-----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, V0ynIrqFHApQQ8tmtfVVZK0hiMVQ1da4HEePw2R6eX+lpXQTlrJJc5DaJFDGZ3hR rpqXsq1ghii8QP9m9Wnfyw== 0000757221-95-000003.txt : 19950814 0000757221-95-000003.hdr.sgml : 19950814 ACCESSION NUMBER: 0000757221-95-000003 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 III CENTRAL INDEX KEY: 0000757221 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 042847256 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14052 FILM NUMBER: 95561033 BUSINESS ADDRESS: STREET 1: 399 BOYLSTON ST 13TH FLR 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 0-14052 NEW ENGLAND LIFE PENSION PROPERTIES III; A REAL ESTATE LIMITED PARTNERSHIP (Exact name of registrant as specified in its charter) MASSACHUSETTS 04-2847256 (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 III; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED JUNE 30, 1995 PART I FINANCIAL INFORMATION NEW ENGLAND LIFE PENSION PROPERTIES III; A REAL ESTATE LIMITED PARTNERSHIP BALANCE SHEET (Unaudited) June 30, 1995 December 31, 1994 ASSETS Real estate investments: Joint ventures $18,276,707 $ 18,674,563 Property, net 1,213,274 1,189,011 ----------- -------------- 19,489,981 19,863,574 Cash and cash equivalents 1,927,244 2,423,836 Short-term investments 1,687,138 996,814 ----------- -------------- $23,104,363 $ 23,284,224 =========== ============== Liabilities and Partners' Capital (Deficit) Accounts payable $ 56,276 $ 86,049 Accrued management fee 42,101 42,101 ----------- -------------- Total liabilities 98,377 128,150 ----------- -------------- Partners' capital (deficit): Limited partners ($493.14 per unit; 75,000 units authorized, 68,414 units issued and outstanding) 23,046,653 23,195,240 General partners (40,667) (39,166) ----------- -------------- Total partners' capital 23,005,986 23,156,074 ----------- -------------- $23,104,363 $ 23,284,224 =========== ============== (See accompanying notes to financial statements) NEW ENGLAND LIFE PENSION PROPERTIES III; 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 $ 44,368 $ 92,714 $ - $ - Property operations expense (18,350) (51,101) - - Depreciation and amortization (9,143) (18,940) - - ----------- ------------- ----------- ------------- 16,875 22,673 - - Joint venture earnings 363,912 795,707 383,447 770,954 Ground rentals and interest on mortgage loans - - 13,758 27,515 Amortization (2,366) (4,732) (3,812) (7,624) ----------- ------------- ----------- ------------- Total real estate operations 378,421 813,648 393,393 790,845 Interest on cash equivalents and short term investments 51,757 100,840 30,825 59,008 ----------- ------------- ----------- ------------- Total investment activity 430,178 914,488 424,218 849,853 ----------- ------------- ----------- ------------- Portfolio Expenses General and administrative 61,313 129,000 71,022 118,487 Management fee 42,101 84,202 36,223 67,594 ----------- ------------- ----------- ------------- 103,414 213,202 107,245 186,081 ----------- ------------- ----------- ------------- Net income $ 326,764 $ 701,286 $ 316,973 $ 663,772 =========== ============= =========== ============= Net income per limited partnership unit $ 4.73 $10.15 $ 4.59 $ 9.61 =========== ============= =========== ============= Cash distributions per limited partnership unit $ 6.16 $ 12.32 $ 4.34 $ 39.93 =========== ============= =========== ============= Number of limited partnership units outstanding during the period 68,414 68,414 68,414 68,414 =========== ============= =========== ============= (See accompanying notes to financial statements)
NEW ENGLAND LIFE PENSION PROPERTIES III; A REAL ESTATE LIMITED PARTNERSHIP STATEMENT OF CHANGES IN PARTNERS' CAPITAL (Deficit) (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 Partners Partners Partners Partners Partners Partners Partners Partners Balance at beginning of period $(39,678) $23,144,587 $(39,166) $23,195,240 $(38,638) $23,247,570 $ (38,934)$ 25,339,093 Cash dis- tributions (4,257) (421,430) (8,514) (842,860) (2,999) (296,917) (6,171) (2,731,771) Net income 3,268 323,496 7,013 694,273 3,170 313,803 6,638 657,134 -------- ----------- -------- ----------- -------- ----------- -------- ----------- Balance at end of period $(40,667) $23,046,653 $ (40,667)$23,046,653 $(38,467) $23,264,456 $ (38,467)$ 23,264,456 ======== =========== ======== =========== ======== =========== ======== =========== (See accompanying notes to financial statements)
NEW ENGLAND LIFE PENSION PROPERTIES III; A REAL ESTATE LIMITED PARTNERSHIP SUMMARIZED STATEMENT OF CASH FLOWS (Unaudited) Six Months Ended June 30, 1995 1994 Net cash provided by operating activities $1,087,890 $ 862,821 ---------- -------- Cash flows from investing activities: Capital expenditures on owned property (54,826) - Decrease (increase) in short-term investments, net (678,282) 1,085,875 ---------- -------- Net cash provided by (used in) investing activities (733,108) 1,085,875 ---------- -------- Cash flows from financing activity: Distributions to partners (851,374) (2,737,942) ---------- -------- Net decrease in cash and cash equivalents (496,592) (789,246) Cash and cash equivalents: Beginning of period 2,423,836 3,252,535 ---------- -------- End of period $1,927,244 $2,463,289 ========== ======== (See accompanying notes to financial statements) NEW ENGLAND LIFE PENSION PROPERTIES III; 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, its cash flows and changes in partners' capital (deficit) 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 III; 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 July, 1985 and made several investments through 1988. It intends to dispose of its investments within twelve years of their acquisition, and then liquidate; however, the managing general partner could extend the investment period if it is in the best interest of the limited partners. NOTE 2 - REAL ESTATE JOINT VENTURES The following summarized financial information is presented in the aggregate for the joint ventures: ASSETS AND LIABILITIES June 30, 1995 December 31, 1994 Assets Real property, at cost less accumulated depreciation of $3,975,335 and $3,697,894, respectively $ 16,004,401 $ 16,188,586 Other assets 438,769 664,906 ------------ --------------- 16,443,170 16,853,492 Liabilities (128,357) (198,804) ------------ --------------- Net Assets $ 16,314,813 $ 16,654,688 ============ =============== RESULTS OF OPERATIONS Six Months Ended June 30, 1995 1994 Revenue Rental income $1,549,707 $ 1,530,207 Other 3,901 4,979 ---------- ---------- 1,553,608 1,535,186 ---------- ---------- Expenses Operating expenses 480,460 486,390 Depreciation and amortization 277,441 277,842 ---------- ---------- 757,901 764,232 ---------- ---------- Net income $ 795,707 $ 770,954 ========== ========== Liabilities and expenses exclude amounts owed and attributable to the Partnership on behalf of its various financing arrangements with the joint ventures. NOTE 3 - PROPERTY On November 15, 1994, the Partnership restructured its ground lease/mortgage loan investment into a wholly-owned property, due to the inability of the ground lessee/mortgagee to meet its financial obligations. The following is a summary of the Partnership's investment in this property: June 30, 1995 December 31, 1994 Land $ 347,772 $ 347,772 Buildings and improvements 901,010 846,184 Accumulated depreciation (21,061) (2,802) Net operating liabilities (14,447) (2,143) ----------- --------------- $ 1,213,274 $ 1,189,011 =========== =============== The buildings are being depreciated over a 25 year period. NOTE 4 - 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 $425,687 ($6.16 per limited partnership unit). 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 December, 1985. A total of 68,414 units were sold. The Partnership received proceeds of $61,950,285, 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. The Partnership made nine real estate investments, six of which were sold prior to 1994. As a result of the sales, capital of $34,676,320 has been returned to the limited partners through June 30, 1995. At June 30, 1995, the Partnership had $3,614,382 in cash, cash equivalents and short-term investments, of which $425,687 was distributed to partners on July 27, 1995; the remainder is being retained as working capital reserves. The source of future liquidity and cash distributions to partners will be cash generated by the Partnership's investments and proceeds from the sale of investments. Distributions of cash from operations for the first two quarters of 1995 were made at the annualized rate of 5% on the adjusted capital contribution. Distributions of cash from operations relating to the first and second quarters of 1994 were made at the annualized rate of 3.5% and 4.5%, respectively, on a weighted average adjusted capital contribution. On January 27, 1994, the Partnership made a capital distribution of $31 per limited partnership unit from the proceeds of the Heritage Green Plaza sale in December 1993. The adjusted capital contribution after this distribution is $493.14 per unit. The increase in the distribution rate results from the attainment of appropriate cash reserve levels and the improvement in cash flow from operations. The carrying value of real estate investments in the financial statements is at cost or 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 appraised value of each real estate investment exceeded its related carrying value; the aggregate excess was approximately $5,500,000. The current appraised value of real estate investments has been estimated by the managing general partner and is generally based on a combination of traditional appraisal approaches performed by the Partnership's 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 FORM OF REAL ESTATE INVESTMENTS Effective November 15, 1994, North Cabot Industrial Park (formerly Marathon / Hayward) was converted to a wholly-owned property; it was previously structured as a ground lease with a mortgage loan to the ground lessee. Bayberry Apartments and 270 Technology Center are structured as joint ventures with real estate management/development firms. OPERATING FACTORS Occupancy at North Cabot Industrial Park increased from 58% to 66% during the second quarter of 1995, with the signing of two new leases, partially offset by the loss of a month-to-month tenant. (Occupancy was 66% one year ago and 58% at year end 1994.) Subsequent to the second quarter, a new lease increased occupancy to 79%. Although occupancy has improved, the managing general partner does not expect this investment to achieve the Partnership's investment objectives. Occupancy at Bayberry Apartments ended the second quarter of 1995 at 93%. During the first half of both 1994 and 1995 occupancy fluctuated between 92% and 94%. Rental rates in the Gaithersburg market have increased over the past year, as supply and demand remain in equilibrium. Occupancy at 270 Technology Park increased to 98% from 95% during the second quarter of 1995. (Occupancy was 97% one year ago.) The property faces minimal lease expiration exposure in 1995. INVESTMENT ACTIVITY Interest on cash equivalents and short-term investments increased between the comparative six month periods due to higher short-term interest rates and larger average investment balances. Real estate operating results were $813,648 for the first six months of 1995 as compared to $790,845 for the comparable six months of 1994. The increase was primarily due to an increase in net operating income at Bayberry Apartments ($55,000) which was partially offset by a decrease in net operating income at 270 Technology Park ($31,000). The increase at Bayberry Apartments results from an increase in rental rates, while the decrease at 270 Technology Park results from a decrease in rental income. Operating cash flow increased $225,069 or 26% between 1994 and 1995. Cash flow from Bayberry Apartments increased approximately $175,000, primarily from the distribution of amounts which had been previously retained as working capital reserves. Cash flow from 270 Technology Park increased approximately $46,000 due to the timing of distributions. 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 managing general partner. General and administrative expenses primarily consist of real estate appraisal, printing, legal, accounting and investor servicing fees. The Partnership management fee increased between the first six months of 1994 and 1995 due to an increase in distributable cash flow. General and administrative expenses increased by $10,513 or 9% between the respective periods. This increase was due to the professional fees associated with the restructuring periods of North Cabot Industrial Park. NEW ENGLAND LIFE PENSION PROPERTIES III; 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 III; A REAL ESTATE LIMITED PARTNERSHIP (Registrant) August 11, 1995 Peter P. Twining Managing Director and General Counsel of Managing General Partner, Copley Properties Company III, Inc. August 11, 1995 Marie A. Welch Investment Officer and Chief Accounting Officer of Managing General Partner, Copley Properties Company III, Inc. EX-27 2 FINANCIAL DATA SCHEDULE
5 6-MOS DEC-31-1995 JUN-30-1995 1927244 1687138 0 0 0 3614382 19489981 0 23104363 98377 0 0 0 0 23005986 23104363 0 989261 0 0 287975 0 0 701286 0 701286 0 0 0 701286 10.15 10.15
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