-----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, RxrpwqdFZS/fR/MC6ubJayHcAL17w9Rjf4TDaHiBdsln73KQ8DKP6aV+0h01JmbE /OI6jbMy1LsqR8Lpl7MWXQ== 0000830056-97-000008.txt : 19970520 0000830056-97-000008.hdr.sgml : 19970520 ACCESSION NUMBER: 0000830056-97-000008 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 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: 1934 Act SEC FILE NUMBER: 000-15656 FILM NUMBER: 97607160 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 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 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, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (Zip Code) Issuer's telephone number (864) 239-1000 Check whether the issuer (1) 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. 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) March 31, 1997 Assets Restricted cash $ 520 Accounts receivable 102 Escrow for taxes 242 Restricted escrows 263 Other assets 424 Investment properties: Land $ 6,534 Buildings and related personal property 26,641 33,175 Less accumulated depreciation (9,886) 23,289 $24,840 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 39 Tenant security deposits 118 Accrued taxes 174 Other liabilities 528 Due to Corporate General Partner 530 Mortgage notes payable 21,524 Partners' Capital (Deficit) General partners $ (443) Depositary unit certificate holders (2,444,000 units authorized; 1,222,000 units issued and outstanding) 2,370 1,927 $24,840 See Accompanying Notes to Financial Statements b) U.S. REALTY PARTNERS LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data) Three Months Ended March 31, 1997 1996 Revenues: Rental income $1,371 $1,285 Interest income 6 5 Other income 36 34 Total revenues 1,413 1,324 Expenses: Operating 339 308 General and administrative 45 46 Maintenance 68 65 Depreciation 210 208 Amortization 15 14 Interest 561 583 Property taxes 112 113 Total expenses 1,350 1,337 Net income (loss) $ 63 $ (13) Net income (loss) allocated to general partners (1%) $ 1 $ -- Net income (loss) allocated to depositary unit certificate holders (99%) 62 (13) $ 63 $ (13) Net income (loss) per Depositary Unit Certificate $ .05 $ (.01) 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 Partners 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 income for the three months ended March 31, 1997 1 62 63 Partners' capital (deficit) at March 31, 1997 1,222,000 $ (443) $ 2,370 $ 1,927 See Accompanying Notes to Financial Statements d) U.S. REALTY PARTNERS LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Three Months Ended March 31, 1997 1996 Cash flows from operating activities: Net income (loss) $ 63 $ (13) Adjustments to reconcile net income (loss) to cash provided by operating activities: Depreciation 210 208 Amortization of leasing commissions, computer software costs and organizational costs 15 14 Bad debt expense (5) 17 Change in accounts: Restricted cash (313) 22 Accounts receivable (50) (17) Escrows for taxes 15 (122) Other assets (3) -- Accounts payable (16) (36) Tenant security deposit liabilities (3) -- Accrued taxes 112 113 Due to Corporate General Partner 6 -- Other liabilities 120 18 Net cash provided by operating activities 151 204 Cash flows from investing activities: Property improvements and replacements (15) (37) Deposits to restricted escrows (53) (3) Net cash used in investing activities (68) (40) Cash flows from financing activities: Payments on mortgage notes payable (83) (164) Net cash used in financing activities (83) (164) Net increase in cash -- -- Cash at beginning of period -- -- Cash at end of period $ -- $ -- Supplemental disclosure of cash flow information: Cash paid for interest $ 439 $ 562 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 month period ended March 31, 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 Insignia Financial Group, Inc. for the quarters ended March 31, 1997 and 1996 were as follows: Three Months Ended March 31, 1997 1996 (in thousands) Property management fees $ 75 $ 75 Reimbursement for services of affiliates 17 30 Interest expense 6 6 Due to Corporate General Partner 530 506 Included in "Reimbursement for services of affiliates" for 1997 are approximately $1,000 in reimbursements for construction oversight costs. The Partnership insures 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 current year's master policy. The current agent assumed the financial obligations to the affiliate of the Corporate General Partner, who receives 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 the three months ended March 31, 1997 and 1996: Average Occupancy Property 1997 1996 Twin Lakes Apartments Palm Harbor, Florida 96% 96% Governor's Park Apartments Little Rock, Arkansas 91% 93% The Gallery - Huntsville Huntsville, Alabama 96% 94% The Gallery - Knoxville Knoxville, Tennessee 93% 98% 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 March 31, 1997. The Partnership's net income for the three months ended March 31, 1997, was approximately $63,000 versus a net loss of approximately $13,000 for the three months ended March 31, 1996. The increase in net income is primarily attributable to an increase in rental income and a decrease in interest expense. Rental income increased due to increases in rental rates at all four properties and an increase in tenant reimbursements at the two commercial properties. Partially offsetting the increase in revenue was an increase in operating expenses. The increase in operating expense was primarily due to an increase in resident relations and concessions at Twin Lakes, where reductions in rent and local gym memberships were offered as leasing incentives. Also, legal fees increased at The Gallery-Knoxville, due to efforts to collect rent from tenants which had vacated their spaces prior to their lease expirations in 1996. In addition, common area expenses, comprised primarily of contract maintenance and landscaping, increased at the two commercial properties. Included in maintenance expense in 1997 is approximately $10,000 of major repairs and maintenance comprised of major landscaping, the purchase of a golf cart, office computers and window coverings. 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. Based on the terms of the debt structure, all cash is considered restricted. Net cash provided by operating activities decreased primarily as a result of the increase in restricted cash. Net cash used in investing activities increased due to an increase in deposits to restricted escrows which were partially offset by a decrease in property improvements and replacements. Net cash used in financing activities decreased as a result of a decrease in principal payments on the mortgage note payable. The Partnership has no material capital programs scheduled to be performed in 1997, 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 $21,524,000 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 in the process of negotiating a possible refinancing of the mortgage indebtedness which, if successful, would reduce both the interest rate and restrictions on future distributions. 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 March 31, 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: May 15, 1997 EX-27 2
5 This schedule contains summary financial information extracted from U.S. Realty Partners Limited Partnership 1997 First Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000788955 U.S. REALTY PARTNERS LIMITED PARTNERSHIP 1,000 3-MOS DEC-31-1997 MAR-31-1997 0 0 102 0 0 0 33,175 (9,886) 24,840 0 21,524 0 0 0 1,927 24,840 0 1,413 0 0 1,350 0 561 0 0 0 0 0 0 63 .05 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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