-----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, FlO9viPGMM26RXOMidZs5TqKtala2JrR6hkocLe/1crzfdwNJqdbOafwKrPpmsL9 JBLqurWu8UYr+qbsERHUvQ== 0000927016-97-003046.txt : 19971114 0000927016-97-003046.hdr.sgml : 19971114 ACCESSION NUMBER: 0000927016-97-003046 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971112 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: SEC FILE NUMBER: 000-14052 FILM NUMBER: 97713686 BUSINESS ADDRESS: STREET 1: 399 BOYLSTON ST 13TH FLR CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 6175781200 10-Q 1 FORM 10-Q 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, 1997 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) 225 Franklin Street, 25th Fl. Boston, Massachusetts 02110 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (617) 261-9000 - ---------------------------------------------------------------------------- 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, 1997 PART I FINANCIAL INFORMATION ---------------------- BALANCE SHEETS (Unaudited)
September 30, 1997 December 31, 1996 ------------------ ----------------- ASSETS Real estate investments: Joint ventures $17,432,638 $17,762,647 Property, net 1,171,651 1,265,968 ----------- ----------- 18,604,289 19,028,615 Cash and cash equivalents 1,549,068 1,260,892 Short-term investments 918,135 1,169,666 ----------- ----------- $21,071,492 $21,459,173 =========== =========== LIABILITIES AND PARTNERS' CAPITAL Accounts payable $ 87,399 $ 74,172 Accrued management fee 45,655 45,792 ----------- ----------- Total liabilities 133,054 119,964 ----------- ----------- Partners' capital (deficit): Limited partners ($485.54 per unit; 75,000 units authorized, 68,414 units issued and outstanding) 20,994,580 21,391,344 General partners (56,142) (52,135) ----------- ----------- Total partners' capital 20,938,438 21,339,209 ----------- ----------- $21,071,492 $21,459,173 =========== ===========
(See accompanying notes to financial statements) STATEMENTS OF OPERATIONS (Unaudited)
Quarter Ended Nine Months Ended Quarter Ended Nine Months Ended September 30, 1997 September 30, 1997 September 30, 1996 September 30, 1996 ------------------ ------------------ ------------------ ------------------ INVESTMENT ACTIVITY Property rentals $ 62,650 $ 199,968 $ 50,686 $ 141,294 Property operating expenses (25,388) (63,448) (22,076) (88,190) Depreciation and amortization (30,074) (96,923) (24,277) (61,310) -------- ---------- -------- ---------- 7,188 39,597 4,333 (8,206) Joint venture earnings 438,236 1,195,966 377,008 1,196,560 Amortization (2,366) (7,098) (2,366) (7,098) -------- ---------- -------- ---------- Total real estate operations 443,058 1,228,465 378,975 1,181,256 Interest on cash equivalents and short-term investments 31,467 90,296 44,653 132,156 -------- ---------- -------- ---------- Total investment activity 474,525 1,318,761 423,628 1,313,412 -------- ---------- -------- ---------- Portfolio Expenses General and administrative 56,124 196,320 59,103 173,364 Management fee 45,655 136,965 82,356 175,033 -------- ---------- -------- ---------- 101,779 333,285 141,459 348,397 -------- ---------- -------- ---------- Net Income $372,746 $ 985,476 $282,169 $ 965,015 ======== ========== ======== ========== Net income per limited partnership unit $ 5.39 $ 14.26 $ 4.08 $ 13.96 ======== ========== ======== ========== Cash distributions per limited partnership unit $ 6.68 $ 20.06 $ 6.78 $ 19.72 ======== ========== ======== ==========
Number of limited partnership units outstanding during the period 68,414 68,414 68,414 68,414 ======== ========== ======== ==========
(See accompanying notes to financial statements) STATEMENTS OF PARTNERS' CAPITAL (DEFICIT) (Unaudited)
Quarter Ended Nine Months Ended Quarter Ended Nine Months Ended September 30, 1997 September 30, 1997 September 30, 1996 September 30, 1996 -------------------- --------------------- --------------------- --------------------- General Limited General Limited General Limited General Limited Partners Partners Partners Partners Partners Partners Partners Partners -------- -------- -------- -------- -------- -------- -------- -------- Balance at beginning of period $(55,254) $21,082,568 $(52,135) $21,391,344 $(45,432) $22,574,789 $(43,319) $22,784,048 Cash distributions (4,616) (457,006) (13,862) (1,372,385) (4,684) (463,847) (13,625) (1,349,124) Net income 3,728 369,018 9,855 975,621 2,822 279,347 9,650 955,365 -------- ----------- -------- ----------- -------- ----------- --------- ----------- Balance at end of period $(56,142) $20,994,580 $(56,142) $20,994,580 $(47,294) $22,390,289 $(47,294) $22,390,289 ======== =========== ======== =========== ======== =========== ========= ===========
(See accompanying notes to financial statements) SUMMARIZED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended September 30, ------------------------------- 1997 1996 ----------- ----------- Net cash provided by operating activities $ 1,431,152 $ 1,394,121 ----------- ----------- Cash flows from investing activities: Investment in property (4,636) (10,394) Decrease in short-term investments, net 247,907 956,044 ----------- ----------- Net cash provided by investing activities 243,271 945,650 ----------- ----------- Cash flows from financing activity: Distributions to partners (1,386,247) (1,362,749) ----------- ----------- Net increase in cash and cash equivalents 288,176 977,022 Cash and cash equivalents: Beginning of period 1,260,892 1,399,905 ----------- ----------- End of period $ 1,549,068 $ 2,376,927 =========== ===========
(See accompanying notes to financial statements) 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, 1997 and December 31, 1996 and the results of its operations, its cash flows and partners' capital (deficit) for the interim periods ended September 30, 1997 and 1996. These adjustments are of a normal recurring nature. See notes to financial statements included in the Partnership's 1996 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 primarily serves as an investment for qualified pension and profit sharing plans and other entities intended to be exempt from federal income tax. The Partnership commenced operations in July, 1985 and acquired the three investments it currently owns prior to the end of 1988. The Partnership 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. The Partnership has engaged AEW Real Estate Advisors, Inc. (the "Advisor") to provide asset management advisory services. NOTE 2 - REAL ESTATE JOINT VENTURES - ----------------------------------- The following summarized financial information is presented in the aggregate for the two joint ventures: Assets and Liabilities ----------------------
September 30, 1997 December 31, 1996 ------------------ ----------------- Assets Real property, at cost less accumulated depreciation of $5,191,562 and $4,812,441 $14,970,390 $15,325,895 Other assets 694,774 659,368 ----------- ----------- 15,665,164 15,985,263 Liabilities 118,966 115,892 ----------- ----------- Net Assets $15,546,198 $15,869,371 =========== ===========
Results of Operations
Nine Months ended September 30, ------------------------------- 1997 1996 --------------- -------------- Revenue Rental income $2,377,443 $2,402,361 Other 3,563 3,433 ---------- ---------- 2,381,006 2,405,794 ---------- ---------- Expenses Operating expenses 805,920 804,201 Depreciation and amortization 379,120 405,033 ---------- ---------- 1,185,040 1,209,234 ---------- ---------- Net income $1,195,966 $1,196,560 ========== ==========
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 - ----------------- The following is a summary of the Partnership's investment in one wholly- owned property:
September 30, 1997 December 31, 1996 ------------------- ------------------ Land $ 347,772 $ 347,772 Buildings and improvements 1,036,148 1,031,512 Accumulated depreciation and amortization (224,876) (138,503) Net operating assets 12,607 25,187 ---------- ---------- $1,171,651 $1,265,968 ========== ==========
NOTE 4 - SUBSEQUENT EVENT - ------------------------- Distributions of cash from operations relating to the quarter ended September 30, 1997 were made on October 30, 1997 in the aggregate amount of $461,621 ($6.68 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 and 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 $35,196,266 has been returned to the limited partners through September 30, 1997. At September 30, 1997, the Partnership had $2,467,203 in cash, cash equivalents and short-term investments, of which $461,621 was used for operating cash distributions to partners on October 30, 1997; the remainder is being retained as working capital reserves. On October 24, 1996, the Partnership made a capital distribution of $519,946 ($7.60 per limited partnership unit) representing undistributed proceeds from the sales of various properties prior to 1994. The adjusted capital contribution after this distribution was $485.54 per unit. Also on October 24, 1996, the Partnership made a special operating cash distribution of $364,186 ($5.27 per limited partnership unit) attributable to a discretionary reduction of previously accumulated cash reserves. The source of future liquidity and cash distributions to partners will primarily 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 1997 and 1996 were made at the annualized rate of 5.5% on the adjusted capital contribution. The carrying value of real estate investments in the financial statements at September 30, 1997 is at depreciated cost, or if the investment's carrying value is determined not to be recoverable through expected undiscounted future cash flows, the carrying value is reduced to estimated fair market value. The fair market value of such investments is further reduced by the estimated cost of sale for properties held for sale. Carrying value may be greater or less than current appraised value. At September 30, 1997, 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 determined by the managing 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 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 North Cabot Industrial Park is a wholly-owned property. 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 remained at 100% during the third quarter of 1997, where it has been since September 30, 1996. Occupancy at Bayberry Apartments remained at 96% during the third quarter, consistent with June 30, 1997. (Occupancy was 89% at December 31, 1996 and 90% at September 30, 1996.) Occupancy at 270 Technology Park declined slightly during the third quarter of 1997 to 80% from 82% at June 30, 1997. A tenant representing 18% of the space vacated upon expiration of their lease on March 31, 1997. (Occupancy was 98% at December 31, 1996 and September 30, 1996.) Investment Results Interest on cash equivalents and short-term investments decreased by approximately $42,000, or 32%, between the first nine months of 1996 and 1997. This decrease is primarily due to lower invested balances as a result of additional distributions from reserves in October 1996 which was partially offset by higher short-term yields in 1997. Real estate operating results were $1,228,465 for the first nine months of 1997, and $1,181,256 for the comparable period of 1996. At North Cabot, 1997 operations improved due to increased occupancy and lower operating expenses attributable to tenant write-offs and legal expenses of approximately $26,000 in 1996. These increases in operations were partially offset by increased amortization expense, commencing in mid-1996, related to certain tenant improvements. Operating income also increased at Bayberry primarily due to the increase in occupancy mentioned above. At 270 Technology Park, operating results declined, consistent with the occupancy decrease discussed above. Cash from operations increased by approximately $37,000 between the two nine-month periods. The increase is primarily due to lower outlays for tenant improvements at North Cabot in 1997, partially offset by the timing of distributions from both joint ventures. Portfolio Expenses General and administrative expenses primarily consist of real estate appraisal, legal, accounting, printing and servicing agent fees. These expenses increased by approximately $23,000 or 13%, between the first nine months of 1996 and 1997 primarily due to an increase in accounting fees. 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. Management fees decreased slightly between the two nine-month periods consistent with the decrease in distributable cash flow. NEW ENGLAND LIFE PENSION PROPERTIES III; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30, 1997 PART II OTHER INFORMATION ------------------- Items 1-5 Not Applicable Item 6. Exhibits and Reports on Form 8-K a. Exhibits: (27) Financial Data Schedule b. Reports on Form 8-K: No Current Reports on Form 8-K were filed during the quarter ended September 30, 1997. 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 12, 1997 /s/ James J. Finnegan ------------------------------- James J. Finnegan Vice President of Managing General Partner, Copley Properties Company III, Inc. November 12, 1997 /s/ Karin J. Lagerlund -------------------------------- Karin J. Lagerlund Principal Financial and Accounting Officer of Managing General Partner, Copley Properties Company III, Inc. EX-27 2 FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-1997 SEP-30-1997 1,549,068 918,135 0 0 0 2,467,203 18,604,289 224,876 21,071,492 133,054 0 0 0 0 20,938,438 21,071,492 1,395,934 1,486,230 63,448 63,448 437,306 0 0 985,476 0 985,476 0 0 0 985,476 14.26 14.26
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