Leasing Activities

12 Months Ended

Dec. 31, 2012

Leasing Activities

NOTE 4 – LEASING ACTIVITIES

The Partnership leases certain properties for operation of restaurants to Del Taco on a triple net basis. The leases are for terms of 35 years commencing with the completion of the restaurant facility located on each property and require monthly rentals equal to 12 percent of the gross sales of the restaurants. The leases terminate in the years 2022 to 2024. Pursuant to the lease agreements, minimum rentals of $3,500 per month are due to the Partnership during the first six months of any non-operating period caused by an insured casualty loss. The Partnership had a total of eight properties leased to Del Taco as of December 31, 2012.

The restaurants operated by Del Taco, for which the Partnership is the lessor, had combined, unaudited sales of $8,213,914, $8,207,338, and $8,638,283 and unaudited net losses of $94,586, $55,685 and $65,785 during the years ended December 31, 2012, 2011 and 2010, respectively. In addition, the restaurant in Industry, CA generated minimum rental income totaling $20,774 subsequent to being destroyed by fire in May 2011 and prior to its sale in December 2011. Net income by restaurant includes charges for general and administrative expenses incurred in connection with supervision of restaurant operations and interest expense. The increase in net loss from the corresponding period of the prior year primarily relates to increased operating expenses.