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EXHIBIT 99.0
1010 COMMONS
STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
YEAR ENDED DECEMBER 31, 1997
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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 1010 Commons for the year ended December 31, 1997. 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 1010 Commons for the year ended December 31, 1997, in
conformity with generally accepted accounting principles.
FARMER, FUQUA, HUNT & MUNSELLE, P.C.
Dallas, Texas
January 21, 1998 (except for Note 3, as to which
the date is March 3, 1998)
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1010 COMMONS
STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
Year Ended December 31, 1997
REVENUES
Net rental revenues $ 1,115,528
Other revenues 3,647
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Total revenues 1,119,175
DIRECT OPERATING EXPENSES
Utilities 325,547
Property taxes 288,585
Repairs and maintenance 271,087
Ground rent 249,447
Salaries and benefits 153,939
Insurance 137,081
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Total direct operating expenses 1,425,686
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DIRECT OPERATING EXPENSES IN EXCESS OF REVENUES $ (306,511)
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The accompanying notes are an integral part of this statement.
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1010 COMMONS
NOTES TO STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
December 31, 1997
NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION
1010 Commons is a 505,531 square foot office building located
in New Orleans, Louisiana. During 1997, the property was owned
by BHNO Partners Limited.
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: SUBSEQUENT EVENT
The property was sold to Continental Mortgage and Equity
Trust, a California business trust, on March 3, 1998.
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