-----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, UZulzZg6b7WQJLigatpY0z1sFt+bvhm058SR+rK7N6xLbE0zw2abqqu/1xISoqTB 8j6ecEEfrtcjj0YjeUhmRg== 0000948524-99-000054.txt : 19990705 0000948524-99-000054.hdr.sgml : 19990705 ACCESSION NUMBER: 0000948524-99-000054 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990618 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990702 FILER: COMPANY DATA: COMPANY CONFORMED NAME: METRIC PARTNERS GROWTH SUITE INVESTORS LP CENTRAL INDEX KEY: 0000800730 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011] IRS NUMBER: 943050708 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-17660 FILM NUMBER: 99658696 BUSINESS ADDRESS: STREET 1: ONE CALIFORNIA ST STREET 2: SUITE 1400 CITY: SAN FRANCISCO STATE: CA ZIP: 94111-5415 BUSINESS PHONE: 4156782000 MAIL ADDRESS: STREET 1: ONE CALIFORNIA ST STREET 2: SUITE 1400 CITY: SAN FRANCISCO STATE: CA ZIP: 94111-5415 FORMER COMPANY: FORMER CONFORMED NAME: FOX GROWTH SUITE INVESTORS DATE OF NAME CHANGE: 19880412 FORMER COMPANY: FORMER CONFORMED NAME: MRI BUSINESS PROPERTIES FUND LTD IV DATE OF NAME CHANGE: 19871104 8-K 1 JUNE 18, 1999 8-K FORM 8-K SECURITIES AND EXCHANGE COMMISION Washington, D.C. 20549 CURRENT REPORT Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 June 18, 1999 ------------- Date of Report (Date of earliest event reported) Metric Partners Growth Suite Investors, L.P. -------------------------------------------- (Exact name of registrant as Specified in its charter) 0-17660 California 94-3050708 ------- ---------- ---------- (Registration (State or Other (IRS Employer File Jurisdiction of Identification Number) Incorporation) Number) One California Street, San Francisco, California 94111-5415 ----------------------------------------------------------- (address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (415) 678-2000 (800) 347-6707 Wats line for all states Item 2. ACQUISITION OR DISPOSITION OF ASSETS (a) The Registrant was organized to acquire, hold for investment, manage and ultimately sell all-suite, extended-stay hotels operated under franchise licenses from Residence Inn by Marriott, Inc. ("Marriott"). On June 18, 1999, the Residence Inn - Nashville (the "Hotel") in Nashville, Tennessee was sold, through foreclosure, to the holder of the mortgage note payable (the "Lender"). The Registrant had been in default on the mortgage note payable since April 1, 1998, when it did not pay the balloon mortgage payment due, totaling $8,491,000 as of Apri1 1 1998. The Registrant was unable to negotiate an extension with the Lender and was unable to sell the Hotel (see Note 5 to the 1998 audited financial statements). In April 1998, the Registrant negotiated a six-month forbearance agreement, during which time the Registrant pursued the potential sale of the Hotel, in exchange for which the Lender accepted a principal payment of $100,000, reimbursement of $20,000 of its costs, and regular monthly debt service payments through November 1, 1998. The Registrant subsequently determined that a sale of the Hotel was not feasible, and it discontinued the monthly debt service payments effective with the payment due December 1, 1998. In January 1999, the Lender and the Registrant agreed that the Registrant would make the monthly debt service payments to cover the payments due December 1, 1998 through April 1, 1999, in exchange for the Lender agreeing to work towards taking title to the property via a deed in lieu of foreclosure, including assumption of the management contract with Marriott (with Marriott's consent), thereby relieving the Registrant of a potential obligation to pay approximately $1,400,000 in termination fees plus other costs, and assumption of the ground lease. The Registrant made the debt service payments (including a property tax impound) through the payment due April 1, 1999, but did not make any subsequent payments. The Lender ultimately decided to foreclose on the Hotel, including the land on which the Hotel is located and the improvements and personal property and rents related thereto. On May 20, 1999, the lessor under the ground lease issued a letter notifying the Registrant that it had terminated the ground lease as the Registrant had defaulted under the terms of the mortgage note for the Hotel, thereby violating a term of the ground lease agreement. However, the Lender has taken the position that the ground lease was not terminated until June 18, 1999, when it was terminated as a result of the foreclosure. Therefore, the date on which the ground lease was terminated has not been determined. TERMS OF ORIGINAL ACQUISITION On May 26 , 1989, the Registrant acquired the leasehold interest and the improvements of the Residence Inn - Nashville for $11,893,000 including a reserve for renovation, franchise fee, acquisition fee and other miscellaneous closing costs. Of the acquisition amount, $9,250,000 was financed by a note payable from the seller, which wrapped an existing loan with the balance of approximately $9,336,000 at the time of acquisition. The Registrant became the direct obligor on the underlying mortgage note payable in 1996, when it cured a then existing default thereon by the seller. The seller of the Hotel guaranteed certain returns to the Registrant through May 26, 1992 up to a maximum of $525,000, of which $315,000 was to be in cash and the remaining $210,000 was to be in the form of offset to the deferred ground lease payments. The full amount of the $525,000 guarantee was utilized by the Registrant. TERMS OF DISPOSITIONS AND FINANCINGS The improvements of the Residence Inn - Nashville owned by the Registrant and the land on which it is located, which was under lease to the Registrant, were sold through foreclosure on June 18, 1999 for $9,050,000, with net proceeds of approximately $600,000 after deduction of the outstanding principal of approximately $8,224,000 and other Lender costs. The purchaser was the holder of the mortgage note payable encumbering the Hotel. The lessor on the ground lease also bid for the property. The lessor has filed suit against the foreclosing trustee, asserting that the trustee denied him his alleged right to redeem the property by paying the debt during the foreclosure. In the foreclosure sale the allocation of the $9,050,000 among the real and personal property securing the loan was not specified. The Registrant is entitled to a portion of the net proceeds from the sale because of its ownership of the personal property sold, which portion it has estimated to be no more than $50,000. Approximately $25,000 of costs were incurred by the Registrant in the disposal of the Hotel. With respect to the ground lease, the Registrant was relieved of future payments as of the date of foreclosure, if not as of May 20, 1999, the date the lessor claims to be the lease termination date. The Registrant is, however, still liable for approximately $650,000 in deferred ground rents and interest accrued thereon. This liability is unpaid. At this time as it is unclear which party is entitled to these rents. CARRYING AMOUNTS AT DATE OF SALE At the date of foreclosure, the carrying amount of the improvements (net of $195,000 impairment provision recognized in 1998) and unamortized deferred franchise costs was approximately $8,239,000 for financial statement purposes. The carrying amount was approximately $8,399,000 for tax reporting purposes. GAIN (LOSS) ON SALE For financial statement purposes, the estimated loss to be recognized in 1999 is approximately $30,000. The loss does not include the potential $1,400,000 in termination fees or other costs that might be due to Marriott in the event the Lender does not effectively assume the management contract. Negotiations relating to the management of the Hotel are in progress between the Lender and Marriott. Under the tax method of accounting, the estimated loss is approximately $190,000. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (a) Financial Statements Not applicable. (b) Pro Forma Financial Information Historical financial information and Pro Forma financial information are included herein. (c) Exhibits Substitute Trustee's Quitclaim Deed, executed to be effective as of the 18th day of June, 1999 from Robert M. Holland, Jr. as Grantor , in his capacity as Substitute Trustee, to WBL II Real Estate Limited Partnership as Grantee, of record in the Register's Office of Davidson County, Tennessee in Book 11536, page 808, incorporated herein by reference. 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. METRIC PARTNERS GROWTH SUITE INVESTORS, L.P., a California Limited Partnership By: Metric Realty an Illinois general partnership its Managing General Partner By: SSR Realty Advisors, Inc. a Delaware corporation its Managing General Partner By: /s/ William A. Finelli ---------------------- William A. Finelli Managing Director, Principal Financial and Accounting Officer of SSR Realty Advisors, Inc. Date: July 1, 1999 ------------ METRIC PARTNERS GROWTH SUITE INVESTORS, L.P. a California Limited Partnership PRO FORMA BALANCE SHEETS (UNAUDITED) March 31, 1999 Pro Forma As Adjustments Adjusted Historical (Note 1) (Note 2) ---------- -------- -------- ASSETS Cash and Cash Equivalents $ 7,809,000 ($ 232,000) $ 7,577,000 Restricted Cash 5,000,000 0 5,000,000 Accounts Receivable 716,000 (132,000) 584,000 Prepaid Expenses and Other Assets 52,000 (52,000) 0 Asset to be Disposed of 8,185,000 (8,185,000) 0 Deferred Franchise Fee 24,000 (24,000) 0 ----------- ----------- ----------- TOTAL ASSETS $21,786,000 ($8,625,000) $13,161,000 =========== =========== =========== LIABILITIES AND PARTNERS' EQUITY Accounts Payable $ 773,000 ($ 254,000) $ 519,000 Accrued Property Taxes 32,000 (32,000) 0 Accrued Interest 216,000 0 216,000 Other Liabilities 694,000 (85,000) 609,000 Note Payable 8,224,000 (8,224,000) 0 ----------- ----------- ----------- TOTAL LIABILITIES 9,939,000 (8,595,000) 1,344,000 ----------- ----------- ----------- PARTNERS' EQUITY General Partners 0 0 0 Limited Partners (59,932 Units Outstanding) 11,847,000 (30,000) 11,817,000 ----------- ----------- ----------- TOTAL PARTNERS' EQUITY 11,847,000 (30,000) 11,817,000 ----------- ----------- ----------- TOTAL LIABILITIES AND PARTNERS' EQUITY $21,786,000 ($8,625,000) $13,161,000 =========== =========== =========== METRIC PARTNERS GROWTH SUITE INVESTORS, L.P. a California Limited Partnership STATEMENT OF OPERATIONS For the Year Ended December 31, 1998 Pro Forma As Adjustments Adjusted Historical (Note 1) (Note 2) ---------- -------- -------- REVENUES: Hotel Operations $ 4,445,000 ($4,445,000) $ 0 Interest and Other 726,000 (17,000) 709,000 ----------- ----------- ----------- Total Revenues 5,171,000 (4,462,000) 709,000 ----------- ----------- ----------- EXPENSES: Hotel Operations: Rooms 936,000 (936,000) 0 Administrative 611,000 (577,000) 34,000 Marketing 464,000 (464,000) 0 Energy 230,000 (230,000) 0 Repair and Maintenance 221,000 (221,000) 0 Management Fees 152,000 (152,000) 0 Property Taxes 112,000 (112,000) 0 Other 258,000 (258,000) 0 ----------- ----------- ----------- Total Hotel Operations 2,984,000 (2,950,000) 34,000 Depreciation and Other Amortization 533,000 (533,000) 0 Interest 859,000 (854,000) 5,000 General and Administrative 1,023,000 0 1,023,000 Impairment Provision for Asset to be Disposed of 195,000 (195,000) 0 ----------- ----------- ----------- Total Expenses 5,594,000 (4,532,000) 1,062,000 ----------- ----------- ----------- INCOME (LOSS) BEFORE GAIN ON SALE OF PROPERTIES (423,000) 70,000 (353,000) Gain on Sale of Properties 300,000 0 300,000 ----------- ----------- ----------- NET INCOME (LOSS) ($ 123,000) $ 70,000 ($ 53,000) =========== =========== =========== NET INCOME (LOSS) PER LIMITED PARTNERSHIP ASSIGNEE UNIT Income (Loss) Before Gain on Sale of Properties ($ 7) $ 1 ($ 6) Gain on Sale of Properties 5 0 5 =========== =========== =========== NET INCOME (LOSS) ($ 2) $ 1 ($ 1) =========== =========== =========== CASH DISTRIBUTION PER LIMITED PARTNERSHIP ASSIGNEE UNIT $ 288 $ 0 $ 288 =========== =========== =========== METRIC PARTNERS GROWTH SUITE INVESTORS, L.P. a California Limited Partnership STATEMENT OF OPERATIONS For the Three Months Ended March 31, 1999 Pro Forma As Adjustments Adjusted Historical (Note 1) (Note 2) ---------- -------- -------- REVENUES: Hotel Operations $ 998,000 ($ 998,000) $ 0 Interest and Other 145,000 (1,000) 144,000 ---------- ---------- ---------- Total Revenues 1,143,000 (999,000) 144,000 ---------- ---------- ---------- EXPENSES: Hotel Operations: Rooms 213,000 (213,000) 0 Administrative 116,000 (116,000) 0 Marketing 101,000 (101,000) 0 Energy 64,000 (64,000) 0 Repair and Maintenance 54,000 (54,000) 0 Management Fees 30,000 (30,000) 0 Property Taxes 37,000 (37,000) 0 Other 57,000 (57,000) 0 ---------- ---------- ---------- Total Hotel Operations 672,000 (672,000) 0 Depreciation and Other Amortization 0 0 0 Interest 210,000 (210,000) 0 General and Administrative 114,000 0 114,000 ---------- ---------- ---------- Total Expenses 996,000 (882,000) 114,000 ---------- ---------- ---------- NET INCOME $ 147,000 ($ 117,000) $ 30,000 ========== ========== ========== NET INCOME PER LIMITED PARTNERSHIP ASSIGNEE UNIT $ 2 ($ 1) $ 1 ========== ========== ========== Basis of Presentation Note 1. The Residence Inn - Nashville (the "Hotel") was sold, through foreclosure, to the holder of the first mortgage note payable on June 18, 1999. See Item 2 of the Form 8-K for information regarding the foreclosure. The pro forma adjustments reflect the elimination of accounts related to the Hotel except for the deferred ground lease balance and accrued interest thereon at the time of foreclosure, which continue to show as liabilites. It is currently not known when and to whom payment of these liabilities will be paid. Note 2. The unaudited financial statements present the pro forma balance sheet at March 31, 1999, had the Hotel been foreclosed on March 31, 1999 and the pro forma statements of operations for the year ended December 31, 1998 and for the three months ended March 31, 1999, had the Hotel been foreclosed on at the beginning of each period presented. The unaudited statements also present the historical figures previously reported in the appropriate Form 10-K and 10-Q reports. No provision for Federal and state income taxes has been made in the historical or pro forma financial statements because income taxes are the obligation of the partners. -----END PRIVACY-ENHANCED MESSAGE-----