Page-18
Exhibit 99.4
STATEMENTS OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
OF THE CRESCENT APARTMENTS
FOR THE PERIOD FROM JANUARY 1, 1997 TO SEPTEMBER 29, 1997 (UNAUDITED)
AND FOR THE YEAR ENDED DECEMBER 31, 1996
Page-19
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Gables Realty Limited Partnership:
We have audited the accompanying statement of excess of revenues over specific
operating expenses of The Crescent Apartments (the "Property") for the year
ended December 31, 1996. This financial statement is the responsibility of the
Property's management. Our responsibility is to express an opinion on this
financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of excess of revenues over specific
operating expenses is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statement. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the Property
after acquisition by the Company. The accompanying financial statement was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission and is not intended to be a complete
presentation of the Property's revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the excess of revenues over specific operating expenses
(exclusive of expenses described in Note 2) of The Crescent Apartments for the
year ended December 31, 1996 in conformity with generally accepted accounting
principles.
/s/ Arthur Andersen LLP
Atlanta, Georgia
November 14, 1997
Page-20
THE CRESCENT APARTMENTS
STATEMENTS OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES
FOR THE PERIOD JANUARY 1, 1997 TO SEPTEMBER 29, 1997 (UNAUDITED)
AND FOR THE YEAR ENDED DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
January 1, 1997 Year Ended
to September December 31,
29, 1997 1996
------------- ----------
(Unaudited)
REVENUES:
Rental revenues (Note 1) ............................. $2,328 $2,272
Other property revenues ............................. 55 76
------ ------
Total property revenues ............................ 2,383 2,348
SPECIFIC OPERATING EXPENSES:
Property operating and maintenance ................... 985 1,277
------ ------
EXCESS OF REVENUES OVER SPECIFIC OPERATING
EXPENSES ........................................... $1,398 $1,071
====== ======
The accompanying notes are an integral part of these statements.
Page-21
THE CRESCENT APARTMENTS
NOTES TO STATEMENTS OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
For the Period From January 1, 1997 to September 29, 1997 (Unaudited)
and the Year Ended December 31, 1996
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Description of Property Acquired
--------------------------------
On September 30, 1997, Gables Realty Limited Partnership (the "Company")
acquired The Crescent Apartments, a multifamily apartment community located
in Houston, Texas, comprised of 324 apartment homes (the "Property").
The aggregate purchase price of $22.6 million was financed through
borrowings under the Company's $175 million unsecured revolving credit
facility.
In February, 1996, the construction of the Property was completed and in
April, 1997, the Property reached a stabilized occupancy level of 93%.
Rental Revenue Recognition
--------------------------
The Property is leased under operating leases with terms generally equal to
one year or less. Rental revenue is recognized when earned which materially
approximates revenue recognition on a straight-line basis.
2. BASIS OF ACCOUNTING
The accompanying statements of excess of revenues over specific operating
expenses are presented on the accrual basis. These statements have been
prepared in accordance with the applicable rules and regulations of the
Securities and Exchange Commission for real estate properties acquired.
Accordingly, the statements exclude certain historical expenses not
comparable to the operations of the Property after acquisition, such as
depreciation, interest and management fees.