-----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, HLsN+rP8RCJUeTxja4ffcV9mQbWMv37KKC/HHxeN+eWjqz3TDXpnF4uImXRG949g 04nxME6r8NH2U6S9ZY43pw== 0000756427-96-000004.txt : 19960515 0000756427-96-000004.hdr.sgml : 19960515 ACCESSION NUMBER: 0000756427-96-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCNEIL REAL ESTATE FUND XXIV LP CENTRAL INDEX KEY: 0000756427 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 742339537 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14267 FILM NUMBER: 96563396 BUSINESS ADDRESS: STREET 1: 13760 NOEL RD STE 700 LB70 CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 2144485800 MAIL ADDRESS: STREET 2: 13760 NOEL ROAD SUITE 700 LB 70 CITY: DALLAS STATE: TX ZIP: 75240 FORMER COMPANY: FORMER CONFORMED NAME: SOUTHMARK EQUITY PARTNERS LTD DATE OF NAME CHANGE: 19920413 10-Q 1 UNITED STATES 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 period ended March 31, 1996 ----------------------------------------------------- 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 number 0-14267 MCNEIL REAL ESTATE FUND XXIV, L.P. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 74-2339537 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 13760 Noel Road, Suite 700, LB70, Dallas, Texas, 75240 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (214) 448-5800 ------------------------------ 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 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No___ MCNEIL REAL ESTATE FUND XXIV, L.P. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - ------- -------------------- BALANCE SHEETS (Unaudited)
March 31, December 31, 1996 1995 --------------- -------------- ASSETS - ------ Real estate investments: Land..................................................... $ 5,949,645 $ 6,781,836 Buildings and improvements............................... 25,368,687 28,462,935 -------------- ------------- 31,318,332 35,244,771 Less: Accumulated depreciation and amortization......... (10,830,904) (12,428,415) -------------- ------------- 20,487,428 22,816,356 Assets held for sale 2,002,549 - Cash and cash equivalents................................... 2,256,322 2,381,183 Cash segregated for security deposits....................... 96,556 94,780 Accounts receivable......................................... 511,811 433,580 Prepaid expenses and other assets, net...................... 175,455 186,490 -------------- ------------- $ 25,530,121 $ 25,912,389 ============== ============= LIABILITIES AND PARTNERS' EQUITY (DEFICIT) - ------------------------------------------ Mortgage note payable....................................... $ 5,513,274 $ 5,538,527 Accounts payable and accrued expenses....................... 129,002 229,628 Payable to affiliates - General Partner..................... 132,225 59,527 Advances from affiliates.................................... 642,581 642,581 Security deposits and deferred rental revenue............... 113,038 102,823 -------------- ------------- 6,530,120 6,573,086 -------------- ------------- Partners' equity (deficit): Limited partners - 40,000 limited partnership units authorized and outstanding at March 31, 1996 and December 31, 1995............................. 19,022,424 19,362,083 General Partner.......................................... (22,423) (22,780) -------------- ------------- 19,000,001 19,339,303 -------------- ------------- $ 25,530,121 $ 25,912,389 ============== =============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND XXIV, L.P. STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended March 31, ---------------------------------- 1996 1995 ---------------------------------- Revenue Rental revenue............................................... $ 1,024,836 $ 982,327 Interest..................................................... 31,760 25,452 Gain on involuntary conversion............................... 24,663 - Property tax refund.......................................... 20,434 - ------------- ------------- Total revenue.............................................. 1,101,693 1,007,779 ------------- ------------- Expenses: Interest..................................................... 108,824 100,492 Depreciation and amortization................................ 333,038 336,435 Property taxes............................................... 122,076 124,986 Personnel costs.............................................. 71,976 84,996 Utilities.................................................... 54,703 47,826 Repairs and maintenance...................................... 90,919 95,335 Property management fees -affiliates......................... 54,340 53,028 Other property operating expenses............................ 59,299 61,331 General and administrative................................... 23,455 20,159 General and administrative - affiliates...................... 147,357 156,783 ------------- ------------- Total expenses............................................. 1,065,987 1,081,371 ------------- ------------- Net income (loss).............................................. $ 35,706 $ (73,592) ============= ============= Net income (loss) allocable to limited partners................ $ 35,349 $ (72,856) Net income (loss) allocable to General Partner................. 357 (736) ------------- -------------- Net income (loss).............................................. $ 35,706 $ (73,592) ============= ============= Net income (loss) per limited partnership unit................. $ .88 $ (1.82) ============= ============= Distributions per limited partnership unit..................... $ 9.38 $ - ============= =============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND XXIV, L.P. STATEMENTS OF PARTNERS' EQUITY (DEFICIT) (Unaudited) For the Three Months Ended March 31, 1996 and 1995
Total General Limited Partners' Partner Partners Equity --------------- --------------- --------------- Balance at December 31, 1994.............. $ (5,832) $ 21,039,922 $ 21,034,090 Net loss.................................. (736) (72,856) (73,592) -------------- -------------- -------------- Balance at March 31, 1995................. $ (6,568) $ 20,967,066 $ 20,960,498 ============= ============= ============= Balance at December 31, 1995.............. $ (22,780) $ 19,362,083 $ 19,339,303 Distributions............................. - (375,008) (375,008) Net income................................ 357 35,349 35,706 ------------- ------------- ------------- Balance at March 31, 1996................. $ (22,423) $ 19,022,424 $ 19,000,001 ============= ============= =============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND XXIV, L.P. STATEMENTS OF CASH FLOWS (Unaudited) Increase (Decrease) in Cash and Cash Equivalents
Three Months Ended March 31, ----------------------------------------- 1996 1995 ----------------- ---------------- Cash flows from operating activities: Cash received from tenants........................ $ 954,401 $ 939,441 Cash paid to suppliers............................ (356,835) (328,551) Cash paid to affiliates........................... (128,999) (200,256) Interest received................................. 31,760 25,452 Interest paid..................................... (101,591) (90,996) Property taxes paid............................... (161,774) (80,135) Property tax refund............................... 20,434 - --------------- -------------- Net cash provided by operating activities............ 257,396 264,955 --------------- -------------- Cash flows from investing activities: Additions to real estate investments.............. (56,996) (55,554) Proceeds received from insurance company.......... 75,000 - --------------- -------------- Net cash provided by (used in) investing activities........................................ 18,004 (55,554) --------------- -------------- Cash flows from financing activities: Principal payments on mortgage note payable......................................... (25,253) (46,132) Distributions paid................................ (375,008) - --------------- -------------- Net cash used in financing activities................ (400,261) (46,132) --------------- -------------- Net increase (decrease) in cash and cash equivalents....................................... (124,861) 163,269 Cash and cash equivalents at beginning of period............................................ 2,381,183 1,720,161 --------------- -------------- Cash and cash equivalents at end of period........... $ 2,256,322 $ 1,883,430 =============== ==============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND XXIV, L.P. STATEMENTS OF CASH FLOWS (Unaudited) Reconciliation of Net Income (Loss) to Net Cash Provided by Operating Activities
Three Months Ended March 31, ----------------------------------------- 1996 1995 ---------------- ----------------- Net income (loss).................................... $ 35,706 $ (73,592) --------------- ---------------- Adjustments to reconcile net income (loss) to net cash provided by operating activities: Gain on involuntary conversion.................... (24,663) - Depreciation and amortization..................... 333,038 336,435 Amortization of deferred borrowing costs.......... 7,770 7,770 Amortization of deferred gain..................... - (5,100) Changes in assets and liabilities: Cash segregated for security deposits........... (1,776) 3,054 Accounts receivable, net........................ (78,231) (39,464) Prepaid expenses and other assets, net.......... 3,265 9,646 Accounts payable and accrued expenses........... (100,626) 15,317 Payable to affiliates - General Partner......... 72,698 9,555 Security deposits and deferred rental income........................................ 10,215 1,334 --------------- -------------- Total adjustments............................. 221,690 338,547 --------------- -------------- Net cash provided by operating activities............ $ 257,396 $ 264,955 =============== ==============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL REAL ESTATE FUND XXIV, L.P. Notes to Financial Statements March 31, 1996 (Unaudited) NOTE 1. - ------- McNeil Real Estate Fund XXIV, L.P. (the "Partnership"), formerly known as Southmark Equity Partners, Ltd., was organized on October 19, 1984, as a limited partnership under the provisions of the California Revised Limited Partnership Act to acquire and operate commercial and residential properties. The general partner of the Partnership is McNeil Partners, L.P. (the "General Partner"), a Delaware limited partnership, an affiliate of Robert A. McNeil ("McNeil"). The principal place of business for the Partnership and the General Partner is 13760 Noel Road, Suite 700, LB70, Dallas, Texas, 75240. In the opinion of management, the financial statements reflect all adjustments necessary for a fair presentation of the Partnership's financial position and results of operations. All adjustments were of a normal recurring nature. However, the results of operations for the three months ended March 31, 1996 are not necessarily indicative of the results to be expected for the year ending December 31, 1996. NOTE 2. - ------- The financial statements should be read in conjunction with the financial statements contained in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1995, and the notes thereto, as filed with the Securities and Exchange Commission, which is available upon request by writing to McNeil Real Estate Fund XXIV, L.P., c/o McNeil Real Estate Management, Inc., Investor Services, 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240. NOTE 3. - ------- Certain prior period amounts have been reclassified to conform to the current period presentation. NOTE 4. - ------- The Partnership pays property management fees equal to 5% of the gross rental receipts for its residential properties and 6% of gross rental receipts for its commercial properties to McNeil Real Estate Management, Inc. ("McREMI"), an affiliate of the General Partner, for providing property management services for the Partnership's residential and commercial properties and leasing services for its residential properties. McREMI may also choose to provide leasing services for the Partnership's commercial properties, in which case McREMI will receive property management fees from such commercial properties equal to 3% of the property's gross rental receipts plus leasing commissions based on the prevailing market rate for such services where the property is located. The Partnership reimburses McREMI for its costs, including overhead, of administering the Partnership's affairs. The Partnership is paying an asset management fee which is payable to the General Partner. Through 1999, the asset management fee is calculated as 1% of the Partnership's tangible asset value. Tangible asset value is determined by using the greater of (i) an amount calculated by applying a capitalization rate of 9% to the annualized net operating income of each property or (ii) a value of $10,000 per apartment unit for residential properties and $50 per gross square foot for commercial properties to arrive at the property tangible asset value. The property tangible asset value is then added to the book value of all other assets excluding intangible items. The fee percentage decreases subsequent to 1999. Total accrued but unpaid asset management fees of $94,323 were outstanding at March 31, 1996. Compensation and reimbursements paid to or accrued for the benefit of the General Partner or its affiliates are as follows:
Three Months Ended March 31, ---------------------------------------- 1996 1995 ---------------- --------------- Property management fees............................. $ 54,340 $ 53,028 Charged to general and administrative - affiliates: Partnership administration........................ 65,001 78,680 Asset management fee.............................. 82,356 78,103 --------------- -------------- $ 201,697 $ 209,811 =============== ==============
Payable to affiliates - General Partner at March 31, 1996 and December 31, 1995 consisted primarily of unpaid property management fees, Partnership general and administrative expenses and asset management fees and are due and payable from current operations. NOTE 5. - ------- In December 1995, wind and hail damage occurred at Pine Hills Apartments. $75,000 was received from the insurance carrier in February 1996. The Partnership recorded a $24,663 gain on involuntary conversion in 1996, which represents the amount of insurance reimbursements received in excess of the basis of the property damaged. NOTE 6. - ------- Martha Hess, et al. v. Southmark Equity Partners II, Ltd., Southmark Income Investors, Ltd., Southmark Equity Partners, Ltd. (presently known as McNeil Real Estate Fund XXIV, L.P.), Southmark Realty Partners III, Ltd., and Southmark Realty Partners II, Ltd., et al. ("Hess"); Kotowski v. Southmark Equity Partners, Ltd. and Donald Arceri v. Southmark Income Investors, Ltd. The Hess case was filed on May 20, 1988, by Martha Hess, individually and on behalf of a putative class of those similarly situated. The original, first, second and third amended complaints in Hess sought rescission, pursuant to the Illinois Securities Act, of over $2.7 million of principal invested in five Southmark (now McNeil) partnerships, and other relief including damages for breach of fiduciary duty and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. The original, first, second and third amended complaints in Hess were dismissed against the defendant-group because the Appellate Court held that they were not the proper subject of a class action complaint. Hess was, thereafter, amended a fourth time to state causes of action against unrelated partnership entities. Hess went to judgment against that entity and the judgment, along with the prior dismissals of the class action, was appealed. The claims against the Partnership were dismissed by the Appellate Court. NOTE 7. - ------- In 1996, the Partnership adopted the Financial Accounting Standards Board's Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." This statement requires the cessation of depreciation on assets held for sale. Since Island Plaza is currently classified as an asset held for sale, no depreciation will be taken effective April 1, 1996. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - ------- --------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- FINANCIAL CONDITION - ------------------- There has been no significant change in the operations of the Partnership's properties since December 31, 1995. The Partnership reported net income for the first three months of 1996 of $35,706 as compared to a net loss of $73,592 for the first three months of 1995. Revenues were $1,101,693 in 1996, up from $1,007,779 for the same period in 1995. Expenses decreased to $1,065,987 in 1996, from $1,081,371 in 1995. Net cash provided by operating activities was $257,396 for the first three months of 1996, comparable to the $264,955 provided during the first three months of 1995. After principal payments on the Partnership's mortgage note payable of $25,253, capital improvements of $56,996, distributions of $375,008 to the limited partners, and $75,000 received from the insurance company for damaged assets, cash and cash equivalents decreased by $124,861 for the quarter ended March 31, 1996. RESULTS OF OPERATIONS - --------------------- Revenue: Total revenue increased by $93,914 for the three months ended March 31, 1996 as compared to the same period in 1995. The increase was primarily due to an increase in rental revenue as well as the recognition of a gain on involuntary conversion and a property tax refund in 1996, as discussed below. Rental revenue increased by $42,509 for three months ended March 31, 1996 in relation to the respective period in 1995. The increase was mainly due to an increase in rental rates at River Bay Shopping Center. Interest income increased by $6,308 for the three months ended March 31, 1996 as compared to the same period in 1995. The increase was mainly due to an increase in interest rates earned on invested cash in the first quarter of 1996. A gain of involuntary conversion of $24,663 was recognized in the first quarter of 1996 relating to wind and hail damage at Pine Hills Apartments (see Note 5). No such income was recorded in the first quarter of 1995. The Partnership received a $20,434 refund of prior years' property taxes for Towne Center as a result of an appeal filed on behalf of the property. No such tax refund was received during the same period in 1995. Expenses: Total expenses decreased by $15,384 for the first three months of 1996 as compared to the same period in 1995. The decrease was primarily the result of a decrease in personnel costs and utilities as discussed below. Personnel costs decreased $13,020 in the first quarter of 1996 as compared to the same period in 1995. The decrease was mainly due to a refund of prior years' worker's compensation insurance at Pine Hills Apartments and Sleepy Hollow Apartments in 1996. No such refund was received in the first quarter of 1995. Utilities increased by $6,877 for the first quarter of 1996 as compared to the same quarter in 1995. The increase was mainly due to an increase of utility rates at Southpointe Plaza Shopping Center. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- The Partnership's primary source of cash flows is from operating activities which generated $257,396 of cash in the first three months of 1996 as compared to $264,955 for the same period in 1995. The Partnership received $75,000 from the insurance carrier in 1996 for wind and hail damage at Pine Hills Apartments (see Note 5). The Partnership made principal payments on the Southpointe Plaza mortgage note payable of $25,253 and $46,132 in the first three months of 1996 and 1995, respectively. Under the terms of the mortgage note agreement, the total payment on the loan was adjusted by the lender in 1995, resulting in a decrease in the amount of principal payments made on the loan in 1996. The Partnership distributed $375,008 to the limited partners in the first quarter of 1996. No distributions were paid to the limited partners in 1995. Short-term liquidity: At March 31, 1996, the Partnership held cash and cash equivalents of $2,256,322. This balance provides a reasonable level of working capital for the Partnership's immediate needs in operating its properties. For the remainder of 1996, Partnership properties are expected to provide positive cash flow from operations after payment of debt service and capital improvements. The Partnership has budgeted $431,000 for necessary capital improvements for all properties in 1996 which is expected to be funded from available cash reserves or from operations of the properties. The present cash balance is believed to provide an adequate reserve for property operations. The General Partner has established a revolving credit facility not to exceed $5,000,000 in the aggregate which is available on a "first-come, first-served" basis to the Partnership and other affiliated partnerships if certain conditions are met. Borrowings under the facility may be used to fund deferred maintenance, refinancing obligations and working capital needs. There is no assurance that the Partnership will receive any funds under the facility because no amounts are reserved for any particular partnership. As of March 31, 1996, $2,662,819 remained available for borrowing under the facility; however, additional funds could become available as other partnerships repay existing borrowings. This commitment will terminate on March 30, 1997. Long-term liquidity: Only one property, Southpointe Plaza Shopping Center, is encumbered with mortgage debt. The Partnership will attempt to obtain refinancing or extension of the mortgage note when it matures in 1997. While the outlook for maintenance of adequate levels of liquidity is favorable, should operations deteriorate and present cash resources become insufficient to fund current needs, the Partnership would require other sources of working capital. No such sources have been identified. The Partnership has no established lines of credit from outside sources. Other possible actions to resolve cash deficiencies include refinancings, deferral of capital expenditures on Partnership properties except where improvements are expected to increase the competitiveness and marketability of the properties, arranging financing from affiliates or the ultimate sale of the properties. Sales and refinancings are possibilities only, and there are at present no plans for any such sales or refinancings, other than Island Plaza, which was placed on the market for sale effective April 1, 1996. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS - ------- ----------------- Martha Hess, et al. v. Southmark Equity Partners II, Ltd., Southmark Income Investors, Ltd., Southmark Equity Partners, Ltd. (presently known as McNeil Real Estate Fund XXIV, L.P.), Southmark Realty Partners III, Ltd., and Southmark Realty Partners II, Ltd., et al. ("Hess"); Kotowski v. Southmark Equity Partners, Ltd. and Donald Arceri v. Southmark Income Investors, Ltd. The Hess case was filed on May 20, 1988, by Martha Hess, individually and on behalf of a putative class of those similarly situated. The original, first, second and third amended complaints in Hess sought rescission, pursuant to the Illinois Securities Act, of over $2.7 million of principal invested in five Southmark (now McNeil) partnerships, and other relief including damages for breach of fiduciary duty and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. The original, first, second and third amended complaints in Hess were dismissed against the defendant-group because the Appellate Court held that they were not the proper subject of a class action complaint. Hess was, thereafter, amended a fourth time to state causes of action against unrelated partnership entities. Hess went to judgment against that entity and the judgment, along with the prior dismissals of the class action, was appealed. The claims against the Partnership were dismissed by the Appellate Court. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ------- -------------------------------- (a) Exhibits. Exhibit Number Description ------- ----------- 4. Amended and Restated Limited Partnership Agreement dated March 30, 1992. (Incorpor- ated by reference to the Current Report of the registrant on Form 8-K dated March 30, 1992, as filed on April 10, 1992). 4.1 Amendment No. 1 to the Amended and Restated Limited Partnership Agreement of McNeil Real Estate Fund XXIV, L.P. dated June 1995 (incorporated by reference to the Quarterly Report of the registrant on Form 10-Q for the period ended June 30,1995, as filed on August 14, 1995). 11. Statement regarding computation of Net Income per Limited Partnership Unit: Net income per limited partnership unit is computed by dividing net income allocated to the limited partners by the number of limited partnership units outstanding. Per unit information has been computed based on 40,000 limited partnership units outstanding in 1996 and 1995. 27. Financial Data Schedule for the quarter ended March 31, 1996. (b) Reports on Form 8-K. There were no reports on Form 8-K filed during the quarter ended March 31, 1996. MCNEIL REAL ESTATE FUND XXIV, L.P. 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: McNEIL REAL ESTATE FUND XXIV, L.P. By: McNeil Partners, L.P., General Partner By: McNeil Investors, Inc., General Partner May 14, 1996 By: /s/ Donald K. Reed - ------------------- --------------------------------------- Date Donald K. Reed President and Chief Executive Officer May 14, 1996 By: /s/ Ron K. Taylor - ------------------- --------------------------------------- Date Ron K. Taylor Acting Chief Financial Officer of McNeil Investors, Inc. May 14, 1996 By: /s/ Carol A. Fahs - ------------------- --------------------------------------- Date Carol A. Fahs Chief Accounting Officer of McNeil Real Estate Management, Inc. EX-27 2
5 3-MOS DEC-31-1996 MAR-31-1996 2,256,322 0 511,811 0 0 0 31,318,332 (10,830,904) 25,530,121 0 5,513,274 0 0 0 0 25,530,121 1,024,836 1,101,693 0 0 957,163 0 108,824 0 0 35,706 0 0 0 35,706 0 0
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