-----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, PKb2InHmLC/9MZhOt9sUirRQOZBTM/AkzB/2c08yaBHr9jTb+bW8dYZD8+qiMVEI BdjujohoJoxs7o2odmtL8Q== 0000317900-98-000002.txt : 19980325 0000317900-98-000002.hdr.sgml : 19980325 ACCESSION NUMBER: 0000317900-98-000002 CONFORMED SUBMISSION TYPE: 10KSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980324 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: US REALTY PARTNERS LTD PARTNERSHIP CENTRAL INDEX KEY: 0000788955 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE OPERATORS (NO DEVELOPERS) & LESSORS [6510] IRS NUMBER: 570814502 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10KSB SEC ACT: SEC FILE NUMBER: 000-15656 FILM NUMBER: 98571389 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391000 MAIL ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 10KSB 1 FORM 10-KSB - ANNUAL OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(D) (As last amended by 34-31905, eff. 4/26/93) FORM 10-KSB (Mark One) [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [No Fee Required] For the fiscal year ended December 31, 1997 or [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [No Fee Required] For the transition period from.........to......... Commission file number 0-15656 U.S. REALTY PARTNERS LIMITED PARTNERSHIP (Name of small business issuer in its charter) South Carolina 57-0814502 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Insignia Financial Plaza, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (Zip Code) Issuer's telephone number (864) 239-1000 Securities registered under Section 12(b) of the Exchange Act: None Securities registered under Section 12(g) of the Exchange Act: None Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [X] State issuer's revenues for its most recent fiscal year. $5,375,000 State the aggregate market value of the voting partnership interests held by non-affiliates computed by reference to the price at which the partnership interests were sold, or the average bid and asked prices of such partnership interests, as of a date within the past 60 days. Market value information for the Registrant's partnership interests is not available. Should a trading market develop for these interests, it is the Corporate General Partner's belief that the aggregate market value of the voting partnership interests would not exceed $25,000,000. DOCUMENTS INCORPORATED BY REFERENCE None PART I ITEM 1. DESCRIPTION OF BUSINESS U.S. Realty Partners Limited Partnership (the "Partnership" or the "Registrant") was formed on January 23, 1986. It is engaged in the business of acquiring, operating and holding real properties for investment. The Registrant commenced operations on August 26, 1986, and acquired its first property, a newly constructed apartment property, on August 28, 1986. Prior to September 5, 1986, it acquired an existing apartment property, a newly constructed shopping center and an existing shopping center. On August 26, 1986, the Registrant delivered 1,222,000 Depositary Unit Certificates, representing assignments of limited partnership interests ("DUCs"), to Wheat First Securities, Inc. and received $30,550,000 ($25.00 per DUC) in proceeds. The DUCs were offered by several underwriters in minimum investment amounts of 100 DUCs ($25.00 per DUC). The Registrant also received $16,369,000 as proceeds from a contemporaneous private bond offering. The Registrant used substantially all of the proceeds from these offerings to acquire the four operating properties. The DUCs were registered under the Securities Act of 1933 via Registration Statement No. 33-2996 (the "Registration Statement"). On April 1, 1993, the Partnership filed for protection under Chapter 11 of the Federal Bankruptcy Code. The filing was made due to the Partnership's inability to repay its secured debt due to an insurance company (see "Note C" of financial statements). On April 23, 1993, the Partnership filed a Reorganization Plan ("the Plan") with the United States Bankruptcy Court for the District of South Carolina. The significant provision of the Plan was the refinancing of the secured debt. On July 23, 1993, the Court entered an order confirming the Partnership's Plan. On January 27, 1994, the Court closed the case. A further description of the Partnership's business is included in "Management's Discussion and Analysis or Plan of Operation" included in "Item 6" of this Form 10-KSB. The Registrant has no full-time employees. Management and administrative services are performed by U.S. Realty I Corporation, the Corporate General Partner, and by affiliates of Insignia Financial Group, Inc. ("Insignia"), the ultimate parent company of the Corporate General Partner. Pursuant to a management agreement between them, Insignia provides property management services to the Registrant. On March 17, 1998, Insignia entered into an agreement to merge its national residential property management operations, and its controlling interest in Insignia Properties Trust, with Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust. The closing, which is anticipated to happen in the third quarter of 1998, is subject to customary conditions, including government approvals and the approval of Insignia's shareholders. If the closing occurs, AIMCO will then control the General Partner of the Partnership. The real estate business of leasing commercial and residential properties is highly competitive and the Partnership is not a significant factor in this industry. The Registrant's real property investments are subject to competition from similar types of properties in the vicinities in which they are located. In addition, various limited partnerships have been formed by the General Partners and/or their affiliates to engage in business which may be competitive with the Registrant. ITEM 2.DESCRIPTION OF PROPERTIES The following table sets forth the Registrant's investments in properties: Date of Property Purchase Type of Ownership Use The Gallery - Huntsville 08/29/86 Fee ownership subject to Retail Huntsville, Alabama first mortgage Approximately 101,000 s.f. The Gallery - Knoxville 09/04/86 Fee ownership subject to Retail Knoxville, Tennessee first mortgage Approximately 100,000 s.f. Governor's Park Apartments 08/29/86 Fee ownership subject to Apartment Little Rock, Arkansas first mortgage 154 units Twin Lakes Apartments 08/28/86 Fee ownership subject to Apartment Palm Harbor, Florida first mortgage 262 units SCHEDULE OF PROPERTIES: (in thousands) Gross Carrying Accumulated Federal Property Value Depreciation Rate Method Tax Basis The Gallery - Huntsville $ 7,397 $ 2,149 5-35 S/L $ 7,812 The Gallery - Knoxville 9,021 2,572 5-35 S/L 7,718 Governor's Park 6,031 2,420 5-35 S/L 2,161 Twin Lakes 10,857 3,382 5-35 S/L 5,036 $33,306 $10,523 $22,727 See "Note A" of the financial statements included in "Item 7" for a description of the Partnership's depreciation policy. SCHEDULE OF MORTGAGES: (in thousands) Principal Principal Balance At Stated Balance December 31, Interest Period Maturity Due At 1997 Rate Amortized Date Maturity U.S. Realty Partnership $21,158 10.00% 95 months 08/01/01 (1) (1) The balance at maturity is directly related to the ability of the Partnership to make cash flow payments per the mortgage agreement. SCHEDULE OF RENTAL RATES AND OCCUPANCY: Average Annual Average Annual Rental Rates Occupancy Property 1997 1996 1997 1996 The Gallery - Huntsville $ 8.99/s.f. $ 9.21/s.f. 98% 93% The Gallery - Knoxville 13.24/s.f. 12.45/s.f. 91% 96% Governor's Park 6,609/unit 6,534/unit 92% 93% Twin Lakes 7,227/unit 7,032/unit 93% 95% The Corporate General Partner attributes the decrease in occupancy at The Gallery - Knoxville to the expiration of the Rack Room Shoes lease during the fourth quarter of 1996. This space comprised approximately 5% of the total square footage of the shopping center and had not been re-leased as of December 31, 1997. The Gallery - Knoxville also had Storehouse transfer into the Barnes and Nobel space which left a 4,000 square foot vacancy during the third quarter of 1997. The vacant Storehouse space comprises approximately 4% of the total square footage of the shopping center. The increase in occupancy at The Gallery - - Huntsville is attributable to new leases that commenced late in 1996 and in the first quarter of 1997. These spaces comprise approximately 11% of the total square footage of the shopping center. As noted under "Item 1. Description of Business," the real estate industry is highly competitive. All of the properties of the Partnership are subject to competition from other residential apartment complexes and commercial buildings in the area. The Corporate General Partner believes that all of the properties are adequately insured. The multi-family residential properties' lease terms are for one year or less. No residential tenant leases 10% or more of the available rental space. The following schedule reflects information on commercial tenants occupying 10% or more of the leasable square feet for each property:
Nature of Square Footage Annual Rent Lease Business Leased Per Square Foot Expiration The Gallery - Huntsville Book Store 12,000 $ 7.50 11/14/01 Shoe Store 13,800 13.13 09/14/04 The Gallery - Knoxville Furniture Store 13,330 9.78 07/31/01
As noted under "Item 1. Description of Business," the Partnership is in the business of acquiring, operating and holding real properties for investment. The Partnership holds two residential properties and two commercial properties. These properties are fully leveraged and the Partnership is currently paying principal and interest payments to reduce its liability. The following is a schedule of the lease expirations for the years 1998-2008 (dollars in thousands): Number of % of Gross The Gallery Expirations Square Feet Annual Rent Annual Rent Knoxville 1998 6 16,150 $194 18.12% 1999 3 14,354 141 13.23% 2000 1 3,600 41 3.88% 2001 5 25,628 302 28.33% 2002 2 11,090 166 15.51% 2003 1 2,514 36 3.40% 2004 2 10,917 187 17.53% 2005-2008 -- -- -- -- The Gallery Huntsville 1998 3 4,000 45 5.07% 1999 7 23,203 212 24.13% 2000 1 3,755 26 2.91% 2001 4 28,800 279 31.82% 2002 1 1,500 16 1.81% 2003 -- -- -- -- 2004 3 18,400 229 26.13% 2005 -- -- -- -- 2006 1 3,600 31 3.58% 2007 -- -- -- -- 2008 1 6,500 40 4.55% The principal businesses located at these properties are retail sales outlets. SCHEDULE OF REAL ESTATE TAXES AND RATES: 1997 1997 Billing Rate (in thousands) The Gallery - Huntsville $ 67 5.80% The Gallery - Knoxville 133 5.30% Governor's Park 63 6.34% Twin Lakes 170 2.08% ITEM 3. LEGAL PROCEEDINGS The Registrant is unaware of any pending or outstanding litigation that is not of a routine nature. The Managing General Partner of the Registrant believes that all such pending or outstanding litigation will be resolved without a material adverse effect upon the business, financial condition, or operations of the Partnership. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS During the year ended December 31, 1997, no matter was submitted to a vote of security holders through the solicitation of proxies or otherwise. PART II ITEM 5. MARKET FOR PARTNERSHIP EQUITY AND RELATED PARTNERSHIP MATTERS The Depositary Unit Certificates were initially listed on the National Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") under the symbol "USRLZ". As of December 31, 1997, the number of DUC holders of record was 2,033. Transfer of DUCs is subject to certain suitability and other requirements. Due to the security being delisted during 1990, no public trading market has developed and it is not anticipated that such a market will develop in the future. No distributions were made in 1997 or 1996. Pursuant to the loan agreement, no distributions can be made until all long-term debt is repaid. ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION This item should be read in conjunction with the consolidated financial statements and other items contained elsewhere in this report. Results of Operations The Partnership's net loss for the year ended December 31, 1997, was approximately $248,000 compared to a net loss of approximately $258,000 for the year ended December 31, 1996. (See "Note D" of the financial statements for a reconciliation of these amounts to the Partnership's federal taxable losses.) The decrease in net loss was primarily due to an increase in rental revenue and other income and a decrease in interest expense. Rental income increased primarily due to increases in rent and tenant reimbursements at The Gallery- Huntsville. These increases were attributable to the increase in occupancy and passing management fees on to the tenants through tenant reimbursements instead of the Partnership absorbing these costs. Other income increased due to an increase in tenant fees associated with lease terminations at The Gallery - Knoxville and at Twin Lakes primarily as a result of the decrease in occupancy at both properties. The decrease in interest expense is directly related to the decrease in the Partnership's mortgage note payable. Offsetting the above decreases in net loss were increases in operating expenses, general and administrative expenses, and property taxes. Operating expenses increased due to a major tenant at The Gallery - Knoxville moving out. As a result of this tenant vacating the property, the remaining unamortized lease commission of $60,000 was expensed in 1997. General and administrative expenses increased due to increases in expense reimbursements. Real estate taxes increased at The Gallery Huntsville and Governors Park due to an increase in assessed tax value. Partially offsetting the increase in property taxes was a decrease in the tax rate for The Gallery - Knoxville during 1997. Included in operating expenses for the year ended December 31, 1997 is approximately $160,000 of major repairs and maintenance comprised primarily of exterior building improvements, exterior painting, major landscaping and parking lot repairs. Included in operating expenses for the year ended December 31, 1996 is approximately $144,000 of major repair and maintenance comprised primarily of exterior building improvements, exterior painting, and major landscaping. As part of the ongoing business plan of the Partnership, the Corporate General Partner monitors the rental market environment of each of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expenses. As part of this plan, the Corporate General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining high overall occupancy levels. However, due to changing market conditions, which can result in the use of rental concessions and rental reductions to offset softening market conditions, there is no guarantee that the Corporate General Partner will be able to sustain such a plan. Liquidity and Capital Resources Based upon the terms of the debt structure, all cash is considered restricted. Net cash provided by operating activities increased primarily as a result of a decrease in net loss as discussed above, an increase in accrued property taxes and other liabilities and a decrease in other assets. Partially offsetting the increase in net cash provided by operating activities is an increase in receivables and deposits. The previously mentioned changes are due to the timing of payments to vendors and the timing of rental collections. Net cash used in investing activities increased primarily due to an increase in restricted escrows. Net cash used in financing activities remained constant. The Partnership has no material capital programs scheduled to be performed in 1998 although certain routine capital expenditures and maintenance expenses have been budgeted. These capital expenditures and maintenance expenses will be incurred only if cash is available from operations or is received from the capital reserve account. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the various properties to adequately maintain the physical assets and other operating needs of the Partnership. Such assets are currently thought to be sufficient for any near-term needs of the Partnership. The total mortgage indebtedness of $21,158,000 requires a balloon payment on August 1, 2001, at which time the properties will be refinanced or sold. Pursuant to the loan agreement, Net Cash Flow of the Partnership is required to be paid to the mortgage holder on a monthly basis to reduce accrued interest and principal. No distributions can be made until all long-term debt is repaid. The Corporate General Partner is currently assessing the feasibility of refinancing the mortgage encumbering the Partnership's investment properties. Year 2000 The Partnership is dependent upon the Corporate General Partner and Insignia for management and administrative services. Insignia has completed an assessment and will have to modify or replace portions of its software so that its computer systems will function properly with respect to dates in the year 2000 and thereafter (the "Year 2000 Issue"). The project is estimated to be completed not later than December 31, 1998, which is prior to any anticipated impact on its operating systems. The Corporate General Partner believes that with modifications to existing software and conversions to new software, the Year 2000 Issue will not pose significant operational problems for its computer systems. However, if such modifications and conversions are not made, or are not completed timely, the Year 2000 Issue could have a material impact on the operations of the Partnership. Other Certain items discussed in this annual report may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act") and as such may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Partnership to be materially different from any future results, performance or achievements expressed or implied by such forward- looking statements. Such forward-looking statements speak only as of the date of this annual report. The Partnership expressly disclaims any obligation or undertaking to release publicly any updates of revisions to any forward-looking statements contained herein to reflect any change in the Partnership's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. ITEM 7. FINANCIAL STATEMENTS U.S. REALTY PARTNERS LIMITED PARTNERSHIP LIST OF FINANCIAL STATEMENTS Report of Ernst & Young LLP, Independent Auditors Balance Sheet - December 31, 1997 Statements of Operations - Years ended December 31, 1997 and 1996 Statements of Changes in Partners' Capital (Deficit) - Years ended December 31, 1997 and 1996 Statements of Cash Flows - Years ended December 31, 1997 and 1996 Notes to Financial Statements Report of Ernst & Young LLP, Independent Auditors The Partners U. S. Realty Partners Limited Partnership: We have audited the accompanying balance sheet of U. S. Realty Partners Limited Partnership as of December 31, 1997, and the related statements of operations, changes in partners' capital (deficit) and cash flows for each of the two years in the period ended December 31, 1997. 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 audit 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 the Partnership's 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 U. S. Realty Partners Limited Partnership at December 31, 1997, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 1997, in conformity with generally accepted accounting principles. /s/ERNST & YOUNG LLP Greenville, South Carolina February 9, 1998, except for Note I, as to which the date is March 17, 1998 U.S. REALTY PARTNERS LIMITED PARTNERSHIP BALANCE SHEET (in thousands, except unit data) December 31, 1997 Assets Restricted cash $ 332 Receivables and deposits, net of $156 for doubtful accounts 431 Restricted escrows 267 Other assets 313 Investment properties (Notes C & F): Land $ 6,534 Buildings and related personal property 26,772 33,306 Less accumulated depreciation (10,523) 22,783 $24,126 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 28 Tenant security deposit liabilities 121 Accrued property taxes 134 Other liabilities 521 Due to Corporate General Partner 548 Mortgage note payable (Note C) 21,158 Partners' Capital (Deficit) General partners $ (446) Depository unit certificate holders (2,440,000 units authorized, 1,222,000 units issued and outstanding) 2,062 1,616 $24,126 See Accompanying Notes to Financial Statements U.S. REALTY PARTNERS LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS (in thousands, except unit data) Years Ended December 31, 1997 1996 Revenues: Rental income $ 5,206 $ 5,116 Other income 169 150 Total revenues 5,375 5,266 Expenses: Operating 1,861 1,760 General and administrative 222 186 Depreciation 847 842 Interest 2,250 2,304 Property taxes 443 432 Total expenses 5,623 5,524 Net loss (Note D) $ (248) $ (258) Net loss allocated to general partner (1%) $ (2) $ (3) Net loss allocated to depository unit certificate holders (99%) (246) (255) $ (248) $ (258) Net loss per depository unit certificate $ (.20) $ (.21) See Accompanying Notes to Financial Statements U.S. REALTY PARTNERS LIMITED PARTNERSHIP STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (in thousands, except unit data)
Depository Limited Unit Partnership General Certificate Units Partners Holders Total Original capital contributions 1,222,000 $ 2 $30,550 $30,552 Partners' capital (deficit) at December 31, 1995 1,222,000 $(441) $ 2,563 $ 2,122 Net loss for the year ended December 31, 1996 -- (3) (255) (258) Partners' capital (deficit) at December 31, 1996 1,222,000 (444) 2,308 1,864 Net loss for the year ended December 31, 1997 -- (2) (246) (248) Partners' capital (deficit) at December 31, 1997 1,222,000 $(446) $ 2,062 $ 1,616 See Accompanying Notes to Financial Statements
U.S. REALTY PARTNERS LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS (in thousands)
Years Ended December 31, 1997 1996 Cash flows from operating activities: Net loss $ (248) $ (258) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 847 842 Amortization 39 58 Bad debt expense 55 71 Change in accounts: Restricted cash (68) 93 Receivables and deposits (240) (162) Other assets 85 9 Accounts payable (27) (32) Tenant security deposit liabilities -- (17) Accrued property taxes 72 -- Due to Corporate General Partner 24 24 Other liabilities 113 7 Net cash provided by operating activities 652 635 Cash flows from investing activities: Property improvements and replacements (146) (184) Net (increase) decrease in restricted escrows (57) 2 Net cash used in investing activities (203) (182) Cash flows from financing activities: Payments on mortgage note payable (449) (453) Net cash used in financing activities (449) (453) Net change in cash and cash equivalents -- -- Cash and cash equivalents at beginning of period -- -- Cash and cash equivalents at end of period $ -- $ -- Supplemental disclosure of cash flow information: Cash paid for interest $2,172 $2,226 See Accompanying Notes to Financial Statements
U. S. REALTY PARTNERS LIMITED PARTNERSHIP Notes to Financial Statements December 31, 1997 NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Organization: U.S. Realty Partners Limited Partnership (the "Partnership" or "Registrant") was organized as a limited partnership under the laws of the State of South Carolina pursuant to a Certificate of Limited Partnership filed January 24, 1986, and an Agreement of Limited Partnership dated January 23, 1986. The Partnership Agreement terminates December 31, 2005, or earlier upon the sale of all properties and distributions to the partners of all net proceeds thereof or certain other events. The Partnership commenced operations on August 26, 1986, and completed its acquisition of two apartment complexes and two shopping plazas on September 4, 1986, all of which are located in the South. The Depositary Unit Certificate ("DUC") holders are assignees of USS Assignor, Inc. (the Limited Partner), an affiliate of the Corporate General Partner, and as such will be entitled to receive the economic rights attributable to the Limited Partnership Interests represented by their DUCs. DUC holders will for all practical purposes be treated as limited partners of the Partnership. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Allocation of Cash Distributions: Cash distributions by the Partnership are allocated 98% to the DUC holders and 2% to the general partners until the DUC holders have received annual noncumulative distributions equal to 10% of their Adjusted Capital Values. Net cash from operations then will be distributed to the general partners until the general partners collectively have received 7% of net cash from operations distributed in that fiscal year. Thereafter, (after repayment of any loans by the general partners to the Partnership), net cash from operations will be distributed 93% to the DUC holders and 7% to the general partners. According to the terms of the Partnership's loan agreements, no distributions may be made until the long term debt is repaid. During the first eight quarters following the issuance of the DUCs, the Corporate General Partner was obligated to loan to the Partnership up to approximately $811,000 to cover any deficiency in the quarterly cash distributions. The Corporate General Partner loaned the Partnership $300,000 under this guarantee, which expired August 26, 1988. A deficiency arose when the DUC holders did not receive annualized cash distributions equal to 10% of the average of their Adjusted Capital Values. The loan bears interest at the lesser of the rates being paid by the parent company of the Corporate General Partner or two percentage points over the CitiBank, N.A. prime interest rate. The repayment of the loan would reduce the amount subsequently available for distribution to the DUC holders. This loan may not be repaid until the Partnership's long term debt is repaid. The balance at December 31, 1997, including accrued interest is $548,000. Allocation of Profits, Gains and Losses: Profits, gains and losses of the Partnership are allocated between the Corporate General Partner and DUC holders in accordance with the provisions of the partnership agreement. Profits and losses generally will be allocated 99% to the DUC holders and 1% to the Corporate General Partner. Net loss per DUC for the years ended December 31, 1997 and 1996, was computed as 99% of the net loss divided by 1,222,000 depositary units outstanding. Investment Properties: Investment properties are stated at cost. Acquisition fees are capitalized as a cost of real estate. The Partnership records impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. For the years ended December 31, 1997 and 1996, no adjustment for impairment of value was recorded. Fair Value of Financial Instruments: The Partnership believes that the carrying amount of its financial instruments (except for long term debt) approximates their fair value due to the short term maturity of these instruments. The Partnership's mortgage debt has payments due based on net cash flow as defined in the loan agreement, and therefore it is impractical to estimate the fair value of this indebtedness. Depreciation: Depreciation is provided by the straight-line method over the estimated lives of the rental properties and related personal property. For Federal income tax purposes, the accelerated cost recovery method is used: 1) for real property over periods of 19 years for additions after May 8, 1985, and before January 1, 1987, and 2) for personal property over 5 years for additions after December 31, 1986, the modified accelerated cost recovery method is used for depreciation of 1) real property additions over 27-1/2 years, and 2) personal property additions over 7 years. Amortization: Computer software costs were amortized over six years and are fully amortized as of December 31, 1997. Lease commissions are being amortized over a period of one to ten years using the straight-line method over the term of the respective leases and are included in other assets. Leases: The Partnership leases certain commercial space to tenants under various lease terms. Some of the leases contain stated rental increases during their term. For leases with fixed rental increases, rents are recognized on a straight-line basis over the terms of the lease. This straight-line basis recognized approximately $14,000 (1997) and $18,000 (1996) less in rental income than was collected. Beginning in 1995, the cash collections under the terms of the leases exceed the straight-line method of revenue recognition. Additionally, some of the leases have percentage rent (rental payments based on agreed upon percentage of sales) clauses. The Partnership recognized $68,000 and $72,000 of such rent in the years ended December 31, 1997 and 1996, respectively. For all other leases, minimum rents are recognized over the terms of the leases. The Partnership generally leases apartment units for twelve-month terms or less. The Partnership recognizes income as earned on these leases. In addition, management finds it necessary to offer rental concessions during particularly slow months or in response to heavy competition from other similar complexes in the area. Concessions are charged to expense as incurred. Restricted Cash Tenant Security Deposits - The Partnership requires security deposits from all apartment lessees for the duration of the lease. Deposits are refunded when the tenant vacates the apartment if there has been no damage. The Partnership held $121,000 of such funds at December 31, 1997. Net Cash Flow Fund - The Partnership maintains a restricted cash account for the purpose of repayment of the Partnership's debt. The Partnership held approximately $211,000 of such funds at December 31, 1997. The Partnership deposits Net Cash Flow, as defined in the loan agreement, into this account to facilitate "Cash Sweeps" as defined in the loan agreement. On a monthly basis, the Net Cash Flow Fund is disbursed or retained as follows: (a) first, at any time as there shall be a balance of less than $150,000 in the Working Capital Account, an amount equal to the difference between the actual balance and $150,000 but not in excess of twenty percent (20%) of such Net Cash Flow shall be paid to the Partnership for deposit into the Working Capital Account; (b) second, to the payment of, or the reimbursement to the Partnership for certain repairs and expenses and Capital Expenditures; (c) third, to the payment of accrued but unpaid interest; (d) fourth, to the payment of that portion of the Principal Balance equal to accrued and unpaid interest therefore added to the Principal Balance pursuant to the loan agreement; (e) fifth, to the payment of the remaining Principal Balance and to any and all other amounts payable to the Surety hereunder, including but not limited to the additional interest. Restricted Escrows Capital Improvement Account - The Partnership established an interest bearing bank account (see "Note C"), for the purpose of deposit and expenditure of cash flow for Capital Expenditures. The Partnership shall deposit from time to time from revenues a reasonable allowance for Capital Expenditures, provided the amount of such deposit shall have been approved in advance by the Surety. The Partnership may withdraw any amounts on deposit in the Capital Expenditures Account to pay for Capital Expenditures as they are made, provided the amount of such withdrawals shall have been approved in advance by the Surety. At December 31, 1997, the balance was approximately $114,000. Working Capital Account - The Partnership established the "Working Capital Account" for the purpose of providing a cash reserve available to the Partnership (see "Note C"). On September 16, 1993, prior to making the first deposit into the Net Cash Flow Fund, the Partnership deposited $150,000 into the Working Capital Account. The bank holds the funds in the Working Capital Account for the benefit of the Surety. The Partnership has the right to access these funds without the consent of the Surety under specific guidelines mutually agreed to by the Partnership and the Surety. Specifically, the Working Capital Account may be used to fund negative cash flow, or emergency or immediate funding needs of a property. At December 31, 1997, the balance was approximately $153,000. Escrow for Taxes: All escrow funds are designated for the payment of real estate taxes and are held by the Partnership. These funds totaled approximately $287,000 at December 31, 1997 and are included in receivables and deposits. Advertising: The Partnership expenses the costs of advertising as incurred. Advertising expense, included in operating expenses, was approximately $35,000 for both the years ended December 31, 1997 and 1996. Reclassifications: Certain reclassifications have been made to the 1996 financial statements to conform with the 1997 presentation. NOTE B - ACCOUNTS RECEIVABLE Accounts receivable included in receivables and deposits at December 31, 1997, consisted of the following (in thousands): Shopping center tenant rentals $ 232 Apartment tenant rentals 8 Common area maintenance, insurance and taxes 60 300 Less allowance for doubtful accounts (156) $ 144 An analysis of the allowance for doubtful accounts is set forth below (in thousands): Years Ended December 31, 1997 1996 Balance at beginning of period $126 $115 Charged to expenses 55 71 Uncollectible amounts written off against related assets (25) (51) Amounts collected -- (9) Balance at end of period $156 $126 NOTE C - MORTGAGE NOTE PAYABLE On October 15, 1993, the Partnership finalized the refinancing of all debt encumbering its real estate assets. The debt has a stated interest rate of 10%, which shall accrue and, to the extent such interest is not paid currently out of Net Cash Flow, as defined in the loan agreement, shall be added to the principal balance on August 16 of each year prior to the maturity date of August 1, 2001; provided, however, that the amount of accrued and unpaid interest, shall at no time exceed the sum of $1,740,733 and the balances in the Capital Expenditures Account, the Working Capital Account, and the Tax Escrow Account established under provisions of the loan agreement. Amounts in excess of this total must be immediately paid by the Partnership. The loan agreement also calls for additional interest of approximately $59,000, which accrues annually on August 1, and is payable on the earlier of the maturity date or the date on which the principal balance and all accrued interest is paid. The Corporate General Partner is currently assessing the feasibility of refinancing the mortgage encumbering the Partnership's investment properties. The obligations of the Partnership to the Surety in connection with the issuance of the debt are secured by a first mortgage or deed of trust on each of the Partnership's properties and are cross-defaulted so that a default with respect to one property is a default under each mortgage or deed of trust. The mortgage note payable is non-recourse. The note does not require prepayment penalties if repaid prior to maturity. The principle terms of the note payable are as follows (in thousands): Principal Principal Balance At Stated Balance December 31, Interest Period Maturity Due At 1997 Rate Amortized Date Maturity U.S. Realty Partnership $21,158 10.00% 95 months 08/01/01 (1) (1) The balance at maturity is directly related to the ability of the Partnership to make cash flow payments per the mortgage agreement. At December 31, 1997 and 1996, approximately $88,000 and $93,000, respectively, of accrued interest was included in other liabilities. NOTE D - INCOME TAXES Under the provisions of the Internal Revenue Code, partnerships are not subject to income taxes. Accordingly, no provision for income taxes is made in the financial statements of the Partnership. Taxable income or loss of the Partnership is reported in the income tax returns of its partners. The following is a reconciliation of reported net loss and Federal taxable loss (in thousands): Years Ended December 31, 1997 1996 Net loss as reported $(248) $(258) Add (deduct): Depreciation differences (689) (685) Difference in bad debt expense 38 3 Difference in rents recognized 61 18 Change in prepaid rentals 70 (12) Other (8) 37 Federal taxable loss $(776) $(897) Federal taxable loss per DUC $(.63) $(.73) The following is a reconciliation between the Partnership's reported amounts and Federal tax basis of net assets and liabilities (in thousands): Net assets as reported $ 1,616 Land and buildings 10,746 Accumulated depreciation (10,802) Syndication 2,774 Other 145 Net assets - tax basis $ 4,479 NOTE E - TRANSACTIONS WITH AFFILIATED PARTIES The Partnership has no employees and is dependent on the Corporate General Partner and its affiliates for the management and administration of all Partnership activities. The Partnership Agreement provides for payments to affiliates for services and as reimbursements of certain expenses incurred by affiliates on behalf of the Partnership. The Corporate General Partner and its affiliates received reimbursements and fees as reflected in the following table: 1997 1996 (in thousands) Property management fees (included in operating expenses) $292 $289 Reimbursement for services of affiliates (included in operating, general and administrative expenses, and investment properties) (1) 159 138 Lease commissions 57 -- Due to General Partner 548 524 (1) Included in "reimbursements for services of affiliates" for 1997 are approximately $7,000 in reimbursements for construction oversight costs. There were no such costs in 1996. For the period of January 1, 1996 to August 31, 1997, the Partnership insured its properties under a master policy through an agency and insurer unaffiliated with the Corporate General Partner. An affiliate of the Corporate General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which was later acquired by the agent who placed the master policy. The agent assumed the financial obligations to the affiliate of the Corporate General Partner, who receives payment on these obligations from the agent. The amount of the Partnership's insurance premiums accruing to the benefit of the affiliate of the Corporate General Partner by virtue of the agent's obligations is not significant. NOTE F - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands) Initial Cost To Partnership Cost Buildings Capitalized and Related (Removed) Personal Subsequent to Description Land Property Acquisition The Gallery Shopping Plaza Huntsville, Alabama $4,070 $ 8,377 $(5,050) The Gallery Shopping Plaza Knoxville, Tennessee 3,376 9,037 (3,392) Governor's Park Apartments Little Rock, Arkansas 423 5,701 (93) Twin Lakes Apartments Palm Harbor, Florida 1,928 9,283 (354) Totals $9,797 $32,398 $(8,889) The cost removed, net of additions, subsequent to the acquisition is primarily due to write-downs and removals in the prior years.
Gross Amount At Which Carried At December 31, 1997 (in thousands) Buildings And Related Personal Accumulated Date of Date Depreciable Description Land Property Total Depreciation Construction Acquired Life-Years The Gallery - Huntsville $2,341 $ 5,056 $ 7,397 $ 2,149 1986 08/29/86 5-35 The Gallery- Knoxville 2,070 6,951 9,021 2,572 1984 09/04/86 5-35 Governor's Park 423 5,608 6,031 2,420 1985 08/29/86 5-35 Twin Lakes 1,700 9,157 10,857 3,382 1986 08/28/86 5-35 Totals $6,534 $26,772 $33,306 $10,523
Each of the Partnership's properties is secured by a first mortgage or deed of trust in connection with the issuance of an Amended and Restated Surety Note, Bond Notes and Suretyship Agreement. Reconciliation of "Real Estate and Accumulated Depreciation" (in thousands): Years Ended December 31, 1997 1996 Real Estate Balance at beginning of year $33,160 $32,985 Property improvements 146 184 Disposals of property -- (9) Balance at end of year $33,306 $33,160 Accumulated Depreciation Balance at beginning of year $ 9,676 $ 8,840 Additions charged to expense 847 842 Disposals of property -- (6) Balance at end of year $10,523 $ 9,676 The aggregate cost of the real estate for Federal income tax purposes at December 31, 1997 and 1996, is approximately $44,052,000 and $43,906,000, respectively. The accumulated depreciation taken for Federal income tax purposes at December 31, 1997 and 1996, is approximately $21,325,000 and $19,789,000, respectively. NOTE G - REVENUES The future minimum rents to be received from commercial tenants under noncancelable operating leases are as follows (in thousands): 1998 $1,906 1999 1,583 2000 1,371 2001 1,050 2002 704 Thereafter 1,191 $7,805 NOTE H - CONTINGENCY The Registrant is unaware of any pending or outstanding litigation that is not of a routine nature. The Managing General Partner of the Registrant believes that all such pending or outstanding litigation will be resolved without a material adverse effect upon the business, financial condition, or operations of the Partnership. NOTE I - SUBSEQUENT EVENT On March 17, 1998, Insignia entered into an agreement to merge its national residential property management operations, and its controlling interest in Insignia Properties Trust, with Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust. The closing, which is anticipated to happen in the third quarter of 1998, is subject to customary conditions, including government approvals and the approval of Insignia's shareholders. If the closing occurs, AIMCO will then control the General Partner of the Partnership. ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANT ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS, COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT The Registrant has no officers or directors. The Individual and Corporate General Partners are as follows: Individual General Partner - N. Barton Tuck, Jr., age 59, is the Individual General Partner of the Registrant. Mr. Tuck is Chairman of GolfSouth Management, Inc. Until August 1990, he served as Chairman and Chief Executive Officer of U.S. Shelter Corporation ("Shelter"), the former parent of AmReal Corporation (parent of the Corporate General Partner of the Partnership). For six years prior to 1966, Mr. Tuck was employed in Greenville, South Carolina by the certified public accounting firm of S.D. Leidesdorf & Company. From 1966 to 1970, he was a registered representative with the investment banking firm of Harris Upham & Co., Inc. in Greenville, South Carolina. Since 1970, Mr. Tuck has been engaged in arranging equity investments for individuals and partnerships. Mr. Tuck is a graduate of the University of North Carolina. Mr. Tuck has delegated to the Corporate General Partner all of his authority, as a general partner of the Partnership, to manage and control the Partnership and its business and affairs. Corporate General Partner - The names and ages of, as well as the positions and offices held by, the executive officers and directors of U. S. Realty I Corporation are set forth below. There are no family relationships between or among any officers or directors. NAME OF INDIVIDUAL POSITION AGE William H. Jarrard, Jr. President/Director 51 Ronald Uretta Vice President/Treasurer 41 Martha L. Long Controller 38 Daniel M. LeBey Vice President/Secretary 32 Robert D. Long, Jr. Vice President 30 Kelley M. Buechler Assistant Secretary 40 William H. Jarrard, Jr. has been President and Director of the Corporate General Partner since August 1994. He has acted as Senior Vice President of Insignia Properties Trust ("IPT"), parent of the Corporate General Partner since May 1997. Mr. Jarrard previously acted as Managing Director - Partnership Administration of Insignia from January 1991 through September 1997 and served as Managing Director - Partnership Administration and Asset Management of Insignia from July 1994 until January 1996. Ronald Uretta has been Vice President and Treasurer of the Corporate General Partner since August 1994 and Insignia's Treasurer since January 1992. Since August 1996, he has also served as Insignia's Chief Operating Officer. He has also served as Insignia's Secretary from January 1992 to June 1996 and as Insignia's Chief Financial Officer from January 1992 to August 1996. Martha L. Long has been Controller of the Corporate General Partner since December 1996 and Senior Vice President - Finance and Controller of Insignia since January 1997. In June 1994, Ms. Long joined Insignia as its Controller and was promoted to Senior Vice President - Finance in January 1997. Prior to that time, she was Senior Vice President and Controller of the First Savings Bank in Greenville, South Carolina. Robert D. Long, Jr. has been Vice President of the Corporate General Partner since January 2, 1998. Mr. Long joined Metropolitan Asset Enhancement, L.P. ("MAE"), an affiliate of Insignia, in September 1993. Since 1994 he has acted as Vice President and Chief Accounting Officer of the MAE subsidiaries. Mr. Long was an accountant for Insignia until joining MAE in 1993. Prior to joining Insignia, Mr. Long was an auditor for the State of Tennessee and was associated with the accounting firm of Harsman Lewis and Associates. Daniel M. LeBey has been Vice President and Secretary of the Corporate General Partner since January 29, 1998 and Insignia's Assistant Secretary since April 30, 1997. Since July 1996 he has also served as Insignia's Associate General Counsel. From September 1992 until June 1996, Mr. LeBey was an attorney with the law firm of Alston & Bird LLP, Atlanta, Georgia. Kelley M. Buechler has been Assistant Secretary of the Corporate General Partner since June 1996 and Assistant Secretary of Insignia since January 1991. ITEM 10. EXECUTIVE COMPENSATION Neither the Individual General Partner nor any of the directors and officers of the Corporate General Partner received any remuneration from the Registrant. ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT As of December 31, 1997, no person was known by the Registrant to be the beneficial owner of more than 5% of the Limited Partnership Units of the Registrant. No director or officer of the Corporate General Partner owns any Units. On March 17, 1998, Insignia entered into an agreement to merge its national residential property management operations, and its controlling interest in Insignia Properties Trust, with Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust. The closing, which is anticipated to happen in the third quarter of 1998, is subject to customary conditions, including government approvals and the approval of Insignia's shareholders. If the closing occurs, AIMCO will then control the General Partner of the Partnership. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The Individual General Partner and the Corporate General Partner received no cash distributions from operations as General or Limited Partners during or with respect to, the fiscal year ended December 31, 1997. For a description of the share of cash distributions from operations, if any, to which the general partners are entitled, reference is made to the material contained in the Prospectus under the heading PROFITS AND LOSSES AND CASH DISTRIBUTIONS. During the first eight quarters following the issuance of the DUCs, the Corporate General Partner was obligated to loan to the Partnership up to approximately $811,000 to cover any deficiency in the quarterly cash distributions. The Corporate General Partner loaned the Partnership $300,000 under this guarantee, which expired August 26, 1988. A deficiency arose when the DUC holders did not receive annualized cash distributions equal to 10% of the average of their Adjusted Capital Values. The loan bears interest at the lesser of the rates being paid by the parent company of the Corporate General Partner or two percentage points over the CitiBank, N.A. prime interest rate. The repayment of the loan would reduce the amount subsequently available for distribution to the DUC holders. This loan may not be repaid until the Partnership's long term debt is repaid. The balance at December 31, 1997, including accrued interest is approximately $548,000. The Partnership has no employees and is dependent on the Corporate General Partner and its affiliates for the management and administration of all Partnership activities. The Partnership Agreement provides for payments to affiliates for services and as reimbursements of certain expenses incurred by affiliates on behalf of the Partnership. The Registrant has a property management agreement with an affiliate of Insignia for the day-to-day management of the Partnership's properties. This service includes the supervision of leasing, rent collection, maintenance, budgeting, employment of personnel and payment of operating expenses. An affiliate of Insignia receives a property management fee equal to 5% of rental revenues for residential properties, and 6% for commercial properties. The Corporate General Partner and its affiliates received reimbursements and fees as reflected in the following table: 1997 1996 (in thousands) Property management fees $292 $289 Reimbursement for services of affiliates (1) 159 138 Lease commissions 57 -- Due to General Partner 548 524 (1) Included in "reimbursements for services of affiliates" for 1997 are approximately $7,000 in reimbursements for construction oversight costs. There were no such costs in 1996. For the period of January 1, 1996 to August 31, 1997, the Partnership insured its properties under a master policy through an agency and insurer unaffiliated with the Corporate General Partner. An affiliate of the Corporate General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which was later acquired by the agent who placed the master policy. The agent assumed the financial obligations to the affiliate of the Corporate General Partner, who receives payment on these obligations from the agent. The amount of the Partnership's insurance premiums accruing to the benefit of the affiliate of the Corporate General Partner by virtue of the agent's obligations is not significant. For a more detailed description of the management fee, see the material contained in the Prospectus under the heading CONFLICTS OF INTEREST - Property Management Services. ITEM 13. EXHIBITS, AND REPORTS ON FORM 8-K (a) Exhibits: Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. (b) Reports on Form 8-K filed in the fourth quarter of fiscal year 1997: None. SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant used this report to be signed on its behalf by the undersigned, thereunto duly authorized. U.S. REALTY PARTNERS LIMITED PARTNERSHIP By: U.S. Realty I Corporation Corporate General Partner By: /s/William H. Jarrard, Jr. William H. Jarrard, Jr. President/Director Date: March 24, 1998 In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated. /s/William H. Jarrard, Jr. President/Director March 24, 1998 William H. Jarrard, Jr. /s/Ronald Uretta Vice President/Treasurer March 24, 1998 Ronald Uretta EXHIBIT INDEX Exhibit 3 See Exhibit 4(a) 4 (a) Amended and Restated Certificate and Agreement of Limited Partnership (included as Exhibit A to the Prospectus of Registrant dated August 19, 1986 contained in Amendment No. 4 Registration Statement, No. 33-2996, of Registrant filed August 19, 1986 (the "Prospectus") and is incorporated herein by reference). (b) Subscription Agreement and Signature Page (included as Exhibit B to the Prospectus and is incorporated herein by reference). (c) Instruments governing the Bonds (filed as Exhibit 10C to Amendment No. 4 to Registration Statement, No. 33-2996, of Registrant filed August 19, 1986 and incorporated herein by reference). (d) First Amendment to U.S. Realty Partners Limited Partnership Amended and Restated Agreement of Limited of Partnership (dated August 15, 1986) dated October 14, 1993. [Filed as Exhibit 4(c) to Form 10QSB for the quarter ended September 30, 1993 and incorporated herein by reference.] 10(i) Contracts related to acquisition of properties: (a) Purchase Agreement dated January 31, 1986 between The Gallery, Ltd./LNDC Venture and U.S. Realty Partners Limited Partnership to acquire The Gallery Shopping Plaza, Knoxville, Tennessee (filed as Exhibit 10D to Amendment No. 1 to Registration Statement, No. 33-2996, of the Registrant filed August 19, 1986 incorporated herein by reference). (b) Form of Purchase Agreement by which U.S. Realty Partners Limited Partnership expects to acquire The Gallery Shopping Plaza, Huntsville, Alabama (filed as Exhibit 10E to Amendment No. 2 to Registration Statement, No. 33-2996, of the Registrant filed August 19, 1986 and incorporated herein by reference). (ii) Form of Management Agreement with U.S. Shelter Corporation (filed with Amendment No. 4 to Registration Statement No. 33-2996, of Registrant filed August 19, 1986 and is incorporated herein by reference). (iii) (a) Form of Master Lease and Management and Leasing Sub-Agreement related to Purchase Agreement (see 10(b) between Cazana/Huntsville Shopping Center, Ltd. and U.S. Shelter Corporation) to acquire The Gallery Shopping Plaza, Huntsville, Alabama (filed as Exhibit 10E to Amendment No. 4 to Registration Statement, No. 33-2996, of the Registrant filed August 19, 1986 and incorporated herein by reference). (b) Amended and Restated Surety Note, Bond Notes and Suretyship Agreement by and between U.S. Realty Partners Limited Partnership and Continental Casualty Company, dated October 15, 1993. * (c) First Amended and Restated Mortgage, Assignment of Rents and Security Agreement dated as of October 15, 1993 from U.S. Realty Partners Limited Partnership, a Delaware limited partnership, to Continental Casualty Company, an Illinois insurance company, securing Twin Lakes Apartments, Palm Harbor, Florida. * (d) State of Florida Uniform Commercial Code - Statement of Change - Form UCC - 3 Rev. 11-88 by U.S. Realty Partners Limited Partnership and Continental Casualty Company. * (e) First Amended and Restated Mortgage, Assignment of Rents and Security Agreement dated as of October 15, 1993 from U.S. Realty Partners Limited Partnership, a Delaware limited partnership, to Continental Casualty Company, an Illinois insurance company, securing Governor's Park (formerly St. Croix) Apartments, Little Rock, Arkansas. * (f) Uniform Commercial Code - Standard Form Pulaski County, Arkansas, Statements of Continuation, Partial Release, Assignment, etc. - Form UCC-3 by U.S. Realty Partners Limited Partnership and Continental Casualty Company. * (g) First Amended and Restated Mortgage, Assignment of Rents and Security Agreement dated as of October 15, 1993 from U.S. Realty Partners Limited Partnership, a Delaware limited partnership, to Continental Casualty Company, an Illinois insurance company, securing Gallery Shopping Plaza, Huntsville, Alabama.* (h) State of Alabama - Uniform Commercial Code, Statements of Continuation, Partial Release Assignments, etc. - Form UCC-3 by U.S. Realty Partners Limited Partnership and Continental Casualty Company. * (i) First Amended and Restated Mortgage, Assignment of Rents and Security Agreement dated as of October 15, 1993 from U.S. Realty Partners Limited Partnership, a Delaware limited partnership, to Continental Casualty Company, an Illinois insurance company, securing Gallery Shopping Plaza, Knoxville, Tennessee.* (j) State of Tennessee Uniform Commercial Code Statements of Continuation Partial Release, Assignment, etc. - Form UCC-3 by U.S. Realty Partners Limited Partnership and Continental Casualty Company. * (k) First Amended and Restated Assignment of Rents and Leases dated October 15, 1993 from U.S. Realty Partners Limited Partnership to Continental Casualty Company, securing Gallery Shopping Plaza, Huntsville, Alabama and Gallery Shopping Plaza, Knoxville, Tennessee. * (l) Depositary Agreement dated as of October 15, 1993, among U.S. Realty Partners Limited Partnership, First Union National Bank of South Carolina and Continental Casualty Company. * (m) Financial Statement - Form UCC-1, State of South Carolina, Office of Secretary of State Jim Miles by US Realty Partners Limited Partnership and Continental Casualty Company. * (n) Incumbency Certificate by U.S. Realty I Corporation and U.S. Realty Partners Limited Partnership. * *Filed as Exhibits 10iii (a) through (m) to Form 10QSB for the quarter ended September 30, 1993 and incorporated herein by reference. 99 Prospectus of Registrant dated August 19, 1986 (included in Registration Statement, No. 33-2996, of Registrant and incorporated herein by reference). EX-27 2
5 This schedule contains summary financial information extracted from U.S. Realty Partners Limited Partnership 1997 Year-End 10-KSB and is qualified in its entirety by reference to such 10-KSB filing. 0000788955 U.S. REALTY PARTNERS LIMITED PARTNERSHIP 1,000 12-MOS DEC-31-1997 DEC-31-1997 332 0 0 0 0 0 33,306 (10,523) 24,126 0 21,158 0 0 0 1,616 24,126 0 5,375 0 0 5,623 0 2,250 0 0 0 0 0 0 (248) (.20) 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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