-----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, FKCN8SIALn7EiHKPncONK1t07bZ4JGB6ITuhcA3cV5V630G0k4qc56s2wlRK1K8l roySJYBIQoMGJ4yvQx8ECg== 0000705752-97-000016.txt : 19971113 0000705752-97-000016.hdr.sgml : 19971113 ACCESSION NUMBER: 0000705752-97-000016 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971113 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: 10QSB SEC ACT: SEC FILE NUMBER: 000-15656 FILM NUMBER: 97716942 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 10QSB 1 FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 QUARTERLY OR TRANSITIONAL REPORT U. S. Securities and Exchange Commission Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1997 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from.........to......... Commission file number 0-15656 U.S. REALTY PARTNERS LIMITED PARTNERSHIP (Exact name of small business issuer as specified 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 Greenville, South Carolina 29602 (Address of principal executive offices) (864) 239-1000 (Issuer's telephone number) 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 . PART I - FINANCIAL INFORMATION ITEM 1.FINANCIAL STATEMENTS a) U.S. REALTY PARTNERS LIMITED PARTNERSHIP BALANCE SHEET (Unaudited) (in thousands, except unit data) September 30, 1997 Assets Restricted cash $ 276 Accounts receivable, net of allowance of $168 136 Escrow for taxes 463 Restricted escrows 263 Other assets 346 Investment properties: Land $ 6,534 Buildings and related personal property 26,717 33,251 Less accumulated depreciation (10,310) 22,941 $24,425 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 59 Tenant security deposits 122 Accrued property taxes 338 Other liabilities 480 Due to corporate general partner 542 Mortgage notes payable 21,205 Partners' Capital (Deficit) General partners' $ (446) Depositary unit certificate holders' (2,440,000 units authorized; 1,222,000 units issued and outstanding) 2,125 1,679 $24,425 See Accompanying Notes to Financial Statements b) U.S. REALTY PARTNERS LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per unit data) Three Months Ended Nine Months Ended September 30, September 30, 1997 1996 1997 1996 Revenues: Rental income $ 1,312 $ 1,284 $ 3,952 $ 3,884 Other income 36 41 121 114 Total revenues 1,348 1,325 4,073 3,998 Expenses: Operating 420 352 1,098 1,011 General and administrative 58 40 166 143 Maintenance 189 164 333 318 Depreciation 213 211 634 629 Interest 565 576 1,688 1,731 Property taxes 112 108 339 331 Total expenses 1,557 1,451 4,258 4,163 Net loss $ (209) $ (126) $ (185) $ (165) Net loss allocated to general partners (1%) $ (2) $ (1) $ (2) $ (2) Net loss allocated to depositary unit certificate holders (99%) (207) (125) (183) (163) $ (209) $ (126) $ (185) $ (165) Net loss per Depositary Unit Certificate $ (.17) $ (.10) $ (.15) $ (.13) See Accompanying Notes to Financial Statements c) U.S. REALTY PARTNERS LIMITED PARTNERSHIP STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited) (in thousands, except unit data) Depositary Depositary Unit Unit General Certificate Certificates Partners' Holders' Total Original capital contributions 1,222,000 $ 2 $ 30,550 $ 30,552 Partners' capital (deficit) at December 31, 1996 1,222,000 $ (444) $ 2,308 $ 1,864 Net loss for the nine months ended September 30, 1997 -- (2) (183) (185) Partners' capital (deficit) at September 30, 1997 1,222,000 $ (446) $ 2,125 $ 1,679 See Accompanying Notes to Financial Statements d) U.S. REALTY PARTNERS LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Nine Months Ended September 30, 1997 1996 Cash flows from operating activities: Net loss $ (185) $ (165) Adjustments to reconcile net loss to cash provided by operating activities: Depreciation 634 629 Amortization 35 43 Bad debt expense 42 (34) Change in accounts: Restricted cash (69) 44 Accounts receivable (131) (7) Escrows for taxes (207) (370) Other assets 56 24 Accounts payable 4 25 Tenant security deposit liabilities 1 (13) Accrued property taxes 276 331 Due to Corporate General Partner 18 18 Other liabilities 72 36 Net cash provided by operating activities 546 561 Cash flows from investing activities: Property improvements and replacements (91) (159) Deposits to restricted escrows (94) (22) Receipts from restricted escrows 41 21 Net cash used in investing activities (144) (160) Cash flows from financing activities: Payments on mortgage notes payable (402) (401) Net cash used in financing activities (402) (401) Net change in cash -- -- Cash at beginning of period -- -- Cash at end of period $ -- $ -- Supplemental disclosure of cash flow information: Cash paid for interest $1,630 $1,676 See Accompanying Notes to Financial Statements e) U.S. REALTY PARTNERS LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited financial statements of U.S. Realty Partners Limited Partnership (the "Partnership") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of U. S. Realty I Corporation (the "Corporate General Partner"), all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended September 30, 1997, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1997. For further information, refer to the financial statements and footnotes thereto included in the Partnership's annual report on Form 10-KSB for the year ended December 31, 1996. Certain reclassifications have been made to the 1996 information to conform to the 1997 presentation. NOTE B - RECONCILIATION OF CASH FLOWS The Partnership considers all cash to be restricted for tenant security deposits and for the purpose of the deposit of Net Cash Flow, as defined by the debt restructure in October of 1993. NOTE C - 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 reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. Transactions between the Partnership and affiliates of the Corporate General Partner for the nine months ended September 30, 1997 and 1996 were as follows: 1997 1996 (in thousands) Property management fees (included in operating expenses) $220 $221 Reimbursement for services of affiliates, including approximately $6,000 and $3,000 in 1997 and 1996, respectively, for construction oversight reimbursements (included in general and administrative expenses and maintenance expense) 78 49 Due to Corporate General Partner-- includes principal and accrued interest 542 518 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 received payments 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. ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment properties consist of two apartment complexes and two commercial shopping centers. The following table sets forth the average occupancy of the properties for each of the nine months ended September 30, 1997 and 1996: Average Occupancy 1997 1996 Twin Lakes Apartments Palm Harbor, Florida 94% 95% Governor's Park Apartments Little Rock, Arkansas 92% 92% The Gallery - Huntsville Huntsville, Alabama 97% 94% The Gallery - Knoxville Knoxville, Tennessee 92% 96% 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 comprises approximately 5% of the total square footage of the shopping center and had not been leased as of September 30, 1997. The Gallery - Knoxville also had Storehouse transfer into the Barnes and Noble Space which left a 4,000 square foot vacancy as of September 15, 1997. The vacant Storehouse space comprises approximately 4% of the total square footage. The Partnership's net loss for the nine months ended September 30, 1997, was approximately $185,000 versus a net loss of approximately $165,000 for the nine months ended September 30, 1996. The Partnership realized net losses for the three months ended September 30, 1997 and 1996 of approximately $209,000 and $126,000, respectively. The increase in net loss for the three and nine months ended September 30, 1997, is primarily attributed to an increase in operating and general and administrative expenses. Operating expenses increased due to a major tenant at The Gallery - Knoxville moving out. As a result, the remaining unamortized lease commission of $60,000 was expensed in the third quarter of 1997. The increase in general and administrative expenses is due to an increase in expense reimbursements. Partially offsetting these increases in expenses for nine months ending September 30, 1997, compared to the corresponding period in 1996, was an increase in rental income. Rental income increased primarily due to increases in rents 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. Also contributing to the increase in the net loss for the three months ended September 30, 1997 compared to the corresponding period in 1996, was an increase in maintenance expense. Maintenance expense increased as a result of an exterior painting project at Twin Lake that was started and completed in the third quarter of 1997. Included in maintenance expense for the nine month period ended September 30, 1997 and 1996 is approximately $141,000 and $125,000, respectively, of major repairs and maintenance comprised of major landscaping, exterior building improvements and exterior painting. Based on the terms of the debt restructure, all cash is considered restricted. Net cash provided by operating activities decreased as a result of an increase in restricted cash partially offset by a decrease in escrows for taxes. Net cash used in investing activities decreased due to a decrease in property replacements and improvements which was partially offset by an increase in deposits to restricted escrows. Net cash used in financing activities remained relatively stable for the nine months ended September 30, 1997 compared to the corresponding period in 1996. 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 a high overall occupancy level. 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. 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 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 mortgage indebtedness of approximately $21,205,000 requires a balloon payment on August 1, 2001, at which time the properties will either be refinanced or sold. The Corporate General Partner is currently assessing the feasibility of refinancing the mortgage encumbering the Partnership's investment properties. Pursuant to the loan agreement, no distributions can be made until all long-term debt is repaid. PART II - OTHER INFORMATION ITEM 6. 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: None filed during the quarter ended September 30, 1997. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused 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 and Director By: /s/Ronald Uretta Ronald Uretta Treasurer (Principal Financial Officer and Principal Accounting Officer) Date: November 13, 1997 EX-27 2
5 This schedule contains summary financial information extracted from U.S. Realty Partners Limited Partnership 1997 Third Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000788955 U.S. REALTY LIMITED PARTNERSHIP 1,000 9-MOS DEC-31-1997 SEP-30-1997 0 0 304 168 0 0 33,251 10,310 24,425 0 21,205 0 0 0 1,679 24,425 0 4,073 0 0 4,258 0 1,688 0 0 0 0 0 0 (185) (.15) 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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