-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PlKC2Mt0Q2xiE/gwrOTVoS+5SNJFJGPD/VQfH7Sq1ii6u6YvuddQ9efesHdCQwyv DNITXQNiFMzgh4XWduZCNw== 0000845613-97-000005.txt : 19970513 0000845613-97-000005.hdr.sgml : 19970513 ACCESSION NUMBER: 0000845613-97-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970512 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRANKLIN SELECT REALTY TRUST CENTRAL INDEX KEY: 0000845613 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 943095938 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-12708 FILM NUMBER: 97599991 BUSINESS ADDRESS: STREET 1: 1800 GATEWAY DR - STE 200 CITY: SAN MATEO STATE: CA ZIP: 94404 BUSINESS PHONE: 4153122000 MAIL ADDRESS: STREET 1: P O BOX 7777 CITY: SAN MATEO STATE: CA ZIP: 94403-7777 FORMER COMPANY: FORMER CONFORMED NAME: FRANKLIN SELECT REAL ESTATE INCOME FUND DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: FRANKLIN CALIFORNIA REAL ESTATE FUND DATE OF NAME CHANGE: 19890307 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) (x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended MARCH 31, 1997 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-12708 FRANKLIN SELECT REALTY TRUST - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) CALIFORNIA 94-3095938 - -------------------------------------------------------------------------------- (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) P. O. BOX 7777, SAN MATEO, CALIFORNIA 94403-7777 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (415) 312-2000 N/A - -------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Common Stock Shares Outstanding as of March 31, 1997, Series A: 12,250,384 Common Stock Shares Outstanding as of March 31, 1997, Series B: 745,584 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS FRANKLIN SELECT REALTY TRUST BALANCE SHEETS AS OF MARCH 31, 1997 AND DECEMBER 31,1996 UNAUDITED (In thousands, except per share data) 1997 1996 - ---------------------------------------------------------------------------- ASSETS Rental property: Land $38,286 $38,286 Buildings and improvements 103,399 103,339 --------------------- 141,685 141,625 Less: accumulated depreciation 18,487 17,583 --------------------- 123,198 124,042 Cash and cash equivalents 3,156 2,558 Mortgage-backed securities, available for sale 571 578 Deferred rent receivable 1,905 1,916 Deferred costs and other assets 2,447 2,204 ===================== Total assets $131,277 $131,298 ===================== - ---------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY Notes and bonds payable $22,821 $22,745 Tenant deposits, accounts payable and accrued expenses 1,292 1,197 Advance rents 17 26 Distributions payable 1,448 1,348 --------------------- Total liabilities 25,578 25,316 --------------------- Minority interest 9,311 9,329 --------------------- Commitments and contingencies Stockholders' equity: Common stock, Series A, without par value; stated value $10 per share; 110,000 shares authorized; 12,250 issued and outstanding 103,161 103,161 Common stock, Series B, without par value; stated value $10 per share; 2,500 shares authorized; 746 shares issued and outstanding 6,294 6,294 Unrealized loss on mortgage-backed securities (32) (36) Accumulated distributions in excess of net income (13,035) (12,766) --------------------- Total stockholders' equity 96,388 96,653 --------------------- Total liabilities and stockholders' equity $131,277 $131,298 ===================== The accompanying notes are an integral part of these consolidated financial statements. FRANKLIN SELECT REALTY TRUST CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996 UNAUDITED Restated (In thousands, except per share data) 1997 1996 - -------------------------------------------------------------------------- REVENUE: Rent $4,096 $3,285 Interest, dividends, and other 36 189 --------------------- Total revenue 4,132 3,474 --------------------- EXPENSES: Interest 592 162 Depreciation and amortization 972 824 Property operating 829 830 Related party 337 250 Consolidation expense - 462 General and administrative 162 193 Minority interest 161 - --------------------- Total expenses 3,053 2,721 --------------------- NET INCOME $1,079 $753 ===================== Net income per share, based on the weighted average shares outstanding of Series A common stock of 12,250 and 14,145 for the three months ended March 31, 1997 and 1996, respectively $ .09 $ .05 ===================== Distributions per share, based on the weighted average shares outstanding of Series A common stock of 12,250 and 14,145 for the three months ended March 31, 1997 and 1996, respectively $ .11 $ .11 ===================== The accompanying notes are an integral part of these consolidated financial statements. FRANKLIN SELECT REALTY TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996 UNAUDITED Restated (In thousands) 1997 1996 - ---------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: NET INCOME $1,079 $753 -------------------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,013 824 Minority interest 161 - Decrease in deferred rent receivable 11 12 Increase in other assets (268) (305) Increase in tenant deposits, accounts payable and accrued expenses 35 135 Decrease in advance rents (9) (9) -------------------- 943 657 -------------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 2,022 1,410 -------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Improvements to rental property (60) (123) Leasing commissions paid (81) (120) Disposition of mortgage-backed securities 11 284 -------------------- NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (130) 41 -------------------- CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings under bonds payable 2,478 - Repayment of notes and bonds payable (2,402) (498) Payment of loan costs (3) - Distributions paid to limited partners (119) - Distributions paid to shareholders (1,248) (1,521) -------------------- NET CASH USED IN FINANCING ACTIVITIES (1,294) (2,019) -------------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 598 (568) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 2,558 6,186 ==================== CASH AND CASH EQUIVALENTS, END OF PERIOD $3,156 $5,618 ==================== The accompanying notes are an integral part of these consolidated financial statements. FRANKLIN SELECT REALTY TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1997 UNAUDITED NOTE 1 - BASIS OF PRESENTATION The accompanying consolidated financial statements of Franklin Select Realty Trust (the "Company") have been prepared in accordance with generally accepted accounting principles applicable to interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. However, in the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation have been included. The Company presumes that users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosure which would substantially duplicate the disclosure contained in the Company's 1996 Annual Report on Form 10-K has been omitted. The accompanying unaudited consolidated financial statements for the period ended, March 31, 1996, have been restated to give effect to the Merger (See Note 2) accounted for as a reorganization of entities under common control. NOTE 2 - NET INCOME PER SHARE On May 7, 1996 Franklin Real Estate Income Fund ("FREIF") and Franklin Advantage Real Estate Income Fund ("Advantage") merged into the Company (the "Merger"). On November 1, 1996 in connection with the merger, the Company repurchased shares of FREIF and Advantage common stock, equivalent to approximately 1.9 million shares of the Company's common stock, which was held by certain FREIF and Advantage shareholders who dissented from the merger. For purposes of calculating net income per share for the period ended March 31, 1996, the weighted average shares outstanding of Series A common stock has been calculated assuming the shares attributable to dissenting shareholders (equivalent to approximately 1.9 million shares of the Company's common stock) were converted into the Company's common stock and were outstanding for the period. FRANKLIN SELECT REALTY TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1997 UNAUDITED NOTE 3 - LITIGATION On December 2, 1996, two stockholders, for themselves and purportedly on behalf of certain other minority stockholders of Advantage, filed a purported class action complaint in the California Superior Court for San Mateo County against Advantage, its directors, the Advisor, Franklin Resources, Inc. and the Massachusetts State Teachers' and Employees' Retirement Systems Trust ("MASTERS"). The complaint alleges that defendants breached fiduciary duties to plaintiffs and other minority stockholders in connection with the purchase by Franklin Resources, Inc. in August 1994 of MASTERS' 46.6% interest in Advantage and in connection with the Merger of Advantage into the Company in May 1996, which was approved by a majority of the outstanding shares of each of the three companies. Plaintiffs also allege that defendants misstated certain material facts or omitted to state material facts in connection with these transactions. The complaint includes a variety of additional claims, including claims relating to the investment of Advantage assets, the suspension of the dividend reinvestment program, the allocation of merger-related expenses, revisions to the investment policies of Advantage, and the restructuring of the contractual relationship with the Advisor. Plaintiffs seek damages in an unspecified amount and certain equitable relief. The defendants deny any wrongdoing in these matters and intend to vigorously defend the action. Management does not believe that the outcome of this litigation will have a material adverse affect on the Company's financial condition or results of operations. NOTE 4 - SUBSEQUENT EVENT On April 1, 1997, FSRT, L.P., a majority-owned subsidiary of the Company, acquired an industrial R&D building located in Fremont, California, for $8.51 million. The acquisition was financed by a $8.6 million draw under the Company's line of credit with Bank of America. Management intends to refinance approximately $5.1 million of the borrowings under the line of credit with fixed rate mortgage debt. FRANKLIN SELECT REALTY TRUST ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTRODUCTION The following discussion is based primarily on the consolidated financial statements of the Company for the period ended March 31, 1997 and the restated, combined financial statements of the Company, FREIF, and Advantage as of, and for the period ended, March 31, 1996 to give effect to the Merger. The information should be read in conjunction with the accompanying consolidated financial statements and the notes thereto. When used in the following discussion, the words "believes," "anticipates" and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those projected, including, but not limited to, those set forth in the section entitled "Potential Factors Affecting Future Operating Results," below. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. RESULTS OF OPERATIONS COMPARISON OF THE THREE MONTH PERIODS ENDED MARCH 31, 1997 AND 1996 Total revenue for the three month period ended March 31, 1997 increased $658,000, or 19%, compared to the same period in 1996 primarily due to rental revenue provided by the LAM Research Buildings acquired in October, 1996, and to an increase in the average portfolio occupancy rate of the other seven properties from 94.1% at March 31, 1996 to 96.9% at March 31, 1997. The increase in rental revenue was partially offset by a decrease in interest revenue due to the sale of mortgage-backed securities in the fourth quarter of 1996. Total expenses for the three month period ended March 31, 1997, increased $332,000, or 12%, compared to the same period in 1996 primarily as a result of increases in interest, depreciation and amortization and minority interest expenses related to the LAM Research Buildings. These increases were partially offset by a decrease in non-recurring expenses related to the Merger. Related party expense for the three month period ended March 31, 1997 increased 35%, primarily as a result of an increase in advisory fees caused by the acquisition of the LAM Research Buildings and to the adoption of the Company's advisory agreement by the two REITs that merged with the Company in May, 1996. Prior to the merger, the REITs operated under advisory agreements containing different methods of compensation to the Advisor. General and administrative expense for the three month period ended March 31, 1997 decreased 16%, due to decreases in legal fees and directors' and officers' insurance premiums, and due to merger related expenses reported in 1996 of $33,000. These decreases were partially offset by increases in transfer agent expense and accounting expense. Net income increased $326,000, or 43%, for the three month period ended March 31, 1997, primarily as a result of an increase in rental income, and a decrease in merger expenses. FRANKLIN SELECT REALTY TRUST ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) LIQUIDITY AND CAPITAL RESOURCES At March 31, 1997, cash and cash equivalents aggregated $3,156,000 which the Company believes is adequate to meet its short-term operating cash requirements. The Company also has access to a revolving line of credit in the amount of $25 million and holds $571,000 in mortgage-backed securities. At March 31, 1997, there were no amounts outstanding under the Company's credit facility. Management continues to evaluate properties for acquisition by the Company. The Company expects to fund the cost of acquisitions, capital expenditures, costs associated with lease renewals and reletting of space, repayment of indebtedness, and development of properties from (i) cash flow from operations, (ii) borrowings under its credit facility and, if available, other indebtedness (which may include indebtedness assumed in acquisitions), (iii) proceeds from the sale of the Company's equity securities, and (iv) the issuance of partnership interests in connection with acquisitions. The Company's operating cash flow has been its principal source of capital for minor property improvements, leasing costs and the payment of quarterly distributions. Net cash provided by operating activities for the three month period ended March 31, 1997 was $2,022,000, or $612,000 more than the same period in 1996. The increase in cash flow provided by operating activities is primarily attributable to the increase in net income as described under "Results of Operations". Net cash provided by investing activities for the three month period ended March 31, 1997, decreased $171,000 when compared to the same period in 1996 primarily due to a decline in principal payments received from the mortgage-backed securities. Net cash used in financing activities decreased $725,000 reflecting cash used in 1996 to payoff the Fairway Center note in the amount of $480,000, and in 1997, the Company paid a constant dividend rate on a smaller number of outstanding shares than were outstanding in 1996. On April 1, 1997, the Company acquired an R&D building located in Fremont, California. The Company acquired the property for a purchase price of $8.51 million utilizing a portion of the line of credit facility available to the Company. Borrowings under the line of credit bear interest at the London Interbank Offered Rate plus 1.90%, or at Bank of America's Reference rate at the Company's option. At May 1, 1997 the weighted average interest rate of borrowings under the line of credit was 7.75%. The Company expects to refinance such borrowings under the line of credit with fixed-rate debt collateralized by the newly acquired property. Management does not believe that the outcome of the litigation described at Note 2 to the accompanying financial statements will have a material adverse affect on the Company's financial condition or results of operations. Management believes that the Company's sources of capital as described under Liquidity and Capital Resources are adequate to meet its liquidity needs in the foreseeable future. IMPACT OF INFLATION The Company's policy of negotiating leases which incorporate operating expense "pass-through" provisions is intended to protect the Company against increased operating costs resulting from inflation. FRANKLIN SELECT REALTY TRUST ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) LIQUIDITY AND CAPITAL RESOURCES (Continued) CASH DISTRIBUTION POLICY Distributions are declared quarterly at the discretion of the Board of Directors. The Company's present distribution policy is to at least annually evaluate the current distribution rate in light of anticipated tenant turnover over the next two or three years, the estimated level of associated improvements and leasing commissions, planned capital expenditures, any debt service requirements and the Company's other working capital requirements. After balancing these considerations, and considering the Company's earnings and cash flow, the level of its liquid reserves and other relevant factors, the Company seeks to establish a distribution rate which: i) provides a stable distribution which is sustainable despite short-term fluctuations in property cash flows; ii) maximizes the amount of cash flow paid out as distributions consistent with the above listed objective; and iii) complies with the Internal Revenue Code requirement that a REIT annually pay out as distributions not less than 95% of its taxable income. During the three month period ended March 31, 1997, the Company declared distributions totaling $1,348,000. FUNDS FROM OPERATIONS The Company considers funds from operations to be a useful measure of the operating performance of an equity REIT because, together with net income and cash flows, Funds from operations provides investors with an additional basis to evaluate the ability of a REIT to support general operating expense and interest expense before the impact of certain activities, such as gains and losses from property sales and changes in the accounts receivable and accounts payable. However, it does not measure whether income is sufficient to fund all of the Company's cash needs including principal amortization, capital improvements and distributions to stockholders. Funds from operations should not be considered an alternative to net income or any other GAAP measurement of performance, as an indicator of the Company's operating performance or as an alternative to cash flows from operating, investing or financing activities as a measure of liquidity. As defined by the National Association of Real Estate Investment Trusts, funds from operations is net income (computed in accordance with GAAP), excluding gains or losses from debt restructuring and sales of property, plus depreciation and amortization, and after adjustment for unconsolidated joint ventures. The Company reports funds from operations in accordance with the revised NAREIT definition. The measure of funds from operations as reported by the Company may not be comparable to similarly titled measures of other companies that follow different definitions. For the Three Months Ended Funds from Operations March 31, (In thousands) 1997 1996 - ----------------------------------------------------------------------- Net income $1,079 $753 Add: Depreciation and amortization 972 824 - ----------------------------------------------------------------------- Funds from Operations $2,051 $1,577 ======================================================================= The primary difference between the periods reflects the changes in net income as discussed under "Results of Operations". FRANKLIN SELECT REALTY TRUST ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) POTENTIAL FACTORS AFFECTING FUTURE OPERATING RESULTS DECLINE IN INTEREST INCOME, LOSS ON SALE OF MORTGAGE-BACKED SECURITIES In prior years, net income has been positively affected by interest income that the Company earned on its investments in mortgage-backed securities. In addition, the Company periodically incurred losses upon the sale of certain of the securities. Late in 1996, the Company liquidated substantially all of its mortgage-backed securities in order to provide funds to repurchase a portion of its outstanding common stock. Therefore, the Company does not anticipate generating significant amounts of interest income, or losses on the sale of mortgage-backed securities, in future years. The repurchase of the Company's common stock was not detrimental to the Company's operating results in 1996 calculated on a per share basis, due to the related decline in the number of shares outstanding. LEASING TURNOVER In connection with any lease renewal or new lease, the Company typically incurs costs for tenant improvements and leasing commissions which will be funded first from operating cash flow and, if necessary, from cash reserves or the line of credit. In addition, while the Company has historically been successful in renewing and releasing space, the Company will be subject to the risk that leases expiring in the future may be renewed or released at terms that are less favorable than current lease terms. LEASING TURNOVER - CONTINENTAL CASUALTY COMPANY An important event in the near-term is the expiration of the Continental Casualty Company ("CNA") lease in November, 1997. The lease covers 74,515 square feet of space and represents approximately 12% of the Company's current base rental income. The Company has commenced renewal negotiations with CNA; however, it is currently unknown whether an agreement will be consummated. Currently, the base annual rental rate of this lease is $22.80 per square foot, and the Company has offered to extend the tenant's lease for five years at a lower rental rate. In addition, the Company expects to incur approximately $870,000 for tenant improvements and leasing commissions. Although it is impossible to predict the final outcome of negotiations with CNA, if the tenant were to accept the Company's proposal, the Company's annual rental income and expense reimbursements would decline by approximately $420,000, or 2.9% of the Company's total revenue in 1996. Alternatively, if CNA were to vacate its space and a single replacement tenant could not be located, the Company may have to reconfigure the space for multiple tenants at a cost which could exceed $2 million. The most likely sources for such funds are the Company's cash reserves, debt financing, or the sale of an undeveloped parcel of land at the Fairway Center. No assurance can be given that CNA will renew under the terms set forth above or whether the space currently occupied by CNA can be rented without detrimental impact to the Company's current annual rental income and expense reimbursements. FRANKLIN SELECT REALTY TRUST ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) POTENTIAL FACTORS AFFECTING FUTURE OPERATING RESULTS(Continued) LEASING TURNOVER - DATA GENERAL BUILDING The Data General Building is located in an area of Los Angeles County that is dominated by aerospace and defense-related companies. Because many of the defense programs that these companies are engaged in have been curtailed, their office space requirements were substantially reduced, causing greater vacancies and lower market rental rates. Based on reports from CB Commercial Real Estate Group, at December 31, 1996, the Manhattan Beach/El Segundo sub-market, had a total vacancy factor of 31% and an average asking full service rental rate of $19.32 per square foot. New leases and renewals that the Company executes while these soft market conditions persist may be at lower rental rates and require greater tenant improvements than current leases at the property. However, according to the CB Commercial reports, the severe job losses experienced by the aerospace and defense industries appear to have bottomed out in February of 1996, and occupancy rates in the El Segundo market are expected to increase in 1997; however, there can be no assurance that this will occur. Over the next two years, the Company's leasing exposure at the Data General Building consists of two leases each covering 48,000 square feet, which expire in November, 1997 and January 1999. The Company believes that the effective rental rate that is provided by the lease expiring in 1997 is substantially at the current market rate. However, the lease expiring in 1999 carries a triple net rental rate that is equivalent to approximately $28.00 per square foot on a full service basis. Compared to the current market asking rate of $19.32 per square foot, this lease provides overmarket rent of approximately $417,000 annually, or 2.9% of the Company's total revenue in 1996. It is impossible to predict the market rental rate in 1999; however, the Company expects that when this lease expires, the rental income related to this space will be less than $28.00 per square foot regardless of whether the lease is renewed or new leases are signed. The Company will also incur costs for tenant improvements and leasing commissions related to both spaces upon the renewal or re-leasing of the spaces, however, the amounts are unknown at this time. FRANKLIN SELECT REALTY TRUST PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Not applicable (b) Reports on Form 8-K No reports on Form 8-K were filed by the Registrant during the quarter ended March 31, 1997. SIGNATURE 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. FRANKLIN SELECT REALTY TRUST By: /S/ DAVID P. GOSS David P. Goss Chief Executive Officer Date: MAY 9, 1997 EX-27 2
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM REGISTRANT'S FINANCIAL STATEMENTS FOR THE QUARTER ENDED MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1997 MAR-31-1997 3,156 571 1,905 0 0 0 141,685 18,487 131,277 0 0 0 0 109,455 (13,067) 131,277 0 4,132 0 2,461 0 0 592 0 0 0 0 0 0 3,053 0 0
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