As filed with the Securities and Exchange Commission on July 10, 1998
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
JUNE 25, 1998
(Date of Report)
EQUITY RESIDENTIAL PROPERTIES TRUST
(Exact Name of Registrant as Specified in its Charter)
1-12252
(Commission File No.)
MARYLAND 13-3675988
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation) Identification No.)
TWO NORTH RIVERSIDE PLAZA, CHICAGO, ILLINOIS 60606
(Address of Principal Executive Offices) (Zip Code)
(312) 474-1300
(Registrant's Telephone Number, Including Area Code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Capitalized terms used but not defined in this Current Report on Form 8-K are as
defined in the Company's Annual Report on Form 10-K for the year ended December
31, 1997, as amended by Form 10-K/A, and the Company's Quarterly Report on Form
10-Q for the quarterly period ended March 31, 1998.
ACQUISITIONS
As used herein, the term "Company" means Equity Residential Properties Trust
("EQR") and its subsidiaries as the survivor of the mergers between EQR and each
of Wellsford Residential Property Trust ("Wellsford") (the "Wellsford Merger")
and Evans Withycombe Residential, Inc. ("EWR") (the "EWR Merger"). The Company
acquired 37 multifamily properties during the period from January 1, 1998 to
June 25, 1998 (the "Acquired Properties"). The Company has also entered into
contracts to acquire an additional 42 multifamily properties. The cash portion
of these transactions was or will be primarily financed through the January 1998
Common Share Offering, the February 1998 Common Share Offerings, the March 1998
Common Share Offering, offerings completed in April 1998 and amounts available
on the Company's line of credit. In April 1998, the Operating Partnership
issued 6.63% unsecured notes due April 13, 2015 (the "2015 Notes") in a public
debt offering. The Operating Partnership received net proceeds of approximately
$298.1 million in connection with this issuance. On April 29, 1998, the Company
completed an offering of 946,565 publicly registered Common Shares, which were
sold at a price of $46.5459 per share (the "April 1998 Common Share Offering").
The Company received net proceeds of approximately $44.1 million in connection
therewith. The terms of purchase and descriptions of the Acquired Properties
follow. Expected terms of purchase and descriptions of the additional 42
multifamily properties (the "Probable Properties") are discussed in Item 5.
DESCRIPTIONS OF PROPERTIES
CITYSCAPE APARTMENTS, ST. LOUIS PARK, MINNESOTA
On January 7, 1998, the Company acquired a multifamily property located in St.
Louis Park, Minnesota ("Cityscape"). Cityscape was approximately 99% occupied
as of June 22, 1998. The property consists of 156 units in a four-story
residential building on approximately four acres. Amenities include a community
room with fireplace, kitchen and large screen color TV, exercise room, outdoor
swimming pool with sun deck plaza, gas grill picnic area, bay windows in master
bedrooms, balconies/patios, full size washers/dryers, vaulted ceilings in select
units, heated underground parking, and sprinkler systems. The property was
constructed in 1990.
TERMS OF PURCHASE
Cityscape was purchased from an unaffiliated third party for approximately $12.3
million.
2
740 RIVER DRIVE APARTMENTS, ST. PAUL, MINNESOTA
On January 9, 1998, the Company acquired a multifamily property located in St.
Paul, Minnesota ("740 River Drive"). 740 River Drive was approximately 97%
occupied as of June 22, 1998. The property consists of 162 units in a 23-story
residential building on approximately two acres. Amenities include a party room
with kitchen, exercise facility, swimming pool with sundeck, underground
parking, furnished lobby, laundry room, and stackable washers/dryers in select
units. The property was constructed in 1962.
TERMS OF PURCHASE
740 River Drive was purchased from an unaffiliated third party for approximately
$12.8 million, which included the assumption of approximately $7 million of
mortgage indebtedness.
PROSPECT TOWERS APARTMENTS, HACKENSACK, NEW JERSEY
On January 13, 1998, the Company acquired a multifamily property located in
Hackensack, New Jersey ("Prospect Towers"). Prospect Towers was approximately
97% occupied as of June 22, 1998. The property consists of 157 units in an
18-story residential building on approximately two acres and a vacant land
parcel. Amenities include a health club, outdoor swimming pool with sauna,
clubhouse, underground parking, 24-hour fire alarm system, and washers/dryers in
each unit. The property was constructed in 1995.
TERMS OF PURCHASE
Prospect Towers was purchased from an unaffiliated third party for approximately
$36.3 million, which included the assumption of approximately $14.9 million of
mortgage indebtedness.
PARK PLACE APARTMENTS, HOUSTON, TEXAS
On January 16, 1998, the Company acquired a multifamily property located in
Houston, Texas ("Park Place"). Park Place was approximately 98% occupied as of
June 22, 1998. The property consists of 229 units in 12 two and three-story
residential buildings on approximately 12 acres. Amenities include a clubhouse,
swimming pool with sundeck area, fitness center, barbeque area, attached
garages/carports, washers/dryers in all units, fireplaces in select units, built
in bookshelves and work areas, and extra phone/fax/computer modem lines. The
property was constructed in 1996.
TERMS OF PURCHASE
Park Place was purchased from an unaffiliated third party for approximately
$13.6 million, which included the assumption of approximately $10.2 million of
mortgage indebtedness.
3
PARK WESTEND APARTMENTS, RICHMOND, VIRGINIA
On January 16, 1998, the Company acquired a multifamily property located in
Richmond, Virginia ("Park Westend"). Park Westend was approximately 96%
occupied as of June 22, 1998. The property consists of 312 units in 24
two-story residential buildings on approximately 18 acres. Amenities include a
clubhouse, swimming pool, jacuzzi, two lighted tennis courts, basketball court,
two car wash areas, washer/dryer connections in select units, fireplaces in
select units, vaulted ceilings in select units, and ceiling fans in select
units. The property was constructed in 1985.
TERMS OF PURCHASE
Park Westend was purchased from an unaffiliated third party for $13.3 million,
which included the assumption of approximately $7.2 million of mortgage
indebtedness.
EMERALD BAY AT WINTER PARK APARTMENTS, WINTER PARK, FLORIDA
On January 29, 1998, the Company acquired a multifamily property located in
Winter Park, Florida ("Emerald Bay"). Emerald Bay was approximately 96% occupied
as of June 22, 1998. The property consists of 432 units in 28 two-story
residential buildings on approximately 23 acres. Amenities include a clubhouse,
three swimming pools, fitness center, tennis court, playground, supervised
children's activity center, three laundry centers, car wash area, sand
volleyball court, and carports. The property was constructed in 1972 and
renovated in 1996.
TERMS OF PURCHASE
Emerald Bay was purchased from an unaffiliated third party for approximately
$15.7 million.
FARNHAM PARK APARTMENTS, HOUSTON, TEXAS
On February 5, 1998, the Company acquired a multifamily property located in
Houston, Texas ("Farnham Park"). Farnham Park was approximately 95% occupied as
of June 22, 1998. The property consists of 216 units in 17 two-story
residential buildings on approximately 13 acres. Amenities include a clubhouse,
fitness center, swimming pool with sundeck area, barbeque area, attached
garages, washers/dryers, fireplaces in select units, built in bookshelves and
work areas, and extra phone/fax/computer modem lines. The property was
constructed in 1996.
TERMS OF PURCHASE
Farnham Park was purchased from an unaffiliated third party for approximately
$15.7 million, which included the assumption of approximately $11.5 million of
mortgage indebtedness.
4
PLANTATION APARTMENTS, HOUSTON, TEXAS
On February 25, 1998, the Company acquired a multifamily property located in
Houston, Texas ("Plantation"). Plantation was approximately 87% occupied as of
June 22, 1998. The property consists of 232 units in 36 two-story residential
buildings on approximately seven acres. Amenities include a clubhouse, three
swimming pools, fitness center, laundry care, lounge area with a sunroom, remote
access gates, washer/dryer connections, and cathedral ceilings in select units.
The property was constructed in 1969.
TERMS OF PURCHASE
Plantation was purchased from an unaffiliated third party for $10 million.
BALCONES CLUB APARTMENTS, AUSTIN, TEXAS
On February 27, 1998, the Company acquired a multifamily property located in
Austin, Texas ("Balcones Club"). Balcones Club was approximately 98% occupied
as of June 22, 1998. The property consists of 312 units in 32 two and
three-story residential buildings on approximately 14 acres. Amenities include
a clubhouse, two swimming pools, washer/dryer connections, fireplaces in select
units, vaulted ceilings in upstairs units, and select units with golf course
views. The property was constructed in 1984.
TERMS OF PURCHASE
Balcones Club was purchased from an unaffiliated third party for $12.3 million.
COACH LANTERN APARTMENTS, SCARBOROUGH, MAINE
On March 2, 1998, the Company acquired a multifamily property located in
Scarborough, Maine ("Coach Lantern"). Coach Lantern was approximately 99%
occupied as of June 22, 1998. The property consists of 90 units in 21 two and
three-story residential buildings on approximately 46 acres. Amenities include
a playground, washer/dryer connections, dishwashers, and disposals. The
property was constructed in 1971 and renovated in 1981.
TERMS OF PURCHASE
Coach Lantern was purchased from an unaffiliated third party for $4.7 million.
5
FOXCROFT APARTMENTS, SCARBOROUGH, MAINE
On March 2, 1998, the Company acquired a multifamily property located in
Scarborough, Maine ("Foxcroft"). Foxcroft was approximately 99% occupied as of
June 22, 1998. The property consists of 104 units in 15 two-story residential
buildings on approximately 26 acres. Amenities include a playground,
washer/dryer connections, dishwashers, and disposals. The property was
constructed between 1977 and 1979.
TERMS OF PURCHASE
Foxcroft was purchased from an unaffiliated third party for $4.9 million.
YARMOUTH WOODS APARTMENTS, YARMOUTH, MAINE
On March 2, 1998, the Company acquired a multifamily property located in
Yarmouth, Maine ("Yarmouth Woods"). Yarmouth Woods was approximately 99%
occupied as of June 22, 1998. The property consists of 138 units in 19
two-story residential buildings on approximately 31 acres. Amenities include on
site laundry facilities, washer/dryer connections, playground, dishwashers, and
garbage disposals. The property was constructed in phases between 1972 and
1978.
TERMS OF PURCHASE
Yarmouth Woods was purchased from an unaffiliated third party for $6.6 million.
ROLIDO PARQUE APARTMENTS, HOUSTON, TEXAS
On March 20, 1998, the Company acquired a multifamily property located in
Houston, Texas ("Rolido Parque"). Rolido Parque was approximately 99% occupied
as of June 22, 1998. The property consists of 369 units in 17 two and
three-story residential buildings on approximately nine acres. Amenities
include a clubhouse, two outdoor swimming pools, two jacuzzis, fitness center,
two tennis courts, lounge area with sunroom, remote access gates, video library,
washer/dryer connections, and cathedral ceilings in select units. The property
was constructed in 1978.
TERMS OF PURCHASE
Rolido Parque was purchased from an unaffiliated third party for approximately
$10.8 million, which included the assumption of approximately $7.2 million of
mortgage indebtedness.
THE TRAILS OF VALLEY RANCH APARTMENTS, IRVING, TEXAS
On March 26, 1998, the Company acquired a multifamily property located in
Irving, Texas ("Trails of Valley Ranch"). Trails of Valley Ranch was
approximately 92% occupied as of June 22, 1998. The property consists of 216
units in 29 two-story residential buildings on approximately 11 acres.
Amenities include a clubhouse, swimming pool, fitness center, sauna, jacuzzi,
wet bars and vaulted ceilings in select units, fireplaces, washers/dryers,
covered parking, and alarm systems. The property was constructed in 1986.
6
TERMS OF PURCHASE
Trails of Valley Ranch was purchased from an unaffiliated third party for $10.7
million.
FAIRFIELD APARTMENTS, STAMFORD, CONNECTICUT
On March 26, 1998, the Company acquired a multifamily property located in
Stamford, Connecticut ("Fairfield"). Fairfield was approximately 99% occupied
as of June 22, 1998. The property consists of 263 units in two four-story
residential buildings on approximately five acres. Amenities include a swimming
pool, health club/fitness room, parking structure with secured access, gourmet
eat-in kitchen, washers/dryers, fireplaces in select units, and vaulted ceilings
in select units. The property was constructed in 1996.
TERMS OF PURCHASE
Fairfield was purchased from an unaffiliated third party for $45.5 million,
which included the assumption of approximately $35.6 million of mortgage
indebtedness.
HARBOR POINTE APARTMENTS, MILWAUKEE, WISCONSIN
On April 1, 1998, the Company acquired a multifamily property located in
Milwaukee, Wisconsin ("Harbor Pointe"). Harbor Pointe was approximately 94%
occupied as of June 22, 1998. The property consists of 595 units in 41
three-story residential buildings on approximately 33 acres. Amenities include
a clubhouse, indoor swimming pool, jacuzzi, sauna, bar and lounge, three party
rooms, health club/fitness center, underground parking, attached garages in
select units, washers/dryers in select units, sand volleyball court, two tennis
courts, playground, gas fireplaces in select units, and vaulted ceilings in
select units. The property was constructed in 1970 and renovated in 1990.
TERMS OF PURCHASE
Harbor Pointe was purchased from an unaffiliated third party for approximately
$24 million, which included $12 million of mortgage indebtedness and the
issuance of 46,291 OP units having a value of approximately $2.3 million.
SONTERRA AT FOOTHILL RANCH APARTMENTS, FOOTHILL RANCH, CALIFORNIA
On April 1, 1998, the Company acquired a multifamily property located in
Foothill Ranch, California ("Sonterra"). Sonterra was approximately 97%
occupied as of June 22, 1998. The property consists of 300 units in 13
three-story residential buildings on approximately 14 acres. Amenities include
a clubhouse, business resource center, swimming pool, spa, fitness center,
washer/dryer hook-ups, walk in closets, central laundry facility, fireplaces in
select units, security access gates, and extended balconies. The property was
constructed in 1997.
TERMS OF PURCHASE
Sonterra was purchased from an unaffiliated third party for $31.5 million.
7
VISTA POINTE AT THE VALLEY APARTMENTS, IRVING, TEXAS
On April 7, 1998, the Company acquired a multifamily property located in Irving,
Texas ("Vista Pointe"). Vista Pointe was approximately 94% occupied as of June
22, 1998. The property consists of 231 units in 19 two-story residential
buildings on approximately 14 acres. Amenities include a clubhouse, two
swimming pools, fitness center, sports court, sand volleyball court, controlled
access gate, attached direct-access garages in select units, wood burning
fireplaces, and washer/dryer connections. The property was constructed during
1996.
TERMS OF PURCHASE
Vista Pointe was purchased from an unaffiliated third party for $18.6 million.
EMERSON PLACE APARTMENTS, BOSTON, MASSACHUSETTS
On April 23, 1998, the Company acquired a multifamily property located in
Boston, Massachusetts ("Emerson Place"). Emerson Place was approximately 98%
occupied as of June 22, 1998. The property consists of 462 units in one
17-story, one 24-story and 2 two-story residential buildings on approximately 48
acres. Amenities include a laundry facility, intercom system, garage parking,
and dishwashers. The property was constructed in 1962.
TERMS OF PURCHASE
Emerson Place was purchased from an unaffiliated third party for $72.5 million.
SIERRA CANYON APARTMENTS, CANYON COUNTRY, CALIFORNIA
On May 13, 1998, the Company acquired a multifamily property located in Canyon
Country, California ("Sierra Canyon"). Sierra Canyon was approximately 97%
occupied as of June 22, 1998. The property consists of 232 units in 16
two-story residential buildings on approximately eight acres. Amenities include
a clubhouse with fireplace, heated swimming pool, spa, fitness center, and two
laundry facilities. The property was constructed in 1987.
TERMS OF PURCHASE
Sierra Canyon was purchased from an unaffiliated third party for approximately
$15.9 million, which included the issuance of 90,445 OP units having a value of
approximately $4.5 million.
NORTHRIDGE APARTMENTS, PLEASANT HILL, CALIFORNIA
On May 14, 1998, the Company acquired a multifamily property located in Pleasant
Hill, California ("Northridge"). Northridge was approximately 98% occupied as
of June 22, 1998. The property consists of 221 units in 15 two and three-story
residential buildings on approximately 15 acres. Amenities include a clubhouse,
two swimming pools, jacuzzi, two spas, garages, fireplaces, and washers/dryers
in select units. The property was constructed in 1974.
8
TERMS OF PURCHASE
Northridge was purchased from an unaffiliated third party for $20 million.
THE ARBORETUM APARTMENTS, CANTON, MASSACHUSETTS
On May 22, 1998, the Company acquired a multifamily property located in Canton,
Massachusetts ("Arboretum"). Arboretum was approximately 98% occupied as of
June 22, 1998. The property consists of 156 units in six residential buildings
on approximately 40 acres. Amenities include a clubhouse, swimming pool,
washer/dryer connections, and laundry rooms. The property was constructed in
1989.
TERMS OF PURCHASE
Arboretum was purchased from an unaffiliated third party for $15.2 million.
TOWNHOMES OF MEADOWBROOK APARTMENTS, AUBURN HILLS, MICHIGAN
On May 28, 1998, the Company acquired a multifamily property located in Auburn
Hills, Michigan ("Townhomes of Meadowbrook"). Townhomes of Meadowbrook was
approximately 94% occupied as of June 22, 1998. The property consists of 230
units in 23 two-story residential buildings on approximately eight acres.
Amenities include a clubhouse, swimming pool with sundeck, jogging trail, sand
volleyball court, washers/dryers, vaulted ceilings, fireplaces, and loft
bedrooms in select units. The property was constructed in 1988.
TERMS OF PURCHASE
Townhomes of Meadowbrook was purchased from an unaffiliated third party for
$13.7 million, which included the assumption of approximately $10.2 million of
mortgage indebtedness.
WOODRIDGE APARTMENTS, EAGAN, MINNESOTA
On May 28, 1998, the Company acquired a multifamily property located in Eagan,
Minnesota ("Woodridge"). Woodridge was approximately 100% occupied as of June
21, 1998. The property consists of 200 units in two three-story residential
buildings on approximately 13 acres. Amenities include a party room, exercise
room, whirlpool and sauna in each building, and heated underground parking. The
property was constructed in 1986.
TERMS OF PURCHASE
Woodridge was purchased from an unaffiliated third party for approximately $11.6
million, which included the assumption of $7.8 million of mortgage indebtedness.
BROOKSIDE APARTMENTS, BOULDER, COLORADO
On June 1, 1998, the Company acquired a multifamily property located in Boulder,
Colorado ("Brookside"). Brookside was approximately 97% occupied as of June 20,
1998. The property
9
consists of 144 units in six residential buildings on approximately five acres.
Amenities include a swimming pool with sundeck, clubhouse, stackable
washer/dryer units, and fireplaces in most units. The property was constructed
in 1993.
TERMS OF PURCHASE
Brookside was purchased from an unaffiliated third party for $13.8 million.
GREYSTONE APARTMENT HOMES, ATLANTA, GEORGIA
On June 10, 1998, the Company acquired a multifamily property located in
Atlanta, Georgia ("Greystone"). Greystone was approximately 89% occupied as of
June 22, 1998. The property consists of 150 units in 25 residential buildings
on approximately nine acres. Amenities include an outdoor swimming pool,
laundry room, playground, and enclosed patios. The property was constructed in
1960 and renovated in 1997.
TERMS OF PURCHASE
Greystone was purchased from an unaffiliated third party for approximately $7.4
million.
COCONUT PALM CLUB APARTMENT HOMES, COCONUT CREEK, FLORIDA
On June 11, 1998, the Company acquired a multifamily property located in Coconut
Creek, Florida ("Coconut Palm Club"). Coconut Palm Club was approximately 90%
occupied as of June 21, 1998. The property consists of 300 units in 14
residential buildings on approximately 16 acres. Amenities include a swimming
pool, racquetball court, volleyball court, picnic area, clubhouse and car wash
area. The property was constructed in 1992.
TERMS OF PURCHASE
Coconut Palm Club was purchased from an unaffiliated third party for
approximately $20.3 million.
PORTSIDE TOWERS APARTMENTS, JERSEY CITY, NEW JERSEY
On June 11, 1998, the Company acquired a multifamily property located in Jersey
City, New Jersey ("Portside Towers"). Portside Towers was approximately 99%
occupied as of June 22, 1998. The property consists of 527 units in two
high-rise residential buildings on approximately six acres. Amenities include a
fitness center, sauna, indoor playroom, outdoor tot lot, two tennis courts, one
sport court, washers/dryers, and laundry rooms. The property was constructed in
phases between 1992 and 1997.
TERMS OF PURCHASE
Portside Towers was purchased from an unaffiliated third party for approximately
$119 million, which included the assumption of mortgage indebtedness of
approximately $58.5 million .
10
DEFOOR VILLAGE APARTMENTS, ATLANTA, GEORGIA
On June 16, 1998, the Company acquired a multifamily property located in
Atlanta, Georgia ("Defoor Village"). Defoor Village was approximately 100%
occupied as of June 29, 1998. The property consists of 156 units in four
residential buildings on approximately five acres. Amenities include a
clubhouse, fitness center, central laundry room, and a resident business center.
The property was constructed in 1997.
TERMS OF PURCHASE
Defoor Village was purchased from an unaffiliated third party for $13.5 million,
which included the issuance of 14,588 OP units with a value of approximately
$0.7 million.
PLANTATION RIDGE APARTMENTS, MARIETTA, GEORGIA
On June 16, 1998, the Company acquired a multifamily property located in
Marietta, Georgia ("Plantation Ridge"). Plantation Ridge was approximately 95%
occupied as of June 29, 1998. The property consists of 454 units in 46
residential buildings on approximately 33 acres. Amenities include a clubhouse,
car wash, six lighted tennis courts, picnic area, boat storage, bi-level
waterfall swimming pool, and laundry facilities. The property was constructed in
1975.
TERMS OF PURCHASE
Plantation Ridge was purchased from an unaffiliated third party for $23.2
million, which included the issuance of 43,798 OP units with a value of
approximately $2.1 million.
WYNBROOK APARTMENTS, NORCROSS, GEORGIA
On June 18, 1998 the Company acquired a multifamily property located in
Norcross, Georgia ("Wynbrook"). Wynbrook was approximately 93% occupied as of
June 29, 1998. The property consists of 318 units in 30 residential buildings
on approximately 25 acres. Amenities include two swimming pools, playground,
two laundry facilities, car wash, and picnic area. The property was constructed
in phases between 1972 and 1976.
TERMS OF PURCHASE
Wynbrook was purchased from an unaffiliated third party for $13.5 million, which
included the issuance of 4,700 OP units with a value of approximately $0.2
million.
THE TCRS PORTFOLIO TRANSACTION
This acquisition consisted of the following five properties.
DESCRIPTION OF PROPERTIES
11
THE GATES AT CARLSON CENTER APARTMENTS, MINNETONKA, MINNESOTA
On April 1, 1998, the Company acquired a multifamily property located in
Minnetonka, Minnesota ("Gates at Carlson"). Gates at Carlson was approximately
100% occupied as of June 22, 1998. The property consists of 435 units in six
three-story residential buildings on approximately 32 acres. Amenities include
a clubhouse with exercise room, swimming pool, spa, washers/dryers, tennis
court, elevators, fireplaces and vaulted ceilings in select units, and
sub-surface parking. The property was constructed in 1989.
GLENGARRY CLUB APARTMENTS, BLOOMINGTON, ILLINOIS
On April 1, 1998, the Company acquired a multifamily property located in
Bloomington, Illinois ("GlenGarry Club"). GlenGarry Club was approximately 97%
occupied as of June 22, 1998. The property consists of 250 units in nine two
and three-story residential buildings on approximately 15 acres. Amenities
include a clubhouse with exercise room, swimming pool, two tennis courts,
basketball court, volleyball court, garages, and fireplaces in select units.
The property was constructed in 1989.
PLUM TREE I, II, AND III APARTMENTS, HALES CORNERS, WISCONSIN
On April 1, 1998, the Company acquired a multifamily property located in Hales
Corners, Wisconsin ("Plum Tree"). Plum Tree was approximately 97% occupied as of
June 23, 1998. The property consists of 332 units in 36 two-story residential
buildings on approximately 17 acres. Amenities include a clubhouse with
exercise room, swimming pool, spa, washers/dryers, wood-burning fireplaces in
select units, and garages. The property was constructed in 1989.
RAVINIA APARTMENTS, GREENFIELD, WISCONSIN
On April 1, 1998, the Company acquired a multifamily property located in
Greenfield, Wisconsin ("Ravinia"). Ravinia was approximately 97% occupied as of
June 22, 1998. The property consists of 206 units in 12 two-story residential
buildings on approximately 18 acres. Amenities include a clubhouse with
exercise room, swimming pool, garages, washers/dryers, and wood burning
fireplaces in select units. The property was constructed in 1991.
WOODLANDS APARTMENTS, BROOKFIELD, WISCONSIN
On April 1, 1998, the Company acquired a multifamily property located in
Brookfield, Wisconsin ("Woodlands"). Woodlands was approximately 98% occupied
as of June 23, 1998. The property consists of 148 units in 34 two-story
residential buildings on approximately 35 acres. Amenities include a clubhouse
with exercise room, swimming pool, attached garages, washers/dryers, and wood
burning fireplaces. The property was constructed in 1990.
TERMS OF PURCHASE
The aggregate purchase price of the TCRS Portfolio was approximately $95.7
million, which included $50 million of mortgage indebtedness and the issuance of
124,398 OP units with a value of approximately $6.3 million.
12
CROSS CREEK APARTMENTS, MATTHEWS, NORTH CAROLINA
On June 24, 1998, the Company acquired a multifamily property located in
Matthews, North Carolina ("Cross Creek"). Cross Creek was approximately 91%
occupied as of June 26, 1998. The property consists of 420 units in 20 two and
three-story residential buildings on approximately 35 acres. Amenities include
a clubhouse, two swimming pools, two tennis courts, fitness center, sand
volleyball court, fireplaces in select units, and a playground. The property was
constructed in 1989.
TERMS OF PURCHASE
Cross Creek was purchased from an unaffiliated third party for $23.4 million.
The Company is currently providing management services for all of the Acquired
Properties.
ITEM 5. OTHER EVENTS
The Company entered into various contracts with unaffiliated third parties to
acquire 42 multifamily properties. Below are the expected terms and the
descriptions of the properties which the Company deems to be probable
acquisitions (the "Probable Properties").
LEXINGTON VILLAGE APARTMENTS, ALPHARETTA, GEORGIA
Lexington Village ("Lexington Village") is a 352-unit multifamily property
located in Alpharetta, Georgia. The property consists of 24 residential
buildings on approximately 36 acres. Amenities include a clubhouse, activity
center, car wash, swimming pool, tennis courts, volleyball court, fitness
center, laundry facility, and a resident business center. The property was
constructed in 1995.
EXPECTED TERMS OF PURCHASE
Lexington Village is expected to be purchased from an unaffiliated third party
for approximately $24.5 million, which will include the assumption of
approximately $18.8 million of mortgage indebtedness and the issuance of
approximately 25,000 OP Units with a value of approximately $1.3 million.
MARTINS LANDING APARTMENTS, ATLANTA, GEORGIA
Martins Landing ("Martins Landing") is a 300-unit multifamily property located
in Roswell, Georgia. The property consists of 24 three-story residential
buildings on approximately 20 acres. Amenities include a swimming pool, fitness
center, tennis court, clubhouse, playground, jogging trails, and a basketball
court. The property was constructed in 1972 and renovated in 1992.
EXPECTED TERMS OF PURCHASE
Martins Landing is expected to be purchased from an unaffiliated third party for
approximately $18.1 million, which will include the assumption of approximately
$13 million of mortgage indebtedness.
13
THE LAKES AT VININGS APARTMENTS, ATLANTA, GEORGIA
Lakes at Vinings ("Lakes at Vinings") is a 464-unit multifamily property located
in Atlanta, Georgia. The property consists of 31 two and three-story
residential buildings on approximately 38 acres. Amenities include a swimming
pool, fitness center, tennis court, clubhouse, volleyball court, jogging trails,
and picnic areas. The property was constructed in phases between 1972 and 1975,
and renovated in 1994.
EXPECTED TERMS OF PURCHASE
Lakes at Vinings is expected to be purchased from an unaffiliated third party
for approximately $27.9 million, which will include the assumption of
approximately $22.5 million of mortgage indebtedness.
THE LINCOLN PROPERTY TRANSACTION
This probable acquisition includes the following 25 properties.
DESCRIPTIONS OF PROPERTIES
ALDERWOOD PARK APARTMENTS, LYNWOOD, WASHINGTON
Alderwood Park Apartments ("Alderwood Park") is a 188-unit multifamily
property located in Lynwood, Washington. The property consists of 14
two-story residential buildings on approximately 10 acres. Amenities include
a swimming pool, spa, clubhouse with lounge, modern exercise facility, suntan
salon, sport court, playground, private patios/decks, fireplaces, and
washers/dryers in select units. The property was constructed in 1982.
BELLEVUE MEADOWS APARTMENTS, BELLEVUE, WASHINGTON
Bellevue Meadows Apartments ("Bellevue Meadows") is a 180-unit multifamily
property located in Bellevue, Washington. The property consists of 15 two-story
residential buildings on approximately nine acres. Amenities include a heated
swimming pool, exercise/weight room, tanning room, tennis court, clubhouse, game
room, indoor spa, volleyball court, washers/dryers, private patios/decks,
wood-burning brick fireplaces, cable TV, dishwashers, and covered parking. The
property was constructed in 1983.
BRAMBLEWOOD APARTMENTS, SAN JOSE, CALIFORNIA
Bramblewood Apartments ("Bramblewood") is a 108-unit multifamily property
located in San Jose, California. The property consists of 10 two and three-story
residential buildings on approximately five acres. Amenities include a swimming
pool, spa, covered parking, barbecue area, patios/balconies, and washer/dryer
hook-ups. The property was constructed in 1986.
BRIARWOOD APARTMENTS, SUNNYVALE, CALIFORNIA
Briarwood Apartments ("Briarwood") is a 192-unit multifamily property located in
Sunnyvale, California. The property consists of nine residential buildings on
approximately eight acres. Amenities include a clubhouse, swimming pool, spa,
playground, basketball court, barbecue
14
area, covered parking, private patios/balconies, washer/dryer connections, air
conditioning, and dishwashers. The property was constructed in 1985.
CEDAR POINTE APARTMENTS, SAN RAMON, CALIFORNIA
Cedar Pointe Apartments ("Cedar Pointe") is a 248-unit multifamily property
located in San Ramon, California. The property consists of 16 two-story
residential buildings on approximately 12 acres. Amenities include a swimming
pool, spa, fitness center, two playground areas, covered parking, private
patios/decks, ceiling fans, washer/dryer connections, air conditioning, and
dishwashers. The property was constructed in 1984.
CHELSEA SQUARE APARTMENTS, REDMOND, WASHINGTON
Chelsea Square Apartments ("Chelsea Square") is a 113-unit multifamily property
located in Redmond, Washington. The property consists of six 2 and one
half-story residential buildings on approximately four acres. Amenities include
a swimming pool, exercise room, suntan room, hot tub spa, fireplaces, breakfast
bars, washers/dryers, volume ceilings, and a clubhouse with wet bar, TV and
meeting lounge. The property was constructed in 1991.
CREEKSIDE APARTMENTS, SAN MATEO, CALIFORNIA
Creekside Apartments ("Creekside") is a 192-unit multifamily property located
in San Mateo, California. The property consists of 13 two-story residential
buildings on approximately seven acres. Amenities include a clubhouse,
barbecue area, swimming pool, spa, tanning salon, security parking, covered
and garage parking, playground, balconies/patios, and washer/dryer. The
property was constructed in 1985.
GRANDVIEW APARTMENTS, LAS VEGAS, NEVADA
Grandview Apartments ("Grandview") is a 456-unit multifamily property located
in Las Vegas, Nevada. The property consists of 26 two-story residential
buildings on approximately 19 acres. Amenities include a swimming pool,
volleyball court, spa, clubhouse, two laundry facilities, playground, tennis
court, ceiling fans, private patio/balconies, and covered parking. The property
was constructed in 1980.
GREENHAVEN APARTMENTS, UNION CITY, CALIFORNIA
Greenhaven Apartments ("Greenhaven") is a 250-unit multifamily property located
in Union City, California. The property consists of 16 one, two, and
three-story residential buildings on approximately ten acres. Amenities include
a solar heated pool, therapy spa, covered parking, exercise studio, three
laundry rooms, and private patios/balconies. The property was constructed in
1983.
LINCOLN GREEN I AND II APARTMENTS, SUNNYVALE ,CALIFORNIA
Lincoln Green I and II Apartments ('Lincoln Green I and II") is a 174-unit
multifamily property located in Sunnyvale, California. The property consists of
nine two-story residential buildings on approximately seven acres. Amenities
include a swimming pool, spa, exercise/weight room,
15
covered parking, and private patios/decks. The property was constructed in two
phases in 1979.
LINCOLN VILLAGE I AND II APARTMENTS, LARKSPUR, CALIFORNIA
Lincoln Village I and II Apartments ("Lincoln Village I and II")is a 342-unit
multifamily property located in Larkspur, California. The property consists of
16 two and three-story residential buildings on approximately 17 acres.
Amenities include two solar heated pools, clubhouse, tennis court, jacuzzi spa,
fitness center, dry saunas, covered parking, corporate/furnished suites, 24 hour
emergency service, vaulted ceilings, and private balconies/patios. The property
was constructed in 1980.
MOUNTAIN SHADOWS APARTMENTS, LAS VEGAS, NEVADA
Mountain Shadows Apartments ("Mountain Shadows") is a 300-unit multifamily
property located in Las Vegas, Nevada. The property consists of 19 two-story
residential buildings on approximately 12 acres. Amenities include a clubhouse,
swimming pool, playground, tennis court, basketball court, barbecue area,
laundry room, ceiling fans in select units, and patios/balconies. The property
was constructed in 1979.
NORTH CREEK APARTMENTS, EVERETT, WASHINGTON
North Creek Apartments ("North Creek") is a 264-unit multifamily property
located in Everett, Washington. The property consists of 26 two-story
residential buildings on approximately 17 acres. Amenities include a heated
pool, jacuzzi, clubhouse, covered parking, basketball court, washers/dryers in
select units, wood burning fireplaces, and private patios/balconies. The
property was constructed during 1986.
OLDE REDMOND PLACE APARTMENTS, REDMOND, WASHINGTON
Olde Redmond Place Apartments ("Olde Redmond Place") is a 192-unit multifamily
property located in Redmond, Washington. The property consists of 16
three-story residential buildings on approximately 14 acres. Amenities include
a heated swimming pool, indoor spa, tanning salon, cabana, exercise/weight room,
tennis court, playground, brick fireplaces, washers/dryers, cathedral ceilings,
private patios/decks, and covered parking. The property was constructed in
1986.
PARKSIDE APARTMENTS, UNION CITY, CALIFORNIA
Parkside Apartments ("Parkside") is a 208-unit multifamily property located in
Union City, California. The property consists of 16 two-story residential
buildings on approximately seven acres. Amenities include a swimming pool,
sauna, covered parking, fully equipped laundry rooms, and private
patios/balconies. The property was constructed in 1979.
SKYLARK APARTMENTS, UNION CITY, CALIFORNIA
Skylark Apartments ("Skylark") is a 174-unit multifamily property located in
Union City, California. The property consists of nine one, two, and three-story
residential buildings on approximately seven acres. Amenities include a
free-form pool and spa, recreation center,
16
covered and underground parking, exercise room, and on-site ice machines. The
property was constructed in 1986.
SOUTHWOOD APARTMENTS, PALO ALTO, CALIFORNIA
Southwood Apartments ("Southwood") is a 99-unit multifamily property located in
Palo Alto, California. The property consists of five two and three-story
residential buildings on approximately four acres. Amenities include units with
double master suites, washer/dryer connections, and private patios/balconies.
The property was constructed in 1985.
SUMMERWOOD APARTMENTS, HAYWARD, CALIFORNIA
Summerwood Apartments ("Summerwood") is a 162-unit multifamily property located
in Hayward, California. The property consists of 12 two-story residential
buildings on approximately six acres. Amenities include a solar-heated pool,
sauna, fitness center, covered parking, laundry facilities, private balconies/
patios, and outdoor storage closets. The property was constructed in 1982.
SURREY DOWNS APARTMENTS, BELLEVUE, WASHINGTON
Surrey Downs Apartments ("Surrey Downs") is a 122-unit multifamily property
located in Bellevue, Washington. The property consists of 13 two and
three-story residential buildings on approximately seven acres. Amenities
include a heated swimming pool, spa, sports court, clubhouse, exercise room,
indoor sauna, brick fireplaces, private patios/decks with storage closets,
washers/dryers, private pond, and a courtyard fountain. The property was
constructed in 1986.
TIMBERWOOD APARTMENTS, AURORA, COLORADO
Timberwood Apartments ("Timberwood") is a 336-unit multifamily property located
in Aurora, Colorado. The property consists of 22 two-story residential
buildings on approximately 15 acres. Amenities include free covered parking,
two heated swimming pools, two tennis courts, indoor jacuzzi, volleyball court,
clubhouse, playgrounds, four laundry rooms, washer/dryer, private
patios, and brick fireplaces. The property was constructed in 1983.
TURF CLUB APARTMENTS, LITTLETON, COLORADO
Turf Club Apartments ("Turf Club") is a 324-unit multifamily property located
in Littleton, Colorado. The property consists of 15 three-story residential
buildings on approximately 12 acres. Amenities include an exercise room, indoor
spa, swimming pool, fireplace, washer/dryer, private balconies/patios
and a business center equipped with internet accessing computer, fax machine
and copy machine. The property was constructed in 1986.
WILLOWICK APARTMENTS, AURORA, COLORADO
Willowick Apartments ("Willowick") is a 100-unit multifamily property located in
Aurora, Colorado. The property consists of seven two-story residential
building on approximately five acres. Amenities include covered parking, heated
swimming pool, clubhouse/activity center,
17
play area for children, laundry facilities, fireplaces, and private patios. The
property was constructed in 1980.
WOODLAKE APARTMENTS, KIRKLAND, WASHINGTON
Woodlake Apartments ("Woodlake") is a 288-unit multifamily property located in
in Kirkland, Washington. The property consists of 18 two-story residential
buildings on approximately 24 acres. Amenities include a clubhouse, heated
swimming pool, poolside cabana, spa, exercise room, tanning room, sauna, tennis
court, sport/basketball court, playground, covered parking, dishwashers,
disposals, and vaulted ceilings in select units. The property was constructed
in 1984.
WOODLEAF APARTMENTS, CAMPBELL, CALIFORNIA
Woodleaf Apartments ("Woodleaf") is a 178-unit multifamily property located in
Campbell, California. The property consists of nine two and three-story
residential buildings on approximately seven acres. Amenities include a
swimming pool, jacuzzi, fitness center, tanning salon, billiards table, media
center, and private patios/balconies. The property was constructed in 1984.
WOODRIDGE APARTMENTS, AURORA, COLORADO
Woodridge Apartments ("Woodridge") is a 584-unit multifamily property located in
Aurora, Colorado. The property consists of 42 two-story residential buildings on
approximately 29 acres. Amenities include five heated swimming pools,
basketball and tennis courts, children's play areas, picnic and barbecue areas,
fireplaces, and private patios/balconies. The property was constructed in three
phases between 1980 and 1982.
EXPECTED TERMS OF PURCHASE
The aggregate purchase price of the 25 properties included in the Lincoln
Property Transaction ("Lincoln Probable Properties") is approximately $465.3
million, which includes the assumption of mortgage indebtedness of approximately
$60.7 million and the issuance of approximately 2.2 million OP units having a
value of approximately $109.7 million.
THE MAGNUM TRANSACTION
This probable acquisition consists of the following ten properties.
DESCRIPTIONS OF PROPERTIES
THE BROADWAY APARTMENTS, GARLAND, TEXAS
The Broadway Apartments ("Broadway") is a 288-unit multifamily property located
in Garland, Texas. The property consists of 20 two-story residential buildings
on approximately 12 acres. Amenities include a clubhouse, two swimming pools,
laundry facility, ceiling fans, balconies/patios, washer/dryer connections, and
fireplaces in select units. The property was
18
constructed in 1983.
CEDAR RIDGE APARTMENTS, ARLINGTON, TEXAS
Cedar Ridge Apartments ("Cedar Ridge") is a 121-unit multifamily property
located in Arlington, Texas. The property consists of 50 two-story residential
buildings on approximately 12 acres. Amenities include two swimming pools,
ceiling fans, washer/dryer connections, fireplaces in select units, security
patrol, and garage parking. The property was constructed in 1980.
FIELDER CROSSING APARTMENTS, ARLINGTON, TEXAS
Fielder Crossing Apartments ("Fielder Crossing") is a 119-unit multifamily
property located in Arlington, Texas. The property consists of 14 two-story
residential buildings on approximately three acres. Amenities include a
clubhouse, jacuzzi, private alarms, and balconies/patios in each unit. The
property was constructed in 1980.
LAKESHORE AT PRESTON APARTMENTS, PLANO, TEXAS
Lakeshore at Preston Apartments ("Lakeshore at Preston") is a 302-unit
multifamily property located in Plano, Texas. The property consists of 14 two
and three-story residential buildings on approximately 19 acres. Amenities
include a clubhouse, two swimming pools, jacuzzi, fitness center, sand
volleyball court, jogging trail, fountained lake, outdoor grills, access gates,
private alarms, and balconies/patios in each unit. The property was constructed
in 1992.
LAKEWOOD GREENS APARTMENTS, DALLAS, TEXAS
Lakewood Greens Apartments ("Lakewood Greens") is a 252-unit multifamily
property located in Dallas, Texas. The property consists of 23 two and
three-story residential buildings on approximately 10 acres. Amenities include
a clubhouse, swimming pool, jacuzzi, fitness center, access gates, two laundry
rooms, security patrols, and balconies/patios in each unit. The property was
constructed in 1986.
PLEASANT RIDGE APARTMENTS, ARLINGTON, TEXAS
Pleasant Ridge Apartments ("Pleasant Ridge") is a 63-unit multifamily property
located in Arlington, Texas. The property consists of 16 one-story residential
buildings on approximately four acres. Amenities include a swimming pool,
jacuzzi, ceiling fans, balconies/patios, washer/dryer connections, and
fireplaces. The property was constructed in 1982.
RIVER PARK APARTMENTS, FORT WORTH, TEXAS
River Park Apartments ("River Park") is a 280-unit multifamily property located
in Fort Worth, Texas. The property consists of 29 two and three-story
residential buildings on approximately 10 acres. Amenities include a clubhouse,
swimming pool, jacuzzi, two laundry facilities, private alarms,
balconies/patios, washer/dryer connections, and fireplaces in select units. The
property was constructed in 1984.
19
SANDSTONE AT BEAR CREEK APARTMENTS, EULESS, TEXAS
Sandstone at Bear Creek Apartments ("Sandstone") is a 40-unit multifamily
property located in Euless, Texas. The property consists of eight one-story
residential buildings on approximately five acres. Amenities include a swimming
pool, monitored alarm system, fireplaces, balconies or patios, washer/dryer
connections, and volume/cathedral ceilings in select units. The property was
constructed in 1988.
VILLAS OF JOSEY RANCH APARTMENTS, CARROLLTON, TEXAS
Villas of Josey Ranch Apartments ("Villas of Josey Ranch") is a 198-unit
multifamily property located in Carrollton, Texas. The property consists of 22
two-story residential buildings on approximately 12 acres. Amenities include a
clubhouse, two swimming pools, two laundry facilities, private alarms, washer
/dryer connections, and balconies/patios in each unit. The property was
constructed in 1986.
WIMBLEDON OAKS APARTMENTS, ARLINGTON, TEXAS
Wimbledon Oaks Apartments ("Wimbledon Oaks") is a 248-unit multifamily property
located in Arlington, Texas. The property consists of 14 two and three-story
residential buildings on approximately nine acres. Amenities include a
clubhouse, swimming pool with fountain, exercise room, jacuzzi, sauna, access
gate, picnic area with grills, balconies or patios, washer/dryer connections,
and fireplaces in select units. The property was constructed in 1985.
EXPECTED TERMS OF PURCHASE
The aggregate purchase price of the 10 properties included in the Magnum
Transaction ("Magnum Probable Properties") is approximately $82.4 million, which
includes the assumption of approximately $59.5 million of mortgage indebtedness.
THE FREDERICK TRANSACTION
This probable acquisition includes the following four properties.
DESCRIPTIONS OF PROPERTIES
OVERLOOK MANOR I & II APARTMENTS, FREDERICK, MARYLAND
Overlook Manor I & II Apartments ("Overlook Manor I & II") is a 290-unit
multifamily property located in Frederick, Maryland. The property consists of
23 three-story residential buildings on approximately 17 acres. Amenities
include two swimming pools, two playgrounds, two tennis courts, and laundry
facilities. The property was constructed in phases between 1980 and 1985.
TILLMAN PLACE APARTMENTS, FREDERICK, MARYLAND
Tillman Place Apartments ("Tillman Place") is a 64-unit multifamily property
located in Frederick, Maryland. The property consists of nine two-story
residential buildings on
20
approximately two acres. Amenities include a swimming pool, tennis court, and
day care. The property was constructed in 1986.
THE WILLOWS APARTMENTS, FREDERICK, MARYLAND
The Willows Apartments ("The Willows") is a 204-unit multifamily property
located in Frederick, Maryland. The property consists of 13 four-story
residential buildings on approximately 11 acres. Amenities include a clubhouse,
swimming pool, car wash facility, and three playgrounds. The property was
constructed in 1979.
EXPECTED TERMS OF PURCHASE
The aggregate purchase price of the four properties included in the Frederick
Transaction ("Frederick Probable Properties") is approximately $26.9 million,
which includes the assumption of approximately $5.9 million of mortgage
indebtedness.
The Company expects to provide property management services for the Probable
Properties subsequent to the date of acquisition by the Company.
The closings of the Probable Properties are subject to certain contingencies and
conditions, therefore, there can be no assurance that any or all of these
transactions will be consummated, or that the final terms thereof will not
differ in material respects from those summarized above.
21
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
C. EXHIBITS
23 CONSENT OF ERNST & YOUNG LLP
No information is required under Items 1, 3, 4, and 6, and these items
have therefore been omitted.
22
EQUITY RESIDENTIAL PROPERTIES TRUST
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS
REQUIRED UNDER ITEM 7(b) OF FORM 8-K
23
EQUITY RESIDENTIAL PROPERTIES TRUST
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Capitalized terms used but not defined in this Current Report on Form 8-K are as
defined in the Company's Annual Report on Form 10-K for the year ended December
31, 1997, as amended by Form 10-K/A, and the Company's Quarterly Report on Form
10-Q for the quarterly period ended March 31, 1998.
The following unaudited Pro Forma Condensed Consolidated Balance Sheet as of
March 31, 1998 and Statements of Operations for the three months ended March
31, 1998 and for the year ended December 31, 1997 have been presented as if
the January 1998 Common Share Offering, the February 1998 Common Share
Offerings, the March 1998 Common Share Offering, the issuance of $300,000,000
of 6.63% unsecured notes due April 13, 2015 (the "2015 Notes"), the sale of
946,565 Common Shares at $46.5459 (the "April Common Share Offering") and the
acquisition or expected acquisition of 79 multifamily properties, including
the related assumption of $412.6 million of mortgage indebtedness, had
occurred on March 31, 1998 with respect to the March 31, 1998 balance sheet,
January 1, 1998 with respect to the statement of operations for the three
months ended March 31, 1998 and January 1, 1997 with respect to the statement
of operations for the year ended December 31, 1997. Fifteen of the Acquired
Properties are included in the Company's Historical Balance Sheet as of March
31, 1998 and all of the remaining properties are included on a pro forma
basis as described in Note A and Note B of the Pro Forma Condensed
Consolidated Balance Sheet as of March 31, 1998.
The unaudited Pro Forma Condensed Consolidated Financial Statements are not
necessarily indicative of the results of future operations, nor the results of
historical operations, had all the transactions occurred as described above on
either January 1, 1997 or January 1, 1998.
The Pro Forma Condensed Consolidated Financial Statements should be read in
conjunction with the accompanying Notes to the Pro Forma Condensed
Consolidated Financial Statements, the Company's Annual Report on Form 10-K
for the year ended December 31, 1997, as amended by Form 10-K/A, the
Company's Quarterly Report on Form 10-Q for the quarterly period ended March
31, 1998 and the Statements of Revenue and Certain Expenses for certain of
the acquired and probable properties (included elsewhere herein).
24
EQUITY RESIDENTIAL PROPERTIES TRUST
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1998
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
1998
MOST RECENT 1998
ACQUIRED PROBABLE PRO
HISTORICAL PROPERTIES (A) PROPERTIES (B) OFFERINGS (C) FORMA
------------ -------------- -------------- ------------- ------------
ASSETS
Rental property, net $ 6,854,535 $ 553,288 $ 645,684 $ -- $ 8,053,507
Investment in mortgage notes, net 175,532 (88,184) -- -- 87,348
Cash and cash equivalents 77,575 (310,318) (111,275) 350,258 6,240
Rents receivable 3,798 -- -- -- 3,798
Deposits-restricted 39,645 -- -- -- 39,645
Escrows deposits-mortgage 45,314 -- -- -- 45,314
Deferred financing costs, net 23,283 -- -- -- 23,283
Other assets 109,660 -- -- -- 109,660
------------ ---------- ---------- ---------- ------------
Total assets $ 7,329,342 $ 154,786 $ 534,409 $ 350,258 $ 8,368,795
------------ ---------- ---------- ---------- ------------
------------ ---------- ---------- ---------- ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $ 1,655,635 $ 138,566 $ 180,450 $ -- $ 1,974,651
Line of credit -- -- 243,000 -- 243,000
Notes, net 1,130,461 -- -- 306,200 1,436,661
Accounts payable and accrued expenses 66,787 -- -- -- 66,787
Accrued interest payable 35,514 -- -- -- 35,514
Rents received in advance and other liabilities 41,417 -- -- -- 41,417
Security deposits 29,711 -- -- -- 29,711
Distributions payable 89,015 -- -- -- 89,015
------------ ---------- ---------- ---------- ------------
Total liabilities 3,048,540 138,566 423,450 306,200 3,916,756
------------ ---------- ---------- ---------- ------------
Commitments and contingencies
Minority Interests 282,240 16,220 70,857 -- 369,317
------------ ---------- ---------- ---------- ------------
Shareholders' equity:
Common shares 964 -- -- 9 973
Preferred shares 1,041,700 -- -- -- 1,041,700
Employee notes (4,987) -- -- -- (4,987)
Paid in capital 3,122,344 -- 40,102 44,049 3,206,495
Distributions in excess of accumulated earnings (161,459) -- -- -- (161,459)
------------ ---------- ---------- ---------- ------------
Total shareholders' equity 3,998,562 -- 40,102 44,058 4,082,722
------------ ---------- ---------- ---------- ------------
Total liabilities and shareholders' equity $ 7,329,342 $ 154,786 $ 534,409 $ 350,258 $ 8,368,795
------------ ---------- ---------- ---------- ------------
------------ ---------- ---------- ---------- ------------
(A) Reflects the most recent multifamily property acquisitions, which include
The Gates at Carlson Center, Glengarry Club, Ravinia, Plum Tree, The
Woodlands, Harbor Pointe, Sonterra at Foothill Ranch, Vista Pointe at
the Valley, Emerson Place, Sierra Canyon, Northridge, The Arboretum,
Townhomes of Meadowbrook, Woodridge, Brookside, Greystone, Coconut Palm
Club, Portside Towers, Defoor Village, Plantation Ridge, Wynbrook and
Cross Creek (collectively the "1998 Most Recent Acquired Properties").
In connection with such : (i) the amounts presented include the initial
purchase price as well as subsequent closing costs anticipated to be
incurred; (ii) the assumption of approximately $138.6 million of
mortgage indebtedness; (iii) the issuance of approximately 324,000 OP
Units with a value of approximately $16.2 million and (iv) the
elimination of the investment in mortgage loans collateralized by five
of the 1998 Most Recent Acquired Properties due to the acquisition of
such properties.
(B) Reflects the probable acquisitions of Lakes at Vinings, Martins Landing,
Lexington Village, Alderwood Park, Bellevue Meadows, Bramblewood,
Briarwood, Cedar Pointe, Chelsea Square, Creekside, Grandview I & II,
Greenhaven, Lincoln Green I & II, Lincoln Village I & II, Mountain
Shadows, North Creek, Olde Redmond Place, Parkside, Skylark, Southwood,
Summerwood, Surrey Downs, Timberwood, Turf Club, Willowick, Woodlake,
Woodleaf, Woodridge I, II, III, Broadway, Cedar Ridge, Fielder Crossing,
Lakeshore at Preston, Lakewood Greens, Pleasant Ridge, River Park,
Sandstone, Villas at Josey Ranch, Wimbledon Oaks, Overlook Manor I,
Overlook Manor II, Tilman Place and Willows (collectively the "1998
Probable Properties"). In connection with such probable acquisitions:
(i) the amounts presented include the initial purchase price as well as
subsequent closing costs anticipated to be incurred; (ii) the
expected assumption of approximately $180.5 million of mortgage
indebtedness and the expected draw of approximately $243 million on
the line of credit and (iii) the expected issuance of approximately 2.3
million OP Units with a value of approximately $111 million.
(C) Reflects the additional issuance of 946,565 Common Shares at a price of
$46.5459 per share (the "April 1998 Common Share Offering"). Also
included are the net proceeds of approximately $298.1 raised through the
issuance of the 2015 Notes and approximately $8.1 million from the sale of
an option to remarket the 2015 notes in April 2005.
25
EQUITY RESIDENTIAL PROPERTIES TRUST
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998
(UNAUDITED)
(AMOUNTS IN THOUSANDS EXCEPT FOR SHARE DATA)
1998 1998
PREVIOUSLY MOST RECENT 1998
ACQUIRED ACQUIRED PROBABLE PRO
HISTORICAL PROPERTIES (A) PROPERTIES (B) PROPERTIES (C) ADJUSTMENTS (D) FORMA
---------- -------------- -------------- -------------- --------------- ----------
REVENUES
Rental income $ 277,226 $ 4,051 $ 17,825 $ 20,852 $ -- $ 319,954
Fee and asset management 1,360 -- -- -- -- 1,360
Interest income - investment in
mortgage notes 4,931 -- -- -- (1,873) 3,058
Interest and other income 2,824 -- -- -- (791) 2,033
---------- -------- --------- --------- -------- ----------
Total revenues 286,341 4,051 17,825 20,852 (2,664) 326,405
---------- -------- --------- --------- -------- ----------
EXPENSES
Property and maintenance 66,713 970 4,696 5,940 (2,006) 76,313
Real estate taxes and insurance 27,443 350 2,299 1,834 -- 31,926
Property management 11,579 -- -- -- 1,014 12,593
Fee and asset management 1,052 -- -- -- -- 1,052
Depreciation 64,390 -- -- -- 9,783 74,173
Interest: --
Expense incurred 50,254 -- -- -- 13,382 63,636
Amortization of deferred
financing costs 624 -- -- -- -- 624
General and administrative 4,880 -- -- -- -- 4,880
---------- -------- --------- --------- -------- ----------
Total expenses 226,935 1,320 6,995 7,774 22,173 265,197
---------- -------- --------- --------- -------- ----------
Income before gain on disposition
of properties and allocation to
Minority Interests 59,406 $ 2,731 $ 10,830 $ 13,078 $ (24,837) 61,208
-------- --------- --------- --------
-------- --------- --------- --------
Gain on disposition of properties 1,869 --
---------- ----------
Income before allocation to
Minority Interests 61,275 61,208
(Income) allocated to Minority
Interests (E) (3,688) (4,406)
---------- ----------
Net income 57,587 56,802
Preferred distributions 21,692 21,692
---------- ----------
Net income available to Common Shares $ 35,895 $ 35,110
---------- ----------
---------- ----------
Net income per weighted average Common
Share outstanding $ 0.38 $ 0.36
---------- ----------
---------- ----------
Weighted average Common Shares
outstanding 93,361 (F) 97,063
---------- ----------
---------- ----------
Net income per weighted average
Common Share outstanding -
assuming dilution $ 0.38 $ 0.36
---------- ----------
---------- ----------
(A) Reflects the results of operations for Cityscape, 740 River Drive,
Prospect Towers, Park Place (TX), Park Westend, Emerald Bay, Farnham
Park, Plantation (TX), Balcones Club, Coach Lantern, Foxcroft, Yarmouth
Woods, Rolido Parque, Trails at Valley Ranch, The Fairfield (acquired
from January through March 1998) (collectively the "1998 Previously
Acquired Properties). The amounts presented represent the historical
amounts for certain revenues and expenses for the periods from January
1, 1998 through the respective acquisition dates for each property.
(B) Reflects the results of operations for the 1998 Most Recent Acquired
Properties. The amounts presented for rental revenues, property and
maintenance and real estate taxes and insurance are based on the
revenues and certain expenses of the 1998 Most Recent Acquired
Properties for the three months ended March 31, 1998.
(C) Reflects the results of operations for the 1998 Probable Properties. The
amounts presented for rental revenues, property and maintenance and real
estate taxes and insurance are based on the revenues and certain
expenses of the 1998 Probable Properties for the three months ended
March 31, 1998.
26
(D) Reflects the following adjustments to the Previously Acquired, Most
Recent Acquired and Probable Properties' results of operations as
follows:
Interest income - investment in mortgage notes:
Reduction of interest income on investment in mortgage loans
collateralized by five of the Most Recent Acquired Properties
to the extent amounts are already included in the Company's
historical financial results. $ (1,873)
---------
---------
Interest and other income:
Reduction of interest income due to the use of working capital for
property acquisitions. $ (791)
---------
---------
Property and maintenance:
The elimination of third-party management fees where the Company is
providing onsite property management services. $ (2,006)
---------
---------
Property management:
Incremental cost associated with self management of the Previously
Acquired, Most Recent Acquired and Probable Properties for the three
months ended March 31, 1998. $ 1,014
---------
---------
Depreciation:
Reflects depreciation based on the expected total investment of
approximately $1.4 billion for the Previously Acquired, Most Recent
Acquired and Probable Properties less 10% allocated to land and
depreciated over a 30-year life for real property. Depreciation for
the 1998 Previously Acquired Properties reflect amounts from January
1, 1998 through the respective acquisition date for each property. $ 9,783
---------
---------
Interest:
Expense incurred:
Interest on mortgage indebtedness for the Previously
Acquired, Most Recent Acquired and Probable Properties (G). $ 5,414
Interest on $50 million of mortgage indebtedness for five
of the Most Recent Acquired Properties. 849
Interest and fees on a $243 million draw on the line of
credit at a LIBOR rate of 5.71875% plus 45 basis points. 2,289
Interest associated with the issuance of the 2015 Notes. 4,830
---------
$ 13,382
---------
---------
(E) A portion of income was allocated to Minority Interests representing
interests in the Operating Partnership not owned by the Company. The
pro forma allocation to Minority Interests (represented by OP Units) is
based upon the percentage owned by such Minority Interests after giving
effect to the pro forma transactions.
(F) Pro Forma weighted average Common Shares outstanding for the three
months ended March 31, 1998 was 97 million, which assumes the Common
Shares issued in connection with the January 1998 Common Share Offering,
February 1998 Common Share Offerings and March Common Share Offering
were outstanding as of January 1, 1998 and includes approximately 0.9
million Common Shares issued in connection with the April 1998 Common
Share Offering. The Common Shares outstanding does not include any
shares issued in a private or public offering that have not been used or
are not intended to be used for acquisitions or repayment of debt
directly incurred in an acquisition.
(G) Detail of interest expense on mortgage indebtedness for the Previously
Acquired, Most Recent Acquired and Probable Properties:
MORTGAGE INTEREST INTEREST
PROPERTY INDEBTEDNESS RATE EXPENSE
----------- ------------- ---------- --------
740 River Drive (1) $ 6,967 7.75% $ 12
Alderwood Park 4,379 7.75% 85
Briarwood 12,800 4.00% 128
Briarwood 2nd 1,513 7.73% 29
Broadway 6,298 8.35% 131
Cedar Pointe 10,931 7.00% 191
Cedar Ridge 3,750 8.13% 76
Farnham Park (1) 11,546 8.00% 86
Fielder Crossing 2,218 10.79% 60
Greenhaven 10,966 4.00% 110
Harbor Pointe 12,000 6.56% 197
Lakes at Vinings 22,531 7.00% 394
Lakeshore at Preston 13,300 7.60% 253
Lakewood Greens 8,480 7.61% 161
Lexington Village 18,750 8.25% 387
Martins Landing 12,982 7.00% 227
North Creek 8,347 7.79% 163
Overlook Manor II 5,930 7.00% 104
Park Place (TX) (1) 10,177 7.46% 32
Park West End (1) 7,168 7.79% 25
Pleasant Ridge 1,692 8.29% 35
Portside Towers 58,500 8.00% 1,170
Prospect Towers (1) 14,913 7.74% 38
River Park 7,888 7.86% 155
Rolido Parque (1) 7,246 7.96% 96
Sandstone 1,400 7.47% 26
Skylark 11,790 4.00% 118
The Fairfield (1) 35,600 3.65% 301
Townhomes of Meadowbrook 10,242 8.54% 219
Villas at Josey Ranch 6,880 7.81% 134
Wimbledon Oaks 7,625 7.80% 149
Woodridge 7,824 6.29% 122
------------- --------
Totals $ 362,633 $5,414
------------- --------
------------- --------
(1) The amounts presented for these properties represent historical amounts for the periods
from January 1, 1998 through the respective acquisition dates for each property.
27
EQUITY RESIDENTIAL PROPERTIES TRUST
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(UNAUDITED)
(AMOUNTS IN THOUSANDS EXCEPT FOR SHARE DATA)
1998 1998
ACQUIRED PROBABLE PRO
HISTORICAL PROPERTIES(A) PROPERTIES(B) ADJUSTMENTS(C) FORMA
----------- ------------- ------------- -------------- ----------
REVENUES
Rental income $ 707,733 $ 92,203 $ 80,649 $ -- $ 880,585
Fee and asset management 5,697 -- -- -- 5,697
Interest income - investment in mortgage notes 20,366 -- -- (4,907) 15,459
Interest and other income 13,525 (6,666) 6,859
----------- ------------- ------------- -------------- ----------
Total revenues 747,321 92,203 80,649 (11,573) 908,600
----------- ------------- ------------- -------------- ----------
EXPENSES
Property and maintenance 176,075 28,436 24,358 (7,803) 221,066
Real estate taxes and insurance 69,520 11,424 7,228 -- 88,172
Property management 26,793 -- -- 4,321 31,114
Fee and asset management 3,364 -- -- -- 3,364
Depreciation 156,644 -- -- 42,598 199,242
Interest:
Expense incurred 121,324 -- -- 61,199 182,523
Amortization of deferred financing costs 2,523 -- -- -- 2,523
General and administrative 15,064 -- -- -- 15,064
----------- ------------- ------------- -------------- ----------
Total expenses 571,307 39,860 31,586 100,315 743,068
----------- ------------- ------------- -------------- ----------
Income before gain on disposition of properties
and allocation to Minority Interests 176,014 $ 52,343 $ 49,063 $ (111,888) 165,532
------------- ------------- --------------
------------- ------------- --------------
Gain on disposition of properties 13,838 --
----------- ----------
Income before allocation to Minority Interests 189,852 165,532
(Income) allocated to Minority Interests (D) (13,260) (12,857)
----------- ----------
Net income 176,592 152,782
Preferred distributions 59,012 59,012
----------- ----------
Net income available to Common Shares $ 117,580 $ 93,663
----------- ----------
----------- ----------
Net income per weighted average Common
Share outstanding $ 1.79 $ 1.28
----------- ----------
----------- ----------
Weighted average Common Shares outstanding 65,729 (E) 73,159
----------- ----------
----------- ----------
Net income per weighted average
Common Share outstanding -
assuming dilution $ 1.76 $ 1.26
----------- ----------
----------- ----------
(A) Reflects the results of operations of the 1998 Previously Acquired
Properties and the 1998 Most Recent Acquired Properties (collectively
the "1998 Acquired Properties"). The amounts presented represent the
historical amounts for certain revenues and expenses for the year ended
December 31, 1997.
(B) Reflects the results of operations of the 1998 Probable Properties. The
amounts presented represent the historical amounts for certain revenues
and expenses for the year ended December 31, 1997.
28
(C) Reflects the following adjustments to the Acquired and Probable
Properties' results of operations as follows:
Interest income - investment in mortgage notes:
Reduction of interest income on investment in mortgage loans
collateralized by five of the Acquired Properties to the extent
amounts are already included in the Company's historical
financial results. $ (4,907)
---------
---------
Interest and other income:
Reduction of interest income due to the use of working capital for
property acquisitions. $ (6,666)
---------
---------
Property and maintenance:
The elimination of third-party management fees where the Company is
providing onsite property management services. $ (7,803)
---------
---------
Property management:
Incremental cost associated with self management of the Acquired and
Probable Properties for the year ended December 31, 1997. $ 4,321
---------
---------
Depreciation:
Reflects depreciation based on the expected total investment of
approximately $1.4 billion for the Acquired and Probable Properties
less amounts allocated to land, generally 10%, and depreciated over a
30-year life for real property. $ 42,598
---------
---------
Interest:
Expense incurred:
Interest on mortgage indebtedness for certain of the
Acquired and Probable Properties (F). $ 25,111
Interest on $50 million of mortgage indebtedness for five
of the Acquired Properties. 3,395
Interest and fees on a $243 million draw on the line of
credit at a LIBOR rate of 5.5% plus 45 basis points. 13,373
Interest associated with the issuance of the 2015 Notes. 19,320
---------
$ 61,199
---------
---------
(D) A portion of income was allocated to Minority Interests representing
interests in the Operating Partnership not owned by the Company. The
pro forma allocation to Minority Interests (represented by OP Units) is
based upon the percentage owned by such Minority Interests after giving
effect to the pro forma transactions.
(E) Pro Forma weighted average Common Shares outstanding for the year ended
December 31, 1997 was 73.1 million, which includes 65.7 million weighted
average Common Shares outstanding as of December 31, 1997 plus the
issuance of 4 million Common Shares in connection with the January 1998
Common Share Offering, the issuance of approximately 2 million Common
Shares in connection with the February 1998 Common Share Offerings, the
issuance of approximately 0.5 million Common Shares in connection with
the March 1998 Common Share Offering and the issuance of approximately
0.9 million Common Shares in connection with the April 1998 Common Share
Offering. The Common Shares outstanding does not include any shares
issued in a private or public offering that have not been used or are
not intended to be used for acquisitions or repayment of debt directly
incurred in an acquisition.
(F) Detail of interest expense on mortgage indebtedness for the Acquired and
Probable Properties:
MORTGAGE INTEREST INTEREST
PROPERTY INDEBTEDNESS RATE EXPENSE
-------- ------------ --------- --------
740 River Drive $ 6,967 7.75% $ 540
Alderwood Park 4,379 7.75% 339
Briarwood 12,800 4.00% 512
Briarwood 2nd 1,513 7.73% 117
Broadway 6,298 8.35% 526
Cedar Pointe 10,931 7.00% 765
Cedar Ridge 3,750 8.13% 305
Farnham Park 11,546 8.00% 924
Fielder Crossing 2,218 10.79% 239
Greenhaven 10,966 4.00% 439
Harbor Pointe 12,000 6.56% 787
Lakes at Vinings 22,531 7.00% 1,577
Lakeshore at Preston 13,300 7.60% 1,011
Lakewood Greens 8,480 7.61% 645
Lexington Village 18,750 8.25% 1,547
Martins Landing 12,982 7.00% 909
North Creek 8,347 7.79% 650
Overlook Manor II 5,930 7.00% 415
Park Place (TX) 10,177 7.46% 759
Park West End 7,168 7.79% 558
Pleasant Ridge 1,692 8.29% 140
Portside Towers 58,500 8.00% 4,680
Prospect Towers 14,913 7.74% 1,154
River Park 7,888 7.86% 620
Rolido Parque 7,246 7.96% 577
Sandstone 1,400 7.47% 105
Skylark 11,790 4.00% 472
The Fairfield 35,600 3.65% 1,299
Townhomes of Meadowbrook 10,242 8.54% 875
Villas at Josey Ranch 6,880 7.81% 537
Wimbledon Oaks 7,625 7.80% 595
Woodridge 7,824 6.29% 493
------------ --------
Totals $ 362,633 $25,111
------------ --------
------------ --------
29
STATEMENTS OF REVENUE
AND CERTAIN EXPENSES
REQUIRED UNDER ITEM 7(a) OF FORM 8-K
30
Report of Independent Auditors
The Board of Trustees of
Equity Residential Properties Trust
We have audited the accompanying Statement of Revenue and Certain Expenses
of the Coconut Palm Club Apartments (the Property) for the year ended
December 31, 1997. The Statement of Revenue and Certain Expenses is the
responsibility of the Property's management. Our responsibility is to
express an opinion on the Statement of Revenue and Certain Expenses based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Statement of Revenue and
Certain Expenses is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
made in the Statement of Revenue and Certain Expenses. An audit also includes
assessing the basis of accounting used and significant estimates made by
management, as well as evaluating the overall presentation of the Statement of
Revenue and Certain Expenses. We believe that our audit provides a reasonable
basis for our opinion.
The accompanying Statement of Revenue and Certain Expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in Equity Residential Properties Trust's
Current Report on Form 8-K as described in Note 1, and is not intended to be
a complete presentation of the Property's revenue and expenses.
In our opinion, the Statement of Revenue and Certain Expenses referred to above
presents fairly, in all material respects, the revenue and certain expenses
described in Note 1 for the year ended December 31, 1997, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
June 11, 1998
31
Coconut Palm Club Apartments
Statements of Revenue and Certain Expenses
(AMOUNTS IN THOUSANDS)
FOR THE
THREE MONTHS FOR THE
ENDED YEAR ENDED
MARCH 31, 1998 DECEMBER 31,
(UNAUDITED) 1997
------------------------------------
REVENUE
Rental Income $714 $2,812
CERTAIN EXPENSES
Property operating and maintenance 165 779
Real estate taxes and insurance 114 433
Management fees 29 113
------------------------------------
308 1,325
Revenue in excess of certain expenses $406 $1,487
------------------------------------
------------------------------------
SEE ACCOMPANYING NOTES.
32
Coconut Palm Club Apartments
Notes to Statements of Revenue and Certain Expenses
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying statements of revenue and certain expenses for the year
ended December 31, 1997 and the three months ended March 31, 1998 (unaudited)
were prepared for the purpose of complying with the rules and regulations of
the Securities and Exchange Commission, for inclusion in the Current Report
on Form 8-K of Equity Residential Properties Trust (the "Company"). The
accompanying financial statements are not representative of the actual
operations of Coconut Palm Club Apartments for the periods presented as
certain expenses, which may not be comparable to the expenses to be incurred
by the Company in the proposed future operations of the Coconut Palm Club
Apartments, have been excluded. Expenses excluded consist of interest,
depreciation and amortization, professional fees and other costs not directly
related to the future operations of Coconut Palm Club Apartments.
In the preparation of the statements of revenue and certain expenses in
conformity with generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from these
estimates.
Rental income attributable to residential leases is recorded when due from
tenants, generally on a straight line basis.
In the opinion of management, the interim financial statement of revenue and
certain expenses for the quarter ended March 31, 1998, reflects all
adjustments necessary for a fair presentation of the results of the interim
period. All such adjustments are of a normal, recurring nature.
Coconut Palm Club Apartments had a management agreement with a management
company unaffiliated with the property owner through the acquisition date.
Management fees were based on 4% of total income. Upon acquisition of
Coconut Palm Club Apartments by the Company, such management contract was
canceled at which the Company will began to management Coconut Palm Club
Apartments.
33
Coconut Palm Club Apartments
Notes to Statements of Revenue and Certain Expenses (continued)
NOTE 2. DESCRIPTION OF PROPERTY
The following is a description of the multifamily property:
TOTAL
DATE NUMBER OF INVESTMENT
PROPERTY NAME LOCATION ACQUIRED UNITS (A)
- -----------------------------------------------------------------------------------
Coconut Palm Club Coconut Creek, 6/11/98 300 $20,415,000
Apartments FL
NOTES
(A) Includes initial purchase price and closing costs.
34
Report of Independent Auditors
The Board of Trustees of
Equity Residential Properties Trust
We have audited the accompanying Statement of Revenue and Certain Expenses of
the Emerson Place Apartments (the Property) for the year ended December 31,
1997. The Statement of Revenue and Certain Expenses is the responsibility of
the Property's management. Our responsibility is to express an opinion on the
Statement of Revenue and Certain Expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that that we plan and perform the audit to obtain
reasonable assurance about whether the Statement of Revenue and Certain Expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the Statement of Revenue and
Certain Expenses. An audit also includes assessing the basis of accounting used
and significant estimates made by management, as well as evaluating the overall
presentation of the Statement of Revenue and Certain Expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying Statement of Revenue and Certain Expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in Equity Residential Properties Trust's
Current Report on Form 8-K as described in Note 1, and is not intended to be a
complete presentation of the Property's revenue and expenses.
In our opinion, the Statement of Revenue and Certain Expenses referred to above
presents fairly, in all material respects, the revenue and certain expenses
described in Note 1 for the year ended December 31, 1997, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
May 1, 1998
35
Emerson Place Apartments
Statements of Revenue and Certain Expenses
(AMOUNTS IN THOUSANDS)
FOR THE
THREE MONTHS FOR THE
ENDED YEAR ENDED
MARCH 31, 1998 DECEMBER 31,
(UNAUDITED) 1997
---------------------------------
REVENUE
Rental income $1,912 $7,357
CERTAIN EXPENSES
Property operating and maintenance 602 2,344
Real estate taxes and insurance 177 709
Management fees 107 552
---------------------------------
886 3,605
---------------------------------
Revenue in excess of certain expenses $1,026 $3,752
---------------------------------
---------------------------------
SEE ACCOMPANYING NOTES.
36
Emerson Place Apartments
Notes to Statements of Revenue and Certain Expenses
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying statements of revenue and certain expenses for the year
ended December 31, 1997 and the three months ended March 31, 1998 (unaudited)
were prepared for the purpose of complying with the rules and regulations of
the Securities and Exchange Commission, for inclusion in the Current Report
on Form 8-K of Equity Residential Properties Trust (the "Company"). The
accompanying financial statements are not representative of the actual
operations of Emerson Place Apartments for the periods presented as certain
expenses, which may not be comparable to the expenses to be incurred by the
Company in the proposed future operations of the Emerson Place Apartments,
have been excluded. Expenses excluded consist of interest, depreciation and
amortization, professional fees and other costs not directly related to the
future operations of the Emerson Place Apartments.
In the preparation of the statements of revenue and certain expenses in
conformity with generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from these
estimates.
Rental income attributable to residential and commercial leases is recorded when
due from tenants, generally on a straight line basis.
In the opinion of management, the interim financial statement of revenue and
certain expenses for the quarter ended March 31, 1998, reflects all
adjustments necessary for a fair presentation of the results of the interim
period. All such adjustments are of a normal, recurring nature.
Emerson Place Apartments had an oral management agreement with a management
company affiliated with the property owner through the acquisition date. In
1997, $551,736 of management fees were paid to an affiliate of the property
owner. Upon acquisition of Emerson Place Apartments by the Company, such
management contract was canceled at which time the Company began to manage
Emerson Place Apartments.
In 1997, rental income includes rents of $218,112 from affiliated entities for
commercial office space and a parking facility. These affiliated entities lease
the office and parking spaces to unrelated third parties.
37
Emerson Place Apartments
Notes to Statements of Revenue and Certain Expenses
(continued)
2. DESCRIPTION OF PROPERTIES
The following is a description of the multifamily property:
TOTAL
DATE NUMBER OF INVESTMENT
PROPERTY NAME LOCATION ACQUIRED UNITS (A)
- -----------------------------------------------------------------------------------
Emerson Place Apartments Boston, MA 4/23/98 462 $72,515,000
NOTES
(A) Includes initial purchase price and closing costs.
38
Report of Independent Auditors
The Board of Trustees of
Equity Residential Properties Trust
We have audited the accompanying Statement of Revenue and Certain Expenses of
The Fairfield (the Property) for the year ended December 31, 1997. The
Statement of Revenue and Certain Expenses is the responsibility of the
Property's management. Our responsibility is to express an opinion on the
Statement of Revenue and Certain Expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Statement of Revenue and Certain Expenses is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures made in the Statement of Revenue and
Certain Expenses. An audit also includes assessing the basis of accounting used
and significant estimates made by management, as well as evaluating the overall
presentation of the Statement of Revenue and Certain Expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying Statement of Revenue and Certain Expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in Equity Residential Properties Trust's
Current Report on Form 8-K as described in Note 1, and is not intended to be a
complete presentation of the Property's revenue and expenses.
In our opinion, the Statement of Revenue and Certain Expenses referred to above
presents fairly, in all material respects, the revenue and certain expenses
described in Note 1 for the year ended December 31, 1997, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
June 4, 1998
39
The Fairfield
Statements of Revenue and Certain Expenses
(AMOUNTS IN THOUSANDS)
FOR THE
PERIOD FROM
JANUARY 1, 1998 FOR THE
THROUGH MARCH YEAR ENDED
25, 1998 DECEMBER 31,
(UNAUDITED) 1997
----------------------------
REVENUE
Rental Income $1,181 $4,489
CERTAIN EXPENSES
Property operating and maintenance 179 811
Real estate taxes and insurance 129 378
Management fees 37 136
----------------------------
345 1,325
Revenue in excess of certain expenses $836 $3,164
----------------------------
----------------------------
SEE ACCOMPANYING NOTES.
40
The Fairfield
Notes to Statements of Revenue and Certain Expenses
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying statements of revenue and certain expenses for the year
ended December 31, 1997 and the period from January 1, 1998 through March 25,
1998 (unaudited) were prepared for the purpose of complying with the rules
and regulations of the Securities and Exchange Commission, for inclusion in
the Current Report on Form 8-K of Equity Residential Properties Trust (the
"Company"). The accompanying financial statements are not representative of
the actual operations of The Fairfield for the periods presented as certain
expenses, which may not be comparable to the expenses to be incurred by the
Company in the proposed future operations of The Fairfield, have been
excluded. Expenses excluded consist of interest, depreciation and
amortization, professional fees and other costs not directly related to the
future operations of The Fairfield.
In the preparation of the statements of revenue and certain expenses in
conformity with generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from these
estimates.
Rental income attributable to residential leases is recorded when due from
tenants, generally on a straight line basis.
In the opinion of management, the interim financial statement of revenue and
certain expenses for the quarter ended March 31, 1998, reflects all
adjustments necessary for a fair presentation of the results of the interim
period. All such adjustments are of a normal, recurring nature.
The Fairfield was managed by an affiliated management company through the
acquisition date. Management fees were based on 3% of total income. The
management fees paid in 1997 to the affiliate of the property owner amounted to
$135,735. Upon acquisition of The Fairfield by the Company, such management
contract was canceled at which time the Company began to manage The Fairfield.
NOTE 2. DESCRIPTION OF PROPERTY
The following is a description of the multifamily property:
PROPERTY NAME LOCATION DATE ACQUIRED NUMBER OF UNITS TOTAL INVESTMENT (A)
- ----------------------------------------------------------------------------------------
The Fairfield Stamford, CT 3/26/98 263 $45,550,000
Note:
(A) Includes initial purchase price and closing costs.
41
Report of Independent Auditors
The Board of Trustees of
Equity Residential Properties Trust
We have audited the accompanying combined Statement of Revenue and Certain
Expenses of the Focus Group Properties (the Properties) described in Note 2 for
the year ended December 31, 1997. The combined Statement of Revenue and Certain
Expenses is the responsibility of the Properties' management. Our
responsibility is to express an opinion on the combined Statement of Revenue and
Certain Expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that that we plan and perform the audit to obtain
reasonable assurance about whether the Statement of Revenue and Certain Expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the Statement of Revenue and
Certain Expenses. An audit also includes assessing the basis of accounting used
and significant estimates made by management, as well as evaluating the overall
presentation of the Statement of Revenue and Certain Expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying combined Statement of Revenue and Certain Expenses was prepared
for the purpose of complying with the rules and regulations of the Securities
and Exchange Commission for inclusion in Equity Residential Properties Trust's
Current Report on Form 8-K as described in Note 1, and is not intended to be a
complete presentation of the Properties' combined revenue and expenses.
In our opinion, the combined Statement of Revenue and Certain Expenses referred
to above presents fairly, in all material respects, the revenue and certain
expenses described in Note 1 for the year ended December 31, 1997, in conformity
with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
June 18, 1998
42
Focus Group Properties
Combined Statements of Revenue and Certain Expenses
(AMOUNTS IN THOUSANDS)
FOR THE
THREE MONTHS FOR THE
ENDED YEAR ENDED
MARCH 31, 1998 DECEMBER 31,
(UNAUDITED) 1997
-----------------------------
REVENUE
Rental income $2,646 $9,080
CERTAIN EXPENSES
Property operating and maintenance 723 3,121
Real estate taxes and insurance 263 541
Management fees 114 368
-----------------------------
1,100 4,030
-----------------------------
Revenue in excess of certain expenses $1,546 $5,050
-----------------------------
-----------------------------
SEE ACCOMPANYING NOTES.
43
Focus Group Properties
Notes to Combined Statements of Revenue and Certain Expenses
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying combined statements of revenue and certain expenses for the
year ended December 31, 1997 and the three months ended March 31, 1998
(unaudited) were prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission, for inclusion in the
Current Report on Form 8-K of Equity Residential Properties Trust (the
"Company"). The accompanying combined financial statements consist of three
multifamily properties that the Company has acquired and one property that
the Company has reached an agreement, in principle, to acquire and is in the
final stages of documenting the acquisition (the "Focus Group Properties").
The closing of the pending transaction is subject to certain contingencies
and conditions; therefore, there can be no assurance that this transaction
will be consummated.
The accompanying combined financial statements are not representative of the
actual operations of the Focus Group Properties for the periods presented as
certain expenses, which may not be comparable to the expenses to be incurred by
the Company in the proposed future operations of the Focus Group Properties,
have been excluded. Expenses excluded consist of interest, depreciation and
amortization, professional fees and other costs not directly related to the
future operations of the Focus Group Properties.
In the preparation of the combined statements of revenue and certain expenses in
conformity with generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from these
estimates.
Rental income attributable to residential leases is recorded when due from
tenants, generally on a straight line basis.
In the opinion of management, the interim financial statement of revenue and
certain expenses for the quarter ended March 31, 1998, reflects all
adjustments necessary for a fair presentation of the results of the interim
period. All such adjustments are of a normal, recurring nature.
The Focus Group Properties were or are expected to be managed by an affiliated
management company through the acquisition date. Management fees of the
properties were based upon 4% of total income. Upon acquisition of the
properties by the Company, such management contracts were or will be canceled at
which time the Company began or will begin to manage the properties.
44
Focus Group Properties
Notes to Combined Statements
of Revenue and Certain Expenses (continued)
2. DESCRIPTION OF PROPERTIES
The following multifamily properties are included in the combined statements of
revenue and certain expenses:
DATE NUMBER OF TOTAL
PROPERTY NAME LOCATION SELLER ACQUIRED UNITS INVESTMENT (B)
- -------------------------------------------------------------------------------------------------
Defoor Village (D) Atlanta, GA (A) 6/16/98 156 $13,515,000
Lexington Village Alpharetta, GA (A) (C) 352 24,515,000
Plantation Ridge Marietta, GA (A) 6/16/98 454 23,215,000
Wynbrook Norcross, GA (A) 6/18/98 318 13,515,000
---------------------------
1,280 $74,760,000
---------------------------
---------------------------
NOTES
(A) The Focus Group Properties have been presented on a combined basis because
all of the properties were or are commonly managed by Focus Management,
Inc.
(B) Includes initial purchase price and closing costs.
(C) The Company has made a commitment to acquire this property or has reached
an agreement in principle and is in the final stages of documenting the
acquisition of this property.
(D) Operations for this property began in June 1997 upon substantial completion
of construction.
45
REPORT OF INDEPENDENT AUDITORS
The Board of Trustees of
Equity Residential Properties Trust
We have audited the accompanying combined Statement of Revenue and Certain
Expenses of the Frederick Probable Properties (the Probable Properties)
described in Note 2 for the year ended December 31, 1997. The combined
Statement of Revenue and Certain Expenses is the responsibility of the
Probable Properties' management. Our responsibility is to express an opinion
on the Statement of Revenue and Certain Expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Statement of Revenue and Certain Expenses is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures made in the Statement of Revenue and
Certain Expenses. An audit also includes assessing the basis of accounting used
and significant estimates made by management, as well as evaluating the overall
presentation of the Statement of Revenue and Certain Expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying combined Statement of Revenue and Certain Expenses was prepared
for the purpose of complying with the rules and regulations of the Securities
and Exchange Commission for inclusion in Equity Residential Properties Trust's
Current Report on Form 8-K as described in Note 1, and is not intended to be a
complete presentation of the Probable Properties' combined revenue and expenses.
In our opinion, the combined Statement of Revenue and Certain Expenses referred
to above presents fairly, in all material respects, the revenue and certain
expenses described in Note 1 for the year ended December 31, 1997, in conformity
with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
May 29, 1998
46
Frederick Probable Properties
Combined Statements of Revenue and Certain Expenses
(AMOUNTS IN THOUSANDS)
FOR THE THREE FOR THE YEAR
MONTHS ENDED ENDED
MARCH 31, 1998 DECEMBER 31,
(UNAUDITED) 1997
-------------------------------
REVENUE
Rental Income $975 $3,712
CERTAIN EXPENSES
Property operating and maintenance 234 1,030
Real estate taxes and insurance 112 428
Management fees 44 167
-------------------------------
390 1,625
Revenue in excess of certain expenses $585 $2,087
-------------------------------
-------------------------------
SEE ACCOMPANYING NOTES.
47
Frederick Probable Properties
Notes to Combined Statements of Revenue and Certain Expenses
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying combined statements of revenue and certain expenses for the
year ended December 31, 1997 and for the three months ended March, 31 1998
(unaudited) were prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission, for inclusion in the
Current Report on Form 8-K of Equity Residential Properties Trust (the
"Company"). The accompanying combined financial statements consist of three
multifamily properties for which the Company made a commitment to acquire or
has reached an agreement, in principle, to acquire these properties and the
Company is in the final stages of documenting the acquisition of these
properties (the "Frederick Probable Properties" or the "Probable
Properties"). The closings of these pending transactions are subject to
certain contingencies and conditions; therefore, there can be no assurance
that these transactions will be consummated.
The accompanying combined financial statements are not representative of the
actual operations of the Frederick Probable Properties for the periods
presented as certain expenses, which may not be comparable to the expenses to
be incurred by the Company in the proposed future operations of the Probable
Properties, have been excluded. Expenses excluded consist of interest,
depreciation and amortization, professional fees and other costs not directly
related to the future operations of the Probable Properties.
In the preparation of the combined statements of revenue and certain expenses in
conformity with generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from these
estimates.
Rental income attributable to residential leases is recorded when due from
tenants, generally on a straight line basis.
In the opinion of management, the interim financial statement of revenue and
certain expenses for the quarter ended March 31, 1998, reflects all
adjustments necessary for a fair presentation of the results of the interim
period. All such adjustments are of a normal, recurring nature.
The Frederick Probable Properties are expected to be managed by an
affiliated management company through the acquisition date. Management fees are
based upon a percentage ranging from 4% to 5% of gross revenues. The management
fees paid in 1997 to the affiliate of the property owner amounted to $167,362.
Upon acquisition of the Probable Properties by the Company, such management
contracts will be canceled at which time the Company will begin to manage the
properties.
48
Frederick Probable Properties
Notes to Combined Statements of Revenue and Certain Expenses
(continued)
NOTE 2. DESCRIPTION OF PROPERTY
The following multifamily properties are included in the combined statements of
revenue and certain expenses:
DATE NUMBER OF TOTAL
PROPERTY NAME LOCATION SELLER ACQUIRED UNITS INVESTMENT(B)
- -----------------------------------------------------------------------------------------------------------------------------
Overlook Manor I & II Frederick, MD (A) (C) 290 $ 13,403,000
Tillman Place Frederick, MD (A) (C) 64 3,858,000
The Willows Frederick, MD (A) (C) 204 9,649,000
--------------------------------
558 $ 26,910,000
--------------------------------
--------------------------------
NOTE:
(A) The Frederick Probable Properties have been presented on a combined basis
because all of the Probable Properties are commonly owned by Frederick.
(B) Includes initial purchase price and closing costs.
(C) The Company has made a commitment to acquire this property or has reached
an agreement in principle and is in the final stages of documenting the
acquisition of this property.
49
Report of Independent Auditors
The Board of Trustees of
Equity Residential Properties Trust
We have audited the accompanying Statement of Revenue and Certain Expenses of
Harbor Pointe (the Property) for the year ended December 31, 1997. The
Statement of Revenue and Certain Expenses is the responsibility of the
Property's management. Our responsibility is to express an opinion on the
Statement of Revenue and Certain Expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Statement of Revenue and Certain Expenses is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures made in the Statement of Revenue and
Certain Expenses. An audit also includes assessing the basis of accounting used
and significant estimates made by management, as well as evaluating the overall
presentation of the Statement of Revenue and Certain Expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying Statement of Revenue and Certain Expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in Equity Residential Properties Trust's
Current Report on Form 8-K as described in Note 1, and is not intended to be a
complete presentation of the Property's revenue and expenses.
In our opinion, the Statement of Revenue and Certain Expenses referred to above
presents fairly, in all material respects, the revenue and certain expenses
described in Note 1 for the year ended December 31, 1997, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
June 2, 1998
50
Harbor Pointe
Statements of Revenue and Certain Expenses
(AMOUNTS IN THOUSANDS)
FOR THE THREE FOR THE
MONTHS ENDED YEAR ENDED
MARCH 31, 1998 DECEMBER 31,
(UNAUDITED) 1997
------------------------------
REVENUE
Rental Income $1,117 $ 4,511
CERTAIN EXPENSES
Property operating and maintenance 356 1,541
Real estate taxes and insurance 167 647
Management fees 45 180
------------------------------
568 2,368
Revenue in excess of certain expenses $ 549 $ 2,143
------------------------------
------------------------------
SEE ACCOMPANYING NOTES.
51
Harbor Pointe
Notes to Statements of Revenue and Certain Expenses
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying statements of revenue and certain expenses for the year
ended December 31, 1997 and the three months ended March 31, 1998 (unaudited)
were prepared for the purpose of complying with the rules and regulations of
the Securities and Exchange Commission, for inclusion in the Current Report
on Form 8-K of Equity Residential Properties Trust (the "Company"). The
accompanying financial statements are not representative of the actual
operations of Harbor Pointe for the periods presented as certain expenses,
which may not be comparable to the expenses to be incurred by the Company in
the proposed future operations of Harbor Pointe, have been excluded.
Expenses excluded consist of interest, depreciation and amortization,
professional fees and other costs not directly related to the future
operations of Harbor Pointe.
In the preparation of the statements of revenue and certain expenses in
conformity with generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from these
estimates.
Rental income attributable to residential leases is recorded when due from
tenants, generally on a straight line basis.
In the opinion of management, the interim financial statement of revenue and
certain expenses for the quarter ended March 31, 1998, reflects all
adjustments necessary for a fair presentation of the results of the interim
period. All such adjustments are of a normal, recurring nature.
Harbor Pointe was managed by an affiliated management company through the
acquisition date. Management fees were based on 4% of total income. The
management fees paid in 1997 to the affiliate of the property were $180,348.
Upon acquisition of Harbor Pointe by the Company, such management contract was
canceled at which time the Company began to manage Harbor Pointe.
NOTE 2. DESCRIPTION OF PROPERTY
The following is a description of the multifamily property purchased by the
Company:
PROPERTY NAME LOCATION DATE ACQUIRED NUMBER OF UNITS TOTAL INVESTMENT(A)
- --------------------------------------------------------------------------------------------------------------
Harbor Pointe Milwaukee, WI 4/1/98 595 $23,965,000
Note:
(A) Includes initial purchase price and closing costs.
52
REPORT OF INDEPENDENT AUDITORS
The Board of Trustees of
Equity Residential Properties Trust
We have audited the accompanying combined Statement of Revenue and Certain
Expenses of The Lakes at Vinings Apartments and Martins Landing Apartments
Probable Properties (the Probable Properties) described in Note 2 for the
year ended December 31, 1997. The combined Statement of Revenue and Certain
Expenses is the responsibility of the Probable Properties' management. Our
responsibility is to express an opinion on the combined Statement of Revenue
and Certain Expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Statement of Revenue and Certain Expenses is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures made in the Statement of Revenue and
Certain Expenses. An audit also includes assessing the basis of accounting used
and significant estimates made by management, as well as evaluating the overall
presentation of the Statement of Revenue and Certain Expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying combined Statement of Revenue and Certain Expenses was prepared
for the purpose of complying with the rules and regulations of the Securities
and Exchange Commission for inclusion in Equity Residential Properties Trust's
Current Report on Form 8-K as described in Note 1, and is not intended to be a
complete presentation of the Probable Properties' combined revenue and expenses.
In our opinion, the combined Statement of Revenue and Certain Expenses referred
to above presents fairly, in all material respects, the revenue and certain
expenses described in Note 1 for the year ended December 31, 1997, in conformity
with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
June 4, 1998
53
The Lakes at Vinings Apartments and Martins Landing Probable Properties
Combined Statements of Revenue and Certain Expenses
(AMOUNTS IN THOUSANDS)
FOR THE THREE FOR THE YEAR
MONTHS ENDED ENDED
MARCH 31, 1998 DECEMBER 31,
(UNAUDITED) 1997
-----------------------------
REVENUE
Rental income $ 1,698 $ 6,529
CERTAIN EXPENSES
Property operating and maintenance 414 1,875
Real estate taxes and insurance 116 503
Management fees 67 257
-----------------------------
597 2,635
-----------------------------
Revenue in excess of certain expenses $ 1,101 $ 3,894
-----------------------------
-----------------------------
SEE ACCOMPANYING NOTES.
54
The Lakes at Vinings Apartments and Martins Landing Probable Properties
Notes to Combined Statements of Revenue and Certain Expenses
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying combined statements of revenue and certain expenses for the
year ended December 31, 1997 and for the three months ended March, 31 1998
(unaudited) were prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission, for inclusion in the
Current Report on Form 8-K of Equity Residential Properties Trust (the
"Company"). The accompanying combined financial statements consist of two
multifamily properties for which the Company made a commitment to acquire or
has reached an agreement, in principle, to acquire and the Company is in the
final stages of documenting the acquisition of these properties ("The Lakes
at Vinings Apartments and Martins Landing Apartments Probable Properties" or
the "Probable Properties"). The closing of these pending transactions are
subject to certain contingencies and conditions; therefore, there can be no
assurance that these transactions will be consummated.
The accompanying combined financial statements are not representative of the
actual operations of the Probable Properties for the periods presented as
certain expenses, which may not be comparable to the expenses to be incurred by
the Company in the proposed future operations of the Probable Properties, have
been excluded. Expenses excluded consist of interest, depreciation and
amortization, professional fees and other costs not directly related to the
future operations of the Probable Properties.
In the preparation of the combined statements of revenue and certain expenses in
conformity with generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from these
estimates.
Rental income attributable to residential leases is recorded when due from
tenants, generally on a straight line basis.
In the opinion of management, the interim financial statement of revenue and
certain expenses for the quarter ended March 31, 1998, reflects all
adjustments necessary for a fair presentation of the results of the interim
period. All such adjustments are of a normal, recurring nature.
The Probable Properties are expected to be managed by an affiliated management
company through the acquisition date. Management fees were based on 4% of
gross revenues. In 1997, $257,431 of management fees were paid to an affiliate
of the property owner. Upon acquisition of the Probable Properties by the
Company, such management contracts will be canceled at which time the Company
will begin to manage the Probable Properties.
55
The Lakes at Vinings Apartments and Martins Landing Probable Properties
Notes to Combined Statements
of Revenue and Certain Expenses (continued)
NOTE 2. DESCRIPTION OF PROPERTIES
The following multifamily properties are included in the combined statements of
revenue and certain expenses:
DATE NUMBER OF TOTAL
PROPERTY NAME LOCATION SELLER ACQUIRED UNITS INVESTMENT(B)
- --------------------------------------------------------------------------------
Martins Landing Atlanta, GA (A) (C) 300 $18,093,000
The Lakes at Vinings Atlanta, GA (A) (C) 464 27,931,000
--------------------------
764 $46,024,000
--------------------------
--------------------------
NOTE:
(A) The Probable Properties have been presented on a combined basis because all
of the Probable Properties are commonly owned.
(B) Includes initial purchase price and closing costs.
(C) The Company has made a commitment to acquire this property or has reached
an agreement in principle and is in the final stages of documenting the
acquisition of this property.
56
Report of Independent Auditors
The Board of Trustees of
Equity Residential Properties Trust
We have audited the accompanying combined Statement of Revenue and Certain
Expenses of the Lincoln Property Company Probable Properties (the Probable
Properties) described in Note 2 for the year ended December 31, 1997. The
combined Statement of Revenue and Certain Expenses is the responsibility of the
Probable Properties' management. Our responsibility is to express an opinion on
the combined Statement of Revenue and Certain Expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that that we plan and perform the audit to obtain
reasonable assurance about whether the Statement of Revenue and Certain Expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the Statement of Revenue and
Certain Expenses. An audit also includes assessing the basis of accounting used
and significant estimates made by management, as well as evaluating the overall
presentation of the Statement of Revenue and Certain Expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying combined Statement of Revenue and Certain Expenses was prepared
for the purpose of complying with the rules and regulations of the Securities
and Exchange Commission for inclusion in Equity Residential Properties Trust's
Current Report on Form 8-K as described in Note 1, and is not intended to be a
complete presentation of the Probable Properties' combined revenue and expenses.
In our opinion, the combined Statement of Revenue and Certain Expenses referred
to above presents fairly, in all material respects, the revenue and certain
expenses described in Note 1 for the year ended December 31, 1997, in conformity
with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
April 30, 1998
57
Lincoln Property Company Probable Properties
Combined Statements of Revenue and Certain Expenses
(AMOUNTS IN THOUSANDS)
FOR THE
THREE MONTHS FOR THE
ENDED YEAR ENDED
MARCH 31, 1998 DECEMBER 31,
(UNAUDITED) 1997
-------------------------------
REVENUE
Rental income $13,999 $54,255
CERTAIN EXPENSES
Property operating and maintenance 3,300 13,337
Real estate taxes and insurance 1,029 4,327
Management fees 673 2,638
-------------------------------
5,002 20,302
-------------------------------
Revenue in excess of certain expenses $ 8,997 $33,953
-------------------------------
-------------------------------
SEE ACCOMPANYING NOTES.
58
Lincoln Property Company Probable Properties
Notes to Combined Statements of Revenue and Certain Expenses
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying combined statements of revenue and certain expenses for the
year ended December 31, 1997 and the three months ended March 31, 1998
(unaudited) were prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission, for inclusion in the
Current Report on Form 8-K of Equity Residential Properties Trust (the
"Company"). The accompanying combined financial statements consist of 25
multifamily properties for which the Company made a commitment to acquire or
has reached an agreement, in principle, to acquire these properties and the
Company is in the final stages of documenting the acquisition of these
properties, (the "Lincoln Probable Properties" or the "Probable Properties").
The closings of these pending transactions are subject to certain
contingencies and conditions; therefore, there can be no assurance that these
transactions will be consummated.
The accompanying combined financial statements are not representative of the
actual operations of the Lincoln Probable Properties for the periods presented
as certain expenses, which may not be comparable to the expenses to be incurred
by the Company in the proposed future operations of the Lincoln Probable
Properties, have been excluded. Expenses excluded consist of interest,
depreciation and amortization, professional fees and other costs not directly
related to the future operations of the Lincoln Probable Properties.
In the preparation of the combined statements of revenue and certain expenses in
conformity with generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from these
estimates.
Rental income attributable to residential leases is recorded when due from
tenants, generally on a straight line basis.
The Lincoln Probable Properties have been presented on a combined basis because
all of the properties were either commonly owned or managed by Lincoln Property
Company, the seller of the Probable Properties.
The Lincoln Probable Properties are expected to be managed by an affiliated
management company through the acquisition date. Management fees are based upon
a percentage ranging from 3.75% to 5% of total income. Upon acquisition of the
Probable Properties by the Company, such management contracts will be canceled
at which time the Company will begin to manage the properties.
59
Lincoln Property Company Probable Properties
Notes to Combined Statements
of Revenue and Certain Expenses (continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
In the opinion of management, the interim financial statement of revenue and
certain expenses for the quarter ended March 31, 1998, reflects all
adjustments necessary for a fair presentation of the results of the interim
period. All such adjustments are of a normal, recurring nature.
Lincoln Residential Services of Colorado, Inc. and Southwest Landscape by Design
perform landscaping services at certain of the Probable Properties. The
Probable Properties paid approximately $210,000 to these affiliated companies
during 1997 for the landscaping services rendered.
Lincoln Check is a related party of the Probable Properties that performs credit
verification services for certain of the Probable Properties. The Probable
Properties paid Lincoln Check approximately $51,200 during 1997 for credit check
services.
The Probable Properties paid the affiliated management company approximately
$4,400 during 1997 for cash management services.
2. DESCRIPTION OF PROPERTIES
The 25 Probable Properties are multifamily properties and contain a total of
5,774 units. The properties range in size from 99 to 584 units. The Probable
Properties are located in California, Colorado, Nevada and Washington.
The Company's total investment for the Probable Properties, including initial
purchase price and closing costs is expected to be approximately $465,695,000.
60
REPORT OF INDEPENDENT AUDITORS
The Board of Trustees of
Equity Residential Properties Trust
We have audited the accompanying combined Statement of Revenue and Certain
Expenses of the Magnum Probable Properties (the Probable Properties) described
in Note 2 for the year ended December 31, 1997. The combined Statement of
Revenue and Certain Expenses is the responsibility of the Probable Properties'
management. Our responsibility is to express an opinion on the Combined
Statement of Revenue and Certain Expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Statement of Revenue and Certain Expenses is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures made in the Statement of Revenue and
Certain Expenses. An audit also includes assessing the basis of accounting used
and significant estimates made by management, as well as evaluating the overall
presentation of the Statement of Revenue and Certain Expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying Combined Statement of Revenue and Certain Expenses was prepared
for the purpose of complying with the rules and regulations of the Securities
and Exchange Commission for inclusion in Equity Residential Properties Trust's
Current Report on Form 8-K as described in Note 1, and is not intended to be a
complete presentation of the Probable Properties' combined revenue and expenses.
In our opinion, the Combined Statement of Revenue and Certain Expenses referred
to above presents fairly, in all material respects, the revenue and certain
expenses described in Note 1 for the year ended December 31, 1997, in conformity
with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
May 1, 1998
61
Magnum Probable Properties
Combined Statements of Revenue and Certain Expenses
(AMOUNTS IN THOUSANDS)
FOR THE THREE FOR THE YEAR
MONTHS ENDED ENDED
MARCH 31, 1998 DECEMBER 31,
(UNAUDITED) 1997
-------------------------------
REVENUE
Rental Income $3,390 $13,309
CERTAIN EXPENSES
Property operating and maintenance 835 3,586
Real estate taxes and insurance 478 1,867
Management fees 136 537
-------------------------------
1,449 5,990
-------------------------------
Revenue in excess of certain expenses $1,941 $ 7,319
-------------------------------
-------------------------------
SEE ACCOMPANYING NOTES.
62
Magnum Probable Properties
Notes to Combined Statements of Revenue and Certain Expenses
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying combined statements of revenue and certain expenses for the
year ended December 31, 1997 and for the three months ended March, 31 1998
(unaudited) were prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission, for inclusion in the
Current Report on Form 8-K of Equity Residential Properties Trust (the
"Company"). The accompanying combined financial statements consist of 10
multifamily properties for which the Company made a commitment to acquire or
has reached an agreement, in principle, to acquire these properties and the
Company is in the final stages of documenting the acquisition of these
properties (the "Magnum Probable Properties" or the "Probable Properties").
The closings of these pending transactions are subject to certain
contingencies and conditions; therefore, there can be no assurance that these
transactions will be consummated.
The accompanying combined financial statements are not representative of the
actual operations of the Magnum Probable Properties for the periods presented as
certain expenses, which may not be comparable to the expenses to be incurred by
the Company in the proposed future operations of the Magnum Probable Properties,
have been excluded. Expenses excluded consist of interest, depreciation and
amortization, professional fees and other costs not directly related to the
future operations of the Magnum Probable Properties.
In the preparation of the combined statements of revenue and certain expenses in
conformity with generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from these
estimates.
Rental income attributable to residential leases is recorded when due from
tenants, generally on a straight line basis.
In the opinion of management, the interim financial statement of revenue and
certain expenses for the quarter ended March 31, 1998, reflects all
adjustments necessary for a fair presentation of the results of the interim
period. All such adjustments are of a normal, recurring nature.
The Magnum Probable Properties had a management agreement with a management
company affiliated with the property owner through the acquisition date.
Management fees were based on 4% of gross revenues. In 1997, $536,512 of
management fees were paid to an affiliate of the property owner. Upon
acquisition of the Magnum Probable Properties by the Company, such management
contracts will be canceled at which time the Company will begin to manage the
properties.
63
Magnum Probable Properties
Notes to Combined Statements of Revenue and Certain Expenses
(continued)
NOTE 2. DESCRIPTION OF PROPERTIES
The following multifamily properties are included in the combined statements of
revenue and certain expenses:
DATE NUMBER OF TOTAL
PROPERTY NAME LOCATION SELLER ACQUIRED UNITS INVESTMENT(B)
- -------------------------------------------------------------------------------------------------------------------------------
Cedar Ridge Arlington, TX (A) (C) 121 $ 4,815,000
Lakewood Greens Dallas, TX (A) (C) 252 11,015,000
Pleasant Ridge Arlington, TX (A) (C) 63 2,415,000
Sandstone at Bear Creek Euless, TX (A) (C) 40 1,815,000
Villas at Josey Ranch Carrollton, TX (A) (C) 198 8,815,000
Wimbledon Oaks Arlington, TX (A) (C) 248 10,315,000
The Broadway Garland, TX (A) (C) 288 9,215,000
Fielder Crossing Arlington, TX (A) (C) 119 4,615,000
River Park Fort Worth, TX (A) (C) 280 11,015,000
Lakeshore at Preston Plano, TX (A) (C) 302 18,505,000
-----------------------------------
1,911 $82,540,000
-----------------------------------
-----------------------------------
NOTE:
(A) The Magnum Probable Properties have been presented on a combined basis
because all of the properties were either commonly owned and managed by
Magnum, the seller of the Probable Properties.
(B) Includes initial purchase price and closing costs.
(C) The Company has made a commitment to acquire this property or has reached
an agreement in principle and is in the final stages of documenting the
acquisition of this property.
64
Report of Independent Auditors
The Board of Trustees of
Equity Residential Properties Trust
We have audited the accompanying combined Statement of Revenue and Certain
Expenses of TCRS Properties (the Properties) described in Note 2 for the year
ended December 31, 1997. The combined Statement of Revenue and Certain
Expenses is the responsibility of the Properties' management. Our
responsibility is to express an opinion on the combined Statement of Revenue
and Certain Expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Statement of Revenue and Certain Expenses is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures made in the Statement of Revenue and
Certain Expenses. An audit also includes assessing the basis of accounting used
and significant estimates made by management, as well as evaluating the overall
presentation of the Statement of Revenue and Certain Expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying combined Statement of Revenue and Certain Expenses was prepared
for the purpose of complying with the rules and regulations of the Securities
and Exchange Commission for inclusion in Equity Residential Properties Trust's
Current Report on Form 8-K as described in Note 1, and is not intended to be a
complete presentation of the Properties' revenue and expenses.
In our opinion, the combined Statement of Revenue and Certain Expenses referred
to above presents fairly, in all material respects, the revenue and certain
expenses described in Note 1 for the year ended December 31, 1997, in conformity
with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
June 10, 1998
65
TCRS Properties
Combined Statements of Revenue and Certain Expenses
(AMOUNTS IN THOUSANDS)
FOR THE THREE FOR THE
MONTHS ENDED YEAR ENDED
MARCH 31, 1998 DECEMBER 31,
(UNAUDITED) 1997
------------------------------
REVENUE
Rental Income $ 3,548 $ 13,867
CERTAIN EXPENSES
Property operating and maintenance 742 2,955
Real estate taxes and insurance 565 2,136
Management fees 160 630
------------------------------
1,467 5,721
Revenue in excess of certain expenses $ 2,081 $ 8,146
------------------------------
------------------------------
SEE ACCOMPANYING NOTES.
66
TCRS Properties
Notes to Combined Statements of Revenue and Certain Expenses
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying combined statements of revenue and certain expenses for the
year ended December 31, 1997 and the three months ended March 31, 1998
(unaudited) were prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission, for inclusion in the
Current Report on Form 8-K of Equity Residential Properties Trust (the
"Company"). The accompanying combined financial statements consist of five
multifamily properties which the Company has purchased.
The accompanying combined financial statements are not representative of the
actual operations of the TCRS Properties (the "Properties") for the periods
presented as certain expenses, which may not be comparable to the expenses to
be incurred by the Company in the proposed future operations of the
Properties, have been excluded. Expenses excluded consist of interest,
depreciation and amortization, professional fees and other costs not directly
related to the future operations of the TCRS Properties.
In the preparation of the combined statements of revenue and certain expenses in
conformity with generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from these
estimates.
Rental income attributable to residential leases is recorded when due from
tenants, generally on a straight line basis.
In the opinion of management, the interim financial statement of revenue and
certain expenses for the quarter ended March 31, 1998, reflects all
adjustments necessary for a fair presentation of the results of the interim
period. All such adjustments are of a normal, recurring nature.
The TCRS Properties were managed by two affiliated management companies
through the acquisition date. Management fees were based on 4.5% of total
income. The management fees paid in 1997 to the affiliates of the property
owner amounted to $629,727. Upon acquisition of the Properties by the
Company, such management contracts were canceled at which time the Company
began to manage the Properties.
TCR Risk Management, an affiliate of the Properties, provided insurance services
to all five of the Properties through the acquisition date. The Properties paid
TCR Risk Management approximately $91,000 during 1997 related to such services.
67
TCRS Properties
Notes to Combined Statements
of Revenue and Certain Expenses (continued)
2. DESCRIPTION OF PROPERTIES
The following multifamily properties are included in the combined statements of
revenue and certain expenses:
Property Date Number of Total
Name Location Seller Acquired Units Investment(B)
- ------------------------------------------------------------------------------------------ ---------------
Gates at Carlson Minnetonka, MN (A) 4/1/98 435 $27,640,000
GlenGarry Club Bloomington, IL (A) 4/1/98 250 18,448,000
Woodlands Brookfield, WI (A) 4/1/98 148 15,034,000
Ravinia Greenfield, WI (A) 4/1/98 206 12,840,000
Plumtree I, II, and III Hales Corners, WI (A) 4/1/98 332 21,813,000
----------- ---------------
1,371 $95,775,000
----------- ---------------
----------- ---------------
Notes
(A) The TCRS Properties have been presented on a combined basis because all
of the Properties are commonly owned and managed.
(B) Includes initial purchase price and closing costs.
68
Report of Independent Auditors
The Board of Trustees of
Equity Residential Properties Trust
We have audited the accompanying Statement of Revenue and Certain Expenses of
the Northridge Apartments (the Property) for the year ended December 31, 1997.
The Statement of Revenue and Certain Expenses is the responsibility of the
Property's management. Our responsibility is to express an opinion on the
Statement of Revenue and Certain Expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Statement of Revenue and Certain Expenses is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures made in the Statement of Revenue and
Certain Expenses. An audit also includes assessing the basis of accounting used
and significant estimates made by management, as well as evaluating the overall
presentation of the Statement of Revenue and Certain Expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying Statement of Revenue and Certain Expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in Equity Residential Properties Trust's
Current Report on Form 8-K as described in Note 1, and is not intended to be a
complete presentation of the Property's revenue and expenses.
In our opinion, the Statement of Revenue and Certain Expenses referred to above
presents fairly, in all material respects, the revenue and certain expenses
described in Note 1 for the year ended December 31, 1997, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
June 9, 1998
69
Northridge Apartments
Statements of Revenue and Certain Expenses
(AMOUNTS IN THOUSANDS)
FOR THE THREE FOR THE
MONTHS ENDED YEAR ENDED
MARCH 31, 1998 DECEMBER 31,
(UNAUDITED) 1997
------------------------------
REVENUE
Rental Income $ 641 $ 2,359
CERTAIN EXPENSES
Property operating and maintenance 154 658
Real estate taxes and insurance 51 211
Management fees 23 83
------------------------------
228 952
Revenue in excess of certain expenses $ 413 $ 1,407
------------------------------
------------------------------
SEE ACCOMPANYING NOTES.
70
Northridge Apartments
Notes to Statements of Revenue and Certain Expenses
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying statements of revenue and certain expenses for the year
ended December 31, 1997 and the three months ended March 31, 1998 (unaudited)
were prepared for the purpose of complying with the rules and regulations of
the Securities and Exchange Commission, for inclusion in the Current Report
on Form 8-K of Equity Residential Properties Trust (the "Company"). The
accompanying financial statements are not representative of the actual
operations of Northridge Apartments for the periods presented as certain
expenses, which may not be comparable to the expenses to be incurred by the
Company in the proposed future operations of Northridge Apartments, have been
excluded. Expenses excluded consist of interest, depreciation and
amortization, professional fees and other costs not directly related to the
future operations of Northridge Apartments.
In the preparation of the statements of revenue and certain expenses in
conformity with generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from these
estimates.
Rental income attributable to residential leases is recorded when due from
tenants, generally on a straight line basis.
In the opinion of management, the interim financial statement of revenue and
certain expenses for the quarter ended March 31, 1998, reflects all
adjustments necessary for a fair presentation of the results of the interim
period. All such adjustments are of a normal, recurring nature.
Northridge Apartments had a management agreement with a management company
affiliated with the property owner through the acquisition date. Management
fees were based on 3.5% of total income. In 1997, $82,882 of management fees
were paid to an affiliate of the property owner. Upon acquisition of Northridge
Apartments by the Company, such management contract was canceled at which time
the Company began to manage Northridge Apartments.
NOTE 2. DESCRIPTION OF PROPERTY
The following is a description of the multifamily property:
PROPERTY NAME LOCATION DATE ACQUIRED NUMBER OF UNITS TOTAL INVESTMENT (A)
- --------------------------------------------------------------------------------------------------------------------------------
Northridge Apartments Pleasant Hill, CA 5/14/98 221 $20,015,000
Note:
(A) Includes initial purchase price and closing costs.
71
Report of Independent Auditors
The Board of Trustees of
Equity Residential Properties Trust
We have audited the accompanying Statement of Revenue and Certain Expenses of
the Portside Towers Apartments (the Property) for the year ended December 31,
1997. The Statement of Revenue and Certain Expenses is the responsibility of
the Property's management. Our responsibility is to express an opinion on
the Statement of Revenue and Certain Expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Statement of Revenue and Certain Expenses is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures made in the Statement of Revenue and
Certain Expenses. An audit also includes assessing the basis of accounting used
and significant estimates made by management, as well as evaluating the overall
presentation of the Statement of Revenue and Certain Expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying Statement of Revenue and Certain Expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in Equity Residential Properties Trust's
Current Report on Form 8-K as described in Note 1, and is not intended to be a
complete presentation of the Property's revenue and expenses.
In our opinion, the Statement of Revenue and Certain Expenses referred to above
presents fairly, in all material respects, the revenue and certain expenses
described in Note 1 for the year ended December 31, 1997, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
June 11, 1998
72
Portside Towers Apartments
Statements of Revenue and Certain Expenses
(AMOUNTS IN THOUSANDS)
FOR THE
THREE MONTHS FOR THE
ENDED YEAR ENDED
MARCH 31, 1998 DECEMBER 31,
(UNAUDITED) 1997
------------------------------
REVENUE
Rental Income $3,039 $7,228
CERTAIN EXPENSES
Property operating and maintenance 415 1,345
Real estate taxes and insurance 477 1,150
Management fees 94 300
------------------------------
986 2,795
Revenue in excess of certain expenses $2,053 $4,433
------------------------------
------------------------------
SEE ACCOMPANYING NOTES.
73
Portside Towers Apartments
Notes to Statements of Revenue and Certain Expenses
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying statements of revenue and certain expenses for the year
ended December 31, 1997 and the three months ended March 31, 1998 (unaudited)
were prepared for the purpose of complying with the rules and regulations of
the Securities and Exchange Commission, for inclusion in the Current Report
on Form 8-K of Equity Residential Properties Trust (the "Company"). The
accompanying financial statements are not representative of the actual
operations of Portside Towers Apartments for the periods presented as certain
expenses, which may not be comparable to the expenses to be incurred by the
Company in the proposed future operations of Portside Towers Apartments, have
been excluded. Expenses excluded consist of interest, depreciation and
amortization, professional fees and other costs not directly related to the
future operations of the Portside Towers Apartments.
In the preparation of the statements of revenue and certain expenses in
conformity with generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from these
estimates.
Rental income attributable to residential and commercial leases is recorded when
due from tenants, generally on a straight line basis.
In the opinion of management, the interim financial statement of revenue and
certain expenses for the quarter ended March 31, 1998, reflects all
adjustments necessary for a fair presentation of the results of the interim
period. All such adjustments are of a normal, recurring nature.
Portside Towers Apartments had a management agreement with a management
company affiliated with the property owner through the acquisition date.
Management fees were based on 4% of total income. Upon acquisition of
Portside Towers Apartments by the Company, such management contract was
canceled at which time the Company began to manage Portside Towers Apartments.
The Property had a security agreement with an affiliated company. Security
services incurred during 1997 were $86,714.
74
Portside Towers Apartments
Notes to Statements of Revenue and Certain Expenses (continued)
NOTE 2. DESCRIPTION OF PROPERTY
The following is a description of the multifamily property:
PROPERTY NAME LOCATION DATE ACQUIRED NUMBER OF UNITS (B) TOTAL INVESTMENT (A)
- ---------------------------------------------------------------------------------------------------------------------------------
Portside Towers Jersey City, NJ 6/11/98 527 $119,095,000
Note:
(A) Includes initial purchase price and closing costs.
(B) In addition to the residential units, the property includes ground floor
commercial space.
75
Report of Independent Auditors
The Board of Trustees of
Equity Residential Properties Trust
We have audited the accompanying Statement of Revenue and Certain Expenses of
Sonterra at Foothill Ranch (the Property) for the year ended December 31, 1997.
The Statement of Revenue and Certain Expenses is the responsibility of the
Property's management. Our responsibility is to express an opinion on the
Statement of Revenue and Certain Expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Statement of Revenue and Certain Expenses is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures made in the Statement of Revenue and
Certain Expenses. An audit also includes assessing the basis of accounting used
and significant estimates made by management, as well as evaluating the overall
presentation of the Statement of Revenue and Certain Expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying Statement of Revenue and Certain Expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in Equity Residential Properties Trust's
Current Report on Form 8-K as described in Note 1, and is not intended to be a
complete presentation of the Property's revenue and expenses.
In our opinion, the Statement of Revenue and Certain Expenses referred to above
presents fairly, in all material respects, the revenue and certain expenses
described in Note 1 for the year ended December 31, 1997, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
April 30, 1998
76
Sonterra at Foothill Ranch
Statements of Revenue and Certain Expenses
(AMOUNTS IN THOUSANDS)
FOR THE THREE FOR THE YEAR
MONTHS ENDED ENDED
MARCH 31, 1998 DECEMBER 31,
(UNAUDITED) 1997
------------------------------
REVENUE
Rental Income $ 840 $ 2,287
CERTAIN EXPENSES
Property operating and maintenance 154 532
Real estate taxes and insurance 148 286
Management fees 34 132
------------------------------
336 950
Revenue in excess of certain expenses $ 504 $ 1,337
------------------------------
------------------------------
SEE ACCOMPANYING NOTES.
77
Sonterra at Foothill Ranch
Notes to Statements of Revenue and Certain Expenses
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying statements of revenue and certain expenses for the year
ended December 31, 1997 and for the three months ended March, 31 1998
(unaudited) were prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission, for inclusion in the
Current Report on Form 8-K of Equity Residential Properties Trust (the
"Company"). The accompanying financial statements are not representative of
the actual operations of Sonterra at Foothill Ranch for the periods presented
as certain expenses, which may not be comparable to the expenses to be
incurred by the Company in the proposed future operations of Sonterra at
Foothill Ranch, have been excluded. Expenses excluded consist of interest,
depreciation and amortization, professional fees and other costs not directly
related to the future operations of Sonterra at Foothill Ranch.
In the preparation of the statements of revenue and certain expenses in
conformity with generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from these
estimates.
Rental income attributable to residential leases is recorded when due from
tenants, generally on a straight line basis.
In the opinion of management, the interim financial statement of revenue and
certain expenses for the quarter ended March 31, 1998, reflects all
adjustments necessary for a fair presentation of the results of the interim
period. All such adjustments are of a normal, recurring nature.
Sonterra at Foothill Ranch had a management agreement with a management company
affiliated with the property owner through the acquisition date to maintain and
manage the operations of the apartment complex. Management fees were based on
4% of gross revenues. Of the management fees paid in 1997, $132,397 were paid
to an affiliate of the property owner. Upon acquisition of Sonterra at Foothill
Ranch by the Company, such management contract was canceled at which time the
Company began to manage Sonterra at Foothill Ranch.
NOTE 2. DESCRIPTION OF PROPERTY
The following is a description of the residential rental property:
PROPERTY NAME LOCATION DATE ACQUIRED NUMBER OF UNITS TOTAL INVESTMENT (A)
- ---------------------------------------------------------------------------------------------------------------------------------
Sonterra at Foothill Ranch (B) Foothill Ranch, CA 4/1/98 300 $ 31,515,000
Note:
(A) Includes initial purchase price and closing costs.
(B) Operations for this property began in January 1997 and the property was
substantially completed in May 1997.
78
SIGNATURES
Pursuant to the requirements 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.
EQUITY RESIDENTIAL PROPERTIES TRUST
July 9, 1998 By: /s/ Michael J. McHugh
------------------ -------------------------------------
(Date) Michael J. McHugh
Executive Vice President, Chief Accounting
Officer and Treasurer
79