-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, HnPFsrwGoH/9NnafXlPLlF340quqs+CULwzolXFhZEvVlG/0FqF4IfBHFl7Aw/ZV CbMnq7srPnMfbK3mqbUmvg== 0000889812-95-000423.txt : 19950814 0000889812-95-000423.hdr.sgml : 19950814 ACCESSION NUMBER: 0000889812-95-000423 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FOX STRATEGIC HOUSING INCOME PARTNERS CENTRAL INDEX KEY: 0000800080 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 943016373 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16877 FILM NUMBER: 95562056 BUSINESS ADDRESS: STREET 1: 5665 NORTHSIDE DR NW STREET 2: STE 370 CITY: ATLANTA STATE: GA ZIP: 30328 BUSINESS PHONE: 4049169090 MAIL ADDRESS: STREET 1: POST & HEYMANN STREET 2: 5665 NORTHSIDE DR NW CITY: ATLANTA STATE: GA ZIP: 30328 FORMER COMPANY: FORMER CONFORMED NAME: FOX STRATEGIC HOUSING PARTNERS /CA/ DATE OF NAME CHANGE: 19870402 FORMER COMPANY: FORMER CONFORMED NAME: CENTURY PROPERTIES GROWTH FUND XXVI DATE OF NAME CHANGE: 19870208 10-Q 1 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1995 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 0-16877 Fox Strategic Housing Income Partners, (a California Limited Partnership) (Exact name of Registrant as specified in its charter) California 94-3016373 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 5665 Northside Drive N.W., Ste. 370, Atlanta, Georgia 30328 (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code (404) 916-9090 N/A Former name, former address and fiscal year, if changed since last report. Indicate by check mark whether Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No_____ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes _____ No _____ APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date __________________. 1 of 13 FOX STRATEGIC HOUSING INCOME PARTNERS - FORM 10-Q - JUNE 30, 1995 (a California Limited Partnership) PART I - FINANCIAL INFORMATION Item 1. Financial Statements. Consolidated Balance Sheets June 30, December 31, 1995 1994 (Unaudited) (Audited) Assets Cash and cash equivalents $ 2,828,000 $ 2,246,000 Cash investments 2,497,000 3,004,000 Other assets and receivables 81,000 195,000 Real estate: Real estate 21,056,000 21,018,000 Accumulated depreciation (4,853,000) (4,518,000) ------------ ------------ Real estate, net 16,203,000 16,500,000 Deferred financing costs, net 118,000 137,000 ------------ ------------ Total assets $ 21,727,000 $ 22,082,000 ============ ============ Liabilities and Partners' Equity Note payable $ 9,233,000 $ 8,756,000 Accrued interest 419,000 398,000 Accrued expenses and other liabilities 273,000 248,000 ------------ ------------ Total liabilities 9,925,000 9,402,000 ------------ ------------ Commitments and Contingencies Partners' Equity (Deficit): General partner (30,000) (13,000) Limited partners (26,111 units outstanding at June 30, 1995 and December 31, 1994) 11,832,000 12,693,000 ------------ ------------ Total partners' equity 11,802,000 12,680,000 ------------ ------------ Total liabilities and partners' equity $ 21,727,000 $ 22,082,000 ============ ============ See notes to consolidated financial statements. 2 of 13 FOX STRATEGIC HOUSING INCOME PARTNERS - FORM 10-Q - JUNE 30, 1995 (a California Limited Partnership) Consolidated Statements of Operations (Unaudited) For the Six Months Ended June 30, 1995 June 30, 1994 Revenues: Rental $ 1,391,000 $ 1,817,000 Interest 119,000 20,000 Gain on sale of property -- 1,469,000 ----------- ----------- Total revenues 1,510,000 3,306,000 ----------- ----------- Expenses: Operating 591,000 796,000 Interest 518,000 599,000 Depreciation 334,000 424,000 General and administrative 146,000 148,000 ----------- ----------- Total expenses 1,589,000 1,967,000 ----------- ----------- Net (loss) income $ (79,000) $ 1,339,000 =========== =========== Net (loss) income per limited partnership assignee unit $ (3) $ 51 =========== =========== Cash distributions per limited partnership assignee unit $ 30 $ 30 =========== =========== See notes to consolidated financial statements. 3 of 13 FOX STRATEGIC HOUSING INCOME PARTNERS - FORM 10-Q - JUNE 30, 1995 (a California Limited Partnership) Consolidated Statements of Operations (Unaudited) For the Three Months Ended June 30, 1995 June 30, 1994 Revenues: Rental $ 705,000 $ 882,000 Interest 87,000 11,000 Gain on sale of property -- 1,469,000 ---------- ---------- Total revenues 792,000 2,362,000 ---------- ---------- Expenses: Operating 301,000 387,000 Interest 271,000 296,000 Depreciation 149,000 207,000 General and administrative 76,000 78,000 ---------- ---------- Total expenses 797,000 968,000 ---------- ---------- Net (loss) income $ (5,000) $1,394,000 ========== ========== Net (loss) income per limited partnership assignee unit -- $ 53 ========== ========== Cash distributions per limited partnership assignee unit $ 15 $ 15 ========== ========== See notes to consolidated financial statements. 4 of 13 FOX STRATEGIC HOUSING INCOME PARTNERS - FORM 10-Q - JUNE 30, 1995 (a California Limited Partnership) Consolidated Statements of Cash Flows (Unaudited) For the Six Months Ended June 30, 1995 June 30, 1994 Operating Activities: Net (loss) income $ (79,000) $ 1,339,000 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 354,000 449,000 Gain on sale of property -- (1,469,000) Interest added to note payable principal 79,000 94,000 Changes in operating assets and liabilities: Other assets and receivables 114,000 (95,000) Accrued interest, accrued expenses and other liabilities 444,000 419,000 ----------- ----------- Net cash provided by operating activities 912,000 737,000 ----------- ----------- Investing Activities: Net proceeds from sale of rental property -- 7,026,000 Additions to rental properties (38,000) (82,000) Proceeds from cash investments 3,004,000 -- Purchase of cash investments (2,497,000) -- ----------- ----------- Net cash provided by investing activities 469,000 6,944,000 ----------- ----------- Financing Activities: Partial repayment of note payable principal -- (2,634,000) Cash distributions to partners (799,000) (799,000) ----------- ----------- Cash (used in) financing activities (799,000) (3,433,000) ----------- ----------- Increase in Cash and Cash Equivalents 582,000 4,248,000 Cash and Cash Equivalents at Beginning of Period 2,246,000 1,404,000 ----------- ----------- Cash and Cash Equivalents at End of Period $ 2,828,000 $ 5,652,000 =========== =========== Supplemental Disclosure of Cash Flow Information: Interest paid in cash during the period -- $ 105,000 =========== =========== Supplemental Disclosure of Non-Cash Investing and Financing Activities Accrued interest added to note payable principal $ 398,000 $ 466,000 =========== =========== See notes to consolidated financial statements. 5 of 13 FOX STRATEGIC HOUSING INCOME PARTNERS - FORM 10-Q - JUNE 30, 1995 (a California Limited Partnership) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. General The accompanying consolidated financial statements, footnotes and discussions should be read in conjunction with the consolidated financial statements, related footnotes and discussions contained in the Partnership's Annual Report for the year ended December 31, 1994. Certain accounts have been reclassified in order to conform to the current period. The financial information contained herein is unaudited. In the opinion of management, however, all adjustments necessary for a fair presentation of such financial information have been included. All adjustments are of a normal recurring nature, except as disclosed in Note 5. At June 30, 1995, the Partnership had approximately $2,591,000 invested in overnight repurchase agreements earning approximately 6% per annum. The Partnership's $3,004,000 investment in a United States Treasury Bill matured in June 1995 and was reinvested in a $2,497,000 United States Treasury Bill earning 5.3% interest and maturing in May 1996. The results of operations for the six and three months ended June 30, 1995 and 1994 are not necessarily indicative of the results to be expected for the full year. 2. Transactions with Related Parties (a) An affiliate of NPI, Inc. received reimbursements of administrative expenses amounting to $48,000 and $52,000 during the six months ended June 30, 1995 and 1994, respectively. These reimbursements are primarily included in general and administrative expenses. (b) An affiliate of NPI, Inc. is entitled to receive a management fee equal to 5% of the annual gross receipts from certain properties it manages. For the six months ended June 30, 1995 and 1994, affiliates of NPI, Inc. received $69,000 and $62,000, which are included in operating expenses. (c) The general partner received cash distributions of $16,000 during the six months ended June 30, 1995 and 1994. (d) An affiliate of NPI, Inc. was paid a fee of $4,000 relating to a successful real estate tax appeal on the Partnership's Wood View Apartments during the six months ended June 30, 1995. This fee is included in operating expenses. 3. Note Payable The Partnership's properties are cross-collateralized by a zero coupon first mortgage which secures the entire amount of the note payable. Interest accrues on the amount borrowed at a contract rate of 10.9 percent per annum, with the interest accrued added to principal each January and July. As of June 30, 1995, $4,346,000 in accrued interest has been added to the principal 6 of 13 FOX STRATEGIC HOUSING INCOME PARTNERS - FORM 10-Q - JUNE 30, 1995 (a California Limited Partnership) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 3. Note Payable (Continued) of this note. The Partnership is required to repay a specified percentage of the then outstanding original principal amount of the loan as follows: 20 percent in August 1995, 20 percent in August 1996, and 30 percent in August 1997. In addition, provided that the Partnership has generated income in an amount as defined in the note agreement, it will be required to repay a specified percentage of the then outstanding accrued interest added to principal as follows: 20 percent in August 1995, 20 percent in August 1996, and 30 percent in August 1997. The remaining principal balance plus all accrued and unpaid interest is due in August 1998. 4. Distributions The Partnership distributed $30 per unit ($783,000 in total) to the holders of limited partnership units and $16,000 to the general partner during the six months ended June 30, 1995 and 1994. In order to meet the August 1998 mortgage payment, it is anticipated that cash distributions will be suspended starting the second half of 1995 through 1998. The general partner will evaluate the propriety of future cash distributions in light of property sales and required debt service payments. 5. Gain on Sale of Property On June 20, 1994, the Partnership sold its Lakewood Village Mobile Home Park, located in Melbourne, Florida for $7,400,000. After payment of $2,634,000 of mortgage principal, a prepayment penalty of $480,000 and closing costs, the Partnership received proceeds of approximately $4,249,000. In addition, in April and May 1994, the Partnership sold a portion of its inventory of mobile homes and received $143,000 of net proceeds. During the period ended June 30, 1994, the Partnership recognized a gain of approximately $1,469,000 on the sale of their Lakewood Village Mobile Home Park property. 7 of 13 FOX STRATEGIC HOUSING INCOME PARTNERS - FORM 10-Q - JUNE 30, 1995 (a California Limited Partnership) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. This item should be read in conjunction with the Consolidated Financial Statements and other Items contained elsewhere in this Report. Liquidity and Capital Resources Registrant's remaining properties consist of two apartment buildings located in Georgia and Ohio. Registrant's Lakewood Village Mobile Home Park property was sold on June 20, 1994. The two remaining properties generated positive cash flow for the six months ended June 30, 1995. Registrant receives rental income from its properties and is responsible for operating expenses, administrative expenses, capital improvements and debt service payments. Registrant uses working capital reserves provided from any undistributed cash flow from operations and sale proceeds as its primary source of liquidity. The current level of cash distributions is being sustained by a combination of both the current and prior years cash provided from operating activities and the proceeds from the sale of Registrant's Lakewood Village Mobile Home Park property. To preserve working capital reserves, which will be required for necessary capital improvements to the properties and debt service requirements, the current level of cash distributions was reduced from an annualized rate of 6.5 percent to 6.0 percent beginning with the May 1993 distribution. During the first six months of 1995, Registrant distributed to the holders of limited partnership units $30 per unit ($783,000 in total) and $16,000 to the general partner. In order to meet the August 1998 mortgage payment, it is anticipated that cash distributions will be suspended starting the second half of 1995 through 1998. The general partner will evaluate the propriety of future cash distributions in light of property sales and required debt service payments. The level of liquidity based upon cash and cash equivalents experienced a $582,000 increase at June 30, 1995, as compared to December 31, 1994. Registrant's $912,000 of cash provided by operating activities and $469,000 of cash from investing activities was only partially offset by $799,000 of cash distributions paid to partners (financing activities). Investing activities consisted of a net $507,000 from liquidating cash investments which was only partially offset by $38,000 of rental property additions. All other increases (decreases) in certain assets and liabilities are the result of the timing of receipt and payment of various operating activities. Working capital reserves are primarily invested in United States Treasury bills and in repurchase agreements secured by United States Treasury obligations. The general partner believes that, if market conditions remain relatively stable, cash flow from operations, when combined with working capital reserves, will be sufficient to fund required capital improvements and debt service payments until August 1998 at which time the balloon payment on the debt comes due. Registrant will be required to arrange further financings or refinancings, or sell a property prior to the maturity date of the note. 8 of 13 FOX STRATEGIC HOUSING INCOME PARTNERS - FORM 10-Q - JUNE 30, 1995 (a California Limited Partnership) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Real Estate Market The national real estate market has suffered from the effects of the real estate recession including but not limited to a downward trend in market values of existing residential properties. In addition, the bail out of the savings and loan associations and sales of foreclosed properties by auction reduced market values and caused a further restriction on the ability to obtain credit. As a result, Registrant's ability to refinance or sell its existing properties may be restricted. These factors caused a decline in market property values and serve to reduce market rental rates and/or sales prices. Compounding these difficulties have been relatively low interest rates, which encourage existing and potential tenants to purchase homes. In addition, there has been a significant decline nationally in new household formation. Despite the above, the rental market appears to be experiencing a gradual strengthening and management anticipates that increases in revenue will generally exceed increases in expenses during 1995. Management believes that the emergence of new institutional purchasers, including real estate investment trusts and insurance companies, should create a more favorable market value for Registrant's properties in the future. Results of Operations Six Months Ended June 30, 1995 vs. June 30, 1994 Operating results declined by $1,418,000 for the six months ended June 30, 1995, as compared to 1994. The decrease in operating results is due to the $1,469,000 gain on the sale of Registrant's Lakewood Village Mobile Home Park in June 1994. Revenues declined by $1,796,000 for the six months ended June 30, 1995, as compared to 1994, due to the previously mentioned sale. With respect to the remaining properties, rental revenues increased by $80,000 due to an increase in rental rates at Registrant's remaining properties coupled with an increase in occupancy and decreased concessions offered to tenant's at Registrant's Barrington Place Apartments property. Interest income increased by $99,000 due to an increase in average working capital reserves available for investment as a result of the proceeds received from the sale of Registrant's Lakewood Village Mobile Home Park property and the effect of higher interest rates. Expenses declined by $378,000 for the six months ended June 30, 1995, as compared to 1994, due to the sale of Registrant's Lakewood Village Mobile Home Park in June 1994. With respect to the remaining properties, expenses increased by $18,000 due to increases in interest expense of $53,000 and operating expenses of $1,000, which were only partially offset by a decrease in depreciation expense of $36,000. Interest expense increased due to the compounding of interest on the zero coupon mortgage. Depreciation expense decreased as a result of a portion of Registrant's prior year assets becoming fully depreciated. Operating expenses remained constant. In addition, general and administrative expenses remained relatively constant. 9 of 13 FOX STRATEGIC HOUSING INCOME PARTNERS - FORM 10-Q - JUNE 30, 1995 (a California Limited Partnership) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Three Months Ended June 30, 1995 vs. June 30, 1994 Operating results declined by $1,399,000 for the three months ended June 30, 1995 as compared to 1994. The decrease in operating results is due to the $1,469,000 gain on sale of Registrant's Lakewood Village Mobile Home Park in June 1994. Revenues declined by $1,570,000 for the three months ended June 30, 1995, as compared to 1994, due to the previously mentioned sale. With respect to the remaining properties, rental revenues increased by $48,000 due to an increase in rental rates and an increase in occupancy at Registrant's remaining properties. Interest income increased by $76,000, due to an increase in average working capital reserves available for investment as a result of the proceeds received from the sale of Registrant's Lakewood Village Mobile Home Park property, the effect of higher interest rates and the timing of interest accruals. Expenses declined by $171,000 for the three months ended June 30, 1995, as compared to 1994, due to the sale of Registrant's Lakewood Village Mobile Home Park in June 1994. With respect to the remaining properties, expenses increased by $9,000, due to increases in interest expense of $39,000 and operating expenses of $6,000, which were only partially offset by a decrease in depreciation expense of $36,000. Interest expense increased due to the compounding of interest and a modification in the second quarter of 1995. Depreciation expense decreased as a result of a portion of Registrant's prior year assets becoming fully depreciated. Operating expenses remained relatively constant. In addition, general and administrative expenses remained relatively constant. 10 of 13 FOX STRATEGIC HOUSING INCOME PARTNERS - FORM 10-Q - JUNE 30, 1995 (a California Limited Partnership) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Properties A description of the properties in which Registrant had an ownership interest during the period covered by this Report, along with occupancy data, follows: FOX STRATEGIC HOUSING INCOME PARTNERS, (a California Limited Partnership) OCCUPANCY SUMMARY Average Occupancy Rate(%) ------------------------ Six Months Three Months Date Ended Ended of June 30, June 30, Name and Location Purchase Size 1995 1994 1995 1994 - ----------------- -------- ---- ---- ---- ---- ---- Wood View Apartments 09/87 180 96 96 97 96 Atlanta, Georgia Barrington Place Apartments 07/89 164 97 95 98 96 Westlake, Ohio Lakewood Village Mobile Home Park (1) Melbourne, Florida 06/87 351 -- 96 -- 96 (1) Property was sold in June 1994. Average occupancy rate is for the period January 1, 1994 through date of sale. 11 of 13 FOX STRATEGIC HOUSING INCOME PARTNERS - FORM 10-Q - JUNE 30, 1995 (a California Limited Partnership) PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. No report on Form 8-K was required to be filed during the period. 12 of 13 FOX STRATEGIC HOUSING INCOME PARTNERS - FORM 10-Q - JUNE 30, 1995 (a California Limited Partnership) SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FOX STRATEGIC HOUSING INCOME PARTNERS (a California Limited Partnership) By: FOX PARTNERS VIII Its General Partner By: FOX CAPITAL MANAGEMENT CORPORATION A General Partner /s/ ARTHUR N. QUELER Secretary/Treasurer and Director (Principal Financial Officer) 13 of 13 EX-27 2 FINANCIAL DATA SCHEDULE
5 The schedule contains summary financial information extracted from Fox Strategic Housing Income Partners and is qualified in its entirety by reference to such financial statements. 1 6-MOS DEC-31-1995 JAN-01-1995 JUN-30-1995 5,325,000 0 0 0 0 0 21,056,000 (4,853,000) 21,727,000 0 9,233,000 0 0 0 11,802,000 21,727,000 0 1,391,000 0 925,000 0 0 518,000 (79,000) 0 (79,000) 0 0 0 (79,000) (3) (3) Includes cash investments of $2,497,000.
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