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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

                                   (MARK ONE)
            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                 SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

                    FOR FISCAL YEAR ENDED: DECEMBER 31, 1997

                                       OR

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
              THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                     FOR THE TRANSITION PERIOD FROM     TO

                           COMMISSION FILE NO. 1-12428

                             OASIS RESIDENTIAL, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


            NEVADA                                        88-0297457
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                            Identification Number)

4041 EAST SUNSET ROAD, HENDERSON, NEVADA                           89014
(Address of principal executive offices)                         (Zip Code)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (702) 435-9800
                                 ---------------

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:


    TITLE OF EACH CLASS                NAME OF EACH EXCHANGE ON WHICH REGISTERED
    -------------------                -----------------------------------------

Common Stock, $.01 par value                       New York Stock Exchange
$2.25 Series A Cumulative Convertible              New York Stock Exchange
Preferred Stock, $.01 par value

                 SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                                             NONE

        Indicate by check mark whether the registrant (1) has filed all reports
        required to be filed by Section 13 or 15(d) of the Securities Exchange
        Act of 1934 during the preceding 12 months (or for such shorter period
        that the registrant was required to file such reports), and (2) has been
        subject to such filing requirements for the past 90 days. YES X NO

        Indicate by check mark if disclosure of delinquent filers pursuant to
        Item 405 of Regulation S-K is not contained herein, and will not be
        contained, to the best of Registrant's knowledge, in definitive proxy or
        information statements incorporated by reference in Part III of this
        Form 10-K or any amendment to this Form 10-K. [ ]
        
        As of March 15, 1998, the aggregate market value of Common Stock of
        Oasis Residential, Inc. held by non-affiliates was $          based
        upon the closing price of the stock on the NYSE. The number of shares of
        common stock outstanding as of that date was 16,326,477.

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                       DOCUMENTS INCORPORATED BY REFERENCE

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
LITIGATION REFORM ACT OF 1995. Statements contained or incorporated by reference
in this document that are not based upon historical fact are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements may be identified by the use of
forward-looking terminology such as "may", "will", "expect", "estimate",
"anticipate", "continue" or similar terms, variations of those terms or the
negative of those terms. The "Risk Factors" set forth below in this document
constitute cautionary statements identifying important factors that could cause
actual results to differ materially from those in the forward-looking
statements.


                                     PART I
ITEM 1. BUSINESS

        Oasis Residential, Inc. (the "Company") is a fully integrated Real
Estate Investment Trust (a "REIT"), with in-house acquisition, development,
property management, and finance expertise. The Company is the largest owner of
predominantly upscale apartment communities in the greater Las Vegas, Nevada
metropolitan area based on the number of apartment units developed and owned. As
of December 31, 1997, the Company owned and operated 51 apartment communities in
Las Vegas, Reno, Denver and Southern California, comprising a total of 14,796
apartment units (the "Properties") with an average age of less than eight years,
as well as a 30,000 square foot commerical center in Henderson, Nevada in which
the Company's headquarters is located (the "Commercial Center"). Forty-three of
the Properties are located in the greater Las Vegas area. The Company's weighted
average occupancy was 95%, 94% and 95% for the years ended December 31, 1997,
1996 and 1995, respectively. During these periods, average monthly rental income
per unit was $647, $606 and $570, respectively. As of December 31, 1997, the
weighted average occupancy rate of the Properties (excluding four communities in
lease-up and the 321 units owned through a limited liability company in which
the Company owns a 50% interest) was 93.4% and the Commercial Center was 100%
occupied. The Company currently has one community comprising 340 units under
construction in Denver.



RECENT DEVELOPMENTS

        Acquisitions. On October 23, 1997, the Company completed the acquisition
of a managing member interest in Oasis Martinique, L.L.C., which owns the 714
unit Villa Martinique apartment community in Orange County, California (which
has been renamed "Oasis Martinique"). In connection with the acquisition, Oasis
Martinique, L.L.C. issued units of limited liability company interest ("LLC
Units") which are exchangeable on a one-for-one basis into 886,022 shares of the
Company's common stock. The Company also assumed existing tax exempt debt of
$51.4 million issued by Orange County, California. The "low floater" bonds
mature in 2009 and have an interest rate subject to weekly repricing based upon
a spread of 125 basis points over the seven-day tax exempt bond floating rate
index. The Company also contributed to Oasis Martinique, L.L.C., approximately
$1.5 million in cash drawn from its bank credit facility for transaction costs
and costs associated with the formation of Oasis Martinique, L.L.C.. At the time
of the closing of the acquisition, the holders of the LLC Units borrowed $8.2
million from the Company. The loans must be repaid by the holders of the LLC
Units prior to December 23, 1998 and are secured by a pledge of the LLC Units.

        On June 5, 1997, the Company completed the acquisition of a 138 unit
apartment community in Costa Mesa, California named Sea Palms. The purchase
price of approximately $10.95 million was funded with cash drawn from the
Company's $200.0 million bank credit facility. Since the acquisition, the


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Company renamed the community Oasis Sea Palms and has invested approximately
$430,000 in a capital refurbishment program designed to upgrade the community to
Oasis brand standards.

        On March 6, 1998, the Company completed the acquisition of a 421
apartment community in Fullerton, California named Parkside Apartments. The
purchase price was approximately $29.0 million. The Company assumed
approximately $21.0 million in mortgage debt, with the remainder of the purchase
price being funded with cash drawn from the Company's $200.0 million bank credit
facility. The Company renamed the community Oasis Parkside and intends to
invest approximately $7.0 million in a capital refurbishment program over the
next 18 months.

        Dispositions. On December 8, 1997, the Company completed the sale of
three Las Vegas apartment properties: Oasis Orchid, 280 units; Oasis Terrace,
336 units; and Oasis Trails, 360 units. The combined sales price for the
properties was $53.7 million, resulting in a book gain of approximately $7.0
million. Additionally, on August 18, 1997, the Company sold the 84 unit Oasis
Villas apartment community for $6.3 million, with no material gain or loss
resulting from the transaction. The net proceeds from the sales were used to
reduce debt outstanding under the Company's $200.0 million bank credit facility.
On February 27, 1998, the Company sold the Oasis Star II Apartment Community for
$1.3 million. The Company is currently under contract to sell the Oasis Morning
apartment community for approximately $3.5 million with an anticipated closing
date of April 1998.

        Developments. During 1997, the Company completed construction on five
apartment communities in the Las Vegas and Reno, Nevada and Denver, Colorado
metropolitan areas comprising an aggregate of 1,897 units with a total
investment of $153.0 as follows: Oasis Bluffs I (450 units in Reno), Oasis
Denver West (321 units in Denver, which was developed as part of a joint venture
agreement with Stevinson Partnership Ltd., an unaffiliated entity), Oasis
Gateway (360 units in Las Vegas), Oasis Lakeway (451 units in Denver), and Oasis
Pines (315 units in Las Vegas). The Company has initiated construction of a 340
unit apartment community called Oasis Interlocken on a 19.5 acre parcel located
in the master planned community of Interlocken, Colorado and plans to complete
the project in the second quarter of 1999.


        Proposed Merger with Camden Property Trust. The Company has entered into
an Agreement and Plan of Merger dated as of December 16, 1997, as amended by
Amendment No. 1 to the Agreement and Plan of Merger dated as of February 4,
1998, with Camden Property Trust ("Camden") and Camden Subsidiary II, Inc., a
wholly-owned subsidiary of Camden, providing for the merger (the "Merger") of
the Company with and into Camden Subsidiary II, Inc. Upon consummation of the
Merger, each outstanding share of Common Stock of the Company (other than shares
held by the Company as treasury stock or owned by any subsidiary of the Company)
will be converted into 0.759 of a Common Share of Beneficial Interest of Camden,
and each outstanding share of Series A Cumulative Convertible Preferred Stock of
the Company (other than shares held by the Company as treasury stock or owned by
any subsidiary of the Company) will be converted into one Series A Cumulative
Convertible Preferred Share of Beneficial Interest of Camden. Consummation of
the Merger is subject to the satisfaction of various conditions, including the
approval of the Merger by stockholders of the Company and shareholders of
Camden. A special meeting of stockholders of the Company will be held on April
8, 1998 for the purpose of voting on the proposal to consummate the Merger. The
Board of Directors of the Company has unanimously approved the Merger and has
unanimously recommended to the stockholders of the Company that they vote in
favor of the Merger at the special meeting of stockholders scheduled for April
8, 1998.

STRATEGIES FOR GROWTH

        The Company's primary business strategy has been to increase cash flow
and enhance portfolio 


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value by focusing on the upscale apartment market. The Company has implemented
this strategy principally by (i) realizing internal growth in income from its
existing portfolio of apartment communities and (ii) pursuing external growth
through the selective development and acquisition of new apartment communities.

        The Company believes its strong local market presence, brand name
identity and resident-oriented approach reduce turnover and encourages resident
referrals, resulting in higher occupancies, higher effective rents and reduced
expenses as compared to its competitors.

        Brand Name Operating Strategy. In order to take advantage of the
Company's significant presence and market leadership position in Las Vegas, the
Company implemented a customer-focused brand name operating strategy in 1995.
The brand name program is designed to build customer recognition of the Company
and its apartment communities and to impart an image of distinction, quality and
consistency. All of the Company's Properties incorporate the Oasis brand name
and all Company on-site associates wear uniforms advertising the Oasis brand
name and logo. The Company believes the Oasis brand name enhances its ability to
attract new residents, retain existing residents, gain additional resident
referrals, and retain more residents transferring from one Oasis community to
another

        Internal Growth Strategy. The Company is committed to increasing cash
flow and Funds from Operations "FFO" (as defined below under "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations - Calculation of Funds from Operations and Funds Available for
Distribution") from its existing portfolio of Properties by utilizing the
experience and quality of the Company's senior management. The Company's
operating priorities are: (i) to provide the residents with the highest quality
lifestyle possible in an apartment community; (ii) to emphasize a clean,
pleasant living environment by maintaining all buildings, grounds and
landscaping in excellent condition; and (iii) to attract the caliber of
residents who desire to live in a high-quality, clean apartment community with
premium service at a reasonable cost.

        External Growth Strategy. The Company has pursued external growth by
selectively developing new apartment communities in areas where it has
first-hand knowledge of growth patterns and local economic conditions and
believes that it has or can create a competitive advantage due to its brand name
identity, extensive experience and reputation as a developer and access to lower
cost of capital than that available to many of its local competitors.

        In evaluating whether to develop a new property, the Company analyzes
salient geographic, demographic, economic and financial data, including the
following factors: (i) prevailing rental and occupancy rates in the area; (ii)
prospective resident income levels and the ability of those income levels to
service the property's requisite rents; (iii) the site's location and aesthetic
appeal; and (iv) the size and growth rate of the employment base in the area. In
order to provide its residents with a feeling of quality, community, security
and accessibility, the Company is extremely selective in seeking development
sites which are located in quality single-family neighborhoods having convenient
access to employment centers and plentiful amenities.

        In certain circumstances, the Company also may expand its portfolio of
properties through the selective acquisition of existing apartment properties.
The Company seeks to acquire properties which are: (i) strategically located in
the Company's existing or target markets; (ii) capable of increased operating
cash flow after benefiting from the Company's renovation and management
expertise; (iii) priced below replacement cost, thereby enabling the Company to
operate the properties profitably at lower rents than those realized from new
properties; and (iv) able to generate returns comfortably in excess of the
Company's weighted average cost of capital.

        The Company has also, from time to time, disposed of properties in order
to enhance stockholder value.


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        It has also been the Company's strategy to expand through acquisition
and development beyond the greater Las Vegas metropolitan area to certain target
markets located in Nevada, Colorado and Southern California. Pursuant to this
strategy, the Company has expanded its operations to the greater Denver and Reno
metropolitan areas and Southern California. The Company believes these target
markets share many of the favorable investment characteristics found in the Las
Vegas area and are in sufficient proximity to allow the Company to continue to
benefit from its successful "hands-on" property management philosophy.

        Financing Strategy. In conducting its operations and pursuing its
external growth strategy, the Company has maintained a conservative balance
sheet to provide the Company with the financial flexibility to choose the
optimal source of capital (whether debt or equity) with which to finance
external growth. It is the Company's policy to maintain a debt to total market
capitalization ratio (i.e., total consolidated debt of the Company as a
percentage of market value of its capital stock plus total consolidated debt) of
less than 50%. For purposes of this calculation, the Company's $2.25 Series A
Cumulative Convertible Preferred Stock (the "Series A Preferred Stock") is
valued at the greater of its liquidation preference or its market value.

        Investment Policies. The Company has developed and acquired apartment
communities for long term investment in a manner consistent with requirements of
the Internal Revenue Code for the Company to qualify as a REIT through the
development and ownership of apartment communities.

CONFLICT OF INTEREST POLICIES

        The Company has adopted certain policies and entered into certain
agreements designed to reduce potential conflicts of interest. The Company's
employment agreements with Scott S. Ingraham, Allan O. Hunter Jr., and Walter B.
Eeds prohibit each of them, during his employment by the Company, from engaging,
without the Company's consent, in any business competitive with that of the
Company. Each agreement also provides that during the one year period following
termination of employment, so long as employment has not been terminated without
cause (as defined in the agreement), the individual will not engage in the
development, acquisition, construction or management of multifamily apartment
properties, other than through the Company, in the states of Nevada, California,
Arizona, Utah, New Mexico and Colorado.

        Robert V. Jones has entered into a noncompetition agreement with the
Company which provides that he will not engage in the development, acquisition,
construction or management of multifamily apartment properties in the states of
Nevada, California, Arizona, Utah, New Mexico and Colorado for such time as Mr.
Jones is an executive officer, Director or greater than 5% stockholder of the
Company.

REGULATION

        General. Multifamily apartment properties are subject to various laws,
ordinances and regulations, including regulations relating to recreational
facilities such as swimming pools, activity centers and other common areas. The
Company believes that its properties have the necessary permits and approvals to
operate its business.

        Restrictions Imposed by Laws Benefiting Disabled Persons. Under the
Americans with Disabilities Act of 1990 (the "ADA"), all places of public
accommodation are required to meet certain federal requirements related to
access and use by disabled persons. These requirements became effective in 1992.
Compliance with the ADA requires removal of structural barriers to handicapped
access in certain public areas of the Company's properties, where removal is
"readily achievable." The ADA does not, however, consider residential
properties, such as apartment communities, to be public accommodations or
commercial facilities, except to the extent portions of the facilities, such as
a leasing office, are open to the public. A number of additional federal, state
and local laws exist which also may require modifications to the Properties and
the Commercial Center or restrict certain further renovations, with respect to
access by 


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disabled persons. For example, the Fair Housing Amendments Act of 1988 (the
"FHAA") requires apartment communities first occupied after March 1991 or for
which construction permits were obtained after June 1990, to be accessible to
the handicapped. Noncompliance with the ADA or the FHAA could result in the
imposition of fines or an award of damages to private litigants.

        The Company has been contacted by certain regulatory agencies with
regard to alleged failures to comply with the FHAA as it pertains to properties
constructed for first occupancy after March 1991. Currently, the Company is
inspecting these properties to determine the extent of the alleged noncompliance
and the changes that may be necessitated. At this time, the Company is unable to
provide an estimate of costs and expenses associated with this matter as the
scope and extent of the required work, if any, has yet to be determined.

        Additional legislation may impose further burdens or restrictions on
owners with respect to access by disabled persons. Although costs of compliance
with the ADA and such additional legislation are not currently ascertainable,
such costs could be substantial. Limitations or restrictions on the completion
of certain renovations may limit application of the Company's investment
strategy in certain instances or reduce overall returns on the Company's
investments.

Rent Control Legislation. State and local rent control laws in certain
jurisdictions limit a property owners' ability to increase rents and to recover
increases in operating expenses and the costs of capital improvements. No rent
control laws are currently applicable to the Properties or the Commercial
Center, and management is not aware of any intention on the part of applicable
governing bodies to enact any rent control legislation. The Company does not
presently intend to develop or acquire multifamily apartment communities in
markets that are either subject to rent control or in which rent limiting
legislation exists. However, affordable housing restrictions on the Company's
tax-exempt financed properties as well as restrictions pertaining to high
density units at Oasis Sea Palms, may impair the Company's ability to achieve
increased rental rates on portions of these properties (see "Item 2.
Properties").

ENVIRONMENTAL MATTERS

        Under various federal, state and local environmental laws, ordinances
and regulations, a current or previous owner or operator of real estate may be
required to investigate and clean up hazardous or toxic substances or petroleum
product releases at the property, and may be held liable to a governmental
entity or to third parties for property damage and for investigation and cleanup
costs incurred by those parties in connection with the contamination. These laws
typically impose cleanup responsibility and liability without regard to whether
the owner knew of or caused the presence of the contaminants, and the liability
under those laws has been interpreted to be joint and several unless the harm is
divisible and there is a reasonable basis for allocation of responsibility. The
costs of investigation, remediation or removal of such substances may be
substantial, and the presence of such substances, or the failure to properly
remediate the property, may adversely affect the owner's ability to sell or rent
the property or to borrow using the property as collateral. In addition, some
environmental laws create a lien on the contaminated site in favor of the
government for damages and costs it incurs in connection with the contamination.
Persons who arrange for the disposal or treatment of hazardous or toxic
substances also may be liable for the costs of removal or remediation of those
substances at the disposal or treatment facility, whether or not the facility is
owned or operated by that person. Finally, the owner of a contaminated site may
be subject to common law claims by third parties based on damages and costs
resulting from environmental contamination emanating from the site.

        Certain federal, state and local laws, regulations and ordinances govern
the removal, encapsulation or disturbance of asbestos-containing materials
("ACMs") when the materials are in poor condition or in the event of building
remodeling, renovation or demolition. The laws may impose liability for release
of ACMs and may enable third parties to seek recovery from owners or operators
of real properties for personal injury associated with ACMs. In connection with
its ownership and operation of properties, the Company could be potentially
liable for these costs.


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        All of the Properties, the development properties and the Commercial
Center owned by the Company have been subject to Phase I or similar
environmental audits by independent environmental consultants. Environmental
assessments have disclosed the existence or possible existence of ACMs on the
Oasis Morning, Oasis Plaza, Oasis Ridge, Oasis Topaz, Oasis View and Oasis Winds
properties. The reports did not recommend any remedial action be taken. The
reports did recommend, however, that the Company conduct further testing in the
relevant areas for ACMs in the event it renovates or demolishes any of these
properties. The Company does not currently have any plans to engage in any
renovation or demolition of these properties that would necessitate further
testing. Phase I assessments are intended to discover information regarding, and
to evaluate the environmental condition of, the surveyed properties and
surrounding properties. Phase I assessments generally include an historical
review, a public records review, a preliminary investigation of the site and
surrounding properties, screening for the presence of asbestos and equipment
containing polychlorinated biphenyls ("PCBs"), and underground storage tanks and
the preparation and issuance of a written report, but do not include soil
sampling or subsurface investigations.

        The Phase I assessments have not revealed any environmental liability
that the Company believes would have a material adverse effect on the Company's
business, assets or results of operations, nor is the Company aware of any
environmental liability. Nevertheless, it is possible that the Company's
assessments did not reveal all environmental liabilities or that there are
material environmental liabilities of which the Company is unaware. The Company
believes that its properties are in compliance in all material respects with all
federal, state and local laws, ordinances and regulations regarding hazardous or
toxic substances or petroleum products. The Company has not been notified by any
governmental authority, and is not otherwise aware, of any material
noncompliance liability or claim relating to hazardous or toxic substances or
petroleum products in connection with any of its present Properties.

EMPLOYEES

        As of February 20, 1998, the Company employed approximately 480 persons.

COMPETITION

        All of the Properties are located in developed areas that include other
apartment properties. There are numerous other multifamily properties and real
estate companies within the market areas in which the Company's properties are
located that compete with the Company, some of which may have greater resources
than the Company. The number of competitive multifamily apartment properties and
real estate companies in a particular area could have a material effect on the
Company's ability to lease apartment units at the Properties or at any newly
developed or acquired properties and on the rents charged. In addition, other
forms of multifamily residential properties and single-family homes provide
housing alternatives to potential residents of apartment properties.

INSURANCE

        Management believes that the Properties and the Commercial Center are
covered by adequate fire, flood and property insurance, and that its development
properties are also covered by adequate insurance for their stage of
development, in each case provided by reputable companies and with commercially
reasonable deductibles and limits. There are, however, certain types of losses
(generally of a catastrophic nature, such as wars or earthquakes) which 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 affected property and could continue to be obligated to repay
any mortgage indebtedness on the property.

TAXATION OF THE COMPANY

        Management of the Company believes that the Company has operated in such
a manner as to 


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qualify for taxation as a "REIT" under Sections 856 to 860 of the Internal
Revenue Code of 1986, as amended (the "Code"), commencing with its taxable year
ended December 31, 1993, and the Company intends to continue to operate in that
manner. No assurance can be given, however, that it has operated or will be able
to continue to operate in a manner that will enable it to qualify or to remain
so qualified.

        If the Company qualifies for taxation as a "REIT", it will generally not
be subject to federal corporate income taxes on net income that is currently
distributed to stockholders. This treatment substantially eliminates the "double
taxation" (e.g., at the corporate and stockholder levels) that generally results
from investment in stock of a corporation. The Company will continue to be
subject, however, to federal income tax under certain circumstances.

        The Company and its stockholders may be subject to state or local
taxation in various state or local jurisdictions, including those in which it or
they transact business or reside. The state and local tax treatment of the
Company and its stockholders may not conform to the federal income tax
treatment.

RISK FACTORS

In addition to the matters set forth in the foregoing discussion of the
Company's business, the operations and financial performance of the Company are
subject to the risks described below.

Lack of Geographic Diversification; Dependence on Greater Las Vegas Metropolitan
Area

        A majority of the Properties are located in the greater Las Vegas
metropolitan area. The Company's performance may therefore be influenced by
economic conditions in this region and the market for apartment units therein. A
decline in the economy in this market may adversely affect the ability of the
Company to make distributions to stockholders.

        Expansion Into New Markets. Pursuant to the Company's plans to expand
beyond the greater Las Vegas metropolitan area, the Company has commenced
operations and construction of multifamily apartment communities in the greater
Denver, Colorado and Reno, Nevada metropolitan areas and Southern California.
Furthermore, the Company has entered into an agreement to purchase a 19.8 acre
parcel in Mission Viejo, California, subject to the satisfaction of certain
entitlement conditions. If the conditions are satisfied and the purchase is
completed the Company intends to build a 380 unit apartment community slated to
begin construction in late 1998. The performance of the Company's properties in
these new markets may be linked to economic conditions in these regions and in
the market for apartments therein.

Development and Acquisition Risks; Increased Project Costs; Failure to Obtain
Financing; Inability to Meet Operating Expenses

        General Development and Acquisition Risks. The Company intends to
continue selective development and acquisition of multifamily properties. New
project development is subject to a number of risks, including risks of
construction delays and cost overruns that may increase project costs, risks
that lease-up may not be completed on schedule or that the properties will not
achieve anticipated occupancy levels or sustain anticipated rent levels
sufficient to generate income to cover operating expenses, and new project
commencement risks such as the receipt of zoning, occupancy and other required
governmental permits and authorizations and the incurrence of development costs
in connection with projects that are not pursued to completion. Acquisitions
entail risks that investments will fail to perform in accordance with
expectations and that judgments with respect to the costs of improvements to
bring an acquired property up to standards established for the market position
intended for that property will prove inaccurate, as well as general investment
risks associated with any new real estate investment.

        Risks Relating to Financing; Distributions. The Company anticipates that
its development and acquisition activities will be largely financed through
externally generated funds from borrowings under 


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credit facilities and other secured and unsecured debt financing and from equity
financing. In addition, new development activities may be financed under lines
of credit or other forms of secured or unsecured construction financing that
would result in a risk that permanent financing for newly developed projects
might not be available or would be available only on disadvantageous terms.
Because the Company must distribute 95% of its taxable income to maintain its
qualification as a REIT, the Company's ability to rely upon income from
operations or cash flow from operations to finance new development or
acquisitions will be limited. Furthermore, it has been the Company's practice to
make distributions in excess of the 95% requirement, further limiting the cash
flow available to the Company for reinvestment. Accordingly, were the Company
unable to obtain funds from borrowings or the capital markets to refinance new
development or acquisitions undertaken without permanent financing, the
Company's ability to grow through additional development and acquisition
activities could be curtailed, Funds Available for Distribution "FAD" (as
defined below under "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations - Calculation of Funds from Operations and
Funds Available for Distribution") could be adversely affected and the Company
could be required to reduce distributions.

        The Company's income will consist primarily of income from its
Properties. Differences in timing between the actual receipt of income and the
actual payment of expenses and the inclusion of the income and deduction of the
expenses in arriving at taxable income of the Company, or the effect of required
debt amortization payments, could require the Company to borrow funds on a
short-term (or, possibly, long-term) basis to meet the distribution requirements
that are necessary to achieve the tax benefits associated with qualifying as a
REIT even if management believed that then prevailing interest rates, terms and
other market conditions were not generally favorable for such borrowings or that
the borrowings would not be advisable in the absence of these tax
considerations.

Debt Risks; Possible Increase in Leverage

        No Limitations on Debt. The Board of Directors of the Company currently
has a policy of limiting its indebtedness to approximately 50% of its market
capitalization (i.e., total consolidated debt of the Company as a percentage of
market value of its capital stock plus total consolidated debt; for purposes of
this calculation, total consolidated debt will be calculated net of amounts
collateralized with cash, and the Series A Preferred Stock will be valued at the
greater of its liquidation preference or its market value, but the
organizational documents of the Company do not contain any limitation on the
amount or percentage of indebtedness, funded or otherwise, the Company might
incur. Accordingly, the Board of Directors could alter or eliminate its current
policy on borrowing. If this policy were changed, the Company could become more
highly leveraged, resulting in an increase in debt service that could adversely
affect the Company's FAD and subsequently its ability to make expected
distributions to its stockholders, resulting in an increased risk of default on
its obligations.

        Use of Debt Financing. The Company is subject to the risks normally
associated with debt financing, including the risk that the Company will have
insufficient cash available to meet required payments of principal and interest.
As a result of the Company's use of indebtedness and leverage, including the use
of debt to finance development and acquisitions and the use of variable rate
financing, the cumulative effect of the risks associated with borrowing is
greater than that of each of these risks considered individually. In addition,
if a property or properties are mortgaged to secure payment indebtedness and the
Company is unable to meet mortgage payments or if certain other events of
default occur, the property could be foreclosed upon by or otherwise transferred
to the mortgagee with a consequent loss of income and asset value to the
Company. Any borrowings under the Company's unsecured credit facility (the
"Credit Facility") and the Company's outstanding notes due 2001, 2003, 2006 in
the aggregate principal amount of $150 million are general recourse obligations
of the Company. In addition, the Credit Facility is secured by
cross-collateralized liens on certain of the Properties and, accordingly,
default under the Credit Facility could result in foreclosure on multiple
properties.

        Existing Debt Maturities. At December 31, 1997, the Company had
outstanding $448.8 million of 


<PAGE>   10

indebtedness, $207.5 million of which was secured by certain of the Properties.
Most of that indebtedness will mature during the period 1998 through 2009. Since
the Company anticipates that only a small portion of the principal of the
indebtedness will be repaid prior to maturity and the Company will not have on
hand funds sufficient to repay the indebtedness in full at maturity, it will be
necessary for the Company to refinance the debt either through additional debt
offerings or additional equity offerings. If, at the time of refinancing,
prevailing interest rates or other factors result in higher interest rates on
refinancings, the Company's interest expenses would increase, which would
adversely affect the Company's Funds Available for Distribution and subsequently
its ability to make distributions to stockholders. In addition, in the event the
Company was unable to refinance the indebtedness on acceptable terms, the
Company might dispose of properties upon disadvantageous terms, which might
result in losses to the Company and might adversely affect FAD.

        Risks of Rising Interest Rates. The Company has incurred and expects in
the future to incur variable rate indebtedness in connection with the
construction of multifamily apartment communities, as well as for other
purposes. In addition, financing under the Credit Facility is variable rate
indebtedness. An increase in interest rates would increase the interest on
variable rate indebtedness, and could have an adverse effect on net income and
FAD.

Real Estate Investment Risks; Adverse Impact on Ability to Make Distributions;
Effect on Value of the Properties

        General. Real property investments are subject to varying degrees of
risk. The yields available from equity investments in real estate depend on the
amount of income generated and expenses incurred. If the Company's Properties do
not generate income sufficient to meet operating expenses, including debt
service and capital expenditures, the Company's income and ability to make
distributions to its stockholders will be adversely affected. Income from
properties may be adversely affected by the general economic climate, local
conditions such as oversupply of apartments or a reduction in demand for
apartments in the area, the attractiveness of the properties to tenants,
competition from other available apartments, the ability of the owner to provide
adequate maintenance and insurance, and increased operating costs (including
real estate taxes). The Company's income would also be adversely affected if a
significant number of tenants were unable to pay rent or apartments could not be
rented on favorable terms. Certain significant expenditures associated with each
property investment (such as mortgage payments, real estate taxes and
maintenance costs) generally are not reduced when circumstances cause a
reduction in income from the investment.

        Illiquidity of Real Estate. Real estate investments may be illiquid and,
therefore, could tend to limit the ability of the Company to vary its portfolio
promptly in response to changes in economic or other conditions. In addition,
the Code places limits on the ability of the Company, as a REIT, to sell
properties held for fewer than four years, which may affect the Company's
ability to sell properties without adversely affecting returns to stockholders

Adverse Tax Consequences of Failure to Qualify as a REIT

        The Company intends at all times to qualify as a REIT under the relevant
provisions of the Code. Although the Company believes that it has been and will
continue to be organized and operated in that manner, no assurance can be given
that the Company will qualify or continue to qualify as a REIT. Qualification as
a REIT involves the application of highly technical and complex provisions of
the Code for which there are only limited judicial or administrative
interpretations, and the determination of various factual matters and
circumstances not entirely within the Company's control. In addition, no
assurance can be given that legislation, new regulations, administrative
interpretations or court decisions will not change the tax laws with respect to
qualification as a REIT or the federal income tax consequences of qualification.

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


<PAGE>   11

federal income tax (including any applicable alternative minimum tax) on its
taxable income at corporate rates. In addition, 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 is lost. An exception to this four-year rule exists if, among
other things, the Company can satisfy the Internal Revenue Service that its
failure to qualify as a REIT was due to reasonable cause and not to willful
neglect of the qualification provisions of the Code. If this exception is not
applicable and the Company becomes disqualified from treatment as a REIT, the
FAD would be reduced for each of the years involved. In addition, the Company
would not be compelled to make distributions under the Code. To the extent that
distributions to stockholders would have been made in anticipation of the
Company's qualifying as a REIT, the Company might be required to borrow funds or
to liquidate certain of its investments to pay the applicable tax. Although the
Company currently intends 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 Company's
Board of Directors to revoke the REIT election.

Ownership Limit Necessary to Maintain REIT Qualification; Exception for Robert
V. Jones and Related Persons

        In order for the Company to maintain its qualification as a REIT, not
more than 50% of the value of its outstanding stock may be owned, directly or
constructively, by five or fewer individuals or entities (as set forth in the
Code). For the purpose of preserving the Company's REIT qualification, the
Company's articles of incorporation prohibit direct or constructive ownership of
more than 8% by value of the outstanding shares of capital stock (the "Ownership
Limit") by any person (with exception for Robert V. Jones, members of his
family, affiliated entities and their transferees), subject to adjustments as
described below. The constructive ownership rules are complex and may cause
shares of capital stock owned directly or constructively by a group of related
individuals or entities to be constructively owned by one individual or entity.
There are certain exceptions for corporations or certain investment funds for
which shares of capital stock are treated as proportionately owned by the owners
of those entities.

        The number of shares of Common Stock held by Robert V. Jones and certain
members of his family and affiliates exceeds the Ownership Limit and may
continue to exceed it. The Company's articles of incorporation provide that any
of Mr. Jones, members of his family, affiliated entities and their transferees
may acquire additional shares up to a limit (the "Existing Holder Limit") such
that the five largest beneficial owners of shares of capital stock, taking into
account the Ownership Limit, do not hold more than 49% of the outstanding shares
of capital stock. Presently, the Existing Holder Limit is 17.8% by value of the
outstanding shares of capital stock.

        The Board of Directors may waive the Ownership Limit with respect to a
particular stockholder if it is satisfied, based upon the advice of tax counsel,
that ownership in excess of this limit will not jeopardize the Company's status
as a REIT. A transfer of shares to a person who, as a result of the transfer,
violates the Ownership Limit may be void under some circumstances or may be
exchanged for Excess Stock which has very limited rights and no rights to
distributions.

Limitation on Acquisition and Change in Control

        Ownership Limit. The Ownership Limit may have the effect of precluding
acquisition of control of the Company by a third party without the consent of
the Board of Directors.

        Staggered Board. The Board of Directors of the Company is comprised of
three classes of Directors, whose terms expire in 1998, 1999 and 2000,
respectively. The staggered terms for Directors may affect the stockholder's
ability to change control of the Company even if a change in control was in the
stockholder's interest.

        Preferred Stock. The Company's articles of incorporation authorize the
Board of Directors to 


<PAGE>   12

issue shares of preferred stock and to establish the preferences and rights of
any shares issued. The issuance of preferred stock could have the effect of
delaying or preventing a change of control of the Company even if a change in
control were in the stockholders' interest.

ITEM 2. PROPERTIES

        General. As of December 31, 1997, the Company owned and operated 51
apartment communities containing 14,796 apartment units, as well as the
Commercial Center in which the Company's headquarters is located and had under
development an additional 340 units. The Properties typically consist of one-and
two-story buildings in a landscaped setting. Thirty-four of the Properties
(comprising approximately 61% of the total units) were completed less than 10
years ago. The Properties are predominantly upscale garden apartment complexes
consisting of one, two and three bedroom apartments. Forty-seven of the
Properties have in excess of 100 apartment units, with the largest having 720
apartment units. As of the end of December 31, 1997, the weighted average
occupancy rate of the Properties (excluding four communities in lease-up) was
93.4%.

        The Properties generally provide residents with a variety of attractive
amenities, such as in-unit laundry facilities, oversized luxury bath tubs,
monitored security systems, swimming pools, spas and saunas, extensive
landscaping and, in certain cases, tennis courts, racquetball courts, and weight
and exercise facilities. The Properties generally are located in or adjacent to
attractive and desirable single-family residential neighborhoods and are easily
accessible to significant areas of employment.

        The 30,000 square foot Commercial Center was constructed in 1989. The
Company occupies 15,100 square feet of the building as its headquarters, and the
remainder is leased to third parties, consisting predominantly of banking,
professional and service businesses. As of December 31, 1997, the Commercial
Center was 100% leased, with third party tenants paying an average annualized
rent per square foot of $24.58. Aside from the Company, one tenant, a bank,
occupies more than 10% of the Commercial Center. The bank's lease expires in May
2008 and has two five-year renewal options priced at fair market value

        None of the Company's properties account for 10% or more of the book
value of the Company's assets.


<PAGE>   13

PROPERTY INFORMATION

The following table presents certain information concerning the Properties:

<TABLE>
<CAPTION>
                                                                                                       DEC. 1997
                                       APPROXIMATE               AVERAGE                             AVERAGE MONTHLY
                             NUMBER     RENTABLE     YEAR         UNIT       1997                     RENTAL RATE(1)
                               OF        AREA     PLACED IN       SIZE      AVERAGE   OCCUPANCY FOR   PER    PER SQ.
THE COMMUNITIES              UNITS     (SQ. FT.)   SERVICE      (SQ. FT.)  OCCUPANCY  DECEMBER 1997   UNIT     FT.
-------------------        ---------   ---------   -------      --------   ---------  -------------   -----  -------
<S>                        <C>         <C>         <C>          <C>        <C>        <C>            <C>      <C>    
Nevada:
  Oasis Bay                    128      108,032      1993          844       95.7%      96.7%   $      706   $  0.84
  Oasis Bel Air I              232      202,600      1993          873       93.9%      96.7%          647      0.74
  Oasis Bel Air II             296      296,512      1995        1,002       94.3%      94.2%          755      0.75
  Oasis Bluffs I               450      501,687      1997        1,115         --(2)    82.3%(3)       975      0.87
  Oasis Breeze                 320      275,920      1993          862       95.1%      91.3%          669      0.78
  Oasis Canyon                 200      197,408      1995          987       92.4%      90.5%          753      0.76
  Oasis Cliffs                 376      351,920      1993          936       96.3%      96.8%          707      0.75
  Oasis Club                   320      286,560      1993          896       96.1%      94.3%          704      0.79
  Oasis Cove                   124      111,290      1993          898       94.7%      97.8%          668      0.74
  Oasis Crossings               72       70,752      1996          983       87.4%      94.0%          736      0.75
  Oasis Del Mar                560      552,040      1996          986       93.4%      90.6%          798      0.81
  Oasis Emerald                132      115,180      1993          873       96.8%      93.9%          630      0.72
  Oasis Gateway                360      418,680      1997        1,163         --(2)    91.5%(3)       840      0.72
  Oasis Glen                   113       89,488      1994          792       98.1%      96.6%          692      0.87
  Oasis Greens                 432      385,216      1993          892       96.3%      93.5%          688      0.77
  Oasis Harbor I               336      338,696      1996        1,008       95.6%      95.0%          769      0.76
  Oasis Heights                240      204,160      1994          851       96.1%      96.4%          637      0.75
  Oasis Heritage               720      678,760      1994          943       92.9%      88.7%          594      0.63
  Oasis Hills                  184      106,472      1993          579       96.5%      91.1%          500      0.86
  Oasis Island                 118      106,260      1993          901       94.3%      94.1%          639      0.71
  Oasis Landing                144      124,752      1993          866       95.8%      90.6%          674      0.78
  Oasis Meadows                383      397,276      1996        1,037       93.7%      91.5%          763      0.74
  Oasis Morning                106       53,772      1993          507       95.2%      96.9%          464      0.91
  Oasis Palms                  208      184,272      1993          886       94.3%      93.9%          647      0.73
  Oasis Paradise               624      560,896      1994          899       93.4%      92.3%          722      0.80
  Oasis Pearl                   90       82,332      1993          915       94.9%      95.1%          666      0.73
  Oasis Pines                  315      313,950      1997          997         --(2)    90.2%(3)       818      0.82
  Oasis Place                  240      105,600      1994          440       96.7%      94.5%          461      1.05
  Oasis Plaza                  300      245,936      1993          820       95.9%      94.5%          590      0.72
  Oasis Pointe                 252      249,216      1996          989       93.9%      91.6%          747      0.76
  Oasis Ridge                  477      187,833      1993          394       95.1%      93.3%          414      1.05
  Oasis Rose                   212      213,888      1994        1,009       92.8%      90.7%          709      0.70
  Oasis Sands                   48       54,000      1994        1,125       86.6%      94.6%          740      0.66
  Oasis Springs                304      246,912      1994          812       94.1%      89.7%          619      0.76
  Oasis Star II                 24       21,720      1993          905       96.2%      92.7%          661      0.73
  Oasis Suites                 409      163,200      1994          399       92.0%      85.9%          439      1.10
  Oasis Summit                 234      277,836   1994/95        1,187       97.6%      95.0%        1,040      0.88
  Oasis Tiara                  400      417,016      1996        1,043       97.0%      96.5%          817      0.78
  Oasis Topaz                  270      223,268      1993          827       96.2%      93.0%          607      0.73
  Oasis View                   180      169,200      1993          940       94.5%      95.9%          642      0.68
  Oasis Vinings                234      269,574   1993/94        1,152       92.5%      92.5%          741      0.64
  Oasis Vintage                368      366,048   1993/94          995       93.2%      92.2%          712      0.72
  Oasis Vista                  408      363,196      1994          890       94.5%      94.4%          522      0.59
  Oasis Winds                  350      282,500      1993          807       95.4%      93.7%          587      0.73
                        ----------   ----------             ----------    -------    -------    ----------   -------
   Subtotals/Wtd. Avg       12,293   10,971,826                    893       94.6%      93.1%          683      0.77

Denver(4)
  Oasis Centennial             276      205,380      1995          744       96.6%      99.2%          639      0.86
  Oasis Deerwood               342      391,590      1996        1,145       90.0%      91.8%        1,057      0.92
  Oasis Lakeway                451      425,770      1997          944      --(2)       77.8%(3)       930      0.99
  Oasis Park(5)                224      167,600      1994          748       97.7%      97.6%          676      0.90
  Oasis Wexford(5)             358      289,968      1994          810       97.0%      94.9%          707      0.87
                        ----------   ----------             ----------    -------    -------    ----------   -------
Subtotals/Wtd. Avg           1,651    1,480,308                    897       95.1%      94.9%          825      0.92

Orange County
  Oasis Martinique(5)          714      642,176      1997          899       97.7%(6)   95.4%          895      1.00
  Oasis Sea Palms(7)           138      123,300      1997          893       96.1%(6)   92.2%          957      1.07
                        ----------   ----------             ----------    -------    -------    ----------   -------
Subtotals/Wtd. Avg             852      765,476                    898       97.5%      94.9%          905      1.01
  Total/Wtd. Avg            14,796   13,217,610                    893       94.9%      93.4%   $      712   $  0.80
                        ==========   ==========             ==========    =======    =======    ==========   =======
</TABLE>

 ---------

(1) Reflects a weighted average of current contract rents for occupied units and
    market rents for unoccupied units for each community.

(2) Under development and/or in lease-up during period. Accordingly, its
    occupancy is not included in the subtotal or total.

(3) In lease-up during the month. Accordingly, its occupancy is not included in 
    the subtotal or total.
<PAGE>   14
(4) Excludes the 321 unit Oasis Denver West community which is owned by a
    limited liability company in which the Company holds a 50% member interest.
    As the Company's only joint venture, Denver West is not included in the
    consolidated financial statements as it is accounted for using the equity
    method.

(5) The Company is required to comply with affordable housing restrictions that
    require a certain percentage of the units at these communities to be leased
    to persons with incomes below a certain percentage of the local median
    income. These restrictions may impair the Company's ability to achieve
    increased rental rates on portions of these communities.

(6) Average occupancy only during the period of management by the Company. 

(7) Due to high density units put in place at the time of construction, Oasis is
    required to comply with affordable housing restrictions that require a
    certain percentage of the units at this community to be leased to persons
    with incomes below a certain percentage of the local median income. These
    restrictions may impair the Company's ability to achieve increased rental
    rates on portions of this community.                                        
    


<PAGE>   15

        Development Information. The following table presents certain
information concerning the Company's development activities:

<TABLE>
<CAPTION>
                                          APPROXIMATE                                                     ESTIMATED
                                   NUMBER  RENTABLE  APPROXIMATE AVERAGE                   ANTICIPATED     TOTAL
                                    OF      AREA        TOTAL    UNIT SIZE CONSTRUCTION    CONSTRUCTION   INVESTMENT
           COMMUNITIES             UNITS  (SQ. FT.)   ACREAGE(1) (SQ. FT.) COMMENCEMENT    COMPLETION        (2)
           -----------             -----  ---------   ---------- --------- ------------    ------------   -----------
                                                                                                          (dollars in
                                                                                                          millions)
<S>                                <C>     <C>        <C>        <C>        <C>            <C>            <C>
      Under Construction
        Denver:
          Oasis Interlocken          340   336,350      19.5       989      4th Qtr. 1997  2nd Qtr. 1999  $33.0
      Future Construction
        Las Vegas:
          Oasis Bluffs II            414   461,552      50.6     1,115               (3)          (3)        (4)
          Oasis Harbor II            248   250,026      13.6     1,008               (3)          (3)        (4)
          Oasis Miramar (5)          352   350,112      19.6       995               (3)          (3)
                                   -----  --------      ----     -----
       Subtotals/Wtd. Avg.         1,014  1,061,690     83.8     1,047
                                   -----  ---------     ----     -----
        Total/weighted average     1,354  1,398,040     103.3    1,033
                                   =====  =========     =====    =====
</TABLE>

----------
(1)  Reflects gross acreage for each community.

(2)  Includes cost of land.

(3) In preliminary planning stage; no construction schedule has been
    established. Commencement of construction is contingent upon a number of
    factors, including suitable financing, and there can be no assurances as to
    when or if suitable financing will be obtained. See "Risk Factors -
    Development and Acquisition Risks

(4) The time required to complete the lease-up phase of development varies from
    project to project. The Company typically develops its properties in phases,
    opening a portion of the total units to occupancy at one time. The Company
    begins leasing activities approximately 60 days before the first phase is
    opened for occupancy, setting up a temporary leasing office at the property.


(5) The Company has entered into an agreement to purchase a 19.8-acre parcel in
    Mission Viejo, California, subject to the satisfaction of certain
    entitlement conditions. If the conditions are satisfied and the purchase is
    completed the Company intends to build a 380 unit apartment community slated
    to begin construction in the second half of 1998.

ITEM 3. LEGAL PROCEEDINGS

        Neither the Company, the Properties, the development properties, nor the
Commercial Center are subject to any material litigation nor, to the Company's
knowledge, is any material litigation threatened against the Company, the
Properties, the development properties or the Commercial Center, other than
routine litigation and administrative proceedings arising in the ordinary course
of business.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        None


<PAGE>   16

PART II

ITEM 5.  MARKET FOR REGISTRANTS' COMMON STOCK AND RELATED STOCKHOLDER MATTERS

The Company's common stock is traded on the New York Stock Exchange (the
"NYSE"). As of ____, 1998, there were approximately ____ stockholders of record
and in excess of _____ beneficial stockholders of the Company's common stock.
The Company's common stock first traded on October 22, 1993. Set forth below are
the high and low sales prices as reported on the NYSE of the Company's common
stock for the periods indicated, as well as the dividends declared by the
Company per share of common stock for each period:



<TABLE>
<CAPTION>
                                                                 DIVIDENDS
                                                                 DECLARED
                                                HIGH     LOW     PER SHARE
                                               -------  -------  ---------
<S>                                            <C>      <C>      <C>     
                   1996
                     First Quarter             $24 1/2  $22      $  .4350
                     Second Quarter             23 1/2   21         .4350
                     Third Quarter              22       21 1/8     .4350
                     Fourth Quarter             23 1/2   20 1/2     .4350
                   1997
                     First Quarter             24 3/8    22 3/8     .4525
                     Second Quarter            23 3/4    22         .4525
                     Third Quarter             24 15/16  23 1/16    .4525
                     Fourth Quarter            25        21 11/16   .4525
                                                       
                   1998
                     First Quarter
                     (through ________, 1998)  _______   ______     .4525
</TABLE>


The closing price of the Company's common stock at December 31, 1997 and 1996
was $22.3125 and $22.75, respectively.

<PAGE>   17

ITEM 6.  SELECTED FINANCIAL DATA

The following table sets forth selected historical financial information for the
Company and for the multifamily apartment communities and Commercial Center
owned by the Company's predecessors prior to the Company's initial public
offering (the "Original Properties and Commercial Center"). The historical
information for the Company reflects the actual operations of the Company from
the date of the initial public offering and the operating data for the Original
Properties and Commercial Center prior to the date of the Company's initial
public offering.

<TABLE>
<CAPTION>
                                                                          YEAR ENDED DECEMBER 31,
                                                                          -----------------------
                                                   1997            1996            1995                 1994         1993
                                                   ----            ----            ----                 ----         ----
                                                                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                            <C>               <C>           <C>                <C>             <C>         
OPERATING DATA
Revenue:
    Rental income                              $    111,591    $     92,843    $     73,249       $     49,316    $     21,737
    Other income                                      4,188           3,156           3,080              2,581             815
    Joint venture investment income                      64              --              --                 --              --
    Interest income (related party)                     142              --              --                 --              --
                                               ------------    ------------    ------------       ------------    ------------
Total revenue                                  $    115,985    $     95,999    $     76,329       $     51,897    $     22,552
                                               ------------    ------------    ------------       ------------    ------------
Expenses:
    Property operating and maintenance               32,482          27,226          21,485             14,978           6,782
    Property management fees (related                                                                                         
      party)                                             --              --              --                 --             391
    General and administrative                        3,692           3,230           2,645              2,352             338
    Real estate taxes                                 6,246           5,230           4,079              2,814           1,372
    Interest                                         26,184          15,216           7,310              6,371           7,538
    Interest (related party)                             --              --              --                 --           1,294
    Interest (non-cash)                               1,214           1,118           1,332                673           1,791
    Depreciation and amortization                    19,113          15,637          12,062              8,689           4,343
                                               ------------    ------------    ------------       ------------    ------------
Total expenses                                       88,931          67,657          48,913             35,877          23,849
                                               ------------    ------------    ------------       ------------    ------------
Income before minority interest, gain on
     sale of real estate assets and                                                                                      
     extraordinary item                              27,054          28,342          27,416             16,020          (1,297)
  Less minority interest                                179              --              --                 --              --
                                               ------------    ------------    ------------       ------------    ------------
Income before gain on sale of real
     estate assets and  extraordinary item           26,875          28,342          27,416             16,020          (1,297)
                                               ------------    ------------    ------------       ------------    ------------
  Gain on sale of real estate assets                  6,999           2,444              --                 --              --
  Extraordinary item                                     --          (1,403)         (1,952)                --              --
                                               ------------    ------------    ------------       ------------    ------------
Net income                                           33,874          29,383          25,464             16,020          (1,297)
Less preferred dividend requirement                   9,372           9,372           6,534                 --              --
                                               ------------    ------------    ------------       ------------    ------------
Earnings available for common stockholders     $     24,502    $     20,011    $     18,930       $     16,020    $     (1,297)
                                               ============    ============    ============       ============    -===========
Net income per common share                    $       1.51    $       1.23    $       1.17       $       1.24              --
Common dividends paid per share                $       1.81    $       1.74    $       1.64       $       1.43              --
Weighted average common shares outstanding       16,250,118      16,237,646      16,230,429         12,957,175              --
BALANCE SHEET DATA
Real estate assets                             $    875,577    $    798,467    $    661,922       $    506,899    $    208,157
Total assets                                        846,528         774,773         641,936            502,432         208,789
Debt                                                448,774         394,274         250,825            212,093          49,426
Total liabilities                                   456,652         402,561         261,482            215,834          50,870
Minority interest                                    20,600              --              --                 --              --
Stockholders' equity                                369,276         372,212         380,454            286,598         157,919
Common shares outstanding                        16,326,477      16,237,646      16,237,646         16,216,134      10,468,134
Series A preferred shares outstanding             4,165,000       4,165,000       4,165,000                 --              --
OTHER DATA 
Cash flows provided (used in):
    Operating activities                       $     45,881    $     39,256    $     41,392       $     22,286    $        842
    Investing activities                            (12,274)       (147,169)       (155,023)          (219,448)        (87,551)
    Financing activities                            (34,474)        105,340         112,544            188,719         101,661
   Funds from Operations (1)                         45,867          43,766          39,329             24,350              --
PROPERTY DATA (2)
</TABLE>


<PAGE>   18

<TABLE>
<S>                                            <C>               <C>           <C>                <C>             <C>         
    Total properties, end of year                        51              49              43                 38              24
    Total apartment units, end of year               14,796          13,428          11,643              9,819           5,317
    Total apartment units, weighted average          14,278          12,671          10,610              7,416           3,501
    Weighted average monthly rental income
     per apartment Unit (3)                    $        647    $        606    $        570       $        549    $        507
  Communities under development at end of year            1               5             13(4)               9(5)             7
</TABLE>


(1) Management considers FFO to be an appropriate measure of the performance of
    an equity REIT. The National Association of Real Estate Investment Trust
    ("NAREIT") currently defines FFO as net income (computed in accordance with
    generally accepted accounting principles), excluding gains (or losses) from
    debt restructuring and sales of property, plus real estate depreciation and
    amortization, and after adjustments for unconsolidated partnerships and
    joint ventures. In addition, extraordinary or unusual items along with
    significant non-recurring events that materially distort the comparative
    measure of FFO are typically disregarded in its calculation. The Company's
    definition of FFO also assumes conversion of all convertible securities,
    including minority interests that are convertible into common equity. The
    Company believes that in order to facilitate a clear understanding of its
    consolidated historical operating results, FFO should be examined in
    conjunction with net income as presented in the consolidated financial
    statements included in this Annual Report on Form 10-K. FFO should not be
    considered as an alternative to net income as an indication of the Company's
    operating performance or to net cash provided by operating activities as a
    measure of the Company's liquidity. Furthermore, FFO as disclosed by other
    REIT's may not be comparable to the Company's calculation.

(2) Excludes communities under development. 

(3) Excludes rental income from commercial properties. 

(4) Includes the 20-unit expansion at Oasis Cove. 

(5) Includes the 156-unit phase II at Oasis Summit.


<PAGE>   19

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

GENERAL BACKGROUND

The following discussion should be read in conjunction with the Selected
Financial Data and the Consolidated Financial Statements and Notes thereto
appearing elsewhere in this report. The Company became an operating entity on
October 22, 1993, when it completed an initial public offering of common stock.
In connection with the Initial Offering, the Company acquired 17 properties from
the Robert V. Jones, Corp. and other affiliates and acquired 2,023 apartment 
units.

In July 1994, the Company completed a second public offering of 5,750,000
shares of common stock. The net proceeds of the offering (approximately
$132,000,000) were used to acquire five multifamily communities containing 2,441
units for approximately $98,811,000 including the assumption of $38,880,000 of
mortgage indebtedness, to effectively repay $16,067,000 of construction loan
indebtedness and to reduce the amounts drawn on the Company's credit facilities
by approximately $51,000,000. The balance of the net proceeds was used for
general corporate purposes, including other acquisitions and development
activities.

In April 1995, the Company completed a public offering of 4,165,000 shares of
$2.25 Series A Cumulative Convertible Preferred Stock at $25.00 per share. The
net proceeds of the offering were approximately $99,200,000 of which $63,000,000
was used to repay credit facility debt, $6,100,000 was used to repay short-term
debt and $23,214,000 was used to repay construction debt. The balance of the net
proceeds was used for working capital purposes.

In November 1996, the Company completed a public offering of $150,000,000 of
unsecured, fixed rate notes payable which priced in three tranches. The Company
borrowed $50,000,000 due November 15, 2001 at a coupon rate of 6.75%,
$50,000,000 due November 15, 2003 at a coupon rate of 7.00% and $50,000,000 due
November 15, 2006 at a coupon rate of 7.25%. The net proceeds of the offering
were used to retire approximately $53,087,000 in mortgage notes payable and to
reduce the outstanding balance on the credit facility.

RESULTS OF OPERATIONS

Increases in the operating results for the periods discussed below are
primarily the result of increases in the number of properties owned and
operated, as well as a result of increased rental rates. Where applicable,
comparisons have been made on a weighted average per unit basis in order to
adjust for such changes in the number of units owned. In computing the weighted
average per unit amounts, income and expenses of the Commercial Center have been
eliminated.

Comparison of year ended December 31, 1997 to year ended December 31, 1996

The weighted average number of apartment units increased by 1,607, or 13%, from
12,671 units in 1996 to 14,278 units in 1997. The increase is primarily the
result of the development of 1,576 and 1,234 units during 1997 and the second
half of 1996, respectively, as well as the acquisition of 852 units during 1997.
This increase was partially offset by the sale of one apartment community with
84 units in August 1997 and three apartment communities comprising 976 units in
December 1997. Total apartment units owned at the end of each period were 14,796
and 13,428, respectively.

For the year ended December 31, 1997, net income increased by $4,491,000 as
compared to the year ended December 31, 1996. For the year ended December 31,
1997, net income included a gain on sale of real estate assets of $6,999,000 and
a deduction for minority interest of $179,000. The gain on sale of real estate
assets related primarily to the sale of three apartment communities, Oasis
Orchid (280 units), Oasis Terrace (336 units) and Oasis Trails (360 units) in
the fourth quarter of 1997. The 


<PAGE>   20

minority interest represents the separate private ownership of Oasis Martinique
(714 units). For the year ended December 31, 1996, net income included an
extraordinary charge of $1,403,000 and a gain on sale of real estate assets of
$2,444,000. The extraordinary charge for the year ended December 31, 1996
related to the unamortized loan fees and prepayment penalty fees associated with
the mortgage notes payable which were repaid with the proceeds from the issuance
of $150,000,000 in notes payable in the fourth quarter of 1996. The gain on sale
of real estate assets related to the sale of Oasis Star I (44 units) and Oasis
Reef (60 units) in the fourth quarter of 1996. When examining income on an
income before minority interest, gain on sale of real estate assets and
extraordinary charge basis, income for the year ended December 31, 1997
decreased by $1,288,000 as compared to the year ended December 31, 1996. This
decrease was due to increases in property operating and maintenance expenses of
$5,256,000, general and administrative expenses of $462,000, real estate taxes
of $1,016,000, interest expense of $10,968,000, interest (non-cash), which
represents amortization of loan fees and costs, of $96,000, and depreciation and
amortization of $3,476,000. Offsetting these factors were increases in rental
income of $18,748,000, other income of $1,032,000, joint venture investment
income of $64,000 and interest income - related party of $142,0000. The
increases in revenue and expenses were primarily the result of operating a
greater number of apartment units in 1997 as compared to 1996.


Multifamily Communities

The following table presents the operations of the Company's multifamily
apartment communities (excluding the commercial properties and corporate general
and administrative expenses) for the year ended December 31, 1997, with
comparative amounts for 1996:

<TABLE>
<CAPTION>
                                                             YEAR ENDED DECEMBER 31,
                                                         ---------------------------------
                                                            1997       1996     % CHANGE
                                                          ---------- ---------- ----------
                                                               (Dollars in thousands)
<S>                                                        <C>         <C>            <C>
      Rental income                                        $110,919    $92,196        20%
      Other income                                            3,736      2,858        31%
                                                          ---------- ---------- ----------

        Total income                                        114,655     95,054        21%
                                                          ---------- ---------- ----------

      Property operating and              
        maintenance                                          32,314     27,085        19%
      Real estate taxes                                       6,199      5,189        19%                         
                                                          ---------- ---------- ----------
        Total property                                                                
          operating expenses                                 38,513     32,274        19%
                                                          ---------- ---------- ----------

        Property net operating income, before 
          interest expense and depreciation and 
          amortization                                       $76,142    $62,780       21%
                                                          ========== ========== ==========
</TABLE>


Rental income increased by $18,723,000, or 20%, from $92,196,000 in 1996 to
$110,919,000 in 1997. This increase was attributable to an increase in the
average monthly income per apartment unit, as well as additional rents received
as a result of the acquisition of 852 units and the completion of 1,897 units
during 1997. This increase was partially offset by the loss of rents relating to
the sale of 1,060 units during 1997. The weighted average monthly rental income
per apartment unit was approximately $647 in 1997 compared to $606 in 1996.

Other income (consisting primarily of nonrefundable security deposits,
application and cleaning fees, laundry and vending income) increased by $878,000
or 31%, from $2,858,000 in 1996 to $3,736,000 


<PAGE>   21

in 1997, primarily due to the operation of additional apartment communities in
1997 as compared to 1996.

Property operating and maintenance expenses increased by $5,229,000, or 19%. On
a weighted average per unit, per month basis, these expenses increased by $11,
or 6%, from $178 in 1996 to $189 in 1997. These increases are primarily
attributable to general increases in utility rates during 1997.

Real estate taxes increased by $1,010,000, or 19%, primarily due to the
acquisition and development of additional apartment communities in 1997 and
during the second half of 1996. On a weighted average per unit, per month basis,
real estate taxes increased by $2, or 6%, from $34 in 1996 to $36 in 1997. This
increase is primarily due to the periodic re-assessment of the value of the
Company's communities. Nevada law requires the taxing authorities to re-assess
approximately twenty percent of all properties each year. Accordingly, each of
the Company's properties will be re-assessed for tax purposes approximately once
every five years.


"Same Store" Portfolio

The operating performance of the 36 communities and the first phase of one
community containing an aggregate of 9,983 apartment units which the Company
owned and operated (excluding communities under development) as of January 1,
1996, are summarized as follows

<TABLE>
<CAPTION>
                                                        YEAR ENDED DECEMBER 31,
                                                   ----------------------------------
                                                       1997       1996     % CHANGE
                                                    ----------- ---------------------
                                                         (Dollars in thousands)
<S>                                                    <C>        <C>             <C>
Rental income                                          $71,766    $70,130         2%
                                                                         
Other income                                             2,569      2,140        20%
                                                    ----------- ---------------------
    Total income                                        74,335     72,270         3%
                                                    ----------- ---------------------

Property operating and maintenance                      21,303     20,604         3%
Real estate taxes                                        4,267      4,081         5%
                                                    ----------- ---------   ----------
    Total property operating expenses                   25,570     24,685         4%
                                                    ----------- ---------   ----------

    Property net operating income, before
      interest expense and depreciation and 
      amortization                                      $48,765    $47,585         2%
                                                    =========== =========   =========
</TABLE>

The increase in rental income of $1,636,000, or 2%, was primarily due to
an increase in the average rental rates.

Other income increased by $429,000, or 20%, primarily due to an increase in fees
unrelated to rent such as nonrefundable security deposits, application and
cleaning fees, and late fees. The increase is directly correlated to a greater
focus on the collection of termination fees and other related charges.

The increase in property operating and maintenance expenses of $699,000, or 3%,
was due to increased repairs and maintenance costs of $227,000, increased
marketing costs of $191,000, increased security costs of $165,000, increased
utility costs of $152,000 and increased payroll costs of $23,000, which were
partially offset by decreases in administrative expenses of $59,000.


<PAGE>   22

Real estate taxes increased by $186,000, or 5%, from $4,081,000 in 1996 to
$4,267,000 in 1997, primarily due to the re-assessment of certain communities by
the taxing authorities.

Comparison of year ended December 31, 1996 to year ended December 31, 1995

The weighted average number of apartment units increased by 2,061, or 19%, from
10,610 units in 1995 to 12,671 units in 1996. This increase is primarily the
result of the development of 1,889 units during 1996, as well as the acquisition
and development of 276 and 856 units, respectively, during the second half of
1995. This increase was partially offset by the sale of two apartment
communities comprising 104 apartment units during December 1996. Total apartment
units owned at the end of each period were 13,428 and 11,643, respectively.

For the year ended December 31, 1996, net income increased by $3,919,000 as
compared to the year ended December 31, 1995. For the year ended December 31,
1996, net income included an extraordinary charge of $1,403,000 and a gain on
sale of real estate assets of $2,444,000. The extraordinary charge for the year
ended December 31, 1996 related to the unamortized loan fees and prepayment
penalty fees associated with the mortgage notes payable which were repaid with
the proceeds from the issuance of $150,000,000 in notes payable in the fourth
quarter of 1996. The gain on sale of real estate assets related to the sale of
Oasis Star I (44 units) and Oasis Reef (60 units) in the fourth quarter of 1996.
For the year ended December 31, 1995, net income included an extraordinary
charge of $1,952,000 for unamortized loan fees and costs associated with the
credit facility debt that was retired during the third quarter of 1995. When
examining income on an income before gain on sale of real estate assets and
extraordinary charge basis, income for the year ended December 31, 1996
increased by $926,000 as compared to the year ended December 31, 1995. This
increase was due to increased rental and other income of $19,594,000 and
$76,000, respectively, as well as a decrease in interest expense (non-cash),
which represents amortization of loan fees and costs, of $214,000. Offsetting
these factors were increases in property operating and maintenance expenses of
$5,741,000, general and administrative expenses of $585,000, real estate taxes
of $1,151,000, interest expense of $7,906,000, and depreciation and amortization
of $3,575,000. The increases in revenue and expenses were primarily the result
of operating a greater number of apartment units in 1996 as compared to 1995.

<PAGE>   23

Multifamily Communities

The following table presents the operations of the Company's multifamily
apartment communities (excluding the commercial properties and corporate general
and administrative expenses) for the year ended December 31, 1996 with
comparative amounts for 1995:

<TABLE>
<CAPTION>
                                                        YEAR ENDED DECEMBER 31,
                                                      -------------------------------
                                                        1996      1995     % CHANGE
                                                      --------- ---------- ----------
                                                          (Dollars in
                                                          thousands)

<S>                                                    <C>         <C>           <C>
Rental income                                         $ 92,196    $72,595        27%
Other income                                             2,858      2,388        20%
                                                      --------- ---------- ----------

   Total income                                         95,054     74,983        27%
                                                      --------- ---------- ----------

Property operating and                                  27,085     21,356        27%
maintenance                                                              
Real estate taxes                                        5,189      4,038        29%
                                                      --------- ---------- ----------
   Total property operating expenses                    32,274     25,394        27%
                                                      --------- ---------- ----------

   Property net operating income, before interest
   expense and depreciation and amortization           $62,780    $49,589        27%
                                                      ========= ========== ==========
</TABLE>


Rental income increased by $19,601,000, or 27%, from $72,595,000 in 1995 to
$92,196,000 in 1996. Of the increase, $16,533,000 was attributable to
development communities, $1,412,000 was attributable to Oasis Centennial, which
was acquired in the third quarter of 1995, and the balance was attributable to
increased rents at communities owned during both periods. The weighted average
monthly rental income per apartment unit was approximately $606 in 1996 compared
to $570 in 1995.

Other income (consisting primarily of nonrefundable security deposits,
application and cleaning fees, laundry and vending income) increased by
$470,000, or 20%, from $2,388,000 in 1995 to $2,858,000 in 1996, primarily due
to the operation of additional apartment communities in 1996 as compared to
1995.

Property operating and maintenance expenses increased by $5,729,000, or 27%. On
a weighted average per unit, per month basis, these expenses increased by $10,
or 6%, from $168 in 1995 to $178 in 1996. These increases are primarily
attributable to general increases in utility rates during 1996, as well as to
additional costs associated with the Company's implementation of its brand name
operating strategy.

Real estate taxes increased by $1,151,000, or 29%, primarily due to the
acquisition and development of additional apartment communities in 1996 and
during the second half of 1995. On a weighted average per unit, per month basis,
real estate taxes increased by $2, or 6%, from $32 in 1995 to $34 in 1996. This
increase is primarily due to the periodic re-assessment of the value of the
Company's communities. Nevada law requires the taxing authorities to re-assess
approximately twenty percent of all properties each year. Accordingly, each of
the Company's properties will be re-assessed for tax purposes approximately once
every five years.


<PAGE>   24

"Same Store" Portfolio

The operating performance of the 40 communities and the first phase of one
community containing an aggregate of 9,819 apartment units which the Company
owned and operated (excluding communities under development) as of January 1,
1995, are summarized as follows:


<TABLE>
<CAPTION>
                                                        YEAR ENDED DECEMBER 31,
                                                    ---------------------------------
                                                       1996       1995     % CHANGE
                                                    ----------- ---------------------
                                                         (Dollars in thousands)
<S>                                                    <C>        <C>            <C>
Rental income                                          $67,850    $66,194        3%
Other income                                             2,163      2,315       (7%)
                                                    ----------- -----------  -------
    Total income                                        70,013     68,509        2%
                                                    ----------- -----------  -------

Property operating and maintenance                      20,424     19,630         4%
Real estate taxes                                        3,934      3,769         4%
                                                    ----------- -----------  -------
    Total property operating expenses                   24,358     23,399         4%
                                                    ----------- -----------  -------

    Property net operating income, before
    interest expense
      and depreciation and amortization                $45,655    $45,110        1%
                                                    =========== =========   ========
</TABLE>


The increase in rental income of $1,656,000, or 3%, was primarily due to an
increase in the average rental rates.

Other income decreased by $152,000, or 7%, primarily due to a decrease in fees
unrelated to rent such as nonrefundable security deposits, application and
cleaning fees, and late fees. This decrease is directly correlated to the
reduction in turnover experienced by the Company during 1996 resulting from the
implementation of its brand name operating strategy.

The increase in property operating and maintenance expenses of $794,000, or 4%,
was due to increased utility costs of $383,000, increased payroll costs of
$247,000, increased marketing costs of $92,000 and increased administrative
costs of $80,000, which were partially offset by decreases in other operating
expenses of $8,000.

Real estate taxes increased by $165,000, or 4%, from $3,769,000 in 1995 to
$3,934,000 in 1996, primarily due to the re-assessment of certain communities by
the taxing authorities.




LIQUIDITY AND CAPITAL RESOURCES

      Net cash provided by operating activities increased by $6,625,000 from
$39,256,000 in 1996 to $45,881,000 in 1997. This increase is primarily due to an
increase in net operating income (income before depreciation and amortization
expense, minority interest, gain on sale of real estate assets and extraordinary
item), an increase in resident deposits and prepaid rent, as well as a reduction
in the decrease of accounts payable and accrued expenses and a reduction in the
increase of deferred assets 


<PAGE>   25

and other costs.

Net cash used in investing activities decreased by $134,895,000, from
$147,169,000 in 1996 to $12,274,000 in 1997. During the year ended December 31,
1996, the Company had 15 communities in development (including a 321 unit
apartment community being developed as part of a joint venture agreement ("Oasis
Denver West")), comprising 4,448 apartment units, of which eight communities
comprising 1,889 apartment units were completed during the period. During the
year ended December 31, 1997, the Company had eight communities in development
(including Oasis Denver West), comprising 2,899 apartment units of which five
communities (including Oasis Denver West) comprising 1,897 units were completed
during the period. The estimated total investment upon completion of the 1,002
apartment units will be finalized prior to the commencement of construction.

In December 1996, the Company sold Oasis Star I, a 44 unit apartment community,
and Oasis Reef, a 60 unit apartment community, both located in Las Vegas, for an
aggregated consideration of $6,600,000, resulting in a combined gain of
$2,444,000. The cash proceeds to the Company were $5,302,000. Additionally, in
connection with the sale of Oasis Reef, the sale agreement provided for a
$1,100,000 note receivable which was issued in favor of the Company. The note
was paid in full during 1997. During 1997, the Company sold, in separate
transactions, Oasis Villas, an 84 unit apartment community, Oasis Orchid, a 280
unit apartment community, Oasis Terrace, a 336 unit apartment community and
Oasis Trails, a 360 unit apartment community, all located in Las Vegas, for an
aggregate consideration of approximately $60,000,000, resulting in a combined
gain of $6,999,000. The cash proceeds to the Company were $58,359,000.

 The Company funds its development activities through a combination of working
capital, construction loans and its $200,000,000 credit facility. Advances under
the credit facility bear interest, at the Company's election, of either the
London Interbank Offered Rate ("LIBOR") plus 1.15% or the prime lending rate,
which reflects the interest rate reductions obtained by the Company during 1997.
In fourth quarter 1997, the LIBOR-based rate on the credit facility was reduced
to LIBOR plus 1.15% from LIBOR plus 1.25%. At December 31, 1997, the Company had
available borrowing capacity under the credit facility of $108,544,000.

      Net cash provided by financing activities was $105,340,000 in 1996
compared to net cash used by financing activities of $34,474,000 in 1997,
representing a difference of $139,814,000. This difference is primarily a result
of the reduction in proceeds from debt.

      At December 31, 1997, the Company had total indebtedness of approximately
$448,774,000, which includes $149,808,000 (net of a discount of $192,000) of
unsecured fixed rate debt, $133,492,000 of fixed rate mortgage debt, $91,456,000
of credit facility debt and $74,018,000 of fixed rate tax-exempt debt.

      The Company anticipates meeting its short-term liquidity requirements
through a combination of cash flow from operations retained for investment
purposes, cash available from its credit facility and construction loans plus
additional long-term borrowings. The Company believes that net cash provided by
operations will be adequate to meet its operating requirements and to pay
dividends in accordance with real estate investment trust ("REIT") requirements.

      The Company expects to meet its long-term liquidity requirements, such as
funds for acquisition and development activity and the repayment of debt,
through new long-term borrowings and the issuance of additional debt securities
or equity securities. In March 1997, the Company filed a shelf 


<PAGE>   26

registration statement with the Securities and Exchange Commission which covers
up to an aggregate of $250,000,000 of debt securities, preferred stock,
depositary stock, common stock and warrants to purchase common stock and
preferred stock which the Company may issue from time to time.


<PAGE>   27

The following table presents certain information concerning the development and
expansion activities of the Company during 1997:


<TABLE>
<CAPTION>
                                                                      COST            PRIMARY SOURCE OF FUNDING
                                                  ESTIMATED         EXPENDED          -------------------------
                                      NUMBER        TOTAL            THROUGH      CONSTRUCTION     WORKING CAPITAL/
                  COMMUNITIES        OF UNITS    INVESTMENT(1)     12/31/97(1)        LOAN         CREDIT FACILITY
                  -----------       ---------    -------------     -----------    ------------     ----------------
                                                            (DOLLARS IN THOUSANDS)
<S>                                 <C>            <C>              <C>             <C>              <C>      
          Completed developments
                 Oasis Bluffs I           450      $  37,670        $  37,670                        $  37,670
                 Oasis Gateway            360         26,634           26,634                           26,634
                 Oasis Lakeway            451         37,883           37,883                           37,883
                 Oasis Pines              315         23,908           23,908                           23,908
                                    ---------      ---------        ---------                        ---------
                                        1,576        126,095          126,095                          126,095
                                                                                                              
          Current developments:                                                                               
                 Oasis Interlocken        340         33,000           10,021                           33,000
                                                                                                              
          Future Developments:                                                                                
                 Oasis Bluffs II          414               (2)         9,569(3)                         9,569
                 Oasis Harbor II          248               (2)         6,335(3)                         6,335
                                    ---------      ---------        ---------                        ---------
                                          662                          15,904                           15,904
                                                                                                              
               Subtotal                 2,578        159,095          152,020                          174,999
                                                                                                              
          Land held for future 
           development:
                 Oasis Miramar            352                           4,083(3)                         4,083
                                    ---------                       ---------                        ---------
                                                                                                              
                    Total               2,930      $ 159,095        $ 156,103                        $ 179,082
                                    =========      =========        =========                        =========
</TABLE>

---------

(1) Includes cost of land.

(2) Estimated total investment for these projects is in the process of being
    finalized.

(3) Represents cost of land and infrastructure.


<PAGE>   28

The following table sets forth certain information with respect to debt at
December 31, 1997. As of that date, 9,330 of the Company's operating apartment
units and the commercial properties were unencumbered:


<TABLE>
<CAPTION>
                                        ENCUMBERED       NUMBER                   INTEREST            BALANCE
                LENDER                  PROPERTIES      OF UNITS   MATURITY         RATE         DECEMBER 31, 1996
         -------------------         ----------------   --------   --------   ----------------   -----------------
                                                                                                   (DOLLARS IN
                                                                                                    THOUSANDS)
         <S>                         <C>                  <C>       <C>       <C>                    <C>    
         Credit facility:
           Wells Fargo Bank          Unsecured                      09/98     LIBOR + 1.15%(1)      $ 91,456
                                                                                                    --------
         Notes payable:
           5  year notes payable     Unsecured                      11/01             6.75%           50,000
           7  year notes payable     Unsecured                      11/03             7.00%           50,000
           10 year notes payable     Unsecured                      11/06             7.25%           50,000
                                                                                                    --------
                                                                                                     150,000(2)
          Mortgage notes payable:
           Lutheran Brotherhood      Oasis Club           320       10/98             6.90%            8,940
           Teachers Insurance        Oasis Del Mar        560       12/02             8.46%           21,449
           FNMA-MBS                  Oasis Greens         432       08/01             8.63%           12,000
           FNMA                      Oasis Hills          184       10/03             7.50%            2,599
           FNMA                      Oasis Landing        144       10/03             7.50%            3,920
           Allstate                  Oasis Paradise I     368       04/08             7.10%           15,573
           FNMA-MBS                  Oasis Plaza          300       08/01             8.63%            6,000
           FNMA                      Oasis Rainbow        232       10/03             7.50%            6,309
           FNMA                      Oasis Topaz          270       12/01             9.50%            6,451
           FNMA                      Oasis Vintage I      336       10/03             7.50%           10,819
           Teachers Insurance        Various(3)         1,024       12/05             8.13%           39,432
                                                        -----                                       --------
                                                        4,170                                        133,492
                                                        -----                                       --------
         Tax-exempt bonds:
           Bonds                     Oasis Park           224       01/26             7.29%            7,591(4)
           Bonds                     Oasis Wexford        358       11/25             6.45%           15,827
           Bonds                     Oasis Martinique     714       01/09                  (5)        50,600
                                                        -----                                       --------
                                                        1,296                                         74,018
                                                        -----                                       --------
                  Subtotal                              5,466                                        448,966
                                                        -----                                       --------
         Unamortized discount 
         on notes payable                                                                               (192)
                                                                                                    --------
                  Total                                 5,466                                       $448,774
                                                        =====                                       ========

</TABLE>

----------



(1) During 1997, the LIBOR-based rate on the credit facility was reduced to
    LIBOR + 1.15% from LIBOR + 1.25%.

(2) $149,808 net after discount.

(3) Communities collateralized are Oasis Bel Air, Oasis Canyon, Oasis Pointe,
    and Oasis Centennial.

(4) $1,090 of the outstanding balance is taxable.

(5) The interest rate on the bonds is based upon the seven day tax exempt bond
    floating rate index plus 125 basis points.


<PAGE>   29

   CAPITAL EXPENDITURES

   The Company capitalizes the direct and indirect costs of expenditures for the
   acquisition or development of apartment communities and replacements and
   improvements. Non-revenue generating capital expenditures are those
   replacements which recur on a regular basis, but which have estimated useful
   lives of more than one year, such as roofing, heating, ventilation and air
   conditioning and exterior repainting. Revenue generating expenditures are
   those improvements which enhance the community's net operating income
   generating capability either through increased rental rates or reduced
   operating expenses.

   During 1995, the Company implemented its customer focused brand name
   operating strategy. The process required many on-site improvements, including
   the changing of property signage (which includes the Oasis name and logo) and
   was completed in 1996. These costs are considered revenue generating capital
   expenditures in that the Company believes that the Oasis brand name enhances
   the Company's ability to attract new residents, retain existing residents,
   gain additional resident referrals and retain more residents transferring
   from one Oasis community to another.

   At newly acquired communities, the Company often finds it necessary to
   upgrade the physical appearance of the properties and to complete maintenance
   and repair work which had been deferred by the prior owners. These activities
   often result in heavier capital expenditures in the early years of Company
   ownership. Some of these expenditures which would normally be considered
   non-revenue generating capital expenditures or expense items are classified
   as revenue generating expenditures when carpets and appliances are replaced
   and the community is substantially upgraded to meet the image and quality
   standards represented by the Oasis brand name. Upon completion of the
   rehabilitation process, normal recurring capital expenditures such as carpet
   and appliances are expensed as incurred.

   Interest, real estate taxes and other carrying costs incurred during the
   development period of communities under construction are capitalized and,
   upon completion of the project, depreciated over the lives of the project.


   INFLATION

   The Company leases apartments to its residents under lease terms generally
   ranging from six to 12 months. Management believes that the short-term lease
   contracts lessen the impact of inflation by giving the Company the ability to
   adjust rental rates to market levels as leases expire. The impact of recent
   low rates of inflation has not been significant to the Company's operations,
   except for the positive effect that low inflation has had on reducing the
   Company's interest cost. Inflation and inflationary expectations and their
   effect on interest rates may affect the Company in the future by changing the
   underlying value of the Company's real estate assets or by affecting the
   Company's costs of financing its operations.


   IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

   In 1997, the Financial Accounting Standards Board issued Statements of
   Financial Accounting Standards No. 130 "Reporting Comprehensive Income" and
   No. 131 "Disclosures about Segments of an Enterprise and Related
   Information". These statements shall be effective for financial statements
   for fiscal years beginning after December 15, 1997. Management does not
   believe that the adoption of Standards No. 130 and 131 will have a material
   effect on its financial position or 


<PAGE>   30

results of operations.


   CALCULATION OF FUNDS FROM OPERATIONS AND FUNDS AVAILABLE FOR DISTRIBUTION

   The Company considers FFO to be an appropriate measure of the performance of
   an equity REIT. The National Association of Real Estate Investment Trust
   ("NAREIT") currently defines FFO as net income (computed in accordance with
   generally accepted accounting principles), excluding gains (or losses) from
   debt restructuring and sales of property, plus real estate depreciation and
   amortization, and after adjustments for unconsolidated partnerships and joint
   ventures. In addition, extraordinary or unusual items along with significant
   non-recurring events that materially distort the comparative measure of FFO
   are typically disregarded in its calculation. The Company's definition of FFO
   also assumes conversion of all convertible securities, including minority
   interests that are convertible into common equity. The Company believes that
   in order to facilitate a clear understanding of its consolidated historical
   operating results, FFO should be examined in conjunction with net income as
   presented in the consolidated financial statements included in this Annual
   Report on Form 10-K. FFO should not be considered as an alternative to net
   income as an indication of the Company's operating performance or to net cash
   provided by operating activities as a measure of the Company's liquidity.
   Furthermore, FFO as disclosed by other REIT's may not be comparable to the
   Company's calculation.

   The following table presents a calculation of FFO and FAD:

<TABLE>
<CAPTION>
                                                       YEAR ENDED
                                                   DECEMBER 31, 1997
                                                  ---------------------
                                                  (Dollars in thousands)
<S>                                               <C>     
Computation of Funds from Operations:
Income before gain on sale of real estate assets and     $ 26,875
extraordinary item
Add:
     Depreciation on real estate assets                    18,813
Less:
    Preferred dividend requirement                         (9,372)
                                                         --------
         FUNDS FROM OPERATIONS - PRIMARY                   36,316
       

Add:
    Preferred dividend requirement                          9,372
    Minority interest                                         179
                                                         --------
           FUNDS FROM OPERATIONS - FULLY DILUTED         $ 45,867
       


Computation of Funds Available for Distribution:
    Funds from Operations - Fully Diluted                $ 45,867
    Add:
       Amortization of deferred financing costs             1,214
       Depreciation of non-real estate                        323
       assets
       Other amortization                                      12
    Less:  Non-revenue generating capital expenditures     (3,250)
                                                         --------

         FUNDS AVAILABLE FOR DISTRIBUTION                $ 44,166
                                                         ========
</TABLE>

<PAGE>   31

NOTES TO COMPUTATIONS OF FUNDS FROM OPERATIONS AND FUNDS AVAILABLE FOR
DISTRIBUTION

1. The Company generally expenses most recurring non-revenue generating property
   expenditures, including carpet and appliance replacements, except for certain
   expenditures on acquisition communities where major improvements are required
   to bring the community up to the operating standards of the Oasis portfolio.

2. Non-revenue generating expenditures at the communities consist of
   replacements and equipment additions that do not enhance the revenue
   generating capabilities of the communities.

3. Non-revenue generating expenditures at the corporate office consist primarily
   of computer and office equipment acquisitions.



<PAGE>   32

                                   SIGNATURES

Pursuant to the requirements of the Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant and has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.

OASIS RESIDENTIAL, INC.

By: /s/ Scott S. Ingraham
    -----------------------------------------
        Scott S. Ingraham
        Chief Executive Officer, President and
        Director

       Date: March 23, 1998

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>

           SIGNATURE                    TITLE                        DATE
           ---------                    -----                        ----
<S>                                <C>                           <C>
   /s/  ROBERT V. JONES            Chairman of the Board         March 23, 1998
-------------------------------
       Robert V. Jones

   /s/  SCOTT S. INGRAHAM          Chief Executive Officer,      March 23, 1998
-------------------------------    President and Director
       Scott S. Ingraham           (Principal Executive
                                   Officer)
                                   

   /s/  ALLAN O. HUNTER, JR.       Executive Vice President,     March 23, 1998
-------------------------------    Chief Operating Officer
       Allan O. Hunter, Jr.        and Director
   

   /s/  JOHN M. CLAYTON            Senior Vice President and     March 23, 1998
-------------------------------    Chief Financial
        John M. Clayton            Officer (Principal
                                   Financial Officer)

   /s/  MARIANNE K. AGUIAR         Vice President and            March 23, 1998
-------------------------------    Controller (Principal
        Marianne K. Aguiar         Accounting Officer)

   /s/  JOHN M. GALVIN             Director                      March 23, 1998
-------------------------------
        John M. Galvin

   /s/  PETER L. RHEIN             Director                      March 23, 1998
-------------------------------
       Peter L. Rhein

   /s/  ROBERT H. SMITH            Director                      March 23, 1998
-------------------------------
       Robert H. Smith

   /s/ EDWARD R. MULLER            Director                      March 23, 1998
-------------------------------
      Edward R. Muller
</TABLE>



<PAGE>   33
 
                            OASIS RESIDENTIAL, INC.
 
                         INDEX TO FINANCIAL STATEMENTS
 
<TABLE>
<CAPTION>
                                                                                        PAGE
                                                                                        ----
<S>                                                                                     <C>
OASIS RESIDENTIAL, INC.
  Report of Independent Accountants...................................................   F-2
  Consolidated Balance Sheets at December 31, 1997 and 1996...........................   F-3
  Consolidated Statements of Operations for the Years ended December 31, 1997, 1996
     and 1995.........................................................................   F-4
  Consolidated Statements of Changes in Stockholders' Equity for the Years ended
     December 31, 1997, 1996 and 1995.................................................   F-5
  Consolidated Statements of Cash Flows for the Years ended December 31, 1997, 1996
     and 1995.........................................................................   F-6
  Notes to the Consolidated Financial Statements......................................   F-7
  Schedule III: Real Estate and Accumulated Depreciation..............................  F-20
</TABLE>
 
All other schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and therefore have been omitted or the
information is presented in the consolidated financial statements or related
notes.
 
                                       F-1
<PAGE>   34

                        REPORT OF INDEPENDENT ACCOUNTANTS


Board of Directors and Stockholders
Oasis Residential, Inc.


We have audited the accompanying consolidated financial statements and the
financial statement schedule of Oasis Residential, Inc. and its subsidiaries
(the "Company") as of December 31, 1997 and 1996 and for each of the three years
in the period ended December 31, 1997 as listed on page F-1 of this Form 10-K.
These consolidated financial statements and the financial statement schedule are
the responsibility of the management of the Company. Our responsibility is to
express an opinion on these consolidated financial statements and the financial
statement schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of the
Company as of December 31, 1997 and 1996 and the results of its operations and
its cash flows for each of the three years in the period ended December 31, 1997
in conformity with generally accepted accounting principles. In addition, in our
opinion, the financial statement schedule referred to above, when considered in
relation to the basic financial statements taken as a whole, presents fairly, in
all material respects, the information required to be included therein.


                                           Coopers & Lybrand L.L.P.

San Francisco, California 
January 23, 1998, except for Note 15 
as to which the date is March 6, 1998.


                                      F-2
<PAGE>   35
 
                            OASIS RESIDENTIAL, INC.
 
                          CONSOLIDATED BALANCE SHEETS
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
                                     ASSETS
 
<TABLE>
<CAPTION>
                                                                             DECEMBER 31,
                                                                         ---------------------
                                                                           1997         1996
                                                                         --------     --------
<S>                                                                      <C>          <C>
Real estate assets:
  Land.................................................................  $126,224     $ 93,484
  Buildings and improvements...........................................   674,155      552,500
  Furniture and fixtures...............................................    45,163       39,515
                                                                         --------     --------
                                                                          845,542      685,499
  Less accumulated depreciation........................................    64,899       53,049
                                                                         --------     --------
                                                                          780,643      632,450
  Land held for development............................................     4,083        3,766
  Construction in progress.............................................    25,952      109,202
                                                                         --------     --------
     Net real estate assets............................................   810,678      745,418
Cash and cash equivalents..............................................     2,530        3,397
Restricted cash........................................................     2,964        2,976
Investment in and advances to joint venture............................     8,370        9,574
Notes receivable (Related Party).......................................     8,216           --
Deposits on real estate assets.........................................     2,654        2,000
Deferred costs and other assets (net of accumulated amortization of
  $3,028 and $1,802 at December 31, 1997 and 1996, respectively).......    11,116       11,408
                                                                         --------     --------
     Total assets......................................................  $846,528     $774,773
                                                                         ========     ========
                             LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Debt.................................................................  $448,774     $394,274
  Resident deposits and prepaid rent...................................     3,148        2,066
  Accounts payable and accrued expenses................................     4,730        6,221
                                                                         --------     --------
     Total liabilities.................................................   456,652      402,561
                                                                         --------     --------
Minority Interest......................................................    20,600           --
Commitments and contingencies (Note 16)
Stockholders' equity:
  Preferred stock, $2.25 Series A Cumulative Convertible,
     $.01 par value, liquidation preference of $25 per share,
     15,000,000 shares authorized, 4,165,000 shares issued and
     outstanding at December 31, 1997 and 1996.........................        42           42
  Common stock, $.01 par value, 100,000,000 shares authorized,
     16,326,477 and 16,237,646 shares issued and outstanding at
     December 31, 1997 and 1996, respectively..........................       163          162
  Paid-in capital......................................................   388,876      386,910
  Distributions in excess of accumulated earnings......................   (19,805)     (14,902)
                                                                         --------     --------
     Total stockholders' equity........................................   369,276      372,212
                                                                         --------     --------
     Total liabilities and stockholders' equity........................  $846,528     $774,773
                                                                         ========     ========
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       F-3
<PAGE>   36
 
                            OASIS RESIDENTIAL, INC.
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
<TABLE>
<CAPTION>
                                                                  YEARS ENDED DECEMBER 31,
                                                          -----------------------------------------
                                                             1997           1996           1995
                                                          -----------    -----------    -----------
<S>                                                       <C>            <C>            <C>
Revenue:
  Rental income........................................   $   111,591    $    92,843    $    73,249
  Other income.........................................         4,188          3,156          3,080
  Joint venture investment income......................            64             --             --
  Interest income -- related party.....................           142             --             --
                                                          -----------    -----------    -----------
                                                              115,985         95,999         76,329
                                                          -----------    -----------    -----------
Expenses:
  Property operating and maintenance...................        32,482         27,226         21,485
  General and administrative...........................         3,692          3,230          2,645
  Real estate taxes....................................         6,246          5,230          4,079
  Interest.............................................        26,184         15,216          7,310
  Interest (non-cash)..................................         1,214          1,118          1,332
  Depreciation and amortization........................        19,113         15,637         12,062
                                                          -----------    -----------    -----------
                                                               88,931         67,657         48,913
                                                          -----------    -----------    -----------
Income before minority interest, gain on sale of real
  estate assets and extraordinary item.................        27,054         28,342         27,416
Minority interest......................................           179             --             --
                                                          -----------    -----------    -----------
Income before gain on sale of real estate assets and
  extraordinary item...................................        26,875         28,342         27,416
Gain on sale of real estate assets.....................         6,999          2,444             --
                                                          -----------    -----------    -----------
Income before extraordinary item.......................        33,874         30,786         27,416
Extraordinary item.....................................            --         (1,403)        (1,952)
                                                          -----------    -----------    -----------
Net income.............................................        33,874         29,383         25,464
Less preferred dividend requirement....................         9,372          9,372          6,534
                                                          -----------    -----------    -----------
Earnings available for common stockholders.............   $    24,502    $    20,011    $    18,930
                                                          ===========    ===========    ===========
Basic and Diluted Earnings Per Share:
  Earnings available for common stockholders before
     extraordinary item................................   $      1.51    $      1.32    $      1.29
  Less extraordinary item..............................            --           0.09           0.12
                                                          -----------    -----------    -----------
  Earnings available for common stockholders...........   $      1.51    $      1.23    $      1.17
                                                          ===========    ===========    ===========
Weighted average number of common shares outstanding...    16,250,118     16,237,646     16,230,429
                                                          ===========    ===========    ===========
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       F-4
<PAGE>   37
 
                            OASIS RESIDENTIAL, INC.
 
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
              FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
                             (DOLLARS IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                                DISTRIBUTIONS
                                                                                         ----------------------------
                                PREFERRED STOCK          COMMON STOCK                     IN EXCESS
                                $.01 PAR VALUE          $.01 PAR VALUE                       OF             TOTAL
                              -------------------    --------------------     PAID-IN    ACCUMULATED    STOCKHOLDERS'
                                SHARES     AMOUNT      SHARES      AMOUNT     CAPITAL     EARNINGS         EQUITY
                              ----------   ------    -----------   ------    ---------   -----------    -------------
<S>                           <C>          <C>       <C>           <C>       <C>         <C>            <C>
Balance, December 31,
  1994......................          --      --      16,218,134    $162      $287,755    $  (1,319)      $ 286,598
  Shares issued for cash
     (net of issuance
     costs).................   4,165,000    $42               --      --        98,655           --          98,697
  Common stock issued to
     executive officer......          --     --           19,512      --           500           --             500
  Net income................          --     --               --      --            --       25,464          25,464
  Dividends paid:
     Preferred stock........          --     --               --      --            --       (4,191)         (4,191)
     Common stock...........          --     --               --      --            --      (26,614)        (26,614)
                               ---------    ---       ----------    ----      --------    ---------       ---------
Balance, December 31,
  1995......................   4,165,000     42       16,237,646     162       386,910       (6,660)        380,454
  Net income................          --     --               --      --            --       29,383          29,383
  Dividends paid:
     Preferred stock........          --     --               --      --            --       (9,372)         (9,372)
     Common stock...........          --     --               --      --            --      (28,253)        (28,253)
                               ---------    ---       ----------    ----      --------    ---------       ---------
Balance, December 31,
  1996......................   4,165,000     42       16,237,646     162       386,910      (14,902)        372,212
  Net income................          --     --               --      --            --       33,874          33,874
  Dividends paid:
     Preferred stock........          --     --               --      --            --       (9,372)         (9,372)
     Common stock...........          --     --               --      --            --      (29,405)        (29,405)
  Common stock issued to
     executive officer......          --     --           32,877      --           754           --             754
  Dividend Reinvestment Plan
     issuance...............          --     --           55,954       1         1,212           --           1,213
                               ---------    ---       ----------    ----      --------    ---------       ---------
Balance, December 31,
  1997......................   4,165,000    $42       16,326,477    $163      $388,876    $ (19,805)      $ 369,276
                               =========    ===       ==========    ====      ========    =========       =========
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       F-5
<PAGE>   38
 
                            OASIS RESIDENTIAL, INC.
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                 YEARS ENDED DECEMBER 31,
                                                           ------------------------------------
                                                             1997         1996          1995
                                                           --------     ---------     ---------
<S>                                                        <C>          <C>           <C>
Cash flows from operating activities:
  Net income.............................................  $ 33,874     $  29,383     $  25,464
  Adjustments to reconcile net income to net cash
     provided by operating activities:
     Depreciation and amortization.......................    19,113        15,637        12,062
     Amortization of discount on notes payable...........        22             2            --
     Gain on sale of real estate assets..................    (6,999)       (2,444)           --
     Extraordinary item (write-off of unamortized loan
       fees).............................................        --           714         1,952
     Interest (non-cash).................................     1,214         1,118         1,332
     Increase in deferred costs and other assets.........      (934)       (2,784)       (6,334)
     Increase (decrease) in liabilities:
       Resident deposits and prepaid rent................     1,082           378           141
       Accounts payable and accrued expenses.............    (1,491)       (2,748)        6,775
                                                           --------     ---------     ---------
       Net cash provided by operating activities.........    45,881        39,256        41,392
                                                           --------     ---------     ---------
Cash flows from investing activities:
  Purchase of real estate assets.........................   (12,455)           --       (12,686)
  Improvements to real estate assets.....................    (7,737)      (15,241)      (15,954)
  Notes receivable (related party).......................    (8,216)           --            --
  Construction of real estate assets.....................   (42,775)     (125,656)     (126,383)
  Deposits on real estate assets.........................      (654)       (2,000)           --
  Net proceeds from the sale of real estate assets.......    58,359         5,302            --
  Investment in and advances to joint venture............     1,204        (9,574)           --
                                                           --------     ---------     ---------
     Net cash used in investing activities...............   (12,274)     (147,169)     (155,023)
                                                           --------     ---------     ---------
Cash flows from financing activities:
  Proceeds from debt.....................................    66,500       329,284       232,235
  Principal payments on debt.............................   (63,422)     (185,838)     (193,503)
  (Increase) decrease in restricted cash.................        12          (481)        5,420
  Net proceeds from public offerings of stock............        --            --        99,197
  Proceeds from issuance of common stock in connection
     with the dividend reinvestment program..............     1,213            --            --
  Cash dividends paid -- preferred stock.................    (9,372)       (9,372)       (4,191)
  Cash dividends paid -- common stock....................   (29,405)      (28,253)      (26,614)
                                                           --------     ---------     ---------
     Net cash provided by financing activities...........   (34,474)      105,340       112,544
                                                           --------     ---------     ---------
     Net decrease in cash and cash equivalents...........      (867)       (2,573)       (1,087)
Cash and cash equivalents, beginning of year.............     3,397         5,970         7,057
                                                           --------     ---------     ---------
Cash and cash equivalents, end of year...................  $  2,530     $   3,397     $   5,970
                                                           ========     =========     =========
Supplemental information:
  Cash paid during the year for interest.................  $ 30,440     $  23,274     $  15,553
                                                           ========     =========     =========
  Supplemental schedule of non-cash investing and
     financing activities:
     Issuance of common stock to executive officer.......  $    754     $      --     $     500
                                                           ========     =========     =========
     Note receivable in connection with the sale of real
       estate assets.....................................  $     --     $   1,100     $      --
                                                           ========     =========     =========
     Assumption of debt in connection with
       acquisitions......................................  $ 51,400     $      --     $      --
                                                           ========     =========     =========
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       F-6
<PAGE>   39
 
                            OASIS RESIDENTIAL, INC.
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
 1. ORGANIZATION AND FORMATION OF THE COMPANY
 
     Oasis Residential, Inc. (the "Company"), which was incorporated in the
State of Nevada on March 23, 1993, is a self-administered and self-managed real
estate investment trust ("REIT"), engaged in the development, acquisition and
operation of predominantly upscale apartment communities in the greater Las
Vegas area, Reno and Denver metropolitan areas and Orange County, California.
The Company commenced operations as a public company on October 22, 1993 with an
initial portfolio of 23 apartment communities comprising 5,215 units and a
30,000 square foot commercial center in Henderson, Nevada in which the Company's
headquarters is located. At December 31, 1997, the Company owned and operated 51
apartment communities containing 14,796 apartment units.
 
     The Company has elected to be taxed as a REIT under the Internal Revenue
Code of 1986, as amended, (the "Code") commencing with the taxable year ended
December 31, 1993. In order for the Company to qualify as a REIT, it must
distribute annually at least 95% of its REIT taxable income, as defined in the
Code, to its stockholders and comply with certain other requirements.
Accordingly, no provision has been made for federal income taxes in the
accompanying consolidated financial statements.
 
 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  Principles of Consolidation and Financial Statement Presentation:
 
     The accompanying consolidated financial statements include the accounts of
all subsidiaries and partnerships in which a controlling interest is held,
including at December 31, 1997, Oasis Martinique, L.L.C. The Company uses the
equity method of accounting where its ownership interest is between 20% and 50%.
 
     All significant intercompany balances and transactions have been eliminated
in consolidation.
 
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenue and expenses during the reporting
periods. Actual results could differ from those estimates.
 
  Real Estate Assets and Depreciation:
 
     Rental property is stated at the lower of cost or fair value. Expenditures
which increase the revenue potential of a property or which extend the useful
life of the asset are generally capitalized. Maintenance and repair expenditures
necessary to maintain a property in operating condition are charged to expense
when incurred. Depreciation is calculated on a straight-line basis over the
estimated useful lives of the depreciable real estate assets, which range from
18 to 40 years for buildings and improvements and 5 to 12 years for furniture
and fixtures.
 
     Costs are capitalized during the development of constructed assets
(including interest, property taxes and other direct and indirect costs)
beginning when active development commences and ending when construction is
substantially complete and the property is ready for occupancy.
 
     Losses in carrying values of investment assets are provided by management
when the losses become apparent and the investment asset is considered impaired.
Management evaluates its investment properties, at least quarterly, to assess
whether any impairment indications are present. If an asset is considered to be
impaired, a loss is provided to reduce the carrying value of the property to its
estimated fair value. No such losses have been required or provided in the
accompanying financial statements.
 
                                       F-7
<PAGE>   40
 
                            OASIS RESIDENTIAL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
  Cash and Cash Equivalents:
 
     The Company considers highly liquid short-term investments with initial
maturities of three months or less to be cash equivalents.
 
     Cash and cash equivalents are primarily held in a single financial
institution, and at times, such balances may be in excess of the Federal Deposit
Insurance Corporation insurance limit.
 
  Restricted Cash:
 
     Restricted cash balances at December 31, 1997 and 1996 are required under
certain debt agreements for property tax and insurance expenses and to secure
the payment of certain replacement and capital improvement costs.
 
  Deferred Financing Costs:
 
     Included in deferred costs and other assets are costs associated with
obtaining debt financing and credit enhancements. Such costs are being amortized
over the term of the associated debt or credit enhancement.
 
  Accounting for Stock-Based Compensation:
 
     The Company applies Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees" ("APB 25"), and related interpretations in
accounting for its stock-based compensation plans.
 
  Interest Rate Protection Agreements:
 
     Premiums paid to purchase interest rate protection agreements are
capitalized and amortized over the terms of those agreements using the
straight-line method which approximates the effective interest method.
Unamortized premiums are included in deferred costs and other assets.
 
  Impact of Recently Issued Accounting Standards:
 
     In 1997, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 130 "Reporting Comprehensive Income" and No.
131 "Disclosures about Segments of an Enterprise and Related Information." These
statements shall be effective for financial statements for fiscal years
beginning after December 15, 1997. Management does not believe that the adoption
of Standards No. 130 and 131 will have a material effect on its financial
position or results of operations.
 
 3. INTEREST CAPITALIZED
 
     Interest costs associated with projects under development aggregating
$5,125, $9,350 and $8,499 for the years ended December 31, 1997, 1996 and 1995,
respectively, were capitalized.
 
 4. INVESTMENT IN AND ADVANCES TO JOINT VENTURE
 
     In April 1995, the Company and Stevinson Partnership, Ltd. ("Stevinson")
entered into an operating agreement to form Denver West Apartments, L.L.C., a
limited liability company (the "Joint Venture"). Under the terms of the
agreement, the Company and Stevinson each have a 50% interest in Oasis Denver
West, a 321 unit apartment community located in Denver, Colorado. In November
1996, the Joint Venture finalized the loan agreement with Northwestern Mutual
Life Company for the construction and permanent financing of the community in
the amount of $15,430 which the Company has guaranteed. The loan bears interest
at a rate of 8.30% and matures on August 1, 2007.
 
                                       F-8
<PAGE>   41
 
                            OASIS RESIDENTIAL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
     The Company has contributed capital of $4,171 and $3,955 as of December 31,
1997 and 1996, respectively. In addition, the Company has advanced cash to the
Joint Venture in the form of a loan. The outstanding balance on the loan was
$2,958 and $4,400 as of December 31, 1997 and 1996, respectively. The loan bears
interest at the prime lending rate plus 2% (prime rate at December 31, 1997 was
8.50%) and is being repaid from operations. Additionally, the Company has
incurred $1,219 of additional costs that are not accounted for at the
joint-venture level.
 
 5. OASIS MARTINIQUE, L.L.C.
 
     On October 23, 1997, the Company acquired a managing member interest in a
limited liability company ("LLC") that owns the 714 unit Oasis Martinique
apartment community in Costa Mesa, California. In connection with the
acquisition, the LLC issued operating LLC units, convertible on a 1 for 1 basis
into 886,022 shares of the Company's common stock. The Company assumed existing
tax exempt debt of $51,400 issued by the County of Orange, California. The
Company also contributed approximately $1,500 in cash for the transaction and
LLC formation costs, thus resulting in a total initial investment to the Company
of approximately $73,500. The Company plans to increase its investment in Oasis
Martinique by $2,500 to $3,000 in order to fund a capital refurbishment program
designed to increase net operating income.
 
     The minority interest represents the separate private ownership of Oasis
Martinique, L.L.C.
 
     In connection with the LLC transaction, the Company loaned the other two
members of the LLC $8,216 collateralized by each member's LLC units. The loans
are payable in quarterly installments of interest only and are due December 23,
1998. The interest rate on these loans is set at 9% if the loans are paid in
full on or before March 31, 1998. If the loans are not paid in full by March 31,
1998, the interest rate is increased to 15% and will be made effective back to
the original issuance date of the loans. Interest income recorded in connection
with these loans for the year ended December 31, 1997 was $142.
 
 6. DEFERRED COSTS AND OTHER ASSETS
 
     Deferred financing costs which included deferred loan fees and offering
costs and which are included in deferred costs and other assets aggregated to
$9,360 and $8,327 at December 31, 1997 and 1996, respectively. Accumulated
amortization which related to deferred financing costs aggregated to $2,977 and
$1,763 at December 31, 1997 and 1996, respectively.
 
 7. DEBT
 
<TABLE>
<CAPTION>
                                                                             DECEMBER 31,
                                                                         ---------------------
                                                                           1997         1996
                                                                         --------     --------
<S>                                                                      <C>          <C>
Notes Payable..........................................................  $150,000     $150,000

     In November 1996, the Company completed a public offering of
$150,000 of unsecured, fixed rate notes payable which priced in three
tranches (the "Notes Payable"). The Company borrowed $50,000 due
November 15, 2001 at a coupon rate of 6.75%, $50,000 due November 15,
2003 at a coupon rate of 7.00% and $50,000 due November 15, 2006 at a
coupon rate of 7.25%. The Notes Payable were sold at a discount, and at
December 31, 1997 and 1996, the unamortized discount was $192 and $214,
respectively.

     The Notes Payable may be redeemed at any time at the option of the
Company, in whole or in part, upon payment of certain yield maintenance
penalties.
</TABLE> 
                                       F-9
<PAGE>   42
 
                            OASIS RESIDENTIAL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
<TABLE>
<CAPTION>
                                                                             DECEMBER 31,
                                                                         ---------------------
                                                                           1997         1996
                                                                         --------     --------
<S>                                                                      <C>          <C>
     The Notes Payable contain certain covenants, the most restrictive
of which, requires that the Company may not at any time own Total
Unencumbered Assets, as defined, equal to less than 150% of the
aggregate outstanding principal amount of the unsecured indebtedness of
the Company on a consolidated basis.
     The net proceeds from the offering were used to retire
approximately $53,087 in Mortgage Notes Payable and to reduce the
outstanding balance on the Credit Facility. For the year ended December
31, 1996, the Company recorded an extraordinary charge in the amount of
$1,403 for the remaining unamortized deferred financing costs and
prepayment penalties in connection with the retirement of these
Mortgage Notes Payable.
Mortgage Notes Payable.................................................  $133,492     $135,062
     Mortgage Notes Payable were comprised of seven loans at December
31, 1997 and 1996, each of which is collateralized by one or more
apartment communities. During 1997, the Company substituted Oasis
Pointe and Oasis Centennial with regards to the Mortgage Notes which
were previously collateralized by Oasis Rose and Oasis Trails. No fees
were incurred as a result of the substitution. The Mortgage Notes
Payable generally require monthly installments of interest and
principal over various terms extending through the year 2008. Interest
rates on the Mortgage Notes Payable are fixed, and ranged from 6.90% to
9.50% (weighted average interest rate was 8.00% at December 31, 1997).
     In March 1996, the Company refinanced a $16,000 loan with Allstate
Insurance Company collateralized by the 368 unit Oasis Paradise I
apartment community. The new interest rate is 7.10%, a reduction from
the previous rate of 9.03%. The loan maturity was extended from April
1996 to April 2008.
     In November 1996, five Mortgage Notes Payable totaling $53,087
were repaid with proceeds from the issuance of the Notes Payable.
Credit Facility........................................................    91,456       85,736
     In 1995, the Company entered into a $150,000 credit facility
agreement (the "Credit Facility") with various banks led by Wells Fargo
Bank and retired its two lines of credit that were previously
outstanding. In connection with the retirement of the two prior lines
of credit, the Company, for the year ended December 31, 1995, recorded
an extraordinary charge of $1,952 for the remaining unamortized
deferred financing costs and other costs associated with those loans.
Advances under the Credit Facility initially bore an interest rate, at
the Company's election, of either the London Interbank Offered Rate
("LIBOR") plus 1.75% or the prime lending rate. During 1996, the Credit
Facility was amended to increase the facility to $200,000 and reduce
the LIBOR-based interest rate to LIBOR plus 1.25%. The LIBOR-based
interest rate was again reduced to LIBOR plus 1.15% during 1997. At
December 31, 1997, LIBOR ranged from 5.72% to 5.97% for one, three, six
and twelve-month indices, and the prime rate was at 8.50%. At December
31, 1997, the weighted average interest rate on borrowings outstanding
on the Credit Facility was 7.15%. The credit facility agreement
terminates in September 1998.
</TABLE>
 
                                      F-10
<PAGE>   43
 
                            OASIS RESIDENTIAL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
<TABLE>
<CAPTION>
                                                                             DECEMBER 31,
                                                                         ---------------------
                                                                           1997         1996
                                                                         --------     --------
<S>                                                                      <C>          <C>
     The Credit Facility contains certain covenants, the most
restrictive of which limits the borrowing capacity of the Company to
50% of Gross Asset Value, as defined, and restricts distributions to
stockholders to 95% of Funds from Operations, as defined. The Company
does not anticipate that these covenants will affect its ability to pay
dividends in accordance with the Company's current dividend policy.
 
Tax-Exempt Bonds.......................................................  $ 74,018     $ 23,690
 
     In connection with the 1994 acquisition of Oasis Wexford, the
Company assumed tax exempt housing bonds in the principal amount of
$17,800. The bonds were reissued in November 1995, for $16,235. The
bonds are payable in monthly installments of principal and interest.
The interest rate on the tax-exempt bonds is 6.45% and is subject to
"reset" on December 1, 2005 based upon market conditions at that time.
The bonds are due on November 1, 2025.
 
     The Company has $6,660 (Series 1995A) of tax-exempt housing bonds
and $1,090 (Series 1995B) of taxable housing bonds collateralized by
Oasis Park. The bonds are payable in monthly installments of principal
and interest. The interest rate on these bonds is 7.29%. The Series
1995A bonds are due on January 1, 2026 and the Series 1995B bonds are
due on July 1, 2006.
 
     In connection with the 1997 acquisition of Oasis Martinique, the
Company assumed $51,400 of low floater, tax exempt bonds. The bonds are
payable in monthly installments of interest only, along with principal
payments made in December of each year. The interest rate on the bonds
is subject to weekly repricing based upon the seven day tax exempt bond
floating rate index plus 125 basis points. At December 31, 1997, the
seven day tax exempt bond floating rate index was 3.55%. The bonds are
due December 1, 2009.
                                                                         --------     --------
                                                                          448,966      394,488
Less unamortized discount on Notes Payable.............................       192          214
                                                                         --------     --------
          Total........................................................  $448,774     $394,274
                                                                         ========     ========
</TABLE>
 
     Scheduled principal payments on debt, are as follows:
 
<TABLE>
<CAPTION>
                                    NOTES       MORTGAGE NOTES     CREDIT      TAX- EXEMPT
                                   PAYABLE         PAYABLE         FACILITY      BONDS         TOTAL
                                   --------     --------------     -------     ----------     --------
<S>                                <C>          <C>                <C>         <C>            <C>
1998.............................  $     --        $ 10,551        $91,456      $  1,095      $103,102
1999.............................        --           1,745             --         1,220         2,965
2000.............................        --           1,889             --         1,345         3,234
2001.............................    50,000          20,046             --         1,455        71,501
2002.............................        --          27,602             --         1,490        29,092
Thereafter.......................   100,000          71,659             --        67,413       239,072
                                   --------        --------        -------      --------      --------
                                   $150,000        $133,492        $91,456      $ 74,018      $448,966
                                   ========        ========        =======      ========      ========
</TABLE>
 
                                      F-11
<PAGE>   44
 
                            OASIS RESIDENTIAL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
     At December 31, 1997 and 1996, management estimates that the carrying
amount of debt approximates fair value; however, current estimates of fair value
could differ significantly from amounts realized in market exchanges.
 
 8. STOCKHOLDERS' EQUITY
 
     In October 1993, the Company completed a public offering of 8,970,000
shares of common stock at a price per share of $21.75. The net proceeds from
this offering were approximately $180,000 and were used for the acquisition of
communities, the repayment of first and second lien preexisting mortgage
indebtedness and for working capital purposes.
 
     In July 1994, the Company completed a second public offering of 5,750,000
shares of common stock at a price per share of $24.50. The net proceeds from
this offering were approximately $132,000 and were used for the acquisition of
five multifamily communities containing 2,441 units for approximately $98,800,
including the assumption of $38,800 of mortgage indebtedness, the repayment of
certain adjustable rate debt, the reduction of the balance owing on the
Company's credit facility and for working capital purposes.
 
     In April 1995, the Company issued 4,165,000 shares of Series A Cumulative
Convertible Preferred Stock ("Preferred Stock") at $25.00 per share. The net
proceeds from the offering were approximately $99,200 and were used for the
repayment of certain short-term and construction debt, the reduction of the
balance owing on the credit facility and for working capital purposes. The
shares pay a cumulative dividend quarterly in arrears in an amount per share
equal to the greater of $2.25 per annum or the cash dividends paid or payable on
a number of shares of common stock equal to the number of shares of common stock
into which a share of Preferred Stock is convertible. The shares generally have
no voting rights and have a liquidation preference of $25.00 per share plus
accrued and unpaid distributions. The Preferred Stock is convertible at the
option of the holder at any time into shares of common stock, at a conversion
price of $24.64 per share of common stock (equivalent to a conversion rate of
1.0146 shares of common stock per share of Preferred Stock), subject to
adjustment in certain circumstances. The Preferred Stock is not redeemable by
the Company prior to April 30, 2001.
 
     In 1995, the Company adopted a Dividend Reinvestment and Share Purchase
Plan (the "Plan"). The Company has reserved 1,000,000 shares for issuance under
the Plan. The Plan allows stockholders to acquire additional shares of the
Company by automatically reinvesting dividends and making voluntary cash
payments. For the year ended December 31, 1997, 55,954 shares were issued at an
average price of $21.68 (net of a 2% discount). For the year ended December 31,
1996, the Company issued no new common shares to stockholders who elected to
participate in this Plan; all shares were purchased in the open market.
 
     In 1994, the Company entered into an agreement with an executive officer
that provided for the Company's acquisition from the executive officer of
certain contractual rights to acquire two properties for development in
Colorado, Oasis Deerwood and Oasis Denver West. The agreement provided that when
each of the two Colorado properties was completed and stabilized, and subject to
the properties meeting certain performance criteria, the executive officer would
have the right to receive up to approximately $1,000 in the Company's common
stock, with approximately $750 applicable to Oasis Deerwood and approximately
$250 applicable to Oasis Denver West. During the fourth quarter of 1997, Oasis
Deerwood met the required performance criteria and the executive officer
received 32,877 shares at a price of $22.94 per share totaling $754. If and when
the required performance criteria are met with regards to Oasis Denver West, the
executive officer will have the right to receive up to $250 in the Company's
common stock. In the event that the executive officer's employment is terminated
for cause, the executive officer's rights under the agreement will be forfeited.
 
                                      F-12
<PAGE>   45
 
                            OASIS RESIDENTIAL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
     As described in Note 1, the Company has elected to be treated, for federal
income tax purposes, as a REIT. As such, the Company is required to distribute
annually, in the form of dividends to its common stockholders, at least 95% of
its taxable income. In reporting periods where taxable income exceeds net
income, stockholders' equity will be reduced by the distributions in excess of
net income and will be increased by the excess of net income over distributions
in periods where net income exceeds taxable income. For tax reporting purposes,
a portion of the common dividends declared during the years ended December 31,
1997 and 1996 represents a return of capital.
 
     For federal income tax purposes, the following tables, on a per share
basis, summarize the taxability of dividends paid in 1997 and 1996:
 
<TABLE>
<CAPTION>
                                                               COMMON SHARES         PREFERRED SHARES
                                                           ---------------------   ---------------------
              YEAR ENDED DECEMBER 31, 1997                 DIVIDEND   PERCENTAGE   DIVIDEND   PERCENTAGE
---------------------------------------------------------  --------   ----------   --------   ----------
<S>                                                        <C>        <C>          <C>        <C>
Ordinary income..........................................   $ 1.14         63%      $ 2.25        100%
Capital gain.............................................      .20         11%          --         --
Return of capital........................................      .47         26%          --         --
                                                            ------        ---       ------        ---
                                                            $ 1.81        100%      $ 2.25        100%
                                                            ======        ===       ======        ===
</TABLE>
 
<TABLE>
<CAPTION>
                                                               COMMON SHARES         PREFERRED SHARES
                                                           ---------------------   ---------------------
              YEAR ENDED DECEMBER 31, 1996                 DIVIDEND   PERCENTAGE   DIVIDEND   PERCENTAGE
---------------------------------------------------------  --------   ----------   --------   ----------
<S>                                                        <C>        <C>          <C>        <C>
Ordinary income..........................................   $ 1.13         65%      $ 2.25        100%
Return of capital........................................     0.61         35%          --         --
                                                            ------        ---       ------        ---
                                                            $ 1.74        100%      $ 2.25        100%
                                                            ======        ===       ======        ===
</TABLE>
 
 9. EARNINGS PER SHARE
 
     The Company has adopted Statement of Financial Accounting Standards No.
128, "Earnings per Share" (the "Statement"). In accordance with the provisions
of the Statement, basic earnings per share for the years ended December 31,
1997, 1996 and 1995, is computed by dividing income available to common
stockholders (income from continuing operations less the preferred stock
dividend requirement) by the weighted average number of shares outstanding
during the period.
 
                                      F-13
<PAGE>   46
 
                            OASIS RESIDENTIAL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
     Additionally, other dilutive potential common shares, are considered when
calculating earnings per share on a diluted basis.
 
<TABLE>
<CAPTION>
                                                                    YEAR ENDED DECEMBER 31,
                                                                -------------------------------
                    BASIC EPS CALCULATION                        1997        1996        1995
--------------------------------------------------------------  -------     -------     -------
<S>                                                             <C>         <C>         <C>
Income before extraordinary item..............................  $33,874     $30,786     $27,416
Preferred stock dividend requirement..........................   (9,372)     (9,372)     (6,534)
                                                                -------     -------     -------
Earnings available for common stockholders before
  extraordinary item..........................................   24,502      21,414      20,882
  Extraordinary item..........................................       --      (1,403)     (1,952)
                                                                -------     -------     -------
Earnings available to common stockholders.....................  $24,502     $20,011     $18,930
                                                                =======     =======     =======
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                                WEIGHTED
              DATES OUTSTANDING                SHARES OUTSTANDING     FRACTION OF PERIOD     AVERAGE SHARES
---------------------------------------------  ------------------     ------------------     --------------
<S>                                            <C>                    <C>                    <C>
January 1 - May 14, 1995.....................      16,218,134               134/365             5,954,055
Issuance of common stock on May 15, 1995.....          19,512
                                                   ----------
May 15 - December 31, 1995...................      16,237,646               231/365            10,276,374
                                                                                               ----------
  Weighted average shares, year ended
     December 31, 1995.......................                                                  16,230,429
                                                                                               ==========
January 1 - December 31, 1996................      16,237,646               365/365            16,237,646
                                                                                               ----------
  Weighted average shares, year ended
     December 31, 1996.......................                                                  16,237,646
                                                                                               ==========
January 1 - June 3, 1997.....................      16,237,646               154/365             6,850,952
Issuance of common stock on June 4, 1997.....             840
                                                   ----------
June 4, 1997 - September 18, 1997............      16,238,486               107/365             4,760,323
Issuance of common stock on September 19,
  1997.......................................             721
                                                   ----------
September 19, 1997 - November 3, 1997........      16,239,207                46/365             2,046,585
Issuance of common stock on November 4,
  1997.......................................          32,877
                                                   ----------
November 4 - November 17, 1997...............      16,272,084                14/365               624,135
Issuance of common stock on November 18,
  1997.......................................          54,393
                                                   ----------
November 18 - December 31, 1997..............      16,326,477                44/365             1,968,123
                                                                                               ----------
  Weighted average shares, year ended
     December 31, 1997.......................                                                  16,250,118
                                                                                               ==========
</TABLE>
 
  Basic EPS
 
<TABLE>
<CAPTION>
                                                              1997      1996      1995
                                                              -----     -----     -----
        <S>                                                   <C>       <C>       <C>
        Earnings available for common stockholders before
          extraordinary item................................  $1.51     $1.32     $1.29
        Extraordinary item..................................     --      (.09)     (.12)
                                                              -----     -----     -----
        Earnings available for common stockholders..........  $1.51     $1.23     $1.17
                                                              =====     =====     =====
</TABLE>
 
     For the years ended December 31, 1997, 1996 and 1995, there were no
dilutive potential common shares outstanding during the period. Therefore,
diluted earnings per share is the same as basic earnings per share.
 
10. RELATED PARTY TRANSACTIONS
 
     An affiliated company leased space in one of the commercial properties
through May 1995. Related party rental revenue was $30 for the year ended
December 31, 1995.
 
                                      F-14
<PAGE>   47
 
                            OASIS RESIDENTIAL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
11. OPERATING LEASES
 
     The Company owns two commercial properties; a portion of one building
serves as its headquarters. The portion of the commercial properties not used by
the Company is leased to tenants under net operating leases with initial terms
extending to the year 2008. Future minimum rentals under noncancellable
operating leases at both commercial properties, excluding tenant reimbursements
of expenses, as of December 31, 1997, are as follows:
 
<TABLE>
            <S>                                                           <C>
            1998......................................................    $  361
            1999......................................................       322
            2000......................................................       186
            2001......................................................       136
            2002......................................................       136
            Thereafter................................................       503
                                                                          ------
            Total.....................................................    $1,644
                                                                          ======
</TABLE>
 
12. STOCK-BASED COMPENSATION PLANS
 
     In May 1995, the Company adopted the 1995 Equity Participation Plan (the
"1995 Plan") to supplement the Company's 1993 Stock Option Plan (the "1993
Plan"). The Company also has a Stock Option Plan for Outside Directors (the
"Outside Directors Plan").
 
     The 1995 Plan provides incentives for officers, key employees and
consultants through the grant or issuance of options, restricted stock
performance awards, dividend equivalents, deferred stock, stock payments and
stock appreciation rights ("SARs"). The aggregate number of shares that may be
issued under the 1995 Plan may not exceed 1,135,000, less the number of shares
covered by options outstanding under the 1993 Plan and the Outside Directors
Plan. The 1995 Plan limits the number of shares that any individual may receive
in any year under the plan to 150,000 and limits the dollar value of awards,
other than options and SARs that may be paid to any employee for any year to
$100.
 
     The 1993 Plan provides for the issuance of incentive and non-qualified
stock options under the Code and grants of the Company's common stock contingent
upon the attainment of certain performance goals or subject to other
restrictions. A total of 700,000 shares of the Company's common stock have been
reserved for issuance under the 1993 Plan and the Outside Directors Plan.
 
     Options awarded under both the 1993 and 1995 Plans provide for the options
to be granted at a price equal to the market value of the Company's common stock
at the date of grant, to vest ratably over a four year period and to expire ten
years from the date the options were granted.
 
     Under the Outside Directors Plan, each of the Company's non-employee
directors is granted an option to purchase 3,000 shares of common stock at the
time of appointment/election to the Board of Directors. In addition, following
each annual meeting of stockholders, each of the Company's non-employee
directors, who have served as a member for one year or more, will receive an
option to purchase up to 3,000 shares of common stock at the market price of the
shares on the date of grant. All options granted under the Outside Directors
Plan will vest one year after the date of grant. The Outside Directors Plan is
administered by the Board of Directors.
 
                                      F-15
<PAGE>   48
 
                            OASIS RESIDENTIAL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
     The following table shows the activity and balances for each stock option
plan:
 
<TABLE>
<CAPTION>
                                   1993 PLAN                            OUTSIDE
                                       &            OPTION PRICE       DIRECTORS        OPTION PRICE
                                   1995 PLAN         PER SHARE           PLAN            PER SHARE
                                   ---------     ------------------    ---------     ------------------
<S>                                <C>           <C>                   <C>           <C>
Balance, December 31, 1994.......    620,000                              15,000
  Options granted................      5,000           $22.50             15,000      $22.625 - $22.875
  Options cancelled..............    (10,000)                             (3,000)
                                   ---------                             -------
Balance, December 31, 1995.......    615,000                              27,000
  Options granted................    351,000      $22.375 - $22.625       12,000           $22.50
  Options cancelled..............    (20,000)                                 --
                                   ---------                             -------
Balance, December 31, 1996.......    946,000                              39,000
  Options granted................    135,000       $23.25 - $23.375       15,000          $23.125
  Options cancelled..............         --                                  --
                                   ---------                             -------
Balance, December 31, 1997.......  1,081,000                              54,000
                                   =========                             =======
</TABLE>
 
     There were no shares available for grant as of December 31, 1997. None of
the options granted are contingent upon the attainment of performance goals or
subject to other restrictions. As of December 31, 1997, outstanding options to
purchase 644,750 shares of common stock were exercisable.
 
     Additionally, 46,500 non-qualified stock options were issued to an
executive officer during 1997. These options were not granted in connection with
either the 1993 or 1995 Plan. The options vest ratably over a four year period
and were granted at an option price of $23.375 per share. The option price was
equal to the market value of the stock on the date of grant. Therefore, the
Company did not recognize any compensation expense in connection with the grant
of these options.
 
     The Company applies APB 25 and related interpretations in accounting for
its stock-based compensation plans. Accordingly, no compensation expense has
been recognized for its stock-based compensation plans. Had compensation cost
for the Company's stock option plans been determined based upon the fair value
at the grant date for awards under these plans consistent with the methodology
prescribed under Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation," the Company's net income and earnings
per share would have been reduced by approximately $423 or $.03 per share for
the year ended December 31, 1997, approximately $634 or $0.04 per share for the
year ended December 31, 1996, and approximately $123 or $0.01 per share for the
year ended December 31, 1995. The estimated fair value of the options granted
during 1997 ranged from $1.40 to $2.22 per share on the date of grant using the
Black-Scholes option pricing model with the following assumptions: dividend
yield of 7.3%, volatility of 17.98%, risk free rates of 5.88% to 6.36% and an
expected life of four years. The estimated fair value of the options granted
during 1996 ranged from $1.43 to $1.45 per share on the date of grant using the
Black-Scholes option pricing model with the following assumptions: dividend
yield of 7.26%, volatility of 16.82%, risk free rates of 4.19% to 5.60% and an
expected life of four years. The estimated fair value of the options granted
during 1995 ranged from $1.63 to $1.78 per share on the date of grant using the
Black-Scholes option pricing model with the following assumptions: dividend
yield of 7.26%, volatility of 16.82%, risk free rates of 4.72% to 5.60% and an
expected life of four years.
 
13. EMPLOYEE BENEFITS
 
     Effective February 1995, the Company adopted an employee investment plan
(the "Plan"), under Section 401(k) of the Internal Revenue Code. Employees who
are at least 21 years old and who have completed one year of eligibility service
may become participants in the Plan. Each participant may make
 
                                      F-16
<PAGE>   49
 
                            OASIS RESIDENTIAL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
contributions to the Plan through salary deferrals in amounts of at least 1% to
a maximum of 15% of the participant's compensation, subject to certain
limitations imposed by the Internal Revenue Code. The Company contributes an
amount equal to 50% of the first 6% of the participant's compensation
contributed. A participant's contribution to the Plan is 100% vested and
nonforfeitable. A participant will become vested in 20% of the Company's
contributions after one year of service while enrolled in the Plan and
increasing by 20% for each additional year of service while enrolled in the
Plan.
 
14. GAIN ON SALE OF REAL ESTATE ASSETS
 
     During 1997, the Company sold, in separate transactions, Oasis Villas, an
84 unit apartment community, Oasis Orchid, a 280 unit apartment community, Oasis
Terrace, a 336 unit apartment community and Oasis Trails, a 360 unit apartment
community, all located in Las Vegas, for an aggregate consideration of
approximately $60,000 , resulting in a combined gain of $6,999.
 
15. SUBSEQUENT EVENTS
 
     On January 20, 1998, the Company declared a quarterly dividend for its
Series A Cumulative Convertible Preferred Stock of $0.5625 per share payable on
February 16, 1998 to stockholders of record on February 2, 1998. In addition, on
January 26, 1998, the Company declared a quarterly dividend of $0.4525 per
common share to stockholders of record on February 3, 1998, payable on February
17, 1998. 

     On February 27, 1998, the Company sold Oasis StarII, a 24 unit apartment
community, for $1,300, with no material gain or loss resulting from the
transaction. 

     On March 6, 1998, the Company purchased a 421 apartment community in
Fullerton, California named Parkside Apartments. The purchase price of
approximately $29,000 was funded with cash drawn from the Company's Credit
Facility. The Company renamed the community Oasis Parkside.
 
16. COMMITMENTS AND CONTINGENCIES
 
     On December 16, 1997, the Company announced the execution of a definitive
merger agreement ("the Agreement") between the Company and Camden Property Trust
("Camden"). Under the terms of the agreement, the Company would be merged with
and into a wholly-owned subsidiary of Camden, with each share of the Company's
common stock being exchanged for 0.759 shares of Camden. The merger is subject
to approval by the shareholders of the Company and Camden, which is expected to
occur in April 1998. At this time, there can be no assurance given that such
approval will be obtained.
 
     The Company is presently in the development stage on three additional
communities (Oasis Bluffs II, Oasis Harbor II and Oasis Interlocken) totaling
1,002 units in its three markets, Las Vegas, Reno and Denver. The estimated
total investment for these units will be finalized prior to the commencement of
construction.
 
     In November 1996, the Company entered into an agreement to purchase a 19.8
acre parcel in Mission Viejo, California, subject to the satisfaction of certain
entitlement conditions. If the conditions are satisfied and the purchase is
completed, the Company intends to build a 380 unit apartment community slated to
begin construction in 1998. In accordance with the terms of the agreement, the
Company made a deposit in the amount of $2,000 into an escrow account. The
payment is fully refundable until the seller completes certain obligations under
the agreement and thereafter, is considered nonrefundable but may be applied to
reduce the amounts due to the seller at the close of escrow.
 
     In October 1997, the Company entered into a contract to purchase a 421 unit
apartment community in Fullerton, California for approximately $29,000, subject
to the satisfaction of certain conditions. In accordance with the terms of the
agreement, the Company made a deposit in the amount of $300 in an escrow
account. In January 1998, the Company made an additional deposit in the amount
of $200 for a total deposit of $500.
 
     The Company has been contacted by certain regulatory agencies with regards
to alleged failures to comply with the "Fair Housing Act" (the "Act") as it
pertains to properties constructed for first occupancy after March 31, 1991 (the
"Properties"). Currently, the Company is inspecting the Properties to determine
the extent of noncompliance and the changes that will be necessitated. It is the
Company's intention to make any and all changes and modifications necessary in
order to meet the compliance standards of the Act. At this
 
                                      F-17
<PAGE>   50
 
                            OASIS RESIDENTIAL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
time, the Company is unable to provide an estimate of costs and expenses
associated with this matter as the scope and extent of required work has yet to
be determined.
 
     The Company is also party to various legal actions which are incidental to
its business. Management believes that these actions will not have a material
adverse affect on the financial position or the results of operations of the
Company.
 
17. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
 
     Quarterly financial information for the years ended 1997 and 1996 are as
follows:
 
<TABLE>
<CAPTION>
                                                       YEAR ENDED DECEMBER 31, 1997
                                        -----------------------------------------------------------
                                           FIRST          SECOND           THIRD          FOURTH
                                        -----------     -----------     -----------     -----------
<S>                                     <C>             <C>             <C>             <C>
Revenue...............................  $    26,824     $    28,071     $    29,619     $    31,471
Income before gain on sale of real
  assets..............................        7,125           7,099           6,163           6,488
Gain on sale of real estate assets....           --              --              --           6,999
Net income............................        7,125           7,099           6,163          13,487
Preferred dividend requirement........        2,343           2,343           2,343           2,343
Earnings available for common
  stockholders........................        4,782           4,756           3,820          11,144
Per share data:
  Income before gain on sale of real
     estate assets and (net of
     preferred dividend
     requirement).....................  $      0.29     $      0.29     $      0.24     $      0.26
     Gain on sale of real estate
       assets.........................           --              --              --            0.43
     Earnings available for common
       stockholders...................         0.29            0.29            0.24            0.69
Weighted average number of common
  shares outstanding..................   16,237,646      16,237,904      16,238,556      16,286,017
</TABLE>
 
                                      F-18
<PAGE>   51
 
                            OASIS RESIDENTIAL, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
<TABLE>
<CAPTION>
                                                       YEAR ENDED DECEMBER 31, 1996
                                        -----------------------------------------------------------
                                           FIRST          SECOND           THIRD          FOURTH
                                        -----------     -----------     -----------     -----------
<S>                                     <C>             <C>             <C>             <C>
Revenue...............................  $    21,752     $    23,207     $    24,875     $    26,165
Income before gain on sale of real
  estate assets and extraordinary
  item................................        6,955           7,057           7,104           7,226
Gain on sale of real estate assets....           --              --              --           2,444
Extraordinary item....................           --              --              --          (1,403)
Net income............................        6,955           7,057           7,104           8,267
Preferred dividend requirement........        2,343           2,343           2,343           2,343
Earnings available for common
  stockholders........................        4,612           4,714           4,761           5,924
Per share data:
  Income before gain on real estate
     assets and extraordinary item
     (net of preferred dividend
     requirement).....................  $      0.28     $      0.29     $      0.29     $      0.60
  Gain on sale of real estate
     assets...........................           --              --              --           (0.15)
  Extraordinary item..................           --              --              --           (0.09)
  Earnings available for common
     stockholders.....................         0.28            0.29            0.29            0.36
Weighted average number of common
  shares outstanding..................   16,237,646      16,237,646      16,237,646      16,237,646
</TABLE>
 
                                      F-19
<PAGE>   52
 
                                  SCHEDULE III
 
                            OASIS RESIDENTIAL, INC.
 
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                               DECEMBER 31, 1997
                             (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                                                TOTAL
                                                       INITIAL COST                                            COST(A)
                                            -----------------------------------       COST                   ------------
                                                        BUILDINGS     FURNITURE   SUBSEQUENT TO               BUILDINGS
                             12/31/97                      AND           AND      CONSTRUCTION/                  AND
      PROPERTY NAME        ENCUMBRANCES       LAND     IMPROVEMENT    FIXTURES     ACQUISITION      LAND     IMPROVEMENTS
-------------------------  ------------     --------   ------------   ---------   -------------   --------   ------------
<S>                        <C>              <C>        <C>            <C>         <C>             <C>        <C>
Oasis Bay................                   $  1,321     $  3,342      $   283       $   283      $  1,321     $  3,423
Oasis Bel Air............    $ 11,435(C)       2,206       16,118          549           144         2,206       16,201
Oasis Bluffs.............                      1,294       35,191        1,185            --         1,294       35,191
Oasis Breeze.............                      2,340       11,538          226           995         2,340       12,066
Oasis Canyon.............       7,886(C)       1,724       10,706          359            73         1,724       10,738
Oasis Centennial.........      10,647(C)       2,592        9,803          276           571         2,592       10,177
Oasis Centre.............                        423        1,159           19           327           425        1,471
Oasis Cliffs.............                      1,619        9,730        1,630         1,668         1,619       10,757
Oasis Club...............       8,940          3,177       10,462          751         1,156         3,177       11,262
Oasis Cove(B)............                      1,003        4,068          386           206         1,022        4,108
Oasis Crossings..........                        673        4,426          153             4           673        4,425
Oasis Deerwood...........                      1,868       26,245          472           810         1,868       27,010
Oasis Del Mar............      21,449          4,073       31,439        1,032           157         4,073       31,519
Oasis Emerald............                        579        3,335          533           509           580        3,674
Oasis Gateway............                      2,819       22,874          941            --         2,819       22,874
Oasis Glen...............                      1,120        4,939          112           166         1,120        5,019
Oasis Greens.............      12,000            709       17,077          295         1,858           709       18,012
Oasis Harbor I...........                      2,446       19,137          724            71         2,446       19,202
Oasis Heights............                      1,485        8,761          245           995         1,486        9,236
Oasis Heritage...........                      3,628       26,162          540         5,134         3,628       27,927
Oasis Hills..............       2,599            550        4,469          300           272           550        4,615
Oasis Island.............                        760        4,095          196           186           761        4,069
Oasis Lakeway............                      3,944       32,686        1,253            --         3,944       32,686
Oasis Landing............       3,920            505        5,937          104           392           505        6,108
Oasis Martinique.........      50,600         26,377       45,821        1,862            --        26,377       45,821
Oasis Meadows............                      2,216       21,447          795           151         2,216       21,589
Oasis Mini Storage.......                        304          976            2           157           304        1,089
Oasis Morning............                         42        1,468          135           459            49        1,627
Oasis Nellis
  Commercial.............                        288          576           --            --           288          576
Oasis Palms..............                      1,021        6,586          799           695         1,022        6,840
 
<CAPTION>
 
                           FURNITURE                               DATE OF
                              AND                 ACCUMULATED   CONSTRUCTION/   DEPRECIABLE
      PROPERTY NAME        FIXTURES     TOTAL     DEPRECIATION   ACQUISITION        LIFE
-------------------------  ---------   --------   -----------   -------------   ------------
<S>                        <C>         <C>        <C>           <C>             <C>
Oasis Bay................       485       5,229     $ 1,126         8/90          5-40 Years
Oasis Bel Air............       610      19,017         882         12/95         5-40 Years
Oasis Bluffs.............     1,185      37,670         242         9/97          5-40 Years
Oasis Breeze.............       693      15,099       1,388         10/93         5-40 Years
Oasis Canyon.............       400      12,862         759         7/95          5-40 Years
Oasis Centennial.........       473      13,242         647         9/95          5-40 Years
Oasis Centre.............        32       1,928         512         10/89         5-40 Years
Oasis Cliffs.............     2,271      14,647       5,084         7/88          5-40 Years
Oasis Club...............     1,107      15,546       2,998         12/89         5-40 Years
Oasis Cove(B)............       533       5,663       1,119      5/90 & 4/96      5-40 Years
Oasis Crossings..........       158       5,256         140         9/96          5-40 Years
Oasis Deerwood...........       517      29,395         978         9/96          5-40 Years
Oasis Del Mar............     1,109      36,701       1,855         10/95         5-40 Years
Oasis Emerald............       702       4,956       1,643         11/88         5-40 Years
Oasis Gateway............       941      26,634         210         6/97          5-40 Years
Oasis Glen...............       198       6,337         539         7/94          5-40 Years
Oasis Greens.............     1,218      19,939       2,143         10/93         5-40 Years
Oasis Harbor I...........       730      22,378         620         11/96         5-40 Years
Oasis Heights............       764      11,486       1,055         2/94          5-40 Years
Oasis Heritage...........     3,909      35,464       3,098         7/94          5-40 Years
Oasis Hills..............       426       5,591       1,368         6/91          5-40 Years
Oasis Island.............       407       5,237       1,061         6/90          5-40 Years
Oasis Lakeway............     1,253      37,883           1         12/97         5-40 Years
Oasis Landing............       325       6,938         715         10/93         5-40 Years
Oasis Martinique.........     1,862      74,060         329         10/97         5-40 Years
Oasis Meadows............       804      24,609         876         4/96          5-40 Years
Oasis Mini Storage.......        46       1,439          97         7/94          5-40 Years
Oasis Morning............       428       2,104       1,221         1978          5-40 Years
Oasis Nellis
  Commercial.............        --         864          51         7/94          5-40 Years
Oasis Palms..............     1,239       9,101       2,660         9/94          5-40 Years
</TABLE>
 
                                      F-20
<PAGE>   53
<TABLE>
<CAPTION>
                                                                                                                TOTAL
                                                       INITIAL COST                                            COST(A)
                                            -----------------------------------       COST                   ------------
                                                        BUILDINGS     FURNITURE   SUBSEQUENT TO               BUILDINGS
                             12/31/97                      AND           AND      CONSTRUCTION/                  AND
      PROPERTY NAME        ENCUMBRANCES       LAND     IMPROVEMENT    FIXTURES     ACQUISITION      LAND     IMPROVEMENTS
-------------------------  ------------     --------   ------------   ---------   -------------   --------   ------------
<S>                        <C>              <C>        <C>            <C>         <C>             <C>        <C>
Oasis Paradise...........      15,573          7,640       27,280          624         1,391         7,843       27,606
Oasis Park...............       7,591          1,217        8,087          224           753         1,217        8,611
Oasis Pearl..............                        585        1,581          224           242           587        1,696
Oasis Pines..............                      2,648       20,437          823            --         2,648       20,437
Oasis Place..............                      2,189        5,950          196           217         2,195        6,024
Oasis Plaza..............       6,000          2,541        6,677          151         2,290         2,541        8,190
Oasis Pointe.............       9,464(C)       2,056       14,273          554            35         2,056       14,305
Oasis Rainbow............       6,309            714        6,245          962           769           714        6,610
Oasis Ridge..............                      1,899        9,869          219           828         1,899       10,074
Oasis Rose...............                      1,943        9,926          453           195         1,964       10,054
Oasis Sands..............                        601        2,417           56            77           601        2,474
Oasis Sea Palms..........                      3,500        7,475          405            --         3,500        7,475
Oasis Springs............                      1,638       11,547          231           919         1,638       11,953
Oasis Star(D)............                        211          312           39           100           212          361
Oasis Suite..............                      1,464        8,470          306           781         1,464        8,637
Oasis Summit.............                      2,275       17,537          479           367         2,352       17,669
Oasis Tiara..............                      4,129       22,086          782           219         4,129       22,259
Oasis Topaz..............       6,451          2,377        6,353          143         3,070         2,377        8,678
Oasis View...............                        341        3,908          316         1,242           341        4,109
Oasis Vinings............                      1,857       11,624          365           415         1,857       11,940
Oasis Vintage............      10,819          2,942       14,237        1,019           280         2,943       14,423
Oasis Vista..............                      2,856       12,930           50         1,048         2,856       13,509
Oasis Wexford............      15,827          2,843       16,111          358           845         2,843       16,616
Oasis Winds..............                      2,309        9,425          152         2,805         2,309       11,133
                             --------       --------     --------      -------       -------      --------     --------
                              207,510        125,881      655,330       25,288        36,327       126,224      674,155
Land held for
  development............                                                                            4,083
                             --------       --------     --------      -------       -------      --------     --------
                              207,510        125,881      655,330       25,288        36,327       130,307      674,155
Construction in
  progress...............
                             --------       --------     --------      -------       -------      --------     --------
                             $207,510       $125,881     $655,330      $25,288       $36,327      $130,307     $674,155
                             ========       ========     ========      =======       =======      ========     ========
 
<CAPTION>
 
                           FURNITURE                               DATE OF
                              AND                 ACCUMULATED   CONSTRUCTION/   DEPRECIABLE
      PROPERTY NAME        FIXTURES     TOTAL     DEPRECIATION   ACQUISITION        LIFE
-------------------------  ---------   --------   -----------   -------------   ------------
<S>                        <C>         <C>        <C>           <C>             <C>
Oasis Paradise...........     1,486      36,935       2,966         3/94          5-40 Years
Oasis Park...............       453      10,281         771         9/94          5-40 Years
Oasis Pearl..............       349       2,632         739         7/87          5-40 Years
Oasis Pines..............       823      23,908         190         6/97          5-40 Years
Oasis Place..............       333       8,552         612         7/94          5-40 Years
Oasis Plaza..............       928      11,659       1,069         10/93         5-40 Years
Oasis Pointe.............       557      16,918         722         3/96          5-40 Years
Oasis Rainbow............     1,366       8,690       3,094         11/88         5-40 Years
Oasis Ridge..............       842      12,815       1,270         10/93         5-40 Years
Oasis Rose...............       499      12,517         987         10/94         5-40 Years
Oasis Sands..............        76       3,151         225         9/94          5-40 Years
Oasis Sea Palms..........       405      11,380         119         6/97          5-40 Years
Oasis Springs............       744      14,335       1,181         7/94          5-40 Years
Oasis Star(D)............        89         662         155         6/91          5-40 Years
Oasis Suite..............       920      11,021         944         7/94          5-40 Years
Oasis Summit.............       637      20,658       1,484      7/94 & 7/95      5-40 Years
Oasis Tiara..............       828      27,216         810         9/96          5-40 Years
Oasis Topaz..............       888      11,943       1,092         5/93          5-40 Years
Oasis View...............     1,357       5,807       3,515         1983          5-40 Years
Oasis Vinings............       464      14,261       1,209         12/93         5-40 Years
Oasis Vintage............     1,112      18,478       2,270         1/93          5-40 Years
Oasis Vista..............       519      16,884       1,270         7/94          5-40 Years
Oasis Wexford............       698      20,157       1,384         12/94         5-40 Years
Oasis Winds..............     1,249      14,691       1,274         10/93         5-40 Years
                            -------    --------     -------
                             42,447     842,826      64,769
Land held for
  development............                 4,083
                            -------    --------     -------
                             42,447     846,909      64,769
Construction in
  progress...............                25,952
                            -------    --------     -------
                            $42,447    $872,861     $64,769
                            =======    ========     =======
</TABLE>
 
---------------
 
(A) The aggregate cost for federal income tax purposes at December 31, 1997 is
    $864,650.
 
(B) Initial cost includes the expansion of Oasis Cove totaling 20 units.
 
(C) Encumbrance represents a portion of the $39,432 Teachers Insurance and
    Annuity Association loan allocated to the property based upon relative size.
 
(D) Initial cost was reduced to reflect the sale of 44 units at Oasis Star I.
 
                                      F-21
<PAGE>   54
 
                              NOTE TO SCHEDULE III
 
                               DECEMBER 31, 1997
                             (DOLLARS IN THOUSANDS)
 
 1. RECONCILIATION OF REAL ESTATE AND ACCUMULATED DEPRECIATION:
 
<TABLE>
<CAPTION>
                                                               1997         1996         1995
                                                             --------     --------     --------
<S>                                                          <C>          <C>          <C>
Real estate investments:
  Balance at beginning of year.............................  $687,174     $547,181     $433,450
  Additions................................................   218,664      144,312      113,731
  Dispositions.............................................   (58,929)      (4,319)          --
                                                             --------     --------     --------
  Balance at end of year...................................  $846,909     $687,174     $547,181
                                                             ========     ========     ========
Accumulated depreciation:
  Balance at beginning of year.............................  $ 52,924     $ 38,499     $ 26,605
  Additions................................................    18,778       15,438       11,894
  Dispositions.............................................    (6,933)      (1,013)          --
                                                             --------     --------     --------
  Balance at end of year...................................  $ 64,769     $ 52,924     $ 38,499
                                                             ========     ========     ========
</TABLE>
 
                                      F-22
<PAGE>   55
3.1     Third Amended and Restated Articles of Incorporation of Oasis
        Residential, Inc. (1)

3.2     Fourth Amended and Restated Bylaws of Oasis Residential, Inc. (1)

10.1    Amended and Restated Employment Contract between the Company and Robert
        V. Jones (6)

10.2    First Amendment to Amended and Restated Employment Contract between the
        Company and Robert V. Jones (6)

10.3    Amended and Restated Employment Contract between the Company and Scott
        S. Ingraham (6)

10.4    First Amendment to Amended and Restated Employment Contract between the
        Company and Scott S. Ingraham (6)

10.5    Amended and Restated Employment Contract between the Company and Allan
        O. Hunter, Jr. (6)

10.6    First Amendment to Amended and Restated Employment Contract between the
        Company and Allan O. Hunter (6)

10.7    Amended and Restated Employment Contract between the Company and Walter
        B. Eeds (6)

10.8    First Amendment to Amended and Restated Employment Contract between the
        Company and Walter B. Eeds (6)

10.9    Noncompetition Agreement between the Company and RVJ (1)

10.10   Stock Option Plan for Outside Directors (l)

10.11   Form of Nonqualified Stock Option Agreement for Outside Directors (l)

10.12   Form of Officers and Directors Indemnification Agreement (l)

10.13   Form of Promissory Note and related documentation between the Company
        and Lutheran Brotherhood (l)

10.14   Form of Promissory Note and related documentation between the Company
        and Washington Pacific Financial Group Ltd. (1)

10.15   Multifamily Note in favor of GMAC Mortgage Corporation of
        Pennsylvania(l)

10.16   Amended and Restated Acquisition Agreement between the Company and
        Walter B. Eeds (3)

10.17   Credit Agreement among the Company, certain lenders, and Wells Fargo
        Bank, National Association. as Agent dated January 9, 1995 (3)

10.18   Loan Agreement for Oasis Parc between ORI-Colorado, Inc. and Bank One,
        Arizona, NA dated September 29, 1994 (3)

10.19   Letter of Credit Reimbursement Agreement between ORI-Colorado, Inc. and
        Bank One, Arizona, NA relating to City of Westminster, Colorado
        Multifamily Housing Revenue Bonds (Wexford Station A Project) 1985
        Series A dated December 1, 1994 (3)

<PAGE>   56
10.20   Loan Agreement between City of Westminster, Colorado and Wexford Venture
        dated December 1, 1985 (3)

10.21   Amendment to Loan Agreement between City of Westminster, Colorado and
        ORI-Colorado, Inc. dated December 1, 1994, relating to Oasis Wexford (3)

10.22   Transcript $6,690,000 Adams County, Colorado Multifamily Housing Revenue
        Refunding Bonds Series 1986A; Sale of Project and Purchase in Lieu of
        Redemption dated October 3, 1994 (3)

10.23   Promissory Note of ORI-Colorado, Inc. in favor of Eagle Chase, Ltd.
        dated September 29, 1994 (3)

10.24   Loan Agreement between ORI-Colorado, Inc. and Bank One, Arizona, NA
        dated September 29, 1994 (3)

10.25   Assignment and Assumption Agreement between Eagle Chase, Ltd. and
        ORI-Colorado, Inc. (3)

10.26   Assignment and Assumption Agreement by and among U.S. Customs Service,
        the Company and Robert V. Jones (3)

10.27   Promissory Note for Oasis Terrace between the Company and Bank One,
        Arizona, NA dated May 11, 1994 (3)

10.28   Promissory Note for Oasis Del Mar between the Company and Bank One,
        Arizona, NA (3)

10.29   Promissory Note for Oasis Canyon between the Company and Bank One,
        Arizona, NA (3)

10.30   Multifamily Deed of Trust, Assignment of Rents and Security Agreement
        and Multifamily Note by and between the Company and Washington Mortgage
        Group Financial Group, Inc. (3)

10.31   Multifamily Deed of Trust, Assignment of Rents and Security Agreement
        and Multifamily Note by and between Washington Mortgage Group Financial
        Group, Inc. and the Company (3)

10.32   Amended and Restated Credit Agreement among the Company, The Lenders
        Listed Therein, Wells Fargo Bank as Administrative Agent, and Morgan
        Guaranty Trust Company of New York dated as of September 25, 1995 (4)

10.33   Promissory Note of the Company in favor of Wells Fargo Bank dated
        September 25, 1995 (4)

10.34   Promissory Note of the Company in favor of Morgan Guaranty Trust Company
        of New York dated September 25, 1995 (4)

10.35   Promissory Note of the Company in favor of Bank One Arizona, N.A. dated
        September 25, 1995 (4)

10.36   Promissory Note of the Company in favor of Dresdner Bank AG, Los Angeles
        Agency and Grand Cayman Branch dated September 25, 1995 (4)

10.37   Promissory Note of the Company in favor of Union Bank dated September
        25, 1995 (4)

10.38   Multifamily Deed of Trust, Assignment of Rents and Security Agreement,
        Multifamily Note, Financing Agreement, Indenture of Trust, and
        Regulatory Agreement by and between BOCC Funding Corporation and the
        Company dated as of November 1, 1995 (Oasis Wexford) (4)

10.39   Multifamily Deed of Trust, Assignment of Rents and Security Agreement,
        Multifamily Note, Financing Agreement and Indenture of Trust by and
        between BOCC Funding Corporation and the Company dated as of December 1,
        1995 (Oasis Park) (4)


<PAGE>   57
10.40   Nevada Deed of Trust and Assignment of Rents and Security Agreement and
        Fixture Filing Statement, Nevada Deed of Trust Note, and Note Agreement
        by and between Teachers Insurance and Annuity Association of America and
        Company dated December 29, 1995 (Oasis Bel Air, Oasis Canyon, Oasis
        Trails, Oasis Rose) (4)

10.41   Nevada Deed of Trust and Assignment of Rents and Security Agreement and
        Fixture Filing Statement, Nevada Deed of Trust Note, and Letter of
        Credit Agreement by and between Teachers Insurance and Annuity
        Association of America and Company dated December 29, 1995 (Oasis Del
        Mar) (4)

10.42   First Modification Agreement to the Amended and Restated Credit
        Agreement among the Company, The Lenders named therein, Wells Fargo Bank
        as Administrative Agent, and Morgan Guaranty Trust Company of New York
        and Bank One, Arizona, N.A., dated as of February 25, 1996 (5)

10.43   Second Modification Agreement to the Amended and Restated Credit
        Agreement among the Company, The Lenders named therein, Wells Fargo Bank
        as Administrative Agent, and Morgan Guaranty Trust Company of New York
        and Bank One, Arizona, N.A., dated as of July 25, 1996 (5)

10.44   Third Modification Agreement to the Amended and Restated Credit
        Agreement among the Company, The Lenders named therein, Wells Fargo Bank
        as Administrative Agent, and Morgan Guaranty Trust Company of New York
        and Bank One, Arizona, N.A., dated as of September 24, 1996 (5)

10.45   Promissory Note of the Company in favor of Wells Fargo Bank dated
        September 24, 1996 (5)

10.46   Promissory Note of the Company in favor of Morgan Guaranty Trust Company
        dated September 24, 1996 (5)

10.47   Promissory Note of the Company in favor of Bank One. Arizona, N.A. dated
        September 24, 1996 (5)

10.48   Promissory Note of the Company in favor of Dresdner Bank AG, New York
        Brand and Grand Cayman Branch dated September 24, 1996 (5)

10.49   Promissory Note of the Company in favor of Union Bank of California,
        N.A. dated September 24, 1996 (5)

10.50   Amended and Restated Deed of Trust, Assignment of Leases, Rents and
        Contracts, Security Agreement and Fixture Filing between Oasis
        Residential, Inc., as Trustor, and Stweart Title of Nevada, as Trustee,
        and Allstate Life Insurance Company, as Beneficiary, dated March 14,
        1996 (Oasis Reef) (6)

10.51   Amended and Restated Mortgage Note with Oasis Residential, Inc. as Maker
        payable to Allstate Life Insurance Company dated March 14, 1996 (Oasis
        Reef) (6)

10.52   Purchase Agreement between Oasis Residential, Inc. as Seller and Siefert
        Investments, a Nevada Limited Partnership as Buyer dated December 11,
        1996, for sale of Oasis Reef Apartments (6)

10.54   Fourth Modification Agreement to the Amended and Restated Credit
        Agreement among the Company, The Lenders named therein, Wells Fargo Bank
        as Administrative Agent, and Morgan Guaranty Trust Company of New York
        and Bank One, Arizona, N.A., dated as of December 18, 1996 (7)

10.55   Land Purchase Agreement for Oasis Interlaken by and between Interlocken,
        Ltd. and ORI-Colorado, Inc. dated December 24, 1996 (7)

<PAGE>   58
10.56   Purchase and Sale Agreement for Oasis Sea Palms by and between Hutton
        Development Company, Inc. and the Company dated May 19, 1997 (7)

10.57   Fifth Modification Agreement to the Amended and Restated Credit
        Agreement among the Company, The Lenders named therein, Wells Fargo Bank
        as Administrative Agent, and Morgan Guaranty Trust Company of New York
        and Bank One, Arizona, N.A., dated as of September 25, 1997 (8)

10.58   Contribution Agreement dated as of October 23, 1997 by and between the
        Company, Costa Mesa Partners, LLC, ISCO, IFT Properties, Ltd., Edward
        Israel and Robert Cohen

10.59   Amended and Restated Limited Liability Company Agreement dated as of
        October 23, 1997 by and among the Company, ISCO and IFT

10.60   Exchange Rights Agreement dated as of October 23, 1997 by and among the
        Company, Oasis Martinique, LLC, ISCO and IFT Properties, Ltd.

10.61   Loan and Security Agreement dated as of October 23, 1997 by and among
        the Company, ISCO, IFT Properties, Ltd., Edward Israel and Robert Cohen

10.62   Agreement and Plan of Merger dated December 16, 1997 by and among
        Camden Property Trust, Camden Subsidiary II, Inc. and the Company (9)

10.63   Amendment No. 1 to Agreement and Plan of Merger dated as of February 4,
        1998, by and among Camden Property Trust, Camden Subsidiary II, Inc. and
        the Company

21.1    List of Subsidiaries

23.1    Consent of Independent Accountants

27.1    Financial Data Schedule Year Ended December 31, 1997

27.2    Financial Data Schedule Quarterly and Year Ended December 31, 1996

27.3    Financial Data Schedule Quarterly 1997

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

(1)     Incorporated by reference from the Company's Registration Statement on
        Form S-11, Registration No. 33-67564

(2)     Incorporated by reference from the Company's Registration Statement on
        Form S-11, Registration No. 33-79564

(3)     Incorporated by reference from the Company's Form 10-K for the fiscal
        year ended December 31, 1994

(4)     Incorporated by reference from the Company's Annual Report on Form 10-K
        for the fiscal year ended December 31, 1995

(5)     Incorporated by reference from the Company's quarterly report on Form
        10-Q for the quarter ended September 30, 1996

(6)     Incorporated by reference from the Company's Annual Report on Form 10-K
        for the fiscal year ended December 31, 1996

(7)     Incorporated by reference from the Company's quarterly report on Form
        10-Q for the quarter ended June 30, 1997

(8)     Incorporated by reference from the Company's quarterly report on Form
        10-Q for the quarter ended September 30, 1997
<PAGE>   59

------------------------------
Scott S. Ingraham
Chief Executive Officer, President and
Director

Date: March 23, 1998

Pursuant to the requirements of the Securities Act of 1934, this Report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
             SIGNATURE                     TITLE                         DATE
             ---------                     -----                         ----
<S>                                    <C>                            <C>    


           Robert V. Jones             Chairman of the Board          March 23,1998
                                                     



          Scott S. Ingraham            Chief Executive Officer,       March 23, 1998
                                       President, and Director        
                                       (Principal Executive Officer)   
                                    


          Allan O. Hunter, Jr.         Executive Vice President,      March 23, 1998
                                       Chief Operating Officer         
                                       and Director

          John M. Clayton              Senior Vice President          March 23, 1998
                                       and Chief Financial Officer  
                                       (Chief Financial Officer)

          Marianne K. Aguiar           Vice President and             March 23, 1998
                                       Controller (Principal   
                                       Accounting Officer)    



          John M. Galvin                     Director                 March 23, 1998
          


          Peter L. Rhein                     Director                 March 23, 1998
          


          Robert H. Smith                    Director                 March 23, 1998
          

          Edward R. Muller                   Director                 March 23, 1998

</TABLE>