-----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, GrUgSRyaJRypVleS+WCXrbKc5RHKua/jNutuPVWAnpVyGSBXmM9xpIGgum9S4UD0 m7Wfavgl2DZ2sJ0rPDP12g== 0000722886-97-000001.txt : 19970222 0000722886-97-000001.hdr.sgml : 19970222 ACCESSION NUMBER: 0000722886-97-000001 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970214 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MRI BUSINESS PROPERTIES FUND LTD CENTRAL INDEX KEY: 0000722886 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 942919856 STATE OF INCORPORATION: CA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-13104 FILM NUMBER: 97534107 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ PO BOX 1089 STREET 2: C/O INSIGNIA FINANCIAL GROUP INC CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8642391513 MAIL ADDRESS: STREET 1: C/O INSIGNIA FINANCIAL GROUP INC STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 FORMER COMPANY: FORMER CONFORMED NAME: CENTURY PROPERTIES FUND 84 DATE OF NAME CHANGE: 19831018 10QSB 1 FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 QUARTERLY OR TRANSITIONAL REPORT (As last amended by 34-32231, eff. 6/3/93) U. S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 For the quarterly period ended December 31, 1996 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period.........to......... Commission file number 0-13104 MRI BUSINESS PROPERTIES FUND LTD. (Exact name of small business issuer as specified in its charter) California 94-2919856 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Insignia Financial Plaza Greenville, South Carolina 29602 (Address of principal executive offices) (864) 239-1000 Issuer's telephone number Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the past 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 . PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS a) MRI BUSINESS PROPERTIES FUND LTD. BALANCE SHEET (Unaudited) (in thousands, except unit data) December 31, 1996 Assets Cash and cash equivalents $ 4,199 Receivables and other assets 2,219 Investment properties: Land $ 440 Building and related personal property 4,035 4,475 Less accumulated depreciation 1,762 2,713 Deferred costs, net 22 Total assets $ 9,153 Liabilities and Partners' Equity Accrued expenses and other liabilities $ 81 Partners' Equity: General partners' deficit $ (1,010) Limited partners' equity (82,158 units outstanding) 10,082 9,072 Total liabilities and partners' equity $ 9,153 See Accompanying Notes to Financial Statements b) MRI BUSINESS PROPERTIES FUND LTD. STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data) Three Months Ended December 31, 1996 1995 Revenues: Commercial operations $ 168 $ 822 Other income 55 67 Gain on sale of property 858 -- Total revenues 1,081 889 Expenses: Operating 104 451 Interest 6 25 Depreciation 39 104 General and administrative 82 113 Total expenses 231 693 Net income before extraordinary item 850 196 Extraordinary item: Loss on extinguishment of debt 94 -- Net income $ 756 $ 196 Net income allocated to general partners $ 153 $ 4 Net income allocated to limited partners 603 192 Net income $ 756 $ 196 Net income per limited partnership unit: Net income before extraordinary item $ 8.25 $ 2.34 Extraordinary loss on extinguishment of debt (.91) -- Net income per limited partnership unit $ 7.34 $ 2.34 Distribution per limited partnership unit $ 83.50 $ -- See Accompanying Notes to Financial Statements c) MRI BUSINESS PROPERTIES FUND LTD. STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited) (in thousands, except unit data)
Limited General Limited Partnership Partners' Partners' Total Units Deficit Equity Equity Original capital contributions 82,158 $ 100 $ 82,158 $ 82,258 Partners' (deficit) capital at September 30, 1996 82,158 $ (1,023) $ 16,339 $ 15,316 Distributions paid to partners (140) (6,860) (7,000) Net income for the three months ended December 31, 1996 -- 153 603 756 Partners' (deficit) capital at December 31, 1996 82,158 $ (1,010) $ 10,082 $ 9,072 See Accompanying Notes to Financial Statements
d) MRI BUSINESS PROPERTIES FUND LTD. STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Three Months Ended December 31, 1996 1995 Cash flows from operating activities: Net income $ 756 $ 196 Adjustments to reconcile net income to net cash provided by operating activities: Gain on sale of properties (858) -- Extraordinary loss on extinguishment of debt 94 -- Depreciation and amortization 43 139 Change in accounts: Receivables and other assets 47 (28) Deferred cost paid (8) (10) Accrued expenses and other liabilities (107) 12 Due to affiliate -- (50) Net cash (used in) provided by operating activities (33) 259 Cash flows from investing activities: Net proceeds from sale of property 3,889 -- Property improvements and replacements -- (28) Net cash provided by (used in) investing activities 3,889 (28) Cash flows from financing activities: Notes payable principal payments -- (11) Satisfaction of notes payable (1,063) -- Costs paid to extinguish debt (32) -- Distribution to partners (7,000) -- Net cash used in financing activities (8,095) (11) (Decrease) increase in cash and cash equivalents (4,239) 220 Cash and cash equivalents at beginning of period 8,438 3,795 Cash and cash equivalents at end of period $ 4,199 $ 4,015 Supplemental information: Interest paid $ 13 $ 24 See Accompanying Notes to Financial Statements e) MRI BUSINESS PROPERTIES FUND LTD. NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited financial statements of MRI Business Properties Fund Ltd. (the "Partnership") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. 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 NPI Equity Investments II, Inc. ("NPI Equity" or the "Managing General Partner"), all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended December 31, 1996, are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 1997. For further information, refer to the financial statements and footnotes thereto included in the Partnership's annual report on Form 10-K for the fiscal year ended September 30, 1996. The statement of operations and statement of cash flow for the three month period ended December 31, 1995, are consolidated statements which include the Partnership and a wholly owned subsidiary, Resource Park West, L.P. Resource Park West, L.P., was dissolved when the investment property Resource Park West was sold October 22, 1996 (see "Note C"). Certain reclassifications have been made to the fiscal year 1996 information to conform to the fiscal year 1997 presentation. NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES The Partnership has no employees and is dependent on the Managing General Partner and its affiliates for the management and administration of all partnership activities. The Partnership Agreement provides for payments to affiliates for services and as reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. The Managing General Partner of the Partnership is Montgomery Realty Company- 83 ("Montgomery"), a California limited partnership of which Fox Realty Investors ("FRI"), a California general partnership, is the managing general partner. The associate general partner of the Partnership is MRI Associates, Ltd., a California limited partnership, of which FRI is the general partner, and Two Broadway Associates II, an affiliate of Merrill Lynch, Pierce, Fenner & Smith, Incorporated, is the limited partner. The Managing General Partner is a wholly owned subsidiary of National Property Investors, Inc., ("NPI"). Pursuant to a series of transactions which closed during the first half of calendar year 1996, affiliates of Insignia Financial Group, Inc. ("Insignia") acquired, among other things, control of NPI Equity. In connection with these transactions, affiliates of Insignia appointed new officers and directors of NPI Equity. The following transactions with affiliates of Insignia, NPI, and affiliates of NPI were charged to expense in 1996 and 1995: For the Three Months Ended December 31, 1996 1995 Reimbursement for services of affiliates (included in general and administrative expenses) $ 5,000 $ 30,000 For the three month period ended December 31, 1996, the Partnership insured its properties under a master policy through an agency and insurer unaffiliated with the Managing General Partner. An affiliate of the Managing General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which was later acquired by the agent who placed the current year's master policy. The current agent assumed the financial obligations to the affiliate of the Managing General Partner who received payments on these obligations from the agent. The amount of the Partnership's insurance premiums accruing to the benefit of the affiliate of the Managing General Partner by virtue of the agent's obligations is not significant. NOTE C - GAIN ON SALE OF PROPERTY AND EXTRAORDINARY LOSS ON EXTINGUISHMENT OF DEBT On October 22, 1996, the Partnership sold Resource Park West Office Building to an unrelated third party for a contract amount of $4,025,000. After the payment of the note payable, closing costs and related expenses of approximately $136,000, the Partnership received proceeds of approximately $3,889,000. The sale resulted in a gain of approximately $858,000 in fiscal year 1997. The early extinguishment of debt resulted in an extraordinary loss of approximately $94,000, arising from prepayment penalties and the write off of unamortized loan costs. A provision for impairment of value of $1,640,000 was recorded in fiscal year 1992. NOTE D - DISTRIBUTIONS In October 1996, the Partnership distributed $6,860,000 ($83.50 per limited partnership unit) to the limited partners and $140,000 to the general partners from proceeds from the disposition of the Norwood Tower Office Building and Mardot II Building which occurred during fiscal year 1996. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment property consists of Parkway Village Shopping Center, located in Atlanta Georgia. The average occupancy for the three month periods ended December 31, 1996 and 1995, was 50% and 61%, respectively. The decrease in occupancy at the Parkway Village Shopping Center is the result of the relocation of an anchor tenant who occupied 41% of the total space, during the first fiscal quarter of 1997. An additional 4% of the property's space, consisting of three tenants, was vacated during the first fiscal quarter as a direct result of the loss of the anchor tenant. At December 31, 1996, occupancy for the property had declined to 20% as a result of the above mentioned tenant losses. The Partnership realized net income of $756,000 and $196,000 for the three months ended December 31, 1996, and 1995, respectively. The increase in net income is the result of the gain on sale of the Resource Park West Building, during the first fiscal quarter of 1997. Additionally, during fiscal 1996, the Partnership sold three properties, the Norwood Tower Office Building, in June of 1996; the Mardot II Building, in July of 1996; and the Priest Office Building in September of 1996. Due to the above mentioned property sales, in fiscal 1996 and 1997, the Partnership has seen a significant reduction in interest, operating, depreciation, and general and administrative expenses as well as a $94,000 loss on the extinguishment of debt arising from the sale of the Resource Park West Building. Revenues at the remaining property, Parkway Village Shopping Center decreased during the three months ended December 31, 1996 as compared to December 31, 1995. The decrease in revenue was the result of tenant losses discussed above. This decrease was partially offset by an increase in tenant reimbursements. Operating expenses at Parkway Village Shopping Center increased for the three months ended December 31, 1996, as compared to the three months ended December 31, 1995. This increase in operating expenses was due to an increase in real estate tax expense resulting from a fiscal year 1995 tax appeal being settled in fiscal year 1996, and the Partnership paying the additional taxes in fiscal year 1996. At December 31, 1996, the Partnership had unrestricted cash of approximately $4,199,000 as compared to approximately $4,015,000 at December 31, 1995. Net cash used in operations decreased due to the decrease in net operating income from the Partnership's remaining property and the sale of the Partnership's four properties during fiscal 1996 and the first quarter of fiscal 1997. Net cash provided by investing activities increased as the result of the proceeds from the sale of the Resource Park West Building. Net cash used in financing activities increased as the result of the satisfaction of approximately $1,063,000 in mortgage indebtedness secured by the Resource Park West Building, and a distribution of approximately $6,860,000 to the limited partners and $140,000 to the general partners. The Partnership's remaining property consists of one shopping center located in Georgia. The Partnership receives rental income from commercial spaces and is responsible for operating and administrative expenses. The Partnership is marketing its remaining property for sale. Although the space occupied by the anchor tenant became vacant during the first fiscal quarter of 1997, the Managing General Partner believes, that at this time, it is prudent to continue to market the property for sale as opposed to expending significant amounts of cash flow in an effort to fully lease the property. Upon the sale of the remaining property, it is anticipated that all cash of the Partnership will be distributed, after establishment of a sufficient reserve, and the Partnership will be liquidated. An affiliate of the Managing General Partner has made available to the Partnership a line of credit of $150,000, per property owned by the Partnership. As of December 31, 1996, there are no outstanding amounts due under this line of credit. Based on present plans, the Managing General Partner does not anticipate the need to borrow in the near future. Other than cash and cash equivalents, the line of credit is the Partnership's only unused source of liquidity. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the property to adequately maintain the physical assets and other operating needs of the Partnership. Such assets are currently thought to be sufficient for any near-term needs of the Partnership. Future cash distributions will depend on the levels of cash generated from operations, a property sale, and the availability of cash reserves. In October 1996, the Partnership distributed $6,860,000 ($83.50 per limited partnership unit) to the limited partners and $140,000 to the general partners from proceeds from the disposition of the Norwood Tower Office Building and Mardot I Building. No distributions were made during the three month period ended December 31, 1995. PART II - OTHER INFORMATION ITEMS 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. b) Reports on Form 8-K: Form 8-K was filed by the Partnership, dated October 22, 1996, relating to the sale of Resource Park West Building. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MRI BUSINESS PROPERTIES FUND, LTD. By: MONTGOMERY REALTY COMPANY 83, its Managing General Partner By: FOX REALTY INVESTORS, its Managing General Partner By: NPI EQUITY INVESTMENTS, II INC. its managing general partner By: /s/ William H. Jarrard, Jr. William H. Jarrard, Jr. President and Director By: /s/ Ronald Uretta Ronald Uretta Chief Operating Officer Date: February 14, 1997 EX-27 2
5 This schedule contains summary financial information extracted from MRI Business Properties Fund Ltd. 1997 First Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000722886 MRI BUSINESS PROPERTIES FUND LTD. 1,000 3-MOS SEP-30-1997 DEC-30-1996 4,199 0 0 0 0 0 4,475 (1,762) 9,153 0 0 0 0 0 9,072 9,153 0 1,081 0 231 0 0 6 850 0 850 0 94 0 756 7.34 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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