhibits
- -----------------
EXHIBIT NO. DESCRIPTION
- ---------- -----------------
3.1 --- Third Amended and Restated Declaration of Trust of Vinings (incorporated by reference as
Exhibit 3.1 to Vinings' Quarterly Report on Form 10-Q for the quarter ended September 30,
1999, No. 0-13693).
3.2 --- Amended and Restated Bylaws of the Trust (incorporated by reference as Exhibit 3.2 to
Vinings' Registration Statement on Form S-11, No. 2-94776).
3.3 --- Certificate of Designation Classifying and designating a series of Preferred Shares as
Series A Convertible Preferred Shares of the Trust (incorporated by reference as Exhibit 3.3
to Vinings' Quarterly Report on Form 10-Q for the quarter ended March 31, 2000, No. 0-13693).
10.1 --- Vinings Investment Properties Trust 1997 Stock Option and Incentive Plan as approved by the
Shareholders on July 1, 1997 (incorporated by reference as Exhibit A to Vinings' report on
Form Schedule 14A filed on May 28, 1997).
10.2 --- Amended and Restated Agreement of Limited Partnership of Vinings Investment Properties, L.P.
(incorporated by reference as Exhibit 10.1 to Vinings' Annual Report on Form 10-K for the
fiscal year ended December 31, 1997, No. 0-13693).
10.3 --- First Amendment to the Amended and Restated Agreement of Limited Partnership of Vinings
Investment Properties, L.P. (incorporated by reference as Exhibit 10.2 to the Vinings'
Annual Report on Form 10-K for the fiscal year ended December 31, 1997, No. 0-13693).
10.4 --- Second Amendment to the Amended and Restated Agreement of Limited Partnership of Vinings
Investment Properties, L.P. (incorporated by reference as Exhibit 10.3 to the Vinings'
Annual Report on Form 10-K for the fiscal year ended December 31, 1997, No. 0-13693).
10.5 --- Third Amendment to the Amended and Restated Agreement of Limited Partnership of Vinings
Investment Properties, L.P. (incorporated by reference as Exhibit 10.4 on Vinings' Annual
Report on Form 10-K for year ended December 31, 1998 No. 0-13693).
10.6 --- Fourth Amendment to the Amended and Restated Agreement of Limited Partnership of Vinings
Investment Properties, L.P. (incorporated by reference as Exhibit 10.5 on Vinings' Annual
Report on Form 10-K for year ended December 31, 1998, No. 0-13693).
10.7 --- Fifth Amendment to the Amended and Restated Agreement of Limited Partnership of Vinings
Investment Properties, L.P. (incorporated by reference as Exhibit 10.6 on Vinings' Annual
Report on Form 10-K for year ended December 31, 1998, No. 0-13693).
10.8 --- Sixth Amendment to the Amended and Restated Agreement of Limited Partnership of Vinings
Investment Properties, L.P., dated as of April 29, 1999 (incorporated by reference as
Exhibit 4.1 to Vinings' report on Form 8-K filed on May 7, 1999).
10.9 --- Seventh Amendment to the Amended and Restated Agreement of Limited Partnership of Vinings
Investment Properties, L.P. (incorporated by reference as Exhibit 3.2 to Vinings' Quarterly
Report on Form 10-Q for the quarter ended September 30, 2000, No. 0-13693).
10.10 --- Eighth Amendment to the Amended and Restated Agreement of Limited Partnership of Vinings
Investment Properties, L.P. (incorporated by reference as Exhibit 3.2 to Vinings' Quarterly
Report on Form 10-Q for the quarter ended March 31, 2000, No. 0-13693).
10.11 --- Ninth Amendment to the Amended and Restated Agreement of Limited Partnership of Vinings
Investment Properties, L.P. (incorporated by reference as Exhibit 3.3 to Vinings' Quarterly
Report on Form 10-Q for the quarter ended June 30, 2000, No. 0-13693).
10.12 --- Promissory Note dated April 27, 1999 between Vinings Investment Properties, L.P., and Bank
Atlanta (incorporated by reference as Exhibit 10.9 to the Vinings' Annual Report on Form
10-K for the fiscal year ended December 31, 1999, No. 0-13693).
10.13 --- Deed to Secure Debt and Security Agreement dated April 27, 1999 between Vinings Investment
Properties, L.P. and Bank Atlanta (incorporated by reference as Exhibit 10.10 to the
Vinings' Annual Report on Form 10-K for the fiscal year ended December 31, 1999, No.
0-13693).
10.14 --- Form of Management Contract dated May 1, 1999 between certain subsidiaries of Vinings and
VIP Management, LLC for the Mississippi Properties (incorporated by reference as Exhibit
10.11 to the Vinings' Annual Report on Form 10-K for the fiscal year ended December 31,
1999, No. 0-13693).
10.15 --- Management Contract dated January 1, 1999, between Thicket Apartments, L.P. and VIP
Management, LLC (incorporated by reference as Exhibit 10.11 on Vinings' Annual Report on
Form 10-K for the year ended December 31, 1998, No. 0-13693).
10.16 --- Management Contract dated January 1, 1999, between Vinings Communities, L.P. and VIP
Management, LLC (incorporated by reference as Exhibit 10.12 on Vinings' Annual Report on
Form 10-K for the year ended December 31, 1998, No. 0-13693).
10.17 --- Management Contract dated January 1, 1999, between Vinings Investment Properties, L.P. and
VIP Management, LLC (incorporated by reference as Exhibit 10.13 on Vinings' Annual Report on
Form 10-K for the year ended December 31, 1998, No. 0-13693).
10.18 -- Form of Amended and Restated Agreement of Purchase and Sale with attached Revised Schedule
of Material Differences For Properties Acquired May 1, 1999 (incorporated by reference as
Exhibit 10.15 to the Vinings' Annual Report on Form 10-K for the fiscal year ended December
31, 1999, No. 0-13693).
10.19 --- Securities Purchase Agreement, dated as of April 29, 1999, Relating to Series A Convertible
Preferred Units of Vinings Investment Properties, L.P., by and among Vinings Investment
Properties Trust, Vinings Investment Properties, L.P. and the Purchasers named therein
(incorporated by reference as Exhibit 10.1 to Vinings' report on Form 8-K filed on May 7,
1999).
10.20 --- Form of Registration Rights and Lock Up Agreement, dated as of April 29, 1999 (incorporated
by reference as Exhibit 10.2 to Vinings' report on Form 8-K filed on May 7, 1999).
10.21 --- Vinings/CMS Master Partnership, L.P., Agreement of Limited Partnership (incorporated by
reference as Exhibit 10.1 to Vinings' report on Form 8-K/A filed on July 15, 1999).
21.1 --- Subsidiaries of the Trust (filed herewith).
23.1 --- Consent of Independent Public Accountants (filed herewith).
23.2 --- Consent of Independent Public Accountants (filed herewith).