-----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, Q8f6eXkz1ZmhrWZ6jE/SSm+i2lZ5Jw/hb9wsyk6JF6OsbpsHuzUgM7GE+izsb0y1 6GJp9r3p14rfn80c3udBTw== 0000726995-97-000007.txt : 19970811 0000726995-97-000007.hdr.sgml : 19970811 ACCESSION NUMBER: 0000726995-97-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970808 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BERRY & BOYLE CLUSTER HOUSING PROPERTIES CENTRAL INDEX KEY: 0000726995 STANDARD INDUSTRIAL CLASSIFICATION: LAND SUBDIVIDERS & DEVELOPERS (NO CEMETERIES) [6552] IRS NUMBER: 042817478 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-13556 FILM NUMBER: 97654666 BUSINESS ADDRESS: STREET 1: 57 RIVER ST CITY: WELLESLEY HILLS STATE: MA ZIP: 02181 BUSINESS PHONE: 6172370544 MAIL ADDRESS: STREET 1: 57 RIVER STREET CITY: WELLESLEY HILLS STATE: MA ZIP: 02181 10-Q 1 10-Q FOR THE QUARTER ENDED JUNE 30, 1997 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________________ to ________________ Commission File No. 0-13556 Cluster Housing Properties (A California Limited Partnership) (Exact name of registrant as specified in its charter) California 04-2817478 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5110 Langdale Way, Colorado Springs CO 80906 (Address of principal executive offices) (Zip Code) (719) 576-5122 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 and 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 ___ PART I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS CLUSTER HOUSING PROPERTIES (a California Limited Partnership) AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS --------------- ASSETS June 30, 1997 December 31, (Unaudited) 1996 Property, at cost: Land $3,677,028 $3,677,028 Buildings and improvements 14,067,756 14,067,757 Equipment, furnishings and fixtures 1,698,484 1,576,836 -------------- --------------- 19,443,268 19,321,621 Less accumulated depreciation (5,006,424) (4,810,314) -------------- --------------- 14,436,844 14,511,307 Cash and cash equivalents 772,320 1,065,855 Real estate tax escrows 95,645 41,632 Deposits 4,010 3,818 Accounts receivable 1,415 2,605 Deferred expenses, net of accumulated amortization of $194,491 and $175,041 - 19,450 -------------- --------------- Total assets $15,310,234 $15,644,667 ============== =============== LIABILITIES AND PARTNERS' EQUITY Mortgage notes payable $8,487,499 $8,559,930 Accounts payable 40,357 115,410 Accrued expenses 208,084 195,794 Due to affiliates (Note 7) 2,132 8,975 Rents received in advance - 4,538 Tenant security deposits 61,995 55,320 -------------- --------------- Total liabilities 8,800,067 8,939,967 General Partners equity (192,294) (192,294) Limited Partners equity 6,702,461 6,896,994 -------------- --------------- Total liabilities and partners' equity $15,310,234 $15,644,667 ============== =============== CLUSTER HOUSING PROPERTIES (a California Limited Partnership) AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS ------------- Three Months Ended Six Months Ended June 30, June 30, 1997 1996 1997 1996 ---- ---- ---- ---- Revenue: Rental income $626,048 $675,625 $1,283,865 $1,368,048 Interest Income 9,705 16,131 20,602 32,934 ------------ ------------- -------------- --------------- Total Revenue 635,753 691,756 1,304,467 1,400,982 Expenses: Operations 303,530 303,735 583,589 573,582 Interest expense 194,180 197,363 389,182 395,476 Depreciation and amortization 107,781 108,078 215,561 208,707 General and administrative 73,908 135,263 116,142 208,125 ------------ ------------- -------------- --------------- Total Expenses 679,399 744,439 1,304,474 1,385,890 ------------ ------------- -------------- --------------- Net income (loss) ($43,646) ($52,683) ($7) $15,092 ============ ============= ============== =============== Net income (loss) allocated to: General Partners ($436) ($527) ($0) $755 Per unit Net income (loss) allocated to Investor Limited Partner interest: 32,421 units issued ($1.33) ($1.61) ($0.00) $0.44 CLUSTER HOUSING PROPERTIES (a California Limited Partnership) AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY (DEFICIT) ------------- Investor Total General Limited Partners' Partners Partners Equity Balance at December 31, 1995 ($170,140) $7,461,041 $7,290,901 Minority interest absorbed - (8,895) (8,895) Cash distributions (20,476) (389,052) (409,528) Net Income (1,678) (166,100) (167,778) ------------- -------------- --------------- Balance at December 31, 1996 ($192,294) $6,896,994 $6,704,700 Cash distributions - (194,526) (194,526) Net income (0) (7) (7) ------------- -------------- --------------- Balance at June 30, 1997 ($192,294) $6,702,461 $6,510,167 ============= ============== =============== CLUSTER HOUSING PROPERTIES (a California Limited Partnership) AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Six Months Ended June 30, Cash flows from operating 1997 1996 ---- ---- activities: Interest received $20,602 $53,657 Cash received from rental income 1,285,810 1,357,008 General and administrative expenses (163,735) (246,610) Operations expense (658,424) (589,136) Interest paid (389,182) (395,476) -------------- --------------- Net cash provided by operating activities 95,071 179,443 Cash flows from investing activities: Purchase of fixed assets (121,648) (56,697) Cash received from short-term investments - 161,128 -------------- --------------- Net cash provided by investing activities (121,648) 104,431 Cash flows from financing activities: Distributions to partners (194,526) (194,526) Deposits - (2,125) Principal payments on mortgage notes payable (72,432) (66,136) -------------- --------------- Net cash used by financing activities (266,958) (262,787) -------------- --------------- Net increase (decrease) in cash and cash equivalents (293,535) 21,087 Cash and cash equivalents at beginning of the period 1,065,855 480,389 -------------- --------------- Cash and cash equivalents at end of the period $772,320 $501,476 ============== =============== CLUSTER HOUSING PROPERTIES (a California Limited Partnership) AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS ------------- Reconciliation of net income (loss) to net cash provided by operating activities: Six Months Ended June 30, 1997 1996 ---- ---- Net income (loss) ($7) $15,092 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 215,561 208,707 Change in assets and liabilities net of effects of investing and financing activities: Decrease in real estate tax escrows (54,013) (66,307) (Increase) decrease in accounts and interest receivable 1,190 18,454 Increase (decrease) in accounts payable and accrued expenses (62,762) 42,401 Increase (decrease) in due to affiliates (6,843) (27,864) Decrease in rent received in advance (4,730) (11,267) Increase in tenant security deposit 6,675 227 -------------- --------------- Net cash provided by operating activities $95,071 $179,443 ============== ===============
CLUSTER HOUSING PROPERTIES (A California Limited Partnership) AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ---------- 1. Organization of Partnership: Cluster Housing Properties (a California Limited Partnership) (the "Partnership"), formerly Berry and Boyle Cluster Housing Properties, was formed on August 8, 1983. The Partnership issued all of the General Partnership Interests to three General Partners in exchange for capital contributions aggregating $2,000. Stephen B. Boyle and GP L'Auberge Communities, L.P., (a California Limited Partnership), formerly Berry and Boyle Management, are the General Partners. In September, 1995, with the consent of Limited Partners holding a majority of the outstanding Units, as well as the consent of the mortgage lenders for the Partnership's three properties, Richard G. Berry resigned as a general partner of the Partnership. A total of 2,000 individual Limited Partners owning 32,421 units have contributed $16,210,500 of capital to the Partnership. At June 30, 1997, the total number of Limited Partners was 1,917. Except under certain limited circumstances, as defined in the Partnership Agreement, the General Partners are not required to make any additional capital contributions. The General Partners or their affiliates will receive various fees for services and reimbursement for various organizational and selling costs incurred on behalf of the Partnership. The accompanying consolidated financial statements present the activity of the Partnership for the six months ended June, 1997 and 1996. The Partnership will continue until December 31, 2010, unless terminated earlier by the sale of all, or substantially all, of the assets of the Partnership, or otherwise in accordance with the provisions of Section 16 of the Partnership Agreement. 2. Significant Accounting Policies: A. Basis of Presentation The consolidated financial statements include the accounts of the Partnership and its properties: Sin Vacas, Pinecliff and Villa Antigua. All intercompany accounts and transactions have been eliminated in consolidation. The Partnership follows the accrual basis of accounting. B. Cash and Cash Equivalents The Partnership considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. The carrying value of cash and cash equivalents approximates fair value. It is the Partnership's policy to invest cash in income-producing temporary cash investments. The Partnership mitigates any potential risk from such concentration of credit by placing investments with high quality financial institutions. C. Significant Risks and Uncertainties 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 date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. D. Depreciation Depreciation is provided for by the use of the straight-line method over estimated useful lives as follows: Buildings and improvements 39-40 years Equipment, furnishings and fixtures 5-15 years E. Deferred Expenses Costs of obtaining the mortgages on the properties are being amortized over the term of the related mortgage notes payable using the straight-line method. Fees paid to certain of the property developers were amortized over the term of the services provided using the straight-line method. Any unamortized costs remaining at the date of a refinancing are expensed in the year of refinancing. F. Income Taxes The Partnership is not liable for Federal or state income taxes because Partnership income or loss is allocated to the Partners for income tax purposes. If the Partnership's tax returns are examined by the Internal Revenue Service or state taxing authority and such an examination results in a change in Partnership taxable income (loss), such change will be reported to the Partners. G. Rental Income Leases require the payment of rent in advance, however, rental income is recorded as earned. H. Long-Lived Assets The Partnership's long-lived assets include property and equipment and deferred expenses. The Partnership evaluates rental properties for impairment when conditions exist which may indicate that it is probable that the sum of expected future cash flows (undiscounted) from rental properties is less than its carrying value. Upon determination that a permanent impairment has occurred, rental properties are reduced to fair value. For the year ended December 31, 1996 and the quarter ended June 30, 1997, permanent impairment conditions did not exist at any of the Partnership's properties. 3. Cash and Cash Equivalents: Cash and cash equivalents at June 30, 1997, and December 31, 1996, consisted of the following: 1997 1996 ---------- ---------- Cash on hand ............................. $ 95,799 $ 854,769 Certificate of deposit ................... 211,086 Money market account ..................... 676,521 ---------- ---------- $ 772,320 $1,065,855 4. Joint Venture and Property Acquisitions: The Partnership has invested in three properties located in Scottsdale and Tucson, Arizona and Colorado Springs, Colorado. The success of the Partnership will depend upon factors which are difficult to predict including general economic and real estate market conditions, both on a national basis and in the areas where the Partnership's investments are located. Sin Vacas On October 25, 1985, the Partnership acquired a majority interest in the Sin Vacas Joint Venture, which owns, and operates the Villas at Sin Vacas, a 72-unit residential property located in Tucson, Arizona. Since the Partnership controls and owns a majority interest in the Sin Vacas Joint Venture, the accounts and operations of the Sin Vacas Joint Venture have been consolidated into the Partnership. The co-venture partner was an affiliate of Evans Withycombe, Inc. ("EWI"), a Phoenix based residential development, construction and management firm. EWI is also the developer of the Villa Sin Vacas property. The Partnership made initial cash payments in the form of capital contributions totaling $2,458,507 and funded $398,949 of property acquisition costs which were treated as a capital contribution to the joint venture. Since completion of construction, the Partnership has made additional contributions totaling $275,167. At June 30, 1997, the total capital contributions and acquisition costs incurred were $2,713,937 and $418,686, respectively. For the six months ended June 30, 1997 and 1996, Sin Vacas had net income of $5,835 and a net loss of $17,584, respectively. JANUARY 1, 1996 THROUGH MAY 13, 1996 Net cash from operations (as defined in the joint venture agreement) was to be distributed as available to each joint venture partner quarterly as follows: First, to the Partnership, an amount equal to 8.75% per annum, noncumulative (computed daily on a simple noncompounded basis from the date of completion funding) of the Partnership's capital investment, as defined in the joint venture agreement; Second, the balance 70% to the Partnership and 30% to the co-venturer. All losses from operations and depreciation for the Sin Vacas Joint Venture were allocated 99% to the Partnership and 1% to the co-venturer. All profits from operations, to the extent of cash distributions, shall first be allocated to the Partnership and co-venturer in the same proportion as the cash distribution. Any remaining profits are allocated 70% to the Partnership and 30% to the co-venturer. In the case of certain capital transactions and distributions as defined in the joint venture agreement, the allocation of related profits, losses and cash distributions, if any, would be different than as described above and would be effected by the relative balances in the individual partners' capital accounts. Villa Antigua On June 11, 1987, the Partnership acquired a majority interest in the Villa Antigua Joint Venture, which owns, and operates Villa Antigua, an 88-unit residential property located in Scottsdale, Arizona. Since the Partnership controls and owns a majority interest in the Villa Antigua Joint Venture, the accounts and operations of the Villa Antigua Joint Venture have been consolidated into the Partnership. The co-venture partner was an affiliate of Evans Withycombe, Inc. ("EWI"), a Phoenix based residential development, construction and management firm. EWI is also the developer of the Villa Antigua property. The Partnership made initial cash payments in the form of capital contributions totaling $2,494,677 and funded $381,729 of property acquisition costs which were treated as a capital contribution to the Villa Antigua Joint Venture. Since completion of construction, the Partnership has made additional contributions totaling $85,440. At June 30, 1997, the total capital contributions and acquisition costs were $2,580,117 and $381,729, respectively. Villa Antigua had net income of $58,269 and $122,461 for the six months ended June, 1997 and 1996, respectively. JANUARY 1, 1996 THROUGH MAY 13, 1996 Net cash from operations (as defined in the joint venture agreement) was to be distributed as available to each joint venture partner quarterly as follows: First, to the Partnership, an amount equal to 10% per annum, noncumulative (computed daily on a simple noncompounded basis from the date of completion funding) of the Partnership's adjusted capital investment, as defined in the joint venture agreement; Second, the balance 70% to the Partnership and 30% to the co-venturer. All losses from operations and depreciation for the Villa Antigua Joint Venture were allocated 99% to the Partnership and 1% to the co-venturer. All profits from operations, to the extent of cash distributions, shall first be allocated to the Partnership and co-venturer in the same proportion as the cash distributions; however, if for any taxable year there are no cash distributions, profits are allocated 99% to the Partnership and 1% to the co-venturer. In the case of certain capital transactions and distributions as defined in the joint venture agreement, the allocation of related profits, losses and cash distributions, if any, would be different than as described above and would be effected by the relative balances in the individual partners' capital accounts. Sin Vacas and Villa Antigua MAY 14, 1996 THROUGH JUNE 30, 1997 On May 14, 1996, the Partnership and certain affiliates consummated an agreement with Evans Withycombe Management, Inc. and certain of its affiliates ("EWI") which separated the interests of EWI and the Partnership, thus affording the Partnership greater flexibility in the operation and disposition of the properties. In consideration of a payment by the Partnership to EWI of $73,775 and delivery of certain mutual releases, EWI (i) relinquished its contract to manage Sin Vacas and Villa Antigua and its option to exercise its rights of first refusal with regard to the sale of those properties and (ii) assigned all of its interest in the Sin Vacas Joint Venture and the Villa Antigua Joint Venture to the Partnership (while preserving the economic interests of the venturer in these Joint Ventures), which resulted in the dissolution of the Sin Vacas Joint Venture and the Villa Antigua Joint Venture. EWI may still share in the cash flow distributions or proceeds from sale of the properties if certain performance levels are met. Pinecliff On July 16, 1986, the Partnership acquired Pinecliff (formerly Autumn Ridge), a 96-unit residential property located in Colorado Springs, Colorado and simultaneously contributed the property to the Autumn Ridge Joint Venture comprised of the Partnership and an affiliate of the property developer. Since the Partnership controls and owns a majority interest in the Autumn Ridge Joint Venture, the accounts and operations of the Autumn Ridge Joint Venture have been consolidated into the Partnership. The co-venture partner was Highland Properties, Inc. ("Highland"), a Colorado based residential development,construction and management firm. Highland developed the property known as L'Auberge Pinecliff. The Partnership made initial cash payments in the form of capital contributions totaling $3,819,397 and funded $546,576 of property acquisition costs which were treated as a capital contribution to the Autumn Ridge Joint Venture. Since completion of construction, the Partnership has made additional contributions totaling $323,811. At June 30, 1997, the total capital contributions and acquisition costs incurred were $4,192,309 and $497,475, respectively. For the six months ended June 30, 1997 and 1996, L'Auberge Pinecliff had a net income of $32,604 and $88,700, respectively. JANUARY 1, 1996 THROUGH JULY 2, 1996: Net cash from operations (as defined in the joint venture agreement) was to be distributed as available to each joint venture partner quarterly as follows: First, to the Partnership, an amount equal to 8% per annum, noncumulative (computed daily on a simple noncompounded basis from the date of completion funding) of the Partnership's capital investment, as defined in the joint venture agreement; Second, the balance 82% to the Partnership and 18% to the co-venturer. All losses from operations and depreciation for the Autumn Ridge Joint Venture were allocated 100% to the Partnership. All profits from operations, to the extent of cash distributions, shall first be allocated to the Partnership and co-venturer in the same proportion as the cash distribution. Any remaining profits are allocated 82% to the Partnership and 18% to the co-venturer. In the case of certain capital transactions and distributions as defined in the joint venture agreement, the allocation of related profits, losses and cash distributions, if any, would be different than as described above and would be affected by the relative balances in the individual partners' capital accounts. JULY 3, 1996 THROUGH JUNE 30, 1997 On July 3, 1996, the Partnership and certain affiliates consummated an agreement with Highland Properties, Inc. ("Highland") which separated the interests of Highland and the Partnership, thus affording the Partnership greater flexibility in the operation and disposition of the property. In consideration of a payment by the Partnership to Highland totaling $7,718 and delivery of certain mutual releases, Highland (i) relinquished its option to exercise its rights of first refusal with regard to the sale of the property and (ii) assigned all of its interest in the L'Auberge Pinecliff Joint Venture to the Partnership, (while preserving the economic interests of the venturer in these Joint Ventures), which resulted in the dissolution of the L'Auberge Pinecliff Joint Venture. Highland may still share in the cash flow distributions or proceeds from sale of the properties if certain performance levels are met. The Sin Vacas Joint Venture, the Autumn Ridge Joint Venture and the Villa Antigua Joint Venture are sometimes collectively referred to as the "Joint Ventures". These joint ventures were effectively terminated on December 31, 1996. The Partnership has eliminated various minority interests related to these joint ventures; as such, the Partnership owns 100% of the underlying assets at December 31, 1996. 5. Mortgage Notes Payable: All of the property owned by the Partnership is pledged as collateral for the nonrecourse mortgage notes payable outstanding at June 30, 1997 and December 31, 1996 which consisted of the following: 1997 1996 ---------- ---------- Villas at Sin Vacas .................... $2,408,299 $2,428,851 Pinecliff .............................. 3,086,363 3,112,702 Villa Antigua .......................... 2,992,837 3,018,377 ---------- ---------- $8,487,499 $8,559,930 ========== ========== Sin Vacas On June 30, 1992, Villas at Sin Vacas refinanced its permanent loan using the proceeds of a new first mortgage loan in the amount of $2,575,000. Under the terms of the note, monthly principal and interest payments of $21,830, based on a fixed interest rate of 9.125%, are required over the term of the loan. The lender has agreed to extend the maturity date of the note from July 15, 1997 to July 15, 1998, with the same interest rate. Pinecliff On June 30, 1992, Pinecliff refinanced its permanent loan using the proceeds of a new first mortgage loan in the amount of $3,300,000. Under the terms of the note, monthly principal and interest payments of $27,976 are required over the term of the loan, based on a fixed interest rate of 9.125%. The lender has agreed to extend the maturity date of the note from July 15, 1997 to July 15, 1998, with the same interest rate. Villa Antigua On June 30, 1992, Villa Antigua refinanced its permanent loan using the proceeds of a new first mortgage loan in the amount of $3,200,000. Under the terms of the note, monthly principal and interest payments of $27,128, based on a fixed interest rate of 9.125%, are required over the term of the loan, based on a fixed interest rate of 9.125%. The lender has agreed to extend the maturity date of the note from July 15, 1997 to July 15, 1998, with the same interest rate. Interest accrued at June 30, 1997, and December 31, 1996, consisted of the following: 1997 1996 ------- ------- Villas at Sin Vacas ........................ $ 9,235 $ 9,235 Pinecliff .................................. 11,835 11,835 Villa Antigua .............................. 11,476 11,476 ------- ------- $32,546 $32,546 ======= ======= The principal balance of the mortgage notes payable appearing on the consolidated balance sheet approximates the fair value of such notes. 6. Partners' Equity: Under the terms of the Partnership Agreement profits are allocated 95% to the Limited Partners and 5% to the General Partners; losses are allocated 99% to the Limited Partners and 1% to the General Partners. Cash distributions to the partners are governed by the Partnership Agreement and are made, to the extent available, 95% to the Limited Partners and 5% to the General Partners. The allocation of the related profits, losses, and distributions, if any, would be different than described above in the case of certain events as defined in the Partnership Agreement, such as the sale of an investment property or an interest in a joint venture partnership. 7. Related-Party Transactions: Due to affiliates at June 30, 1997, and December 31, 1996, consisted of reimbursable costs payable to L'Auberge Communities Inc., an affiliate of the General Partners, in the amounts of $2,132 and $8,975, respectively. For the six months ended June 30, 1997 and 1996, general and administrative expenses included $26,870 and $39,440, respectively, of salary reimbursements paid to the General Partners for certain administrative and accounting personnel who performed services for the Partnership. The officers and principal shareholders of Evans Withycombe, Inc., the developer of the Villas at Sin Vacas and Villa Antigua properties and an affiliate of the co-venturers of those joint ventures, together hold a two and one half percent cumulative profit or partnership voting interest in LP L'Auberge Communities, a California Limited Partnership, formerly Berry and Boyle, which is the principal limited partner of GP L'Auberge Communities, L.P. Residential Services - L'Auberge, formerly Berry and Boyle Residential Services, the property manager of Pinecliff, Villas Sin Vacas and Villa Antigua, is an affiliate of the General Partners of the Partnership. For the six months ended June 30, 1997, property management fees of $50,038 were paid to Residential Services - L'Auberge. For the six months ending June 30, 1996, Residential Services-L'Auberge was paid $24,880 for the management of L'Auberge Pinecliff. For the management of Villa sin Vacas and Villa Antigua, $39,440 of property management fees were paid to Evans Withycombe, Inc., until the termination of the Management Agreement on May 15, 1996. 8. Subsequent Event: On May 6, 1997, the Partnership entered into a Purchase and Sales Agreement ( the "Agreement") to sell Villas Sin Vacas in Tucson, Arizona, and Villa Antigua, Phase I, in Scottsdale, Arizona, to an unaffiliated purchaser. The purchase price for Villas Sin Vacas is approximately $5,040,000 and the purchase price for Villa Antigua, Phase I, is approximately $6,248,000. The Agreement is subject to completion of customary due diligence to the satisfaction of the purchaser, and the purchaser obtaining a financing commitment for the purchase of the property on commercially reasonable terms and conditions. Under the terms of the Agreement, it is anticipated that the closing would occur within approximately 3 to 5 months after the date of the Agreement. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources In connection with its capitalization, the Partnership admitted investors who purchased a total of 32,421 Units aggregating $16,210,500. These offering proceeds, net of organizational and offering costs of $2,431,575, provided $13,778,925 of net proceeds to be used for the purchase of income-producing residential properties, including related fees and expenses, and working capital reserves. The Partnership expended $10,410,263 to (i) acquire its joint venture interests in the Sin Vacas Joint Venture, the Villa Antigua Joint Venture, and the Autumn Ridge Joint Venture, (ii) to pay acquisition expenses, including acquisition fees to one of the General Partners, and (iii) to pay certain costs associated with the refinancing of the Autumn Ridge permanent loan. The Partnership distributed $1,731,681 to the Limited Partners as a return of capital resulting from construction cost savings with respect to the Sin Vacas, Autumn Ridge and Villa Antigua projects and other excess offering proceeds. The remaining net proceeds of $1,636,981 have been used to establish initial working capital reserves sufficient to meet future needs of the Partnership, including contributions to the various properties that may be required. Through June 30, 1997, $373,990 cumulatively was contributed to the properties for this purpose. The working capital reserves of the Partnership consist of cash and cash equivalents and short-term investments. Together these amounts provide the Partnership with the necessary liquidity to carry on its day-to-day operations and to make necessary contributions to the various joint ventures. Thus far in 1997, the aggregate net decrease in working capital reserves was $293,535. This decrease resulted primarily from cash provided by operations of $95,071 offset by distributions to partners of $194,526, purchase of fixed assets of $121,648, and $72,432 of principal payments on mortgage notes payable. Property Status Villas at Sin Vacas As of June 30, 1997, the property was 83% occupied, compared to 80% approximately one year ago. At June 30, 1997 and 1996, the market rents for the various unit types were as follows: Unit Type ............................... 1997 1996 - ---------------------------------------------- ------ ------ One bedroom one bath ......................... $ 835 $ 835 Two bedroom two bath ......................... 1,050 1,050 Three bedroom two bath ....................... 1,200 1,200 Pinecliff As of June 30, 1997, the property was 83% occupied, compared to 90% approximately one year ago. At June 30, 1997 and 1996, the market rents for the various unit types were as follows: Unit Type .................................... 1997 1996 - ---------------------------------------------- ------ ------ One bedroom one bath ....................... $ 905 $ 910 Two bedroom two bath ....................... 1,118 1,120 Villa Antigua As of June 30, 1997, the property was 81% occupied, compared to 87% approximately one year ago. At June 30, 1997 and 1996, the market rents for the various unit types were as follows: Unit Type ............................... 1997 1996 - ---------------------------------------------- ------ ------ One bedroom one bath ......................... $ 760 $ 775 Two bedroom two bath ......................... 925 925 Three bedroom two bath ....................... 1,105 1,080 Results of Operations For the three months ended June 30, 1997, the Partnership's operating results were comprised of its share of the income and expenses from the Sin Vacas, Pinecliff and Villa Antigua, as well as partnership level interest income earned on short term investments, reduced by administrative expenses. A summary of these operating results appears below. Sin L'Auberge Villa Investment Consolidated Vacas Pinecliff Antigua Partnership Total Total revenue $173,400 $247,148 $206,203 $9,002 $635,753 Expenses: General and administrative 73,908 73,908 Operations 91,907 115,327 96,296 303,530 Depreciation and amortization 31,670 45,450 30,661 107,781 Interest 55,098 70,611 68,471 194,180 ------------- --------------- --------------- --------------- --------------- 178,675 231,388 195,428 73,908 679,399 ------------- --------------- --------------- --------------- --------------- Net income ($5,275) $15,760 $10,775 ($64,906) ($43,646) ============= =============== =============== =============== ===============
For the three months ended June 30, 1996, the Partnership's operating results were comprised of its share of the income and expenses from the Sin Vacas, Pinecliff and Villa Antigua, as well as partnership level interest income earned on short term investments, reduced by administrative expenses. A summary of these operating results appears below. Sin L'Auberge Villa Investment Consolidated Vacas Pinecliff Antigua Partnership Total Revenue $169,042 $279,976 $227,734 15,004 691,756 Expenses: General and administrative 1,686 259 133,318 135,263 Operations 114,214 106,934 81,837 750 303,735 Depreciation and amortization 33,229 44,057 30,792 108,078 Interest 56,001 71,768 69,594 197,363 ------------- -------------- --------------- -------------- ----------------- 205,130 222,759 182,482 134,068 744,439 ------------- -------------- --------------- -------------- ----------------- Net loss ($36,088) $57,217 $45,252 ($119,064) ($52,683) ============= ============== =============== ============== =================
For the six months ended June, 1997, the Partnership's operating results were comprised of its share of the income and expenses from the Sin Vacas, Pinecliff and Villa Antigua, as well as partnership level interest income earned on short term investments, reduced by administrative expenses. A summary of these operating results appears below. Sin L'Auberge Villa Investment Consolidated Vacas Pinecliff Antigua Partnership Total Total revenue $358,472 $482,174 $444,376 $19,445 $1,304,467 Expenses: General and administrative 116,142 116,142 Operations 178,869 217,148 187,554 18 583,589 Depreciation and amortization 63,339 90,901 61,321 215,561 Interest 110,429 141,521 137,232 389,182 -------------- ---------------- -------------- --------------- --------------- 352,637 449,570 386,107 116,160 1,304,474 -------------- ---------------- -------------- --------------- --------------- Net income $5,835 $32,604 $58,269 ($96,715) ($7) ============== ================ ============== =============== ===============
For the six months ended June 30, 1996, the Partnership's operating results were comprised of its share of the income and expenses from the Sin Vacas, Pinecliff and Villa Antigua, as well as partnership level interest income earned on short term investments, reduced by administrative expenses. A summary of these operating results appears below. Sin L'Auberge Villa Investment Consolidated Vacas Pinecliff Antigua Partnership Total Revenue $357,910 $528,120 $484,257 30,695 1,400,982 Expenses: General and administrative 1,686 259 206,180 208,125 Operations 199,406 209,024 162,152 3,000 573,582 Depreciation and amortization 62,187 86,587 59,933 208,707 Interest 112,215 143,809 139,452 395,476 ------------- --------------- -------------- -------------- ---------------- 375,494 439,420 361,796 209,180 1,385,890 ------------- --------------- -------------- -------------- ---------------- Net loss ($17,584) $88,700 $122,461 ($178,485) $15,092 ============= =============== ============== ============== ================
Comparison of Operating Results for the Six Months Ended June 30, 1997 and 1996: Total revenue decreased by $96,515 or 7% primarily due to a decrease in rental income as a result of competitive pressure from new apartment properties in the lease up phase in the local market. Operating expenses increased by $10,007 (2%) primarily due to one-time costs of preparing the properties for disposition, including an increase advertising, promotions, repairs and maintenance. General and administrative expenses have decreased by $91,983, of which $73,775 was the Evans Withycombe termination fee in 1996. A contributing factor to the additional reduction of $18,208 was primarily due to the re-stabilization of costs associated with Partnership administrative, financial and investor services functions following the office relocation to Colorado Springs. Thus far in 1997, the Partnership has made $194,526 of cash distributions to its Limited Partners and $-0- to the General Partners. PART II-OTHER INFORMATION ITEM 1. Legal Proceedings Response: None ITEM 2. Changes in Securities Response: None ITEM 3. Defaults Upon Senior Securities Response: None ITEM 4. Submission of Matters to a Vote of Security Holders Response: None ITEM 5. Other Information Response: None ITEM 6. Exhibits and Reports on Form 8-K Response: None 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. CLUSTER HOUSING PROPERTIES By: GP L'Auberge Communities, L.P., a California Limited Partnership, General Partner By: L'Auberge Communities, Inc., its General Partner By: __/s/ Stephen B. Boyle_______________________________ Stephen B. Boyle, President EX-27 2 FDS --
5 6-MOS Dec-31-1997 Jun-30-1997 772,320 0 1,415 0 0 0 19,443,844 (5,006,424) 15,310,234 312,568 0 0 0 0 8,487,499 15,310,234 0 1,304,467 0 0 915,292 0 389,182 0 0 0 0 0 0 (7) 0 0
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