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EXHIBIT 99.3
BAY PLAZA OFFICE BUILDING
STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
YEAR ENDED DECEMBER 31, 1996
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Independent Auditors' Report
To the Board of Trustees
Continental Mortgage and Equity Trust
We have audited the accompanying statement of revenues and direct operating
expenses of Bay Plaza Office Building for the year ended December 31, 1996.
This statement of revenues and direct operating expenses is the responsibility
of the Property's management. Our responsibility is to express an opinion on
this statement of revenues and direct operating expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement of revenues and direct
operating expenses is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statement of revenues and direct operating expenses. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall statement of revenues and
direct operating expenses presentation. We believe that our audit provides a
reasonable basis for our opinion.
The accompanying financial statement is prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission (for
inclusion in Form 8-K of Continental Mortgage and Equity Trust) and, as
described in Note 1, is not intended to be a complete presentation of the
results of operations.
In our opinion, the statement of revenues and direct operating expenses
referred to above presents fairly, in all material respects, the revenues and
direct operating expenses of Bay Plaza Office Building for the year ended
December 31, 1996, in conformity with generally accepted accounting principles.
Farmer, Fuqua, Hunt & Munselle, P.C.
Dallas, Texas
May 29, 1997
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BAY PLAZA OFFICE BUILDING
STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
Year Ended December 31, 1996
REVENUES
Net rental revenues $ 999,848
Other revenues 71,064
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Total revenues 1,070,912
OPERATING EXPENSES
Repairs and maintenance 146,001
Utilities 132,575
Property taxes 76,448
Salaries and benefits 35,124
Insurance 13,866
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Total direct operating expenses 404,014
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REVENUES IN EXCESS OF DIRECT OPERATING EXPENSES $ 666,898
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The accompanying notes are an integral part of this statement.
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BAY PLAZA OFFICE BUILDING
NOTES TO STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
December 31, 1996
NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION
Bay Plaza Office Building is a 75,780 square foot office building
located in Tampa, Florida. During 1996, the property was owned
by Bay Plaza I Partners.
The accompanying financial statement does not include a provision
for depreciation and amortization, bad debt expense, interest
expense or income taxes. Accordingly, this statement is not
intended to be a complete presentation of the results of
operations.
NOTE 2: ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
NOTE 3: OTHER REVENUES
Other revenues consists of the following:
Utility reimbursements $ 70,098
Miscellaneous 966
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$ 71,064
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NOTE 4: SUBSEQUENT EVENT
The property was sold to Continental Mortgage and Equity Trust, a
California business trust, on June 24, 1997.
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