UNITED STATES 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
For the fiscal year ended Commission File Number
December 31, 1999 1-12875
CORNERSTONE REALTY INCOME TRUST, INC.
(Exact name of registrant as specified in its charter)
VIRGINIA 54-1589139
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
306 EAST MAIN STREET, RICHMOND, VA 23219
(Address of principal executive offices) (Zip Code)
(804) 643-1761
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of Each Class Name of Each Exchange on Which Registered
------------------- -----------------------------------------
Common shares, no par value New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common shares, no par value
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 closing sales price of March 15, 2000, the aggregate market value
of the voting common equity held by non-affiliates of the registrant on such
date was $393,859,319.*
On March 15, 2000, there were outstanding approximately 37,962,344 common
shares.
- ----------
* In determining this figure, the Company has assumed that all of its officers
and directors, and persons known to the Company to be beneficial owners of more
than 5% of the Company's common shares, are affiliates. Such assumptions should
not be deemed conclusive for any other purpose.
DOCUMENTS INCORPORATED BY REFERENCE
The portions of the registrant's annual report to security holders for the
fiscal year ended December 31, 1999 referred to in Part II.
The registrant's Proxy Statement for its 2000 Annual Meeting of Shareholders.
PART I
INTRODUCTION
This Annual Report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1993, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such forward-looking statements
include, without limitation, statements concerning anticipated improvements in
financial operations from completed and planned property renovations, and
benefits from the Company's acquisition of Apple Residential Income Trust, Inc.
Such statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievement of the Company to
be materially different from the results of operations or plans expressed or
implied by such forward-looking statements. Such factors include, among other
things, unanticipated adverse business developments affecting the Company or the
properties, as the case may be, adverse changes in the real estate markets and
general and local economies and business conditions. Although the Company
believes that the assumptions underlying the forward-looking statements
contained herein are reasonable, any of the assumptions could be inaccurate, and
therefore there can be no assurance that such statements included in this annual
report will prove to be accurate. In light of the significant uncertainties
inherent in the forward-looking statements included herein, the inclusion of
such information should not be regarded as a representation by the Company or
any other person that the results or conditions described in such statements or
the objectives and plans of the Company will be achieved. In addition, the
Company's continued qualification as a real estate investment trust ("REIT")
involves the application of highly technical and complex provisions of the
Internal Revenue Code. Readers should carefully review the Company's financial
statements and the notes thereto, as well as the risk factors described in the
Company's filings with the Securities and Exchange Commission.
ITEM 1. Business
Cornerstone Realty Income Trust, Inc. (together with its subsidiaries, the
"Company") is a Virginia corporation and was incorporated in August 1989.
Initial capitalization occurred on August 18, 1992. Operations of rental
property commenced on June 1, 1993. The business of the Company is to acquire
and operate existing residential apartment complexes located in the southern
United States. As of December 31, 1999, the Company owned 87 apartment
communities, which comprised a total of 20,965 apartment units. The Company's
apartment
2
communities are located in Georgia, North Carolina, South Carolina, Texas and
Virginia. The Company's property acquisitions are described in Item 2 of this
report, which is hereby incorporated herein by reference. The Company directly
owns all of its properties in Georgia and Virginia. In other states, the Company
owns its properties through its wholly-owned or majority-owned subsidiaries.
The Company is a self-administered and self-managed equity REIT headquartered in
Richmond, Virginia. The Company is a fully integrated real estate organization
with expertise in the management, acquisition and renovation of apartment
communities. The Company maintains an intense focus on the operations of its
properties to generate consistent, sustained growth in net operating income
("NOI"), which it believes is the key to growing funds from operations per
common share. The Company believes that successful implementation of this
strategy will allow it to continue to increase its NOI from its apartment
portfolio. Through renovation and enhanced property management of the apartment
communities, the Company strives to increase cash flows, thereby adding value to
the underlying real estate.
The Company's objective is to increase distributable cash flow and common share
value by:
o Increasing rental rates, maintaining high economic occupancy rates, and
controlling costs at the properties; and
o Acquiring additional properties at attractive prices that provide the
opportunity to improve operating performance through the application of the
Company's management, marketing, and renovation programs.
The Company has nine regional property management offices, which are located in
the following cities: Atlanta, Georgia; Raleigh, Charlotte and Wilmington, North
Carolina; Columbia, South Carolina; Dallas and Fort Worth, Texas; and Blacksburg
and Virginia Beach, Virginia. As of December 31, 1999, the Company had
approximately 625 employees, including specialists in acquisition, management,
marketing, leasing, development, accounting and information systems. The
Company's executive officers have substantial experience with apartment
properties, having been responsible for the management, acquisition and
renovation of more than 25,000 apartment units over the last 25 years using the
strategies and techniques described below. The Company's top three executive
officers have an average of approximately 20 years each in the management,
acquisition and renovation of residential apartment communities.
Growth through Management and Leasing
The Company seeks to increase net operating income through active property
management, which includes keeping rental rates at or above market levels,
maintaining high economic occupancy through tenant retention, creating a
property identity, effectively marketing each property, and controlling
operating expenses at the property level.
Management develops the overall management and leasing strategy, including goals
and budgets, for each property. To achieve each property's objectives,
management delegates significant decision-making responsibility to regional and
on-site employees, thereby instilling in
3
its employees a sense of ownership of their property. Management believes that
this strategy is an effective way to maximize each property's potential. To
achieve desired results, the Company emphasizes training for its on-site
employees as well as raising rents to be at or above the market for comparable
properties. The Company also ties on-site employees' bonuses to both net
operating income targets established for their respective properties and the
Company's overall financial performance.
Management believes that tenant retention is critical to generating net
operating income growth. Tenant retention maintains or increases economic
occupancy and minimizes the costs associated with preparing apartments for new
occupants. The Company employs one person at each property who has a primary
focus on tenant retention. The tenant retention specialist's objective is to
make tenants feel at home in the community through personal attention, which
includes organizing social functions and activities as well as responding
promptly to any tenant problems that may arise in conjunction with the apartment
or community. The Company's philosophy is to market its properties continually
to existing tenants in order to achieve a low turnover rate. The Company
believes that the turnover rate of its properties is below the average turnover
rate for comparable apartment communities.
The Company seeks to create a unique identity for each property by emphasizing
curb appeal, signage, and attractive common area facilities, such as clubhouses
and swimming pools. The Company has upgraded or renovated many of the
properties' common area facilities after acquisition. Each property is marketed
as a "Cornerstone Community" but typically has an individual property name tied
to a local theme. Each property has a dedicated on-site marketing person whose
responsibility is to position and market the property within the local community
through such activities as media advertising, on-site promotional events and
personal calls to local businesses.
Operating expenses are controlled at each property by setting budgets at the
corporate level and requiring that any expense over budget at a property be
approved by management. Purchase discounts are sought at both the corporate
level and locally in those areas where the Company has a significant presence.
All contracts for goods and services are re-bid annually to ensure competitive
pricing. The Company has a preventive maintenance program and the ability to
perform work using in-house personnel, which helps the Company to reduce
expenses at the properties. For example, the maintenance manager at each
property is qualified to perform HVAC and plumbing work which otherwise would be
contracted outside the Company. In addition, the Company passes through expenses
to tenants by sub-metering of water and sewer to tenants where local and state
regulations allow.
Growth through Acquisitions, Renovations and Expansion
The Company seeks to generate growth in net operating income through
acquisitions by: (i) acquiring under-performing assets at less than replacement
cost; (ii) correcting operational problems; (iii) making selected renovations;
(iv) increasing economic occupancy; (v) raising rental rates; (vi) implementing
cost controls; and (vii) providing enhanced property and centralized management.
In markets that it targets for acquisition opportunities, the Company attempts
to gain a significant local presence in order to achieve operating efficiencies.
In analyzing acquisition opportunities, the Company considers acquisitions of
property portfolios as well as individual properties.
4
The Company has demonstrated an ability to grow through acquisitions. The
Company's first two properties were acquired in June of 1993. As of December 31,
1999, the Company owned and operated 87 apartment communities.
The Company analyzes specific criteria in connection with a proposed
acquisition. These criteria include: (i) the market in which a property is
located and whether it has a diversified economy, stable employment base and
increasing average household income; (ii) the property's current and projected
cash flow and the ability to increase net operating income; (iii) the condition
and design of the property and whether the property can benefit from
renovations; (iv) historical and projected occupancy rates; (v) geographic
location in light of the Company's diversification objectives; and (vi) the
purchase price of the property as it relates to the cost of new construction.
The Company believes it has been and will be able to purchase properties at less
than replacement cost based on deferred maintenance, management neglect, or the
prior owner's financial distress. Upon acquisition, the Company seeks to improve
both operating results and property identity through a 24-month renovation
policy which includes selective renovations such as new roofs, new exterior
siding, exterior painting, clubhouse renovation and construction, and interior
refurbishment. The Company has invested in renovations to its properties in the
approximate amounts of $30 million in 1999, $26 million in 1998, $23 million in
1997, and $19.0 million in 1996.
The Company has also made, and may in the future make, acquisitions of
established apartment communities involved in foreclosure proceedings. In this
situation, the Company seeks properties that have below market-rate leases,
correctable vacancy problems or inefficient property management. The Company
also may make acquisitions of properties from over-leveraged owners of
properties, governmental regulatory authorities, lending institutions that have
taken control of such properties, mortgagees-in-possession and, possibly,
through bankruptcy reorganization proceedings.
If sufficient tenant demand exists and suitable land is available, the Company
may construct additional apartment units on land adjacent to certain properties.
The Company believes that its successful experience with large-scale property
renovation will also permit strategic and cost-effective property expansion. It
is the Company's policy to acquire such additional apartment units on a
"turn-key" basis from a third party contractor, thereby minimizing the risks
normally associated with development and lease-up.
As of December 31, 1999, the Company had planned expansion projects for two
existing properties: Glen Eagles and The Meadows. Glen Eagles is a 166-unit
apartment community located in Winston-Salem, North Carolina. The land adjacent
to the community will accommodate approximately 220 additional apartment units
which can be served by existing amenities. At The Meadows, a 176-unit community
in Asheville, North Carolina, there is additional land for approximately 250
additional apartment units. The Company acquired these adjacent parcels and
transferred them to a developer for construction and lease-up of the
5
additional apartment units. These parcels and the additional apartments are
subject to repurchase by the Company, which is contingent on a number of
factors, including the achievement of certain occupancy levels and compliance
with various time commitments. The construction at the Meadows has been
completed, and the Company repurchased the property on March 16, 2000. The
Company does not have interests in any land adjacent to any other properties it
now owns, but may acquire land or options to acquire land of this type adjacent
to other properties it may acquire in the future.
Acquisition of Apple Residential Income Trust, Inc.
On July 23, 1999, the Company acquired Apple Residential Income Trust, Inc.
("Apple"). As a result, the Company acquired 29 apartment communities containing
7,503 apartment homes. The acquisition qualified as a tax-free reorganization
and was accounted for under the purchase method of accounting. The acquisition
was structured as a merger of Apple into a majority-owned subsidiary of the
Company. The aggregate purchase price was approximately $311 million. Under the
terms of the merger agreement, each Apple shareholder received 0.4 of the
Company's Series A Convertible Preferred Shares for each common share of Apple.
A total of 12,666,019 of the Company's Series A Convertible Preferred Shares
were issued as a result of the merger. The Series A Convertible Preferred Shares
have a first year dividend rate of $2.125, which will increase to $2.25 in the
second year and $2.375 in the third year and thereafter. Each Series A
Convertible Preferred Share reflects a conversion price of $15.80 per common
share of the Company. After five years, the Series A Convertible Preferred
Shares will be redeemable at $25 per share plus any accrued dividends, at the
option of the Company, in whole or in part, for cash or stock, subject to
certain conditions. In addition, the company assumed approximately $32 million
of Apple's debt with an effective interest rate of approximately 6.475%. No
goodwill was recorded as a result of this transaction.
Financing Policy
The Company's objective is to seek capital as needed at the lowest possible
cost. In addition to obtaining capital from future sales of common shares, the
Company may obtain capital from lines of credit or other secured or unsecured
borrowings.
On September 29, 1999, the Company received a loan in the principal amount of
$73.5 million from The Prudential Insurance Company of America. The loan is
secured by ten properties. The loan is interest only, paid monthly, and bears
interest at a fixed interest rate of 7.29% per annum with a maturity date of
September, 2006. The proceeds were used to pay down short-term debt and to
curtail the Company's existing line of credit as described below.
In connection with the Apple merger, the Company assumed six mortgage notes with
a principal amount of $30.8 million. These mortgages were recorded at a fair
value of $32 million at the date of assumption. The difference between the fair
value and the principal is being amortized as an adjustment to interest expense
over the term of the respective notes. Prepayment penalties apply for early
retirements. Scheduled maturities are at various dates through December 2005. At
December 31, 1999 the balance of the mortgage note payable was $31,545,682.
Mortgage notes payable are due in monthly installments, including principal and
interest.
6
During 1999, the Company's $175 million Unsecured Line of Credit was increased
to $185 million and the maturity date was extended to July 9, 2002. The lenders
are a syndicate of banks with First Union National Bank as agent. The Unsecured
Line of Credit currently bears interest equal to one-month LIBOR plus 1.20%. The
interest rate is adjusted monthly and the formula for determination of the
interest rate can change based on changes in financial condition and debt level
of the Company. At December 31, 1999, the Company had an unused borrowing
capacity of $35 million under the Unsecured Line of Credit. In addition, the
Company is obligated to pay lenders a quarterly commitment fee equal to .20% per
annum of the unused portion of the line. At December 31, 1999, borrowings under
the agreement was $150 million.
During 1999, the Company increased its $5 million unsecured line of credit for
general corporate purposes to $7.5 million. This line of credit bears interest
at LIBOR plus 1.20%, adjusted monthly, and the maturity date was extended to
October 31, 2000. On December 31, 1999, the outstanding balance on this loan was
$7.5 million.
The Company intends to maintain a debt policy limit in which the Company's total
combined indebtedness plus its pro rata share of indebtedness of any
unconsolidated investments ("Joint Venture Debt") is limited to 40% of the
Company's total equity market capitalization plus its combined indebtedness
(including its pro rata share of Joint Venture Debt).
Environmental Matters
In connection with each of its property acquisitions, the Company obtains a
Phase I Environment Report, and such additional environmental reports and
surveys as are necessitated by such preliminary report. Based on such reports,
the Company is not aware of any environmental situations requiring remediation
at its properties which have not been or are not currently being remediated as
necessary.
Recent Developments
Effective as of March 10, 2000, the Company sold 16 apartment communities for a
gross selling price of $136.5 million. These apartment communities had a net
book value, after depreciation, of approximately $105 million at December 31,
1999.
ITEM 2. Properties
Property Descriptions and Characteristics
As of December 31, 1999, the Company owned 87 apartment communities, which
comprised a total of 20,965 apartment units. Those apartment communities were
located in Georgia (7 communities), North Carolina (31 communities), South
Carolina (8 communities), Texas (29 communities), and Virginia (12 communities).
The following table sets forth specific information regarding the Company's
properties:
7
Total Total
Initial Investment Investment
Year Date of Encum-- Acquisition at Number Per Unit at
Property Location Completed Acquisition brances Cost 12-31-99(1) of Units 12-31-99
-------- -------- --------- ----------- ------- ---- ----------- -------- --------
GEORGIA
Ashley Run............... Atlanta 1987 April 1997 (8) $18,000,000 $19,972,413 348 $57,392
Stone Brook.............. Atlanta 1986 October 1997 (8) 7,850,000 8,872,988 188 47,197
Carlyle Club............. Atlanta 1974 April 1997 --- 11,580,000 13,251,328 243 54,532
Dunwoody Springs......... Atlanta 1981 July 1997 --- 15,200,000 19,090,735 350 54,545
Savannah West............ Augusta 1968 July 1996 --- 9,843,620 14,048,274 456 30,808
West Eagle Greens........ Augusta 1974 March 1996 --- 4,020,000 6,426,900 165 38,951
Spring Lake.............. Morrow 1986 August 1998 (8) 9,000,000 9,866,697 188 52,482
NORTH CAROLINA
The Meadows.............. Asheville 1974 January 1996 6,200,000 7,499,248 176 42,609
Beacon Hill.............. Charlotte 1985 May 1996 --- 13,579,203 14,977,670 349 42,916
Bridgetown Bay........... Charlotte 1986 April 1996 --- 5,025,000 5,978,562 120 49,821
Charleston Place......... Charlotte 1986 May 1997 (8) 9,475,000 10,479,833 214 48,971
Hanover Landing.......... Charlotte 1972 August 1995 --- 5,725,000 7,688,461 192 40,044
Heatherwood ............. Charlotte (3) (3) --- 17,630,457 25,678,852 476 53,947
Meadow Creek............. Charlotte 1984 May 1996 --- 11,100,000 12,846,737 250 51,387
Paces Glen............... Charlotte 1986 July 1996 --- 7,425,000 8,283,569 172 48,160
Sailboat Bay............. Charlotte 1973 November 1995 --- 9,100,000 13,760,358 358 38,437
Summerwalk............... Concord 1983 May 1996 --- 5,660,000 7,811,259 160 48,820
Deerfield................ Durham 1985 November 1996 --- 10,675,000 11,434,772 204 56,053
The Landing.............. Durham 1984 May 1996 --- 8,345,000 10,273,739 200 51,369
Parkside at Woodlake..... Durham 1996 Sept ember 1996 --- 14,663,886 15,363,983 266 57,759
Wind Lake................ Greensboro 1985 April 1995 --- 8,760,000 11,513,608 299 38,507
Signature Place.......... Greenville 1981 August 1996 --- 5,462,948 7,490,089 171 43,802
Highland Hills........... Raleigh 1987 September 1996 --- 12,100,000 14,777,352 264 55,975
Clarion Crossing......... Raleigh 1972 September 1997 --- 10,600,000 11,199,362 228 49,120
The Hollows.............. Raleigh 1974 June 1993 --- 4,200,000 6,344,761 176 36,050
Paces Arbor.............. Raleigh 1986 March 1997 --- 5,588,219 6,061,500 101 60,015
Paces Forest............. Raleigh 1986 March 1997 --- 6,473,481 7,061,353 117 60,353
Remington Place.......... Raleigh 1985 October 1997 (8) 7,900,000 8,742,446 136 64,283
St. Regis................ Raleigh 1986 October 1997 (8) 9,800,000 10,313,631 180 57,298
The Trestles............. Raleigh 1987 December 1994 --- 10,350,000 11,674,666 280 41,695
The Timbers ............. Raleigh 1983 June 1998 --- 8,100,000 8,973,326 176 50,985
Chase Mooring............ Wilmington 1968 August 1994 --- 3,594,000 7,033,468 224 31,399
Osprey Landing........... Wilmington 1974 November 1995 --- 4,375,000 7,568,285 176 43,002
Wimbledon Chase.......... Wilmington 1976 February 1994 --- 3,300,000 5,792,212 192 30,168
Glen Eagles.............. Winston Salem 1986 October 1995 --- 7,300,000 8,387,218 166 50,525
December Year-to-Date
Average Average Economic
Unit Size Rent Per Month (6) Occupancy (7)
(Square ------------------ -------------
Property Feet) 1998(2) 1999 1998(2) 1999
-------- ----- ------- ---- ------ ----
GEORGIA
Ashley Run............... 1,150 743 781 92% 92%
Stone Brook.............. 937 656 703 89% 92%
Carlyle Club............. 1,089 730 768 92% 93%
Dunwoody Springs......... 948 681 724 92% 95%
Savannah West............ 877 473 454 83% 78%
West Eagle Greens........ 796 485 510 90% 88%
Spring Lake.............. 1,009 646 693 94% 92%
NORTH CAROLINA
The Meadows.............. 1,068 620 649 95% 95%
Beacon Hill.............. 734 587 612 94% 92%
Bridgetown Bay........... 867 631 677 95% 96%
Charleston Place......... 806 613 632 93% 92%
Hanover Landing.......... 832 545 574 94% 93%
Heatherwood ............. 1,186 609 649 90% 93%
Meadow Creek............. 860 620 636 91% 90%
Paces Glen............... 907 640 658 93% 93%
Sailboat Bay............. 906 569 602 91% 94%
Summerwalk............... 963 626 656 94% 95%
Deerfield................ 888 754 756 92% 94%
The Landing.............. 960 650 667 93% 95%
Parkside at Woodlake..... 865 686 712 88% 91%
Wind Lake................ 727 506 522 92% 91%
Signature Place.......... 1,037 533 568 94% 93%
Highland Hills........... 1,000 767 765 96% 92%
Clarion Crossing......... 769 637 659 93% 91%
The Hollows.............. 903 655 692 92% 94%
Paces Arbor.............. 899 672 684 89% 90%
Paces Forest............. 883 665 678 89% 91%
Remington Place.......... 1,098 758 781 92% 92%
St. Regis................ 840 686 701 93% 92%
The Trestles............. 776 589 605 92% 94%
The Timbers ............. 745 614 638 92% 93%
Chase Mooring............ 867 559 532 79% 84%
Osprey Landing........... 981 629 626 88% 91%
Wimbledon Chase.......... 818 574 568 92% 90%
Glen Eagles.............. 952 683 670 93% 88%
8
Total Total
Initial Investment Investment
Year Date of Encum-- Acquisition at Number Per Unit at
Property Location Completed Acquisition brances Cost 12-31-99(1) of Units 12-31-99
-------- -------- --------- ----------- ------- ---- ----------- -------- --------
Mill Creek............... Winston Salem 1984 September 1995 --- 8,550,000 9,756,845 220 44,349
Stone Point.............. Charlotte 1986 January 1998 (8) 9,700,000 10,340,351 192 53,856
Pinnacle Ridge........... Asheville 1951 April 1998 --- 5,731,150 6,421,295 168 38,222
SOUTH CAROLINA
Westchase................ Charleston 1985 January 1997 (8) 11,000,000 13,212,319 352 37,535
Hampton Pointe........... Charleston 1986 March 1998 (8) 12,225,000 14,667,288 304 48,248
The Arbors at Windsor
Lake................... Columbia 1991 January 1997 (8) 10,875,000 11,701,117 228 51,321
Stone Ridge.............. Columbia 1975 December 1993 --- 3,325,000 6,019,560 191 31,516
Breckinridge............. Greenville 1973 June 1995 --- 5,600,000 7,208,834 236 30,546
Magnolia Run............. Greenville 1972 June 1995 --- 5,500,000 7,009,512 212 33,064
Polo Club................ Greenville 1972 June 1993 4,300,000 7,866,907 365 21,553
Cape Landing............. Myrtle Beach 1998 October 1998 --- 17,100,000 19,233,648 288 66,784
VIRGINIA
Trophy Chase............. Charlottesville (5) (5) --- 12,628,991 16,648,166 425 39,172
Greenbrier............... Fredericksburg 1970/1990 October 1996 --- 11,099,525 12,606,881 258 48,864
Tradewinds............... Hampton 1988 November 1995 --- 10,200,000 11,781,289 284 41,483
County Green............. Lynchburg 1976 December 1993 --- 3,800,000 5,496,059 180 30,534
Ashley Park.............. Richmond 1988 March 1996 --- 12,205,000 13,271,520 272 48,792
Hampton Glen............. Richmond 1986 August 1996 --- 11,599,931 13,008,010 232 56,069
Trolley Square........... Richmond (4) (4) --- 10,242,575 13,717,622 325 42,208
Arbor Trace.............. Virginia 1985 March 1996 --- 5,000,000 6,141,118 148 41,494
Bay Watch Pointe......... Virginia 1972 July 1995 --- 3,372,525 5,156,962 160 32,231
Harbour Club............ Virginia 1988 May 1994 --- 5,250,000 6,543,804 214 30,579
Mayflower Seaside........ Virginia 1950 October 1993 --- 7,634,144 10,786,692 263 41,014
The Gables............... Richmond 1987 July 1998 --- 11,500,000 12,710,802 224 56,745
TEXAS
Brookfield............... Dallas 1984 July 1999 --- 8,014,533 8,161,716 232 35,180
Toscana.................. Dallas 1986 July 1999 --- 7,334,023 7,365,639 192 38,363
Paces Cove............... Dallas 1982 July 1999 --- 11,712,879 11,971,802 328 36,499
Timberglen............... Dallas 1984 July 1999 --- 13,220,605 13,584,884 304 44,687
Summertree............... Dallas 1980 July 1999 --- 7,724,156 8,229,667 232 35,473
Devonshire............... Dallas 1978 July 1999 $3,966,620 7,564,892 7,891,678 144 54,803
The Courts on Pear Ridge. Dallas 1988 July 1999 --- 11,843,691 11,946,254 242 49,365
Eagle Crest.............. Irving 1983\1985 July 1999 --- 21,566,317 21,656,922 484 44,746
Remington Hills.......... Irving 1984\1985 July 1999 --- 20,921,219 21,404,019 362 59,127
Estrada Oaks............. Irving 1983 July 1999 --- 10,786,882 11,012,434 248 44,405
Aspen Hills.............. Arlington 1979 July 1999 --- 7,223,722 7,358,975 240 30,662
Mill Crossing............ Arlington 1979 July 1999 --- 5,269,792 5,338,858 184 29,016
Polo Run................. Arlington 1984 July 1999 --- 7,556,647 8,352,311 224 37,287
December Year-to-Date
Average Average Economic
Unit Size Rent Per Month (6) Occupancy (7)
(Square ------------------ -------------
Property Feet) 1998(2) 1999 1998(2) 1999
-------- ----- ------- ---- ------ ----
Mill Creek............... 897 592 579 94% 90%
Stone Point.............. 848 631 660 94% 94%
Pinnacle Ridge........... 885 528 563 95% 95%
SOUTH CAROLINA
Westchase................ 706 551 589 96% 96%
Hampton Pointe........... 1,035 606 681 98% 98%
The Arbors at Windsor
Lake................... 966 668 661 94% 91%
Stone Ridge.............. 1,047 542 576 93% 91%
Breckinridge............. 726 441 440 90% 93%
Magnolia Run............. 993 535 553 91% 92%
Polo Club................ 807 403 440 84% 92%
Cape Landing............. 933 666 662 84% 93%
VIRGINIA
Trophy Chase............. 1,736 581 625 94% 91%
Greenbrier............... 851 648 681 97% 95%
Tradewinds............... 930 624 653 92% 94%
County Green............. 1,000 525 543 94% 93%
Ashley Park.............. 765 606 629 95% 94%
Hampton Glen............. 788 677 717 94% 94%
Trolley Square........... 589 561 612 95% 92%
Arbor Trace.............. 850 590 652 91% 93%
Bay Watch Pointe......... 911 620 644 95% 96%
Harbour Club............ 813 589 654 91% 93%
Mayflower Seaside........ 698 715 753 95% 92%
The Gables............... 700 600 654 94% 92%
TEXAS
Brookfield............... 714 --- 547 --- 94%
Toscana.................. 601 --- 546 --- 97%
Paces Cove............... 670 --- 563 --- 92%
Timberglen............... 728 --- 601 --- 93%
Summertree............... 575 --- 512 --- 92%
Devonshire............... 876 --- 665 --- 96%
The Courts on Pear Ridge. 774 --- 678 --- 94%
Eagle Crest.............. 887 --- 647 --- 89%
Remington Hills.......... 957 --- 791 --- 90%
Estrada Oaks............. 771 --- 617 --- 94%
Aspen Hills.............. 671 --- 527 --- 92%
Mill Crossing............ 691 --- 525 --- 93%
Polo Run................. 854 --- 609 --- 92%
9
Total Total
Initial Investment Investment
Year Date of Encum-- Acquisition at Number Per Unit at
Property Location Completed Acquisition brances Cost 12-31-99(1) of Units 12-31-99
-------- -------- --------- ----------- ------- ---- ----------- -------- --------
Cottonwood............... Arlington 1985 July 1999 --- 6,271,756 6,768,671 200 33,843
Burney Oaks.............. Arlington 1985 July 1999 --- 9,965,236 10,224,472 240 42,602
Copper Crossing.......... Fort Worth 1981 July 1999 --- 11,776,983 12,005,817 400 30,015
The Arbors on Forest..... Bedford 1986 July 1999 --- 9,573,954 9,617,764 210 45,799
Park Village............. Bedford 1983 July 1999 --- 8,224,541 8,582,259 238 36,060
Wildwood................. Euless 1984 July 1999 --- 4,471,294 4,524,238 120 37,702
Main Park................ Duncanville 1984 July 1999 --- 9,082,967 9,201,464 192 47,924
Pace's Point............. Lewisville 1985 July 1999 8,076,155 12,980,245 13,167,942 300 43,893
Silver Brook I........... Grand Prairie 1982 July 1999 --- 15,709,893 16,505,257 472 34,969
Silver Brook II.......... Grand Prairie 1984 July 1999 2,996,150 5,808,250 6,022,167 170 35,425
Grayson Square II........ Grapevine 1986 July 1999 6,622,849 12,210,121 12,437,775 250 49,751
Grayson Square I......... Grapevine 1985 July 1999 6,884,762 9,948,959 10,238,037 200 51,190
Meridian................. Austin 1988 July 1999 2,999,146 7,539,224 7,742,932 200 38,715
Canyon Hills............. Austin 1996 July 1999 --- 12,512,502 12,586,448 229 54,963
Cutter's Point........... Richardson 1978 July 1999 --- 9,859,840 10,367,834 196 52,897
Sierra Ridge............. San Antonio 1981 July 1999 --- 6,624,666 7,014,246 230 30,497
--------------------------------------------------------------
$105,045,682 $799,739,444 $919,128,738 20,965 $43,841
December Year-to-Date
Average Average Economic
Unit Size Rent Per Month (6) Occupancy (7)
(Square ------------------ -------------
Property Feet) 1998(2) 1999 1998(2) 1999
-------- ----- ------- ---- ------ ----
Cottonwood............... 751 --- 540 --- 95%
Burney Oaks.............. 794 --- 635 --- 96%
Copper Crossing.......... 739 --- 494 --- 91%
The Arbors on Forest..... 804 --- 643 --- 92%
Park Village............. 647 --- 539 --- 93%
Wildwood................. 755 --- 651 --- 92%
Main Park................ 939 --- 732 --- 97%
Pace's Point............. 762 --- 624 --- 97%
Silver Brook I........... 842 --- 558 --- 94%
Silver Brook II.......... 741 --- 512 --- 94%
Grayson Square II........ 850 --- 690 --- 94%
Grayson Square I......... 840 --- 683 --- 93%
Meridian................. 741 --- 612 --- 97%
Canyon Hills............. 799 --- 730 --- 98%
Cutter's Point........... 1,010 --- 719 --- 95%
Sierra Ridge............. 751 --- 502 --- 92%
----------------------------------------------------
863 $608 $625 92% 92%
Notes to Table of Properties:
(1) "Total Investment" includes the purchase price of the property plus real
estate commissions, closing costs and improvements capitalized since the
date of acquisition, excluding Apple properties. The Apple properties
include the allocated purchase price at the time of the merger and
improvements capitalized since the merger.
(2) An open item denotes that the Company did not own the property during the
period indicated.
(3) Heatherwood Apartments is comprised of Heatherwood (completed in 1980) and
Italian Village and Villa Marina Apartments (completed in 1980), acquired
in September 1996 and August 1997, respectively, at a cost of $10,205,457
and $7,425,000. They are adjoining properties and are operated as one
apartment community.
(4) Trolley Square Apartments is comprised of Trolley Square East Apartments
(completed in 1964) and Trolley Square West Apartments (completed in 1965)
acquired in June 1996 and December 1996, respectively, at a cost of
$6,000,000 and $4,242,575. They are adjacent properties and are operated as
one apartment community.
10
(5) Trophy Chase is comprised of Trophy Chase (completed in 1970) and Hunter's
Creek (completed in 1970) acquired in April 1996 and July 1999,
respectively, at a cost of $3,710,000 and $8,918,991.
(6) Average rent per month reflects December's monthly gross potential less
concessions divided by the property's number of units.
(7) Economic Occupancy percentage reflects Adjusted Schedule Rent divided by
Adjusted Gross Potential where Adjusted Gross Potential consists of Gross
Potential net of concessions, model unit costs, and employee unit costs,
and Adjusted Schedule Rent consists of Adjusted Gross Potential net of
vacancies and bad debt expense.
(8) Indication for ten properties that serve as collateral for $73.5 million of
secured debt.
11
ITEM 3. Legal Proceedings
Neither the Company nor any of its apartment properties is presently subject to
any material litigation nor, to the Company's knowledge, is any litigation
threatened against the Company or any of the properties, other than routine
actions arising in the ordinary course of business, some of which are expected
to be covered by liability insurance and all of which collectively are not
expected to have a material adverse effect on the business or financial
condition or results of operations of the Company.
ITEM 4. Submission of Matters to a Vote of Security Holders
None.
12
PART II
ITEM 5. Market for Registrant's Common Equity and Related Stockholder Matters
The Company's common shares are traded on the New York Stock Exchange ("NYSE").
The common shares were listed on the NYSE under the symbol "TCR" on April 18,
1997. Before that date, there was no active trading market for the common
shares. The following table sets forth the high and low sale prices on the NYSE
for the common shares (as reported by the NYSE) and the cash distributions
declared and paid for each quarterly period indicated. On March 15, 2000, the
last reported sale price on the NYSE was $10.375 per common share.
- ------------------------------------- ---------------- ----------------- ---------------------
Cash Distribution
1998 High Low Per Common Share
- ---- ---- --- ----------------
First Quarter $ 13.25 $ 11.875 $ 0.25
Second Quarter 12.6875 11.125 0.26
Third Quarter 12.125 10.25 0.26
Fourth Quarter 11.25 10.25 0.26
1999
- ----
First Quarter $ 11.125 $ 9.00 $ 0.26
Second Quarter 10.9375 9.625 0.27
Third Quarter 10.625 9.00 0.27
Fourth Quarter 10.6875 9.0625 0.27
- ------------------------------------- ---------------- ----------------- ---------------------
Distributions of $42,050,415 and $38,317,602 were made to the shareholders
during 1999 and 1998, respectively.
The timing and amounts of distributions to shareholders are within the
discretion of the Company's board of directors. Future distributions will depend
on the Company's results of operations, cash flow from operations, economic
conditions and other factors, such as working capital, cash requirements to fund
investing and financing activities, capital expenditure requirements, including
improvements to and expansions of properties and the acquisition of additional
properties, as well as the distribution requirements under federal income tax
provisions for qualification as a REIT. The Company's distributions to its
shareholders also may be limited by the agreement pertaining to the Company's
Unsecured Line of Credit.
For federal income tax purposes, distributions paid to common shareholders may
consist of ordinary income, capital gains distributions, non-taxable return of
capital, or a combination thereof. Distributions constitute ordinary income to
the extent of the Company's current and accumulated earnings and profits.
Distributions which exceed the Company's current and accumulated earnings and
profits constitute a return of capital rather than a dividend to the extent of a
shareholder's basis in his common shares and reduce the shareholder's basis in
the common
13
shares. To the extent that a distribution exceeds both the Company's current and
accumulated earnings and profits and the shareholder's basis in his common
shares, it is generally treated as gain from the sale or exchange of that
shareholder's common shares. The Company notifies shareholders annually as to
the taxability of distributions paid during the preceding year. In 1999,
approximately 11% of distributions represented a return of capital, and the
balance represented ordinary income.
The Company has a Dividend Reinvestment and Share Purchase Plan under which any
record holder of common shares may reinvest cash dividends and may invest
additional cash payments of up to $15,000 per quarter in common shares.
On July 23, 1999, in connection with the Apple merger, the Company issued
12,666,019 Series A Convertible Preferred Shares, each of which is convertible
into 1.5823 of the Company's common shares, reflecting a conversion price of
$15.80 per common share of the Company. The Series A Convertible Preferred
Shares are non-voting and have a liquidation preference of $25 per share of the
Company's common shares. After five years, the Series A Convertible Preferred
Shares are redeemable at $25 per share plus any accrued dividends, at the option
of the Company, in whole or in part, for cash or stock, subject to certain
conditions. The Company is imputing dividends calculated as the present value
difference between the perpetual preferred stock distribution and the stated
distribution rate. The imputed dividend is reflected as additional preferred
stock distributions. The Series A Convertible Preferred Shares are not listed on
any exchange.
On March 15, 2000, the Company's common shares were held by 128 record
shareholders.
ITEM 6. Selected Financial Data
For the information called for by this item, see the information in Exhibit 13,
1999 Annual Report, under the caption "Selected Financial Data" on page 26
thereof, which information is hereby incorporated by reference herein.
The selected financial data should be read in conjunction with the financial
statements and related notes of the Company included under Item 8 of this
Report.
ITEM 7 / 7A. Management's Discussion and Analysis of Financial Condition and
Results of Operations / Market Risk Disclosure
For the information called for by this item, see the information in Exhibit 13,
1999 Annual Report, under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations" on pages 27 through 32 thereof,
which information is hereby incorporated herein by reference.
14
ITEM 8. Financial Statements and Supplementary Data
The financial statements of the Company and report of independent auditors
required to be included in this item are set forth in Item 14 of this report and
are hereby incorporated herein by reference.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
15
PART III
ITEM 10. Directors and Executive Officers of the Registrant
For information with respect to the Company's directors and director nominees
see the information under "Ownership of Equity Securities" and "Election of
Directors" in the Company's Proxy Statement for its 2000 Annual Meeting of
Shareholders, which information is hereby incorporated herein by reference. For
information with respect to the Company's executive officers see "Executive
Officers" in the Company's Proxy Statement for its 2000 Annual Meeting of
Shareholders, which information is hereby incorporated herein by reference.
ITEM 11. Executive Compensation
For information with respect to compensation of the Company's executive officers
and directors, see the information under "Compensation of Executive Officers"
and "Compensation of Directors" in the Company's Proxy Statement for its 2000
Annual Meeting of Shareholders, which information is hereby incorporated herein
by reference.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
See the information under "Ownership of Equity Securities" in the Company's
Proxy Statement for its 2000 Annual Meeting of Shareholders, which information
is hereby incorporated herein by reference.
ITEM 13. Certain Relationships and Related Transactions
For information on certain relationships and related transactions, see the
information under "Certain Relationships and Agreements" in the Company's Proxy
Statement for its 2000 Annual Meeting of Shareholders, which information is
hereby incorporated herein by reference.
16
PART IV
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) Documents filed as part of the report
1. Financial Statements
The following consolidated financial statements of the registrant are
hereby included in Item 8 and incorporated by reference from Exhibit 13 (1999
Annual Report).
Independent Auditors' Report
Ernst & Young LLP
Consolidated Balance Sheets
December 31, 1999 and 1998
Consolidated Statements of Operations
Years Ended December 31, 1999, 1998 and 1997
Consolidated Statements of Shareholders' Equity
Years ended December 31, 1999, 1998 and 1997
Consolidated Statements of Cash Flows
Years ended December 31, 1999, 1998 and 1997
Notes to Consolidated Financial Statements
2. Financial Statement Schedule
Schedule III - Real Estate and Accumulated Depreciation
(Included at the end of this Part IV on pages 19 through 26 of
this report)
All other financial statement schedules have been omitted because they are
not applicable or not required or because the required information is included
elsewhere in the financial statements or notes thereto.
3. Exhibits
Incorporated herein by reference are the exhibits listed under "Exhibit
Index" on pages 28 through 36 of this report.
17
(b) Reports on Form 8-K
During the last quarter of 1999, the Company filed the following Current
Reports on Form 8-K:
On October 13, 1999, the registrant filed a Report on Form 8-K to a Report
on Form 8-K dated October 1, 1999. This item was item 5 and 7.
On November 3, 1999, the registrant filed a Report on Form 8-K to a Report
on Form 8-K dated September 29, 1999.
18
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION (AS OF DECEMBER 31, 1999)
------------------------------------------------------------------------------------
Initial Cost Subsequent Imp. Gross Amount Carried
Encum- ------------------------------------------------------------------------------------
Description brances Land Bldg. & Imp. Capitalized Land Bldg. & Imp. Total
- ------------------------------------------------------------------------------------------------------------------------
1) Polo Club -- $ 264,698 $4,035,302 $3,566,907 $264,698 $7,602,209 $7,866,907
* Greenville, SC
* Multi-family housing
2) The Hollows -- 1,374,840 2,825,160 2,144,761 1,390,671 4,954,090 6,344,761
* Raleigh, NC
* Multi-family housing
3) Mayflower Seaside -- 2,258,169 5,375,975 3,152,548 2,258,248 8,528,444 10,786,692
* Virginia Beach, VA
* Multi-family housing
* Retail shops
4) Stone Ridge -- 374,271 2,950,729 2,694,560 374,293 5,645,267 6,019,560
* Columbia, SC
* Multi-family housing
5) County Green -- 319,250 3,480,750 1,696,059 327,484 5,168,575 5,496,059
* Lynchburg, VA
* Multi-family housing
6) Wimbledon Chase -- 304,590 2,995,410 2,492,212 305,365 5,486,847 5,792,212
* Wilmington, NC
* Multi-family housing
7) Harbour Club -- 1,019,895 4,230,105 1,293,804 1,020,274 5,523,530 6,543,804
* Virginia Beach, VA
* Multi-family housing
8) Chase Mooring -- 258,126 3,335,874 3,439,468 252,909 6,780,559 7,033,468
* Wilmington, NC
* Multi-family housing
9) The Trestles -- 2,650,884 7,699,116 1,324,666 2,686,006 8,988,660 11,674,666
* Raleigh, NC
* Multi-family housing
Year Date
Description Acc. Depr. Constructed Acquired Dep. Life
- -------------------------------------------------------------------------------
1) Polo Club $2,229,426 1972 June 3, 1993 27.5 yrs.
* Greenville, SC
* Multi-family housing
2) The Hollows $1,371,280 1974 June 1, 1993 27.5 yrs.
* Raleigh, NC
* Multi-family housing
3) Mayflower Seaside $1,776,525 1950 Oct. 26, 1993 27.5 yrs.
* Virginia Beach, VA
* Multi-family housing
* Retail shops
4) Stone Ridge $1,523,199 1975 Dec. 8, 1993 27.5 yrs.
* Columbia, SC
* Multi-family housing
5) County Green $1,287,273 1976 Dec. 1, 1993 27.5 yrs.
* Lynchburg, VA
* Multi-family housing
6) Wimbledon Chase $1,312,650 1976 Feb. 1, 1994 27.5 yrs.
* Wilmington, NC
* Multi-family housing
7) Harbour Club $1,185,861 1988 May 1, 1994 27.5 yrs.
* Virginia Beach, VA
* Multi-family housing
8) Chase Mooring $1,221,272 1968 Aug. 1, 1994 27.5 yrs.
* Wilmington, NC
* Multi-family housing
9) The Trestles $1,951,490 1987 Dec. 30, 1994 27.5 yrs.
* Raleigh, NC
* Multi-family housing
19
------------------------------------------------------------------------------------
Initial Cost Subsequent Imp. Gross Amount Carried
Encum- ------------------------------------------------------------------------------------
Description brances Land Bldg. & Imp. Capitalized Land Bldg. & Imp. Total
- ------------------------------------------------------------------------------------------------------------------------
10) Wind Lake -- 1,051,200 7,708,800 2,753,608 1,088,780 10,424,828 11,513,608
* Greensboro, NC
* Multi-family housing
11) Magnolia Run -- 495,000 5,005,000 1,509,512 509,001 6,500,511 7,009,512
* Greenville, SC
* Multi-family housing
12) Breckinridge -- 1,512,000 4,088,000 1,608,834 1,558,060 5,650,774 7,208,834
* Greenville, SC
* Multi-family housing
13) Bay Watch Pointe -- 775,680 2,596,845 1,784,437 816,936 4,340,026 5,156,962
* Virginia Beach, VA
* Multi-family housing
14) Hanover Landing -- 801,500 4,923,500 1,963,461 822,285 6,866,176 7,688,461
* Charlotte, NC
* Multi-family housing
15) Mill Creek -- 1,368,000 7,182,000 1,206,845 1,417,614 8,339,231 9,756,845
* Winston-Salem, NC
* Multi-family housing
16) Glen Eagles -- 1,095,000 6,205,000 1,087,218 890,680 7,496,538 8,387,218
* Winston-Salem, NC
* Multi-family housing
17) Sailboat Bay -- 2,002,000 7,098,000 4,660,358 2,066,930 11,693,428 13,760,358
* Charlotte, NC
* Multi-family housing
18) Tradewinds -- 1,428,000 8,772,000 1,581,289 1,436,890 10,344,399 11,781,289
* Hampton, VA
* Multi-family housing
19) Osprey Landing -- 393,750 3,981,250 3,193,285 403,842 7,164,443 7,568,285
* Wilmington, NC
* Multi-family housing
20) The Meadows -- 186,000 6,014,000 1,299,248 166,196 7,333,052 7,499,248
* Asheville, NC
* Multi-family housing
21) West Eagle Green -- 326,400 3,693,600 2,406,900 316,825 6,110,075 6,426,900
* Augusta, GA
* Multi-family housing
Year Date
Description Acc. Depr. Constructed Acquired Dep. Life
- -------------------------------------------------------------------------------
10) Wind Lake $1,797,291 1985 April 1, 1995 27.5 yrs.
* Greensboro, NC
* Multi-family housing
11) Magnolia Run $1,249,880 1972 June 1, 1995 27.5 yrs.
* Greenville, SC
* Multi-family housing
12) Breckinridge $1,070,571 1973 June 21, 1995 27.5 yrs.
* Greenville, SC
* Multi-family housing
13) Bay Watch Pointe $850,371 1972 July 18, 1995 27.5 yrs.
* Virginia Beach, VA
* Multi-family housing
14) Hanover Landing $1,124,516 1972 Aug. 22, 1995 27.5 yrs.
* Charlotte, NC
* Multi-family housing
15) Mill Creek $1,367,852 1984 Sept. 1, 1995 27.5 yrs.
* Winston-Salem, NC
* Multi-family housing
16) Glen Eagles $1,277,793 1990 Oct. 1, 1995 27.5 yrs.
* Winston-Salem, NC
* Multi-family housing
17) Sailboat Bay $2,893,325 1972 Nov. 1, 1995 27.5 yrs.
* Charlotte, NC
* Multi-family housing
18) Tradewinds $1,671,376 1988 Nov. 1, 1995 27.5 yrs.
* Hampton, VA
* Multi-family housing
19) Osprey Landing $1,252,918 1973 Nov. 1, 1995 27.5 yrs.
* Wilmington, NC
* Multi-family housing
20) The Meadows $1,193,546 1974 Jan. 31, 1996 27.5 yrs.
* Asheville, NC
* Multi-family housing
21) West Eagle Green $1,006,501 1974 March 1, 1996 27.5 yrs.
* Augusta, GA
* Multi-family housing
20
------------------------------------------------------------------------------------
Initial Cost Subsequent Imp. Gross Amount Carried
Encum- ------------------------------------------------------------------------------------
Description brances Land Bldg. & Imp. Capitalized Land Bldg. & Imp. Total
- ------------------------------------------------------------------------------------------------------------------------
22) Ashley Park -- 1,586,650 10,618,350 1,066,520 1,589,251 11,682,269 13,271,520
* Richmond, VA
* Multi-family housing
23) Arbor Trace -- 1,100,000 3,900,000 1,141,118 1,130,749 5,010,369 6,141,118
* Virginia Beach, VA
* Multi-family housing
24) Bridgetown Bay -- 603,000 4,422,000 953,562 624,233 5,354,329 5,978,562
* Charlotte, NC
* Multi-family housing
25) Trophy Chase -- 853,000 2,856,700 4,019,175 2,480,997 14,167,169 16,648,166
* Charlottesville, VA 1,602,680 7,316,311
* Multi-family housing
26) Beacon Hill -- 3,121,587 10,457,616 1,398,467 3,076,214 11,901,456 14,977,670
* Charlotte, NC
* Multi-family housing
27) Summerwalk -- 1,528,200 4,131,800 2,151,259 1,565,051 6,246,208 7,811,259
* Concord, NC
* Multi-family housing
28) The Landing -- 1,001,400 7,343,600 1,928,739 1,023,951 9,249,788 10,273,739
* Raleigh, NC
* Multi-family housing
29) Meadowcreek -- 1,110,000 9,990,000 1,746,737 1,134,445 11,712,292 12,846,737
* Pineville, NC
* Multi-family housing
30) Trolley Square -- 1,620,000 4,380,000 3,475,047 2,817,605 10,900,017 13,717,622
Trolley Square West 1,145,495 3,097,080
* Richmond, VA
* Multi-family housing
31) Savannah West -- 627,860 9,215,760 4,204,654 1,146,016 12,902,258 14,048,274
* Augusta, GA
* Multi-family housing
32) Paces Glen -- 2,153,250 5,271,750 858,569 2,226,399 6,057,170 8,283,569
* Charlotte, NC
* Multi-family housing
33) Signature Place -- 491,665 4,971,283 2,027,141 502,648 6,987,441 7,490,089
* Greenville, NC
* Multi-family housing
Year Date
Description Acc. Depr. Constructed Acquired Dep. Life
- -------------------------------------------------------------------------------
22) Ashley Park $1,799,541 1988 March 1, 1996 27.5 yrs.
* Richmond, VA
* Multi-family housing
23) Arbor Trace $815,867 1985 March 1, 1996 27.5 yrs.
* Virginia Beach, VA
* Multi-family housing
24) Bridgetown Bay $801,470 1986 April 1, 1996 27.5 yrs.
* Charlotte, NC
* Multi-family housing
25) Trophy Chase $1,173,456 1970 April 1, 1996 27.5 yrs.
* Charlottesville, VA
* Multi-family housing
26) Beacon Hill $1,670,404 1985 May 1, 1996 27.5 yrs.
* Charlotte, NC
* Multi-family housing
27) Summerwalk $933,110 1983 May 1, 1996 27.5 yrs.
* Concord, NC
* Multi-family housing
28) The Landing $1,314,898 1984 May 1, 1996 27.5 yrs.
* Raleigh, NC
* Multi-family housing
29) Meadowcreek $1,676,493 1984 May 31, 1996 27.5 yrs.
* Pineville, NC
* Multi-family housing
30) Trolley Square $1,627,402 1968 June 25, 1996 27.5 yrs.
Trolley Square West 1964 Dec. 31, 1996 27.5 yrs.
* Richmond, VA
* Multi-family housing
31) Savannah West $1,753,913 1976 July 1, 1996 27.5 yrs.
* Augusta, GA
* Multi-family housing
32) Paces Glen $807,822 1986 July 19, 1996 27.5 yrs.
* Charlotte, NC
* Multi-family housing
33) Signature Place $1,056,405 1981 August 1, 1996 27.5 yrs.
* Greenville, NC
* Multi-family housing
21
------------------------------------------------------------------------------------
Initial Cost Subsequent Imp. Gross Amount Carried
Encum- ------------------------------------------------------------------------------------
Description brances Land Bldg. & Imp. Capitalized Land Bldg. & Imp. Total
- ------------------------------------------------------------------------------------------------------------------------
34) Hampton Glen -- 1,391,992 10,207,939 1,408,079 1,414,237 11,593,773 13,008,010
* Richmond, VA
* Multi-family housing
35) Heatherwood -- 2,449,310 7,756,147 8,048,395 4,186,842 21,492,010 25,678,852
Italian Village/Villa Marina 1,707,750 5,717,250
* Charlotte, NC
* Multi-family housing
36) Highland Hills -- 1,210,000 10,890,000 2,677,352 1,198,724 13,578,628 14,777,352
* Carrboro, NC
* Multi-family housing
37) Parkside at Woodlake -- 2,932,778 11,731,108 700,097 2,884,355 12,479,628 15,363,983
* Durham, NC
* Multi-family housing
38) Greenbrier -- 998,957 10,100,568 1,507,356 1,009,698 11,597,183 12,606,881
* Fredericksburg, VA
* Multi-family housing
39) Deerfield -- 427,000 10,248,000 759,772 430,416 11,004,356 11,434,772
* Durham, NC
* Multi-family housing
40) The Arbors at Windor
Lake (2) 978,750 9,896,250 826,117 994,426 10,706,691 11,701,117
* Columbia, SC
* Multi-family housing
41) Westchase (2) 1,980,000 9,020,000 2,212,319 2,012,327 11,199,992 13,212,319
* Charleston, SC
* Multi-family housing
42) Paces Arbor -- 1,173,526 4,414,693 473,281 1,181,172 4,880,328 6,061,500
* Raleigh, NC
* Multi-family housing
43) Paces Forest -- 1,359,431 5,114,050 587,872 1,370,590 5,690,763 7,061,353
* Raleigh, NC
* Multi-family housing
44) Carlyle Club -- 3,589,800 7,990,200 1,671,328 3,607,026 9,644,302 13,251,328
* Lawrenceville, GA
* Multi-family housing
Year Date
Description Acc. Depr. Constructed Acquired Dep. Life
- ---------------------------------------------------------------------------------
34) Hampton Glen $1,556,617 1986 August 1, 1996 27.5 yrs.
* Richmond, VA
* Multi-family housing
35) Heatherwood $2,376,773 1980 Sept. 1, 1996 27.5 yrs.
Italian Village/Villa Marina 1980 Aug. 29, 1997
* Charlotte, NC
* Multi-family housing
36) Highland Hills $1,867,985 1987 Sept. 27, 1996 27.5 yrs.
* Carrboro, NC
* Multi-family housing
37) Parkside at Woodlake $1,616,808 1996 Aug. 31, 1996 27.5 yrs.
* Durham, NC
* Multi-family housing
38) Greenbrier $1,537,701 1980 Oct. 1, 1996 27.5 yrs.
* Fredericksburg, VA
* Multi-family housing
39) Deerfield $1,323,856 1985 Nov. 1, 1996 27.5 yrs.
* Durham, NC
* Multi-family housing
40) The Arbors at Windsor
Lake $1,255,948 1991 Jan. 1, 1997 27.5 yrs.
* Columbia, SC
* Multi-family housing
41) Westchase $1,356,921 1985 Jan. 15, 1997 27.5 yrs.
* Charleston, SC
* Multi-family housing
42) Paces Arbor $542,022 1986 March 1, 1997 27.5 yrs.
* Raleigh, NC
* Multi-family housing
43) Paces Forest $635,445 1986 March 1, 1997 27.5 yrs.
* Raleigh, NC
* Multi-family housing
44) Carlyle Club $1,098,000 1974 Apr. 30, 1997 27.5 yrs.
* Lawrenceville, GA
* Multi-family housing
22
------------------------------------------------------------------------------------
Initial Cost Subsequent Imp. Gross Amount Carried
Encum- ------------------------------------------------------------------------------------
Description brances Land Bldg. & Imp. Capitalized Land Bldg. & Imp. Total
- ------------------------------------------------------------------------------------------------------------------------
45) Ashley Run (2) 3,780,000 14,220,000 1,972,413 3,793,621 16,178,792 19,972,413
* Norcross, GA
* Multi-family housing
46) Charleston Place (2) 1,516,000 7,959,000 1,004,833 1,534,603 8,945,230 10,479,833
* Charlotte, NC
* Multi-family housing
47) Dunwoody Springs -- 3,648,000 11,552,000 3,890,735 3,662,295 15,428,440 19,090,735
* Dunwoody, GA
* Multi-family housing
48) Clarion Crossing -- 3,180,000 7,420,000 599,362 3,235,960 7,963,402 11,199,362
* Raleigh, NC
* Multi-family housing
49) Stone Brook (2) 1,570,000 6,280,000 1,022,988 1,582,468 7,290,520 8,872,988
* Norcross, GA
* Multi-family housing
50) St. Regis (2) 2,156,000 7,644,000 513,631 2,170,353 8,143,278 10,313,631
* Raleigh, NC
* Multi-family housing
51) Remington Place (2) 1,422,000 6,478,000 842,446 1,433,609 7,308,837 8,742,446
* Raleigh, NC
* Multi-family housing
52) Stone Point (2) 1,164,000 8,536,000 640,351 1,128,956 9,211,395 10,340,351
* Charlotte, NC
* Multi-family housing
53) Pinnacle Ridge -- 1,547,411 4,183,740 690,144 1,572,517 4,848,778 6,421,295
* Ashville, NC
* Multi-family housing
54) Hampton Point (2) 1,589,250 10,635,750 2,442,288 1,648,342 13,018,946 14,667,288
* Charleston, SC
* Multi-family housing
55) The Timbers -- 1,944,000 6,156,000 873,326 1,955,741 7,017,585 8,973,326
* Raleigh, NC
* Multi-family housing
56) The Gables -- 2,185,000 9,315,000 1,210,802 2,200,818 10,509,984 12,710,802
* Richmond, VA
* Multi-family housing
Year Date
Description Acc. Depr. Constructed Acquired Dep. Life
- -------------------------------------------------------------------------------
45) Ashley Run $1,744,247 1987 Apr. 30, 1997 27.5 yrs.
* Norcross, GA
* Multi-family housing
46) Charleston Place $936,387 1986 May 13, 1997 27.5 yrs.
* Charlotte, NC
* Multi-family housing
47) Dunwoody Springs $1,538,123 1981 July 25, 1997 27.5 yrs.
* Dunwoody, GA
* Multi-family housing
48) Clarion Crossing $709,617 1972 Sept. 30, 1997 27.5 yrs.
* Raleigh, NC
* Multi-family housing
49) Stone Brook $653,005 1986 Oct. 31, 1997 27.5 yrs.
* Norcross, GA
* Multi-family housing
50) St. Regis $670,792 1986 Oct. 31, 1997 27.5 yrs.
* Raleigh, NC
* Multi-family housing
51) Remington Place $588,592 1985 Oct. 31, 1997 27.5 yrs.
* Raleigh, NC
* Multi-family housing
52) Stone Point $718,777 1986 Jan.15, 1998 27.5 yrs.
* Charlotte, NC
* Multi-family housing
53) Pinnacle Ridge $337,877 1951 April 1, 1998 27.5 yrs.
* Ashville, NC
* Multi-family housing
54) Hampton Point $937,704 1986 Mar 31, 1998 27.5 yrs.
* Charleston, NC
* Multi-family housing
55) The Timbers $451,536 1983 June 4, 1998 27.5 yrs.
* Raleigh, NC
* Multi-family housing
56) The Gables $615,267 1987 July 2, 1998 27.5 yrs.
* Richmond, VA
* Multi-family housing
23
------------------------------------------------------------------------------------
Initial Cost Subsequent Imp. Gross Amount Carried
Encum- ------------------------------------------------------------------------------------
Description brances Land Bldg. & Imp. Capitalized Land Bldg. & Imp. Total
- ------------------------------------------------------------------------------------------------------------------------
57) Spring Lake (2) 900,000 8,100,000 866,697 907,578 8,959,119 9,866,697
* Morrow, GA
* Multi-family housing
58) Cape Landing -- 1,026,000 16,074,000 2,133,648 1,860,687 17,372,961 19,233,648
* Myrtle Beach, SC
* Multi-family housing
59) Brookfield -- 1,624,051 6,390,482 147,183 1,624,051 6,537,665 8,161,716
* Dallas, TX
* Multi-family housing
60) Eagle Crest -- 4,038,424 17,527,893 90,605 4,038,424 17,618,498 21,656,922
* Irving, TX
* Multi-family housing
61) Aspen Apartments -- 1,129,071 6,094,651 135,253 1,129,071 6,229,904 7,358,975
* Arlington, TX
* Multi-family housing
62) Mill Crossing -- 803,095 4,466,697 69,066 803,095 4,535,763 5,338,858
* Arlington, TX
* Multi-family housing
63) Polo Run -- 936,682 6,619,965 795,664 936,682 7,415,629 8,352,311
* Arlington, TX
* Multi-family housing
64) Wildwood -- 881,479 3,589,815 52,944 881,479 3,642,759 4,524,238
* Euless, TX
* Multi-family housing
65) Toscana -- 998,938 6,335,085 31,616 998,937 6,366,702 7,365,639
* Dallas, TX
* Multi-family housing
66) Arbors on Forest Ridge -- 862,803 8,711,151 43,810 862,803 8,754,961 9,617,764
* Bedford, TX
* Multi-family housing
67) Paces Cove -- 2,259,317 9,453,562 258,923 2,259,317 9,712,485 11,971,802
* Dallas, TX
* Multi-family housing
68) Remington Hills -- 4,509,071 16,412,148 482,800 4,509,072 16,894,947 21,404,019
* Irving, TX
* Multi-family housing
Year Date
Description Acc. Depr. Constructed Acquired Dep. Life
- -------------------------------------------------------------------------------
57) Spring Lake $487,958 1986 Aug. 12, 1998 27.5 yrs.
* Morrow, GA
* Multi-family housing
58) Cape Landing $800,319 1997/98 Oct. 16, 1998 27.5 yrs.
* Myrtle Beach, SC
* Multi-family housing
59) Brookfield $186,973 1984 July 23, 1999 27.5 yrs.
* Dallas, TX
* Multi-family housing
60) Eagle Crest $357,622 1983 July 23, 1999 27.5 yrs.
* Irving, TX 1985
* Multi-family housing
61) Aspen Apartments $155,255 1979 July 23, 1999 27.5 yrs.
* Arlington, TX
* Multi-family housing
62) Mill Crossing $107,921 1979 July 23, 1999 27.5 yrs.
* Arlington, TX
* Multi-family housing
63) Polo Run $154,386 1984 July 23, 1999 27.5 yrs.
* Arlington, TX
* Multi-family housing
64) Wildwood $84,312 1984 July 23, 1999 27.5 yrs.
* Euless, TX
* Multi-family housing
65) Toscana $126,957 1986 July 23, 1999 27.5 yrs.
* Dallas, TX
* Multi-family housing
66) Arbors on Forest Ridge $170,899 1986 July 23, 1999 27.5 yrs.
* Bedford, TX
* Multi-family housing
67) Paces Cove $195,934 1982 July 23, 1999 27.5 yrs.
* Dallas, TX
* Multi-family housing
68) Remington Hills $370,565 1984 July 23, 1999 27.5 yrs.
* Irving, TX 1985
* Multi-family housing
24
------------------------------------------------------------------------------------
Initial Cost Subsequent Imp. Gross Amount Carried
Encum- ------------------------------------------------------------------------------------
Description brances Land Bldg. & Imp. Capitalized Land Bldg. & Imp. Total
- ------------------------------------------------------------------------------------------------------------------------
69) Copper Crossing -- 1,782,562 9,994,421 228,834 1,783,749 10,222,068 12,005,817
* Fort Worth, TX
* Multi-family housing
70) Main Park -- 619,641 8,463,326 118,497 619,641 8,581,823 9,201,464
* Duncanville, TX
* Multi-family housing
71) Timberglen -- 2,563,522 10,657,083 364,279 2,563,522 11,021,362 13,584,884
* Dallas, TX
* Multi-family housing
72) Silver Brook I -- 3,352,896 12,356,997 795,364 3,352,896 13,152,361 16,505,257
* Grand Prairie, TX
* Multi-family housing
73) Summer Tree -- 3,338,748 4,385,408 505,511 3,338,748 4,890,919 8,229,667
* Dallas, TX
* Multi-family housing
74) Park Village -- 928,744 7,295,797 357,718 928,743 7,653,516 8,582,259
* Bedford, TX
* Multi-family housing
75) Cottonwood -- 474,344 5,797,412 496,915 474,344 6,294,327 6,768,671
* Arlington, TX
* Multi-family housing
76) Devonshire $3,966,620 1,892,165 5,672,727 326,786 1,892,165 5,999,513 7,891,678
* Dallas, TX
* Multi-family housing
77) Pace's Point $8,076,155 2,132,795 10,847,450 187,697 2,132,795 11,035,147 13,167,942
* Lewisville, TX
* Multi-family housing
78) The Meridian $2,999,146 531,832 7,007,392 203,708 531,832 7,211,100 7,742,932
* Austin, TX
* Multi-family housing
79) Grayson II $6,622,849 962,939 11,247,182 227,654 962,939 11,474,836 12,437,775
* Grapevine, TX
* Multi-family housing
80) Silver Brook II $2,996,150 1,202,745 4,605,505 213,917 1,202,746 4,819,421 6,022,167
* Grand Prairie, TX
* Multi-family housing
Year Date
Description Acc. Depr. Constructed Acquired Dep. Life
- -------------------------------------------------------------------------------
69) Copper Crossing $225,802 1980/1981 July 23, 1999 27.5 yrs.
* Fort Worth, TX
* Multi-family housing
70) Main Park $161,804 1984 July 23, 1999 27.5 yrs.
* Duncanville, TX
* Multi-family housing
71) Timberglen $226,307 1984 July 23, 1999 27.5 yrs.
* Dallas, TX
* Multi-family housing
72) Silver Brook I $279,259 1982 July 23, 1999 27.5 yrs.
* Grand Prairie, TX
* Multi-family housing
73) Summer Tree $121,790 1980 July 23, 1999 27.5 yrs.
* Dallas, TX
* Multi-family housing
74) Park Village $157,853 1983 July 23, 1999 27.5 yrs.
* Bedford, TX
* Multi-family housing
75) Cottonwood $118,929 1985 July 23, 1999 27.5 yrs.
* Arlington, TX
* Multi-family housing
76) Devonshire $135,312 1978 July 23, 1999 27.5 yrs.
* Dallas, TX
* Multi-family housing
77) Pace's Point $207,288 1985 July 23, 1999 27.5 yrs.
* Lewisville, TX
* Multi-family housing
78) The Meridian $134,852 1988 July 23, 1999 27.5 yrs.
* Austin, TX
* Multi-family housing
79) Grayson II $208,621 1986 July 23, 1999 27.5 yrs.
* Grapevine, TX
* Multi-family housing
80) Silver Brook II $98,797 1984 July 23, 1999 27.5 yrs.
* Grand Prairie, TX
* Multi-family housing
25
------------------------------------------------------------------------------------
Initial Cost Subsequent Imp. Gross Amount Carried
Encum- ------------------------------------------------------------------------------------
Description brances Land Bldg. & Imp. Capitalized Land Bldg. & Imp. Total
- ------------------------------------------------------------------------------------------------------------------------
81) Estrada Oaks -- 1,939,650 8,847,232 225,552 1,939,651 9,072,783 11,012,434
* Irving, TX
* Multi-family housing
82) Burney Oaks -- 1,063,277 8,901,959 259,236 1,063,277 9,161,195 10,224,472
* Arlington, TX
* Multi-family housing
83) Cutter's Point -- 2,001,796 7,858,044 507,994 2,001,796 8,366,038 10,367,834
* Richardson, TX
* Multi-family housing
84) The Courts on Pear -- 2,360,962 9,482,729 102,563 2,360,962 9,585,292 11,946,254
* Dallas, TX
* Multi-family housing
85) Sierra Ridge -- 611,683 6,012,983 389,580 611,693 6,402,553 7,014,246
* San Antonio, TX
* Multi-family housing
86) Grayson I $6,884,762 770,541 9,178,418 289,078 770,911 9,467,126 10,238,037
* Grapevine, TX
* Multi-family housing
87) Canyon Hills -- 1,233,883 11,278,619 73,946 1,081,892 11,504,556 12,586,448
* Austin, TX
* Multi-family housing
housing
--------------------------------------------------------------------------------------------------
$105,045,682 138,289,067 661,450,377 119,389,294 136,326,140 782,802,598 919,128,738 (1)
Year Date
Description Acc. Depr. Constructed Acquired Dep. Life
- -------------------------------------------------------------------------------
81) Estrada Oaks $164,335 1983 July 23, 1999 27.5 yrs.
* Irving, TX
* Multi-family housing
82) Burney Oaks $172,359 1985 July 23, 1999 27.5 yrs.
* Arlington, TX
* Multi-family housing
83) Cutter's Point $172,370 1978 July 23, 1999 27.5 yrs.
* Richardson, TX
* Multi-family housing
84) The Courts on Pear $165,473 1988 July 23, 1999 27.5 yrs.
* Dallas, TX
* Multi-family housing
85) Sierra Ridge $118,741 1981 July 23, 1999 27.5 yrs.
* San Antonio, TX
* Multi-family housing
86) Grayson I $168,123 1985 July 23, 1999 27.5 yrs.
* Grapevine, TX
* Multi-family housing
87) Canyon Hills $185,272 1996 July 23, 1999 27.5 yrs.
* Austin, TX
* Multi-family housing
-------------------
$77,538,085
(1) Represents the aggregate cost for Federal Income tax purposes.
(2) $73.5 million of secured debt which is secured by 10 properties which are
individually noted.
The reconciliations of the carrying amount of real estate owned and accumulated
depreciation is contained in Note 3 of the audited financial statements.
26
SIGNATURES
Pursuant to the requirements of Section 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.
Cornerstone Realty Income Trust, Inc.
By: /s/ Glade M. Knight
----------------------------------
Glade M. Knight
Chairman of the Board,
Chief Executive Officer
and President
March 27, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant and
in the capacities and on the date indicated.
SIGNATURE CAPACITIES DATE
--------- ---------- ----
/s/ Glade M. Knight Director, Chief Executive Officer March 27, 2000
- ----------------------------------- and President
Glade M. Knight
/s/ Stanley J. Olander, Jr. Director, Chief Financial Officer March 27, 2000
- ----------------------------------- and Principal Accounting Officer
Stanley J. Olander, Jr.
/s/ Glenn W. Bunting, Jr. Director March 24, 2000
- -----------------------------------
Glenn W. Bunting, Jr.
/s/ Leslie A. Grandis Director March 27, 2000
- -----------------------------------
Leslie A. Grandis
/s/ Penelope W. Kyle Director March 27, 2000
- -----------------------------------
Penelope W. Kyle
/s/ Harry S. Taubenfeld Director March 24, 2000
- -----------------------------------
Harry S. Taubenfeld
/s/ Martin Zuckerbrod Director March 24, 2000
- -----------------------------------
Martin Zuckerbrod
27
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
2 Agreement and Plan of Merger, dated as of March 30, 1999, by and among
the registrant, Apple Residential Income Trust, Inc. and Cornerstone
Acquisition Company (Incorporated by reference to Exhibit 2 included in
the registrant's Registration Statement on Form S-4; Registration
Statement No. 333-78117).
3.1 Amended and Restated Articles of Incorporation of Cornerstone Realty
Income Trust, Inc., as amended (Incorporated by reference to Exhibit
3.1 included in the registrant's Report on Form 8-K dated May 12, 1998;
File No. 1-12875).
3.2 Articles of Amendment to the Amended and Restated Articles of
Incorporation of Cornerstone Realty Income Trust, Inc. (Incorporated by
reference to Exhibit 3.2 included in the registrant's Report on Form
8-K dated July 23, 1999; File No. 1-12875).
3.3 Bylaws of Cornerstone Realty Income Trust, Inc. (Amended Through July
15, 1999) (Incorporated by reference to Exhibit 3.3 included in the
registrant's Report on Form 8-K dated July 23, 1999; File No. 1-12875).
4.1 Amended and Restated Credit Agreement dated as of July 9, 1999, by and
among Cornerstone Realty Income Trust, Inc., CRIT-NC, LLC, Cornerstone
REIT Limited Partnership, and any Additional Borrowers party thereto,
as Borrowers, the Lenders referred to therein, First Union National
Bank, as Administrative Agent, and Fleet National Bank, as Syndication
Agent (Incorporated by reference to Exhibit 4.1 included in the
registrant's Report on Form 8-K dated June 25, 1999; File No. 1-12875).
4.2 Joinder Agreement dated July 26, 1999 to the Amended and Restated
Credit Agreement dated as of July 9, 1999, by and among Cornerstone
Realty Income Trust, Inc. and its subsidiaries, as Borrowers, the
lenders party to the Amended and Restated Credit Agreement, First Union
National Bank, as Administrative Agent, and Fleet National Bank, as
Syndication Agent (Incorporated by reference to Exhibit 4.2 included in
the registrant's Report on Form 8-K dated June 25, 1999; File No.
1-12875).
4.3 Lender Addition and Acknowledgement Agreement dated July 27, 1999 to
the Amended and Restated Credit Agreement dated as of July 9, 1999, by
and among Cornerstone Realty Income Trust, Inc. and its subsidiaries,
as Borrowers, the Lenders who are or may become party thereto, First
Union National Bank, as Administrative Agent, and Fleet National Bank
as Syndication Agent (Incorporated by reference to Exhibit 4.3 included
in the registrant's Report on Form 8-K dated June 25, 1999; File No.
1-12875).
28
Exhibit
No. Description
- ------- -----------
4.4 (1) Replacement Revolving Credit Note dated July 27, 1999 in the
principal amount of up to $60,000,000 made payable by Cornerstone
Realty Income Trust, Inc. and its subsidiaries to the order of First
Union National Bank, and (2) Revolving Credit Note dated July 27, 1999
in the principal amount of up to $35,000,000 made payable by
Cornerstone Realty Income Trust, Inc. and its subsidiaries to the order
of Wachovia Bank, N.A., and (3) Replacement Revolving Credit Note dated
July 27, 1999 in the principal amount of up to $35,000,000 made payable
by Cornerstone Realty Income Trust, Inc. and its subsidiaries to the
order of Fleet National Bank, and (4) Replacement Revolving Credit Note
dated July 27, 1999 in the principal amount of up to $30,000,000 made
payable by Cornerstone Realty Income Trust, Inc. and its subsidiaries
to the order of Guaranty Federal Bank, F.S.B., and (5) Replacement
Revolving Credit Note dated July 27, 1999 in the principal amount of up
to $25,000,000 made payable by Cornerstone Realty Income Trust, Inc.
and its subsidiaries to the order of Crestar Bank (Incorporated by
reference to Exhibit 4.4 included in the registrant's Report on Form
8-K dated June 25, 1999; File No. 1-12875).
4.5 Loan Letter Agreement dated June 25, 1999 among Cornerstone Realty
Income Trust, Inc., CRIT-NC, LLC and Cornerstone REIT Limited
Partnership as Borrowers, and First Union National Bank as Lender,
pertaining to a loan in the amount of $5,500,000 (Incorporated by
reference to Exhibit 4.5 included in the registrant's Report on Form
8-K dated June 25, 1999; File No. 1-12875).
4.6 Promissory Note dated September 27, 1999 in the principal amount of
$50,550,000 made payable by Cornerstone Realty Income Trust, Inc. to
the order of The Prudential Insurance Company of America (Incorporated
by reference to Exhibit 4.1 included in the registrant's Report on Form
8-K dated September 29, 1999; File No. 1-12875).
4.7 Promissory Note dated September 27, 1999 in the principal amount of
$22,950,000 made payable by CRIT-NC, LLC to the order of The Prudential
Insurance Company of America (Incorporated by reference to Exhibit 4.2
included in the registrant's Report on Form 8-K dated September 29,
1999; File No. 1-12875).
4.8 Mortgage and Security Agreement dated as of September 27, 1999 from
Cornerstone Realty Income Trust, Inc., as borrower, to The Prudential
Insurance Company of America, as lender, pertaining to the Hampton
Pointe and Westchase properties (Incorporated by reference to Exhibit
4.3 included in the registrant's Report on Form 8-K dated September 29,
1999; File No. 1-12875).
4.9 Mortgage and Security Agreement dated as of September 27, 1999 from
Cornerstone Realty Income Trust, Inc., as borrower, to The Prudential
Insurance Company of America, as lender, pertaining to the Arbors at
Windsor Lake property (Incorporated by reference to Exhibit 4.4
included in the registrant's Report on Form 8-K dated September 29,
1999; File No. 1-12875).
29
Exhibit
No. Description
- ------- -----------
4.10 Deed of Trust and Security Agreement dated as of September 27, 1999
made by CRIT-NC, LLC, as borrower, for the benefit of The Prudential
Insurance Company of America, as lender, pertaining to the Charleston
Place and Stone Point properties (Incorporated by reference to Exhibit
4.5 included in the registrant's Report on Form 8-K dated September 29,
1999; File No. 1-12875).
4.11 Deed of Trust and Security Agreement dated as of September 27, 1999
made by CRIT-NC, LLC, as borrower, for the benefit of The Prudential
Insurance Company of America, as lender, pertaining to the St. Regis
and Remington Place properties (Incorporated by reference to Exhibit
4.6 included in the registrant's Report on Form 8-K dated September 29,
1999; File No. 1-12875).
4.12 Deed To Secure Debt and Security Agreement by Cornerstone Realty Income
Trust, Inc., as borrower, to The Prudential Insurance Company of
America, as lender, pertaining to the Ashley Run, Stone Brook and
Spring Lake properties (Incorporated by reference to Exhibit 4.7
included in the registrant's Report on Form 8-K dated September 29,
1999; File No. 1-12875).
4.13 Assignment of Leases and Rents dated as of September 27, 1999, by
Cornerstone Realty Income Trust, Inc. to The Prudential Insurance
Company of America (Charleston County, South Carolina) (Incorporated by
reference to Exhibit 4.8 included in the registrant's Report on Form
8-K dated September 29, 1999; File No. 1-12875).
4.14 Assignment of Leases and Rents dated as of September 27, 1999, by
Cornerstone Realty Income Trust, Inc. to The Prudential Insurance
Company of America (Richland County, South Carolina) (Incorporated by
reference to Exhibit 4.9 included in the registrant's Report on Form
8-K dated September 29, 1999; File No. 1-12875).
4.15 Assignment of Leases and Rents dated as of September 27, 1999, by
CRIT-NC, LLC to The Prudential Insurance Company of America
(Mecklenburg County, North Carolina) (Incorporated by reference to
Exhibit 4.10 included in the registrant's Report on Form 8-K dated
September 29, 1999; File No. 1-12875).
4.16 Assignment of Leases and Rents dated as of September 27, 1999, by
Cornerstone Realty Income Trust, Inc. to The Prudential Insurance
Company of America (Clayton County, Georgia) (Incorporated by reference
to Exhibit 4.11 included in the registrant's Report on Form 8-K dated
September 29, 1999; File No. 1-12875).
4.17 Assignment of Leases and Rents dated as of September 27, 1999, by
Cornerstone Realty Income Trust, Inc. to The Prudential Insurance
Company of America (Gwinnett County, Georgia) (Incorporated by
reference to Exhibit 4.12 included in the registrant's Report on Form
8-K dated September 29, 1999; File No. 1-12875).
30
Exhibit
No. Description
- ------- -----------
4.18 Assignment of Leases and Rents dated as of September 27, 1999, by
CRIT-NC, LLC to The Prudential Insurance Company of America (Wake
County, North Carolina) (Incorporated by reference to Exhibit 4.13
included in the registrant's Report on Form 8-K dated September 29,
1999; File No. 1-12875).
The registrant agrees to furnish the Securities and Exchange Commission
on request a copy of any instrument with respect to long-term debt of the
registrant or its subsidiaries the total amount of securities authorized under
which does not exceed 10% of the total assets of the registrant and its
subsidiaries on a consolidated basis.
10.1 Amendment and Restatement of Cornerstone Realty Income Trust, Inc. 1992
Incentive Plan. (Exhibit 10.14) (1) This is a management contract or
compensatory plan or arrangement required to be filed as an exhibit
pursuant to Item 14(c) of Form 10-K.
10.2 Amendment and Restatement of Cornerstone Realty Income Trust, Inc. 1992
Non-Employee Directors Stock Option Plan. (Exhibit 10.15) (1) This is a
management contract or compensatory plan or arrangement required to be
filed as an exhibit pursuant to Item 14 (c) of Form 10-K.
10.3 Agreement for Appointment of Transfer Agent and Registrar between
Cornerstone Realty Income Trust, Inc. and First Union National Bank of
North Carolina (Incorporated by reference to Exhibit 10.19 to the
registrant's Report on Form 10-K for the Year Ended December 31, 1994;
File No. 0-23954).
10.4 Agreement and Bill of Transfer and Assignment dated October 1, 1996
between Cornerstone Management Group, Inc. and Cornerstone Realty
Income Trust, Inc.(2)
10.5 Agreement and Bill of Transfer and Assignment dated October 1, 1996
between Cornerstone Advisors, Inc. and Cornerstone Realty Income Trust,
Inc.(2)
10.6 Agreement and Bill of Transfer and Assignment dated October 1, 1996
between Cornerstone Realty Group, Inc. and Cornerstone Realty Income
Trust, Inc. (Acquisition/Disposition Agreement).(2)
10.7 Agreement and Bill of Transfer and Assignment dated October 1, 1996
between Cornerstone Realty Group, Inc. and Cornerstone Realty Income
Trust, Inc. (Personal Property). (2)
10.8 Employment Agreement dated September 1, 1996 between Cornerstone Realty
Income Trust, Inc. and Glade M. Knight. This is a management contract
or compensatory plan or arrangement required to be filed as an exhibit
pursuant to Item 14 (c) of Form 10-K. (Incorporated by reference to
Exhibit 10.8 to the registrant's Report on Form 10-K for the Year Ended
December 31, 1997; File No. 1-12875).
31
Exhibit
No. Description
- ------- -----------
10.9 Employment Agreement dated September 1, 1996 between Cornerstone Realty
Income Trust, Inc. and Debra A. Jones. This is a management contract or
compensatory plan or arrangement required to be filed as an exhibit
pursuant to Item 14 (c) of Form 10-K. (2)
10.10 Employment Agreement dated September 1, 1996 between Cornerstone Realty
Income Trust, Inc. and Stanley J. Olander, Jr . This is a management
contract or compensatory plan or arrangement required to be filed as an
exhibit pursuant to Item 14 (c) of Form 10-K. (2)
10.11 First Amendment to the Cornerstone Realty Income Trust, Inc. 1992
Incentive Plan. This is a management contract or compensatory plan or
arrangement required to be filed as an exhibit pursuant to Item 14 (c)
of Form 10-K. (Incorporated by reference to Exhibit 10.24 to the
registrant's Report on Form 10-K for the Year Ended December 31, 1997;
File No. 1-12875).
10.12 First Amendment to the 1992 Incentive Plan Nonstatutory Stock Option
Agreement between Cornerstone Realty Income Trust, Inc. and Martin
Zuckerbrod. This is a management contract or compensatory plan or
arrangement required to be filed as an exhibit pursuant to Item 14 (c)
of Form 10-K. (Incorporated by reference to Exhibit 10.25 to the
registrant's Report on Form 10-K for the Year Ended December 31, 1997;
File No. 1-12875).
10.13 First Amendment to the 1992 Incentive Plan Nonstatutory Stock Option
Agreement between Cornerstone Realty Income Trust, Inc. and Harry S.
Taubenfeld. This is a management contract or compensatory plan or
arrangement required to be filed as an exhibit pursuant to Item 14 (c)
of Form 10-K. (Incorporated by reference to Exhibit 10.26 to the
registrant's Report on Form 10-K for the Year Ended December 31, 1997;
File No. 1-12875).
10.14 First Amendment to the Cornerstone Realty Income Trust, Inc. 1992
Non-Employee Directors Stock Option Plan. This is a management contract
or compensatory plan or arrangement required to be filed as an exhibit
pursuant to Item 14 (c) of Form 10-K. (Incorporated by reference to
Exhibit 10.1 to the registrant's Current Report on Form 8-K dated May
12, 1998; File No. 1-12875).
10.15 Articles of Organization of CRIT-NC, LLC (Incorporated by reference to
Exhibit 10.1 included in the registrant's Current Report on Form 8-K
dated December 30, 1997; File No. 0-23954.)
10.16 Operating Agreement of CRIT-NC, LLC dated as of December 9, 1997
(Incorporated by reference to Exhibit 10.2 included in the registrant's
Current Report on Form 8-K dated December 30, 1997; File No. 0-23954).
32
Exhibit
No. Description
- ------- -----------
10.17 Environmental Indemnity Agreement dated as of September 27, 1999 by
Cornerstone Realty Income Trust, Inc. in favor of The Prudential
Insurance Company of America referring to the $50,550,000 Promissory
Note (Incorporated by reference to Exhibit 10.1 included in the
registrant's Report on Form 8-K dated September 29, 1999; File No.
1-12875).
10.18 Environmental Indemnity Agreement dated as of September 27, 1999 by
CRIT-NC, LLC and Cornerstone Realty Income Trust, Inc. in favor of The
Prudential Insurance Company of America referring to the $22,950,000
Note (Incorporated by reference to Exhibit 10.2 included in the
registrant's Report on Form 8-K dated September 29, 1999; File No.
1-12875).
10.19 Unconditional and Irrevocable Guaranty of Payment and Performance
(Recourse Carveouts) dated as of September 27, 1999 made by Cornerstone
Realty Income Trust, Inc. in favor of The Prudential Insurance Company
of America pertaining to the $22,950,000 Promissory Note (Incorporated
by reference to Exhibit 10.3 included in the registrant's Report on
Form 8-K dated September 29, 1999; File No. 1-12875).
10.20 Unconditional and Irrevocable Guaranty of Payment and Performance
(Cross-Collateralization) dated as of September 27, 1999 made by
Cornerstone Realty Income Trust, Inc. in favor of The Prudential
Insurance Company of America pertaining to the $22,950,000 Promissory
Note (Incorporated by reference to Exhibit 10.4 included in the
registrant's Report on Form 8-K dated September 29, 1999; File No.
1-12875).
10.21 Unconditional and Irrevocable Guaranty of Payment and Performance
(Cross-Collateralization) dated as of September 27, 1999 made by
CRIT-NC, LLC in favor of The Prudential Insurance Company of America
pertaining to the $50,550,000 Promissory Note (Incorporated by
reference to Exhibit 10.5 included in the registrant's Report on Form
8-K dated September 29, 1999; File No. 1-12875).
10.22 Articles of Incorporation of Apple General, Inc. (Incorporated by
reference to Exhibit 10.14 filed in the registration statement on Form
S-11 of Apple Residential Income Trust, Inc.; File No. 333-10635).
10.23 Bylaws of Apple General, Inc. (Incorporated by reference to Exhibit
10.15 filed in the registration statement on Form S-11 of Apple
Residential Income Trust, Inc.; File No. 333-10635).
10.24 Articles of Incorporation of Apple Limited, Inc. (Incorporated by
reference to Exhibit 10.12 filed in the registration statement on Form
S-11 of Apple Residential Income Trust, Inc.; File No. 333-10635).
10.25 Bylaws of Apple Limited, Inc. (Incorporated by reference to Exhibit
10.13 filed in the registration statement on Form S-11 of Apple
Residential Income Trust, Inc.; File No. 333-10635).
33
Exhibit
No. Description
- ------- -----------
10.26 Certificate of Limited Partnership of Apple REIT Limited Partnership
(Incorporated by reference to Exhibit 10.16 filed in the registration
statement on Form S-11 of Apple Residential Income Trust, Inc.; File
No. 333-10635).
10.27 Limited Partnership Agreement of Apple REIT Limited Partnership
(Incorporated by reference to Exhibit 10.17 filed in the registration
statement on Form S-11 of Apple Residential Income Trust, Inc.; File
No. 333-10635).
10.28 Certificate of Limited Partnership for Apple REIT II Limited
Partnership (Incorporated by reference to Exhibit 10.1 to Current
Report on Form 8-K dated July 9, 1998 of Apple Residential Income
Trust, Inc.; File No. 0-23983).
10.29 Limited Partnership Agreement for Apple REIT II Limited Partnership
(Incorporated by reference to Exhibit 10.6 to Current Report on Form
8-K dated July 9, 1998 of Apple Residential Income Trust, Inc.; File
No. 0-23983).
10.30 Certificate of Limited Partnership for Apple REIT III Limited
Partnership (Incorporated by reference to Exhibit 10.2 to Current
Report on Form 8-K dated July 9, 1998 of Apple Residential Income
Trust, Inc.; File No. 0-23983).
10.31 Limited Partnership Agreement for Apple REIT III Limited Partnership
(Incorporated by reference to Exhibit 10.7 to Current Report on Form
8-K dated July 9, 1998 of Apple Residential Income Trust, Inc.; File
No. 0-23983).
10.32 Certificate of Limited Partnership for Apple REIT IV Limited
Partnership (Incorporated by reference to Exhibit 10.3 to Current
Report on Form 8-K dated July 9, 1998 of Apple Residential Income
Trust, Inc.; File No. 0-23983).
10.33 Limited Partnership Agreement for Apple REIT IV Limited Partnership
(Incorporated by reference to Exhibit 10.8 to Current Report on Form
8-K dated July 9, 1998 of Apple Residential Income Trust, Inc.; File
No. 0-23983).
10.34 Certificate of Limited Partnership for Apple REIT V Limited Partnership
(Incorporated by reference to Exhibit 10.4 to Current Report on Form
8-K dated July 9, 1998 of Apple Residential Income Trust, Inc.; File
No. 0-23983).
10.35 Limited Partnership Agreement for Apple REIT V Limited Partnership
(Incorporated by reference to Exhibit 10.9 to Current Report on Form
8-K dated July 9, 1998 of Apple Residential Income Trust, Inc.; File
No. 0-23983).
10.36 Certificate of Limited Partnership for Apple REIT VI Limited
Partnership (Incorporated by reference to Exhibit 10.5 to Current
Report on Form 8-K dated July 9, 1998 of Apple Residential Income
Trust, Inc.; File No. 0-23983)
34
Exhibit
No. Description
- ------- -----------
10.37 Limited Partnership Agreement for Apple REIT VI Limited Partnership
(Incorporated by reference to Exhibit 10.10 to Current Report on Form
8-K dated July 9, 1998 of Apple Residential Income Trust, Inc.; File
No. 0-23983).
10.38 Certificate of Limited Partnership of Apple REIT VII Limited
Partnership (Incorporated by reference to Exhibit 10.3 to Current
Report on Form 8-K dated February 1, 1999 of Apple Residential Income
Trust, Inc.; File No. 0-23983).
10.39 Limited Partnership Agreement of Apple REIT VII Limited Partnership
(Incorporated by reference to Exhibit 10.4 to Current Report on Form
8-K dated February 1, 1999 of Apple Residential Income Trust, Inc.;
File No. 0-23983).
10.40 Apple Residential Income Trust, Inc. 1996 Non-Employee Directors Stock
Option Plan. This is a management contract or compensatory plan or
arrangement required to be filed as an exhibit pursuant to Item 14(c)
of Form 10-K (Incorporated by reference to Exhibit 99 to the
Registration Statement on Form S-8 of Apple Residential Income Trust,
Inc., as filed with the Securities and Exchange Commission on September
30, 1998; File No. 333-64703).
10.41 Apple Residential Income Trust, Inc. 1996 Incentive Plan. This is a
management contract or compensatory plan or arrangement required to be
filed as an exhibit pursuant to Item 14(c) of Form 10-K (Incorporated
by reference to Exhibit 99 to the Registration Statement on Form S-8 of
Apple Residential Income Trust, Inc., as filed with the Securities and
Exchange Commission on September 30, 1998; File No. 333-64701).
10.42 Articles of Incorporation of Cornerstone Acquisition Company, as
amended by Articles of Amendment thereto (FILED HEREWITH).
10.43 Bylaws of Cornerstone Acquisition Company. (FILED HEREWITH).
10.44 Articles of Incorporation of CRIT-SC, Inc. (FILED HEREWITH).
10.45 Bylaws of CRIT-SC, Inc. (FILED HEREWITH).
10.46 Articles of Organization of CRIT-SC, LLC. (FILED HEREWITH).
10.47 Operating Agreement of CRIT-SC, LLC. (FILED HEREWITH).
10.48 Certificate of Limited Partnership of CRIT-Cornerstone Limited
Partnership. (FILED HEREWITH).
10.49 Limited Partnership Agreement of CRIT-Cornerstone Limited Partnership.
(FILED HEREWITH).
10.50 Stock Option Agreement dated July 23, 1999 between Glade M. Knight and
Cornerstone Realty Income Trust, Inc. This is a management contract or
compensatory plan or arrangement required to be filed as an exhibit
pursuant to Item 14(c) of Form 10-K. (FILED HEREWITH).
35
Exhibit
No. Description
- ------- -----------
12 Statement regarding computation of Ratio of Earnings to Fixed Charges.
(FILED HEREWITH).
13 Portions of the registrant's 1999 Annual Report (with the exception of
the information incorporated by reference in Items 6, 7, and 14 of this
Form 10-K Report, no other information appearing in the 1999 Annual
Report is to be deemed filed as a part of this Form 10-K Report).
(FILED HEREWITH).
21 Subsidiaries of Cornerstone Realty Income Trust, Inc. (FILED HEREWITH).
23 Consent of Independent Auditors. (FILED HEREWITH).
27 Financial Data Schedule. (FILED HEREWITH).
(1) Incorporated herein by reference to the Exhibit referred to in
parentheses which was filed as an Exhibit to the registrant's
Post-Effective Amendment No. 5 to its Registration Statement on Form
S-11 (File No. 33-51296), as filed with the Securities and Exchange
Commission on April 28, 1994.
(2) Incorporated herein by reference to the Exhibit of the same number
filed as an Exhibit to the registrant's Report on Form 8-K dated
September 26, 1996 (File No. 0-23954).
36