-----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, EQBprSUeKiCBv/bIWfNSSRx04pZplSGEBjTYR1LLKYNOWqckG9HBFIajI5HwzGtK UOs2V/CqsfxFNNlhUIuwcQ== 0000757221-95-000005.txt : 19951119 0000757221-95-000005.hdr.sgml : 19951119 ACCESSION NUMBER: 0000757221-95-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 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: 95590512 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 September 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 SEPTEMBER 30, 1995 PART I FINANCIAL INFORMATION ---------------------- NEW ENGLAND LIFE PENSION PROPERTIES III; A REAL ESTATE LIMITED PARTNERSHIP BALANCE SHEET (Unaudited)
September 30, 1995 December 31, 1994 ------------------ ----------------- ASSETS Real estate investments: Joint ventures $ 18,232,280 $ 18,674,563 Property, net 1,265,058 1,189,011 --------------- --------------- 19,497,338 19,863,574 Cash and cash equivalents 1,557,199 2,423,836 Short-term investments 1,944,332 996,814 --------------- --------------- $ 22,998,869 $ 23,284,224 =============== =============== LIABILITIES AND PARTNERS' CAPITAL (Deficit) Accounts payable $ 82,536 $ 86,049 Accrued management fee 42,101 42,101 --------------- --------------- Total liabilities 124,637 128,150 --------------- --------------- Partners' capital (deficit): Limited partners ($493.14 per unit; 75,000 units authorized, 68,414 units issued and outstanding) 22,916,217 23,195,240 General partners (41,985) (39,166) --------------- --------------- Total partners' capital 22,874,232 23,156,074 --------------- --------------- $ 22,998,869 $ 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 Nine Months Ended Quarter Ended Nine Months Ended September 30, 1995 September 30, 1995 September 30, 1994 September 30, 1994 ------------------ ------------------ ------------------- ------------------ INVESTMENT ACTIVITY Property rentals $ 59,044 $ 151,758 $ -- $ -- Property operations expense (24,194) (75,295) -- -- Depreciation and amortization (8,462) (27,402) -- -- --------------- --------------- ---------------- --------------- 26,388 49,061 -- -- Joint venture earnings 320,560 1,116,267 378,078 1,149,032 Ground rentals and interest on mortgage loans -- -- 18,343 45,858 Amortization (2,366) (7,098) (3,812) (11,436) --------------- --------------- ---------------- --------------- Total real estate operations 344,582 1,158,230 392,609 1,183,454 Interest on cash equivalents and short term investments 51,422 152,262 31,387 90,395 --------------- --------------- ---------------- --------------- Total investment activity 396,004 1,310,492 423,996 1,273,849 --------------- --------------- ---------------- --------------- Portfolio Expenses General and administrative 59,970 188,970 54,558 173,045 Management fee 42,101 126,303 37,932 105,526 --------------- --------------- ---------------- --------------- 102,071 315,273 92,490 278,571 --------------- --------------- ---------------- --------------- Net Income $ 293,933 $ 995,219 $ 331,506 $ 995,278 =============== =============== ================ =============== Net income per limited partnership unit $ 4.25 $ 14.40 $ 4.80 $ 14.40 =============== =============== ================ =============== Cash distributions per limited partnership unit $ 6.16 $ 18.48 $ 5.55 $ 45.48 =============== =============== ================ =============== 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 Nine Months Ended Quarter Ended Nine Months Ended September 30, 1995 September 30, 1995 September 30, 1994 September 30, 1994 ------------------- ------------------- ------------------- ------------------ General Limited General Limited General Limited General Limited Partners Partners Partners Partners Partners Partners Partners Partners --------- --------- --------- --------- --------- --------- --------- --------- Balance at beginning of period $(40,667) $23,046,653 $ (39,166) $23,195,240 $(38,467) $23,264,456 $(38,934) $25,339,093 Cash distributions (4,257) (421,430) (12,771) (1,264,290) (3,835) (379,698) (10,006) (3,111,469) Net income 2,939 290,994 9,952 985,267 3,315 328,191 9,953 985,325 --------- ---------- --------- ---------- --------- ---------- ---------- ---------- Balance at end of period $(41,985) $22,916,217 $ (41,985) $22,916,217 $(38,987) $23,212,949 $(38,987) $23,212,949 ========== =========== ========= =========== ======== =========== ========= =========== (See accompanying notes to financial statements)
NEW ENGLAND LIFE PENSION PROPERTIES III; A REAL ESTATE LIMITED PARTNERSHIP SUMMARIZED STATEMENT OF CASH FLOWS (Unaudited)
Nine Months Ended September 30, -------------------------------- 1995 1994 -------------------------------- Net cash provided by operating activities $ 1,415,963 $ 1,268,901 -------------- ------------- Cash flows from investing activities: Capital expenditures on owned property (84,856) -- Decrease (increase) in short-term investments, net (920,683) 105,312 ------------ ------------ Net cash provided by (used in) investing activities (1,005,539) 105,312 ------------ ------------ Cash flows from financing activity: Distributions to partners (1,277,061) (3,121,475) ------------ ------------ Net decrease in cash and cash equivalents (866,637) (1,747,262) Cash and cash equivalents: Beginning of period 2,423,836 3,252,535 ------------ ------------ End of period $ 1,557,199 $ 1,505,273 ============== ============== (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 September 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 September 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 ---------------------- September 30, 1995 December 31, 1994 ------------------ ----------------- Assets Real property, at cost less accumulated depreciation of $4,116,951 and $3,697,894, respectively $ 15,866,139 $ 16,188,586 Other assets 480,539 664,906 ------------- ------------- 16,346,678 16,853,492 Liabilities 153,598 198,804 ------------- ------------- Net Assets $ 16,193,080 $ 16,654,688 ============ ============ Results of Operations Nine months ended September 30, -------------------------------- 1995 1994 ---- ---- Revenue Rental income $ 2,320,006 $ 2,326,671 Other 10,774 10,752 ------------ ------------- 2,330,780 2,337,423 ------------ ------------- Expenses Operating expenses 795,455 771,622 Depreciation and amortization 419,058 416,769 ------------ ------------- 1,214,513 1,188,391 ------------ ------------- Net income $ 1,116,267 $ 1,149,032 ============= ============== 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: September 30, 1995 December 31, 1994 ------------------ ----------------- Land $ 347,772 $ 347,772 Buildings and improvements 931,040 846,184 Accumulated depreciation (29,523) (2,802) Net operating assets/(liabilities) 15,769 (2,143) ------------ ------------- $ 1,265,058 $ 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 September 30, 1995 were made on October 26, 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 September 30, 1995. At September 30, 1995, the Partnership had $3,501,531 in cash, cash equivalents and short-term investments, of which $425,687 was distributed to partners on October 26, 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 three 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, second, and third quarters of 1994 were made at the annualized rate of 3.5%, 4.5% 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 September 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 66% to 87% during the third quarter of 1995, with the signing of two new leases. (Occupancy was 66% one year ago and 58% at year end 1994.) Occupancy, however, could decline over the next year as leases on 48% of the currently occupied space expire. Although occupancy has improved, the managing general partner does not expect this investment to achieve the Partnership's original investment objectives. Occupancy at Bayberry Apartments ended the third quarter of 1995 at 95%. During the first nine months of both 1994 and 1995, occupancy fluctuated between 92% and 95%. Market conditions remain competitive; however, rental rates in the Gaithersburg market have increased over the past year, as supply and demand remain in equilibrium. Occupancy at 270 Technology Park remained at 98% during the third quarter of 1995. (Occupancy was 95% one year ago.) The property faces minimal lease expiration exposure over the next year. Investment Activity Interest on cash equivalents and short-term investments increased between the comparative nine month periods due to higher short-term interest rates and larger average investment balances. Real estate operating results were $1,158,230 for the first nine months of 1995 as compared to $1,183,454 for the comparable nine months of 1994. This decrease was primarily due to a decrease in net operating income at 270 Technology Park ($37,000) resulting from a decrease in rental income caused by lower lease rates. Rental income at Bayberry Apartments increased during the comparable nine month period due to an increase in average occupancy; however, this increase was offset by an increase in operating expenses. Operating cash flow increased $147,062 or 12% between the first nine months of 1994 and 1995. Cash flow from Bayberry Apartments increased approximately $111,000, 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 nine months of 1994 and 1995 due to an increase in distributable cash flow. General and administrative expenses increased by $15,925 or 9% between the respective periods. This increase was due to the professional fees associated with the restructuring of the North Cabot Industrial Park investment. NEW ENGLAND LIFE PENSION PROPERTIES III; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED SEPTEMBER 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 September 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) November 9, 1995 ----------------------------------------- Peter P. Twining Managing Director and General Counsel of Managing General Partner, Copley Properties Company III, Inc. November 9, 1995 ----------------------------------------- Marie A. Welch Investment Officer and Chief Accounting Officer of Managing General Partner, Copley Properties Company III, Inc. EX-27 2
5 9-MOS DEC-31-1995 SEP-30-1995 1557199 1944332 0 0 0 0 19497338 0 22998869 124637 0 0 0 0 22874232 22998869 0 1420287 0 0 425068 0 0 995219 0 995219 0 0 0 995219 14.40 14.40
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