[Code of Federal Regulations]
[Title 17, Volume 2]
[Revised as of April 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 17CFR228.102]

[Page 311-312]
 
              TITLE 17--COMMODITY AND SECURITIES EXCHANGES
 
             CHAPTER II--SECURITIES AND EXCHANGE COMMISSION
 
PART 228--INTEGRATED DISCLOSURE SYSTEM FOR SMALL BUSINESS ISSUERS--Table of Contents
 
                        Subpart A--Regulation S-B
 
Sec. 228.102  (Item 102) Description of Property.

    (a) Give the location of the principal plants and other property of 
the small business issuer and describe the condition of the property. If 
the small business issuer does not have complete ownership of the 
property, for example, others also own the property or there is a 
mortgage or lien on the property, describe the limitations on the 
ownership.

Instructions to Item 102(a): 1. Small business issuers engaged in 
significant mining operations also should provide the information in 
Guide 7 (Sec. 229.801(g) and Sec. 229.802(g) of this chapter).
    2. Small business issuers engaged in oil and gas producing 
activities also should provide the information in Guide 2 
(Sec. 229.801(b) and Sec. 229.802(b) of this chapter).
    3. Small business issuers engaged in real estate activities should, 
in addition to Guide 5 (Sec. 229.801(e) of this chapter) provide 
responses to the following Items:

    (b) Investment policies. Describe the policy of the small business 
issuer with respect to each of the following types of investments. State 
whether there are any limitations on the percentage of assets which may 
be invested in any one investment, or type of investment, and indicate 
whether such policy may be changed without a vote of security holders. 
State whether it is the small business issuer's policy to acquire assets 
primarily for possible capital gain or primarily for income.
    (1) Investments in real estate or interests in real estate. Indicate 
the types of real estate in which the small business issuer may invest, 
for example, office or apartment buildings, shopping centers, industrial 
or commercial properties, special purpose buildings and undeveloped 
acreage, and the geographic area(s) of these properties. Briefly 
describe the method, or proposed method, of operating and financing 
these properties. Indicate any limitations on the number or amount of 
mortgages which may be placed on any one piece of property.
    (2) Investments in real estate mortgages. Indicate the types of 
mortgages, for example, first or second mortgages, and the types of 
properties subject to mortgages in which the small business issuer 
intends to invest, for example, single family dwellings, apartment 
buildings, office buildings, unimproved land, and the nature of any 
guarantees or insurance. Describe each type of mortgage activity in 
which the small business issuer intends to engage such as originating, 
servicing and warehousing, and the portfolio turnover policy.
    (3) Securities of or interests in persons primarily engaged in real 
estate activities. Indicate the types of securities in which the small 
business issuer may invest, for example, common stock, interest in real 
estate investment trusts, partnership interests. Indicate the primary 
activities of persons in which the small business issuer will invest, 
such as mortgage sales, investments in developed or undeveloped 
properties and state the investment policies of such persons.
    (c) Description of real estate and operating data. This information 
shall be furnished separately for each property the book value of which 
amounts to ten percent or more of the total assets of the small business 
issuer and its consolidated subsidiaries for the last fiscal year. With 
respect to other properties, the information shall be given by such 
classes or groups and in such detail as will reasonably convey the 
information required.
    (1) Describe the general character and location of all materially 
important properties held or intended to be acquired by or leased to the 
small business issuer and describe the present or proposed use of such 
properties and their suitability and adequacy for such use. Properties 
not yet acquired shall be identified as such.
    (2) State the nature of the small business issuer's title to, or 
other interest in such properties and the nature and amount of all 
material mortgages, liens or encumbrances against such

[[Page 312]]

properties. Disclose the current principal amount of each material 
encumbrance, interest and amortization provisions, prepayment 
provisions, maturity date and the balance due at maturity assuming no 
prepayments.
    (3) Outline briefly the principal terms of any lease of any of such 
properties or any option or contract to purchase or sell any of such 
properties.
    (4) Outline briefly any proposed program for the renovation, 
improvement or development of such properties, including the estimated 
cost thereof and the method of financing to be used. If there are no 
present plans for the improvement or development of any unimproved or 
undeveloped property, so state and indicate the purpose for which the 
property is to be held or acquired.
    (5) Describe the general competitive conditions to which the 
properties are or may be subject.
    (6) Include a statement as to whether, in the opinion of the 
management of the small business issuer, the properties are adequately 
covered by insurance.
    (7) With respect to each improved property which is separately 
described, provide the following in addition to the above:
    (i) Occupancy rate;
    (ii) Number of tenants occupying ten percent or more of the rentable 
square footage and principal nature of business of each such tenant and 
the principal provisions of each of their leases;
    (iii) Principal business, occupations and professions carried on in, 
or from the building;
    (iv) The average effective annual rental per square foot or unit;
    (v) Schedule of the lease expirations for each of the ten years 
starting with the year in which the registration statement is filed, 
stating:
    (A) the number of tenants whose leases will expire,
    (B) the total area in square feet covered by such leases,
    (C) the annual rental represented by such leases, and
    (D) the percentage of gross annual rental represented by such 
leases;
    (vi) Each of the properties and components thereof upon which 
depreciation is taken, setting forth the:
    (A) federal tax basis,
    (B) rate,
    (C) method, and
    (D) life claimed with respect to such property or component thereof 
for purposes of depreciation;
    (vii) The realty tax rate, annual realty taxes and estimated taxes 
on any proposed improvements.

Instruction: If the small business issuer has a number of properties, 
the information may be given in tabular form.