-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DJzTJYTF9Dxp8K/C7/y417QdXFZjrNmJgY6vH1mLt6Vp94d12O3FQxh9HphQtfvV w+I5PXLyPkOSyLhEBm8M+g== 0000024148-98-000005.txt : 19980512 0000024148-98-000005.hdr.sgml : 19980512 ACCESSION NUMBER: 0000024148-98-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980511 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONTINENTAL REAL ESTATE PARTNERS LTD CENTRAL INDEX KEY: 0000024148 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 042523977 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-07752 FILM NUMBER: 98614798 BUSINESS ADDRESS: STREET 1: WOOD RIDGE RD CITY: GLEN ARBOR STATE: MI ZIP: 49636 BUSINESS PHONE: 6163345000 MAIL ADDRESS: STREET 1: P O BOX 947 CITY: TRAVERSE CITY STATE: MI ZIP: 49685-0947 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended March 31, 1998 Commission file number 0-7752 CONTINENTAL REAL ESTATE PARTNERS, LTD. (Exact name of Registrant as Specified in its Certificate of Limited Partnership) Massachusetts 04-2523977 (State of organization) (Internal Revenue Service Employer Identification Number) Wood Ridge Road Glen Arbor, Michigan 49636 (Address of principal executive (Zip code) offices) (616) 334-5000 Registrants' telephone number Including area code Not applicable Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No The number of limited partnership interests outstanding as of March 31, 1998: Limited partnership units, $500 per unit - 30,004 units Index CONTINENTAL REAL ESTATE PARTNERS, LTD. Page PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Statements of assets, liabilities and partners' capital - March 31, 1998 and December 31, 1997 3 Statements of operations - quarter ended and nine months ended March 31, 1998 and 1997 4 Statements of changes in partners' capital - nine months ended March 31, 1998 and 1997 5 Statements of cash flows - nine months ended March 31, 1998 and 1997 6 Notes to financial statements - March 31, 1998 7 Report of Independent Certified Public Accountants on Interim Financial Information 8 PART II. OTHER INFORMATION Item 6. Exhibits and reports on Form 8-K 9 SIGNATURES 10 May 7, 1998 To Our Partners: This report contains information on the Partnership's operations for the first quarter and on the potential sale discussed in our Annual Report. Therefore, please read it with care. For the quarter ended March 31, 1998, the Partnership had a loss of $52,757, which compared to a year prior loss of $35,237. On review, you will note that the primary difference related to an accural for real estate taxes which was not accrued last year. The net cash flow provided by operating activities was $70,500, and the Partnership ended the quarter with $1,292,723 in cash reserves. As to the potential sale of the Lakeland Mall to the First Baptist Church, you should know that a change has occurred since the date of our last report to you. The change arose when it became apparent to the First Baptist Church officers and professionals advising them that the small portion of the Partnership's remaining property (about one acre or 3% of the total), which was to be excluded from the sale, was important to the long-term needs of the First Baptist Church. Therefore, the First Baptist Church officials approached us and asked us to include the excluded parcel in the sale without an increase in compensation. We declined to do so and negotiations followed. During our negotiations, the First Baptist Church officials advised us that they had reached a satisfactory agreement with Wal-Mart and had obtained a commitment for the requisite financing. They also advised us that they were willing to consider an inspection period shorter than the eight months allowed by the Purchase and Sale Agreement. After consideration, we concluded that the progress the First Baptist Church had made removed two of the contingencies about which we had written. We also concluded that the investment value of the capital coming from the sale, if received some seven months earlier than anticipated, would approach the value of the excluded parcel, regardless of whether the Partnership or its individual partners were making the investment decisions. Therefore, we negotiated for and obtained a much shorter inspection period and, in return for it, agreed to amend the Purchase and Sale Agreement to include the excluded parcel if the sale is closed prior to the end of this month. It appears that the First Baptist Church is resolving the remaining contingencies. Therefore, we have a higher degree of confidence in this transaction than we had previously expressed and feel there are some reasons to believe the sale may close before the end of this month. Therefore, if the sale closes, we have taken additional steps to be prepared to promptly distribute funds and liquidate the Partnership in accordance with Article XVII of the Partnership Agreement. We will, of course, keep you fully advised. Sincerely, Robert A. Kuras President PART I. FINANCIAL INFORMATION Continental Real Estate Partners, Ltd. STATEMENTS OF ASSETS, LIABILITIES AND PARTNERS' CAPITAL
March 31, December 31, 1998 1997 ASSETS (Unaudited) (Note B) Investments in real estate Land $183,581 $183,581 Land improvements 1,877,263 1,877,263 Buildings and equipment 11,932,804 11,932,804 13,993,648 13,993,648 Less accumulated depreciation 11,703,681 11,601,241 2,289,967 2,392,407 Cash 1,292,723 1,222,223 Other assets 237,725 264,343 $3,820,415 $3,878,973 LIABILITIES AND PARTNERS' CAPITAL LIABILITIES Unclaimed distribution checks $170,164 $170,164 Accounts payable and accrued expenses 57,913 48,073 Liabilities to general partner 2,127,568 2,143,209 2,355,645 2,361,446 PARTNERS' CAPITAL General partner 365,619 368,257 Limited partners - 30,004 units of limited partnership interest 1,099,151 1,149,270 1,464,770 1,517,527 $3,820,415 $3,878,973 See Notes to Financial Statements. -3-
Continental Real Estate Partners, Ltd. STATEMENTS OF OPERATIONS (UNAUDITED) Three months ended March 31, Operating revenue Rental income $120,572 $122,028 Other, principally operating expense reimbursements - 200 120,572 122,228 Operating expense Depreciation 102,440 100,387 Repairs and maintenance 9,064 13,682 Insurance 24,732 23,687 Real estate taxes 18,161 - Utilities 1,768 6,307 Professional services 6,000 6,297 Property management fees 9,102 9,104 Commissions 3,027 3,027 Investor communications 1,440 1,080 Other 10,971 6,838 186,705 170,409 Operating loss (66,133) (48,181) Interest income 13,376 12,944 NET LOSS $(52,757) (35,237) Net loss allocated to General partner $(2,638) $(1,762) Limited partners - $(1.67) and $(1.12) net loss per unit of limited partnership interest outstanding for the three months ended March 31, 1998 and 1997, respectively (50,119) (33,475) $(52,757) $(35,237) See Notes to Financial Statements. -4-
Continental Real Estate Partners, Ltd. STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (UNAUDITED) Three months ended March 31,
1998 1997 General Limited General Limited Partner Partner Partner Partner Beginning balance $368,257 $1,149,270 $380,796 $1,387,511 NET LOSS (2,638) (50,119) (1,762) (33,475) Ending balance $365,619 $1,099,151 $379,034 $1,354,036 Balance, March 31, 1998 and 1997, per unit of limited partnership interest $36.63 $45.13 See Notes to Financial Statements. -5-
Continental Real Estate Partners, Ltd. STATEMENTS OF CASH FLOWS (UNAUDITED) Three months ended March 31,
1998 1997 Operating activities Net loss $(52,757) $(35,237) Adjustments to reconcile net loss to cash provided by operating activities Depreciation and amortization 102,440 103,414 Decrease in other assets 26,618 37,329 Increase in accounts payable and accrued expenses (5,801) (10,667) Net cash flow provided by operating activities 70,500 94,839 Cash flows from investing activities Purchase of improvements - (5,038) Net cash flow used by investing activities - (5,038) NET INCREASE IN CASH 70,500 89,801 Balance of cash, beginning of period 1,222,223 1,065,816 Balance of cash, end of period $1,292,723 $1,155,617 See Notes to Financial Statements. -6-
Continental Real Estate Partners, Ltd. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) NOTE A - BASIS OF PRESENTATION The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 1998 are not necessarily indicative of the results that may be expected for the year ended December 31, 1998. For further information, refer to the financial statements and footnotes thereto included in the company's annual report on Form 10-K for the year ended December 31, 1997. NOTE B - DECEMBER 31, 1997 STATEMENT OF ASSETS, LIABILITIES AND PARTNERS' CAPITAL The statement of assets, liabilities and partners' capital at December 31, 1997 has been derived from the audited financial statements at that date. -7- REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON INTERIM FINANCIAL INFORMATION The Bayberry Group, Inc. Sole General Partner of Continental Real Estate Partners, Ltd. The accompanying statement of assets, liabilities and partners' capital of Continental Real Estate Partners, Ltd. (a Massachusetts limited partnership) as of March 31, 1998 and the related statements of operations for the three month period ended March 31, 1998 and the statement of cash flows and changes in partners' capital for the three month periods ended March 31, 1998 and 1997 were not audited by us and, accordingly, we do not express an opinion on them. The accompanying statement of assets and liabilities for the year ended December 31, 1997 was audited by us, and we expressed an unqualified opinion on it in our report dated January 16, 1998, but we have not performed any auditing procedures since that date. Traverse City, Michigan April 23, 1998 -8- CONTINENTAL REAL ESTATE PARTNERS, LTD. PART II. OTHER INFORMATION Item 6. Exhibits and reports on Form 8-K The company did not file any reports on Form 8-K during the three months ended March 31, 1998. -9- CONTINENTAL REAL ESTATE PARTNERS, LTD. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CONTINENTAL REAL ESTATE PARTNERS, LTD. Date Robert A. Kuras, Principal Financial Officer and President of The Bayberry Group, Inc. Sole General Partner -10- EX-25 2 [ARTICLE] 5 [CIK] 0000024148 [NAME] CONTINENTAL REAL ESTATE PARTNERS LTD [PERIOD-TYPE] 3-MOS [FISCAL-YEAR-END] DEC-31-1998 [PERIOD-END] MAR-31-1998 [CASH] 1292723 [SECURITIES] 0 [RECEIVABLES] 0 [ALLOWANCES] 0 [INVENTORY] 0 [CURRENT-ASSETS] 237725 [PP&E] 13993648 [DEPRECIATION] 11703681 [TOTAL-ASSETS] 3820415 [CURRENT-LIABILITIES] 2355645 [BONDS] 0 [PREFERRED-MANDATORY] 0 [PREFERRED] 0 [COMMON] 0 [OTHER-SE] 1464770 [TOTAL-LIABILITY-AND-EQUITY] 3820415 [SALES] 133948 [TOTAL-REVENUES] 133948 [CGS] 0 [TOTAL-COSTS] 0 [OTHER-EXPENSES] 186705 [LOSS-PROVISION] 0 [INTEREST-EXPENSE] 0 [INCOME-PRETAX] (52757) [INCOME-TAX] 0 [INCOME-CONTINUING] (52757) [DISCONTINUED] 0 [EXTRAORDINARY] 0 [CHANGES] 0 [NET-INCOME] (52757) [EPS-PRIMARY] (1.67) [EPS-DILUTED] (1.67)
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