Golf Trust of America Inc · 424B3 · On 11/5/97

Filed On 11/5/97   ·   SEC File 333-36847   ·   Accession Number 1047469-97-2764

Prospectus   ·   Rule 424(b)(3)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B3       Prospectus                                           268  1,571K 

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                                                FILED PURSUANT TO RULE 424(B)(3)
                                                      REGISTRATION NO. 333-36847

[LOGO]

3,000,000 SHARES

COMMON STOCK

Golf Trust of America, Inc. (collectively with its affiliates, the      
"Company") is a self-administered real estate investment trust ("REIT") formed  
to capitalize upon consolidation opportunities in the ownership of upscale golf 
courses throughout the United States. The Company currently holds a             
participating interest in 19 golf courses (the "Golf Courses") located in       
Florida (5), South Carolina (4), Georgia (2), Virginia (2), Alabama, Kansas,    
Nebraska, North Carolina, Ohio and Texas.                                       

   The Company's goal is to increase Cash Available for Distribution per share
and to enhance stockholder value by becoming a leading owner of, and            
participating in increased revenue from, nationally or regionally recognized    
golf courses. The Company's principal business strategy is to acquire upscale   
golf courses and thereafter lease the golf courses to qualified third party     
operators, including affiliates of the sellers. The Company holds its           
participating interest in the Golf Courses through an operating partnership (the
"Operating Partnership"). As a result, the Company may acquire interests in golf
courses through the issuance of units of limited partnership interest ("OP      
Units") in the Operating Partnership, which generally can provide deferral of   
gain recognition for sellers of golf courses. The Company believes it has a     
distinct competitive advantage in the acquisition of upscale golf courses,      
including those that might not otherwise be available for purchase, because of  
(i) its utilization of a multiple independent lessee structure, (ii)            
management's substantial industry knowledge, experience and relationships within
the golf community, (iii) the Company's strategic alliances with prominent golf 
course operators and (iv) its ability to issue OP Units to golf course owners on
a tax-deferred basis.                                                           

All of the shares of common stock, par value $0.01 per share ("Common   
Stock"), offered hereby are being sold by the Company. The Common Stock is      
listed on the American Stock Exchange ("AMEX") under the symbol "GTA." On       
November 4, 1997, the last reported sale price of the Common Stock on the AMEX  
was $26.00 per share. See "Price Range of Common Stock and Distribution         
History."                                                                       

   SEE "RISK FACTORS" COMMENCING ON PAGE 22 FOR CERTAIN FACTORS RELEVANT TO AN
INVESTMENT IN THE COMMON STOCK, INCLUDING:                                      

- The Company's valuation of the Golf Courses and establishment of Lease
      Payments (as herein defined) and interest payments under the Participating
Mortgage (as herein defined) may reflect significant adjustments to 
 historical operations or estimates of future performance that, if not
warranted, may result in non-payment of Lease Payments under a      
  Participating Lease (as herein defined) or interest payments under the
Participating Mortgage. Such estimates of future performance were   
     particularly significant with respect to two recently-opened Golf Courses
and the Participating Mortgage.                                     

- Dependence on Lease Payments and payments under the Participating     
   Mortgage, which payments account for substantially all of the Company's
income.                                                             

  - The length of the Participating Leases, which, with extensions, may have
     terms of up to 40 years, which may affect adversely the Company's ability
to sell a Golf Course.                                              

   - The Company's inability to sell all or substantially all of the assets of
  the Operating Partnership or to cause a merger or consolidation of the
Operating Partnership without the consent of holders of 66.7% of the
limited partnership interests.                                      

- The Company's limited control over the day-to-day management and      
     operations of the Golf Courses due to the tax restrictions that prevent a
REIT from operating golf courses.                                   

  - Golf course operation risks in general, including competition, uninsured
     casualties, increases in operating costs, inclement weather, seasonality,
oversupply and general decreases in demand.                         

   - The Company's dependence on the skill, industry knowledge and established
 relationships of its key personnel, all of whom would be difficult to
replace.                                                            

    - Taxation of the Company as a regular corporation if it fails to qualify as
     a REIT for federal income tax purposes and the resulting decrease in Cash
Available for Distribution.                                         

  - Risks associated with providing construction financing for golf courses.
----------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES        
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE          
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO    
           THE CONTRARY IS A CRIMINAL OFFENSE.

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                                                  UNDERWRITING             
                                      PRICE TO   DISCOUNTS AND  PROCEEDS TO
                                       PUBLIC     COMMISSIONS   COMPANY (1)
                                                                           
Per Share..........................   $25.625        $1.35        $24.275  
Total (2).......................... $76,875,000    $4,050,000   $72,825,000

(1)  Before deducting expenses payable by the Company, estimated at $1,000,000. 

(2)  The Company has granted the Underwriters a 30-day option to purchase up to 
an additional 450,000 shares of Common Stock solely to cover            
   over-allotments, if any. See "Underwriting." If such option is exercised in
   full, the total Price to Public, Underwriting Discounts and Commissions and
Proceeds to Company will be $88,406,250, $4,657,500 and $83,748,750,    
respectively.                                                           
----------------------

    The Common Stock is offered by the Underwriters as stated herein, subject to
receipt and acceptance by them and subject to their right to reject any order in
whole or in part. It is expected that delivery of such shares will be made      
through the offices of BancAmerica Robertson Stephens, San Francisco, California
on or about November 10, 1997.                                                  
(On the inside front cover, there is a picture of the Island Golf Course in     
Tampa, Florida. There is also a color map of the United States showing the      
states where the Company's Golf Courses are located. These states are           
highlighted in green. There is also a breakout of each state with a numbered    
flag in the location of each Golf Course. There is a legend next to the map that
lists each Golf Course with its corresponding number).                          

BANCAMERICA ROBERTSON STEPHENS                                                  
A.G. EDWARDS & SONS, INC.                         
          RAYMOND JAMES & ASSOCIATES, INC.
                                                      WHEAT FIRST BUTCHER SINGER

The date of this Prospectus is November 4, 1997 

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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT     
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MAY OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH         
TRANSACTIONS MAY BE EFFECTED ON THE AMERICAN STOCK EXCHANGE, IN THE             
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZATION, IF COMMENCED, MAY BE  
DISCONTINUED AT ANY TIME.                                                       

CERTAIN INFORMATION CONTAINED IN THIS PROSPECTUS CONSTITUTES            
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND SECTION 21E OF THE EXCHANGE 
ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"), WHICH CAN BE IDENTIFIED BY THE USE
OF FORWARD-LOOKING TERMINOLOGY SUCH AS "MAY," "WILL," "ANTICIPATE," "ESTIMATE"  
OR "CONTINUE" OR THE NEGATIVES THEREOF OR VARIATIONS THEREON OR COMPARABLE      
TERMINOLOGY. THE SECTION ENTITLED "RISK FACTORS" HEREIN CONTAINS CAUTIONARY     
STATEMENTS IDENTIFYING IMPORTANT FACTORS, INCLUDING CERTAIN RISKS AND           
UNCERTAINTIES, WITH RESPECT TO SUCH FORWARD-LOOKING STATEMENTS THAT COULD CAUSE 
THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO DIFFER        
MATERIALLY FROM THOSE REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS.             

  NO DEALER, SALES REPRESENTATIVE OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS     
OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE,  
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN       
AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT          
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY          
SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES OR AN OFFER 
TO, OR SOLICITATION OF, ANY PERSON IN ANY JURISDICTION WHERE SUCH OFFER OR      
SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY 
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT 
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR 
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO   
THE DATE HEREOF.                                                                
------------------

TABLE OF CONTENTS 

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                                              PAGE   
                                              -----  
                                                     
PROSPECTUS SUMMARY.......................           1
  The Company............................           1
  Developments Since the Initial Public              
    Offering.............................           2
  Risk Factors...........................           4
  The Golf Industry......................           6
  The Golf Courses.......................           8
  Business Strategies and Objectives.....          11
  Formation and Structure................          14
  Distribution Policy....................          16
  Tax Status.............................          16
  The Offering...........................          16
  Summary Financial Data.................          17
RISK FACTORS.............................          22
  Use of Adjustments and Projections in              
    Establishing Lease Payments and                  
    Participating Mortgage Payments......          22
  Dependence on Payments Under the                   
    Participating Leases and the                     
    Participating Mortgage; Difficulty of            
    Finding Replacement Operators........          22
  Duration of Lease; No Right to                     
    Terminate Participating Leases on a              
    Sale.................................          23
  Need for Certain Consents from the                 
    Limited Partners.....................          23
  Lack of Control Over Day-to-Day                    
    Operations and Management of the Golf            
    Courses..............................          23
  The Participating Mortgage.............          23
  Golf Industry Risks....................          24
  Dependence Upon Key Personnel..........          25
  Real Estate Investment Trust and                   
    Partnership Qualification............          25
  Risks Relating to Construction                     
    Financing............................          26


                                              PAGE   
                                              -----  
                                                     
  Certain Golf Courses with Limited                  
    Operating History....................          26
  Limited Operating History..............          26
  Adverse Effect of Shares Available for             
    Future Issuance and Sale on Market               
    Price of Common Stock................          26
  Risks Related to the Company's Growth              
    Strategy.............................          27
  Risks of Leverage; No Limitations on               
    Indebtedness.........................          28
  Limits on Changes in Control...........          28
  Adverse Effect of Increase in Market               
    Interest Rates.......................          28
  Real Estate Investment Risks...........          28
  Conflicts of Interest..................          30
  Competition for Management Time of the             
    Operators............................          30
  Changes in Investment and Financing                
    Policies.............................          30
  Dependence on Acquisitions to Increase             
    Cash Available for Distribution......          30
  Distribution to Stockholders...........          31
  ERISA Risks............................          31
  Ownership Limit........................          32
  Anti-takeover Effect of Certain                    
    Provisions of Maryland Law and the               
    Company's Charter and Bylaws.........          32
THE COMPANY..............................          34
  The Operating Partnership..............          35
  Business Strategies and Objectives.....          36
  Acquisitions and Expansions............          36
  Internal Growth........................          38
USE OF PROCEEDS..........................          40

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                                              PAGE   
                                              -----  
                                                     
PRICE RANGE OF COMMON STOCK AND                      
 DISTRIBUTION HISTORY....................          40
CAPITALIZATION...........................          41
SELECTED FINANCIAL INFORMATION...........          42
MANAGEMENT'S DISCUSSION AND ANALYSIS OF              
 FINANCIAL CONDITION AND RESULTS OF                  
 OPERATIONS..............................          47
  Overview...............................          47
  The Golf Courses.......................          47
  Liquidity and Capital Resources of the             
    Company..............................          49
  The Legends Group Prior Owners.........          51
  Inflation..............................          53
  Seasonality............................          53
  Recent Accounting Pronouncements.......          53
  Changes in the Company's Certifying                
    Public Accountant....................          54
  Important Factors Related to Forward-              
    Looking Statements and Associated                
    Risks................................          54
THE GOLF INDUSTRY........................          55
  Demographics...........................          57
THE GOLF COURSES.........................          58
  Descriptions of the Golf Courses.......          60
  Resort Courses.........................          60
  High-End Daily Fee Courses.............          62
  Private Club Courses...................          63
  The Participating Leases...............          66
  The Participating Mortgage.............          71
  Competition............................          74
  Employees..............................          74
  Legal Proceedings......................          75
  Government Regulation..................          75
MANAGEMENT...............................          76
  Directors and Executive Officers.......          76
  Committees of the Board of Directors...          77
  Compensation of Directors..............          78
  Directors and Officers Insurance.......          78
  Indemnification........................          78
  Executive Compensation.................          79
  Stock-Based Compensation Plans.........          80
  Directors' Plan........................          80
  Stock Incentive Plans..................          81
  Deferred Compensation Plan.............          82
  Employment Agreements..................          82
  Covenants Not to Compete...............          83
LESSEES AND OPERATORS....................          84
POLICIES AND OBJECTIVES WITH RESPECT TO              
 CERTAIN ACTIVITIES......................          86
  Investment Objectives and Policies.....          86
  Dispositions...........................          86
  Financing..............................          86
  Working Capital Reserves...............          87
  Conflict of Interest Policies..........          87
  Other Policies.........................          88
THE FORMATION TRANSACTIONS...............          88
  Overview...............................          88
  Formation Transactions.................          89
  Benefits to Officers and Directors.....          90

                                              PAGE   
                                              -----  
                                                     
  Transfer Documents.....................          91
CERTAIN RELATIONSHIPS AND TRANSACTIONS...          92
  Relationships Among Officers and                   
    Directors............................          92
  Acquisition of Interests in Certain of             
    the Golf Courses.....................          92
  Repayment of Indebtedness..............          92
  Employment Agreements..................          92
  Option to Purchase and Right of First              
    Refusal..............................          92
PARTNERSHIP AGREEMENT....................          93
  Management.............................          93
  Transferability of OP Units............          93
  Pledge.................................          93
  Redemption Rights......................          94
  Capital Contribution...................          94
  Term...................................          95
  Tax Matters............................          95
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL             
 OWNERS AND MANAGEMENT...................          95
  Principal Stockholders of the Company &            
    Principal Partners in the Operating              
    Partnership..........................          95
CAPITAL STOCK............................          96
  General................................          96
  Corporate Governance...................          97
  Restrictions on Ownership..............          97
  Limitations on Changes in Control......          99
  Transfer Agent and Registrar...........          99
CERTAIN PROVISIONS OF MARYLAND LAW AND OF            
 THE COMPANY'S CHARTER AND BYLAWS........         100
  Maryland Business Combination Law......         100
  Limitation of Liability of Directors;              
    Indemnification Agreements...........         100
  Control Share Acquisitions.............         101
  Interested Director Transactions.......         102
  Amendments to the Charter and Bylaws...         102
SHARES AVAILABLE FOR FUTURE SALE.........         103
  Registration Rights....................         103
FEDERAL INCOME TAX CONSIDERATIONS........         104
  Taxation of the Company................         104
  Partnership Anti-Abuse Rule............         111
  Failure to Qualify.....................         112
  Taxation of Taxable Domestic                       
    Stockholders.........................         112
  Backup Withholding.....................         113
  Taxation of Tax-Exempt Stockholders....         113
  Taxation of Foreign Stockholders.......         114
  State and Local Taxes..................         115
  Tax Aspects of the Operating                       
    Partnership..........................         115
UNDERWRITING.............................         119
EXPERTS..................................         120
LEGAL MATTERS............................         121
ADDITIONAL INFORMATION...................         121
GLOSSARY.................................         122
FINANCIAL STATEMENTS.....................         F-1

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PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED 
INFORMATION AND FINANCIAL INFORMATION AND STATEMENTS, AND THE NOTES THERETO,    
APPEARING ELSEWHERE IN THIS PROSPECTUS. UNLESS OTHERWISE INDICATED, ALL         
CALCULATIONS AND INFORMATION CONTAINED IN THIS PROSPECTUS ASSUME THAT THE       
UNDERWRITERS' OVER-ALLOTMENT OPTION WILL NOT BE EXERCISED. UNLESS THE CONTEXT   
OTHERWISE REQUIRES, THE TERM "COMPANY" INCLUDES GOLF TRUST OF AMERICA, INC.     
("GTA"), GTA GP, INC. ("GTA GP"), GTA LP, INC. ("GTA LP"), EACH OF WHICH IS A   
WHOLLY-OWNED SUBSIDIARY OF GOLF TRUST OF AMERICA, INC., AND GOLF TRUST OF       
AMERICA, L.P., A DELAWARE LIMITED PARTNERSHIP (THE "OPERATING PARTNERSHIP").    
AFTER GIVING EFFECT TO THIS OFFERING (THIS "OFFERING"), THE COMPANY WILL OWN A  
60.8% INTEREST IN THE OPERATING PARTNERSHIP. ALL REFERENCES TO THE COMPANY AS A 
REIT ASSUME THAT THE COMPANY WILL QUALIFY AS A REAL ESTATE INVESTMENT TRUST     
("REIT") BEGINNING WITH THE TAX YEAR ENDING DECEMBER 31, 1997. SEE "GLOSSARY"   
FOR THE DEFINITIONS OF CERTAIN ADDITIONAL CAPITALIZED TERMS USED IN THIS        
PROSPECTUS.                                                                     

THE COMPANY 

    Golf Trust of America, Inc. is a self-administered REIT formed to capitalize
upon consolidation opportunities in the ownership of upscale golf courses       
throughout the United States. The Company currently holds a participating       
interest in 19 golf courses (the "Golf Courses"), 15 of which are owned and four
of which serve as collateral for a 30-year participating mortgage loan made by  
the Company to the owner of the Innisbrook Resort (the "Participating           
Mortgage"). The Golf Courses are located in Florida (5) South Carolina (4),     
Georgia (2), Virginia (2), Alabama, Kansas, Nebraska, North Carolina, Ohio and  
Texas.                                                                          

    The Company's goal is to increase Cash Available for Distribution (as herein
defined) per share and to enhance stockholder value by becoming a leading owner 
of, and participating in increased revenue from, nationally or regionally       
recognized golf courses. The Company's principal business strategy is to acquire
upscale golf courses and thereafter lease the golf courses to qualified third   
party operators, including affiliates of the sellers. The Company may acquire   
golf courses through the issuance of units of limited partnership interest in   
the Operating Partnership ("OP Units"), which are redeemable for cash or, at the
Company's option, shares of Common Stock on a one-for-one basis. When the       
Company acquires a golf course in exchange for OP Units, the golf course seller 
generally may defer tax recognition until such seller elects to cause the OP    
Units to be redeemed.                                                           

The Company believes it has a distinct competitive advantage in the     
acquisition of upscale golf courses, including those that might not otherwise be
available for purchase, because of (i) its utilization of the multiple          
independent lessee structure, (ii) management's substantial industry knowledge, 
experience and relationships within the golf community, (iii) the Company's     
strategic alliances with prominent golf course operators and (iv) its ability to
issue OP Units to golf course owners on a tax-deferred basis. The Company is one
of only two publicly-traded REITs in the United States focused on owning and    
acquiring golf courses.                                                         

In February 1997, the Company raised net proceeds of approximately $73.0
million in its initial public offering (the "IPO") and acquired 10 Golf Courses 
(the "Initial Courses") from their prior owners (together with the prior owners 
of the Golf Courses acquired since the IPO, the "Prior Owners"). Each of the    
Initial Courses was leased back to an affiliate of its Prior Owner as described 
below. The Company believes the continuity of management provided by these      
experienced operators facilitates the Company's growth and profitability. Since 
the IPO, the Company has acquired an interest in an additional nine Golf        
Courses. See "Developments Since the Initial Public Offering."                  

    The Golf Courses are leased to multiple independent third party lessees (the
"Lessees") pursuant to leases ("Participating Leases") which provide for        
payments ("Lease Payments") of fixed base rent ("Base Rent") and participating  
rent ("Participating Rent") based on growth in revenue at the Golf Courses. The 
interest payment under the Participating Mortgage is structured similarly to the
rent payments under the Participating Leases to provide the Company with base   
interest payments and additional interest payments based on growth in revenue at
the Innisbrook Resort. See "The Participating Mortgage." Neither the Company nor
its executive officers                                                          

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owns any interest in, or participates in the management of, the Lessees or the  
Innisbrook Resort Owner (as herein defined).                                    

    The Company believes the Initial Courses and its investments in Golf Courses
since the IPO are consistent with its goal of becoming a leading owner of, and  
participating in increased revenue from, nationally or regionally recognized    
upscale golf courses. Five of the Golf Courses were ranked among the Top Ten New
Courses by either GOLF DIGEST or GOLF MAGAZINE in the year the Golf Course      
opened, including Stonehouse Golf Club and Royal New Kent, each of which was    
named the "Best New Upscale Course" by GOLF DIGEST in 1996 and 1997,            
respectively, and Oyster Bay, which was named Best New Resort Course in the     
United States in 1983 by GOLF DIGEST. The Copperhead Course at the Innisbrook   
Resort was ranked 43rd in the 1996 survey by GOLF MAGAZINE of the "Top 100      
Courses You Can Play" and the Island Course at the Innisbrook Resort was ranked 
as one of the "Top 75 Resort Courses" by GOLF DIGEST in 1992. Heritage Golf Club
was ranked in the Top 50 Public Golf Courses by GOLF DIGEST in 1992. See "The   
Golf Courses." The Company believes that the quality of the Golf Courses is     
further reflected in the average green fees at the Golf Courses, which          
significantly exceed national industry averages.                                

DEVELOPMENTS SINCE THE INITIAL PUBLIC OFFERING

GOLF COURSE INVESTMENTS                                                         

Since its acquisition of the ten Initial Courses in February 1997, the  
Company has acquired interests in the following nine Golf Courses for total     
consideration of approximately $100 million.                                    

TIBURON GOLF CLUB.  On August 18, 1997, the Company acquired the 27-hole
Tiburon Golf Club ("Tiburon"), an upscale semi-private golf course in Omaha,    
Nebraska, for an aggregate price of $6.0 million, including the issuance of     
21,429 shares of Common Stock (valued at approximately $600,000 on such date).  
Players can choose to play any two of the three nine-hole layouts at Tiburon for
a total of three distinct 18-hole combinations. The courses at Tiburon are      
characterized by rolling fairways with mounds, berms and greenside bunkers.     
Tiburon is leased to an affiliate of Granite Golf Group, Inc., (together with   
its affiliates, "Granite Golf"). Granite Golf currently manages over 30 golf    
courses throughout the United States.                                           

RAINTREE COUNTRY CLUB.  On September 2, 1997, the Company acquired the  
Raintree Country Club ("Raintree"), located near Akron, Ohio, for an aggregate  
price of $4.6 million, including the issuance of 121,529 OP Units (valued at    
approximately $3.4 million based on the price of the Common Stock on such date).
This high-end daily fee golf course is located in a wooded area and has many    
narrow fairways demanding precision shots. Raintree is leased to its Prior      
Owner, who has continuously managed the course since its construction in 1991.  

 EAGLE WATCH GOLF CLUB.  On September 30, 1997, the Company acquired Eagle
Watch Golf Club ("Eagle Watch"), located in Atlanta, Georgia, for an aggregate  
price of $6.4 million, including the issuance of 70,158 OP Units (valued at     
approximately $1.9 million based on the price of the Common Stock on such date).
Eagle Watch is an 18-hole course designed by Arnold Palmer on rolling hills with
tree-lined fairways and numerous lakes and ponds. The Prior Owner of Eagle Watch
is an affiliate of the Prior Owner of Olde Atlanta Golf Club, a course that was 
acquired by the Company at the IPO. Eagle Watch is leased to an affiliate of the
Lessee of Olde Atlanta Golf Club.                                               

 LOST OAKS GOLF COURSE.  On October 3, 1997, the Company acquired the Lost
Oaks Golf Course ("Lost Oaks"), in Tampa, Florida located near the Innisbrook   
Resort, for approximately $5.9 million, including closing costs. Lost Oaks is   
leased to an affiliate of Starwood Capital Group, LLC (together with its        
affiliates, "Starwood"). The Company has agreed to fund certain improvements at 
Lost Oaks in an amount not to exceed $1.25 million in exchange for an increased 
Lease Payment.                                                                  

   CLUB OF THE COUNTRY.  On October 17, 1997, the Company acquired Club of the
Country, a private country club located near Kansas City, Kansas, for an        
aggregate price of approximately $3.1 million, including the                    

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issuance of approximately 19,231 OP Units (valued at approximately $500,000     
based on the price of the Common Stock on such date). Club of the Country, noted
for its outstanding greens and playability, combines the serenity of a wooded   
countryside, meandering creeks and rolling hills with the challenge of 18 holes 
of championship golf. Club of the Country is leased to an affiliate of the Prior
Owner and managed by an affiliate of Granite Golf.                              

  INNISBROOK RESORT.  On June 20, 1997, the Company entered into and made an
initial advance of $69.975 million under the $78.975 million Participating      
Mortgage to Golf Host Resorts, Inc. (the "Innisbrook Resort Owner"), an         
affiliate of Starwood. The loan is secured by a first lien on the Innisbrook    
Resort, located near Tampa, Florida, and all other assets of the Innisbrook     
Resort Owner. The Innisbrook Resort is a destination golf resort with 63 holes  
(plus an additional nine holes currently under construction) and was named by   
ESQUIRE as one of the top 10 resorts in North America. The four Golf Courses at 
the Innisbrook Resort are operated by Troon Management Company, LLC ("Troon     
Golf"), an affiliate of Starwood. The Innisbrook Resort also features one of the
largest hotel and conference facilities in Florida, which facilities are        
operated by Westin Hotels & Resorts Company ("Westin") pursuant to a long-term  
management agreement. Westin has agreed to pay up to $2.5 million per year to   
the Innisbrook Resort Owner to supplement results of operations with respect to 
the operations at the Innisbrook Resort for up to five years (the "Westin       
Guaranty"). The Innisbrook Resort Owner used a portion of the proceeds of the   
Participating Mortgage to acquire from the Company 274,039 newly issued OP Units
and 159,326 newly issued shares of Common Stock, representing an ownership      
interest in the Company of approximately 5.1% (3.7% after giving effect to this 
Offering).                                                                      

THIRD QUARTER RESULTS                                                           

 For the quarter ended September 30, 1997, the Company's total revenue was
$6.1 million, net income was $1.6 million and net income per share was $0.39.   
For the period from February 12, 1997 (inception of operations) through         
September 30, 1997, the Company's total revenue was $12.1 million, net income   
was $3.6 million and net income per share was $0.84.                            

LETTERS OF INTENT                                                               

  The Company has entered into three letters of intent to acquire a total of
four golf courses for purchase prices totalling $25 million. In addition, the   
Company has recently submitted non-binding offers to acquire additional golf    
courses and is in various stages of discussions to acquire additional golf      
courses. The Company is in various stages of negotiation and due diligence      
review for each of these golf courses. Completion of these transactions is      
subject to negotiation and execution of definitive purchase and sale agreements,
satisfactory completion of the Company's due diligence review and certain other 
customary closing conditions. No assurances can be given that the Company will  
continue to pursue or complete the acquisition of any of these golf courses.    

LINE OF CREDIT                                                                  

On June 20, 1997, the Company closed a two-year, $100 million secured   
revolving credit facility (the "Line of Credit") with a group of four commercial
banks led by NationsBank, N.A. On September 24, 1997, the Company negotiated a  
reduction in the interest rate from LIBOR plus 2.0% to LIBOR plus 1.75%.        
Additionally, the Company has received a commitment to increase the Line of     
Credit, upon completion of this Offering, to $125 million and to convert it to  
an unsecured facility.                                                          

The Company drew upon the Line of Credit to fund a portion of the       
Participating Mortgage as well as to fund the acquisitions of Tiburon, Raintree,
Eagle Watch, Lost Oaks and Club of the Country. The Company intends to draw upon
the Line of Credit, or any successor line of credit, to fund any future         
acquisitions of additional golf courses. There can be no assurance, however,    
that the Company will close any future acquisitions or that the Company will    
continue to have access to sufficient debt and equity financing to allow it     
successfully to pursue its acquisition strategy.                                

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STRATEGIC AFFILIATIONS                                                          

  AFFILIATION WITH STARWOOD.  Starwood, through its affiliates, operates the
Golf Courses at the Innisbrook Resort and leases Lost Oaks. In addition, the    
golf and conference facilities of the Innisbrook Resort are owned by an         
affiliate of Starwood and the hotel and conference facilities are managed by    
Westin, an affiliate of Starwood. The Company believes Starwood, through its    
affiliates, is one of the United States' leading golf course management,        
development and consulting companies. Troon Golf has the exclusive right to     
operate golf courses at hotels owned by Westin. The Company believes that its   
existing relationship with Starwood, Westin and Troon Golf will provide the     
Company with additional acquisition opportunities throughout the United States. 

AFFILIATION WITH GRANITE GOLF.  The Lessee of Tiburon is an affiliate of
Granite Golf and an affiliate of Granite Golf manages Club of the Country.      
Granite Golf and its affiliates currently manage over 30 golf courses throughout
the United States. Granite Golf identified the acquisition opportunity at       
Tiburon. The Company believes its affiliation with Granite Golf will provide the
Company with additional acquisition opportunities.                              

RISK FACTORS

INVESTORS SHOULD CONSIDER CAREFULLY THE MATTERS DISCUSSED UNDER "RISK   
FACTORS" PRIOR TO MAKING AN INVESTMENT DECISION REGARDING THE COMMON STOCK      
OFFERED HEREBY. SUCH RISKS INCLUDE:                                             

   - The Company generally values golf courses, and establishes Lease Payments
and Participating Mortgage Payments based on selected adjustments to
     historical operating results or estimates of future performance which the
 Company believes are appropriate. These adjustments include projected
increases in revenues from golf course operations and elimination of
      certain operating expenses. If such adjustments are not appropriate, or if
   estimates of future performance are not met, a Lessee or the Innisbrook
Resort Owner may not be able to make its scheduled payments to the  
      Company. Failure of a Lessee or the Innisbrook Resort Owner to make such a
    payment may result in a default under a Participating Lease or under the
    Participating Mortgage. This would have a material adverse effect on the
  Company. Estimates of future performance were particularly significant
   with respect to two recently-opened Virginia courses and the Innisbrook
Resort. In addition, although the Westin Guaranty is designed to    
  supplement results of operations at the Innisbrook Resort, it is for a
limited period and limited amount and may be insufficient to ensure 
     receipt by the Company of base interest under the Participating Mortgage.

- Dependence on Lease Payments and payments under the Participating     
   Mortgage, which payments account for substantially all of the Company's
income.                                                             

- The Participating Leases, with extensions, may have terms of up to 40 
    years, which could adversely affect the Company's ability to sell a Golf
Course.                                                             

- Even though the Company's wholly-owned subsidiary, GTA GP, is the sole
  general partner of the Operating Partnership, the Company alone cannot
     cause the Operating Partnership to merge or consolidate or to sell all or
      substantially all of its assets under the Partnership Agreement (as herein
defined). Such extraordinary transactions require the consent of the
  holders of at least 66.7% of the OP Units and, upon completion of this
Offering, the Company will hold only 60.8% of such interests.       

   - The REIT provisions of the Internal Revenue Code of 1986, as amended (the
      "Tax Code"), prevent the Company from operating Golf Courses. As a result,
    the Company must continue to find qualified independent lessees to lease
  and operate its courses, and the Company may not exercise control over
such lessees' day-to-day management and operational decisions.      

- The Golf Courses are subject to risks affecting golf course operations
generally, including competition, uninsured casualties, increases in
   operating costs, inclement weather, seasonality, oversupply and general
  decreases in demand, all of which could affect adversely a Golf Course
operator's ability to make its scheduled payments to the Company.   

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- The Company depends upon the skill, industry knowledge and established
   relationships of its key personnel, including W. Bradley Blair, II, the
Company's Chief Executive Officer and President, David J. Dick, its 
    Executive Vice President, and Scott D. Peters, its Senior Vice President
and Chief Financial Officer. The loss of such officers' services may
affect adversely the Company's business results.                    

   - The Company will be taxed as a regular corporation if it fails to qualify
    as a REIT for federal income tax purposes, and the Operating Partnership
    will be treated as an association taxable as a regular corporation if it
fails to qualify as a partnership, both of which would result in a  
reduction in Cash Available for Distribution.                       

 - The Company from time to time acquires newly developed golf courses and
   provides construction financing for expanding golf courses. In light of
    the limited operating history at such acquisitions and expansions, there
is a risk that they will not perform at levels commensurate with the
 Company's expectations, which may affect adversely Cash Available for
Distribution per share.                                             

- In light of the Company's limited operating history and management's  
limited experience operating a public company, operating a REIT and 
     working together as a team, the Company may lack the experience necessary
to implement its growth strategy.                                   

   - Beginning in February 1998, 2,310,157 OP Units will become redeemable, at
     the option of their holders, for cash or, at the election of the Company,
      shares of Common Stock on a one-for-one basis. Such redemption could cause
      a substantial increase in the number of shares of Common Stock outstanding
(of up to 32.3% after giving effect to this Offering). The increased
    number of outstanding shares, or the perception of such possibility, may
cause the market price of the Common Stock to decline.              

  - The Company competes with other well-established owners and operators to
acquire a limited number of golf courses available for purchase.    

  - Five of the Golf Courses are located in the Myrtle Beach, South Carolina
   vicinity and five of the Golf Courses are located in the Tampa, Florida
      area. Such geographic concentration leaves the Company vulnerable to local
market shifts and natural disasters, either of which could affect   
     adversely a Golf Course operator's ability to make its scheduled payments
to the Company.                                                     

- A substantial number of golf courses were opened in recent years, are 
currently under development or are planned for development. Such new
    supply may increase competition for golfers in the Company's markets and
   may affect adversely the number of rounds played at the Golf Courses. A
      decrease in the number of rounds played may affect adversely a Golf Course
operator's ability to make its scheduled payments to the Company.   

 - Stockholders face the risks normally associated with a company's use of
  debt financing and the fact that there is no charter limitation on the
amount of debt the Company may incur.                               

    - The Company's Charter and Bylaws contain certain restrictions, including a
limit on the extent of any one person's ownership of the outstanding
  Common Stock, intended to ensure the Company's compliance with certain
      requirements related to its qualification as a REIT. Such restrictions may
  inhibit a change in control of the Company even where such a change in
control might be beneficial to the Company's stockholders.          

- Increases in the market rate of interest and other factors may affect 
adversely the trading price of the Common Stock.                    

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THE GOLF INDUSTRY 

 UNLESS OTHERWISE NOTED, REFERENCES HEREIN TO NATIONAL INDUSTRY STATISTICS
AND AVERAGES ARE BASED ON REPORTS OF THE NATIONAL GOLF FOUNDATION ("NGF"), AN   
INDUSTRY TRADE ASSOCIATION NOT AFFILIATED WITH THE COMPANY.                     

    The Company believes the United States golf industry is entering a period of
significant growth. This belief is based, in part, on the fact that people over 
the age of 50 play more golf than younger people, and the expectation that over 
the next several years the number of people age 50 and older will increase      
significantly as the "baby boomers" age. See "The Golf Industry --              
Demographics." The Company expects that the aging population will contribute to 
an increase in the number of rounds played and Gross Golf Revenues (as herein   
defined) at the Golf Courses and any golf courses subsequently acquired by the  
Company.                                                                        

  Golf course ownership in the United States is highly fragmented. There are
approximately 15,700 golf courses (approximately 12,900 eighteen-hole           
equivalents) in the United States that the Company believes are owned by        
approximately 13,000 different entities. The Company believes there are         
relatively few owners of more than one course. The Company believes that the 15 
largest golf course owners in the United States collectively own fewer than 5%  
of the total number of golf courses and that fewer than 10 golf course owners   
own more than 10 golf courses. The Company believes that this fragmented        
ownership provides it with an excellent opportunity for consolidation of the    
ownership of upscale golf courses.                                              

The Company believes the current fragmentation of golf course ownership 
resulted from a variety of factors, including a scarcity of capital, the        
entrepreneurial nature of many golf course owners and operators and their       
associated pride of ownership. The Company believes that the economies of scale 
in owning and operating multiple golf courses, the growing significance of      
professional financial management in the operation of golf courses and the      
desire for liquidity by golf course owners could lead to consolidation of golf  
course ownership. In particular, the Company believes golf course owners will be
attracted to the Company's multiple independent lessee structure, which permits 
the Company to acquire a course and then lease it back to an affiliate of the   
seller. Such structure satisfies the owner's desire to remain involved in the   
day-to-day operation of his course, while also satisfying his desire to obtain  
liquidity. The Company further believes its ability to issue OP Units in        
exchange for a golf course will attract potential sellers, who generally can    
defer recognition of taxable gain on the exchange until they exercise their     
right to cause the Company to redeem the OP Units for cash (or Common Stock, at 
the Company's option) (their "Redemption Right"). By offering golf course owners
the tax planning benefit of OP Units and the economic benefit of participating  
in the independent lessee structure, including resulting economies of scale in  
operating golf courses, the Company believes it is able to acquire desirable    
upscale courses that may not otherwise be available for purchase. See "The      
Company -- Business Strategies and Objectives -- Acquisitions and Expansions."  

Largely in response to the popularity of golf, the construction of golf 
courses in the United States has increased significantly in recent years. New   
golf course openings from the mid-1970's through 1987 averaged approximately 150
golf courses per year. For the period 1987 through 1996 an average of 279 new   
golf courses were opened each year, with a high of 336 new golf course openings 
in 1995.                                                                        

The emergence and popularity of younger professional golfers, including 
Tiger Woods, Justin Leonard, Phil Mickelson and Karrie Webb, have increased     
awareness and interest in golf. According to industry statistics, 19.4 million  
homes watched the final round of the four major golf championships in 1996. In  
1997, television viewership of the final four rounds of the four major golf     
championships increased 56 percent to 30.3 million. The Company believes this   
resurgent interest will result in increasing golf participation, including      
increasing participation by women and younger golfers.                          

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The golf industry generated approximately $15 billion in revenues in the
United States in 1996. The Company believes the game of golf has exhibited      
strong growth in popularity in the past 16 years as illustrated below:          

                                                        · Enlarge/Download Table

                                                                                 1980  1996  % CHANGE
                                                                                 ----  ----  --------
                                                                                 (MILLIONS)          
                                                                                                     
Number of golfers............................................................... 15.0  24.7    65%   
Rounds played...................................................................  358   477    33%   

DEMOGRAPHICS.  Additionally, the Company believes the game of golf will 
benefit from favorable demographic trends. The United States Census Bureau      
estimates that the population age 50 and over will increase by 39% between 1996 
and 2010, from 69.3 million to 96.3 million. The average number of rounds played
per golfer on an annual basis increases significantly as the golfer ages.       
Golfers in their 50's play nearly twice as many rounds annually as golfers in   
their 30's, and golfers age 65 and older generally play three times as many     
rounds annually as golfers in their 30's. The Company believes that the number  
of golfers as well as the total number of rounds played will increase           
significantly as the average age of the population continues to increase. The   
Company believes that "baby boomers," the oldest of whom are now in their early 
50's, will contribute to the growth in total rounds played due to growing wealth
and leisure time as well as the suitability of golf as a sport for an aging     
population. Since 1991, the number of senior golfers (golfers age 50 and over)  
has grown 16%, or by nearly 1 million golfers. See "The Golf Industry --        
Demographics."                                                                  

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THE GOLF COURSES

   The Company believes that its acquisition of the 10 Initial Courses and its
acquisitions since the IPO are consistent with its goal of becoming a leading   
owner of, and participating in increased revenue from, nationally or regionally 
recognized golf courses. The Company's Golf Courses consist of 19 upscale       
courses located in the mid-Atlantic, southeastern, midwestern and southwestern  
United States. Five of the Golf Courses were ranked among the Top Ten New       
Courses by either GOLF DIGEST or GOLF MAGAZINE in the year opened, including    
Stonehouse Golf Club and Royal New Kent, each of which was named the Best New   
Upscale Course by GOLF DIGEST in 1996 and 1997, respectively, and Oyster Bay,   
which was named Best New Resort Course in the United States in 1983 by GOLF     
DIGEST. The Copperhead Course at the Innisbrook Resort was ranked 43rd in the   
1996 survey by GOLF MAGAZINE of the "Top 100 Courses You Can Play" and the      
Island Course at the Innisbrook Resort was rated by GOLF DIGEST as one of the   
"Top 75 Resort Courses" in 1992. Heritage Golf Club was ranked in the Top 50    
Public Golf Courses by GOLF DIGEST in 1992.                                     

  The Golf Courses include 17 upscale Daily Fee courses (including 10 Resort
Courses) and two private clubs. "Daily Fee" courses are open to the public and  
generate revenues principally through green fees, golf cart rentals, food and   
beverage operations, merchandise sales and driving range charges. "Resort       
Courses" are Daily Fee golf courses that attract a significant percentage of    
players from outside the immediate area in which the golf course is located and 
generate a significant amount of revenue from golf vacation packages. The       
Company considers its Daily Fee and Resort Courses to be high-end golf courses  
because of the quality and maintenance of each golf course. Private country     
clubs generally are closed to the public and derive revenues principally from   
membership dues, initiation fees, transfer fees, golf cart rentals, guest fees, 
food and beverage operations and merchandise sales.                             

The Company believes that the overall quality of the Golf Courses is    
reflected in the green fees charged at each Golf Course, which significantly    
exceed national averages. The Company believes its focus on upscale Daily Fee   
golf courses and private country clubs, which attract golfers with attractive   
demographic and economic profiles, will result in stronger and less cyclical    
revenue growth in comparison to golf courses with lower green fees.             

Five of the Golf Courses are located in the Myrtle Beach, South Carolina
vicinity, a popular year-round golf destination area. Myrtle Beach is considered
one of the nation's premier golf resort locations with nearly 100 golf courses  
and approximately 3.9 million rounds played in 1996, according to the MYRTLE    
BEACH GOLF HOLIDAY-TM-. In addition to golf courses, Myrtle Beach offers a mix  
of entertainment, shopping and dining, as well as proximity to beaches. All of  
the Golf Courses located in the Myrtle Beach vicinity were developed and        
contributed to the Company by The Legends Group, a leading golf course owner,   
developer and operator in the southeast and mid-Atlantic regions of the United  
States controlled by Legends Group, Ltd. (together with its affiliates, "The    
Legends Group").                                                                

  Five of the Golf Courses are located in the Tampa, Florida area. Of these,
four are located at the Innisbrook Resort, a destination golf resort that       
includes one of the largest hotel and conference facilities in the state. The   
fifth course, Lost Oaks, is located near the Innisbrook Resort, and all five    
courses are near the sandy beaches on the Gulf of Mexico. Additionally, the     
courses benefit from the millions of tourists annually that visit               
Disneyworld-TM-, Busch Gardens-TM- and other regional recreational attractions. 

  Two of the Golf Courses are located in the Williamsburg, Virginia area and
were opened in June and August, 1996. Williamsburg is a leading tourist         
destination and has a population of approximately 2.6 million within a 60 mile  
radius. Williamsburg is an emerging golf resort destination, as evidenced by the
six new courses that have opened in the Williamsburg vicinity since 1995,       
including two of the Company's courses. In addition to golf, Williamsburg and   
the surrounding area offer shopping, dining, entertainment and historical       
attractions. Both of the Golf Courses located in Williamsburg were developed and
contributed to the Company by The Legends Group.                                

   The Company owns a fee simple interest in each of the Golf Courses with the
exception of Oyster Bay, which is subject to a long-term ground lease (with     
approximately 35 years remaining), and the four Golf Courses at the Innisbrook  
Resort, where the Company holds a first lien on the Golf Courses and all of the 
related facilities (other than the separately-owned condominium units comprising
the hotel). The Company holds an option to purchase the Innisbrook Resort and   
such facilities at the expiration of the Participating Mortgage for the lesser  
of its fair market value or a pre-determined number of shares of Common Stock   
and the cancellation of the outstanding balance of the Participating Mortgage.  

Certain unaudited information regarding each of the Golf Courses is set 
forth on the following page:                                                    

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THE GOLF COURSES

                                                        · Enlarge/Download Table

                                                                                                              REVENUE PER PLAYER 
                                                                                       ROUNDS                        (2)         
                                                                          ---------------------------------  --------------------
                                                                                                  TWELVE                         
                                                                                                  MONTHS                         
                                                                                                   ENDED                         
                                         YARDAGE     TYPE OF     YEAR                            JUNE 30,                        
NAME                   LOCATION            (1)       COURSE     OPENED      1995       1996        1997        1995       1996   
----------------  -------------------  -----------  ---------  ---------  ---------  ---------  -----------  ---------  ---------
INITIAL COURSES:                                                                                                                 
                                                                                                                                 
Heritage Club...  Pawleys Island, SC        7,040    Resort      1986        55,094     52,382      52,889   $   57.28  $   59.96
Heathland.......  Myrtle Beach, SC          6,785    Resort      1990        49,312     50,294      50,937       55.04      53.92
Moorland........  Myrtle Beach, SC          6,799    Resort      1990        49,590     51,102      51,754       55.03      54.79
Parkland........  Myrtle Beach, SC          7,170    Resort      1992        46,564     47,331      48,437       54.98      54.21
Oyster Bay                                                                                                                       
 (6)............  Sunset Beach, NC          6,685    Resort      1983        62,141     57,856      58,725       55.66      56.83
Woodlands.......  Gulf Shores, AL           6,584    Resort      1994        43,464     41,744      44,623       32.88      34.86
Royal New Kent    Providence Forge,                                                                                              
 (7)............  VA                        7,291   Daily Fee    1996        --          5,743      12,948      --          60.60
Stonehouse Golf                                                                                                                  
 Club (8).......  Williamsburg, VA          6,963   Daily Fee    1996        --          5,686      16,762      --          60.50
Olde Atlanta....  Atlanta, GA               6,789   Daily Fee    1993        41,195     41,053      44,485       37.53      41.39
Northgate                                                                                                                        
 Country Club                                                                                                                    
 (9)............  Houston, TX               6,540    Private     1984        46,600     45,400      46,268       59.40      64.27

SUBSEQUENT                                                                                                                       
 ACQUISITIONS:                                                                                                                   
Tiburon Golf                                                                                                                     
 Club (10)......  Omaha, NE                 7,005   Daily Fee    1989        56,496     53,160      60,644       21.33      23.19
Raintree Country                                                                                                                 
 Club...........  Akron, OH                 6,886   Daily Fee    1991        44,000     40,000      40,000       19.25      20.38
Eagle Watch.....  Atlanta, GA               6,896   Daily Fee    1989        36,484     36,322      40,126       38.67      39.23
Lost Oaks.......  Tampa, FL                 6,500   Daily Fee    1975        40,072     52,760      67,708       31.87      29.64
Club of the                                                                                                                      
 Country........  Kansas City, KS           6,412    Private     1979        15,749     17,575      19,093       43.69      43.93
Innisbrook                                                                                                                       
 Resort                                                                                                                          
 (6)(12)........  Tampa, FL                                                 148,294    140,922     139,094       95.35     101.23
  Copperhead....                            7,087    Resort      1972                                                            
  Island........                            6,999    Resort      1970                                                            
  Eagle's Watch                                                                                                                  
    (13)........                            6,245    Resort      1971                                                            
  Hawk's Run                                                                                                                     
    (13)........                            6,245    Resort      1971                                                            
  Total..........................................................................................................................



                                     GROSS GOLF REVENUE (3)                                                                      
                               ----------------------------------                                                                
                    TWELVE                               TWELVE                                                                  
                    MONTHS                               MONTHS                                                                  
                     ENDED                               ENDED      INITIAL                                                      
                   JUNE 30,                             JUNE 30,   BASE RENT                                                     
NAME                 1997         1995        1996        1997        (4)                                                        
----------------  -----------  ----------  ----------  ----------  ----------                                                    
INITIAL COURSES:                                                                                                                 
                                                                                                                                 
Heritage Club...   $   60.20   $3,156,000  $3,141,000  $3,184,000  $1,825,000                                                    
Heathland.......       53.81    2,714,000   2,712,000   2,741,000   1,556,000(5)                                                 
Moorland........       55.20    2,729,000   2,800,000   2,857,000   1,556,000(5)                                                 
Parkland........       53.88    2,560,000   2,566,000   2,610,000   1,557,000(5)                                                 
Oyster Bay                                                                                                                       
 (6)............       56.40    3,459,000   3,288,000   3,312,000   1,856,000                                                    
Woodlands.......       37.02    1,429,000   1,455,000   1,650,000     679,000                                                    
Royal New Kent                                                                                                                   
 (7)............       64.26       --         348,000     832,000   1,817,000                                                    
Stonehouse Golf                                                                                                                  
 Club (8).......       67.65       --         344,000   1,134,000   1,890,000                                                    
Olde Atlanta....       41.14    1,546,000   1,699,000   1,830,000     845,000                                                    
Northgate                                                                                                                        
 Country Club                                                                                                                    
 (9)............       66.05    2,768,000   2,918,000   3,056,000   1,407,000                                                    
SUBSEQUENT                                                                                                                       
 ACQUISITIONS:                                                                                                                   
Tiburon Golf                                                                                                                     
 Club (10)......       21.37    1,205,000   1,233,000   1,296,000     682,000                                                    
Raintree Country                                                                                                                 
 Club...........       21.43      847,000     815,000     857,000     520,000                                                    
Eagle Watch.....       38.03    1,411,000   1,425,000   1,526,000     703,000                                                    
Lost Oaks.......       24.28    1,277,000   1,564,000   1,644,000     625,000(11)                                                
Club of the                                                                                                                      
 Country........       41.01      668,000     772,000     783,000     330,000                                                    
Innisbrook                                                                                                                       
 Resort                                                                                                                          
 (6)(12)........      103.53   14,140,000  14,265,000  14,400,000   6,739,000                                                    
  Copperhead....                                                                                                                 
  Island........                                                                                                                 
  Eagle's Watch                                                                                                                  
    (13)........                                                                                                                 
  Hawk's Run                                                                                                                     
    (13)........                                                                                                                 
                               ----------  ----------  ----------  ----------                                                    
  Total.........               $39,909,000 $41,345,000 $43,712,000 $24,587,000                                                   
                               ----------  ----------  ----------  ----------                                                    
                               ----------  ----------  ----------  ----------                                                    

(FOOTNOTES ON FOLLOWING PAGE)                                                   

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---------------                                                                 

(1) Yardage is calculated from the championship tees.                         

(2) "Revenue Per Player" is calculated by dividing Gross Golf Revenue at the  
    applicable Golf Course by the number of rounds played at the applicable Golf
Course.                                                                 

 (3) Gross Golf Revenue is defined as all revenues from a golf course, including
green fees, golf cart rentals, range fees, membership dues, member      
initiation fees and transfer fees, but excluding food and beverage and  
   merchandise revenue. In the case of the Innisbrook Resort the amounts shown
 in the table include all revenue at the Innisbrook Resort, including golf
and hotel revenue, and food, beverage and merchandise sales, but exclude
  various taxes and net of rental payments to individual condominium owners.

(4) In addition to Base Rent, Participating Rent may be payable by the Lessees
and Participating Interest (as herein defined) may be payable by the    
    Innisbrook Resort Owner. Participating Rent is calculated based on increases
   in the Gross Golf Revenue from a base year (1996 in the case of the Initial
Courses), as adjusted. For the Innisbrook Resort, Base Rent shown       
corresponds to the Base Interest payment.                               

(5) Heathland, Moorland and Parkland are subject to a single Participating    
Lease and the Base Rent is equally allocated among these Golf Courses.  

(6) The Company acquired or has a contract to acquire the fee simple interest 
in each of the Golf Courses except Oyster Bay, which is subject to a    
long-term ground lease with a lessor not affiliated with the Prior Owner
thereof, and the Innisbrook Resort, which serves as collateral under the
Participating Mortgage.                                                 

(7) Opened in August 1996.                                                    

(8) Opened in June 1996.                                                      

(9) The Company has agreed to fund up to $3.0 million to construct an         
additional nine holes located on land adjacent to this Golf Course. The 
Company expects to acquire, upon completion, the additional nine holes. 
Amounts shown for Northgate Country Club are for its fiscal year ended  
December 20, or the twelve months ended June 30, as applicable.         

(10) Tiburon consists of 27 holes. Eighteen holes were built in 1989 with an    
additional nine holes built in 1994. With the exception of Initial Base 
 Rent, numbers are 18-hole equivalents. Yardage and year opened is for the
White/Blue course.                                                      

(11) The Company has agreed to fund up to $1.25 million to pay for additional   
   improvements at the Lost Oaks course. If this amount is fully advanced, the
Base Rent will be increased to $740,930.                                

(12) The Company has a participating mortgage interest in the Innisbrook Resort.
The facility currently has 63 holes with an additional nine holes under 
construction. Under the terms of the Participating Mortgage, the Company
initially funded $69.975 million and has agreed to fund an additional $9
    million to fund certain improvements at the Innisbrook Resort, including the
construction of the additional nine holes. Upon funding of the entire $9
   million, the Base Interest will be increased to approximately $7.6 million.

(13) Eagle's Watch and Hawk's Run currently comprise the 27-hole Sandpiper      
course at the Innisbrook Resort. An additional nine holes are under     
construction, which is scheduled for completion in 1998. Yardage shown  
reflects 18-hole equivalents for Sandpiper.                             

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BUSINESS STRATEGIES AND OBJECTIVES

The Company's primary objectives are to increase its Cash Available for 
Distribution per share to stockholders and to enhance stockholder value. The    
Company's main strategy for such growth is to (i) acquire additional golf       
courses that meet the Company's investment criteria and (ii) participate in     
increased revenues at its Golf Courses. The Company currently holds a           
participating interest in 19 Golf Courses.                                      

    When the Company acquires a golf course, the course is either leased back to
its prior owner or leased to another qualified operator not affiliated with the 
Company. Under the Company's standard Participating Lease, the Company receives 
fixed Base Rent and Participating Rent based on increases in Gross Golf Revenues
(as herein defined), if any, at such Golf Course. Currently all Golf Courses    
owned by the Company are leased to their Prior Owners (or such owners'          
affiliates) with the exception of Tiburon and Lost Oaks. The Company believes   
the continuity of management provided by these experienced operators will       
facilitate the Company's growth and profitability. Each Lessee is required to   
join the Company's Lessee Advisory Association, which provides marketing        
information and potential economic benefits to the Lessees, such as bulk        
purchasing power for certain golf course supplies and equipment.                

In certain instances, state and federal tax laws make sale-leaseback    
transactions prohibitively expensive, in which case the Company may provide     
financing to a particular golf course, provided it receives a participating     
interest in revenues at the golf course on a basis comparable to the Company's  
standard Participating Lease. Typically, the Company's loan will be secured by a
first-lien on the underlying golf course asset and will include an option to    
purchase the course at the end of the loan's term. In considering any financing 
transactions, including the Participating Mortgage, the Company seeks to obtain 
economic terms similar to the standard Participating Lease.                     

  In addition to acquiring new golf courses and new participating interests,
the Company seeks to increase revenue from its current assets through internal  
growth. Both strategies are discussed below.                                    

ACQUISITIONS AND EXPANSIONS                                                     

 ACQUISITIONS.  The Company believes market conditions today are favorable
for the acquisition of golf courses at attractive returns. The Company intends  
to continue to acquire additional golf courses, including multi-course          
portfolios, that meet one or more of its investment criteria as generally       
described below. The Company believes the factors described below provide it    
with a distinct competitive advantage in the acquisition of upscale golf        
courses, including courses that might not otherwise be available for purchase.  

    To fund acquisitions, the Company has access to a variety of debt and equity
financing sources, including the Line of Credit, and the ability to issue OP    
Units. The issuance of OP Units can provide a means of structuring tax-deferred 
transactions for sellers of golf courses. OP Units represent units of limited   
partnership interest in the Operating Partnership. Holders of OP Units generally
have the right to cause the Company to redeem their OP Units after certain      
holding periods for cash, or at the Company's option for Common Stock on a      
one-for-one basis. To the extent the Company acquires a golf course in exchange 
for OP Units, the golf course seller generally will not recognize taxable income
until it exercises the Redemption Right (as herein defined).                    

   The Company believes it can attract sellers by offering competitive pricing
and valuation and by offering the following benefits: (i) the ability to retain 
control over the operations of the golf course by leasing the golf course back  
from the Company through the Company's multiple independent lessee structure;   
(ii) the tax deferral and increased liquidity associated with owning OP Units;  
(iii) the ability to obtain additional OP Units through the Lessee Performance  
Option (described below); (iv) marketing and purchasing economies of scale      
gained from participation in the Lessee Advisory Association; and (v) the       
ability to diversify the seller's investment by participating as an equity owner
in the Company's portfolio of golf courses.                                     

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    The Company intends to concentrate its investment activities on golf courses
available at attractive prices that meet one or more of the following criteria: 

- upscale Daily Fee courses that target avid golfers, who the Company   
  believes are generally willing to pay the higher green fees associated
with upscale golf courses;                                          

   - private or semi-private golf courses with proven operating histories that
have the potential for significant cash flow growth;                

- courses that offer superior facilities and service and attract a      
relatively high number of affluent destination golfers;             

- courses owned by multi-course owners and operators who have a strong  
   regional presence and afford the Company the opportunity to expand in a
particular region;                                                  

- newly developed, well-designed courses with high growth potential; and

- upscale, well-maintained golf courses with proven operating histories 
located in areas where significant barriers to entry exist.         

 The Company will undertake an analysis with respect to golf courses to be
considered for acquisition, including an evaluation of the following:           

- product and service differentiation;                                  

- competitive position in market;                                       

- barriers to entry in development of new golf courses;                 

- conditioning of the golf course and agronomy review;                  

- quantity, quality and cost of irrigation; and                         

 - strength of the lodging industry, including hotels and condominiums, in
destination golf areas.                                             

  There can be no assurance that the Company will be able to find additional
golf courses that meet its investment criteria and there can be no assurance    
that the Company will have access to sufficient debt and equity financing to    
allow it successfully to acquire such courses. Moreover, acquisitions entail    
risks that acquired courses will fail to perform in accordance with             
expectations.                                                                   

EXPANSIONS.  The Prior Owner of Northgate Country Club plans to add nine
holes to that Golf Course, the Prior Owner of Woodlands is constructing a new   
clubhouse at Woodlands and the owner of Lost Oaks plans to renovate and remodel 
the clubhouse and course there (collectively, the "Expansion Facilities").      
Subject to satisfaction of certain conditions, the Company has agreed that it   
will purchase the Expansion Facilities when fully completed and operational. The
Company has agreed to fund the expansion at Northgate Country Club and may fund 
the construction of the other Expansion Facilities. The Company will acquire    
each Expansion Facility for a price equal to the cost of construction, which    
cost must be approved in advance by the Company and which may include an        
allowance for land. No development fee will be paid to a Prior Owner or any     
affiliate thereof in connection with the construction of the Expansion          
Facilities.                                                                     

  Upon the Company's acquisition of the respective Expansion Facilities, the
Participating Leases for Northgate Country Club, Woodlands and Lost Oaks will be
amended to include the applicable Expansion Facility, to increase the Base Rent 
in an amount designed to be accretive to the Company's Funds From Operations (as
herein defined) per share, and, with the exception of Lost Oaks (which          
Participating Lease is cross-defaulted with the Participating Mortgage on the   
Innisbrook Resort), the Prior Owner will be required to pledge additional OP    
Units (or cash or other security acceptable to the Company) equal to 15% of the 
purchase price paid by the Company for the applicable Expansion Facility. See   
"The Company -- Business Strategies and Objectives -- Acquisitions and          
Expansions."                                                                    

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The Lessee of Stonehouse Golf Club and Royal New Kent currently is      
constructing clubhouses of 6,600 square feet and 7,700 square feet,             
respectively, at such courses. The clubhouses are expected to be completed by   
June 30, 1998 and will be constructed at the Lessee's expense. Base Rent will   
not be adjusted but the Company will participate in any increases in Gross Golf 
Revenue (as herein defined). See "The Golf Courses -- The Participating Leases."

   The Innisbrook Resort Owner currently is adding an additional nine holes at
the Innisbrook Resort and is making significant capital improvements to the     
resort and conference facilities. The Company, under the Participating Mortgage,
has agreed to fund up to $9 million for these improvements.                     

INTERNAL GROWTH                                                                 

Based on the experience of its management, the Company believes the Golf
Courses offer opportunities for revenue growth through effective marketing and  
efficient operations. See "The Golf Courses -- The Participating Leases --      
Advisory Association." The Participating Leases and the Participating Mortgage  
have been structured to provide the operators with incentives to manage and     
maintain the Golf Courses in a manner designed to increase revenue and, as a    
result, increase payments to the Company under the Participating Leases and the 
Participating Mortgage. The Company believes that management of the Lessees, as 
well as Troon Golf, have demonstrated expertise in the operation of the Golf    
Courses and that the Golf Courses are positioned to benefit from favorable      
trends in the golf industry. See "Lessees and Operators" and "The Golf          
Industry."                                                                      

  PARTICIPATING LEASES.  The Participating Leases generally provide that for
any calendar year, the Company will receive with respect to each leased Golf    
Course, the greater of (a) Base Rent (as adjusted by the Base Rent Escalator    
described below) or (b) an amount equal to the original (unescalated) Base Rent 
plus the Participating Rent payable at the Golf Course. Participating Rent is   
equal to 33 1/3% of the difference between that calendar year's Gross Golf      
Revenue and Gross Golf Revenue at the Golf Course in the calendar year prior to 
the course's acquisition, as adjusted in determining the original Base Rent.    
Base Rent under each Participating Lease generally increases annually by the    
lesser of (i) 3% or (ii) 200% of the change in the Consumer Price Index ("CPI") 
for the prior year (the "Base Rent Escalator") during each of the first five    
years of the Participating Lease and, if the Lessee Performance Option is       
exercised, for an additional five years thereafter. Annual increases in Lease   
Payments are limited to 5% during the first five years of the lease terms.      
"Gross Golf Revenue" is generally defined as all revenues from a Golf Course    
including green fees, golf cart rentals, range fees, membership dues, member    
initiation fees and transfer fees, excluding, however, food and beverage and    
merchandise revenue. See "The Golf Courses" and "Management's Discussion and    
Analysis of Financial Condition and Results of Operations."                     

PARTICIPATING MORTGAGE.  The $78.975 million Participating Mortgage is  
structured similarly to the Participating Lease. The Company anticipates that it
will receive a return similar to the return it anticipates on the Participating 
Leases. Under the Participating Mortgage, the Company made an initial advance of
$69.975 million, which will be followed by additional advances of up to $9.0    
million to be used for a nine-hole expansion and other improvements to the      
Innisbrook Resort facilities currently underway. The loan term is 30 years, with
an initial base interest rate of 9.63% per annum and an interest rate of 9.75%  
per annum on the amount of the loan in excess of $69.975 million (the "Base     
Interest"). The loan provides for minimum increases in the aggregate annual     
payment of Base Interest of 5% per year for the first five years and a          
participating interest feature throughout the term based upon the growth in     
Gross Golf Revenues, as well as in other revenues, at the Innisbrook Resort over
a 1996 base year (the "Participating Interest," and, together with the Base     
Interest, the "Mortgage Payment"). The annual increases in the Mortgage Payment 
are limited to 7% during the first five years. Westin has agreed to pay up to   
$2.5 million per year to the Innisbrook Resort Owner to supplement results of   
operations with respect to the operations at the Innisbrook Resort. The Westin  
Guaranty has a term of up to five years.                                        

LESSEE PERFORMANCE OPTION.  The Participating Leases utilize an         
incentive-based performance structure (the "Performance Option") designed to    
encourage the operators to seek aggressive growth in revenue at the Golf        
Courses. The structure also is designed to attract potential sellers of golf    
courses that the Company believes                                               

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have high growth potential and that might not otherwise be available for        
purchase. Under the Performance Option for the Participating Leases, during     
years three through five of each Participating Lease, the operator or its       
affiliate, subject to certain qualifications and restrictions, may elect one    
time to increase the Base Rent, in order to receive additional OP Units or      
Common Stock. The Prior Owner of the Northgate Country Club has an additional   
two-year period to exercise the Performance Option following its election to    
construct the nine-hole expansion. The Performance Option for the Participating 
Leases may be exercised only if the current-year net operating income of the    
operator of the applicable Golf Course, inclusive of a capital replacement      
reserve, exceeds 113.5% of such Lessee's Lease Payment, after taking into       
account the increased amount of Base Rent. If the Performance Option is         
exercised, the Base Rent is increased by an amount calculated to be accretive to
the Company's Funds From Operations on a per share basis. Following exercise of 
the Performance Option, the adjusted Base Rent will be increased by the Base    
Rent Escalator each year for a period of five years. An operator's ability to   
exercise the Performance Option and the number of OP Units or Common Stock      
issuable to such Prior Owner in connection therewith, will depend on future     
operating results at the applicable Golf Course and therefore cannot be         
determined in advance.                                                          

PERFORMANCE OPTION FOR THE PARTICIPATING MORTGAGE.  The structure of the
Performance Option for the Participating Mortgage is similar to the Performance 
Option for the Participating Leases. Under the Performance Option for the       
Participating Mortgage, during years three though five of the Participating     
Mortgage the Innisbrook Resort Owner, subject to certain qualifications and     
restrictions, may elect one time to require the Company to make an additional   
advance (the "Performance Advance") under the Participating Mortgage. The       
Innisbrook Resort Owner will be required to purchase additional OP units with   
the Performance Advance. The Performance Option for the Participating Mortgage  
may be exercised only if the current-year net operating income of the Innisbrook
Resort, inclusive of a capital replacement reserve, exceeds 113.5% of such      
operator's Participating Mortgage obligation, after taking into account the     
increased amount of Base Interest. If the Performance Advance is made, the      
interest on the Performance Advance will be calculated to be accretive to the   
Company's Funds From Operations on a per share basis. Following exercise of the 
Performance Option for the Participating Mortgage, the adjusted Base Interest   
will be increased 3% per annum for five years. The Innisbrook Resort Owner's    
ability to exercise the Performance Option will depend on future operating      
results and therefore cannot be determined in advance.                          

FORMATION AND STRUCTURE 

GTA was incorporated in Maryland in November 1996 to take advantage of  
consolidation opportunities in owning golf courses. GTA has two wholly-owned    
subsidiaries, GTA GP and GTA LP, which exist solely to hold the Company's       
general and limited partnership interests in the Operating Partnership, the     
Company's operating subsidiary. The board of directors of each subsidiary is    
comprised of the executive officers of GTA. The Operating Partnership was formed
in Delaware in November 1996. GTA GP is the sole general partner of the         
Operating Partnership.                                                          

In February 1997, the Company raised net proceeds of approximately $73.0
million in its IPO and acquired its 10 Initial Courses from their Prior Owners. 
Each Initial Course was then leased back to an affiliate of its Prior Owner. The
Company believes that the substantial ownership interest of the Prior Owners and
operators in the Company, equal to approximately 54% prior to this Offering,    
aligns the interests of their affiliated Lessees with the interests of          
stockholders.                                                                   

Prior to the IPO, the Chairman of the Board, Chief Executive Officer and
President of the Company, W. Bradley Blair, II, served as the Executive Vice    
President and Chief Operating Officer of Legends Group, Ltd., which controls The
Legends Group, a leading golf course owner, developer and operator in the       
southeast and mid-Atlantic regions of the United States. Certain of the Lessees 
are affiliates of The Legends Group. Upon completion of the IPO, Mr. Blair      
resigned from Legends Group, Ltd. and no longer holds any interest in the golf  
operations of The Legends Group.                                                

    Seven of the Company's Initial Courses were acquired from The Legends Group.
As part of the Formation Transactions (as herein defined), the Company entered  
into an Option to Purchase and Right of First Refusal                           

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Agreement relating to golf courses owned, developed or acquired by The Legends  
Group. The Participating Leases with affiliates of The Legends Group (the       
"Legends Lessees") are cross-collateralized and cross-defaulted. Larry D. Young,
a director of the Company, is the majority owner of The Legends Group and the   
Legends Lessee.                                                                 

   Certain investors in the entities that contributed the Initial Golf Courses
to the Company at the IPO received certain benefits in connection with the IPO. 
See "Formation Transactions."                                                   

 OPERATING PARTNERSHIP.  GTA, through its wholly-owned subsidiaries GTA GP
and GTA LP, currently holds a 47.4% interest in the Operating Partnership (60.8%
after giving effect to this Offering). GTA GP is the sole general partner of the
Operating Partnership. GTA LP is a limited partner of the Operating Partnership.
The other limited partners include those Prior Owners who received OP Units in  
exchange for the contribution of their Golf Courses. Pursuant to the First      
Amended and Restated Agreement of Limited Partnership, which was entered into   
concurrently with the closing of the IPO, the limited partners do not have      
day-to-day control over the Operating Partnership. However, the limited partners
are entitled to vote on certain matters, including the sale of all or           
substantially all the Company's assets or the merger or consolidation of the    
Operating Partnership, which decisions require the approval of the holders of at
least 66.7% of the limited partnership interests in the Operating Partnership.  
Each of the limited partners (other than GTA LP) may exercise Redemption Rights 
for up to 50% of its OP Units beginning one year after the IPO (February 12,    
1998) and the remaining 50% two years thereafter for cash or, at the election of
the Company, for shares of Common Stock on a one-for-one basis. See "Partnership
Agreement -- Redemption Rights."                                                

The relationship after this Offering between GTA, its subsidiaries, the 
Operating Partnership, the Limited Partners (including many Prior Owners) and   
the Lessees is described in the following chart:                                

[ORGANIZATIONAL CHART OF THE COMPANY AND ITS AFFILIATES]

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DISTRIBUTION POLICY 

The Company intends to make regular quarterly distributions to its      
stockholders. The Company declared a quarterly distribution of $0.41 per share  
of Common Stock ($1.64 on an annualized basis) on October 15, 1997 to           
stockholders of record on October 27, 1997. Future distributions will be at the 
discretion of the Board of Directors based on the Company's actual results of   
operations, economic conditions, tax considerations (including those related to 
REITs) and other factors. In order to maintain its status as a REIT for federal 
income tax purposes, the Company currently is required to distribute at least   
95% of its annual taxable income. Holders of OP Units will receive distributions
on a per unit basis equal to the per share distributions to owners of Common    
Stock. See "Partnership Agreement."                                             

TAX STATUS

   The Company will elect to be taxed as a REIT under sections 856 through 860
of the Tax Code commencing with its taxable year ending December 31, 1997. If   
the Company qualifies for taxation as a REIT, with certain exceptions, the      
Company will not be subject to federal income tax at the corporate level on its 
taxable income that is distributed to its stockholders. A REIT is subject to a  
number of organizational and operational requirements, including a requirement  
that it distribute at least 95% of its annual taxable income. Failure to qualify
as a REIT will render the Company subject to federal income tax (including any  
applicable alternative minimum tax) on its taxable income at regular corporate  
rates and distributions to the stockholders in any such year will not be        
deductible by the Company. Although the Company does not intend to request a    
ruling from the Internal Revenue Service (the "Service") as to its REIT status, 
the Company has received the opinion of its legal counsel, O'Melveny & Myers    
LLP, as to its REIT status, which opinion is based on certain assumptions and   
representations and is not binding on the Service or any court. Even if the     
Company qualifies for taxation as a REIT, the Company may be subject to certain 
state and local taxes on its income and property. In connection with the        
Company's election to be taxed as a REIT, the Company's Charter imposes         
restrictions on the transfer of shares of Common Stock. The Company has adopted 
the calendar year as its taxable year. See "Risk Factors -- Real Estate         
Investment Trust and Partnership Qualification," "-- Limits on Changes in       
Control" and "-- Ownership Limit," "Federal Income Tax Considerations" and      
"Capital Stock -- Restrictions on Ownership."                                   

THE OFFERING

                                                        · Enlarge/Download Table
                                                                                        
Common Stock offered by the                                                             
 Company.......................... 3,000,000 shares (1)                                 

Common Stock and OP Units to be                                                         
 outstanding after completion of                                                        
 the Offering..................... 11,781,068 shares (1)(2)                             

Use of Proceeds................... To repay outstanding mortgage indebtedness under the 
                                   Line of Credit and for working capital, including the
                                   acquisition of additional golf courses               

American Stock Exchange symbol.... GTA                                                  

------------                                                                    

(1) Assumes the Underwriters' over-allotment option is not exercised. See       
"Underwriting."                                                         

(2) Includes 70,000 shares of restricted Common Stock issued to the Company's   
    officers, which shares are subject to vesting conditions. See "Management --
  Executive Compensation." Does not include an aggregate of 1,130,000 shares
 reserved for issuance pursuant to the Company's Stock Incentive Plans and
the Directors' Plan (each as herein defined), see "Management -- Stock  
  Incentive Plans" and "Management -- Directors' Plan," and does not include
  additional OP Units that may be issued pursuant to the Performance Option,
    see "The Company -- Business Strategies and Objectives -- Internal Growth --
Performance Option."                                                    

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SUMMARY FINANCIAL DATA

The following tables set forth (i) unaudited selected consolidated      
historical and pro forma financial information for the Company and The Legends  
Group and (ii) selected historical financial information for The Legends Group, 
the accounting acquiror, and for the Legends Lessee, the significant lessee. The
pro forma operating information is presented as if the Formation Transactions,  
this Offering and the acquisition of the Golf Courses acquired subsequent to the
IPO (the "Subsequent Acquisitions") had occurred as of January 1, 1996, and     
therefore incorporates certain assumptions that are included in the Notes to Pro
Forma Condensed Statements of Operations included elsewhere in this Prospectus. 
The pro forma balance sheet information is presented as if this Offering and the
Subsequent Acquisitions had occurred on June 30, 1997. The pro forma information
does not purport to represent what the Company's nor the Legends Group's        
financial position or results of operations actually would have been had the    
Formation Transactions, this Offering and the Subsequent Acquisitions, in fact, 
occurred on such date or at the beginning of the period indicated, or to project
the Company's or The Legends Group's financial position or results of operations
at any future date or for any future period.                                    

GOLF TRUST OF AMERICA, INC. 
UNAUDITED SUMMARY CONSOLIDATED FINANCIAL DATA 
(in thousands, except per share data) 

                                                        · Enlarge/Download Table

                                                                                                  PERIOD FROM    
                                                                                 SIX MONTHS    FEBRUARY 12, 1997 
                                                                   YEAR ENDED    ENDED JUNE      (INCEPTION OF   
                                                                  DECEMBER 31,       30,      OPERATIONS) THROUGH
                                                                      1996          1997         JUNE 30, 1997   
                                                                  -------------  -----------  -------------------
                                                                         (PRO FORMA)             (HISTORICAL)    
                                                                                                                 
OPERATING DATA:                                                                                                  
Revenue:                                                                                                         
  Participating Leases (1).......................................   $  15,949     $   9,033       $     5,859    
  Participating Mortgage.........................................       8,067         4,034               181    
  Other interest income..........................................      --            --                   448    
                                                                  -------------  -----------       ----------    
    Total revenue................................................      24,016        13,067             6,488    
                                                                  -------------  -----------       ----------    
Depreciation and amortization (1)................................       5,317         2,950             1,149    
General and administrative.......................................       2,097         1,300               910    
Interest expense.................................................         368           184               290    
                                                                  -------------  -----------       ----------    
    Total expenses...............................................       7,782         4,434             2,349    
                                                                  -------------  -----------       ----------    
Income before minority interest (1)..............................      16,234         8,633             4,139    
Minority interest (2)............................................       6,104         3,384             2,129    
                                                                  -------------  -----------       ----------    
Net income applicable to common stockholders.....................   $  10,130     $   5,249       $     2,010    
                                                                  -------------  -----------       ----------    
                                                                  -------------  -----------       ----------    
Net income per share of Common Stock.............................   $    1.42     $    0.73       $      0.50    
                                                                  -------------  -----------       ----------    
                                                                  -------------  -----------       ----------    
Weighted average shares of Common Stock outstanding..............       7,161         7,161             4,007    
                                                                  -------------  -----------       ----------    
                                                                  -------------  -----------       ----------    
CASH FLOW DATA:                                                                                                  
  Cash flows from operating activities (3).......................   $  21,551     $  11,583       $     3,578    
  Cash flows used in investing activities (4)....................        (719)         (359)         (116,497)   
  Cash flows from financing activities (5).......................      14,505         9,660           115,190    

OTHER DATA:                                                                                                      
  Funds From Operations (6)......................................   $  21,551     $  11,583       $     5,288    
  Cash Available for Distribution (6)............................   $  19,504     $  10,560       $     5,011    
  Weighted average Common Stock and OP Units outstanding.........      11,482        11,781             8,479    

                                                        · Enlarge/Download Table

                                                                                                 JUNE 30,         
                                                                                         ------------------------ 
                                                                                                         1997     
                                                                                                      ----------- 
                                                                                            1997      (HISTORICAL)
                                                                                         -----------              
                                                                                         (PRO FORMA)              
                                                                                                                  
BALANCE SHEET DATA:                                                                                               
  Investment in Golf Courses............................................................  $  87,599    $  61,724  
  Mortgage note receivable (7)..........................................................     61,680       61,680  
  Notes payable.........................................................................      4,325       43,900  
  Minority interest in Operating Partnership............................................     49,267       43,487  
  Total stockholders' equity............................................................    112,786       40,361  

(NOTES ON PAGE 20)                                                              

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THE LEGENDS GROUP GOLF COURSE OPERATIONS
UNAUDITED SUMMARY PRO FORMA FINANCIAL DATA
(in thousands)

                                                        · Enlarge/Download Table

                                                                                      SEASIDE    LEGENDS             
                                                                                      RESORTS      OF        TOTAL   
                                                               GOLF      HERITAGE     (OYSTER   VIRGINIA    LEGENDS  
                                                              LEGENDS    GOLF CLUB     BAY)        (8)       GOLF    
                                                             ---------  -----------  ---------  ---------  --------- 
                                                                                                                     
YEAR ENDED DECEMBER 31, 1996                                                                                         
OPERATING DATA:                                                                                                      
  Revenue from Golf Course operations....................... $   8,078   $   3,141   $   3,288  $     692  $  15,199 
  Other revenue.............................................     2,534         745         784        151      4,214 
                                                             ---------  -----------  ---------  ---------  --------- 
  Total revenue.............................................    10,612       3,886       4,072        843     19,413 
  Participating Lease payments (1)..........................     4,670       1,825       1,856        928      9,279 
  Other operating expenses (9)..............................     6,216       2,171       2,296      2,492     13,175 
                                                             ---------  -----------  ---------  ---------  --------- 
  Net income (loss)......................................... $    (274)  $    (110)  $     (80) $  (2,577) $  (3,041)
                                                             ---------  -----------  ---------  ---------  --------- 
                                                             ---------  -----------  ---------  ---------  --------- 
CASH FLOW DATA:                                                                                                      
  Cash flows from (used in) operating activities (10)....... $    (125)  $     (69)  $      40  $  (2,577) $  (2,731)
  Cash flows from investing activities (11).................    --          --          --         --         --     
  Cash flows from financing activities (12).................    --          --          --         --         --     

OTHER DATA:                                                                                                          
  EBITDA (13)............................................... $     (31)  $     (55)  $      59  $  (2,577) $  (2,604)

SIX MONTHS ENDED JUNE 30, 1997                                                                                       
OPERATING DATA:                                                                                                      
  Revenue from Golf Course operations....................... $   4,853   $   1,943   $   2,012  $   1,274  $  10,082 
  Other revenue.............................................     1,692         453         517        252      2,914 
                                                             ---------  -----------  ---------  ---------  --------- 
  Total revenue.............................................     6,545       2,396       2,529      1,526     12,996 
  Participating Lease payments (1)..........................     2,335         913         928      1,853      6,029 
  Other operating expenses (9)..............................     3,714       1,204       1,168      1,857      7,943 
                                                             ---------  -----------  ---------  ---------  --------- 
  Net income (loss)......................................... $     496   $     279   $     433  $  (2,184) $    (976)
                                                             ---------  -----------  ---------  ---------  --------- 
                                                             ---------  -----------  ---------  ---------  --------- 
CASH FLOW DATA:                                                                                                      
  Cash flows from (used in) operating activities (10)....... $     548   $     295   $     450  $  (2,184) $    (891)
  Cash flows from investing activities (11).................    --          --          --         --         --     
  Cash flows from financing activities (12).................    --          --          --         --         --     

OTHER DATA:                                                                                                          
  EBITDA (13)............................................... $     557   $     298   $     453  $  (2,184) $    (876)

(NOTES ON PAGE 20)                                                              

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THE LEGENDS GROUP 
SUMMARY COMBINED HISTORICAL FINANCIAL INFORMATION 
(in thousands)

                                                        · Enlarge/Download Table

                                                                                                SIX MONTHS ENDED   
                                                      YEAR ENDED DECEMBER 31,                       JUNE 30,       
                                       -----------------------------------------------------  -------------------- 
                                         1992       1993       1994       1995       1996       1996     1997(14)  
                                       ---------  ---------  ---------  ---------  ---------  ---------  --------- 
                                                                                                  (UNAUDITED)      
                                                                                                                   
FINANCIAL DATA:                                                                                                    
  Revenue from golf course                                                                                         
    operations.......................  $  11,724  $  13,455  $  14,371  $  14,619  $  15,199  $   8,641  $  10,082 
  Other revenue......................      2,931      3,438      4,725      3,823      4,214      2,284      2,914 
                                       ---------  ---------  ---------  ---------  ---------  ---------  --------- 
  Total revenue......................     14,655     16,893     19,096     18,442     19,413     10,925     12,996 
  Operating expenses(9)..............      8,895      9,882     10,083     10,322     13,556      5,757     12,540 
  Depreciation and amortization......      1,406      1,564      1,830      1,791      2,400      1,004        808 
  Interest expense...................        648        619        998      1,017      1,589        515        420 
                                       ---------  ---------  ---------  ---------  ---------  ---------  --------- 
  Income before equity in earnings of                                                                              
    the Operating Partnership........      3,706      4,828      6,185      5,312      1,868      3,649       (772)
  Equity in earnings of the Operating                                                                              
    Partnership(15)..................     --         --         --         --         --         --          1,916 
                                       ---------  ---------  ---------  ---------  ---------  ---------  --------- 
  Net income.........................  $   3,706  $   4,828  $   6,185  $   5,312  $   1,868  $   3,649  $   1,144 
                                       ---------  ---------  ---------  ---------  ---------  ---------  --------- 
                                       ---------  ---------  ---------  ---------  ---------  ---------  --------- 
BALANCE SHEET DATA:                                                                                                
  Investment in Golf Courses and                                                                                   
    related equipment................  $  17,425  $  16,663  $  19,301  $  33,099  $  35,060  $  34,738  $   1,083 
  Total assets.......................     20,484     22,719     24,649     42,300     49,804     49,458     22,019 
  Mortgages, notes payable and                                                                                     
    advances from affiliates and                                                                                   
    stockholders.....................     16,293     19,285     18,638     35,163     40,480     37,512      8,268 
  Capital lease obligations..........        332     --         --         --         --         --         --     
  Total owners' equity...............      2,086      2,263      3,772      6,328      7,174      9,976     11,000 

(NOTES ON PAGE 20)                                                              

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---------------                                                                 
 (1) Represents payments of Base Rent from the Lessees to the Company calculated
on a pro forma basis as if the beginning of the period presented was the
beginning of a lease year, except for Legends of Virginia, the Lessee of
  Stonehouse Golf Club and Royal New Kent, which courses opened in June 1996
    and August 1996, respectively. Pro forma Participating Lease revenue payable
by Legends of Virginia reflects only the periods during which such Golf 
Courses were actually operating.                                        

If Stonehouse Golf Club and Royal New Kent had been operating during the
entire period presented (i) Participating Lease revenue would have been 
   $1,847 higher for the year ended December 31, 1996, for a total of $17,796,
   (ii) depreciation and amortization would have been $580 higher for the year
ended December 31, 1996, for a total of $5,897, and (iii) income before 
minority interest for the year ended December 31, 1996 would have been  
$1,267 higher for a total of $17,501.                                   

   The pro forma information does not include estimates of Base Rent increases
    in the second year. Pro forma results for the six months ended June 30, 1997
 and actual results for the period from February 12, 1997 through June 30,
1997 include $109 of Participating Rent.                                

(2) Calculated as approximately 37.6%, 39.2% and 51.4% of the Operating       
Partnership's net income for the applicable period based on the OP Units
outstanding for the period not owned by the Company.                    

(3) Represents the Company's income before minority interest adjusted for     
   non-cash depreciation and amortization. Estimated pro forma cash flows from
operating activities excludes cash provided by (used in) operating      
activities due to changes in working capital resulting from changes in  
  current assets and current liabilities. The Company does not believe these
excluded items are material to cash flows from operating activities.    

(4) Pro forma cash flows used in investing activities represents the amount of
 the reserve which the Company will be required to make available annually
  under the Participating Leases to fund capital expenditures, calculated as
2.0% to 5.0% of Gross Golf Revenue at the Golf Courses. In addition to  
increases resulting from the Base Rent Escalator and payments of        
 Participating Rent, the Lessees generally are obligated to increase their
  lease payments each year in an amount equal to the increase in the capital
expenditure reserve from the prior year. Historical cash flows used in  
investing activities additionally reflects golf course acquisitions and 
mortgage note issuance.                                                 

(5) Pro forma cash flows used in financing activities represent estimated     
distributions to be paid based on the current quarterly dividend rate of
 $0.41 per share of Common Stock or per OP Unit and an aggregate of 11,482
and 11,781 shares of Common Stock and OP Units outstanding for the year 
ended December 31, 1996 and the six months ended June 30, 1997,         
respectively, and debt of $4,325.                                       

(6) Estimated Funds From Operations and Cash Available for Distribution are   
calculated as follows:                                                  

                                                        · Enlarge/Download Table

                                                                                                     PERIOD FROM FEBRUARY 12,
                                                                                                               1997          
                                                                                                          (INCEPTION OF      
                                                                YEAR ENDED        SIX MONTHS ENDED         OPERATIONS)       
                                                             DECEMBER 31, 1996     JUNE 30, 1997      THROUGH JUNE 30, 1997  
                                                             -----------------   ------------------  ------------------------
                                                                          (PRO FORMA)                      (HISTORICAL)      
                                                                                                                             
Income before minority interest.............................      $16,234             $ 8,633                 $4,139         
Depreciation and amortization...............................        5,317               2,950                  1,149         
                                                             -----------------     ----------                -------         
Funds From Operations.......................................       21,551              11,583                  5,288         
Adjustments:                                                                                                                 
  Noncash mortgage revenue..................................       (1,328)               (664)                   (30)        
  Estimated capital expenditures............................         (719)               (359)                  (247)        
                                                             -----------------     ----------                -------         
Cash Available for Distribution.............................       19,504              10,560                  5,011         
Additional Base Rent for courses not operational during                                                                      
 entire period..............................................        1,847             --                   --                
                                                             -----------------     ----------                -------         
Adjusted Cash Available for Distribution....................      $21,351             $10,560                 $5,011         

  In accordance with the resolution adopted by the Board of Governors of the
National Association of Real Estate Investment Trusts, Inc. ("NAREIT"), 
  Funds From Operations represents net income (loss) (computed in accordance
    with generally accepted accounting principles ("GAAP")), excluding gains (or
  losses) from debt restructuring or sales of property, plus depreciation of
real property, and after adjustments for unconsolidated partnership and 
joint ventures. Funds From Operations should not be considered as an    
  alternative to net income or other measurements under GAAP as an indicator
of operating performance or to cash flows from operating investing or   
  financial activities as a measure of liquidity. Funds From Operations does
not reflect working capital changes, cash expenditures for capital      
improvements or principal payments on indebtedness. The Company believes
that Funds From Operations is helpful to investors as a measure of the  
   performance of an equity REIT, because along with cash flows from operating
activities, financing activities and investing activities, it provides  
  investors with an understanding of the ability of the Company to incur and
service debt and make capital expenditures. Compliance with the NAREIT  
    definition of Funds From Operations is voluntary. Accordingly, the Company's
calculation of Funds From Operations in accordance with the NAREIT      
definition may be different than similarly titled measures used by other
   REITs. See "Distribution Policy." Pro forma income before minority interest
for the year ended December 31, 1996, reflects base rent from Legends of
Virginia for the period during which the Golf Courses it leases from the
 Company, Stonehouse Golf Club and Royal New Kent, were actually operating
(Stonehouse Golf Club opened in June 1996 and Royal New Kent opened in  
August 1996). The adjustment above reflects additional Base Rent payable
    during the Golf Courses' initial year of operations (i.e., to reflect a full
year's initial Base Rent). Noncash mortgage revenue represents the      
  difference between interest revenue on the Participating Mortgage reported
by the Company in accordance with GAAP and the actual cash payment to be
    received by the Company. See "The Golf Courses -- The Participating Mortgage
-- Fixed Interest Rate Escalation."                                     

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The Participating Leases require the Company to reserve annually between
    2.0% and 5.0% of the Gross Golf Revenues of the Golf Courses to fund capital
expenditures. Any capital expenditures in excess of such amounts will be
funded by the Lessees.                                                  

(7) Represents amounts outstanding under the Participating Mortgage exclusive 
of the amounts used to acquire OP Units and shares of the Common Stock. 

(8) Legends of Virginia financial data reflects partial period operations at  
   both Stonehouse Golf Club and Royal New Kent, which opened in June 1996 and
   August 1996, respectively. Participating Lease payments reflect the periods
in which the Golf Courses were actually operating.                      

(9) Represents operating costs and expenses, general and administrative,      
    repairs and maintenance, utilities, marketing and management fees. Operating
Expenses for The Legends Group for the six months ended June 30, 1997   
includes Base Rent payments for the period commencing February 12, 1997.

(10) Represents pro forma income adjusted for non-cash depreciation and         
amortization. Estimated pro forma cash flows from operating activities  
  excludes cash provided by (used in) operating activities due to changes in
working capital resulting from changes in current assets and current    
   liabilities. The Company does not believe these excluded items are material
to cash flows from operating activities.                                

(11) Cash flows from investing activities consists principally of capital       
 improvements to the Golf Courses. As such improvements are expected to be
funded through a capital expenditure reserve funded by the Company, cash
    flows from investing activities funded by the Lessees are not expected to be
material.                                                               

(12) Cash flows from financing activities primarily includes transactions with  
the Prior Owners and borrowings and repayments on loans. Such cash flows
have been excluded in the determination of cash flows from financing    
    activities as the Company does not believe these excluded items are material
to cash flows from financing activities.                                

(13) EBITDA is defined as operating income before interest, income taxes,       
depreciation and amortization. Management considers EBITDA to be an     
  important measure of the cash flows from operations of the Lessees (before
payment of debt service obligations and non-cash depreciation charges). 
EBITDA does not represent cash generated from operating activities in   
  accordance with GAAP and should not be considered as an alternative to net
income as an indication of financial performance or to cash flows from  
operating activities as a measure of liquidity.                         

(14) Information presented includes the Prior Owners and the Legends Lessees    
    combined, as the operations were transferred to the Legends Lessee effective
February 12, 1997. Summary unaudited operating results for the Legends  
  Lessees for the period February 12, 1997 (inception) through June 30, 1997
   included in The Legends Group for the six months ended June 30, 1997 are as
follows:                                                                

                                                        · Enlarge/Download Table
                                                                                                           
Gross golf revenue............................................................................... $   9,164
Other revenue....................................................................................     2,496
                                                                                                  ---------
  Total Revenue..................................................................................    11,660
Operating expenses...............................................................................     6,368
Lease Payments...................................................................................     4,629
Depreciation and amortization....................................................................        37
                                                                                                  ---------
  Total Expenses.................................................................................    11,034
                                                                                                  ---------
Net income....................................................................................... $     626
                                                                                                  ---------
                                                                                                  ---------

(15) Equity in earnings of the Operating Partnership reflects the Prior Owner's 
    proportionate interest in the earnings of the Operating Partnership based on
its limited partnership interest. These amounts do not represent cash   
distributions to the Legends Group Prior Owner. Earnings reflect the    
interest of the Prior Owner and not the Legends Lessee, and any         
   distributions payable to the Legends Group Prior Owner will not necessarily
be available to the Legends Lessee to make Lease Payments.              

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RISK FACTORS

AN INVESTMENT IN THE COMMON STOCK INVOLVES VARIOUS RISKS. PROSPECTIVE   
INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS IN CONJUNCTION   
WITH THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS BEFORE PURCHASING SHARES
OF COMMON STOCK IN THIS OFFERING.                                               

WHEN USED IN THIS PROSPECTUS, THE WORDS "MAY," "WILL," "EXPECT,"        
"ANTICIPATE," "CONTINUE," "ESTIMATE," "PROJECT," "INTEND" AND SIMILAR           
EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS WITHIN THE      
MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION   
21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, REGARDING EVENTS,       
CONDITIONS AND FINANCIAL TRENDS THAT MAY AFFECT THE COMPANY'S FUTURE PLANS OF   
OPERATIONS, BUSINESS STRATEGY, RESULTS OF OPERATIONS AND FINANCIAL POSITION.    
PROSPECTIVE INVESTORS ARE CAUTIONED THAT ANY FORWARD-LOOKING STATEMENTS ARE NOT 
GUARANTEES OF FUTURE PERFORMANCE AND ARE SUBJECT TO RISKS AND UNCERTAINTIES AND 
THAT ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE INCLUDED WITHIN THE        
FORWARD-LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. FACTORS THAT COULD   
CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE  
DESCRIBED BELOW, UNDER THE HEADING "MANAGEMENT'S DISCUSSION AND ANALYSIS OF     
FINANCIAL CONDITION AND RESULTS OF OPERATIONS" AND ELSEWHERE IN THIS PROSPECTUS.

USE OF ADJUSTMENTS AND PROJECTIONS IN ESTABLISHING LEASE PAYMENTS AND           
PARTICIPATING MORTGAGE PAYMENTS                                             

 The Company generally values golf courses, and establishes Lease Payments
(and established the Participating Mortgage Payments), based on selected        
adjustments to historical operating results or estimates of future performance  
that the Company believes are appropriate. These adjustments include projected  
increases in revenues from golf course operations and elimination of certain    
operating expenses. If such adjustments are not appropriate, or if estimates of 
future performance are not met, a Lessee or the Innisbrook Resort Owner may not 
be able to make its scheduled payments to the Company. Failure of an operator to
make such a payment would have a material adverse effect on the operations of   
the Company. Estimates of future performance were particularly significant with 
respect to two recently-opened Virginia courses and the Innisbrook Resort. In   
addition, although the Westin Guaranty is designed to supplement results of     
operations at the Innisbrook Resort, it is for a limited period and limited     
amount and may be insufficient to ensure receipt by the Company of Base Interest
under the Participating Mortgage.                                               

DEPENDENCE ON PAYMENTS UNDER THE PARTICIPATING LEASES AND THE PARTICIPATING     
MORTGAGE;                                                                   
DIFFICULTY OF FINDING REPLACEMENT OPERATORS                                 

The Company's ability to make distributions to stockholders will depend 
primarily upon the ability of the Lessees to make Lease Payments under          
Participating Leases and of the Innisbrook Resort Owner to make interest        
payments under the Participating Mortgage (which, in both cases, will be        
dependent primarily on the Golf Course operators' ability to generate sufficient
revenues in excess of operating expenses from the Golf Courses). Any failure or 
delay by a Lessee or the Innisbrook Resort Owner in making such payments may    
affect adversely the Company's ability to make anticipated distributions to     
stockholders. Such failure or delay may be caused by reductions in revenue from 
the Golf Courses or in the net operating income of a Lessee or otherwise. In    
addition, the Lessees are recently-organized limited purpose entities and have  
nominal capitalization. Although failure on the part of a Lessee materially to  
comply with the terms of its Participating Lease would give the Company the     
right to terminate such Participating Lease, recover any OP Units pledged as a  
security deposit, repossess the applicable Golf Course and enforce the Lease    
Payment obligations under the Participating Lease, the Company then would be    
required to find another lessee to lease such Golf Course or risk losing its    
ability to elect or maintain REIT status, as applicable. It may be difficult for
the Company to find suitable replacement lessees following a default,           
particularly in instances where the prior lessee was not able to operate        
profitably. In such instances the Company would likely be required to reduce the
Base Rent and consequently the Cash Available for Distribution on a per share   
basis would be reduced.                                                         

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DURATION OF LEASE; NO RIGHT TO TERMINATE PARTICIPATING LEASES ON A SALE         

   The Participating Leases, with extensions, may have terms of up to 40 years
and do not terminate when a Golf Course is sold. It may therefore be more       
difficult to sell a Golf Course, and the value to a prospective buyer, and      
therefore the price paid to the Company for a Golf Course, may be less than if  
the Participating Leases were to terminate upon a sale. See "The Golf Courses --
The Participating Leases."                                                      

NEED FOR CERTAIN CONSENTS FROM THE LIMITED PARTNERS                             

   Under the Partnership Agreement (as herein defined) the holders of at least
66.7% of the interests in the Operating Partnership, including the Company which
currently owns a 60.8% interest in the Operating Partnership (after giving      
effect to this Offering), must approve a sale of all or substantially all of the
assets of the Operating Partnership or a merger or consolidation of the         
Operating Partnership. Larry D. Young, majority owner of The Legends Group and a
director of the Company, and his affiliates own a 31.7% interest in the         
Operating Partnership (after giving effect to this Offering) and thus           
effectively hold veto power over such extraordinary transactions. See           
"Partnership Agreement -- Management."                                          

LACK OF CONTROL OVER DAY-TO-DAY OPERATIONS AND MANAGEMENT OF THE GOLF COURSES   

  In order to qualify as a REIT for federal income tax purposes, the Company
may not operate the Golf Courses or participate in the decisions affecting the  
operations of the Golf Courses. Each of the Lessees and the Innisbrook Resort   
Owner controls the operations of the respective Golf Courses. The Participating 
Leases have initial terms of 10 years and generally may be extended at the      
option of each Lessee for up to six five-year renewal terms. The Company will   
not have the authority to require any operator to operate the Golf Courses in a 
particular manner, or to govern any particular aspect of their operation (e.g., 
setting green fees), except as set forth in the Participating Leases or the     
Participating Mortgage. Thus, even if the Company believes an operator is       
operating a Golf Course inefficiently or in a manner that does not result in a  
maximization of Participating Rent or Participating Interest to the Company and,
therefore, does not increase Cash Available for Distribution to the             
stockholders, the Company may not require an operator to change its method of   
operation. The Company is limited to seeking redress only if a operator violates
the terms of the Participating Lease or the Participating Mortgage, as          
applicable, in which case the Company's primary remedy is to terminate the      
Participating Leases or the Participating Mortgage as applicable and seek to    
recover damages from such operator. If a Participating Lease is terminated, the 
Company will be required to find another lessee or risk losing its ability to   
elect or maintain REIT status, as applicable. See "The Golf Courses -- The      
Participating Leases."                                                          

THE PARTICIPATING MORTGAGE                                                      

DEFAULT ON PARTICIPATING MORTGAGE                                           

 A default by the Innisbrook Resort Owner under the Participating Mortgage
could materially and adversely affect the Company's results from operations. A  
default under the Participating Mortgage may require the Company to become      
involved in expensive and time-consuming proceedings, including bankruptcy,     
reorganization or foreclosure proceedings, in an attempt to recover some portion
or all of its investment. It is anticipated that the resort property underlying 
the Participating Mortgage will be the primary source of any recovery for the   
Company. Because of the Company's status as a REIT, the Company may not operate 
the Innisbrook Resort in the event of foreclosure. Accordingly, in the event of 
a foreclosure, the Company will be materially dependent upon (i) its ability to 
lease the Innisbrook Resort on favorable economic terms and (ii) the value of   
the real property underlying the Participating Mortgage, each of which may be   
affected by numerous factors outside the control of the Company. See "--        
Dependence on Payments Under the Participating Leases; Difficulty of Finding    
Replacement Lessees."                                                           

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LACK OF AMORTIZATION OF PARTICIPATING MORTGAGE                              

The Participating Mortgage does not provide for the amortization of     
principal during its term. As a result, the entire principal balance of the     
Participating Mortgage will be due at its maturity. Failure to amortize the     
principal balance of the Participating Mortgage may increase the risk of a      
default during the term, and at maturity, of the Participating Mortgage. A      
default under the Participating Mortgage would have a material adverse effect on
the operations of the Company.                                                  

GOLF INDUSTRY RISKS                                                             

OPERATING RISKS                                                             

  The Golf Courses will be subject to all operating risks common to the golf
industry. These risks include, among other things (i) increases in operating    
costs due to inflation and other factors, which increases may not be offset by  
increased dues and fees; (ii) dependence on tourism, particularly for the Resort
Courses, which may fluctuate and is seasonal; and (iii) adverse effects of      
general and local economic conditions. These factors could adversely affect the 
Golf Course operators' ability to generate revenues and to make payments under  
the Participating Leases and the Participating Mortgage and, in turn, the       
Company's ability to make expected distributions to the Company's stockholders. 

COMPETITION; SUPPLY OF GOLF COURSES                                         

The Company's Golf Courses face competition for golfers from other golf 
courses. A substantial number of new golf courses have opened in recent years   
and a number of new courses currently are under development, or planned for     
development including golf courses located near the Golf Courses. These new golf
courses could increase the competition faced by one or more of the Golf Courses 
and reduce the rounds played and revenues associated with one or more of the    
Golf Courses. Any such decrease in revenues may adversely affect the net        
operating income of a Golf Course operator and, therefore, its ability to make  
its scheduled payments to the Company.                                          

INVESTMENT IN SINGLE INDUSTRY                                               

  The Company's current strategy is to acquire only golf courses and related
facilities. As a result, the Company will be subject to risks inherent in       
investments in a single industry. The effects on Cash Available for Distribution
to stockholders resulting from a downturn in the golf industry will be more     
pronounced than if the Company had diversified its investments.                 

SEASONALITY                                                                 

 The golf industry is seasonal. Seasonal variations in revenue at the Golf
Courses may require the Golf Course operators to supplement revenue at the      
applicable Golf Course to make scheduled payments to the Company. Failure of a  
Golf Course operator to manage properly its cash flow may result in such        
operator having insufficient cash to make its scheduled payments to the Company 
during low seasons and, therefore, adversely affect Cash Available for          
Distribution to stockholders.                                                   

ADVERSE WEATHER CONDITIONS                                                  

Several climatological factors beyond the control of the Golf Course    
operators may influence the revenues at the Golf Courses, including adverse     
weather such as hurricanes, heat waves, frosts and floods. In the event of      
adverse weather or destruction of the turf grass at a Golf Course, the number of
rounds played at such Golf Course could decrease, which could have a negative   
impact on any Participating Rent or Participating Interest received from the    
affected Golf Course and the ability of the applicable Golf Course operator to  
make its scheduled payments to the Company. The 10 Golf Courses in the Myrtle   
Beach, Tampa and Gulf Shores areas are susceptible to damage from hurricanes,   
which damage (including loss of revenue) is not generally insurable             

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at commercially reasonable rates. Consequently, a hurricane may adversely affect
both the value of the Company's investment in a particular Golf Course as well  
as the ability of the operator of such Golf Course to make its scheduled        
payments to the Company. Additionally, hurricanes may damage local              
accommodations such as hotels and condominiums, thereby limiting play,          
particularly at the Company's Resort Courses.                                   

FACTORS AFFECTING GOLF PARTICIPATION                                        

The success of efforts to attract and retain members at private country 
clubs and the number of rounds played at public golf courses historically has   
been dependent upon discretionary spending by consumers, which may be adversely 
affected by regional and economic conditions. A decrease in the number of       
golfers or their rates of participation or in consumer spending on golf could   
have an adverse effect on the Gross Golf Revenue generated per Golf Course and, 
therefore, the Lease Payments to be paid under the Participating Leases or the  
interest payable under the Participating Mortgage. For the period 1991 through  
1996 golf participation decreased by 0.3%, according to NGF.                    

COURSE CONDITIONS                                                           

 General turf grass conditions must be satisfactory to attract play on the
Golf Courses. Severe weather or other factors, including disease and insect     
infestation, could adversely affect the turf grass conditions at the Golf       
Courses. Turf grass conditions at the Golf Courses also depend to a large extent
on the quality and quantity of water available. The quality and quantity of     
water available is affected by various factors, many of which are beyond the    
control of the Company. There can be no assurance that certain conditions,      
including drought, governmental regulation or environmental concerns, which     
could adversely affect the supply of water to a particular Golf Course, may not 
arise in the future.                                                            

DEPENDENCE UPON KEY PERSONNEL                                                   

The Company's success depends to a large extent upon the experience and 
abilities of its founders W. Bradley Blair, II, who serves as the Company's     
Chief Executive Officer and President, David J. Dick, who serves as Executive   
Vice President, and Scott D. Peters, who serves as Senior Vice President and    
Chief Financial Officer. See "Management -- Directors and Executive Officers."  
The loss of the services of any of these individuals could have a material      
adverse effect on the Company, its operations and its business prospects. See   
"Certain Relationships and Transactions -- Employment Agreements." The Company's
success is also dependent upon its ability to attract and retain qualified      
personnel.                                                                      

REAL ESTATE INVESTMENT TRUST AND PARTNERSHIP QUALIFICATION                      

   The Company operates and intends to continue to operate so as to qualify as
a REIT under the Tax Code. Although the Company believes that it is so organized
and operates in such a manner and has received a favorable opinion of its legal 
counsel, O'Melveny & Myers LLP, as to its REIT status (which opinion is based on
certain assumptions and representations), no assurance can be given that the    
Company will qualify or remain qualified as a REIT. Qualification as a REIT     
involves the application of highly technical and complex Tax Code provisions for
which there are only limited judicial or administrative interpretations. The    
complexity of these provisions and of the applicable income tax regulations that
have been promulgated under the Tax Code (the "Treasury Regulations") is greater
in the case of a REIT that holds its assets in partnership form. The            
determination of various factual matters and circumstances not entirely within  
the Company's control may affect its ability to qualify as a REIT. In addition, 
no assurance can be given that legislation, new regulations, administrative     
interpretations or court decisions will not significantly change the tax laws   
with respect to qualification as a REIT or the federal income tax consequences  
of such qualification. See "Federal Income Tax Considerations."                 

 If the Company were to fail to qualify as a REIT in any taxable year, the
Company would not be allowed a deduction for distributions to stockholders in   
computing taxable income and would be subject to federal income                 

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tax on its taxable income at regular corporate rates. Unless entitled to relief 
under certain statutory provisions, the Company would also be disqualified from 
treatment as a REIT for the four taxable years following the year during which  
qualification was lost. As a result, the Cash Available for Distribution to the 
Company's stockholders would be reduced for each of the years involved. Although
the Company currently operates and intends to continue to operate in a manner   
designed to qualify as a REIT, it is possible that future economic, market,     
legal, tax or other considerations may cause the Company to fail to qualify as a
REIT or may cause the Board of Directors to revoke the REIT election. See       
"Federal Income Tax Considerations."                                            

The Operating Partnership has been structured to be classified as a     
partnership for federal income tax purposes. If the Service were to challenge   
successfully the tax status of the Operating Partnership as a partnership for   
federal income tax purposes, the Operating Partnership would be treated as an   
association taxable as a regular corporation. In such event, the character of   
the Company's assets and items of gross income would change and preclude the    
Company from satisfying the asset tests and possibly the income tests (imposed  
by the Tax Code as discussed below) and, in turn, would prevent the Company from
qualifying as a REIT. See "Federal Income Tax Considerations -- Taxation of the 
Company -- Requirements for Qualification." In addition, the imposition of a    
corporate income tax on the Operating Partnership would reduce the amount of    
Cash Available for Distribution to the Company and its stockholders. See        
"Federal Income Tax Considerations -- Tax Aspects of the Operating Partnership."

RISKS RELATING TO CONSTRUCTION FINANCING                                        

    The Company has agreed to fund certain additional construction at certain of
the Golf Courses and anticipates that it may make other construction loans,     
generally either (i) as financing that repays constructions costs, or (ii) where
the loan is secured by property with a pre-construction value that is within the
Company's investment guidelines. Construction loans often involve a higher      
degree of risk than other lending because, among other reasons, (i) repayment   
may be dependent upon successful completion of the project, (ii) the project, as
constructed or rehabilitated, may lack any operating history upon which to base 
the loan's underwriting, (iii) estimating construction costs and timing is      
difficult, (iv) construction costs may exceed budgeted amounts and (v) timing   
delays may occur.                                                               

CERTAIN GOLF COURSES WITH LIMITED OPERATING HISTORY                             

  The two Virginia Golf Courses recently opened and have a limited operating
history. The Base Rent for these Golf Courses is based on estimates of Gross    
Golf Revenue and net operating income and constitutes a substantial portion of  
the Company's pro forma Lease revenue. These Golf Courses may not achieve such  
anticipated Gross Golf Revenues or net operating income and, in that case, the  
Lessees of such Golf Courses may be unable to make their Lease Payments to the  
Company.                                                                        

LIMITED OPERATING HISTORY                                                       

   The Company was recently organized and has limited operating history. There
can be no assurance that the Company will be able to generate sufficient revenue
from operations to make anticipated distributions to stockholders. The Company  
also is subject to the risks generally associated with the formation of any new 
business. The Company's management has limited experience operating a public    
company or a REIT and limited experience working together.                      

ADVERSE EFFECT OF SHARES AVAILABLE FOR FUTURE ISSUANCE AND SALE ON MARKET PRICE 
OF COMMON STOCK                                                             

  Sales of a substantial number of shares of Common Stock, or the perception
that such sales could occur, may affect adversely prevailing market prices for  
the Common Stock. In addition to the shares of Common Stock currently           
outstanding and the Shares offered by the Company in this Offering, an aggregate
of 4,620,313 OP Units will be outstanding (excluding OP Units held by           
subsidiaries of GTA) following completion of this Offering, including an        
aggregate of 4,135,356 OP Units issued in connection with the Formation         
Transactions,                                                                   

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see "The Formation Transactions". Fifty percent of the OP Units (I.E., 2,310,157
OP units) may be tendered for redemption by the holders of such OP Units at any 
time after February 12, 1998, and the remaining 50% of such OP Units may be     
tendered for redemption at any time after February 12, 1999, for cash or, at the
Company's option, for shares of Common Stock on a one-for-one basis. See "Shares
Available for Future Sale." At the conclusion of the periods described above,   
the shares of Common Stock issuable upon redemption of such OP Units may be sold
in the public market pursuant to a shelf registration statement that the Company
is obligated to file with respect to the issuance or resale of such shares, or  
pursuant to any available exemptions from registration. The Company also has    
granted the OP Unit holders certain "piggyback" registration rights commencing  
on February 12, 1998, subject to the requirement that each such holder agree not
to sell any of its redeemed shares not included in such piggyback offering      
during the week prior to, and the month following, such piggyback offering. See 
"Shares Available for Future Sale -- Registration Rights."                      

The Company's acquisition strategy depends in large part on access to   
additional capital through sales and issuances of equity securities, including  
OP Units. The market price of the Common Stock may be adversely affected by the 
availability for future sale and issuance of shares of Common Stock that may be 
issued upon redemption of the OP Units as well as any additional OP Units issued
in future acquisitions or in connection with a Lessee's exercise of the Lessee  
Performance Option. See "The Company -- Acquisitions and Expansions." No        
predictions can be made as to the effect, if any, that future sales of shares,  
or the perception that such sales could occur, will have on the price of the    
Common Stock.                                                                   

RISKS RELATED TO THE COMPANY'S GROWTH STRATEGY                                  

COMPETITION FOR ACQUISITIONS                                                

    The Company competes for golf course acquisition opportunities with entities
organized for purposes substantially similar to the Company's objectives as well
as other purchasers of golf courses. From time to time the Company may compete  
for such golf course acquisition opportunities with entities having             
substantially greater financial resources and a broader geographic knowledge    
base than the Company. These entities may also be able to accept more risk than 
the Company prudently can manage. Thus, competition may reduce the number of    
suitable golf course acquisition opportunities available to the Company. See    
"The Golf Courses -- Competition."                                              

POSSIBLE UNAVAILABILITY OF CAPITAL                                          

 The success of the Company's growth strategy depends, in large part, upon
its continuing access to capital necessary to acquire additional golf courses.  
There can be no assurance that the Company's use of excess cash flow, borrowings
or subsequent issuances of Common Stock, OP Units or other securities will be   
sufficient to raise such necessary capital.                                     

INABILITY TO MANAGE GROWTH EFFECTIVELY                                      

The Company's success will depend upon the ability of each operator     
effectively to manage all of its Golf Courses, as well as the ability of the    
Company to continue to select an appropriate lessee for each additional Golf    
Course it acquires. There can be no assurance that the current operators or     
future lessees will operate efficiently and, if not, Cash Available for         
Distribution to stockholders could be affected adversely.                       

CONCENTRATION OF INVESTMENTS                                                

Five of the Golf Courses are located in the Myrtle Beach, South Carolina
area and five of the Golf Courses are located in the Tampa, Florida area. The   
concentration of the Company's investments in these areas leaves the Company    
vulnerable to regionally adverse events or conditions such as competition,      
hurricanes and other weather conditions, overbuilding and economic recession. If
the Myrtle Beach or Tampa regions are subject to such events or conditions, the 
Company's Cash Available for Distribution will be more adversely affected that  
it would have been if the Company's investments were more geographically        
diverse.                                                                        

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RISKS OF LEVERAGE; NO LIMITATIONS ON INDEBTEDNESS                               

   The Company's Charter does not limit its ability to incur indebtedness. The
Company may borrow under the Line of Credit or from other lenders in the future,
or may issue corporate debt securities in public or private offerings. Certain  
of such additional borrowings may be secured by the Golf Courses owned by the   
Company. See "Management's Discussion and Analysis of Financial Condition and   
Results of Operations -- Liquidity and Capital Resources" and "Policies and     
Objectives with Respect to Certain Activities -- Financing." The Company has    
agreed to maintain up to $4.3 million of indebtedness for a period of up to 10  
years following the IPO to accommodate a Prior Owner's efforts to minimize      
certain adverse tax consequences from the contribution of one of the Initial    
Courses to the Company. In the event that the Company fails to maintain such    
indebtedness, the Company will be liable for any resulting income tax           
liabilities to the Prior Owner.                                                 

There can be no assurance that the Company, upon the incurrence of debt,
will be able to meet its debt service obligations and, to the extent that it    
cannot, the Company risks the loss of some or all of its assets, including any  
Golf Courses securing such debt, to foreclosure, which could result in a        
financial loss to the Company. Adverse economic conditions could result in      
higher interest rates on variable rate debt, including borrowings under the Line
of Credit, which could decrease Cash Available for Distribution and increase the
risk of loss upon a sale or from a foreclosure.                                 

LIMITS ON CHANGES IN CONTROL                                                    

The restrictions on the ownership of outstanding shares of Common Stock 
intended to ensure compliance with certain requirements related to continued    
qualification of the Company as a REIT and restrictions on changes in control   
contained in the Company's Charter and Bylaws, including a staggered Board of   
Directors and the ability of the Board of Directors to issue preferred stock    
without stockholder approval, may have the effect of inhibiting a change in     
control of the Company, even where such a change of control could be beneficial 
to the Company's stockholders. See also "-- Anti-takeover Effect of Certain     
Provisions of Maryland Law and the Company's Charter and Bylaws."               

ADVERSE EFFECT OF INCREASE IN MARKET INTEREST RATES                             

One of the factors that may influence the price of the Common Stock in  
public trading markets will be the annual yield from distributions by the       
Company on the Common Stock as compared to yields on other financial            
instruments. Thus, an increase in market interest rates will result in higher   
yields on other financial instruments, which could adversely affect the market  
price of the Common Stock. The Company finances a portion of its operations     
through its Line of Credit, which bears interest at a floating rate. The        
Participating Mortgage bears interest at a fixed rate and the Participating     
Leases have fixed rent payments (subject to certain adjustments). Accordingly,  
increases in interest payable by the Company may not be reflected in interest   
received under the Participating Mortgage or rent received under the            
Participating Leases, exposing the Company to the risk of rises in market       
interest rates. A significant rise in interest rates could affect adversely the 
ability of the Company to make distributions to stockholders.                   

REAL ESTATE INVESTMENT RISKS                                                    

GENERAL                                                                     

The Company's current holdings are subject, and any acquisitions of     
additional golf courses will be subject, to risks typically associated with     
investments in real estate. Such risks include the possibility that the Golf    
Courses and any additional golf courses will generate rent and capital          
appreciation, if any, at rates lower than those anticipated or will yield       
returns lower than those available through other investments. Income from the   
Golf Courses may be affected by many factors, including changes in government   
regulation, general or local economic conditions, the available local supply of 
golf courses, a decrease in the number of golfers, adverse weather conditions or
other factors.                                                                  

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ILLIQUIDITY OF REAL ESTATE                                                  

   Real estate investments are relatively illiquid. The ability of the Company
to vary its portfolio in response to changes in economic and other conditions is
limited. The ground lessor of the Oyster Bay Golf Course has a right of first   
refusal to acquire such Golf Course upon any proposed sale of such Golf Course  
by the Company. In addition, each Lessee generally has a right of first offer to
acquire the Golf Course(s) leased by it in the event of a proposed sale by the  
Company. The right of first offer is void in the event of a default by the      
Lessee under the Participating Lease. The three courses located at the Legends  
Resort -- Heathland, Moorland and Parkland -- are subject to conservatory       
easements that prohibit developments other than golf courses on the property,   
limit the ability to materially modify the existing layouts at such Golf Courses
and require that such Golf Courses be open for public play. In the event that a 
sale of a Golf Course will result in a taxable gain to the Prior Owner thereof, 
the Company has agreed to use reasonable efforts to structure such a sale as a  
tax-deferred exchange. All of these factors may make it more difficult to       
transfer a Golf Course even where such transfer may be in the best interests of 
the Company.                                                                    

ENVIRONMENTAL MATTERS                                                       

Operations at the Golf Courses involve the use and storage of various   
hazardous materials such as herbicides, pesticides, fertilizers, motor oil and  
gasoline. Under various federal, state and local laws, ordinances and           
regulations, an owner or operator of real property may become liable for the    
costs of removal or remediation of certain hazardous substances released on or  
in its property. Such laws often impose such liability without regard to whether
the owner or operator knew of, or was responsible for, the release of such      
hazardous substances. The presence of such substances, or the failure to        
remediate such substances properly, may adversely affect the owner's ability to 
sell such real estate or to borrow using such real estate as collateral.        
Although all of the Golf Courses have been subjected to a Phase I environmental 
audit (which does not involve invasive procedures, such as soil sampling or     
ground water analysis) by an independent environmental consultant, no assurance 
can be given that these reports audits all potential environmental liabilities, 
that no prior or adjacent owner created any material environmental condition not
known to the Company or the independent consultant or that future uses or       
conditions (including, without limitation, changes in applicable environmental  
laws and regulations) will not result in imposition of environmental liability  
to the Company. While the Participating Leases and Participating Mortgage       
provide that the operators will indemnify the Company for certain potential     
environmental liabilities at the Golf Courses, the current operators have only  
nominal capitalization. See "The Golf Courses -- Government Regulation."        

UNINSURED LOSSES                                                            

 The Participating Leases and the Participating Mortgage require that each
operator maintains insurance with respect to each of the Golf Courses it        
operates, including comprehensive liability, fire, flood (but only to the extent
comparable golf courses in the area carry such insurance and such insurance is  
available at commercially reasonable rates) and extended coverage insurance.    
There are, however, certain types of losses (such as from hurricanes, floods or 
earthquakes) that may be either uninsurable or not economically insurable.      
Should an uninsured loss occur, the Company could lose both its invested capital
in and anticipated profits from the applicable Golf Course. See "The Golf       
Courses -- The Participating Leases." The Participating Mortgage provides for   
similar insurance requirements.                                                 

GROUND LEASE                                                                

   One of the Golf Courses, Oyster Bay, is operated pursuant to a ground lease
with a remaining term of approximately 35 years. In the event of a default by   
the Company under the ground lease, the ground lessor may terminate the ground  
lease subject to certain terms and conditions. If the ground lease is terminated
or is not renewed, the Company would lose its investment in the Oyster Bay Golf 
Course.                                                                         

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CONFLICTS OF INTEREST                                                           

SALE OF GOLF COURSES                                                        

 One of the directors of the Company and his affiliates have an unrealized
gain in their interests in certain of the Golf Courses transferred to the       
Company. The sale of such courses by the Company may cause adverse tax          
consequences to such director and his affiliates. See "Federal Income Tax       
Considerations -- Tax Aspects of the Operating Partnership -- Tax Allocations   
with Respect to the Golf Courses." Therefore, the interests of the Company and  
such director and his affiliates could differ in connection with the disposition
of such Golf Courses.                                                           

RISK OF ENFORCEMENT OF TERMS OF CONTRIBUTION, LEASE AND OTHER AGREEMENTS    

   Because Mr. Young, a director of the Company, is the principal owner of The
Legends Group, which contributed seven of the Golf Courses to the Company and   
the Legends Lessees, which lease those Golf Courses from the Company, there may 
be a conflict of interest with respect to the enforcement of the Contribution   
Agreement executed by The Legends Group, as well as with respect to enforcement 
and termination of the Participating Leases respecting the Golf Courses leased  
to the Legends Lessees.                                                         

OTHER POSSIBLE CONFLICTS                                                    

  Other transactions involving the Company and affiliates of the Lessees may
also give rise to possible conflicts of interest, such as future acquisitions of
golf courses and selection of operators for such golf courses.                  

COMPETITION FOR MANAGEMENT TIME OF THE OPERATORS                                

Management of the Golf Course operators devote significant time to other
business interests, including in many instances resort and residential          
development on property adjacent to the Golf Courses and the operation of golf  
courses not being contributed to the Company. As a result, management of the    
Golf Course operators are subject to competing demands on their time, and may   
not devote sufficient time to the operations of the Golf Courses, which may     
result in less revenue being generated from the Golf Courses than if they were  
devoted full time to the Golf Courses.                                          

CHANGES IN INVESTMENT AND FINANCING POLICIES                                    

   The Board of Directors of the Company (the "Board of Directors") determines
the Company's investment and financing policies and policies with respect to    
certain other activities, including its growth, outstanding indebtedness,       
capitalization, distributions and operating policies. Although the Board of     
Directors has no present intention to amend or revise these policies, the Board 
of Directors may do so at any time without a vote of the Company's stockholders.
See "Policies and Objectives With Respect to Certain Activities -- Investment   
Objectives and Policies."                                                       

DEPENDENCE ON ACQUISITIONS TO INCREASE CASH AVAILABLE FOR DISTRIBUTION          

   The Company's success in implementing its growth plan depends significantly
on the Company's ability to acquire additional golf courses at attractive       
prices. Internal growth through increases in revenues from the Golf Courses is  
not expected to provide as much growth in Cash Available for Distribution to    
stockholders as will the acquisition of additional golf courses. See "-- Risks  
of Leverage; No Limitation on Indebtedness" and "-- Risks Related to the        
Company's Growth Strategy." If the Company is unable to acquire additional golf 
courses at attractive prices, the Company's ability to grow and maintain or     
increase Cash Available for Distribution per share may be adversely affected.   

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DISTRIBUTION TO STOCKHOLDERS                                                    

 The Company's continued ability to make distributions to its stockholders
will be based principally on Lease Payments under the Participating Leases and  
interest payments under the Participating Mortgage. In the event of a default by
a Lessee under a Participating Lease or by the borrower under the Participating 
Mortgage, there could be a decrease or cessation of payments under the          
Participating Leases or the Participating Mortgage. In addition, the amount     
available to the Company to make distributions to its stockholders may decrease 
on a per share basis if golf courses acquired in the future yield lower than    
expected revenues. In addition, if the Company incurs additional indebtedness in
the future, it will require additional funds to service such indebtedness and   
Cash Available for Distribution may decrease. Distributions by the Company will 
also be dependent on a number of other factors, including the amount of Cash    
Available for Distribution, the Company's financial condition, any decision to  
reinvest funds rather than to distribute such funds, capital expenditures, the  
annual distribution requirements under the REIT provisions of the Tax Code (see 
"Federal Income Tax Considerations -- Taxation of the Company -- Requirements   
for Qualifications -- Annual Distribution Requirements") and such other factors 
as the Company deems relevant.                                                  

In order to qualify as a REIT, the Company generally is required to     
distribute to its stockholders at least 95% of its net taxable income each year.
In addition, the Company will be subject to a 4% nondeductible excise tax on the
amount, if any, by which certain distributions paid by it with respect to any   
calendar year are less than the sum of 85% of its ordinary income, 95% of its   
capital gain net income and undistributed income from prior years.              

    The Company intends to make distributions to its stockholders to comply with
the 95% distribution requirements of the Tax Code and to avoid the nondeductible
excise tax. The Company's income and cash flow will consist primarily of rent   
payments under the Participating Leases and interest payments under the         
Participating Mortgage. Differences in timing between the receipt of income and 
the payment of expenses in arriving at taxable income and the effect of required
debt amortization payments could require the Company to borrow funds on a       
short-term basis to meet the distribution requirements that are necessary to    
achieve the tax benefits associated with qualifying as a REIT.                  

   For Federal income tax purposes, the Company is required to report interest
income from the Participating Mortgage, including Participating Interest, or a  
yield-to-maturity Loan on a straight-line basis over the life of the            
Participating Mortgage. Based on the Company's estimate of future revenue, the  
Company expects to recognize for tax purposes interest income equal to          
approximately 11.5% per year with respect to the Participating Mortgage, which  
interest income will initially exceed cash payments to the Company under the    
Participating Mortgage. In addition, upon a "Transfer Triggering Event" (as     
herein defined), the borrower under the Participating Mortgage is required to   
pay to the Company an amount equal to $19 million, discounted from the maturity 
date of the Participating Mortgage to the date of the Transfer Triggering Event 
at 11.5% per annum, and income will be recognized by the Company in such amount.
This amount is then required to be lent to the borrower by the Company and the  
amount so lent accrues interest at 11.5% per annum. As a result of these        
provisions, the Company will be deemed at various times to have received income 
without having any corresponding cash payment. Consequently, to maintain the    
Company's REIT status or, after 1997, to avoid a corporate level tax, the       
Company may be required to borrow money to make cash distributions, which may   
have a material adverse effect on the operations of the Company.                

ERISA RISKS                                                                     

 Depending upon the particular circumstances of the plan, an investment in
Common Stock may not be an appropriate investment for an ERISA plan, a qualified
plan or an IRA. In deciding whether to purchase Common Stock, a fiduciary of an 
ERISA plan, in consultation with its advisors, should carefully consider its    
fiduciary responsibilities under ERISA, the prohibited transaction rules of     
ERISA and the Tax Code, and the effect of the "plan asset" regulations issued by
the U.S. Department of Labor.                                                   

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OWNERSHIP LIMIT                                                                 

  In order for the Company to qualify and to maintain its qualification as a
REIT, not more than 50% in value of its outstanding stock may be owned, directly
or constructively, by five or fewer individuals (as defined in the Tax Code)    
during the latter half of any taxable year (other than 1997). In addition, rent 
from related party tenants is not qualifying income for purposes of the gross   
income tests under the Tax Code. See "Federal Income Tax Considerations --      
Taxation of the Company." Two sets of constructive ownership rules (one to      
determine whether a REIT is closely held and one to determine whether rent is   
from a related party tenant) apply in determining whether these requirements are
met. For the purpose of preserving the Company's REIT qualification, the Charter
prohibits direct or constructive ownership of more than 9.8% of the lesser of   
the total number or value of the outstanding shares of the Common Stock or more 
than 9.8% of the outstanding preferred stock (if any) of the Company (the       
"Ownership Limit"). The constructive ownership rules are complex and may cause  
Common Stock owned, directly or constructively, by a group of related           
individuals and/or entities to be deemed to be constructively owned by one      
individual or entity. As a result, the acquisition of less than 9.8% of the     
Common Stock (or the acquisition of an interest in an entity which owns Common  
Stock) by an individual or entity could cause that individual or entity (or     
another individual or entity) to own constructively in excess of 9.8% of the    
Common Stock, and thus be subject to the Ownership Limit. See "Capital Stock -- 
Restrictions on Ownership." Direct or constructive ownership of shares of Common
Stock in excess of the Ownership Limit would cause the violative transfer or    
ownership to be void, or cause such shares to be designated as "Shares-in-      
Trust," as herein defined. See "Capital Stock -- Restrictions on Ownership."    

ANTI-TAKEOVER EFFECT OF CERTAIN PROVISIONS OF MARYLAND LAW AND THE COMPANY'S    
CHARTER AND BYLAWS                                                          

Certain provisions of the Company's articles of incorporation (the      
"Charter") and bylaws (the "Bylaws"), as well as Maryland corporate law, may be 
deemed to have anti-takeover effects and may delay, defer or prevent a takeover 
attempt that might be in the stockholders' best interest. For example, such     
provisions may (i) defer tender offers for Common Stock, which offers may be    
beneficial to stockholders, or (ii) defer purchases of large blocks of Common   
Stock, thereby limiting the opportunity for stockholders to receive a premium   
for their Common Stock over then-prevailing market prices. These provisions     
include the following:                                                          

PREFERRED STOCK                                                             

  The Charter authorizes the Board of Directors to issue Preferred Stock (as
defined herein) in one or more classes and to establish the preferences and     
rights (including the right to vote and the right to convert into Common Stock) 
of any class of Preferred Stock issued. No Preferred Stock will be issued or    
outstanding as of the closing of the Offering. See "Description of Capital Stock
-- Preferred Stock."                                                            

STAGGERED BOARD                                                             

The Board of Directors of the Company is divided into three classes of  
directors. The initial terms of the first, second and third classes expire in   
1998, 1999 and 2000, respectively. Directors of each class serve for a          
three-year term and until their successors are elected and qualified. The       
affirmative vote of Stockholders holding less than two-thirds of all votes      
entitled to be cast for the election of directors is required to remove a       
director. See "Policies and Objectives With Respect to Certain Activities --    
Charter and Bylaw Provisions."                                                  

MARYLAND BUSINESS COMBINATION STATUTE                                       

Under the Maryland General Corporation Law ("MCGL"), certain "business  
combinations" (including the issuance of equity securities) between a Maryland  
corporation and any person who owns, directly or indirectly, 10% or more of the 
voting power of the corporation's shares of capital stock (an "Interested       
Stockholder") must be approved by 80% of voting shares. In addition, an         
Interested Stockholder may not engage in a business combination with the        
Maryland corporation for five years following the date he or she became an      
Interested                                                                      

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Stockholder. See "Certain Provisions of Maryland Law and of the Company's       
Charter and Bylaws -- Maryland Business Combination Law."                       

MARYLAND CONTROL SHARE ACQUISITION                                          

  Maryland law provides that "Control Shares" of a corporation acquired in a
"Control Share Acquisition" have no voting rights except to the extent approved 
by a vote of two-thirds of the votes eligible under the statute to be cast on   
the matter (unless the corporation has opted out of the Control Share           
Acquisition statute). "Control Shares" are voting shares of beneficial interest 
that, if aggregated with all other such shares of beneficial interest previously
acquired by the acquiror, would entitle the acquiror directly or indirectly to  
exercise voting power in electing directors within one of the following ranges  
of voting power: (i) one-fifth or more but less than one-third, (ii) one-third  
or more but less than a majority or (iii) a majority of all voting powers.      
Control Shares do not include shares of beneficial interest the acquiring person
is then entitled to vote as a result of previously having obtained stockholder  
approval. A "Control Share Acquisition" means the acquisition of Control Shares,
subject to certain exceptions.                                                  

    If voting rights are not approved at a meeting of stockholders then, subject
to certain conditions and limitations, the issuer may redeem any or all of the  
Control Shares (except those for which voting rights have previously been       
approved) for fair value. If voting rights for Control Shares are approved at a 
stockholders meeting and the acquiror becomes entitled to vote a majority of the
shares of beneficial interest entitled to vote, all other stockholders may      
exercise appraisal rights. See "Certain Provisions of Maryland Law and of the   
Company's Charter and Bylaws."                                                  

The Bylaws of the Company contain a provision exempting from the Control
Share Acquisition statute any and all acquisitions by any person of the         
Company's Common Stock. There can be no assurance that such provision will not  
be amended or eliminated at any time in the future.                             

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THE COMPANY 

    Golf Trust of America, Inc. is a self-administered REIT formed to capitalize
upon consolidation opportunities in the ownership of upscale golf courses       
throughout the United States. The Company currently holds a participating       
interest in 19 golf courses, 15 of which are owned and four of which serve as   
collateral for the Participating Mortgage. The Golf Courses are located in      
Florida (5), South Carolina (4), Georgia (2), Virginia (2), Alabama, Kansas,    
Nebraska, North Carolina, Ohio and Texas.                                       

   The Company's goal is to increase Cash Available for Distribution per share
and to enhance stockholder value by becoming a leading owner of, and            
participating in increased revenue from, nationally or regionally recognized    
upscale golf courses. The Company's principal business strategy is to acquire   
upscale golf courses and thereafter lease the golf courses to qualified third   
party operators, including affiliates of the sellers. The Company may acquire   
golf courses through the issuance of limited partnership interest in the        
Operating Partnership which are redeemable for cash or, at the Company's option,
shares of Common Stock on a one-for-one basis. When the Company acquires a golf 
course in exchange for OP Units, the golf course seller generally defers tax    
recognition until the seller elects to cause the OP Units to be redeemed.       

The Company believes it has a distinct competitive advantage in the     
acquisition of upscale golf courses, including those which might not otherwise  
be available for purchase, because of (i) its utilization of the multiple       
independent lessee structure, (ii) management's substantial industry knowledge, 
experience and relationships within the golf community, (iii) the Company's     
strategic alliances with prominent golf course operators and (iv) its ability to
issue OP Units to golf course owners on a tax-deferred basis. The Company is one
of only two publicly-traded REITs in the United States focused on owning and    
acquiring golf courses.                                                         

In February 1997, the Company raised net proceeds of approximately $73.0
million in its initial public offering and acquired the ten Initial Courses from
their Prior Owners. Each of the Initial Courses was leased-back to an affiliate 
of its Prior Owner as described below. The Company believes the continuity of   
management provided by these experienced operators facilitates the Company's    
growth and profitability. Since the IPO, the Company has acquired an interest in
an additional nine Golf Courses. See "Developments Since the Initial Public     
Offering."                                                                      

  The Golf Courses which the Company owns are leased to multiple independent
third party lessees pursuant to Participating Leases which provide for the      
payment of fixed Base Rent and Participating Rent based on growth in revenue at 
the Golf Courses. The interest payment under the Participating Mortgage is      
structured similarly to the Participating Leases to provide the Company with    
base interest payments and additional interest payments based on growth in      
revenue at the Innisbrook Resort. See "The Participating Mortgage." Neither the 
Company nor its executive officers owns any interest in, or participates in the 
management of, the Lessees or the Innisbrook Resort Owner.                      

  The Company believes the Initial Courses and its investments since the IPO
are consistent with its goal of becoming a leading owner of, and participating  
in increased revenue from, nationally or regionally recognized upscale golf     
courses. Five of the Golf Courses were ranked among the Top Ten New Courses by  
either GOLF DIGEST or GOLF MAGAZINE in the year the Golf Course opened,         
including Stonehouse Golf Club and Royal New Kent, each of which was named the  
"Best New Upscale Course" by GOLF DIGEST in 1996 and 1997, respectively, and    
Oyser Bay, which was named Best New Resort Course in the United States in 1983  
by GOLF DIGEST. The Copperhead Course at the Innisbrook Resort was ranked 43rd  
in the 1996 survey by GOLF MAGAZINE of the "Top 100 Courses You Can Play" and   
the Island Course at the Innisbrook Resort was ranked as one of the "Top 75     
Resort Courses" by GOLF DIGEST in 1992. Heritage Golf Club was ranked in the Top
50 Public Golf Courses by GOLF DIGEST. See "The Golf Courses." The Company      
believes that the quality of the Golf Courses is further reflected in the       
average green fees at the Golf Courses, which significantly exceed national     
industry averages.                                                              

The Company's executive offices are located at 14 North Adger's Wharf,  
Charleston, South Carolina 29401 and its telephone number is (803) 723-GOLF     
(4653).                                                                         

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THE OPERATING PARTNERSHIP 

    The Operating Partnership holds the Participating Mortgage and owns the Golf
Courses which are subject to the Participating Leases. GTA, through its         
wholly-owned subsidiaries, GTA GP and GTA LP, currently holds a 47.4% interest  
in the Operating Partnership (60.8% after giving effect to this Offering). GTA  
GP is the sole general partner of the Operating Partnership and GTA LP is a     
limited partner of the Operating Partnership. The other limited partners include
those Prior Owners who received OP Units in exchange for the contribution of    
their Golf Courses. Pursuant to the First Amended and Restated Agreement of     
Limited Partnership, which was entered into concurrently with the closing of the
IPO, the limited partners do not have day-to-day control over the Operating     
Partnership. However, the limited partners are entitled to vote on certain      
matters, including the sale of all or substantially all the Company's assets or 
the merger or consolidation of the Operating Partnership, which decisions       
require the approval of the holders of at least 66.7% of the interests in the   
Operating Partnership. Each of the limited partners (other than GTA LP) may     
exercise Redemption Rights for up to 50% of its OP Units beginning one year     
after completion of the IPO (February 12, 1998) and the remaining 50% beginning 
two years after completion of the IPO for cash or, at the election of the       
Company, for shares of Common Stock on a one-for-one basis. See "Partnership    
Agreement -- Redemption Rights."                                                

The relationship after this Offering among GTA, its subsidiaries, the   
Operating Partnership, the Limited Partners (including many Prior Owners and the
Innisbrook Resort Owner) and the Lessees is described in the following chart:   

[ORGANIZATIONAL CHART OF THE COMPANY AND ITS AFFILIATES]

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BUSINESS STRATEGIES AND OBJECTIVES

The Company's primary objectives are to increase its Cash Available for 
Distribution per share to stockholders and to enhance stockholder value. The    
Company's main strategy for such growth is to (i) acquire additional golf       
courses that meet the Company's investment criteria and (ii) participate in     
increased revenues at its Golf Courses. The Company currently holds a           
participating interest in 19 Golf Courses.                                      

    When the Company acquires a golf course, the course is either leased back to
its prior owner or leased to another qualified operator. Under the Company's    
standard Participating Lease, the Company receives fixed Base Rent and          
Participating Rent based on increases in Gross Golf Revenues, if any, at such   
Golf Course. Currently all Golf Courses owned by the Company are leased to their
Prior Owners (or such owners' affiliates) with the exception of Tiburon and Lost
Oaks. The Company believes the continuity of management provided by these       
experienced operators will facilitate the Company's growth and profitability.   
Each Lessee joins the Company's Lessee Advisory Association, which provides     
marketing information and opportunities and potential economic benefits to the  
Lessees, such as bulk purchasing power for certain golf course supplies and     
equipment.                                                                      

In certain instances, state and federal tax laws make sale-leaseback    
transactions prohibitively expensive, in which case the Company may provide     
financing to a particular golf course, provided it receives a participating     
interest in revenues at the golf course on a basis comparable to the Company's  
standard Participating Lease. Typically, the Company's loan will be secured by a
first-lien on the underlying golf course asset and will include an option to    
purchase the course at the end of the loan's term. In considering any financing 
transactions, including the Participating Mortgage, the Company seeks to obtain 
economic terms similar to the standard Participating Lease.                     

  In addition to acquiring new golf courses and new participating interests,
the Company seeks to increase revenue from its current assets through internal  
growth. Both strategies are discussed below.                                    

ACQUISITIONS AND EXPANSIONS                                                     

 ACQUISITIONS.  The Company believes market conditions today are favorable
for the acquisition of golf courses at attractive returns. The Company intends  
to continue to acquire additional golf courses, including multi-course          
portfolios, that meet one or more of its investment criteria as generally       
described below. The Company believes the factors described below provide it    
with a distinct competitive advantage in the acquisition of upscale golf        
courses, including courses that might not otherwise be available for purchase.  

    To fund acquisitions, the Company has access to a variety of debt and equity
financing sources, including the Line of Credit and the ability to issue OP     
Units. The issuance of OP Units can provide a means of structuring tax-deferred 
transactions for sellers of golf courses. Holders of OP Units generally have the
right to cause the Company to redeem their OP Units after certain holding       
periods for cash, or at the Company's option, for Common Stock on a one-for-one 
basis. To the extent the Company acquires a golf course in exchange for OP      
Units, the golf course seller generally will not recognize taxable income until 
it exercises the Redemption Right.                                              

   The Company believes it can attract sellers by offering competitive pricing
and valuation and by offering them the following benefits: (i) the ability to   
retain control over the operations of the golf course by leasing the golf course
back from the Company; (ii) the tax deferral and increased liquidity associated 
with owning OP Units; (iii) the ability to obtain additional OP Units through   
the Lessee Performance Option; (iv) marketing and purchasing economies of scale 
gained from participation in the Lessee Advisory Association; and (v) the       
ability to diversify the seller's investment by participating as an equity owner
in the Company's portfolio of golf courses.                                     

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    The Company intends to concentrate its investment activities on golf courses
available at attractive prices that meet one or more of the following criteria: 

- upscale Daily Fee courses that target avid golfers, who the Company   
  believes are generally willing to pay the higher green fees associated
with upscale golf courses;                                          

   - private or semi-private golf courses with proven operating histories that
have the potential for significant cash flow growth;                

- courses that offer superior facilities and service and attract a      
relatively high number of affluent destination golfers;             

- courses owned by multi-course owners and operators who have a strong  
   regional presence and afford the Company the opportunity to expand in a
particular region;                                                  

- newly developed, well-designed courses with high growth potential; and

- upscale, well-maintained golf courses with proven operating histories 
located in areas where significant barriers to entry exist.         

 The Company will undertake an analysis with respect to golf courses to be
considered for acquisition, including an evaluation of the following:           

- product and service differentiation;                                  

- competitive position in market;                                       

  - barriers to entry in development of new golf courses such as scarcity of
land and long lead-times for course developement;                   

- conditioning of the golf course and agronomy review;                  

- quantity, quality and cost of irrigation; and                         

 - strength of the lodging industry, including hotels and condominiums, in
destination golf areas.                                             

  There can be no assurance that the Company will be able to find additional
golf courses that meet its investment criteria and there can be no assurance    
that the Company will have access to sufficient debt and equity financing to    
allow it successfully to acquire such courses. Moreover, acquisitions entail    
risks that acquired courses will fail to perform in accordance with             
expectations.                                                                   

AFFILIATION WITH STARWOOD.  Starwood, through an affiliate, operates the
Golf Courses at the Innisbrook Resort and leases Lost Oaks. In addition, the    
golf and conference facilities of the Innisbrook Resort are owned by an         
affiliate of Starwood and the hotel and conference facilities are managed by    
Westin, an affiliate of Starwood. The Company believes Starwood, through its    
affiliate is one of the United States' leading golf course management,          
development and consulting companies. Troon Golf has the exclusive right to     
operate golf courses at hotels owned by Westin. The Company believes that its   
existing relationship with Starwood, Westin and Troon Golf, will provide the    
Company with additional acquisition opportunities throughout the United States. 

AFFILIATION WITH GRANITE GOLF.  The Lessee of Tiburon is an affiliate of
Granite Golf and an affiliate of Granite Golf manages Club of the Country.      
Granite Golf and its affiliates currently manage over 30 golf courses throughout
the United States. Granite Golf identified the acquisition opportunity at       
Tiburon. The Company believes its affiliation with Granite Golf will provide the
Company with additional acquisition opportunities.                              

   EXPANSIONS.  The Prior Owner of Northgate Country Club is adding nine holes
to that Golf Course, the Prior Owner of Woodlands is constructing a new         
clubhouse at Woodlands and the owner of Lost Oaks plans to renovate and remodel 
the clubhouse and course there (collectively, the "Expansion Facilities").      
Subject to satisfaction of certain conditions, the Company has agreed that it   
will purchase the Expansion Facilities when fully completed and operational. The
Company has agreed to fund the expansion at Northgate Country Club and          

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may fund the construction of the other Expansion Facilities. The Company will   
acquire each Expansion Facility for a price equal to the cost of construction,  
which cost must be approved in advance by the Company and which may include an  
allowance for land. Upon such purchase or funding, the Base Rent payable at each
such course will be increased. No development fee will be paid to a Prior Owner 
or any affiliate thereof in connection with the construction of the Expansion   
Facilities.                                                                     

The Company has entered into a loan agreement to provide construction   
financing of approximately $3.0 million for the additional 9-hole facility at   
Northgate Country Club, which construction is expected to commence in late 1997.
The interest rate for such loan is 10.47% and interest is payable monthly in    
arrears.                                                                        

  Upon the Company's acquisition of the respective Expansion Facilities, the
Participating Leases for Northgate Country Club, Woodlands and Lost Oaks will be
amended to include the applicable Expansion Facility, to increase the Base Rent 
in an amount designed to be accretive to the Company's Funds From Operations (as
herein defined) per share, and, with the exception of Lost Oaks (which          
Participating Lease is cross-defaulted with the Participating Mortgage on the   
Innisbrook Resort), the Prior Owner will be required to pledge additional OP    
Units (or cash or other security acceptable to the Company) equal to 15% of the 
purchase price paid by the Company for the applicable Expansion Facility. See   
"The Company -- Business Strategies and Objectives -- Acquisitions and          
Expansions."                                                                    

The Prior Owner of Stonehouse Golf Club and Royal New Kent currently is 
constructing clubhouses of 6,600 square feet and 7,700 square feet,             
respectively, at such courses. The clubhouses are expected to be completed by   
June 30, 1998 and will be constructed at the Lessee's expense. Base Rent will   
not be adjusted but the Company will participate in any increases in Gross Golf 
Revenue. See "The Golf Courses -- The Participating Leases."                    

   The Innisbrook Resort Owner currently is adding an additional nine holes at
the Innisbrook Resort and is making significant capital improvements to the     
resort and conference facilities. The Company, under the Participating Mortgage,
has agreed to fund up to $9.0 million for these improvements.                   

INTERNAL GROWTH                                                                 

Based on the experience of its management, the Company believes the Golf
Courses offer opportunities for revenue growth through effective marketing and  
efficient operations. See "The Golf Courses -- The Participating Leases --      
Advisory Association." The Participating Leases and the Participating Mortgage  
have been structured to provide the operators with incentives to manage and     
maintain the Golf Courses in a manner designed to increase revenue and, as a    
result, increase payments to the Company under the Participating Leases and the 
Participating Mortgage. The Company believes that management of the Lessees, as 
well as Troon Golf, have demonstrated expertise in the operation of the Golf    
Courses and that the Golf Courses are positioned to benefit from favorable      
trends in the golf industry. See "Lessees and Operators" and "The Golf          
Industry."                                                                      

  PARTICIPATING LEASES.  The Participating Leases generally provide that for
any calendar year, the Company will receive with respect to each leased Golf    
Course, the greater of (a) Base Rent (as adjusted by the Base Rent Escalator    
described below) or (b) an amount equal to the original (unescalated) Base Rent 
plus the Participating Rent payable at the Golf Course. Participating Rent is   
equal to 33 1/3% of the difference between that calendar year's Gross Golf      
Revenue and Gross Golf Revenue at the Golf Course in the calendar year prior to 
the course's acquisition, as adjusted in determining the original Base Rent.    
Base Rent under each Participating Lease generally increases annually by the    
lesser of (i) 3% or (ii) 200% of the change in the Consumer Price Index ("CPI") 
for the prior year (the "Base Rent Escalator") during each of the first five    
years of the Participating Lease and, if the Lessee Performance Option is       
exercised, for an additional five years thereafter. Annual increases in Lease   
Payments are limited to 5% during the first five years of the lease terms.      
"Gross Golf Revenue" is generally defined as all revenues from a Golf Course    
including green fees, golf cart rentals, range fees, membership dues, member    
initiation fees and transfer fees, excluding, however, food and beverage and    
merchandise revenue. See "The Golf Courses" and "Management's Discussion and    
Analysis of Financial Condition and Results of Operations."                     

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PARTICIPATING MORTGAGE.  The $78.975 million Participating Mortgage is  
structured similarly to the Participating Leases. The Company anticipates that  
it will receive a return similar to the return it anticipates on the            
Participating Leases. Under the Participating Mortgage, the Company has made an 
initial advance of $69.975 million, which will be followed by additional        
advances of up to $9.0 million to be used for a nine-hole expansion and other   
improvements to the Innisbrook Resort facilities currently underway. The loan   
term is 30 years, with an initial Base Interest rate of 9.63% per annum and an  
interest rate of 9.75% per annum on the amount of the loan in excess of $69.975 
million. The loan provides for minimum increases in the aggregate annual payment
of Base Interest of 5% per year for the first five years and a participating    
interest feature throughout the term based upon the growth in Gross Golf        
Revenues, as well as in other revenues, at the Innisbrook Resort over a 1996    
base year. The annual increases in the Mortgage Payment are limited to 7% during
the first five years. Westin has agreed to pay up to $2.5 million per year to   
the Innisbrook Resort Owner to supplement results of operations with respect to 
the operations at the Innisbrook Resort for up to five years.                   

LESSEE PERFORMANCE OPTION.  The Participating Leases utilize an         
incentive-based performance structure. This Performance Option structure, is    
designed to encourage the operators to seek aggressive growth in revenue at the 
Golf Courses. The structure also is designed to attract potential sellers of    
golf courses that the Company believes have high growth potential and that might
not otherwise be available for purchase. Under the Performance Option for the   
Participating Leases, during years three through five of each Participating     
Lease, the operator or its affiliate, subject to certain qualifications and     
restrictions, may elect one time to increase the Base Rent in order to receive  
additional OP Units or Common Stock. The Prior Owner of the Northgate Country   
Club will have an additional two-year period to exercise the Performance Option 
if it elects to construct the planned nine-hole expansion. The Performance      
Option for the Participating Leases may only be exercised if the current-year   
net operating income of the operator of the applicable Golf Course, inclusive of
a capital replacement reserve, exceeds 113.5% of such Lessee's Lease Payment    
after taking into account the increased amount of Base Rent. If the Performance 
Option is exercised, the Base Rent is increased by an amount calculated to be   
accretive to the Company's Funds From Operations on a per share basis. Following
exercise of the Lessee Performance Option, the adjusted Base Rent will be       
increased by the Base Rent Escalator each year for a period of five years. An   
operator's ability to exercise the Performance Option and the number of OP Units
or Common Stock issuable to such Prior Owner in connection therewith, will      
depend on future operating results at the applicable Golf Course and therefore  
cannot be determined in advance.                                                

PERFORMANCE OPTION FOR THE PARTICIPATING MORTGAGE.  The structure of the
Performance Option for the Participating Mortgage is similar to the Performance 
Option for the Participating Leases. Under the Performance Option for the       
Participating Mortgage, during years three and five of the Participating        
Mortgage the Innisbrook Resort Owner, subject to certain qualifications and     
restrictions, may elect one time to require the Company to make an additional   
advance under the Participating Mortgage and the Innisbrook Resort Owner will be
required to purchase additional OP Units with that advance. The Performance     
Option for the Participating Mortgage may be exercised only if the current-year 
net operating income of the Innisbrook Resort, inclusive of a capital           
replacement reserve, exceeds 113.5% of such operator's Participating Mortgage   
obligation after taking into account the increased amount of Base Interest. If  
the Performance Advance is made, interest on the Performance Advance will be    
calculated to be accretive to the Company's Funds From Operations on a per share
basis. Following exercise of the Performance Option for the Participating       
Mortgage, the adjusted Base Interest will be increased by 3% per year for five  
years. The Innisbrook Resort Owner's ability to exercise the Performance Option 
will depend on future operating results and therefore cannot be determined in   
advance.                                                                        

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USE OF PROCEEDS 

The net proceeds to the Company from this Offering, after payment of    
estimated expenses of approximately $1,000,000 incurred in connection with this 
Offering, are estimated to be approximately $71,825,000. GTA, through its       
corporate subsidiaries, intends to contribute the net proceeds of this Offering 
to the Operating Partnership in exchange for additional interests in the        
Operating Partnership, increasing GTA's ownership in the Operating Partnership  
from 47.4%, currently, to 60.8%. The Operating Partnership will use the net     
proceeds of this Offering to repay approximately $59.1 million outstanding under
the Line of Credit and for general corporate purposes, including the acquisition
of additional golf courses.                                                     

PRICE RANGE OF COMMON STOCK AND DISTRIBUTION HISTORY

The Company's Common Stock began trading on the American Stock Exchange 
("AMEX") on February 7, 1997, under the symbol "GTA." On November 4, 1997, the  
last reported sale price per share of Common Stock on the AMEX was $26.00 and   
there were approximately 50 holders of record of the Common Stock. The following
table sets forth the quarterly high and low closing sale prices per share of    
Common Stock reported on the AMEX and the distributions paid by the Company with
respect to each such period.                                                    

                                                        · Enlarge/Download Table

                                                                                              CASH DISTRIBUTIONS
                                                                                                   DECLARED     
QUARTER ENDED                                                                     HIGH   LOW      PER SHARE     
--------------------------------------------------------------------------------  ----   ---  ------------------
                                                                                                                
March 31, 1997 (from February 7, 1997)..........................................  $261/8 $223/4       $0.21(1)  
June 30, 1997...................................................................  $283/4 $235/8       $0.41     
September 30, 1997..............................................................  $285/8 $263/16       $0.41(2) 

------------                                                                    

(1) The distribution was for a partial period from the closing of the IPO and   
was equivalent to a quarterly distribution of $0.41 per share of Common 
Stock.                                                                  

(2) The third quarter dividend was declared on October 15, 1997 and is payable  
on November 10, 1997 to stockholders of record on October 27, 1997.     
Purchasers of Common Stock in this Offering will not receive the third  
quarter distribution in respect of the shares of Common Stock offered   
hereby.                                                                 

   The Company's Board of Directors declared a quarterly distribution of $0.41
per share for the quarter ended September 30, 1997. Future distributions by the 
Company will be at the discretion of the Board of Directors and will depend on  
the Company's financial condition, its capital requirements, the annual         
distribution requirements under the REIT provisions of the Tax Code and such    
other factors as the Board of Directors deems relevant. There can be no         
assurance that any such distributions will be made by the Company.              

 Distributions by the Company to the extent of its current and accumulated
earnings and profits for federal income tax purposes generally will be taxable  
to stockholders as ordinary dividend income. Distributions in excess of current 
and accumulated earnings and profit will be treated as a non-taxable reduction  
of the stockholder's basis in its shares of Common Stock to the extent thereof, 
and thereafter as taxable gain. Distributions that are treated as a reduction of
the stockholder's basis in its shares of Common Stock will have the effect of   
deferring taxation until the sale of the stockholder's shares. The Company      
anticipates that, for federal income tax purposes, only a nominal portion of the
per share distribution paid for 1997 will represent a return of capital to the  
stockholders. See "Federal Income Tax Considerations."                          

In the future, the Company may implement a dividend reinvestment program
under which holders of Common Stock may elect automatically to reinvest         
dividends and make additional investments in shares of Common Stock. If a       
dividend reinvestment and stock purchase program is implemented, the Company,   
from time to time, may repurchase Common Stock in the open market for purposes  
of fulfilling its obligations under the program, or may elect to issue          
additional shares of Common Stock.                                              

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CAPITALIZATION

   The following table sets forth the historical capitalization of the Company
and the pro forma capitalization of the Company as of June 30, 1997, assuming   
completion of this Offering and use of the proceeds from this Offering as       
described in "Use of Proceeds."                                                 

                                                                · Download Table

                                                             JUNE 30, 1997     
                                                          -------------------- 
                                                          HISTORICAL PRO FORMA 
                                                          ---------  --------- 
                                                             (IN THOUSANDS)    
                                                                               
Borrowings under the Line of Credit.....................  $  43,900  $   4,325 
Minority interest in Operating Partnership..............     43,487     49,267 
Stockholders' equity:                                                          
  Preferred stock, $0.01 par value, 10,000,000 shares                          
    authorized, no shares issued and outstanding........     --         --     
  Common stock, $0.01 par value per share, 90,000,000                          
    shares authorized, 4,069,326 shares issued and                             
    outstanding, 7,160,755 issued and outstanding pro                          
    forma (1)...........................................         41         72 
  Additional paid-in capital............................     42,429    114,823 
  Note receivable from stock sale.......................     (3,298)    (3,298)
  Accumulated earnings..................................      1,189      1,189 
                                                          ---------  --------- 
  Total stockholders' equity............................     40,361    112,786 
                                                          ---------  --------- 
    Total capitalization................................  $ 127,748  $ 166,378 
                                                          ---------  --------- 
                                                          ---------  --------- 

------------                                                                    

(1) Excludes 4,620,313 shares issuable upon redemption of OP Units outstanding  
prior to this Offering.                                                 

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SELECTED FINANCIAL INFORMATION

The following tables set forth (i) unaudited selected consolidated      
historical and pro forma financial information for the Company and The Legends  
Group and (ii) selected historical financial information for The Legends Group, 
the accounting acquiror, and for the Legends Lessee, the significant lessee. The
pro forma operating information is presented as if the Formation Transactions,  
this Offering and the Subsequent Acquisitions had occurred as of January 1,     
1996, and therefore incorporates certain assumptions that are included in the   
Notes to Pro Forma Condensed Statements of Operations included elsewhere in this
Prospectus. The pro forma balance sheet information is presented as if this     
Offering and the Subsequent Acquisitions had occurred on June 30, 1997. The pro 
forma information does not purport to represent what the Company's nor The      
Legends Group's financial position or results of operations actually would have 
been had the Formation Transactions, this Offering and the Subsequent           
Acquisitions, in fact, occurred on such date or at the beginning of the period  
indicated, or to project the Company's or The Legends Group's financial position
or results of operations at any future date or for any future period.           

GOLF TRUST OF AMERICA, INC. 
UNAUDITED SELECTED CONSOLIDATED FINANCIAL DATA
(in thousands, except per share data) 

                                                        · Enlarge/Download Table

                                                                                                  PERIOD FROM    
                                                                                 SIX MONTHS    FEBRUARY 12, 1997 
                                                                   YEAR ENDED    ENDED JUNE      (INCEPTION OF   
                                                                  DECEMBER 31,       30,      OPERATIONS) THROUGH
                                                                      1996          1997         JUNE 30, 1997   
                                                                  -------------  -----------  -------------------
                                                                         (PRO FORMA)             (HISTORICAL)    
                                                                                                                 
OPERATING DATA:                                                                                                  
Revenue:                                                                                                         
  Participating Leases (1).......................................   $  15,949     $   9,033       $     5,859    
  Participating Mortgage.........................................       8,067         4,034               181    
  Other interest income..........................................      --            --                   448    
                                                                  -------------  -----------       ----------    
    Total revenue................................................      24,016        13,067             6,488    
                                                                  -------------  -----------       ----------    
Depreciation and amortization (1)................................       5,317         2,950             1,149    
General and administrative.......................................       2,097         1,300               910    
Interest expense.................................................         368           184               290    
                                                                  -------------  -----------       ----------    
    Total expenses...............................................       7,782         4,434             2,349    
                                                                  -------------  -----------       ----------    
Income before minority interest (1)..............................      16,234         8,633             4,139    
Minority interest (2)............................................       6,104         3,384             2,129    
                                                                  -------------  -----------       ----------    
Net income applicable to common stockholders.....................   $  10,130     $   5,249       $     2,010    
                                                                  -------------  -----------       ----------    
                                                                  -------------  -----------       ----------    
Net income per share of Common Stock.............................   $    1.42     $    0.73       $      0.50    
                                                                  -------------  -----------       ----------    
                                                                  -------------  -----------       ----------    
Weighted average shares of Common Stock outstanding..............       7,161         7,161             4,007    
                                                                  -------------  -----------       ----------    
                                                                  -------------  -----------       ----------    
CASH FLOW DATA:                                                                                                  
  Cash flows from operating activities (3).......................   $  21,551     $  11,583       $     3,578    
  Cash flows used in investing activities (4)....................        (719)         (359)         (116,497)   
  Cash flows from financing activities (5).......................      14,505         9,660           115,190    

OTHER DATA:                                                                                                      
  Funds From Operations (6)......................................   $  21,551     $  11,583       $     5,288    
  Cash Available for Distribution (6)............................   $  19,504     $  10,560       $     5,011    
  Weighted average Common Stock and OP Units outstanding.........      11,482        11,781             8,479    

                                                        · Enlarge/Download Table

                                                                                                 JUNE 30,         
                                                                                         ------------------------ 
                                                                                                         1997     
                                                                                                      ----------- 
                                                                                            1997      (HISTORICAL)
                                                                                         -----------              
                                                                                         (PRO FORMA)              
                                                                                                                  
BALANCE SHEET DATA:                                                                                               
  Investment in Golf Courses............................................................  $  87,599    $  61,724  
  Mortgage note receivable (7)..........................................................     61,680       61,680  
  Notes payable.........................................................................      4,325       43,900  
  Minority interest in Operating Partnership............................................     49,267       43,487  
  Total stockholders' equity............................................................    112,786       40,361  

(NOTES ON PAGE 45)                                                              

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THE LEGENDS GROUP GOLF COURSE OPERATIONS
UNAUDITED SELECTED PRO FORMA FINANCIAL DATA 
(in thousands)

                                                        · Enlarge/Download Table

                                                                                      SEASIDE    LEGENDS             
                                                                                      RESORTS      OF        TOTAL   
                                                               GOLF      HERITAGE     (OYSTER   VIRGINIA    LEGENDS  
                                                              LEGENDS    GOLF CLUB     BAY)        (8)       GOLF    
                                                             ---------  -----------  ---------  ---------  --------- 
                                                                                                                     
YEAR ENDED DECEMBER 31, 1996                                                                                         
OPERATING DATA:                                                                                                      
  Revenue from Golf Course operations....................... $   8,078   $   3,141   $   3,288  $     692  $  15,199 
  Other revenue.............................................     2,534         745         784        151      4,214 
                                                             ---------  -----------  ---------  ---------  --------- 
  Total revenue.............................................    10,612       3,886       4,072        843     19,413 
  Participating Lease payments (1)..........................     4,670       1,825       1,856        928      9,279 
  Other operating expenses (9)..............................     6,216       2,171       2,296      2,492     13,175 
                                                             ---------  -----------  ---------  ---------  --------- 
  Net income (loss)......................................... $    (274)  $    (110)  $     (80) $  (2,577) $  (3,041)
                                                             ---------  -----------  ---------  ---------  --------- 
                                                             ---------  -----------  ---------  ---------  --------- 
CASH FLOW DATA:                                                                                                      
  Cash flows from (used in) operating activities (10)....... $    (125)  $     (69)  $      40  $  (2,577) $  (2,731)
  Cash flows from investing activities (11).................    --          --          --         --         --     
  Cash flows from financing activities (12).................    --          --          --         --         --     

OTHER DATA:                                                                                                          
  EBITDA (13)............................................... $     (31)  $     (55)  $      59  $  (2,577) $  (2,604)

SIX MONTHS ENDED JUNE 30, 1997                                                                                       
OPERATING DATA:                                                                                                      
  Revenue from Golf Course operations....................... $   4,853   $   1,943   $   2,012  $   1,274  $  10,082 
  Other revenue.............................................     1,692         453         517        252      2,914 
                                                             ---------  -----------  ---------  ---------  --------- 
  Total revenue.............................................     6,545       2,396       2,529      1,526     12,996 
  Participating Lease payments (1)..........................     2,335         913         928      1,853      6,029 
  Other operating expenses (9)..............................     3,714       1,204       1,168      1,857      7,943 
                                                             ---------  -----------  ---------  ---------  --------- 
  Net income (loss)......................................... $     496   $     279   $     433  $  (2,184) $    (976)
                                                             ---------  -----------  ---------  ---------  --------- 
                                                             ---------  -----------  ---------  ---------  --------- 
CASH FLOW DATA:                                                                                                      
  Cash flows from (used in) operating activities (10)....... $     548   $     295   $     450  $  (2,184) $    (891)
  Cash flows from investing activities (11).................    --          --          --         --         --     
  Cash flows from financing activities (12).................    --          --          --         --         --     

OTHER DATA:                                                                                                          
  EBITDA (13)............................................... $     557   $     298   $     453  $  (2,184) $    (876)

(NOTES ON PAGE 45)                                                              

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LEGENDS GOLF
SELECTED COMBINED HISTORICAL FINANCIAL INFORMATION
(in thousands)

                                                        · Enlarge/Download Table

                                                                                                SIX MONTHS ENDED   
                                                      YEAR ENDED DECEMBER 31,                       JUNE 30,       
                                       -----------------------------------------------------  -------------------- 
                                         1992       1993       1994       1995       1996       1996     1997(14)  
                                       ---------  ---------  ---------  ---------  ---------  ---------  --------- 
                                                                                                  (UNAUDITED)      
                                                                                                                   
FINANCIAL DATA:                                                                                                    
  Revenue from golf course                                                                                         
    operations.......................  $  11,724  $  13,455  $  14,371  $  14,619  $  15,199  $   8,641  $  10,082 
  Other revenue......................      2,931      3,438      4,725      3,823      4,214      2,284      2,914 
                                       ---------  ---------  ---------  ---------  ---------  ---------  --------- 
  Total revenue......................     14,655     16,893     19,096     18,442     19,413     10,925     12,996 
  Operating expenses(9)..............      8,895      9,882     10,083     10,322     13,556      5,757     12,540 
  Depreciation and amortization......      1,406      1,564      1,830      1,791      2,400      1,004        808 
  Interest expense...................        648        619        998      1,017      1,589        515        420 
                                       ---------  ---------  ---------  ---------  ---------  ---------  --------- 
  Income before equity in earnings of                                                                              
    the Operating Partnership........      3,706      4,828      6,185      5,312      1,868      3,649       (772)
  Equity in earnings of the Operating                                                                              
    Partnership(15)..................     --         --         --         --         --         --          1,916 
                                       ---------  ---------  ---------  ---------  ---------  ---------  --------- 
  Net income.........................  $   3,706  $   4,828  $   6,185  $   5,312  $   1,868  $   3,649  $   1,144 
                                       ---------  ---------  ---------  ---------  ---------  ---------  --------- 
                                       ---------  ---------  ---------  ---------  ---------  ---------  --------- 
BALANCE SHEET DATA:                                                                                                
  Investment in Golf Courses and                                                                                   
    related equipment................  $  17,425  $  16,663  $  19,301  $  33,099  $  35,060  $  34,738  $   1,083 
  Total assets.......................     20,484     22,719     24,649     42,300     49,804     49,458     22,019 
  Mortgages, notes payable and                                                                                     
    advances from affiliates and                                                                                   
    stockholders.....................     16,293     19,285     18,638     35,163     40,480     37,512      8,268 
  Capital lease obligations..........        332     --         --         --         --         --         --     
  Total owners' equity...............      2,086      2,263      3,772      6,328      7,174      9,976     11,000 

(NOTES ON PAGE 45)                                                              

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---------------                                                                 

 (1) Represents payments of Base Rent from the Lessees to the Company calculated
on a pro forma basis as if the beginning of the period presented was the
beginning of a lease year, except for Legends of Virginia, the Lessee of
  Stonehouse Golf Club and Royal New Kent, which courses opened in June 1996
    and August 1996, respectively. Pro forma Participating Lease revenue payable
by Legends of Virginia reflects only the periods during which such Golf 
Courses were actually operating.                                        

If Stonehouse Golf Club and Royal New Kent had been operating during the
entire period presented (i) Participating Lease revenue would have been 
   $1,847 higher for the year ended December 31, 1996, for a total of $17,796,
   (ii) depreciation and amortization would have been $580 higher for the year
ended December 31, 1996, for a total of $5,897, and (iii) income before 
minority interest for the year ended December 31, 1996 would have been  
$1,267 higher for a total of $17,501.                                   

   The pro forma information does not include estimates of Base Rent increases
    in the second year. Pro forma results for the six months ended June 30, 1997
 and actual results for the period from February 12, 1997 through June 30,
1997 include $109 of Participating Rent.                                

(2) Calculated as approximately 37.6%, 39.2% and 51.4% of the Operating       
Partnership's net income for the applicable period based on the OP Units
outstanding for the period not owned by the Company.                    

(3) Represents the Company's income before minority interest adjusted for     
   non-cash depreciation and amortization. Estimated pro forma cash flows from
operating activities excludes cash provided by (used in) operating      
activities due to changes in working capital resulting from changes in  
  current assets and current liabilities. The Company does not believe these
excluded items are material to cash flows from operating activities.    

(4) Pro forma cash flows used in investing activities represents the amount of
 the reserve which the Company will be required to make available annually
  under the Participating Leases to fund capital expenditures, calculated as
2.0% to 5.0% of Gross Golf Revenue at the Golf Courses. In addition to  
increases resulting from the Base Rent Escalator and payments of        
 Participating Rent, the Lessees generally are obligated to increase their
  lease payments each year in an amount equal to the increase in the capital
expenditure reserve from the prior year. Historical cash flows used in  
investing activities additionally reflects golf course acquisitions and 
mortgage note issuance.                                                 

(5) Pro forma cash flows used in financing activities represents estimated    
distributions to be paid based on the current quarterly dividend rate of
 $0.41 per share of Common Stock or per OP Unit and an aggregate of 11,482
and 11,781 shares of Common Stock and OP Units outstanding for the year 
ended December 31, 1996 and the six months ended June 30, 1997,         
respectively, and debt of $4,325.                                       

(6) Estimated Funds From Operations and Cash Available for Distribution are   
calculated as follows:                                                  

                                                        · Enlarge/Download Table

                                                                                                     PERIOD FROM FEBRUARY 12,
                                                                                                               1997          
                                                                                                          (INCEPTION OF      
                                                                YEAR ENDED        SIX MONTHS ENDED         OPERATIONS)       
                                                             DECEMBER 31, 1996     JUNE 30, 1997      THROUGH JUNE 30, 1997  
                                                             -----------------   ------------------  ------------------------
                                                                          (PRO FORMA)                      (HISTORICAL)      
                                                                                                                             
Income before minority interest.............................      $16,234             $ 8,633                 $4,139         
Depreciation and amortization...............................        5,317               2,950                  1,149         
                                                                  -------             -------                 ------         
Funds From Operations.......................................       21,551              11,583                  5,288         
Adjustments:                                                                                                                 
  Noncash mortgage revenue..................................       (1,328)               (664)                   (30)        
  Estimated capital expenditures............................         (719)               (359)                  (247)        
                                                                  -------             -------                 ------         
Cash Available for Distribution.............................       19,504              10,560                  5,011         
Additional Base Rent for courses not operational during                                                                      
 entire period..............................................        1,847             --                   --                
                                                                  -------             -------                 ------         
Adjusted Cash Available for Distribution....................      $21,351             $10,560                 $5,011         

In accordance with the resolution adopted by the Board of Governors of  
NAREIT, Funds From Operations represents net income (loss) (computed in 
  accordance with GAAP), excluding gains (or losses) from debt restructuring
or sales of property, plus depreciation of real property, and after     
 adjustments for unconsolidated partnership and joint ventures. Funds From
    Operations should not be considered as an alternative to net income or other
   measurements under GAAP as an indicator of operating performance or to cash
flows from operating investing or financial activities as a measure of  
  liquidity. Funds From Operations does not reflect working capital changes,
cash expenditures for capital improvements or principal payments on     
   indebtedness. The Company believes that Funds From Operations is helpful to
  investors as a measure of the performance of an equity REIT, because along
with cash flows from operating activities, financing activities and     
investing activities, it provides investors with an understanding of the
ability of the Company to incur and service debt and make capital       
    expenditures. Compliance with the NAREIT definition of Funds From Operations
is voluntary. Accordingly, the Company's calculation of Funds From      
 Operations in accordance with the NAREIT definition may be different than
 similarly titled measures used by other REITs. See "Distribution Policy."
 Pro forma income before minority interest for the year ended December 31,
1996, reflects base rent from Legends of Virginia for the period during 
   which the Golf Courses it leases from the Company, Stonehouse Golf Club and
    Royal New Kent, were actually operating (Stonehouse Golf Club opened in June
1996 and Royal New Kent opened in August 1996). The adjustment above    
   reflects additional Base Rent payable during the Golf Courses' initial year
 of operations (i.e., to reflect a full year's initial Base Rent). Noncash
  mortgage revenue represents the difference between interest revenue on the
  Participating Mortgage reported by the Company in accordance with GAAP and
    the actual cash payment to be received by the Company. See "The Golf Courses
-- The Participating Mortgage -- Fixed Interest Rate Escalation."       

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The Participating Leases require the Company to reserve annually between
    2.0% and 5.0% of the Gross Golf Revenues of the Golf Courses to fund capital
expenditures. Any capital expenditures in excess of such amounts will be
funded by the Lessees.                                                  

(7) Represents amounts outstanding under the Participating Mortgage exclusive 
of the amounts used to acquire OP Units and shares of the Common Stock. 

(8) Legends of Virginia financial data reflects partial period operations at  
   both Stonehouse Golf Club and Royal New Kent, which opened in June 1996 and
   August 1996, respectively. Participating Lease payments reflect the periods
in which the Golf Courses were actually operating.                      

(9) Represents operating costs and expenses, general and administrative,      
    repairs and maintenance, utilities, marketing and management fees. Operating
Expenses for The Legends Group for the six months ended June 30, 1997   
includes Base Rent payments for the period commencing February 12, 1997.

(10) Represents pro forma income adjusted for non-cash depreciation and         
amortization. Estimated pro forma cash flows from operating activities  
  excludes cash provided by (used in) operating activities due to changes in
working capital resulting from changes in current assets and current    
   liabilities. The Company does not believe these excluded items are material
to cash flows from operating activities.                                

(11) Cash flows from investing activities consists principally of capital       
 improvements to the Golf Courses. As such improvements are expected to be
funded through a capital expenditure reserve funded by the Company, cash
    flows from investing activities funded by the Lessees are not expected to be
material.                                                               

(12) Cash flows from financing activities primarily includes transactions with  
the Prior Owners and borrowings and repayments on loans. Such cash flows
have been excluded in the determination of cash flows from financing    
    activities as the Company does not believe these excluded items are material
to cash flows from financing activities.                                

(13) EBITDA is defined as operating income before interest, income taxes,       
depreciation and amortization. Management considers EBITDA to be an     
  important measure of the cash flows from operations of the Lessees (before
payment of debt service obligations and non-cash depreciation charges). 
EBITDA does not represent cash generated from operating activities in   
  accordance with GAAP and should not be considered as an alternative to net
income as an indication of financial performance or to cash flows from  
operating activities as a measure of liquidity.                         

(14) Information presented includes the Prior Owners and the Legends Lessee     
    combined, as the operations were transferred to the Legends Lessee effective
February 12, 1997. Summary unaudited operating results for the Legends  
  Lessees for the period February 12, 1997 (inception) through June 30, 1997
   included in The Legends Group for the six months ended June 30, 1997 are as
follows:                                                                

                                                        · Enlarge/Download Table

Gross golf revenue............................................................................... $   9,164
                                                                                                           
Other revenue....................................................................................     2,496
                                                                                                  ---------
        Total revenue............................................................................    11,660
Operating expenses...............................................................................     6,368
Lease payments...................................................................................     4,629
Depreciation and amortization....................................................................        37
                                                                                                  ---------
        Total expenses...........................................................................    11,034
                                                                                                  ---------
Net income....................................................................................... $     626
                                                                                                  ---------
                                                                                                  ---------

(15) Equity in earnings of the Operating Partnership reflects the Prior Owner's 
    proportionate interest in the earnings of the Operating Partnership based on
its limited partnership interest. These amounts do not represent cash   
distributions to the Legends Group Prior Owner. Earnings reflect the    
interest of the Prior Owner and not the Legends Lessee, and any         
   distributions payable to the Legends Group Prior Owner will not necessarily
be available to the Legends Lessee to make Lease Payments.              

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 

OVERVIEW                                                                        

    GTA was incorporated in Maryland on November 8, 1996. The Company was formed
to capitalize upon consolidation opportunities in the ownership of upscale golf 
courses in the United States. The Company's principal business strategy is to   
acquire upscale golf courses and then lease the golf courses to qualified third 
party operators, including affiliates of the sellers. Title to the acquired     
courses is held by the Operating Partnership, in which the Company is the sole  
general partner. The Company has the ability to issue OP Units in the Operating 
Partnership. OP Units are redeemable by their holder for cash or, at the        
election of the Company, for shares of Common Stock on a one-for-one basis. When
the Company acquires a golf course in exchange for OP Units, in most instances  
the seller of the golf course does not recognize taxable gain until it exercises
the Redemption Right. OP Units can thus provide an attractive tax-deferred sale 
structure for golf course sellers. The Company believes it has a distinct       
competitive advantage in the acquisition of upscale golf courses, including     
those which might not otherwise be available for purchase, because of (i) its   
utilization of a multiple independent lessee structure, (ii) management's       
substantial industry knowledge, experience and relationships within the golf    
community, (iii) the Company's strategic alliances with prominent golf course   
operators and (iv) its ability to issue OP Units to golf course owners on a     
tax-deferred basis.                                                             

In February 1997, the Company raised net proceeds of approximately $73  
million in its IPO and consummated the Formation Transactions. In the IPO the   
Company sold 3,910,000 shares of Common Stock at $21.00 per share (including    
510,000 shares sold pursuant to the underwriters' over-allotment option, which  
was exercised in full). The Company contributed the net proceeds of the IPO to  
the Operating Partnership in exchange for a 49% interest in the Operating       
Partnership.                                                                    

THE GOLF COURSES                                                                

Concurrently with the closing of the IPO, the Company acquired the 10   
Initial Courses from their Prior Owners. The ten Initial Courses are located in 
South Carolina (4), Virginia (2), Alabama, Georgia, North Carolina and Texas.   
Title to the Initial Courses is held by the Operating Partnership. The Initial  
Courses were contributed by their Prior Owners to the Operating Partnership in  
exchange for approximately $6.2 million in cash, the assumption of approximately
$43.1 million of mortgage and other indebtedness and approximately 4.1 million  
OP Units, which represented a 51% limited partnership interest in the Operating 
Partnership. Control of the Operating Partnership remains in the hands of the   
Company, as the sole general partner.                                           

On June 23, 1997, the Company closed the $78.975 million Participating  
Mortgage with the Innisbrook Resort Owner in connection with a merger           
transaction that resulted in the Innisbrook Resort Owner acquiring the          
Innisbrook Resort, as well as the Tamarron Resort, an 18-hole destination golf  
and conference facility located near Durango, Colorado. The Company made an     
initial advance of $69.975 million, which will be followed by additional        
advances of up to $9.0 million to be used for a nine-hole expansion and other   
improvement to the Innisbrook Resort facilities currently underway. The Company 
was granted a first lien on the Innisbrook Resort, including the golf courses,  
the conference facilities and the undeveloped land, but excluding the hotel,    
which consists of individually-owned condominiums. Troon Golf manages the golf  
facilities at the Innisbrook Resort. The condominium rental pool and conference 
facility at the Innisbrook Resort is managed by Westin. Westin has agreed to pay
up to $2.5 million per year to the Innisbrook Resort Owner to supplement results
of operations with respect to the operations at the Innisbrook Resort. The      
Westin Guaranty, which is for a period of up to five years, is designed to      
ensure receipt by the Company of Base Interest payments under the Participating 
Mortgage. The Participating Mortgage has a 30-year maturity, a 5% annual        
increase in the Base Interest for the first five years and a participating      
interest feature throughout the term based upon the growth in revenues over a   
base year. The Company has the right to acquire the Innisbrook Resort at the    
expiration of the term of the Participating Mortgage, including any early       
expiration resulting from a default of the borrower thereunder. The purchase    
price shall equal the lesser of the fair market value of the Innisbrook Resort  
(but in no event less than                                                      

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the outstanding balance of the Participating Mortgage), as determined by a third
party appraisal, or 400,000 shares (125,000 shares if a Transfer Triggering     
Event, as hereinafter defined, has occured) of the Company's Common Stock and   
cancellation of the outstanding principal balance of the Participating Mortgage.
See "The Golf Courses--The Participating Mortgage."                             

 On August 19, 1997, the Company acquired Tiburon, a 27-hole, upscale golf
course located in Omaha, Nebraska for $5.4 million in cash and Common Stock     
valued at approximately $600,000 and leased the Golf Course to Granite Golf     
under a Participating Lease.                                                    

   On September 2, 1997, the Company acquired Raintree, an 18-hole golf course
located in Akron, Ohio, for $1.2 million in cash and OP Units valued at         
approximately $3.4 million and leased the Golf Course to the Prior Owner under a
Participating Lease.                                                            

On September 30, 1997, the Company acquired Eagle Watch, an 18-hole golf
course located in Atlanta, Georgia, for $4.5 million in cash and OP Units valued
at approximately $1.9 million. The Company leases the Golf Course under a       
Participating Lease to an affiliate of the Prior Owner.                         

   On October 3, 1997, the Company acquired Lost Oaks, an 18-hole upscale golf
course located in Tampa, Florida, for $5.9 million in cash, including closing   
costs. The Company leases the Golf Course to an affiliate of Starwood under a   
Participating Lease.                                                            

 On October 17, 1997, the Company acquired Club of the Country, an 18-hole
private country club located in Kansas City, Kansas, for approximately $2.6     
million in cash and OP Units valued at approximately $500,000.                  

  The leases between the Company, as lessor, and each Lessee provide for the
payment of Lease Payments comprised of Base Rent, including minimum rent        
increases for a minimum of five years, and Participating Rent based on growth in
revenue at the Golf Course.                                                     

The Company's primary source of revenue is Lease Payments under the     
Participating Leases and mortgage payments under the Participating Mortgage.    
Each Lessee has only nominal capitalization and a Lessee's ability to make the  
Lease Payments to the Company under the Participating Leases will be dependent  
upon the Lessee's ability to generate sufficient cash flow from the operation of
the Golf Course(s) leased by it. Participating Rent is generally equal to       
33 1/3% of the increase in Gross Golf Revenues over the Gross Golf Revenues for 
the Golf Course for the base year, as adjusted by the Company in determining the
initial Base Rent. Base Rent will increase each year by the Base Rent Escalator 
during the first five years of the lease term (and for an additional five years 
thereafter following an exercise of the Lessee Performance Option). The Base    
Rent Escalator for a given year generally equals the lesser of (i) 3% or (ii)   
200% of the change in the CPI over the prior year. Annual increases in Lease    
Payments are limited to a maximum of 5% for the first five years of the lease   
terms.                                                                          

    Management believes the principal source of growth in Gross Golf Revenues at
the Golf Courses will be increased green fees, cart fees and other related fees.
In order to achieve higher revenues, management believes the Lessees will need  
to continue to offer golfers a high quality golf experience as it relates to the
pace of play, condition of the Golf Course and overall quality of the           
facilities.                                                                     

  The following discussion and analysis of financial condition and pro forma
results of operations of the Company, and the Legends Group Prior Owners is     
based upon the Company's financial statements as of December 31, 1996, the pro  
forma consolidated balance sheet and income statement of the Company and the    
Legend Lessees, and the historical combined financial statements of The Legends 
Group, the accounting acquiror, with respect to seven of the Initial Courses. In
establishing the amount of Base Rent for the Courses, the Company and the       
Lessees considered, in addition to actual historical results of operations, a   
number of other factors which under the accounting rules of the Securities and  
Exchange Commission cannot be reflected in the pro forma financial information  
for the Lessees. Such factors include (i) cost savings expected to be achieved  
by the Lessees as a result of operational changes following completion of the   
Formation Transaction (affecting the Legends Group courses), (ii) revenue       
enhancing programs that certain Lessees intend to implement following completion
of the Formation Transactions (affecting Legends Resort Courses, Oyster Bay and 
Heritage Golf                                                                   

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Club) and (iii) estimated revenues and expenses at the two recently opened      
Initial Courses (Royal New Kent and Stonehouse Golf Club). The pro forma        
financial information for the Company and the Legends Lessees reflect initial   
Base Rent and no Participating Rent.                                            

RESULTS OF OPERATIONS OF THE COMPANY                                    

FOR THE PERIOD FROM FEBRUARY 12, 1997 TO JUNE 30, 1997                          

    For the period from February 12, 1997 to June 30, 1997, the Company received
$6,040,000 in revenue from the Participating Leases for the Initial Courses and 
interest received on the mortgage note receivable. Included in revenue was      
$109,000 Participating Rent from 8 of the 10 Initial Courses.                   

   Total expenses before minority interest, totaling $2,349,000 for the period
from February 12 to June 30, 1997, reflect depreciation and amortization,       
general and administrative expenses and interest expense.                       

   Net income before minority interest for the period from February 12 to June
30, 1997 is $4,139,000.                                                         

LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY                                  

    Cash flow from operating activities for the period from February 12, 1997 to
June 30, 1997, was $3,578,000. This reflects net income before minority         
interest, plus noncash charges to income for depreciation and loan fee          
amortization and working capital changes. Cash flows used in investing          
activities reflect mortgage receivable of $61,599,000 and original golf course  
acquisitions of $54,554,000. Cash flows provided by financing activities,       
totaling $115,190,000, represents the total borrowing of $43,825,000 under the  
Credit Facility (discussed below) and offering proceeds of $73,055,000 less     
dividend distributions.                                                         

  Concurrent with the closing of the IPO, the Company borrowed approximately
$4,325,000 that, together with the net proceeds of the IPO, was used to retire  
mortgage indebtedness and other debt of the Prior Owners, to fund the cash      
portion of the purchase of the Initial Courses and to provide initial working   
capital. The Company has agreed to maintain approximately $4,325,000 of         
indebtedness for up to 10 years to accommodate a Prior Owner's efforts to seek  
to minimize certain adverse tax consequences from its contribution of one of the
Initial Courses to the Company. This loan has been consolidated with the Line of
Credit.                                                                         

  On June 20, 1997, the Company entered into the Line of Credit ($43,900,000
outstanding as of June 30, 1997) to be used primarily for the acquisition of    
additional golf courses, although a portion also may be used for acquisition of 
the Expansion Facilities, for capital expenditures or for general working       
capital purposes. The Line of Credit imposes certain conditions on the Company's
ability to draw on the Line of Credit, including, without limitation, a         
borrowing base calculation. On September 24, 1997 the Company negotiated a      
reduction in the interest rate from LIBOR plus 2.0% to LIBOR plus 1.75%.        
Additionally, the Company has received a commitment to increase the Line of     
Credit, upon completion of this Offering, to $125 million and to convert it to  
an unsecured facility.                                                          

The Company intends to invest in additional golf courses as suitable    
opportunities arise, but the Company will not undertake investments unless      
adequate sources of financing are available. The Company anticipates that future
acquisitions would be funded with debt financing provided by the Line of Credit,
the issuance of OP Units or with proceeds of additional equity offerings. In the
future, the Company may negotiate additional credit facilities or issue         
corporate debt instruments. Any debt issued or incurred by the Company may be   
secured or unsecured, long-term or short-term, fixed or variable interest rate  
and may be subject to such other terms, as the Board of Directors deems prudent.
Except as described in this Prospectus, the Company currently has no binding    
agreement to acquire any additional golf courses. The Company is in active      
negotiations regarding the acquisition of additional golf courses, although     
there can be no assurance that the Company will acquire any of these golf       
courses.                                                                        

   The Company's acquisition capabilities are enhanced by its existing capital
structure. The Company intends to maintain a capital structure with consolidated
indebtedness representing no more than 50% of its total market capitalization.  

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The Participating Leases require the Company to reserve annually between
2.0% and 5.0% of the Gross Golf Revenues of the Golf Courses to fund capital    
expenditures. Any capital expenditures in excess of such amounts will be funded 
by the Lessees. For the six months ended June 30, 1997, the Company had reserved
$247,000 to fund capital expenditures under the Participating Leases,           

    The Company has agreed to fund certain improvements of $1.25 million at Lost
Oaks. In addition, the Company has committed to provide up to an additional $9  
million under the Participating Mortgage and $3.0 million at Northgate under a  
loan agreement to fund the construction of an additional nine holes.            

PRO FORMA RESULTS OF OPERATIONS OF THE COMPANY                          

    On a pro forma basis for the year ended December 31, 1996 and the six months
ended June 30, 1997, the Company would have received $15,949,000 and $9,033,000,
respectively, in Base Rent from the Participating Leases for the Golf Courses.  
For the year ended December 31, 1996, this amount does not include $1,847,000 in
rent from Legends of Virginia LC related to its two courses, Stonehouse Golf    
Club and Royal New Kent, because such courses opened in June 1996 and August    
1996, respectively. As these Golf Courses are now fully operational, the Company
contractually is entitled to receive rent of approximately $17,856,000 in its   
first full year of operation.                                                   

   On a pro forma basis the Company also would have recognized interest income
under the Participating Mortgage of $8,067,000 and $4,034,000, respectively.    
None of the revenue/income amounts reflects any participation revenue.          

Total pro forma expenses of $7,782,000 and $4,434,000 for the year ended
December 31, 1996 and the six months ended June 30, 1997, respectively, reflect 
depreciation and amortization, general and administrative expenses and interest 
expense. Depreciation expense is based on the Company's cost of acquiring the   
Golf Courses, except for the Golf Courses acquired by the Company from The      
Legends Group. The contribution of these Golf Courses is treated for accounting 
purposes as a reorganization of the interests of The Legends Group in the       
contributed Golf Courses and has been accounted for at historical cost. Pro     
forma expenses for the year ended December 31, 1996, do not include $580,000 of 
depreciation related to the period these courses were not operational in 1996.  
If these courses had been operational for all of 1996, total pro forma expenses 
for the year ended December 31, 1996 would have been $8,362,000.                

   Minority interest totaling $6,104,000 for the year ended December 31, 1996,
($6,860,000 if the Legends of Virginia Golf Courses had been fully operational  
for all of 1996) and $3,384,000 for the six months ended June 30, 1997, reflects
the 37.5% and 39.2% interest respectively, of the Prior Owners, management and  
operators in the pro forma net income of the Operating Partnership.             

Pro forma net income for the year ended December 31, 1996 is $10,130,000
($10,641,000 if the Legends of Virginia Golf Courses had been fully operational 
for all of 1996). Pro forma net income for the six months ended June 30, 1997,  
is $5,249,000.                                                                  

PRO FORMA LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY                

    On a pro forma basis, cash flow from operating activities for the year ended
December 31, 1996 and six months ended June 30, 1997, excluding changes in      
working capital, would have been $21,551,000 ($23,398,000 for 1996 if the       
Legends of Virginia Golf Courses had been fully operational for all of 1996) and
$11,583,000. This reflects net income before minority interest, plus non-cash   
charges to income for depreciation and loan fee amortization. Cash flows used in
investing activities reflects capital expenditures of $719,000 and $359,000,    
calculated based upon the Company's capital expenditure reserves required by the
terms of the Participating Leases. Cash flows from financing activities,        
totaling $14,505,000 and $9,660,000, represents distributions (based upon the   
current quarterly per share and per OP Unit distribution rate of $0.41) to      
holders of the Common Stock and OP Units and the amount of the initial borrowing
of $4,325,000.                                                                  

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THE LEGENDS GROUP PRIOR OWNERS                                                  

Pursuant to the Formation Transactions, the Company acquired seven Golf 
Courses from The Legends Group: Heritage Golf Club, Heathland, Moorland,        
Parkland, Oyster Bay, Royal New Kent and Stonehouse Golf Club. These seven Golf 
Courses are operated by four Legends Lessees. The Legends Resort Courses,       
Heathland, Moorland and Parkland, share a common clubhouse, driving range, golf 
carts and other facilities and are leased by a single Legends Lessee pursuant to
a single Participating Lease. The recently opened Golf Courses -- Royal New Kent
and Stonehouse Golf Club -- are in similar stages of operation and are leased by
a single Legends Lessee. Each of the two other Legends Golf Courses is leased by
a separate Legends Lessee. Aggregate Base Rent under the Participating Leases   
with the Legends Lessees represents approximately 42.5% and 46.1% of the        
Company's pro forma revenue for the year ended December 31, 1996 and the six    
months ended June 30, 1997, respectively. The Legends Group Prior Owners        
received OP Units representing approximately 46.5% of the outstanding Common    
Stock and OP Units upon completion of the Formation Transactions.               

The following discussion and analysis addresses the combined historical 
results of operations of the Golf Courses being contributed by The Legends      
Group; however, the results of operations of such Golf Courses do not purport to
represent the pro forma results of operations of the Legends Lessees or the     
Company and should not be used to assess the operating performance of the       
Legends Lessees or the Company. Two of the Golf Courses being contributed by The
Legends Group, Stonehouse Golf Club and Royal New Kent, opened in June and      
August 1996, respectively.                                                      

  The Legends Group markets its courses through media advertising (primarily
in golf publications) and various other promotional arrangements (generally     
discounted green fees) provided to guests of local hotels in the markets where  
its Golf Courses are located. In addition, in 1995, affiliated entities began   
constructing, selling and renting golf villas as part of a resort/residential   
development at the Legends Resort, site of the Legends Resort Courses,          
Heathland, Moorland and Parkland. This development eventually is expected to    
include 204 golf villas with over 800 beds. The Company believes that this      
resort/residential development helped contribute to the number of rounds played 
at the Legends Resort Courses in 1996 and 1997 to date and is expected to       
continue to be a source of rounds played as the development is completed.       

  For purposes of financial presentations, the term "Legends Golf" refers to
the combined operations of all seven Golf Courses contributed by The Legends    
Group, and the term "Golf Legends" refers to operations of the three Golf       
Courses located at the Legends Resort.                                          

RESULTS OF OPERATIONS OF THE LEGENDS GROUP                              

SIX MONTHS ENDED JUNE 30, 1997 AND 1996                                         

   Revenue from golf operations increased 16.7% from $8,641,000 to $10,082,000
while the revenue per player increased from $60.95 to $61.30, and the total     
rounds played increased 16.0% from 141,780 to 164,482. The increase in total    
number of rounds primarily is due to the opening of the two Legends of Virginia 
courses in mid-1996. Of the 22,702 increase in rounds, Legends of Virginia, LC  
accounted for 18,281 rounds and a total revenue increase of $1,253,000.         

   The number of rounds played significantly influences other revenue sources,
including food and beverage and merchandise sales. The number of rounds         
increased 16.0% and other revenue increased 27.6% to $2,914,000 from $2,284,000 
principally because of (i) a 25.9% increase in food and beverage sales (which   
resulted from additional demand created by occupants of the newly constructed   
golf villas at the Legends Resort), increased sales at Legends of Virginia, LC  
and (iii) a 15.9% increase in pro shops sales, (which resulted principally from 
sales at Legends of Virginia, LC). Other income increased as a result of        
reinstituting the course photography.                                           

    Operating expenses increased 97.3% to $13,348,000 from $6,761,000. Principal
components of the $6,587,000 increase were (i) operating costs exclusive of     
lease payments to the Company and depreciation expense of approximately         
$1,774,000 associated with the two Legends of Virginia courses opened in        
mid-1996,                                                                       

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(ii) lease payments to the Company, land lease payments to the prior owner and  
depreciation expense totaling $6,287,000 for 1997 compared to $1,543,000 for    
1996 (an increase of $4,744,000) when there were no lease payments to the       
Company, (iii) $321,000 attributable to clubhouse repairs at Heritage Golf Club 
and Oyster Bay along with the addition of several maintenance personnel to      
improve the quality of the course maintenance and (iv) increased costs of the   
food and beverage operations consistent with the increase in sales.             

 Interest expense decreased 18.5% to $420,000 from $515,000 as a result of
lower borrowings outstanding related to debt for the courses that was           
transferred in connection with the Formation Transaction's retirement of debt.  

Equity in earnings of the Operating Partnership resulted from an        
approximately 48% limited partnership interest originating with the Formation   
Transactions held by Legends Golf.                                              

    Net income decreased $2,505,000 from $3,649,000 to $1,144,000 primarily as a
result of the increased operating expenses from the two new courses and Lease   
Payments under the Participating Leases.                                        

YEAR ENDED DECEMBER 31, 1996 AND 1995                                           

    Revenue from golf operations increased 4.0% from $14,619,000 to $15,199,000.
Revenue per player increases $55.65 to $56.21, principally as a result of       
increased green fees and golf cart rentals), while the total rounds played      
increased 2.9% from 262,700 to 270,400. The increase in total number of rounds  
is primarily due to the opening of the two Legends of Virginia courses in       
mid-1996. Without these two courses the total number of rounds decreases 1.4% to
259,000. The Company believes that the late, harsh winter of 1996 in the midwest
and northeastern United States reduced vacation golfers' travel from these areas
and contributed to the decrease in the number of rounds played. Rounds played   
were also adversely affected by two hurricanes during the summer of 1996 that   
resulted in minimal damage to the Golf Courses but reduced vacation golf travel 
to the area. The increase in total revenues in 1996 due to the two new courses  
approximated $690,000. In January and February 1996, management reduced         
available tee times and increased green and cart fees over the prior period's   
winter rates in an effort to enhance the quality of the golf experience during  
the slower time of the year.                                                    

 Other revenue sources, including food and beverage and merchandise sales,
are influenced by the number of rounds played. While the number of rounds       
increased 2.9%, the revenue increased 10.2% to $4,214,000 from $3,823,000,      
principally due to a 22.6% increase in food and beverage sales resulting from   
additional demand created by occupants of the newly constructed golf villas at  
the Legends Resort. The rental units recently opened and additional units are   
being developed. Management is unable to estimate the future impact on food and 
beverage sales. However, food and beverage revenues are not included in the     
calculation of Gross Golf Revenue and therefore do not affect Participating Rent
payments.                                                                       

Operating expenses increased 31.7% to $15,956,000 from $12,113,000.     
Principal components of the $3,843,000 increase were (i) initial operating costs
of approximately $3,178,000 associated with the two Legends of Virginia courses 
opened in mid-1996, (ii) a one-time increase in chemical and fertilizer expense 
of approximately $90,000, (iii) periodic resurfacing of cart paths totaling     
$50,000, (iv) food and beverage operations of approximately $352,000 attributed 
to an increase in revenue and (v) an increase in repair and maintenance expense.

  Interest expense increased 56.2% to $1,589,000 from $1,017,000 as a result
of higher borrowings incurred in connection with the completion and pre-opening 
costs of the two recently-opened Initial Courses.                               

Net income decreased 64.8% from $5,312,000 to $1,868,000 primarily as a 
result of additional $3,178,000 of expenses associated with the two recently    
opened Initial Courses.                                                         

YEAR ENDED DECEMBER 31, 1995 AND 1994                                           

    Revenue from golf operations increased 1.7% to $14,619,000 from $14,371,000.
The increase resulted primarily from a 9.5% increase in revenue per player      
(principally as a result of increased green fees and golf cart                  

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rentals) from $50.82 to $55.65. During this same period rounds played decreased 
7.1% from 282,800 to 262,700 as a result of management's focus on increasing    
green fees.                                                                     

   Other revenue decreased 19.1% from $4,725,000 to $3,823,000 principally due
to a contribution of land totaling $1,000,000, which was partially offset by    
increased food and beverage and merchandise sales as a result of improved       
merchandising efforts in the pro shop.                                          

    Operating expenses increased 1.7% to $12,113,000 from $11,913,000, primarily
as a result of normal wage and other operating cost increases,                  

    Interest expense increased 1.9% to $1,017,000 from $998,000 primarily due to
financing costs incurred in connection with the purchase of maintenance         
equipment.                                                                      

Net income decreased 14.1% to $5,312,000 from $6,185,000.               

INFLATION                                                                       

  All of the Participating Leases provide for initial terms of 10 years with
Base Rent and Participating Rent features. Base Rent will increase by the Base  
Rent Escalator for each year during the first five years of the term of each    
Participating Lease (and for an) additional five years if the Lessee Performance
Option is exercised). All of such leases are triple net leases requiring the    
Initial Lessees to pay for all maintenance and repair, insurance, utilities and 
services. The Participating Mortgage has a 5% increase in the Base Interest     
payment for up to five years, and 3% for an additional five years if the        
Performance Option is exercised. As a result, the Company believes the effect of
inflation on the Company is not material.                                       

SEASONALITY                                                                     

The golf industry is seasonal in nature based on weather conditions and 
fewer available tee times in the rainy season and the winter months. The        
operator of each of the Daily Fee Golf Courses may vary green fees based on     
changes in demand.                                                              

RECENT ACCOUNTING PRONOUNCEMENTS                                                

 In February 1997, the Financial Accounting Standards Board issued FAS No.
128, "EARNINGS PER SHARE," which established new standards for computations of  
earnings per share. Statement No. 128 will be effective for periods ending after
December 15, 1997 and will require presentation of: (1) "Basic Earnings per     
Share," computed by dividing income available to common stockholders by the     
weighted average number of common shares outstanding during the period and (2)  
"Diluted Earnings per Share," which gives effect to all dilutive potential      
common shares that were outstanding during the period, by increasing the        
denominator to include the number of additional common shares that would have   
been outstanding if the dilutive potential common shares had been issued. Had   
FAS 128 been effective for the period from February 12, 1997 (period of         
inception) through June 30, 1997, basic and diluted earnings per share would    
have been as follows:                                                           

                                                                · Download Table

Basic earnings per share............................................   $     .51
                                                                                
Diluted earnings per share..........................................   $     .50

  In June 1997, the Financial Accountant Standards Board issued Statement of
Financial Accounting Standards No. 130, REPORTING COMPREHENSIVE INCOME (SFAS    
130), which establishes standards for reporting and display of comprehensive    
income, its components and accumulated balances. Comprehensive income is defined
to include all changes in equity except those resulting from investments by     
owners and distributions to owners. Among other disclosures, SFAS 130 requires  
that all items that are required to be recognized under current accounting      
standards as components of comprehensive income be reported in a financial      
statement that is displayed with the same prominence as other financial         
statements.                                                                     

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  SFAS 130 is effective for financial statements for periods beginning after
December 15, 1997, and requires comparative information for earlier years to be 
restated. Because of the recent issuance of this standard, management has been  
unable fully to evaluate the impact, if any, the standard may have on future    
financial statement disclosures. Results of operations and financial position,  
however, will be unaffected by implementations of this standard.                

CHANGES IN THE COMPANY'S CERTIFYING PUBLIC ACCOUNTANT                           

On February 26, 1997, the Company dismissed Price Waterhouse LLP as     
independent accountants. Effective February 28, 1997, the Company engaged BDO   
Seidman, LLP as principal accountants. The decision to change accountants was   
approved by the Audit Committee and ratified by the Board of Directors of the   
Company.                                                                        

    The Company was formed on November 8, 1996. Its balance sheet as of November
8, 1996 was audited by Price Waterhouse LLP. The balance sheet and the report of
Price Waterhouse LLP thereon were included in the Company's Form S-11 which was 
declared effective by the Securities and Exchange Commission on February 6,     
1997. In connection with Price Waterhouse LLP's audit of the November 8, 1996   
balance sheet and through February 26, 1997, there were no disagreements between
the Company and Price Waterhouse LLP on any matter of accounting principles or  
practices, financial statement disclosure, or auditing scope or procedure, which
disagreements if not resolved to the satisfaction of Price Waterhouse LLP would 
have caused them to make reference thereto in their report on the November 8,   
1996 balance sheet and there were no reportable events (as defined in Regulation
S-K Item 304(a)(1)(v)).                                                         

The report of Price Waterhouse LLP on the Registrant's November 8, 1996 
balance sheet did not contain an adverse opinion or a disclaimer of opinion and 
the report was not qualified or modified as to uncertainty, audit scope or      
accounting principles.                                                          

IMPORTANT FACTORS RELATED TO FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS    

 The preceding section, "Management's Discussion and Analysis of Financial
Condition and Results of Operations," and other sections of this Prospectus     
contain various "forward-looking statements" within the meaning of Section 27A  
of the Securities Act and Section 21E of the Exchange Act which represent the   
Company's expectations or beliefs concerning future events, including, without  
limitation, statements containing the words "believes," "anticipates," "expects"
and words of similar import; and also including, without limitation, the        
following: statements regarding the Company's continuing ability to target and  
acquire upscale golf courses; the continued availability of the Line of Credit  
and other debt and equity financing; the sufficiency of the Company's working   
capital, cash flow and financing to support the Company's future operating and  
capital requirements; the Lessees' and other Golf Course Operators' future cash 
flows, results of operations and overall financial performance; the Company's   
continued strategic alliance with Starwood, the planned acquisition and/or      
financing of certain golf courses; the expected completion and acquisition of   
the Expansion Facilities; the expected dividend distribution rate; the intended 
limit on the Company's level of consolidated indebtedness; the expected tax     
treatment of the Company's operations; the Company's beliefs about continued    
growth in the golf industry; statements regarding the possible redemption of OP 
Units and exercise of the Lessee Performance Options; and the expected          
completion of real estate developments near certain Golf Courses. Such          
forward-looking statements relate to future events and the future financial     
performance of the Company and the industry and involve known and unknown risks,
uncertainties and other important factors which could cause actual results,     
performance or achievements of the Company or industry to differ materially from
the future results, performance or achievements expressed or implied by such    
forward-looking statements.                                                     

 Investors should carefully consider the various factors identified in the
section "Risk Factors," in "Management's Discussion and Analysis of Financial   
Condition and Results of Operation," and elsewhere in this Prospectus that could
cause actual results to differ materially from the results predicted in the     
forward-looking statements. Further, the Company specifically cautions investors
to consider the following important factors in                                  

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conjunction with the forward-looking statements: the possible decline in the    
Company's ability to locate and acquire quality golf courses and to negotiate   
acceptable lease terms; the possibility that the Lessees and the Innisbrook     
Resort Owner may be unable to make required payments under the Participating    
Leases and the Participating Mortgage; the possibility that Company management  
lacks the skill to manage the Company's planned process of acquisitions and     
expansions; the possible adverse effect of changing economic conditions,        
including interest rate movements and changes in the real estate market both    
locally and nationally; the effect of severe weather or natural disasters; and  
the effect of competitive pressures from other golf course acquirors and other  
golf course lessors. Because of the foregoing factors, the actual results       
achieved by the Company in the future may differ materially from the expected   
results described in the forward-looking statements.                            

THE GOLF INDUSTRY 

    The Company believes the United States golf industry is entering a period of
significant growth. This belief is based, in part, on the fact that people over 
the age of 50 play more golf than younger people, and the expectation that over 
the next several years the number of people age 50 and older will increase      
significantly as the "baby boomers" age. See "-- Demographics." The Company     
expects that the aging population will contribute to an increase in the number  
of rounds played and Gross Golf Revenues at the Golf Courses and any golf       
courses subsequently acquired by the Company.                                   

  Golf course ownership in the United States is highly fragmented. There are
approximately 15,700 golf courses (approximately 12,900 eighteen-hole           
equivalents) in the United States that the Company believes are owned by        
approximately 13,000 different entities. The Company believes there are         
relatively few owners of more than one course. The Company believes that the 15 
largest golf course owners in the United States collectively own fewer than 5%  
of the total number of golf courses and that fewer than 10 golf course owners   
own more than 10 golf courses. The Company believes that this fragmented        
ownership provides it with an excellent opportunity for consolidation of the    
ownership of upscale golf courses.                                              

The Company believes the current fragmentation of golf course ownership 
resulted from a variety of factors, including a scarcity of capital, the        
entrepreneurial nature of many golf course owners and operators and their       
associated pride of ownership. The Company believes that the economies of scale 
in owning and operating multiple golf courses, the growing significance of      
professional financial management in the operation of golf courses and the      
desire for liquidity by golf course owners could lead to consolidation of golf  
course ownership. In particular, the Company believes golf course owners will be
attracted to the Company's multiple independent lessee structure, which permits 
the Company to acquire a course and then lease it back to an affiliate of the   
seller. Such structure satisfies the owner's desire to remain involved in the   
day-to-day operation of his course, while also satisfying his desire to obtain  
liquidity. The Company further believes its ability to issue OP Units in        
exchange for a golf course will attract potential sellers, who generally can    
defer recognition of taxable gain on the exchange until they exercise their     
Redemption Right. By offering golf course owners the tax planning benefit of OP 
Units and the economic benefit of participating in the independent lessee       
structure, including resulting economies of scale in operating golf courses, the
Company believes it is able to acquire desirable upscale courses that may not   
otherwise be available for purchase. See "The Company -- Business Strategies and
Objectives -- Acquisitions and Expansions."                                     

Largely in response to the popularity of golf, the construction of golf 
courses in the United States has increased significantly in recent years. New   
golf course openings from the mid-1970's through 1987 averaged approximately 150
golf courses per year. For the period 1987 through 1996 an average of           
approximately 240 new golf courses were opened each year, with a high of 336 new
golf course openings in 1995.                                                   

The emergence and popularity of younger professional golfers, including 
Tiger Woods, Justin Leonard, Phil Mickelson and Karrie Webb, have increased     
awareness and interest in golf. According to industry statistics,               

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19.4 million homes watched the final round of the four major golf championships 
in 1996. In 1997, television viewership of the final four rounds of the four    
major golf championships increased 56 percent to 30.3 million. The Company      
believes this resurgent interest will result in increasing golf participation,  
including increasing participation by women and younger golfers.                

The golf industry generated approximately $15 billion in revenues in the
United States in 1996. The Company believes the game of golf has exhibited      
strong growth in popularity in the past 16 years as illustrated below:          

                                                        · Enlarge/Download Table

                                                                       1980       1996       % CHANGE   
                                                                     ---------  ---------  -------------
                                                                          (MILLIONS)                    
                                                                                                        
Number of golfers...................................................      15.0       24.7          65%  
Rounds played.......................................................       358        477          33%  

    The following table illustrates the growth in demand in the United States at
Daily Fee and private country clubs, as compared to municipal courses, which    
tend to be of lesser quality.                                                   

                                                        · Enlarge/Download Table

                                                 ROUNDS PLAYED (IN MILLIONS)                           
                                          ------------------------------------------                   
                                                  1986                  1996           PERCENT CHANGE  
                                          --------------------  --------------------  -----------------
                                                                                                       
Daily Fee................................     156.4      38.9%      192.4      40.3%           23.0%   
Municipal................................     110.4      27.5%      121.3      25.4%            9.9%   
Private..................................     135.1      33.6%      163.7      34.3%           21.2%   
                                          ---------  ---------  ---------  ---------            ---    
Total....................................     401.9     100.0%      477.4     100.0%           18.8%   

The Company believes that upscale Daily Fee courses (including Resort   
Courses), similar to those owned and targeted by the Company, are well situated 
to take advantage of the changing demographics. As shown below, in recent years 
the top 5% of Daily Fee golf courses have been able to increase weekend green   
fees by an annual rate in excess of 10% from 1993 to 1995.                      

                                                        · Enlarge/Download Table

                                                                     DAILY FEE                                  
                                                                   GREEN FEES --                                
                                                                      WEEKEND                                   
                                                              ------------------------    PERCENT      ANNUAL   
                                                                 1993         1995        CHANGE       CHANGE   
                                                                  ---          ---      -----------  -----------
                                                                                                                
Median.......................................................  $      18    $      21        16.7%         8.0% 
Top 25%......................................................  $      25    $      30        20.0%         9.5% 
Top 5%.......................................................  $      53    $      65        22.6%        10.7% 

DEMOGRAPHICS.  Additionally, the Company believes the game of golf will 
benefit from favorable demographic trends. The United States Census Bureau      
estimates that the population age 50 and over will increase by 39% between 1996 
and 2010, from 69.3 million to 96.3 million. The average number of rounds played
per golfer on an annual basis increases significantly as the golfer ages.       
Golfers in their 50's play nearly twice as many rounds annually as golfers in   
their 30's, and golfers age 65 and older generally play three times as many     
rounds annually as golfers in their 30's. The Company believes that the number  
of golfers as well as the total number of rounds played will increase           
significantly as the average age of the population continues to increase. The   
Company believes that "baby boomers," the oldest of whom are now in their early 
50's, will contribute to the growth in total rounds played due to growing wealth
and leisure time as well as the suitability of golf as a sport for an aging     
population. Since 1991, the number of senior golfers (golfers age 50 and over)  
has grown 16%, or by nearly 1 million golfers.                                  

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The following graph sets forth the difference in age dispersion in the  
United States between 1996 and 2010 and the effect on the number of golf rounds 
played as an individual ages.                                                   

DEMOGRAPHICS

    Columns Represent Average Annual Rounds/Golfer per Age Group

Graph representing average annual rounds played by golfers and the golfers' age 
groups. The chart also shows the U.S. population by age groups 30-65. The graph 
shows that golfers generally play more rounds of golf as they get older and     
that, by 2010, there will be over one million more 50-year old Americans than   
there was in 1996.                                                              

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THE GOLF COURSES

   The Company believes that its acquisition of the 10 Initial Courses and its
acquisitions since the IPO are consistent with its goal of becoming a leading   
owner of, and participating in increased revenue from, nationally or regionally 
recognized golf courses. The Company's Golf Courses consist of 19 upscale       
courses located in the mid-Atlantic, southeastern, midwestern and southwestern  
United States. Four of the Golf Courses were ranked among the Top Ten New       
Courses by either GOLF DIGEST or GOLF MAGAZINE in the year opened, including    
Stonehouse Golf Club and Royal New Kent, each of which was named the Best New   
Upscale Course by GOLF DIGEST in 1996 and 1997, respectively, and Oyster Bay,   
which was named Best New Resort Course in the United States in 1983 by GOLF     
DIGEST. The Copperhead Course at the Innisbrook Resort was ranked 43rd in the   
1996 survey by GOLF MAGAZINE of the "Top 100 Courses You Can Play" and the      
Island Course at the Innisbrook Resort was rated by GOLF DIGEST as one of the   
"Top 75 Resort Courses" in 1992. Heritage Golf Club was ranked in the Top 50    
Public Golf Courses by GOLF DIGEST in 1992.                                     

  The Golf Courses include 17 upscale Daily Fee courses (including 10 Resort
Courses) and two private country clubs. "Daily Fee" courses are open to the     
public and generate revenues principally through green fees, golf cart rentals, 
food and beverage operations, merchandise sales and driving range charges.      
"Resort Courses" are Daily Fee golf courses that attract a significant          
percentage of players from outside the immediate area in which the golf course  
is located and generate a significant amount of revenue from golf vacation      
packages. The Company considers its Daily Fee and Resort Courses to be high-end 
golf courses because of the quality and maintenance of each golf course. Private
country clubs generally are closed to the public and derive revenues principally
from membership dues, initiation fees, transfer fees, golf cart rentals, guest  
fees, food and beverage operations and merchandise sales.                       

The Company believes that the overall quality of the Golf Courses is    
reflected in the green fees charged at each Golf Course, which significantly    
exceed national averages. The Company believes its focus on upscale Daily Fee   
golf courses and private country clubs, which attract golfers with attractive   
demographic and economic profiles, will result in stronger and less cyclical    
revenue growth in comparison to golf courses with lower green fees.             

Five of the Golf Courses are located in the Myrtle Beach, South Carolina
vicinity, a popular year-round golf destination area. Myrtle Beach is considered
one of the nation's premier golf resort locations with nearly 100 golf courses  
and approximately 3.9 million rounds played in 1996, according to the MYRTLE    
BEACH GOLF HOLIDAY-TM-. In addition to golf courses, Myrtle Beach offers a mix  
of entertainment, shopping and dining, as well as proximity to beaches. All of  
the Golf Courses located in the Myrtle Beach vicinity were developed and        
contributed to the Company by The Legends Group, a leading golf course owner,   
developer and operator in the southeast and mid-Atlantic regions of the United  
States controlled by The Legends Group.                                         

    Five of the Golf Courses are located near Tampa, Florida. Of these, four are
located at the Innisbrook Resort, a destination golf resort that includes one of
the largest hotel and conference facilities in the state. The fifth course, Lost
Oaks, is located near the Innisbrook Resort, and all five courses are near the  
the Gulf of Mexico. Additionally, the courses benefit from the millions of      
tourists annually that visit Disneyworld-TM-, Busch Gardens-TM- and other       
regional recreational attractions.                                              

  Two of the Golf Courses are located in the Williamsburg, Virginia area and
were opened in June and August, 1996. Williamsburg is a leading tourist         
destination and has a population of approximately 2.6 million within a 60 mile  
radius. Williamsburg is an emerging golf resort destination, as evidenced by the
six new courses that have opened in the Williamsburg vicinity since 1995,       
including two of the Company's courses. In addition to golf, Williamsburg and   
the surrounding area offer shopping, dining, entertainment and historical       
attractions. Both of the Golf Courses located in Williamsburg were developed and
contributed to the Company by The Legends Group.                                

   The Company owns a fee simple interest in each of the Golf Courses with the
exception of Oyster Bay, which is subject to a long-term ground lease (with     
approximately 35 years remaining), and the four Golf Courses at the Innisbrook  
Resort, where the Company holds a first lien on the Golf Courses and all of the 
related facilities (other than the separately-owned condominium units comprising
the hotel). The Company additionally holds an option to purchase the Innisbrook 
Resort and such facilities at the expiration of the Participating Mortgage for  
the lesser of its fair market value or a pre-determined number of shares of     
Common Stock.                                                                   

Certain unaudited information regarding each of the Golf Courses is set 
forth on the following page:                                                    

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THE GOLF COURSES

                                                        · Enlarge/Download Table

                                                                                                       ROUNDS               
                                                                                              -------------------------     
                                                                                                               TWELVE       
                                                                                                               MONTHS       
                                                                                                                ENDED       
                                                               YARDAGE      TYPE OF    YEAR                   JUNE 30,      
NAME                                           LOCATION          (1)        COURSE    OPENED   1995    1996     1997        
----------------------------------------  ------------------  ----------   ---------  ------  ------  ------  ---------     
                                                                                                                            
INITIAL COURSES:                                                                                                            
Heritage Club...........................  Pawleys Island, SC    7,040       Resort     1986   55,094  52,382     52,889     
Heathland...............................  Myrtle Beach, SC      6,785       Resort     1990   49,312  50,294     50,937     
Moorland................................  Myrtle Beach, SC      6,799       Resort     1990   49,590  51,102     51,754     
Parkland................................  Myrtle Beach, SC      7,170       Resort     1992   46,564  47,331     48,437     
Oyster Bay (6)..........................  Sunset Beach, NC      6,685       Resort     1983   62,141  57,856     58,725     
Woodlands...............................  Gulf Shores, AL       6,584       Resort     1994   43,464  41,744     44,623     
                                          Providence Forge,                                                                 
Royal New Kent (7)......................  VA                    7,291      Daily Fee   1996     --     5,743     12,948     
Stonehouse Golf Club (8)................  Williamsburg, VA      6,963      Daily Fee   1996     --     5,686     16,762     
Olde Atlanta............................  Atlanta, GA           6,789      Daily Fee   1993   41,195  41,053     44,485     
Northgate Country Club (9)..............  Houston, TX           6,540       Private    1984   46,600  45,400     46,268     

SUBSEQUENT ACQUISITIONS:                                                                                                    
Tiburon Golf Club (10)..................  Omaha, NE             7,005      Daily Fee   1989   56,496  53,160     60,644     
Raintree Country Club...................  Akron, OH             6,886      Daily Fee   1991   44,000  40,000     40,000     
Eagle Watch.............................  Atlanta, GA           6,896      Daily Fee   1989   36,484  36,322     40,126     
Lost Oaks...............................  Tampa, FL             6,500      Daily Fee   1975   40,072  52,760     67,708     
Club of the Country.....................  Kansas City, KS       6,412       Private    1979   15,747  17,575     19,093     
Innisbrook Resort (6)(12)...............  Tampa, FL                                           148,294 140,922   139,094     
  Copperhead............................                        7,087       Resort     1972                                 
  Island................................                        6,999       Resort     1970                                 
  Eagle's Watch (13)....................                        6,245       Resort     1971                                 
  Hawk's Run (13).......................                        6,245       Resort     1971                                 
    Total .............................................................................................................     


                                           REVENUE PER PLAYER (2)            GROSS GOLF REVENUE (3)                         
                                          -------------------------   -------------------------------------                 
                                                           TWELVE                                 TWELVE                    
                                                           MONTHS                                 MONTHS                    
                                                            ENDED                                  ENDED                    
                                                          JUNE 30,                               JUNE 30,     INITIAL BASE  

NAME                                       1995    1996     1997         1995         1996         1997         RENT (4)    

----------------------------------------  ------  ------  ---------   -----------  -----------  -----------  -------------- 

                                                                                                                            
INITIAL COURSES:                                                                                                            
Heritage Club...........................  $57.28  $59.96   $  60.20   $ 3,156,000  $ 3,141,000  $ 3,184,000  $ 1,825,000    

Heathland...............................   55.04   53.92      53.81     2,714,000    2,712,000    2,741,000    1,556,000(5) 

Moorland................................   55.03   54.79      55.20     2,729,000    2,800,000    2,857,000    1,556,000(5) 

Parkland................................   54.98   54.21      53.88     2,560,000    2,566,000    2,610,000    1,557,000(5) 

Oyster Bay (6)..........................   55.66   56.83      56.40     3,459,000    3,288,000    3,312,000    1,856,000    

Woodlands...............................   32.88   34.86      37.02     1,429,000    1,455,000    1,650,000      679,000    

Royal New Kent (7)......................    --     60.60      64.26       --           348,000      832,000    1,817,000    

Stonehouse Golf Club (8)................    --     60.50      67.65       --           344,000    1,134,000    1,890,000    

Olde Atlanta............................   37.53   41.39      41.14     1,546,000    1,699,000    1,830,000      845,000    

Northgate Country Club (9)..............   59.40   64.27      66.05     2,768,000    2,918,000    3,056,000    1,407,000    

SUBSEQUENT ACQUISITIONS:                                                                                                    
Tiburon Golf Club (10)..................   21.33   23.19      21.37     1,205,000    1,233,000    1,296,000      682,000    

Raintree Country Club...................   19.25   20.38      21.43       847,000      815,000      857,000      520,000    

Eagle Watch.............................   38.67   39.23      38.03     1,411,000    1,425,000    1,526,000      703,000    

Lost Oaks...............................   31.87   29.64      24.28     1,277,000    1,564,000    1,644,000      625,000(11)

Club of the Country.....................   43.69   43.93      41.01       688,000      772,000      783,000      330,000    

Innisbrook Resort (6)(12)...............   95.35  101.23     103.53    14,140,000   14,265,000   14,400,000    6,739,000    

  Copperhead............................                                                                                    
  Island................................                                                                                    
  Eagle's Watch (13)....................                                                                                    
  Hawk's Run (13).......................                                                                                    
                                                                      -----------  -----------  -----------  -------------- 

    Total ..............................                              $39,909,000  $41,345,000  $43,712,000  $24,587,000    

                                                                      -----------  -----------  -----------  -------------- 

                                                                      -----------  -----------  -----------  -------------- 


(FOOTNOTES ON FOLLOWING PAGE)                                                   

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---------------                                                                 

(1) Yardage is calculated from the championship tees.                         

(2) "Revenue Per Player" is calculated by dividing Gross Golf Revenue at the  
    applicable Golf Course by the number of rounds played at the applicable Golf
Course.                                                                 

 (3) Gross Golf Revenue is defined as all revenues from a golf course, including
green fees, golf cart rentals, range fees, membership dues, member      
initiation fees and transfer fees, but excluding food and beverage and  
   merchandise revenue. In the case of the Innisbrook Resort the amounts shown
 in the table include all revenue at the Innisbrook Resort, including golf
and hotel revenue, and food, beverage and merchandise sales, but exclude
  various taxes and net of rental payments to individual condominium owners.

(4) In addition to Base Rent, Participating Rent may be payable by the Lessees
 and Participating Interest may be payable by the Innisbrook Resort Owner.
Participating Rent is calculated based on increases in the Gross Golf   
Revenue from a base year (1996 in the case of the Initial Courses), as  
    adjusted. For the Innisbrook Resort, Base Rent shown corresponds to the Base
Interest payment.                                                       

(5) Heathland, Moorland and Parkland are subject to a single Participating    
Lease and the Base Rent is equally allocated among these Golf Courses.  

(6) The Company acquired or has a contract to acquire the fee simple interest 
in each of the Golf Courses except Oyster Bay, which is subject to a    
long-term ground lease with a lessor not affiliated with the Prior Owner
thereof, and the Innisbrook Resort, which serves as collateral under the
Participating Mortgage.                                                 

(7) Opened in August 1996.                                                    

(8) Opened in June 1996.                                                      

(9) The Company has agreed to fund up to $3.0 million to construct an         
additional nine holes located on land adjacent to this Golf Course. The 
Company expects to acquire, upon completion, the additional nine holes. 
Amounts shown for Northgate Country Club are for its fiscal year ended  
December 20, or the twelve months ended June 30, as applicable.         

(10) Tiburon Golf Club consists of 27 holes. Eighteen holes were built in 1989  
  with an additional nine holes built in 1994. With the exception of Initial
  Base Rent, numbers are 18-hole equivalents. Yardage and year opened is for
the White/Blue course.                                                  

(11) The Company has agreed to fund up to $1.25 million to pay for additional   
   improvements at the Lost Oaks course. If this amount is fully advanced, the
Base Rent will be increased to $740,930.                                

(12) The Company has a participating mortgage interest in the Innisbrook Resort.
The facility currently has 63 holes with an additional nine holes under 
construction. Under the terms of the Participating Mortgage, the Company
initially funded $69.975 million and has agreed to fund an additional $9
    million to fund certain improvements at the Innisbrook Resort, including the
construction of the additional nine holes. Upon funding of the entire $9
   million, the Base Interest will be increased to approximately $7.6 million.

(13) Eagle's Watch and Hawk's Run currently comprise the 27-hole Sandpiper      
course at the Innisbrook Resort. An additional nine holes are under     
construction, which is scheduled for completion in 1998. Yardage shown  
reflects 18-hole equivalents for Sandpiper.                             

DESCRIPTIONS OF THE GOLF COURSES

  Set forth below are brief descriptions of each of the Golf Courses. Unless
otherwise noted, the Company owns fee title to the Golf Courses, free and clear 
of any material liens.                                                          

RESORT COURSES                                                                  

Resort Courses are Daily Fee golf courses that draw a high percentage of
players from outside the immediate area in which the course is located and      
generate a significant amount of revenue from golf vacation packages. Some      
Resort Courses are semi-private, in that they offer membership packages that    
allow members special privileges at the golf course, but also allow public play.

HEATHLAND -- MYRTLE BEACH, SOUTH CAROLINA                                       

 Heathland, a Resort Course developed and currently managed by The Legends
Group, opened in 1990 and was named by GOLF MAGAZINE as one of the United       
States' Top 10 New Courses that year. The Heathland course has been molded in   
the image of the British Isles links courses and most of its holes are without  
trees or vegetation, providing a spectacular visual presentation. Heathland is  
part of the Legends Resort that consists of a 42,000 square foot clubhouse on a 
1,300 acre development, along with the Moorland and Parkland courses described  
below. This Scottish style resort includes various amenities such as a pub      
adorned with Scottish memorabilia and the sounds of Scottish bagpipes at sunset.
Heathland was designed by Tom Doak.                                             

MOORLAND -- MYRTLE BEACH, SOUTH CAROLINA                                        

Moorland, a Resort Course developed and currently managed by The Legends
Group, opened in 1990 and was named by GOLF DIGEST as one of the United States' 
Top 5 New Courses in 1990. Moorland is part of the                              

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Legends Resort and was designed by P.B. Dye. Moorland consists of large expanses
of natural growth, sand and water that combine with undulations and bulkheaded  
areas to present a challenging "target style" course.                           

PARKLAND -- MYRTLE BEACH, SOUTH CAROLINA                                        

Parkland, a Resort Course developed and currently managed by The Legends
Group, opened in 1992 and is the latest golf course to be opened at the Legends 
Resort. Parkland demonstrates the diversity and beauty of the local natural     
terrain by its combination of tree-lined fairways, vast natural areas,          
deep-faced bunkers and massive multi-level greens.                              

HERITAGE GOLF CLUB -- PAWLEYS ISLAND, SOUTH CAROLINA                            

    The Heritage Golf Club ("Heritage Club"), developed and currently managed by
The Legends Group, was designed by Dan Maples. It opened in 1986 and was named  
to GOLF DIGEST'S Top 50 Public Courses in the United States in 1992. Heritage   
Club is a semi-private resort consisting of over 600 acres of giant magnolias   
and oaks, fresh water lakes and marshes. Heritage Club is built on the site of  
two plantations and retains an historic atmosphere with facilities designed in a
traditional plantation architectural style, including the southern style        
Colonial Clubhouse.                                                             

OYSTER BAY -- SUNSET BEACH, NORTH CAROLINA                                      

   Oyster Bay, developed and currently managed by The Legends Group, opened in
1983 and was named by GOLF DIGEST as its Best New Resort Course in the United   
States in 1983 and was named to GOLF DIGEST'S Top 50 Public Courses in the      
United States in 1992. Oyster Bay currently is owned pursuant to a ground lease 
with a remaining term of 35 years. The ground lessor is not affiliated with     
either The Legends Group or the Company. Oyster Bay consists of several         
marsh-oriented holes, two island greens and strategic fresh water lakes. Over   
half of the holes are situated so that water hazards add an additional          
challenge.                                                                      

WOODLANDS -- GULF SHORES, ALABAMA                                               

Woodlands is a 6,600-yard par 72 course that opened in 1994. The course,
featuring lakes, marshes and tree-lined fairways, was designed by Larry Nelson, 
former United States Open champion and two-time PGA Championship winner. It was 
developed and currently is managed by Bright's Creek Development, LLC. Gulf     
Shores, Alabama, located near the Florida panhandle, is an emerging golf course 
destination that includes 10 golf courses in the immediate area. Gulf Shores    
includes over 30 miles of white sand beaches and the historic Civil War outposts
of Fort Morgan and Fort Gaines.                                                 

    Subject to certain conditions, the Company has agreed to acquire a clubhouse
under construction at the course by the Lessee of Woodlands for the cost of     
construction, which cost must be approved in advance by the Company. See "The   
Company -- Business Strategies and Objectives -- Acquisitions and Expansions."  
The Company believes that upon its scheduled completion in October 1997, the    
clubhouse will permit the Lessee to attract more group and tournament play and  
also may support an increase in green fees.                                     

   The Company has agreed to reconvey to the Prior Owner of Woodlands the land
on which a portion of certain of the existing holes are located at such time as 
the Prior Owner is prepared to contribute comparable replacement golf holes at  
Woodlands to the Company. All costs associated with such exchange shall be paid 
for by the Prior Owner.                                                         

COPPERHEAD COURSE -- TAMPA, FLORIDA                                             

 Located within the 1,000-acre Innisbrook Resort, the Copperhead Course is
over 7,000 yards, has undulating hills, extremely narrow fairways and very tall 
pine trees. GOLF DIGEST rated the Copperhead Course as the 5th "Best Public     
Course" in Florida in 1996 and as the 43rd best under the 1996 category of "Top 
100 Courses You Can Play."                                                      

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ISLAND COURSE -- TAMPA, FLORIDA                                                 

  The Island Course, part of the Innisbrook Resort, has tight fairways, fast
and undulating greens and water in play on a number of the holes. The golf      
course was ranked by GOLF DIGEST in the top 75 "Best Resort Courses" in the     
United States for 1992.                                                         

HAWK'S RUN COURSE AND EAGLE'S WATCH COURSE -- TAMPA, FLORIDA                    

The Hawk's Run and Eagle's Watch courses, part of the Innisbrook Resort,
together currently consist of three sets of nine-holes known as the Sandpiper   
course that can be played in various 18-hole combinations. Upon the completion  
of an additional nine holes, which are presently under construction, there will 
be two complete 18-hole courses. Designed by Larry Packwood, both courses lie on
hilly terrain featuring natural lakes and woodlands. At both courses, players   
meander around streams, lakes and sand bunkers. Play at Eagle's Watch and Hawk's
Run is demanding because of their narrow fairways and small undulating greens.  

HIGH-END DAILY FEE COURSES                                                      

The Company considers its Daily Fee courses to be high-end courses,     
reflected in the quality and maintenance standards of the golf courses, and the 
green fees, which are generally higher than other golf courses in their         
respective markets. Some high-end daily fee courses are semi-private, in that   
they offer membership packages but also allow public play.                      

STONEHOUSE GOLF CLUB -- WILLIAMSBURG, VIRGINIA                                  

    Located within a 10,000 acre master planned community under development by a
third party, Stonehouse Golf Club was developed and currently is managed by The 
Legends Group. It opened in June 1996 and was named by GOLF DIGEST as the Best  
New Upscale Course for 1996. Stonehouse Golf Club was designed by Mike Strantz  
(formerly an understudy of Tom Fazio) and constructed in a densely forested area
that includes tall hardwood trees and deep ravines. One of the holes at         
Stonehouse Golf Club features a spring-fed waterfall behind the green while     
another requires players to hit over a wide, plunging ravine to a green on a    
cliff-like setting. Stonehouse Golf Club features large greens and wide fairways
despite the nearby trees.                                                       

Consistent with the original purchase agreement, the Lessee of this Golf
Course has commenced construction of a 6,600 square foot clubhouse at the Golf  
Course at no cost to the Company. See "Risk Factors -- Real Estate Investment   
Risks -- Illiquidity of Real Estate" and "-- Certain Matters Regarding          
Stonehouse Golf Club and Royal New Kent."                                       

ROYAL NEW KENT -- PROVIDENCE FORGE, VIRGINIA                                    

  Opened in August 1996, Royal New Kent was named by GOLF DIGEST as the Best
New Upscale Course for 1997. It is located within a third party owned master    
planned community outside Williamsburg, Virginia, Royal New Kent was developed  
and is currently managed by The Legends Group. Royal New Kent is located        
adjacent to Colonial Downs, which opened in September 1997 and currently is the 
only pari-mutual horse racing facility in Virginia. Royal New Kent also was     
designed by Mike Strantz and includes five sets of tees, including the "Invicta"
(Latin for "unconquerable") tees to accommodate the nearly 7,300 yards of the   
course. Royal New                                                               
Kent was fashioned after traditional links-style Irish courses.                 

Consistent with the original purchase agreement, the Lessee of this Golf
Course has commenced construction of a 7,700 square foot clubhouse at the Golf  
Course at no cost to the Company. See "Risk Factors -- Real Estate Investment   
Risks -- Illiquidity of Real Estate" and "-- Certain Matters Regarding          
Stonehouse Golf Club and Royal New Kent."                                       

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OLDE ATLANTA GOLF CLUB -- ATLANTA, GEORGIA                                      

  Olde Atlanta Golf Club ("Olde Atlanta") is open for public play as well as
for member play. Olde Atlanta was designed by Arthur Hills. It is located in    
Suwanee, Georgia (a northeast Atlanta suburb), in the foothills of north        
Georgia, and is situated within a 594 acre master planned community consisting  
of 645 homesites. This geographic setting allows for multiple changes in terrain
and elevation throughout the course. Olde Atlanta's course layout includes three
lakes, clustered mounds, grass and sand bunkers and grassy hollows. Olde        
Atlanta's facilities include a 6,000 square foot clubhouse, which includes a pro
shop and a dining room that can seat up to 100 persons. Olde Atlanta is managed 
by The Crescent Company.                                                        

TIBURON GOLF CLUB -- OMAHA, NEBRASKA                                            

Tiburon has three nine hole courses that are played as three 18-hole    
combinations. The courses are characterized by rolling fairways with mounds,    
berms and greenside bunkers. Two lakes come into play on the courses.           

RAINTREE COUNTRY CLUB -- AKRON, OHIO                                            

Raintree, located near Akron, Ohio, was cut out of a wooded area and    
consequently has some narrow fairways demanding precision shots. Water hazards  
come into play on seven of the holes.                                           

EAGLE WATCH GOLF CLUB -- ATLANTA, GEORGIA                                       

   Eagle Watch is an 18-hole course designed by Arnold Palmer on rolling hills
cut out of the Georgia forest. The course is tight with tree-lined fairways     
lining many of the holes. A number of ponds and lakes come into play. Routing of
the course capitalizes on the beauty of the existing natural features, creating 
spectacular scenic views and elevation changes of up to 60 feet on some holes.  
The course also includes a 12,000 square foot, two-level clubhouse.             

LOST OAKS GOLF COURSE -- TAMPA, FLORIDA                                         

Lost Oaks is located near the Innisbrook Resort in Palm Harbor, Florida.
Wildlife often wanders onto the course, and alligators can be seen at a safe    
distance. Lost Oaks is leased to an affiliate of Starwood. The Company has      
agreed to fund certain improvements at Lost Oaks in an amount not to exceed     
$1.25 million in exchange for an increased Lease Payment.                       

PRIVATE CLUB COURSES                                                            

Private clubs are generally closed to the public and generate revenue   
principally through initiation fees and membership dues, golf cart rentals and  
guest green fees. Initiation fees and membership dues are determined according  
to the particular market segment in which the club operates.                    

 Revenue and cash flows of private country clubs generally are more stable
and predictable than those of public courses because the receipt of membership  
dues generally is independent of the level of course utilization.               

NORTHGATE COUNTRY CLUB -- HOUSTON, TEXAS                                        

Northgate Country Club is a full service upscale country club with a    
championship golf course designed by Robert von Haggie and Bruce Devlin, which  
opened in 1984. An additional nine holes are expected to open at the course in  
1998. The Company has agreed to fund up to $3.0 million to construct an         
additional nine holes located on land adjacent to the existing Golf Course. The 
Company's loan is secured by a first lien on the property where the new nine    
holes is being constructed and the loan is cross-defaulted and                  
cross-collateralized with the existing lease at Northgate. The loan bears       
interest at 10.47% per annum and is payable monthly in arrears. The Company has 
agreed to acquire such additional holes, subject to certain conditions. See "The

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Company -- Acquisitions and Expansions -- Expansions." The Golf Course is       
located in a forested area north of Houston within a 440 acre high-end master   
planned community.                                                              

  Northgate recently completed the construction of a tennis center building,
which includes a restaurant cafe. The improvements provide Northgate greater    
utilization of its facilities, which the Company believes have produced a       
sustainable increase in new membership sales. The adjacent country club         
community of Northgate Forest presently comprises 177 developed homesites with  
completed homes situated on 83 of these homesites. It is anticipated that 128   
more homesites will be developed with approximately 80% of these new homesites  
to be situated on the additional nine-hole expansion referred to above, which is
expected to provide Northgate with a sustainable source of future members.      

CLUB OF THE COUNTRY -- KANSAS CITY, KANSAS                                      

Club of the Country is an 18-hole course located approximately 20 miles 
south of the Kansas City metropolitan area, in Louisburg, Kansas. Club of the   
Country is noted for its outstanding greens and playability. Club of the Country
combines the serenity of a wooded countryside, meandering creeks and rolling    
hills with the challenge of 18 holes of championship golf.                      

The following table sets forth certain information regarding the Golf   
Courses.                                                                        

THE GOLF COURSES -- RESORT COURSES

                                                        · Enlarge/Download Table

                                                                                                  FACILITIES AND SERVICES         
                                                                                         -----------------------------------------
                                                                NO. OF            YEAR    PRACTICE    CART                 FOOD & 
COURSE NAME                              CITY, STATE            HOLES   YARDAGE  OPENED  FACILITIES  RENTAL   CLUBHOUSE   BEVERAGE
------------------------------  ------------------------------  ------  -------  ------  ----------  ------   ---------   --------
                                                                                                                                  
Healthland....................  Myrtle Beach, South Carolina      18     6,785    1990      Yes       Yes      Yes          Yes   
Parkland......................  Myrtle Beach, South Carolina      18     7,170    1992      Yes       Yes      Yes          Yes   
Moorland......................  Myrtle Beach, South Carolina      18     6,799    1990      Yes       Yes      Yes          Yes   
Heritage Golf Club............  Pawleys Island, South Carolina    18     7,040    1986      Yes       Yes      Yes          Yes   
Oyster Bay....................  Sunset Beach, North Carolina      18     6,685    1983      Yes       Yes      Yes          Yes   
Woodlands.....................  Gulf Shores, Alabama              18     6,584    1994      Yes       Yes      Yes(1)       Yes   
Copperhead Course.............  Tampa, Florida                    18     7,087    1972      Yes       Yes      Yes          Yes   
Island Course.................  Tampa, Florida                    18     6,999    1970      Yes       Yes      Yes          Yes   
Eagle's Watch (2).............  Tampa, Florida                    18     6,245    1971      Yes       Yes      Yes          Yes   
Hawk's Run (2)................  Tampa, Florida                    18     6,245    1971      Yes       Yes      Yes          Yes   



                                PRO                                                                                               
COURSE NAME                     SHOP                                                                                              
------------------------------  ----                                                                                              
                                                                                                                                  
Healthland....................  Yes                                                                                               
Parkland......................  Yes                                                                                               
Moorland......................  Yes                                                                                               
Heritage Golf Club............  Yes                                                                                               
Oyster Bay....................  Yes                                                                                               
Woodlands.....................  Yes                                                                                               
Copperhead Course.............  Yes                                                                                               
Island Course.................  Yes                                                                                               
Eagle's Watch (2).............  Yes                                                                                               
Hawk's Run (2)................  Yes                                                                                               

---------------                                                                 

(1) Woodlands has a temporary clubhouse and a permanent facility is under       
construction. See "The Company -- Business Strategies and Objectives -- 
Acquisitions and Expansions --