-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, QVom5YqpQh6QHxdbySXT/q2bJf+JOI3lvZPjTamDNaUrIO+F6gQSvwBEHxCz2zXz cl8tbrPnokFStxp26eC9+A== 0000728525-95-000002.txt : 19950814 0000728525-95-000002.hdr.sgml : 19950814 ACCESSION NUMBER: 0000728525-95-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW ENGLAND LIFE PENSION PROPERTIES II CENTRAL INDEX KEY: 0000728525 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 042803902 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-13323 FILM NUMBER: 95561382 BUSINESS ADDRESS: STREET 1: 399 BOYLSTON ST 13TH FL CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 6175781200 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________________ FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended JUNE 30, 1995 COMMISSION FILE NUMBER 0-13323 NEW ENGLAND LIFE PENSION PROPERTIES II; A REAL ESTATE LIMITED PARTNERSHIP (Exact name of registrant as specified in its charter) MASSACHUSETTS 04-2803902 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 399 BOYLSTON STREET, 13TH FL. BOSTON, MASSACHUSETTS 02116 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (617) 578-1200 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 Exchange Act of 1934 during the preceding twelve (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 ___ NEW ENGLAND LIFE PENSION PROPERTIES II; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED JUNE 30, 1995 PART I FINANCIAL INFORMATION NEW ENGLAND LIFE PENSION PROPERTIES II; A REAL ESTATE LIMITED PARTNERSHIP BALANCE SHEET (Unaudited) June 30, 1995 December 31, 1994 ASSETS Real estate investments: Ground leases and mortgage loans, net $ 18,800,332 $ 19,014,308 Property, net 14,735,090 14,689,691 Deferred leasing costs and other assets, net 600,125 591,963 ----------- --------------- 34,135,547 34,295,962 Cash and cash equivalents 4,033,344 4,101,201 Short-term investments 1,671,040 1,292,505 Interest and rent receivable 75,293 179,289 ----------- --------------- $ 39,915,224 $ 39,868,957 =========== =============== LIABILITIES AND PARTNERS' CAPITAL Accounts payable $ 164,116 $ 548,907 Accrued management fee 62,089 57,662 Deferred disposition fees 314,464 314,464 ----------- --------------- Total liabilities 540,669 921,033 ----------- --------------- Partners' capital: Limited partners ($889.89 per unit; 110,000 units authorized, 39,917 units issued and outstanding) 39,297,846 38,875,480 General partner 76,709 72,444 ----------- --------------- Total partners' capital 39,374,555 38,947,924 ----------- --------------- $ 39,915,224 $ 39,868,957 =========== =============== (See accompanying notes to financial statements) NEW ENGLAND LIFE PENSION PROPERTIES II; A REAL ESTATE LIMITED PARTNERSHIP STATEMENT OF OPERATIONS (Unaudited)
QUARTER ENDED SIX MONTHS ENDED QUARTER ENDED SIX MONTHS ENDED JUNE 30, 1995 JUNE 30, 1995 JUNE 30, 1994 JUNE 30, 1994 INVESTMENT ACTIVITY Property rentals $ 697,414 $ 1,279,743 $ 386,974 $ 844,751 Property operations (221,225) (434,972) (216,991) (450,123) Depreciation and amortization (143,477) (288,968) (130,238) (260,500) ----------- ------------- ----------- ------------- 332,712 555,803 39,745 134,128 Provision for impaired mortgage loans (205,000) (205,000) (800,000) (800,000) Ground rentals and interest on mortgage loans 715,684 1,346,399 661,616 1,455,293 ----------- ------------- ----------- ------------- Total real estate activity 843,396 1,697,202 (98,639) 789,421 Interest on cash equivalents and short-term investments 75,730 150,611 69,470 125,649 ----------- ------------- ----------- ------------- Total investment activity 919,126 1,847,813 (29,169) 915,070 ----------- ------------- ----------- ------------- PORTFOLIO EXPENSES Management fee 62,088 124,177 60,932 121,864 General and administrative 42,438 86,188 49,167 87,626 ----------- ------------- ----------- ------------- 104,526 210,365 110,099 209,490 ----------- ------------- ----------- ------------- NET INCOME (LOSS) $ 814,600 $ 1,637,448 $ (139,268) $ 705,580 =========== ============= =========== ============= NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT $ 20.20 $ 40.61 $ (3.45) $ 17.50 =========== ============= =========== ============= CASH DISTRIBUTIONS PER LIMITED PARTNERSHIP UNIT $ 15.57 $ 30.03 $ 15.28 $ 30.56 =========== ============= =========== ============= NUMBER OF LIMITED PARTNERSHIP UNITS OUTSTANDING DURING THE PERIOD 39,917 39,917 39,917 39,917 =========== ============= =========== ============= (See accompanying notes to financial statements)
NEW ENGLAND LIFE PENSION PROPERTIES II; A REAL ESTATE LIMITED PARTNERSHIP STATEMENT OF CHANGES IN PARTNERS' CAPITAL (Unaudited)
Quarter Ended Six Months Ended Quarter Ended Six Months Ended June 30, 1995 June 30, 1995 June 30, 1994 June 30, 1994 General Limited General Limited General Limited General Limited Partner Partners Partner Partners Partner Partners Partner Partners Bal. at beginning of period $74,842 $ 39,112,900 $72,444 $ 38,875,480 $ 75,736 $41,201,861 $ 73,449 $ 40,975,393 Cash dis- tributions (6,279) (621,508) (12,109) (1,198,708) (6,161) (609,932) (12,322) (1,219,864) Net income (loss) 8,146 806,454 16,374 1,621,074 (1,392) (137,876) 7,056 698,524 ------ ----------- ------- ----------- ------- ----------- -------- ----------- Bal. at end of period $76,709 $ 39,297,846 $76,709 $ 39,297,846 $ 68,183 $40,454,053 $ 68,183 $ 40,454,053 ====== =========== ======= =========== ======= =========== ======== =========== (See accompanying notes to financial statements) NEW ENGLAND LIFE PENSION PROPERTIES II; A REAL ESTATE LIMITED PARTNERSHIP SUMMARIZED STATEMENT OF CASH FLOWS (Unaudited) Six Months Ended June 30, 1995 1994 Net cash provided by operating activities $ 2,008,381 $1,359,110 ----------- ---------- Cash flows from investing activities: Increase in mortgage loan - (110,253) Capital expenditures on owned property (492,159) (350,730) Decrease (increase) in short-term investments, net (373,262) 671,599 ----------- ---------- Net cash provided by (used in) investing activities (865,421) 210,616 ----------- ---------- Cash flows from financing activity: Distributions to partners (1,210,817) (1,232,186) ----------- ---------- Net increase (decrease) in cash and cash equivalents (67,857) 337,540 Cash and cash equivalents: Beginning of period 4,101,201 7,075,659 ----------- ---------- End of period $ 4,033,344 $7,413,199 =========== ========== (See accompanying notes to financial statements) NEW ENGLAND LIFE PENSION PROPERTIES II; A REAL ESTATE LIMITED PARTNERSHIP Notes to Financial Statements (Unaudited) In the opinion of management, the accompanying unaudited financial statements contain all adjustments necessary to present fairly the Partnership's financial position as of June 30, 1995 and December 31, 1994 and the results of its operations and its cash flows for the interim periods ended June 30, 1995 and 1994. These adjustments are of a normal recurring nature. See notes to financial statements included in the Partnership's 1994 Annual Report on Form 10-K for additional information relating to the Partnership's financial statements. NOTE 1 - ORGANIZATION AND BUSINESS New England Life Pension Properties II; A Real Estate Limited Partnership (the "Partnership") is a Massachusetts limited partnership organized for the purpose of investing primarily in newly constructed and existing income producing real properties. The Partnership commenced operations in June 1984 and acquired several properties through 1986. It intends to dispose of its investments within twelve years of their acquisition, and then liquidate; however, the general partner could extend the investment period if it is in the best interest of the limited partners. NOTE 2 - INVESTMENTS IN GROUND LEASES AND MORTGAGE LOANS In accordance with Statement of Financial Accounting Standards No. 114 which the Partnership adopted as of January 1, 1993, the mortgage loans on Elkridge and Susana Corporate Center are impaired. Accordingly, a valuation allowance has been established to adjust the carrying value of the loans to their estimated fair market value less anticipated costs of sale. The aggregate recorded and carrying values of the impaired mortgage loans at the beginning and end of the respective periods are as follows: Recorded Valuation Carrying Value Allowance Value Balance at December 31, 1993 $5,541,140 $(1,670,000) $3,871,140 ========== ========== Decrease in estimated fair market value of collateral (800,000) -------- Balance at June 30, 1994 $5,806,133 $(2,470,000) $3,336,133 ========== =========== ========== Balance at December 31, 1994 $5,517,874 $(2,200,000) $3,317,874 ========== ========== Decrease in estimated fair market value of collateral (205,000) -------- Balance at June 30, 1995 $5,585,250 $(2,405,000) $3,180,250 ========== =========== ========== During the second half of 1994, the allowance was decreased by $270,000. NOTE 3 - SUBSEQUENT EVENT Distributions of cash from operations relating to the quarter ended June 30, 1995 were made on July 27, 1995 in the aggregate amount of $627,786 ($15.57 per limited partnership unit). NEW ENGLAND LIFE PENSION PROPERTIES II; A REAL ESTATE LIMITED PARTNERSHIP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES The Partnership completed its offering of units of limited partnership interest in November 1984. A total of 39,917 units were sold. The Partnership received proceeds of $36,296,995, net of selling commissions and other offering costs, which were invested in real estate, used to pay related acquisition costs, or retained as working capital reserves. Capital of $4,395,261 has been returned to the limited partners through June 30, 1995. Two of the Partnership's mortgage loan investments had a maturity date in 1994; another matured in early 1995. The Partnership is in the process of evaluating various alternatives to renewing these loans. At June 30, 1995, the Partnership had $5,704,384 in cash, cash equivalents and short-term investments, of which $627,786 was used for cash distributions to partners on July 27, 1995; the remainder will be used to fund the rehabilitation of the Willows Shopping Center or retained as working capital reserves. The source of future liquidity and cash distributions to partners is expected to be cash generated by the Partnership's investments and proceeds from the sale of such investments. Distributions of cash from operations for the first and second quarters of 1995 were made at the annualized rate of 7% on the adjusted capital contribution, while the cash distribution rate for the comparative prior year quarters was 6.5% and 6%, respectively. The adjusted capital contribution was reduced from $940 per unit to $889.89 per unit due to the distribution of the Oxford Place sale proceeds (sold in December, 1993) during July 1994. The cash distribution rate increased with the stabilization of property operations and the attainment of appropriate reserve levels. The carrying value of real estate investments in the financial statements, other than impaired mortgage loans, is reduced to its lower net realizable value if the investment's carrying value is determined not to be recoverable through expected undiscounted future cash flows. At June 30, 1995, the carrying value of Willows Shopping Center exceeded its appraised value by approximately $1,100,000, and the carrying values of the remainder of the investments exceeded their appraised values by an aggregate of approximately $285,000. The current appraised value of real estate investments has been estimated by the general partner and is generally based on a combination of traditional appraisal approaches performed by the advisor and independent appraisers. Because of the subjectivity inherent in the valuation process, the estimated current appraised value may differ significantly from that which could be realized if the real estate were actually offered for sale in the marketplace. RESULTS OF OPERATIONS OPERATING FACTORS Leasing at the Willows Shopping Center has remained at 91% during the first half of 1995. (The Center was 78% leased at June 30, 1994.) This property is undergoing a full rehabilitation, including the complete renovation and reconfiguration of the Center. The general partner has determined that it is in the best interest of the Partnership to provide funding for the rehabilitation costs together with its affiliate which shares in the ownership. The Partnership's share of the remaining estimated rehabilitation cost is approximately $2,625,000. Two tenants (totaling 3,200 square feet) that signed leases in the first quarter are now scheduled to commence occupancy in the third quarter; their occupancy was pushed back due to delays in construction. In addition, two other tenants (totaling 15,700 square feet) have signed leases and are scheduled to commence occupancy late in the third quarter. During the second quarter, a lease buyout was agreed upon with the tenant who had vacated the pad site at the entrance to the Center. This space is now available for rehabilitation; the focus is on finding an attractive long-term tenant for this site. Occupancy at Elkridge increased from 40% to 43% during the second quarter of 1995. (Occupancy was 73% a year ago.) The increase is due to the signing of three new leases in the R&D building, which brings its occupancy level up to 73%. The warehouse building, which remains vacant, is being marketed for sale. The Susana Corporate Center remained 100% leased to a single tenant at June 30, 1995. This property is currently listed for sale. Although there has been some buyer interest, no serious offers have been received. INVESTMENT RESULTS The credit from (provision for) impaired mortgage loans relates to changes in the net fair market value of the collateral underlying the Elkridge and Susana Corporate Center mortgage loans. Exclusive of the provision for impaired mortgage loans, real estate investment results were $1,902,202 and $1,589,421 for the six months ended June 30, 1995 and 1994, respectively. This increase of $312,781 or 20% is due to an increase in net operating income generated by Willows Shopping Center of approximately $420,000 as a result of both improved occupancy and the Partnership's share of the lease buyout proceeds (approximately $195,000). The increase was partially offset by a decrease in percentage rent of approximately $100,000 from Case Communications. A final settlement of prior year percentage rent of $200,000 was recognized in 1994. Short-term interest income increased between the respective six-month periods due to an increase in the average investment balance and an increase in short-term investment rates. The increase in operating cash flow during the first half of 1995 as compared to the prior year period is generally consistent with the change in the Partnership's investment results, exclusive of the non- cash provision for impaired loans taken together with changes in its net working capital. PORTFOLIO EXPENSES The Partnership management fee is 9% of distributable cash flow from operations after any increase or decrease in working capital reserves as determined by the general partner. General and administrative expenses primarily consist of real estate appraisal, printing, legal, accounting, investor servicing fees and state filing and tax fees. The management fee and general and administrative expenses remained relatively unchanged for the six months ended June 30, 1995 compared to the same period of the prior year. NEW ENGLAND LIFE PENSION PROPERTIES II; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED JUNE 30, 1995 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K a. Exhibits: NONE. b. Reports on Form 8-K: No reports on Form 8-K were filed during the quarter ended June 30, 1995 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. NEW ENGLAND LIFE PENSION PROPERTIES II; A REAL ESTATE LIMITED PARTNERSHIP (Registrant) August 11, 1995 Peter P. Twining Managing Director and General Counsel of Managing General Partner, Copley Properties Company, Inc. August 11, 1995 Marie A. Welch Investment Officer and Chief Accounting Officer of Managing General Partner Copley Properties Company, Inc.
EX-27 2
5 6-MOS DEC-31-1995 JUN-30-1995 4033334 1671040 75293 0 0 5779667 34135547 0 39915224 540669 0 0 0 0 39374555 39915224 0 2776753 0 0 1139305 0 0 1637448 0 1637448 0 0 0 1637448 40.61 40.61
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