-----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, JX74VjDrBuK/EWtFuj7imfIBvw4NQ9e+/y6WZVACODEGdD28Bz5OZQC2pvR5Pff7 t5PeOiZ40rBXa8uzwY2xpg== 0000936392-99-000310.txt : 19990326 0000936392-99-000310.hdr.sgml : 19990326 ACCESSION NUMBER: 0000936392-99-000310 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990325 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EXCEL PROPERTIES LTD CENTRAL INDEX KEY: 0000785932 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 870426335 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 033-02320 FILM NUMBER: 99572005 BUSINESS ADDRESS: STREET 1: 16955 VIA DEL CAMPO #200 CITY: SAN DIEGO STATE: CA ZIP: 92127 BUSINESS PHONE: 6194859400 MAIL ADDRESS: STREET 1: 16955 VIA DEL CAMPO STREET 2: STE 110 CITY: SAN DIEGO STATE: CA ZIP: 92127 10-K 1 FORM 10-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT UNDER SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended: Commission File Number: DECEMBER 31, 1998 33-2320 - -------------------------- ----------------------- EXCEL PROPERTIES, LTD. (Exact name of registrant as specified in its charter) CALIFORNIA 87-0426335 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification Number) 16955 VIA DEL CAMPO, SUITE 110 SAN DIEGO, CALIFORNIA 92127 (Address of principal executive offices and zip code) Registrant's telephone number, including area code: (619) 485-9400 Securities registered pursuant to Section 12(b) of the Act: NONE 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 (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. (1) Yes [X] No [ ] (1) Yes [X] No [ ] 2 PART I ITEM 1. DESCRIPTION OF BUSINESS Excel Properties, Ltd., a California limited partnership (the "Partnership"), was organized to purchase commercial real estate properties for cash and to hold these assets for investment. The general partners of the Partnership are New Plan Excel Realty Trust, Inc., a Maryland corporation, and Gary B. Sabin, an individual. The Partnership was formed on September 19, 1985 and will continue in existence until December 31, 2015, unless dissolved earlier under certain circumstances. Properties that have been acquired by the Partnership are subject to long-term triple-net leases. Such leases require the lessee to pay the prescribed minimum rental plus all costs and expenses associated with the operations and maintenance of the property. These expenses include real property taxes, property insurance, repairs and maintenance and similar expenses. The net effect is that, under normal circumstances, no expenses will offset the rental revenue from the property. Most of the leases also provide some form of inflation hedge which calls for the minimum rent to be increased, based upon adjustments in the consumer price index, fixed rent escalation, or by a percentage of the gross sales of the tenant. Properties have been acquired free and clear of liens and encumbrances. The Partnership may seek to finance one or more of the properties and distribute the financing proceeds to the partners, but only if the financing proceeds equal or exceed 100% of the Partnership's capital invested in the property or properties (including a prorata amount of the Partnership's public offering unit selling commissions and organization expenses). To date, no properties owned by the Partnership have been the subject of any mortgage financing, therefore, at the present time, all properties remain free and clear from any mortgage loan, lien or encumbrance. The principal investment objectives of the Partnership are to provide to its limited partners: (1) preservation, protection and eventual return of the investment, (2) distributions of cash from operations, some of which may be a return of capital for tax purposes rather than taxable income, and (3) realization of long-term appreciation in value of properties. The general partners are currently attempting to sell all of the properties held by the Partnership. The selling of the properties could take several years as the general partners attempt to maximize the sales price of each property. There can be no assurance that the general partners will be successful in selling all of the properties or what price they can obtain. Additionally, the general partners may change its plans in the future. ITEM 2. PROPERTIES The Partnership presently owns twelve properties as follows: KINDER-CARE LEARNING CENTERS The Partnership owns six properties on lease to Kinder-Care, Inc., the nation's largest provider of day-care centers. KINDER-CARE LEARNING CENTER - GAHANNA, OHIO Date of purchase: May 28, 1987 Purchase price: $216,823 Property description: This property is located approximately fifteen miles northeast of Columbus, Ohio in the suburb of Gahanna. The building is located on .551 acres and contains 4,528 square feet. The current lease expires June 30, 2003. The annual rent over the remainder of the lease is as follows: January 1, 1999 to December 31, 2002 $43,016 January 1, 2003 to June 30, 2003 $21,508 2 3 KINDER-CARE LEARNING CENTER - GROVE CITY, OHIO Date of purchase: May 28, 1987 Purchase price: $222,340 Property description: This property is located in Grove City, Ohio, seven miles south of Columbus, Ohio. The building is located on .8939 acres and contains 4,528 square feet. The current lease expires November 30, 2003. The annual rent over the remainder of the lease is as follows: January 1, 2003 to November 30, 2003 $33,205 KINDER-CARE LEARNING CENTER - WEST CARROLLTON, OHIO Date of purchase: May 28, 1987 Purchase price: $190,337 Property description: This property is located approximately eight miles southwest of Dayton, Ohio in the suburb of West Carrollton. The building contains 4,650 square feet and is situated on .55 acres of land. The current lease expires December 31, 2001. The annual rent over the remainder of the lease is as follows: January 1, 1999 to December 31, 2001 $ 35,526 KINDER-CARE LEARNING CENTER - COLUMBUS, OHIO Date of purchase: May 28, 1987 Purchase price: $190,337 Property description: This property is located in Columbus, Ohio. The building is situated on .538 acres and contains 4,650 square feet. The property has been sublet by Kinder-Care to Children Today, another child-care provider. The property is on lease until July 31, 2001. The annual rent over the remainder of the lease is as follows: January 1, 1999 to December 31, 2000 $ 35,526 January 1, 2001 to July 31, 2001 $ 20,724 KINDER-CARE LEARNING CENTER - DAYTON, OHIO Date of purchase: May 28, 1987 Purchase price: $190,337 Property description: This property is located approximately thirty miles northeast of Dayton, Ohio in the Mud River Township. The building is situated on .645 acres and contains 4,650 square feet. The current lease expires December 31, 2001. The annual base rent over the remaining term of the lease is as follows: January 1, 1999 to December 31, 2001 $ 35,526 3 4 KINDER-CARE LEARNING CENTER - INDIANAPOLIS, INDIANA Date of purchase: May 2, 1989 Purchase price: $201,080 Property description: This property is located at 1034 N. Whitcomb Ave. in Indianapolis, Indiana. The building contains 4,487 square feet and is situated on .598 acres. The current lease expires December 31, 2000 with gross rents of $49,694 per year. PARAGON RESTAURANT GROUP, INC. The Partnership owns two properties operated as Mountain Jack's Restaurants, on lease to Paragon Steakhouse Restaurants, Inc. The company, headquartered in San Diego, California, is one of the nation's premier specialty restaurant chain operators. Their trade names include Mountain Jack's and Hungry Hunter. MOUNTAIN JACK'S RESTAURANT - MIDDLEBURG HEIGHTS, OHIO Date of purchase: July 21, 1987 Purchase price: $1,046,222 Property description: The property, situated on 1.72 acres and containing 6,331 square feet, is an upscale steak and seafood restaurant located in Middleburg Heights, Ohio, a suburb of Cleveland. It has seating for approximately 163 persons and parking for approximately 115 cars. The annual lease payment is the greater of $104,500 or 5% of the gross sales. The lease expires on July 20, 2005. MOUNTAIN JACK'S RESTAURANT - LAFAYETTE, INDIANA Date of purchase: September 29, 1987 Purchase price: $1,080,096 Property description: This property is located at 2411 State Road 26 East, Lafayette, Indiana. Lafayette is strategically located between Chicago, Illinois to the north and Indianapolis, Indiana to the south. It is the home of Purdue University. The property is situated on 1.72 acres, contains 8,274 gross square feet and has seating for approximately 294 persons. The site is ideally located along a main commercial artery and is surrounded by seven hotels. The annual lease payment is the greater of $107,800 or 5% of the gross sales. The lease expires on September 28, 2005. AUTOWORKS - BELLEVUE, NEBRASKA Date of purchase: July 5, 1988 Purchase price: $688,580 Property description: The property is located at a major shopping center at 915 Fort Crook Road, Bellevue, Nebraska, a suburb of Omaha, Nebraska. Bellevue is the home of the Strategic Air Command (SAC) which contributes largely to the area economy. The improvements consist of a free standing concrete block and glass building containing 4,870 square feet. The base minimum annual rent is $80,500 per year with scheduled rental increases occurring every third year of the lease based on increases in the Consumer Price Index not to exceed a 10% increase. The lease expires on July 5, 2008. 4 5 PONDEROSA RESTAURANT - ANN ARBOR, MICHIGAN Date of purchase: January 20, 1989 Purchase price: $759,618 Property description: The property, containing 5,034 square feet, is situated on approximately one acre located at 3354 East Washtenaw Street, Ann Arbor, Michigan. The property is surrounded by numerous commercial enterprises including the Arbor Land enclosed shopping mall. The lease calls for a minimum rent of $77,187 plus 6.5% of the annual gross sales in excess of the average annual sales for the years 1989 and 1990. The lease expires September 21, 2003. PAYLESS SHOE STORE - PLANT CITY, FLORIDA Date of purchase: December 1, 1989 Purchase price: $648,122 Property description: The property is located at 1801 Jim Redman Parkway, Plant City, Florida. Plant City is located approximately 18 miles northeast of the central business district of Tampa, Florida. The property is situated on .89 acres and contains 2,989 square feet. The lease is guaranteed by the May Department Store Co. The property is on lease until November 30, 1999 with four additional 5-year options. The minimum rent is $70,785 per year. The rent would be $82,682, $94,578, $106,495 and $118,372 for each option period should the options be exercised by the tenant. TODDLE HOUSE RESTAURANT - KENNER, LOUISIANA Date of purchase: November 26, 1991 Purchase price: $218,738 Property description: Toddle House Restaurants is a national restaurant chain. It features 24-hour service with a cook-to-order menu. Toddle House Restaurants, Inc. is a wholly-owned subsidiary of Diversified Hospitality Group, Inc. (DHG) which also operates the Steak 'N' Eggs Kitchen restaurants. The property is located at 2,841 Loyola, Kenner, Louisiana and contains 2,175 square feet. The land on which the restaurant is located is 16,800 square feet. Toddle House is currently in Chapter 11 Bankruptcy and did not pay any rent in 1998. The Partnership is attempting to re-lease or sell this property. ITEM 3. LEGAL PROCEEDINGS None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. ITEM 5. MARKET FOR REGISTRANT'S LIMITED PARTNERSHIP UNITS AND RELATED SECURITY HOLDER MATTERS A) A public market for the Partnership's units does not exist. 5 6 B) As of December 31, 1998, there were 1,670 investors holding 135,199 units. C) The Partnership made its first cash flow distribution from operations in May 1987. Since that date, consistent cash distributions have been made at the end of each calendar quarter through December 31, 1998. The Partnership expects to continue to make cash distributions on a quarterly basis in the future to the extent the Partnership continues to generate net operating income, or realize proceeds through property sales. PART II ITEM 6. SELECTED FINANCIAL DATA The following information has been selected from the financial statements of the Partnership:
INCOME STATEMENT DATA 1998 1997 1996 1995 1994 ------------ ------------ ------------ ------------ ------------ Total rental revenue $ 670,691 $ 827,221 $ 1,048,015 $ 1,185,371 $ 1,145,656 Interest and other income 119,518 156,668 202,786 129,399 112,772 Operating expenses: Property expenses 32,240 70,308 214,221 63,761 (2,438) General and administrative 49,893 94,589 59,106 36,972 43,955 Depreciation 126,485 143,021 176,133 193,696 212,716 Net income before real estate sales 581,591 675,971 801,341 1,020,341 1,004,195 Gain on sale of real estate 99,986 84,373 880,643 450,293 -- Net income 681,577 760,344 1,681,984 1,470,634 1,004,195 Per Unit Data: Net income 4.71 5.45 12.07 10.77 7.33 Distributions 15.05 21.96 25.10 8.50 8.90 BALANCE SHEET DATA Net real estate 4,452,546 5,777,802 6,213,838 8,414,719 9,451,413 Cash 412,033 444,616 1,393,367 1,817,201 641,053 Accounts receivable, net 8,998 19,897 79,217 165,083 19,135 Total assets 6,041,019 7,415,403 9,665,303 11,417,867 11,138,851 Total liabilities 19,369 37,333 45,898 50,213 79,274 Partners' equity 6,021,650 7,378,070 9,619,405 11,367,654 11,059,577
6 7 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Certain statements in this Form 10-K may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities and Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results of the Partnership to be materially different from historical results or from any results expressed or implied by such forward-looking statements. The following discussion should be read in conjunction with the financial statements and the notes thereto. Historical results and percentage relationships set forth in the Statements of Income contained in the Financial Statements, including trends which might appear, should not be taken as indicative of future operations. Comparison of year ended December 31, 1998 to year ended December 31, 1997. The net income of the Partnership decreased by $78,767 in 1998 when compared to 1997. The differences in income and expenses are explained below. Rental revenue decreased by $156,530 or 19% to $670,691 in 1998 from $827,221 in 1997. The decrease in rental revenue was primarily attributed to the sale in August 1997 of a building that was leased to Kindercare, and to Toddle House Restaurant, which is bankrupt and no longer being charged rents. These properties accounted for $49,252 in rental revenue in 1997. In May 1998, the sale of a building leased to Timber Lodge Restaurant accounted for approximately $70,627 in rental revenue in 1997 as compared to $30,201 in 1998. In September 1998, the sale of a building leased to Ponderosa Restaurant, which was vacant in 1998, accounted for approximately $70,359 in rental revenue in 1997 as compared to $0 in 1998. Interest income decreased by $37,150 or 24% in 1998 from 1997. This decrease was due primarily to finance charges for Toddle House Restaurants in 1997 of approximately $28,680. No such charges were assessed in 1998. Operating expenses decreased by $99,300 in 1998 from 1997. The net decrease was primarily attributed to the $45,371 decrease in bad debt expense and a decrease of $42,614 in accounting and legal expenses. The bad debt expense for 1998 was $3,521 as compared to $48,892 in 1997. The decrease in bad debts expense relates to reserves for Toddle House Restaurants, which is in Chapter 11 Bankruptcy, but was being charged rents in 1997. The decrease in accounting and legal expenses relates to legal fees paid by the Partnership in 1997 of approximately $48,131 relating to Ponderosa Restaurant. No such fees were incurred in 1998. Property tax expense increased by $8,320 or 61%. This increase is attributed to the Company incurring property taxes expenses that would have been paid by Ponderosa, who had vacated one of the Company's properties and has stopped paying rents, and Toddle House, which is in Chapter 11 Bankruptcy. Overall, other expenses and other income varied little between the two accounting periods. During 1998, the Partnership sold two properties. In May 1998, the Partnership sold a building leased to Timber Lodge Restaurant in Burnsville, Minnesota. The net sales price was $689,760 and a $100,094 gain was recognized on the sale. In September 1998, the Partnership sold a building leased to Ponderosa Restaurant in Alton, Illinois. The net sales price was $608,997 and a $108,000 loss was recognized on the sale. The Partnership has continued to distribute cash flows to the limited partners since 1989. Management anticipates that distributions from cash flows will continue in 1999. The distributions may be supplemented by proceeds from property sales, if any. If additional properties are sold and proceeds are distributed to the partners instead of reinvested, future distributions are expected to decrease. Comparison of year ended December 31, 1997 to year ended December 31, 1996. The net income of the Partnership decreased by $921,640 in 1997 when compared to 1996. The differences in income and expenses are explained below. 7 8 Rental revenue decreased by $183,893 or 18% to $827,221 in 1997 from $1,011,114 in 1996. The decrease in rental revenue is primarily attributed to the sale of four properties in 1996, which accounted for $190,551 in rental revenue in 1996. In 1997, the company sold one operating property which accounted for $7,200 in rental revenue in 1997. Percentage rents decreased $36,901 due to the sale of the Denny's building in 1996 that generated all the percentage rents in 1996. Interest income decreased by $46,118 in 1997 from 1996. This decrease was due to finance charges to Ponderosa Restaurant and Toddle House, charged in 1996 but not in 1997, and larger cash balances in 1996 than 1997 from proceeds relating to certain property sales before the funds were distributed to the partners. Operating expenses decreased by $141,542 in 1997 from 1996. The net decrease was primarily attributed to the $134,716 decrease in bad debt expense and the decrease of $17,563 in depreciation. The bad debt expense for 1997 was $48,892 as compared to $183,608 in 1996. The decrease in bad debts was due largely to the write-off of finance charges reserved for Toddle House in 1996. No finance charges were made in 1997 relating to this tenant. Legal expense increased by $28,399 primarily due to collection efforts on amounts owed to the Partnership from Ponderosa which incurred fire damages during the year. Depreciation expense decreased primarily due to the properties sold during 1996. Overall, other expenses and other income varied little between the two accounting periods, except for office expenses which increased by $8,073 or 102%. The increase was due primarily to costs related to SEC filings and various expenses relating to the Ponderosa restaurant. During 1997 the Partnership sold one property and a parcel of land. In August, the Partnership sold a building leased to Kindercare located in Indianapolis, Indiana for $182,388. The Partnership recognized a net gain of $18,173. In September, the partnership sold a parcel of land in Las Vegas, Nevada for $195,000. The Partnership recognized a gain of $66,200 on the sale. In 1996, the Partnership sold four properties and a parcel of land for $2,752,006 and realized a net gain of $880,643. Inflation is not expected to negatively impact the operations of the Partnership due to the structure of its investment portfolio. The leases all provide a minimum rental which the lessee is obligated to pay. Additionally, most leases contain some form of inflation hedge which provides for the rent to be increased. The rent increases may be in the form of scheduled fixed minimum rent increases, Consumer Price Index (CPI) adjustments or by participating in a percentage of the gross sales volume of the tenant. Since the triple-net leases require the lessees to pay for all property operating expenses, the net effect is that the revenue received will not be eroded away as operating expenses increase due to inflation. LIQUIDITY AND CAPITAL RESOURCES Each of the Partnership's present properties is leased to an operator/lessee on an absolute net basis, whereby the lessee pays all maintenance, repairs, property taxes and insurance expect for a building previously leased to Toddle House, which is now vacant. The Partnership's leases typically provide a minimum rental plus a percentage of the lessee's gross revenues from the property operation and/or a cost of living increase and/or a fixed rental increase. The Partnership currently owns and manages twelve properties. The Partnership has $412,033 in cash at December 31, 1998, with no outstanding debt on any of the properties that it owns. The Partnership has income of approximately $57,000 per month from rental income which management anticipates would cover expenses which might need to be paid. However, the Partnership does not expect to use funds for costs and expenses associated with operations and maintenance of the properties, except miscellaneous costs on the dark Toddle House building, as the properties are leased on a triple-net lease basis. The Partnership's primary source of cash in 1999 is expected to continue to come from the rental of the real estate properties currently owned. The Partnership is attempting to sell its properties which would provide additional cash for distribution. There can be no assurance, however, that the Partnership will be successful in selling its properties. Management anticipates that rental income will be sufficient to cover the operating expenses of the Partnership and allow for cash distributions to be made to the limited partners. The Partnership has the policy of paying quarterly distributions to the limited partners of the actual cash earned by the Partnership in the preceding quarter. Therefore, if expenses were to increase or income were to decrease the Partnership would decrease the quarterly distributions to the limited partners. Management expects that the liquidity of the Partnership will change if properties are sold and/or excess cash is distributed to the Partners. YEAR 2000 The Partnership currently uses Management Reports Inc. ("MRI") software on a Novell local area network. MRI has been modified to accept four digits as the year date and is Year 2000 compliant. The Partnership has made an assessment of the impact of the Year 2000 issue on its internal operations and has developed a plan to bring its computer systems into 8 9 compliance by the Year 2000. The plan addresses the modification or replacement of applications and operating systems to achieve timely Year 2000 compliance and also includes communication and analysis with outside vendors with whom the Partnership interfaces electronically. Although it is not possible to quantify the aggregate cost of such modifications, the Partnership does not anticipate that the cost will have a material adverse effect on its financial position or results of operations. The foregoing discussion of Year 2000 issues contains forward-looking statements and actual compliance may be affected by a number of factors which include the timing and compliance by the Partnership's outside vendors and suppliers. This discussion should be read in conjunction with the Partnership's disclosures under the heading "Certain Cautionary Statements" below. CERTAIN CAUTIONARY STATEMENTS Certain statements in this Form 10-Q are not historical fact and constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results of the Partnership to be materially different from historical results or from any results expressed or implied by such forward-looking statements. Such risk, uncertainties and other factors include, but are not limited to, the following risks: Economic Performance and Value of Properties Dependent on Many Factors. Real property investments are subject to varying degrees of risk. The economic performance and values of real estate can be affected by many factors, including changes in the national, regional and local economic climates, local conditions such as an oversupply of space or reductions in demand for real estate in the area, the attractiveness of the properties to tenants, competition from other available space, the ability of the owner to provide adequate maintenance and insurance and increased operating costs. Dependence on Rental Revenue from Real Property. Since substantially all of the Partnership's income is derived from rental revenue from real property, the Partnership's income and funds for distribution would be adversely affected if a significant number of the Partnership's tenants were unable to meet their obligations to the Partnership or if the Partnership were unable to lease a significant amount of space in its buildings on economically favorable lease terms. There can be no assurance that any tenant whose lease expires in the future will renew such lease or that the Partnership will be able to re-lease space on economically advantageous terms. Illiquidity of Real Estate Investments. Equity real estate investments are relatively illiquid and therefore tend to limit the ability of the Partnership to vary its portfolio promptly in response to changes in economic or other conditions. Risk of Bankruptcy of Tenants. The bankruptcy or insolvency of a tenant would have an adverse impact on the property affected and on the income produced by such property. Under bankruptcy law, a tenant has the option of assuming (continuing) or rejecting (terminating) any unexpired lease. If the tenant assumes its lease with the Partnership, the tenant must cure all defaults under the lease and provide the Partnership with adequate assurance of its future performance under the lease. If the tenant rejects the lease, the Partnership's claim for breach of the lease would (absent collateral securing the claim) be treated as a general unsecured claim. The amount of the claim would be capped at the amount owed for unpaid pre-petition lease payments unrelated to the rejection, plus the greater of one years' lease payments or 15% of the remaining lease payments payable under the lease (but not to exceed the amount of three years' lease payments). At December 31, 1998, the Company had one tenant under bankruptcy. The Company is attempting to sell or lease this property. Environmental Risks. Under various federal, state and local laws, ordinances and regulations, the Partnership may be considered an owner or operator of real property or may have arranged for the disposal or treatment of hazardous or toxic substances and, therefore, may become liable for the costs of removal or remediation of certain hazardous substances released on or in its property or disposed of by it, as well as certain other potential costs which could relate to hazardous or toxic substances (including governmental fines and injuries to persons and property). Such liability may be imposed whether or not the Partnership knew of, or was responsible for, the presence of such hazardous toxic substances. 9 10 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Partnership is filing as part of this report, its financial statements which contain the following:
Page ---- 1) Report of Independent Accountants F-2 2) Balance Sheets December 31, 1998 and 1997 F-3 3) Statements of Income Years Ended December 31, 1998, 1997 and 1996 F-4 4) Statements of Changes in Partners' Equity Years Ended December 31, 1998, 1997 and 1996 F-5 5) Statements of Cash Flows Years Ended December 31, 1998, 1997 and 1996 F-6 6) Notes to Financial Statements F-7 7) Financial Statement Schedules: II - Valuation and Qualifying Accounts Years Ended December 31, 1998, 1997 and 1996 F-11 III - Real Estate and Accumulated Depreciation December 31, 1998 F-12
PART III ITEM 10. GENERAL PARTNERS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP The general partners of the Partnership are New Plan Excel Realty Trust, Inc., a Maryland corporation, and Gary B. Sabin. Neither Gary B. Sabin nor the executive officers of New Plan Excel Realty Trust, Inc. receive compensation from the Partnership. The General Partner and the officers and employees of New Plan Excel Realty Trust, Inc. spend such time in the administration of Partnership affairs to the extent deemed necessary. The names, ages and positions of responsibility held by the executive officers and directors of New Plan Excel Realty Trust, Inc. are as follows:
Name Age Position ---- --- -------- Gary B. Sabin 44 President and Chairman of the Board Richard B. Muir 43 Executive Vice President and Director Jeffrey D. Egertson 46 Chief Financial Officer and Senior Vice President Ronald H. Sabin 48 Senior Vice President Graham R. Bullick 48 Senior Vice President Mark T. Burton 38 Senior Vice President S. Eric Ottesen 43 General Counsel and Senior Vice President
10 11 FAMILY RELATIONSHIPS Gary B. Sabin and Ronald H. Sabin are brothers. BUSINESS EXPERIENCE The following is a brief background of the directors and executive officers of New Plan Excel Realty Trust, Inc (the "Company"). GARY B. SABIN has served as Chief Executive Officer, President and Chairman of the Board of Directors since January 1989. He is a graduate of Brigham Young University and Stanford University's Graduate School of Business where he received a master's degree as a Sloan Fellow. Mr. Sabin has extensive experience in the financial services industry with emphasis in the areas of commercial real estate and marketable securities. RICHARD B. MUIR has served as Executive Vice President, Secretary and Director of the Company since January 1989. Mr. Muir has worked extensively in the field of commercial real estate, developing expertise in real estate acquisition, property management, leasing and project financing. JEFFERY D. EGERTSON, CPA has served as Chief Financial Officer and Senior Vice President of the Company since January 1999. He previously served as Vice President, Financial Services of TrizecHahn from 1997 to 1999, and partner in charge of real estate practices for the Los Angeles office of Coopers & Lybrand from 1989 to 1997. RONALD H. SABIN has served as Senior Vice President of the Company in charge of property management since January 1989. Mr. Sabin has also served in various similar capacities with other affiliated companies since 1979. GRAHAM R. BULLICK, Ph.D. has served as Senior Vice President of the Company since January 1991. Prior to joining the company, Mr. Bullick served for four years as an account manager of a company specializing in organizational development and service/quality systems. MARK T. BURTON has served as Vice President of the Company since January 1989 and as a Senior Vice President since January 1996. Mr. Burton's duties for the Company primarily consist of the evaluation and selection of property acquisitions and dispositions. Mr. Burton has served in various capacities with other affiliated companies since 1984. S. ERIC OTTESEN has served as General Counsel of the Company since January 1995. Prior to 1995, Mr. Ottesen worked as a partner in a law firm. ITEM 11. EXECUTIVE COMPENSATION The Partnership has no executive officers and has not paid nor proposes to pay any compensation or retirement benefits to the directors or executive officers of New Plan Excel Realty Trust, Inc. See ITEM 13 for compensation to the general partner. 11 12 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT No person is known by the Partnership to be the beneficial owner of more than 5% of the limited partner units. The following information sets forth the number of units owned directly or indirectly by each general partner.
PERCENT OF NUMBER UNITS AT TITLE OF CLASS BENEFICIAL OWNER OF UNITS 12/31/98 -------------- ---------------- -------- -------- Units of Limited Partnership Interest Gary B. Sabin None None Units of Limited New Plan Excel Partnership Interest Realty Trust, Inc. 853 0.630%
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The table below reflects compensation paid to New Plan Excel Realty Trust, Inc., a general partner, or their affiliates during the year ended December 31, 1998:
DESCRIPTION AMOUNT ----------- ------ Management fees $ 6,750 Administrative fees 10,800 Accounting 6,480
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (A) Documents filed as part of this report: (1) (2) Financial statements under Item 8 in Part II hereof. (3) Exhibits: None (B) Reports on Form 8-K No reports on Form 8-K have been filed during the past year. 12 13 SIGNATURES Pursuant to the requirement of Section 13 or 15(d) 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. Date: March 24, 1999 Excel Properties, Ltd. (Registrant) New Plan Excel Realty Trust, Inc. (General Partner) By: /s/ Gary B. Sabin ------------------------------- Gary B. Sabin President By: /s/ James Y. Nakagawa ------------------------------- James Y. Nakagawa Principal Accounting Officer 13 14 INDEX TO FINANCIAL STATEMENTS ----------
PAGE ---- 1. FINANCIAL STATEMENTS: Report of Independent Accountants - Squire & Co........................ F-2 Balance Sheets December 31, 1998 and 1997.......................................... F-3 Statements of Income Years Ended December 31, 1998, 1997 and 1996........................ F-4 Statements of Changes in Partners' Equity Years Ended December 31, 1998, 1997 and 1996........................ F-5 Statements of Cash Flows Years Ended December 31, 1998, 1997 and 1996........................ F-6 Notes to Financial Statements.......................................... F-7 2. FINANCIAL STATEMENT SCHEDULES: Schedule II - Valuation and Qualifying Accounts Years Ended December 31, 1998, 1997 and 1996........................ F-11 Schedule III - Real Estate and Accumulated Depreciation December 31, 1998................................................... F-12
F-1 15 REPORT OF INDEPENDENT ACCOUNTANTS To the Partners Excel Properties, Ltd. We have audited the accompanying balance sheets of Excel Properties, Ltd., as of December 31, 1998 and 1997, and the related statements of income, changes in partners' equity, and cash flows for each of the three years in the period ended December 31, 1998. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Excel Properties, Ltd., as of December 31, 1998 and 1997, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1998, in conformity with generally accepted accounting principles. Our audits were made for the purposes of forming an opinion in the basic financial statements taken as a whole. Financial statement Schedules II and III are presented for the purpose of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. SQUIRE & CO. February 5, 1999 Poway, California F-2 16 EXCEL PROPERTIES, LTD. BALANCE SHEETS DECEMBER 31, 1998 AND 1997 ----------
1998 1997 ----------- ----------- ASSETS Real estate: Land $ 2,142,112 $ 2,728,464 Buildings 3,510,518 4,417,200 Less: accumulated depreciation (1,200,084) (1,367,861) ----------- ----------- Net real estate 4,452,546 5,777,803 Cash 412,033 444,616 Accounts receivable, less allowance for bad debts of $0 and $191,764 in 1998 and 1997, respectively 8,998 19,897 Notes receivable 1,159,104 1,167,273 Interest receivable 8,338 5,814 ----------- ----------- Total assets $ 6,041,019 $ 7,415,403 =========== =========== LIABILITIES AND PARTNERS' EQUITY Liabilities: Accounts payable: Affiliates $ 598 $ 697 Other 2,493 2,139 Property taxes payable 0 19,089 Tenant security deposits 0 5,000 Deferred rental income 16,278 10,408 ----------- ----------- Total liabilities 19,369 37,333 ----------- ----------- Partners' Equity: General partner's equity 41,464 16,376 Limited partners' equity, 235,308 units authorized, 135,199 units issued and outstanding 5,980,186 7,361,694 ----------- ----------- Total partners' equity 6,021,650 7,378,070 ----------- ----------- Total liabilities and partners' equity $ 6,041,019 $ 7,415,403 =========== ===========
The accompanying notes are an integral part of the financial statements F-3 17 EXCEL PROPERTIES, LTD. STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996 ----------
1998 1997 1996 ---------- ---------- ---------- Revenue: Base rent $ 670,691 $ 827,221 $1,011,114 Percentage rents -- -- 36,901 Interest and other income 119,518 156,668 202,786 ---------- ---------- ---------- Total revenue 790,209 983,889 1,250,801 ---------- ---------- ---------- Operating Expenses: Bad debts 3,521 48,892 183,608 Depreciation 126,485 143,021 176,133 Accounting and legal 25,220 67,834 40,424 Property taxes 21,969 13,649 17,962 Administrative 10,800 10,800 10,800 Management fees 6,750 7,767 9,414 Office expenses 13,873 15,955 7,882 Miscellaneous -- -- 3,237 ---------- ---------- ---------- Total operating expenses 208,618 307,918 449,460 ---------- ---------- ---------- Net income before real estate sales 581,591 675,971 801,341 Gain - sale of real estate 99,986 84,373 880,643 ---------- ---------- ---------- Net income $ 681,577 $ 760,344 $1,681,984 ========== ========== ========== Net income allocated to: General partner $ 45,438 $ 22,820 $ 49,182 Limited partners 636,139 737,524 1,632,802 ---------- ---------- ---------- Total $ 681,577 $ 760,344 $1,681,984 ========== ========== ========== Net income per weighted average limited partnership unit $ 4.71 $ 5.45 $ 12.07 ========== ========== ==========
The accompanying notes are an integral part of the financial statements F-4 18 EXCEL PROPERTIES, LTD. STATEMENTS OF CHANGES IN PARTNERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996 ----------
GENERAL LIMITED PARTNERS PARTNERS TOTAL ------------ ------------ ------------ Balance at January 1, 1996 $ 8,691 $ 11,358,963 $ 11,367,654 Net income - 1996 49,182 1,632,802 1,681,984 Partner distributions - 1996 (34,300) (3,395,933) (3,430,233) ------------ ------------ ------------ Balance at December 31, 1996 23,573 9,595,832 9,619,405 Net income - 1997 22,820 737,524 760,344 Partner distributions - 1997 (30,017) (2,971,662) (3,001,679) ------------ ------------ ------------ Balance at December 31, 1997 16,376 7,361,694 7,378,070 Liquidation of Limited Partnership units - 1998 0 (3,000) (3,000) Net Income - 1998 45,438 636,139 681,577 Partner distributions - 1998 (20,350) (2,014,647) (2,034,997) ------------ ------------ ------------ Balance at December 31, 1998 $ 41,464 $ 5,980,186 $ 6,021,650 ============ ============ ============
The accompanying notes are an integral part of the financial statements F-5 19 EXCEL PROPERTIES, LTD. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996 ----------
1998 1997 1996 ----------- ----------- ----------- Cash flows from operating activities: Net income $ 681,577 $ 760,344 $ 1,681,984 Adjustments to reconcile net income to net cash provided by operations: Depreciation 126,485 143,021 176,133 Allowance for doubtful accounts (191,765) 48,892 184,422 Gain on sale of real estate (99,986) (84,373) (880,643) Changes in operating assets and liabilities: (Increase) decrease in assets: Accounts receivable 202,664 10,429 (95,237) Interest receivable 81 75 (698) Other assets (2,605) -- -- Increase (decrease) in liabilities: Accounts payable 256 1,036 (2,237) Property taxes payable (19,089) 19,089 (4,258) Tenant security deposits (5,000) -- -- Deferred rental income 5,870 (28,691) (1,139) ----------- ----------- ----------- Net cash provided by operating activities 698,488 869,822 1,058,327 ----------- ----------- ----------- Cash flows from investing activities: Collection of escrow deposits -- 963,968 -- Proceeds from real estate sales 1,298,757 211,638 1,941,423 Collection of notes receivable 8,169 7,500 6,649 ----------- ----------- ----------- Net cash provided by investing activities 1,306,926 1,183,106 1,948,072 ----------- ----------- ----------- Cash flows from financing activities: Redemption of partnership units (3,000) -- -- Cash distributions (2,034,997) (3,001,679) (3,430,233) ----------- ----------- ----------- Net cash used by financing activities (2,037,997) (3,001,679) (3,430,233) ----------- ----------- ----------- Net decrease in cash (32,583) (948,751) (423,834) Cash at beginning of year 444,616 1,393,367 1,817,201 ----------- ----------- ----------- Cash at end of year $ 412,033 $ 444,616 $ 1,393,367 =========== =========== ===========
The accompanying notes are an integral part of the financial statements F-6 20 EXCEL PROPERTIES, LTD. NOTES TO FINANCIAL STATEMENTS ---------- 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: ORGANIZATION Excel Properties, Ltd. (the "Partnership") was formed in the State of California on September 19, 1985, for the purpose of, but not limited to, acquiring real property and syndicating such property. REAL ESTATE Land and buildings are recorded at cost. Buildings are depreciated using the straight-line method over the tax life of 31.5 years. The tax life does not differ materially from the economic useful life. Expenditures for maintenance and repairs are charged to expense as incurred. Significant renovations are capitalized. The cost and related accumulated depreciation of real estate are removed from the accounts upon disposition. Gains and losses arising from the dispositions are reported as income or expense. The Partnership assesses whether there has been an impairment in the value of its real estate by considering factors such as expected future operating income, trends, and prospects, as well as the effects of the demand, competition and other economic factors. Such factors include a lessee's ability to pay rent under the terms of the lease. If a property is leased at a significantly lower rent, the Partnership may recognize a permanent impairment loss if the income stream is not sufficient to recover its investment. CASH DEPOSITS At December 31, 1998, the carrying amount of the Partnership's cash deposits total $412,033. The bank balances are $412,317 of which $200,000 which is covered by federal depository insurance. STATEMENT OF CASH FLOWS - SUPPLEMENTAL DISCLOSURE There was no interest or taxes paid for the years ended December 31, 1998, 1997 or 1996. The Partnership had no noncash investing or financing transactions in 1998. In 1997, the Partnership assumed a note receivable in the amount of $165,750 in conjunction with the sale of a land parcel. In 1996, $963,968 in proceeds from the sale of a restaurant in Colorado were deposited in an escrow account. These transactions are excluded from the statement of cash flows. INCOME TAXES The Partnership is not liable for payment of any income taxes because as a partnership, it is not subject to income taxes. The tax effects of its activities accrue directly to the partners. ACCOUNTS RECEIVABLE All net accounts receivable are deemed to be collectible within the next 12 months. Continued F-7 21 EXCEL PROPERTIES, LTD. NOTES TO FINANCIAL STATEMENTS, CONTINUED ---------- 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED: FINANCIAL STATEMENT ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. RECLASSIFICATIONS Certain reclassifications have been made to the financial statements for the years ended December 31, 1998 and 1997 in order to conform with the current period presentation. 2. FINANCIAL STATEMENT AND TAX RETURN DIFFERENCES The Partnership had the following differences between the financial statements and the Partnership tax return.
1998 1997 1996 ------------ ------------ ------------ Net income: Financial statements $ 681,577 $ 760,344 $ 1,681,984 Tax returns 487,913 724,356 1,870,650 ------------ ------------ ------------ Difference $ 193,664 $ 35,988 $ (188,666) ============ ============ ============ Difference is due to: Allowance for bad debts $ 193,664 $ 44,252 $ (184,422) Deferred gain - like kind exchange -- (8,264) (4,244) ------------ ------------ ------------ $ 193,664 $ (188,666) $ (188,666) ============ ============ ============ Partners' equity: Financial statements $ 5,533,737 $ 7,378,070 $ 9,619,405 Tax returns 6,741,160 8,779,157 11,056,481 ------------ ------------ ------------ Difference $ (1,207,423) $ (1,401,087) $ (1,437,076) ============ ============ ============ Difference is due to: Syndication costs $ (1,498,718) $ (1,498,718) $ (1,498,718) Allowance for bad debts 1,900 (191,764) (236,017) Deferred gain - like-kind exchange -- -- 8,264 Deferred gain on sale of building 289,395 289,395 289,395 ------------ ------------ ------------ $ (1,207,423) $ (1,401,087) $ (1,437,076) ============ ============ ============
Continued F-8 22 EXCEL PROPERTIES, LTD. NOTES TO FINANCIAL STATEMENTS, CONTINUED ---------- 3. FEES PAID TO GENERAL PARTNER: The Partnership has paid the General Partner or its affiliates the following fees:
1998 1997 1996 ------- ------- ------- Management fees $ 6,750 $ 7,767 $ 9,414 Administrative fees 10,800 10,800 10,800 Accounting 6,480 14,994 16,080
4. NOTES RECEIVABLE: The Company had the following notes receivable at December 31, 1998 and 1997:
1998 1997 ---------- ---------- Note from the sale of land, interest at 10%. Due upon the occurrence of certain events. $ 165,750 $ 165,750 Note from sale of building, receipts of $1,390 per month at 9% interest. Secured by building sold. Currently due. 130,522 135,225 Note from sale of building, interest only receipts of $5,366 per month at 8.5% interest. Secured by building sold. Due November 2003. 757,500 757,500 Note from sale of building, receipts of $1,004 per month at 8% interest. Secured by building sold. Due December 2001. 105,332 108,798 ---------- ---------- Total notes receivable $1,159,104 $1,167,273 ========== ==========
5. MINIMUM FUTURE RENTALS: The Company leases single-tenant buildings to tenants under noncancelable operating leases requiring the greater of fixed or percentage rents. The leases are primarily triple-net, requiring the tenant to pay all expenses of operating the property such as insurance, property taxes, repairs and utilities. Minimum future rental revenue for the next five years for the commercial real estate currently owned and subject to noncancelable operating leases is as follows:
YEAR ENDING DECEMBER 31, ------------------------ 1999 $ 670,386 2000 605,500 2001 541,003 2002 449,228 2003 403,475 Thereafter 713,753
Continued F-9 23 EXCEL PROPERTIES, LTD. NOTES TO FINANCIAL STATEMENTS, CONTINUED ---------- 6. REAL ESTATE: During 1998, the Partnership sold two properties. In May 1998, the Partnership sold a building leased to Timberlodge Restaurant in Burnsville, Minnesota. The net sales price was $689,760 and a $100,094 gain was recognized on the sale. In September 1998, the Partnership sold a building leased to Ponderosa Restaurant in Alton, Illinois. The net sales price was $608,997 and a $108,000 loss was recognized on the sale. In 1997, the Partnership sold one property and a parcel of land. In August 1997, the Partnership sold a building leased to Kinder Care in Indianapolis, Indiana. The net sales price was $182,388 and a $18,173 gain was recognized on the sale. In September 1997, the Partnership sold a land parcel in Las Vegas, Nevada for $195,000. The Partnership issued a note receivable in the amount of $165,750 in conjunction with the sale and recognized a gain of $66,200. During 1996, the Partnership sold four properties and a parcel of land. In April 1996, the Partnership sold a Kentucky Fried Chicken building and a Wendy's building located in Blaine Minnesota for $901,187. The Partnership recognized a net gain of $206,761 on these sales. In October 1996, the partnership sold a building that was leased to Checker Autoworks in Denver, Colorado for $811,494 of which the Partnership recognized a $208,072 gain. Also in October 1996, the Partnership sold a land parcel for $75,357 and recognized a $9,004 gain. The land parcel was located in Las Vegas, Nevada. Finally, in December 1996, the Partnership sold a building leased to Denny's Restaurant and located in Denver, Colorado for $963,968 and recognized a $456,806 gain. F-10 24 EXCEL PROPERTIES, LTD. SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
Additions Deductions ----------- --------------------- Balance at Balance at Beginning Charged to End Description of Year Expense Description Amount of Year - ------------------------------- ----------- ----------- --------------------- ---------- ---------- Year ended December 31, 1998: Allowance for bad debts $ 191,764 $ 3,521 Write-off of Reserves $ 195,285 $ 0 =========== =========== ========== ========== Year ended December 31, 1997: Allowance for bad debts $ 236,017 $ 48,892 Write-off of Reserves $ 93,145 $ 191,764 =========== =========== ========== ========== Year ended December 31, 1996: Allowance for bad debts $ 51,595 $ 183,608 Reconciling Item $ (814) $ 236,017 =========== =========== ========== ==========
F-11 25 EXCEL PROPERTIES, LTD. SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1998
Cost Capitalized Subsequent to Gross Amount at Which Initial Cost Acquisition Carried at Close of Period ----------------------------- ---------- ---------------------------- Buildings Buildings and and Description Encumbrances Land Improvements Improvements Land Improvements ------------ ---------- ------------ ------------ ---------- ------------ Kinder Care: Columbus, Ohio $ -- $ 57,101 $ 133,236 $ -- $ 57,101 $ 133,236 Gahanna, Ohio -- 65,047 151,775 -- 65,047 151,775 West Carrollton, Ohio -- 57,101 133,236 -- 57,101 133,236 Grove City, Ohio -- 66,702 155,638 -- 66,702 155,638 Dayton, Ohio -- 57,101 133,236 -- 57,101 133,236 Indianapolis, Indiana -- 60,324 140,756 -- 60,324 140,756 Paragon Restaurant: Middleburg Heights, Ohio -- 313,867 732,355 -- 313,867 732,355 Lafayette, Indiana -- 324,028 756,068 -- 324,028 756,068 Autoworks: Omaha, Nebraska -- 275,432 413,148 -- 275,432 413,148 Ponderosa: Ann Arbor, Michigan -- 379,809 379,809 -- 379,809 379,809 Volume Shoe-Plant City, FL -- 398,104 250,018 -- 398,104 250,018 Toddle House-Kenner, LA -- 87,496 131,243 -- 87,496 131,243 ---------- ---------- ---------- ---------- ---------- ---------- $ -- $2,142,112 $3,510,518 $ 0 $2,142,112 $3,510,518 ========== ========== ========== ========== ========== ==========
Life on Which Depreciation Accumu- in Latest lated Income Total Depreci- Date Statements Description (a)(b) ation (c) Acquired is Computed ---------- ---------- ---------- ------------- Kinder Care: Columbus, Ohio $ 190,337 $ 49,170 1987 31.5 years Gahanna, Ohio 216,822 56,012 1987 31.5 years West Carrollton, Ohio 190,337 49,170 1987 31.5 years Grove City, Ohio 222,340 57,438 1987 31.5 years Dayton, Ohio 190,337 49,170 1987 31.5 years Indianapolis, Indiana 201,080 43,008 1987 31.5 years Paragon Restaurant: Middleburg Heights, Ohio 1,046,222 266,399 1987 31.5 years Lafayette, Indiana 1,080,096 271,023 1987 31.5 years Autoworks: Omaha, Nebraska 688,580 137,169 1988 31.5 years Ponderosa: Ann Arbor, Michigan 759,618 120,072 1989 31.5 years Volume Shoe-Plant City, FL 648,122 71,765 1989 31.5 years Toddle House-Kenner, LA 218,739 29,686 1991 31.5 years ---------- ---------- $5,652,630 $1,200,084 ========== ==========
(a) Also represents cost for federal income tax purposes. (b) Reconciliation of total real estate carrying value for the three years ended December 31, 1998 is as follows:
1998 1997 1996 ----------- ----------- ----------- Balance at beginning of year $ 7,145,664 $ 7,475,542 $ 9,838,437 Acquistions -- -- -- Cost of property sold (1,493,034) (329,878) (2,362,895) ----------- ----------- ----------- Balance at end of year $ 5,652,630 $ 7,145,664 $ 7,475,542 =========== =========== ===========
(c) Reconciliation of accumulated depreciation for the three years ended December 31, 1998 is as follows:
1998 1997 1996 ----------- ----------- ----------- Balance at beginning of year $ 1,367,861 $ 1,261,704 $ 1,423,718 Expense 126,485 143,021 176,133 Deletions (294,262.00) (36,864.00) (338,147.00) ----------- ----------- ----------- Balance at end of year $ 1,200,084 $ 1,367,861 $ 1,261,704 =========== =========== ===========
F-12 EX-27 2 EXHIBIT 27
5 YEAR DEC-31-1998 JAN-01-1998 DEC-31-1998 412,033 0 1,176,440 0 0 1,588,473 5,652,630 1,200,084 6,041,019 19,369 0 0 0 0 6,021,650 6,041,019 0 790,209 0 82,133 126,485 3,521 0 681,577 0 681,577 0 0 0 681,577 0 4.71
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