Leasing Activities

12 Months Ended

Dec. 31, 2012

Leasing Activities

NOTE 3 – LEASING ACTIVITIES

The Partnership leases certain properties for operation of restaurants to Del Taco on a triple net basis. The leases are for terms of 35 years commencing with the completion of the restaurant facility located on each property and require monthly rentals equal to 12 percent of the gross sales of the restaurants. The leases expire in the years 2021 to 2023. Pursuant to the lease agreements, minimum rentals of $3,500 per month are due to the Partnership during the first six months of any non-operating period caused by an insured casualty loss. The Partnership had a total of five properties leased as of December 31, 2012, 2011, and 2010.

The five restaurants operated by Del Taco, for which the Partnership is the lessor, had combined, unaudited sales of $4,421,845, $4,456,766, and $4,554,867 and unaudited net losses of $170,321, $156,064 and $354,958 for the years ended December 31, 2012, 2011 and 2010, respectively. Del Taco net income by restaurant includes charges for general and administrative expenses incurred in connection with supervision of restaurant operations and interest expense and the increase in net loss from the corresponding period of the prior years primarily relates to increased operating expenses.