-----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, LanixzoMqxUXcPm30UqeOuNcarURkFNJuSB+N0Zxg1uULfPyEpKLx/uo1S8cV6qT Y+4r55DLUVQNLrv5RbtmCQ== 0000950149-01-500344.txt : 20010402 0000950149-01-500344.hdr.sgml : 20010402 ACCESSION NUMBER: 0000950149-01-500344 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010330 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: 10-K SEC ACT: SEC FILE NUMBER: 000-17660 FILM NUMBER: 1588043 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 10-K 1 f71159e10-k.txt FORM 10-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (MARK ONE) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2000 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 0-17660 METRIC PARTNERS GROWTH SUITE INVESTORS, L.P., A CALIFORNIA LIMITED PARTNERSHIP (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) CALIFORNIA 94-3050708 - -------------------------------------------------------------- ------------------------------------ (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.) 1 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 IN ALL STATES Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Limited Partnership Assignee Units
Indicate by check mark whether the 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 [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not 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-K or any amendment to this Form 10-K. [X] No market for the Limited Partnership Assignee Units exists and therefore a market value for such Units cannot be determined. 2 METRIC PARTNERS GROWTH SUITE INVESTORS, L.P., A CALIFORNIA LIMITED PARTNERSHIP PART I ITEM 1. BUSINESS. Metric Partners Growth Suite Investors, L.P., a California Limited Partnership (the "Partnership"), was organized in 1984 under the California Uniform Limited Partnership Act. On April 1, 1997, Metric Holdings, Inc. and Metric Realty Corp., the partners of the Managing General Partner, Metric Realty, were involved in certain corporate transactions. Pursuant to these transactions, (i) Metric Holdings, Inc. was merged into a newly-formed corporation known as SSR Realty Advisors, Inc. ("SSR Realty"), which became the managing partner of Metric Realty, and (ii) Metric Realty Corp. was merged into Metric Property Management, Inc., a subsidiary of SSR Realty. Accordingly, the partners of Metric Realty are now SSR Realty and Metric Property Management, Inc. After consummation of these transactions, both partners of Metric Realty continue to be wholly owned subsidiaries of Metropolitan Life Insurance Company, as were both partners prior to the occurrence of such transactions. The associate general partner of the Partnership is GHI Associates II, L.P., a California Limited Partnership. The general partner of GHI Associates II is Metric Realty and the limited partner is Prudential-Bache Properties, Inc. The Partnership's Registration Statement, filed pursuant to the Securities Act of 1933 (No. 33-8610), was declared effective by the Securities and Exchange Commission on April 14, 1988. The Partnership marketed its securities pursuant to its Prospectus dated April 14, 1988, which was thereafter supplemented (hereinafter, the "Prospectus"). This Prospectus was filed with the Securities and Exchange Commission pursuant to Rule 424(b) of the Securities Act of 1933. The principal business of the Partnership was to acquire, hold for investment, manage and ultimately sell all-suite, extended stay hotels, which are operated under franchise licenses from Residence Inn by Marriott, Inc. The Partnership is a "closed" limited partnership real estate syndicate. For a further description of the Partnership's business, see the sections entitled "Risk Factors" and "Investment Objectives and Policies" in the Prospectus. Beginning in April 1988, the Partnership offered $60,000,000 in Limited Partnership Assignee Units. The offering was closed on June 30, 1989, with total funding of $59,932,000. The net proceeds of the offering were used to purchase ten hotel properties, which are described in Item 2. The acquisition activities of the Partnership were completed on March 16, 1990, with the purchase of the Residence Inn Altamonte Springs. Since that time, the principal activity of the Partnership had been managing its portfolio. As the Partnership's long-term goal was to ultimately liquidate the portfolio, the markets where the hotels are located were monitored on an ongoing basis for potential sales opportunities. The Partnership entered into a purchase and sale agreement for the Residence Inn-Atlanta (Perimeter West) with an unaffiliated buyer and sold the property on October 3, 1995. In 1997, the Partnership marketed eight of the nine remaining hotels for sale, and on December 30, 1997, the hotels were sold to an unaffiliated buyer. The Partnership's last property, the Residence Inn - -Nashville, was sold through foreclosure on June 18, 1999, as further described in Part II, Item 7. Environmental site assessments were performed for each of the properties at the time of property acquisition. No material adverse environmental conditions or liabilities were identified at that time, nor were any identified during due diligence conducted in conjunction with the sale of the Partnership's hotels. In no case has the Partnership received notice that it is a potentially responsible party with respect to an environmental clean-up site. 2 3 ITEM 2. PROPERTIES. Following is a description of the hotel properties that the Partnership owned:
NAME AND LOCATION ROOMS DATE OF PURCHASE DATE OF SALE - ----------------- ----- ---------------- ------------ Residence Inn-Ontario 200 04/88 12/97 2025 East D Street, Ontario, California Residence Inn-Fort Wayne 80 06/88 12/97 4919 Lima Road, Fort Wayne, Indiana Residence Inn-Columbus East 80 06/88 12/97 2084 South Hamilton Road, Columbus, Ohio Residence Inn-Indianapolis 88 06/88 12/97 3553 Founders Road, Indianapolis, Indiana Residence Inn-Lexington 80 06/88 12/97 1080 Newtown Pike, Lexington, Kentucky Residence Inn-Louisville 96 06/88 12/97 120 North Hurtsbourne Lane, Louisville, Kentucky Residence Inn-Winston-Salem 88 06/88 12/97 7835 North Point Blvd., Winston-Salem, North Carolina Residence Inn-Nashville 168 05/89 06/99* 2300 Elm Hill Pike, Nashville, Tennessee Residence Inn-Atlanta (Perimeter West) 128 10/89 10/95 6096 Barfield Road, Atlanta, Georgia Residence Inn-Altamonte Springs 128 03/90 12/97 270 Douglas Avenue, Altamonte Springs, Florida
* Date of foreclosure. ITEM 3. LEGAL PROCEEDINGS. There are no material pending legal proceedings to which the Partnership is a party or to which any of its assets are subject, except the following: Metric Partners Growth Suite Investors, L.P. vs. Kenneth E. Nelson, The Nelson Group, et al., San Francisco County Superior Court, Case No. 928065. Nashville Lodging Company vs. Metric Partners Growth Suite Investors, L.P., et al., Circuit Court, State of Wisconsin, Case No. 94CV001212. Orlando Residence, Ltd. vs. 2300 Elm Hill Pike, Inc. and Nashville Lodging Company vs. Metric Partners Growth Suite Investors, L.P., Chancery Court for Davidson County, in Nashville, Tennessee, Case No. 94-1911-I. Metric Partners Growth Suite Investors, L.P., vs. Nashville Lodging Co., 2300 Elm Hill Pike, Inc., Orlando Residence, Ltd., and LaSalle National Bank, as trustee under that certain pooling and servicing agreement, dated July 11, 1995, for the holders of the WHP Commercial Mortgage Pass Through Certificates, Series 1995C1 and Robert Holland, Trustee, Chancery Court for Davidson County, in Nashville, Tennessee, Case No. 96-1405-III. 3 4 Kenneth E. Nelson and Nashville Lodging Co., vs. Metric Realty et. al., Chancery Court for Davidson County, in Nashville, Tennessee, Case No. 97-2189-III (the "Inducement Action"). Metric Partners Growth Suite Investors, L.P. vs. James Reuben et al, San Francisco County Superior Court, Case No. 998214. For information regarding these lawsuits, see Management's Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 8, Note 7 to the Financial Statements. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. No matter was submitted to a vote of security holders during the period covered by this report. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. The Limited Partnership Assignee Unit holders are entitled to certain distributions as provided in the Partnership Agreement. From inception through September 7, 1999, Assignee Unit holders have received distributions from operations and sales ranging from $696 - $789 for each $1,000 limited partnership assignee Unit, inclusive of $395 from sales proceeds. No market for Limited Partnership Assignee Units exists, nor is one expected to develop. As of December 31, 2000, the approximate number of holders of Limited Partnership Assignee Units was as follows:
TITLE OF CLASS NUMBER OF RECORD HOLDERS -------------- ------------------------ Limited Partnership Assignee Units............ 4,279
4 5 ITEM 6. SELECTED FINANCIAL DATA. The following represents selected financial data for Metric Partners Growth Suite Investors, L.P., a California Limited Partnership, for each of the five years in the period ended December 31, 2000. The data should be read in conjunction with the financial statements included elsewhere herein.
FOR THE YEAR ENDED DECEMBER 31, ------------------------------------------------------------------ 2000(2) 1999 1998 1997 1996 -------- -------- -------- -------- -------- (AMOUNTS IN THOUSANDS EXCEPT PER UNIT DATA) Total Revenues $ 447 $ 2,566 $ 5,171 $ 26,193 $ 25,045 ======== ======== ======== ======== ======== Net Income (Loss): Income (Loss) Before Gain on Sale or Loss on Foreclosure of Property $ 174 $ 474 $ (423) $ 2,814 $ 521 Gain (Loss) on Foreclosure of Property 410 (340) - - - Gain on Sale of Properties - - 300 7,505 - -------- -------- -------- -------- -------- Net Income (Loss) $ 584 $ 134 $ (123) $ 10,319 $ 521 ======== ======== ======== ======== ======== Net Income (Loss) per Limited Partnership Assignee Unit(1): Income (Loss) Before Gain on Sale or Gain (Loss) on Foreclosure of Property $ 3 $ 8 $ (7) $ 47 $ 8 Gain (Loss) on Foreclosure of Property 7 (6) - - - Gain on Sale of Properties - - 5 120 - -------- -------- -------- -------- -------- Net Income (Loss) per Limited Partnership Assignee Unit $ 10 $ 2 $ (2) $ 167 $ 8 ======== ======== ======== ======== ======== Total Assets $ 7,281 $ 7,374 $ 21,845 $ 60,636 $ 67,436 ======== ======== ======== ======== ======== Long Term Obligations: Notes Payable $ - $ - $ 8,292 $ 26,983 $ 42,518 ======== ======== ======== ======== ======== Cash Distributions per Limited Partnership Assignee Unit $ - $ 85 $ 288 $ 40 $ 68 ======== ======== ======== ======== ========
(1) $1,000 original contribution per limited partnership assignee Unit, based on limited partnership assignee units outstanding during the period, after allocation to the General Partners. (2) See discussion in Item 7 regarding future results of operations. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Introduction This Item should be read in conjunction with financial statements contained elsewhere in this Report. The Partnership sold eight of its nine remaining hotels in December 1997. The remaining property, the Residence Inn -- Nashville, was sold through foreclosure in June 1999. Accordingly, historical financial information will not be representative of future results. Future results of operations will be dependent on general and administrative expenses and interest income, as well as the outcome of the legal proceedings discussed in Note 7 to the financial statements. RESULTS OF OPERATIONS 2000 Compared to 1999 Net income in 2000 was $584,000 as compared to $134,000 in 1999 and reflects a gain of $410,000 for an adjustment to the loss on foreclosure recorded in 1999. The change reflects the absence of net income from hotel operations due to the sale and transfer of hotel properties by the end of 1999. Hotel operations and related interest income in 1999 5 6 contributed $474,000 to net income before recognition of a $340,000 loss on foreclosure. Interest income decreased in 2000 on lower cash balances due to the distribution made to the partners in 1999. General and administrative expenses decreased in 2000 compared to 1999 primarily due to substantially lower legal expenses, partnership management fees and administrative costs associated with the lack of hotel operations and resolution of certain legal matters. 1999 Compared to 1998 Net income was $134,000 in 1999 compared to a net loss of $123,000 in 1998. The change is primarily due to the sale through foreclosure of the Partnership's last property, the Residence Inn -- Nashville, in June 1999. This disposition was anticipated, and in 1998 the Partnership recognized a $195,000 provision for impairment (see discussion in the following section). While net hotel operations decreased in 1999 as a result of approximately six months of operations compared to twelve in 1998, the $195,000 provision for impairment in 1998 (see Notes 3 and 4 to the financial statements) and the consequential cessation of depreciation expense at December 31, 1998 had a positive effect on net income. In addition, interest expense in 1999 was only recorded for the first quarter (see Note 4 to the financial statements), while 1998 reflected a full year of interest expense. These factors, combined with a substantial decrease in general and administrative expenses, and despite a recognition of a $300,000 deferred gain in 1998 versus a loss on foreclosure of property of $340,000 in 1999, led to a net income in 1999 versus a net loss in 1998. Interest income decreased in 1999 compared to 1998 as a result of lower cash balances primarily caused by a distribution to the partners in September 1999. General and administrative expenses decreased in 1999 compared to 1998 primarily due to substantially lower legal expenses, partnership management fees and administrative costs. PARTNERSHIP LIQUIDITY AND CAPITAL RESOURCES Introduction As reported on the 2000 Statement of Cash Flows, cash was used by operating activities, primarily from interest income earned on cash reserves, the collection of outstanding receivable balances, the payment of outstanding liabilities and an adjustment to the loss on foreclosure recorded in 1999. The cash balances relate to court-ordered reserves held until the resolution of litigation with third parties. The receivable balances collected were in connection with certain reserves held by Marriott pursuant to the sale of the remaining hotel investments. The adjustment to the loss on foreclosure results from the realization of $410,000 more than anticipated upon the conclusion of foreclosure proceedings commenced in 1999. The Partnership considers cash equivalents to be those investments (primarily commercial paper) with an original maturity date of less than three months at time of purchase. There were no cash equivalents at December 31, 2000. As presented in the 1999 Statement of Cash Flows, cash was used by operating activities. Cash was provided by investing activities from receipt by the Partnership of the balance of an escrow account (the "Shortfall Guaranty Account") that had been established at the time of sale of the Residence Inn -- Atlanta in October 1995. The conditions for payment from the Shortfall Guaranty Account to the buyer of the hotel were not met and, and pursuant to the escrow agreement, the full amount including any interest earned was returned to the Partnership on March 31, 1999. Cash was used by financing activities for distribution to partners and principal payments on notes payable. The former management company at the Residence Inn-Ontario, which is controlled by Kenneth E. Nelson ("Nelson"), defaulted on certain obligations under the management agreement. In 1991, the Partnership terminated the management agreement and initiated legal proceedings against the former management company. The management company withheld $194,000 from property funds in unauthorized management fees prior to relinquishing management of the property. The $194,000 was treated as a receivable in the Partnership's financial statements until 1996 when it was written off. As discussed in Note 7 to the financial statements, in March 1993 the parties verbally agreed to settle the lawsuit (the "SF Settlement"); however, difficulties arose in consummating the settlement. After a hearing in May 1994, the Court ruled in June that in the settlement the Partnership had agreed to purchase the land underlying the Residence Inn-Nashville (the "Land") from Nashville Lodging Company ("NLC"), an affiliate of Nelson, subject to a lis pendens on the Land. 6 7 Following this ruling, the Partnership attempted to negotiate and enter into a settlement agreement and a land purchase agreement and related agreements (the "Settlement Documents") among itself and Nelson and NLC and another Nelson entity, 2300 Elm Hill Pike, Inc. ("2300"). These parties were not able to reach agreement on all issues relating to the Settlement Documents. In May 1991 legal proceedings were initiated against the Partnership and others by Orlando Residence Ltd., ("Orlando"), holder of a promissory note issued by a previous owner of the Residence Inn-Nashville (the "Hotel"). Orlando claimed the sale of the Hotel to the Partnership by NLC was intended to defraud, hinder and delay Orlando's recovery of the amount owed to it. The Partnership obtained a summary judgement dismissing the case against it on September 15, 1993. In July 1994, the Court in the case filed by Orlando ruled that the Hotel had been fraudulently conveyed to NLC by 2300 in 1986 and voided the conveyance. Judgements totaling more than $1,350,000 were subsequently entered by this Court against Nelson, NLC and 2300. Based on this judgement, Orlando purchased the Land at a judicial sale and became the landlord under the Lease. This judgement was reversed in December 1996 and NLC asked the Court to return ownership of the Land to it. However, the Court denied NLC's request. In another action in Nashville, Tennessee, 2300 and NLC have alleged that the Partnership refused to purchase the Land as required by the SF Settlement and demanded indemnification for all costs and losses of 2300 and NLC relating to Orlando's claims. In February 1996, the Court in this action granted a motion filed by 2300 and NLC for partial summary judgement, ruling that the Partnership had breached the SF Settlement. The action continues to determine damages and other issues. In February 1998, the Court enjoined the Partnership from conveying, transferring, or otherwise disposing of its cash to any extent which would leave less than $5 million available for payment of any judgment awarded to 2300 and NLC. The Partnership does not believe it breached the SF Settlement. See Item 8, Note 7 to the financial statements for more information about the foregoing and other related proceedings. In December 1996 the Partnership reported its intention to proceed with the marketing for sale of the remaining hotels in the portfolio, and the sale of eight of the nine remaining hotels was completed on December 30, 1997. In January 1998, the Partnership made two distributions to its general and limited partners, one totaling $16,818,000, representing a portion of the net sales proceeds, and another one totaling $612,000 representing a distribution from 1997 operations. In April 1998, the Partnership made another distribution to its partners totaling $229,000 in order to comply with certain states' tax withholding requirements. In September 1999, the Partnership made distribution to the partners totaling $5,198,000, representing a portion of the net sales proceeds from the sale in December 1997 of eight properties. Since this latest distribution, the Partnership has maintained approximately $6.9 million in average cash balances (including $5,000,000 of restricted cash, as discussed in Note 7 to the financial statements). The balance may change depending upon future interest income and the level of general and administrative expenses including costs of the ongoing legal proceedings related to the Residence Inn -- Nashville, as described in Note 7 to the financial statements. With respect to the use of cash, the Partnership continues to be under certain restrictions as discussed in Item 8, Note 7 to the financial statements. On April 1, 1998, the balloon mortgage payment for the Residence Inn - Nashville, totaling approximately $8.5 million, became due and payable (see Note 4 to the financial statements). In exchange for a six-month forbearance agreement, during which time the Partnership pursued the potential sale of the property, the lender accepted a principal reduction payment of $100,000, reimbursement of $20,000 of its costs, and regular monthly debt service payments through November 1, 1998. The Partnership subsequently determined that a sale of the property was not feasible, and the forbearance agreement expired. The Partnership attempted to negotiate with the lender to accept the deed in lieu of foreclosure and to assume the Marriott management contract, but was unsuccessful. A deed in lieu of foreclosure would have relieved the Partnership of substantial contract termination fees that it might have had to pay in the event of a foreclosure sale. In this regard, the Partnership made regular monthly debt service payments for the months of December 1998, January, February, March and April 1999. On June 18, 1999, the Hotel, its contents and the land on which it is located, which was under lease to the Partnership, was sold through foreclosure. Certain difficulties arose in the course of and as a result of the foreclosure with respect to the foreclosure proceedings, the allocation of net proceeds of the personal property of the Hotel, and ownership of the net current assets held by Marriott on behalf of the Partnership from the operations of the Hotel to the date of 7 8 foreclosure. In addition, while the Partnership believed that the ground lease associated with the property would be terminated in the event of a foreclosure, it was unclear which party was entitled to receipt of deferred ground rents (including accrued interest thereon) owed by the Partnership at the time of foreclosure. The issues were settled in February 2000, as described in Note 3 to the financial statements. Subsequent to the foreclosure, Marriott issued a notice requiring the Partnership to pay a $1,415,000 termination fee, computed as per the management agreement, plus certain employee costs not specified in amount. However, Marriott and the Lender subsequently entered into a management agreement for Marriott's continued management of the property and Marriott has verbally acknowledged that a termination fee is not due. The Partnership will be required to pay a minimal amount of less than $20,000 for costs incurred by Marriott in renegotiating and signing a new management agreement with the Lender. Internal Revenue Service regulations provide that, should 5% or more of the outstanding assignee limited partnership units of a limited partnership be traded via non-exempt transactions within a calendar year, the limited partnership could be classified as a publicly-traded partnership for Federal tax purposes, and could therefore be taxed as a corporation. Transfers that are exempt from the above restrictions include transfers at death; transfers between siblings, spouses, ancestors, or lineal descendants; and distributions from qualified retirement plans. In 1996, 1997, and in 1998, the Managing General Partner suspended the processing of most types of resale transactions, as the level of such resale transactions reached 4.9% of the total number of outstanding Units for each of those years. This action was taken to ensure that resale transactions did not result in the termination of the Partnership for tax purposes, or cause the Partnership to be classified as a publicly traded partnership or to be taxed as a corporation. On June 25, 1999, Gemisys, the Partnership's Servicing and Transfer Agent notified the Managing General Partner that non-exempt trading representing approximately 4.9% of the outstanding Units of the Partnership had been reached, at which time the Managing General Partner again suspended processing of resale transactions for the remainder of the calendar year. Unit holders were advised of that suspension in accordance with Section 12.1 of the Partnership Agreement, via a special communication dated June 25, 1999. All resale transaction paperwork submitted subsequent to that date through the end of the year was returned to the originator. Gemisys again began processing resale transactions on January 3, 2000. During 2000, resale transactions did not reach the 4.9% limit. Conclusion In view of the uncertainties in connection with the litigation relating to the Residence Inn -- Nashville (as described in Note 7 to the financial statements) and the distributions the General Partners will be obligated to return to the Partnership prior to its liquidation, the Partnership no longer provides an estimated net asset value per Assignee Unit. However, the Partnership is aware that some resale transactions of Units have taken place in the informal secondary market. In this informal market, transactions may or may not take place in any given time period and occur at a price negotiated between the buyer and seller. The Partnership has no knowledge concerning how a particular price may be determined. A total of 24 resale transactions were recorded on the books of the Partnership's transfer agent between January 1, 2000 and December 31, 2000, reflecting prices ranging from $21 to $140 per Unit, with a simple average price of $89. The Partnership's knowledge of these transactions is based solely on the books and records of its Transfer Agent. As discussed in Item 8, Note 1 to the financial statements, there is substantial doubt regarding the Partnership's ability to continue as a going concern. The Partnership does not expect to receive any significant cash flow through December 31, 2001. 8 9 ITEM 8. FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES. METRIC PARTNERS GROWTH SUITE INVESTORS, L.P., A CALIFORNIA LIMITED PARTNERSHIP TABLE OF CONTENTS
PAGE ---- Report of Independent Auditors......................................................... 10 Financial Statements: Balance Sheets at December 31, 2000 and 1999........................................ 11 Statements of Operations for the Years ended December 31, 2000, 1999 and 1998....... 12 Statements of Partners' Equity (Deficiency) for the Years ended December 31, 2000, 1999 and 1998........................................ 13 Statements of Cash Flows for the Years ended December 31, 2000, 1999 and 1998....... 14 Notes to Financial Statements....................................................... 15-24
Financial Statements and financial statement schedules not included have been omitted because of the absence of conditions under which they are required or because the information is included elsewhere in the Financial Statements. 9 10 REPORT OF INDEPENDENT AUDITORS Metric Partners Growth Suite Investors, L.P., a California Limited Partnership: We have audited the accompanying balance sheets of Metric Partners Growth Suite Investors, L.P., a California Limited Partnership, (the "Partnership") as of December 31, 2000 and 1999, and the related statements of operations, partners' equity (deficiency) and cash flows for each of the three years in the period ended December 31, 2000. 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 auditing standards generally accepted in the United States. 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 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 the Partnership at December 31, 2000 and 1999, and the results of its operations and its cash flows for the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States. The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. As more fully described in Note 1, the Partnership is subject to ongoing litigation. The uncertainties relating to this litigation raise substantial doubt about the Partnership's ability to continue as a going concern. Management's plans in regard to this litigation are also described in Note 1. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts or classifications of liabilities that may result from the outcome of these uncertainties. Ernst & Young LLP New York, New York February 21, 2001 10 11 METRIC PARTNERS GROWTH SUITE INVESTORS, L.P., A CALIFORNIA LIMITED PARTNERSHIP BALANCE SHEETS DECEMBER 31,
ASSETS 2000 1999 ----------- ----------- CASH AND CASH EQUIVALENTS .............................. $ 2,067,000 $ 1,875,000 RESTRICTED CASH ........................................ 5,000,000 5,000,000 ACCOUNTS RECEIVABLE .................................... 214,000 499,000 ----------- ----------- TOTAL ASSETS ........................................... $ 7,281,000 $ 7,374,000 =========== =========== LIABILITIES AND PARTNER'S EQUITY ACCRUED INTEREST ....................................... $ - $ 229,000 OTHER LIABILITIES ...................................... 61,000 509,000 ----------- ----------- TOTAL LIABILITIES ...................................... 61,000 738,000 ----------- ----------- PARTNERS' EQUITY: GENERAL PARTNERS .................................... (914,000) (914,000) LIMITED PARTNERS (59,932 units outstanding) ......... 8,134,000 7,550,000 ----------- ----------- TOTAL PARTNERS' EQUITY ................................. 7,220,000 6,636,000 ----------- ----------- TOTAL LIABILITIES AND PARTNERS' EQUITY ................. $ 7,281,000 $ 7,374,000 =========== ===========
See notes to financial statements. 11 12 METRIC PARTNERS GROWTH SUITE INVESTORS, L.P., A CALIFORNIA LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
2000 1999 1998 ----------- ----------- ----------- REVENUES Hotel operations .......................................... $ - $ 2,016,000 $ 4,445,000 Interest and other ........................................ 447,000 550,000 726,000 ----------- ----------- ----------- Total revenues ............................................ 447,000 2,566,000 5,171,000 ----------- ----------- ----------- EXPENSES (Including $22,000, $133,000 and $282,000 paid to managing general partner and affiliates in 2000, 1999 and 1998, respectively) Hotel operations: Rooms ................................................. - 463,000 936,000 Administrative ........................................ - 324,000 611,000 Marketing ............................................. - 199,000 464,000 Energy ................................................ - 101,000 230,000 Repair and maintenance ................................ - 99,000 221,000 Management fees ....................................... - 63,000 152,000 Property taxes ........................................ - 60,000 112,000 Other ................................................. - 107,000 258,000 ----------- ----------- ----------- Total hotel operations .................................... - 1,416,000 2,984,000 Depreciation and other amortization ....................... - - 533,000 Interest .................................................. 26,000 223,000 859,000 General and administrative ................................ 247,000 453,000 1,023,000 Impairment provision for asset to be disposed of .......... - - 195,000 ----------- ----------- ----------- Total expenses ............................................ 273,000 2,092,000 5,594,000 ----------- ----------- ----------- INCOME (LOSS) BEFORE GAIN ON SALE OR LOSS ON FORECLOSURE OF PROPERTIES ................................. 174,000 474,000 (423,000) Gain on sale of properties ................................ - - 300,000 Gain (Loss) on foreclosure of property .................... 410,000 (340,000) - ----------- ----------- ----------- NET INCOME (LOSS) ......................................... $ 584,000 $ 134,000 $ (123,000) =========== =========== =========== NET INCOME PER LIMITED PARTNERSHIP ASSIGNEE UNIT: Income (loss) before gain on sale or loss on foreclosure of properties ............................................. $ 3 $ 8 $ (7) Gain on sale of properties ................................ - - 5 Gain (loss) on foreclosure of property .................... 7 (6) - ----------- ----------- ----------- NET INCOME (LOSS) ......................................... $ 10 $ 2 $ (2) =========== =========== =========== CASH DISTRIBUTIONS PER LIMITED PARTNERSHIP ASSIGNEE UNIT .. $ - $ 85 $ 288 =========== =========== ===========
See notes to financial statements. 12 13 METRIC PARTNERS GROWTH SUITE INVESTORS, L.P., A CALIFORNIA LIMITED PARTNERSHIP STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY) FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
GENERAL LIMITED PARTNERS PARTNERS TOTAL ------------ ------------ ------------ BALANCE, JANUARY 1, 1998 ............................... $ 348,000 $ 29,115,000 $ 29,463,000 Income (Loss) Before Gain on Sale of Properties ........ 5,000 (428,000) (423,000) Gain on Sale of Property ............................... - 300,000 300,000 Cash Distributions ..................................... (353,000) (17,287,000) (17,640,000) ------------ ------------ ------------ BALANCE, DECEMBER 31, 1998 ............................. - 11,700,000 17,000,000 Income (Loss) Before Loss on Foreclosure of Property ... (470,000) 944,000 474,000 Loss on Foreclosure of Property ........................ (340,000) (340,000) Cash Distributions ..................................... (104,000) (5,094,000) (5,198,000) ------------ ------------ ------------ BALANCE, DECEMBER 31, 1999 ............................. (914,000) 7,550,000 6,636,000 Income Before Gain on Foreclosure of Property .......... - 174,000 174,000 Gain on Foreclosure of Property ........................ - 410,000 410,000 ------------ ------------ ------------ BALANCE, DECEMBER 31, 2000 ............................. $ (914,000) $ 8,134,000 $ 7,220,000 ============ ============ ============
See notes to financial statements. 13 14 METRIC PARTNERS GROWTH SUITE INVESTORS, L.P., A CALIFORNIA LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
2000 1999 1998 ------------ ------------ ------------ OPERATING ACTIVITIES: Net income (loss) ......................................... $ 584,000 $ 134,000 $ (123,000) Adjustments to reconcile net income (loss) to net cash used by operating activities: Depreciation and other amortization ................... - - 533,000 (Gain) loss on foreclosure of property ................ (410,000) 340,000 - Impairment provision for asset to be disposed of ...... - - 195,000 Gain on sale of properties ............................ - - (300,000) Changes in operating assets and liabilities: Accounts receivable ............................... 285,000 (176,000) 623,000 Prepaid expenses and other assets ................. - 109,000 52,000 Accrued interest and other liabilities ............ (677,000) (1,070,000) (1,381,000) ------------ ------------ ------------ Net cash used by operating activities ..................... (218,000) (663,000) (401,000) ------------ ------------ ------------ INVESTING ACTIVITIES: Proceeds from foreclosure of property ..................... 410,000 - - Capital improvements ...................................... - (26,000) (480,000) Cash in escrow ............................................ - - 19,214,000 Restricted cash ........................................... - 353,000 (5,018,000) Purchase of cash investments .............................. - - - Costs paid on foreclosure of property ..................... - (8,000) - Proceeds from sale of cash investments .................... - - 3,888,000 ------------ ------------ ------------ Net cash provided by investing activities ................. 410,000 319,000 17,604,000 ------------ ------------ ------------ FINANCING ACTIVITIES: Notes payable principal payments .......................... - (68,000) (18,691,000) Prepayment penalties paid ................................. - - (438,000) Cash distributions to partners ............................ - (5,198,000) (17,640,000) ------------ ------------ ------------ Cash used by financing activities ......................... - (5,266,000) (36,769,000) ------------ ------------ ------------ INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ............................................... 192,000 (5,610,000) (19,566,000) Cash and cash equivalents at beginning of year ............ 1,875,000 7,485,000 27,051,000 ------------ ------------ ------------ CASH AND CASH EQUIVALENTS AT END OF YEAR .................. $ 2,067,000 $ 1,875,000 $ 7,485,000 ============ ============ ============ SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Interest paid in cash during the year ..................... $ 255,000 $ 327,000 $ 833,000 ============ ============ ============
See notes to financial statements. 14 15 METRIC PARTNERS GROWTH SUITE INVESTORS, L.P., A CALIFORNIA LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization - Metric Partners Growth Suite Investors, L.P., a California Limited Partnership (the "Partnership"), was organized under the laws of the State of California to acquire, hold for investment, manage, and ultimately sell, all-suite, extended stay hotels which are a franchise of the Residence Inn by Marriott, Inc. The Managing General Partner is Metric Realty, an Illinois general partnership. The Associate General Partner of the Partnership is GHI Associates II, L.P., a California Limited Partnership, of which Metric Realty is the general partner and Prudential-Bache Properties, Inc., a wholly owned subsidiary of Prudential Securities Group Inc., is the limited partner. Through March 31, 1997, Metric Realty was owned by Metric Holdings, Inc. and Metric Realty Corp. Metric Realty Corp. was the Managing Partner of Metric Realty. On April 1, 1997, Metric Holdings, Inc. and Metric Realty Corp., the partners of the Managing General Partner, Metric Realty, were involved in certain corporate transactions. Pursuant to these transactions, (i) Metric Holdings, Inc. was merged into a newly formed corporation known as SSR Realty Advisors, Inc. ("SSR Realty"), which became the managing partner of Metric Realty, and (ii) Metric Realty Corp. was merged into Metric Property Management, Inc., a subsidiary of SSR Realty. Accordingly, the partners of Metric Realty are now SSR Realty and Metric Property Management, Inc. After consummation of these transactions, both partners of Metric Realty continue to be wholly owned individual subsidiaries of Metropolitan Life Insurance Company, as were both partners prior to the occurrence of such transactions. The Partnership was organized on June 28, 1984, and commenced operations on April 14, 1988. Capital contributions of $59,932,000 ($1,000 per assignee Unit) were made by the limited partners. Basis of Presentation -- The financial statements of the Partnership have been prepared assuming that the Partnership will continue as a going concern. The partnership is subject to ongoing litigation which is more fully described in Note 7. The uncertainties relating to this litigation create substantial doubt about the Partnership's ability to continue as a going concern. Management intends to vigorously defend against this litigation. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts or classifications of liabilities that may result from the outcome of those uncertainties. Fair Value of Financial Instruments - The carrying amounts of cash and cash equivalents, restricted cash and other liabilities, due to the short nature of such items, approximate their fair value. Use of Estimates - The preparation of the financial statements in conformity with accounting principles generally accepted in the United States 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. Cash and Cash Equivalents - The Partnership considers all highly liquid investments, primarily commercial paper, with an original maturity date of three months or less at the time of purchase to be cash equivalents. Restricted Cash -- The $5,000,000 balance at December 31, 2000 and 1999 is the amount which (as discussed in Note 7) the Court enjoined the Partnership from conveying, transferring, or otherwise disposing of. Credit Risk - Financial instruments which potentially subject the Partnership to concentrations of credit risk include cash and cash equivalents and restricted cash. The Partnership places its cash deposits and temporary cash investments with creditworthy, high-quality financial institutions. The concentration of such cash deposits and temporary cash investments is not deemed to create a significant risk to the Partnership. 15 16 Gain on Sale of Properties - Sales are generally recorded at the close of escrow or after title has been transferred to buyer and after appropriate payments have been received and other criteria have been met. Depreciation - Depreciation was computed using the straight-line method over estimated useful lives of 30 years for buildings and improvements and six years for furnishings. Marketing - Marketing costs were expensed as incurred. Deferred Financing Costs - Financing costs were deferred and amortized as interest expense over the lives of the related loans. Deferred Franchise Fees - Franchise fees, paid in connection with the acquisition of the Residence Inns, were deferred and amortized over the lives of the franchise agreements. Net Income (Loss) Per Limited Partnership Assignee Unit - Net income per limited partnership assignee Unit is computed by dividing net income allocated to the limited partners by 59,932 Assignee Units. Income Taxes - No provision for Federal and state income taxes has been made in the financial statements because income taxes are the obligation of the partners. Segment Information -- The Financial Accounting Standards Board (the "FASB") issued Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information" ("FAS 131"), which is effective for financial statements for periods beginning after December 15, 1997. FAS 131 establishes standards for the way that public business enterprises report financial and descriptive information about reportable operating segments in annual financial statements and in interim reporting to investors. The Partnership adopted FAS 131 in 1998. The Partnership determined in 1998 that it had one operating and reportable segment, the operations of its one remaining hotel property in Nashville, which is further described in Note 3. 2. TRANSACTIONS WITH THE MANAGING GENERAL PARTNER AND AFFILIATES In accordance with the Partnership agreement, the Partnership is charged by the Managing General Partner and affiliates for services provided to the Partnership. The amounts are as follows:
2000 1999 1998 -------- -------- -------- Partnership management fees ....... $ 22,000 $ - $ 72,000 Reimbursement of expenses ......... - 133,000 210,000 -------- -------- -------- Total ............................. $ 22,000 $133,000 $282,000 ======== ======== ========
Reimbursement of expenses includes expenses for partnership accounting, professional services and investor services. In accordance with the Partnership agreement the general partners are allocated their two percent continuing interest in the Partnership's net income or loss and cash distributions. In addition, in 1994 the general partners were allocated gross income of $245,000 in accordance with and calculated pursuant to the Partnership Agreement. However, beginning in 1995 and through 1998, due to the general partners' equity account balance, the Partnership adjusted and limited the income allocation to the general partners to amounts equal to their two percent continuing interest in cash distributions. Pursuant to the Partnership Agreement, immediately prior to liquidation and if certain distribution levels to the limited partners are not met, the general partners may be obligated to return all or a portion of the cumulative amounts received in distributions. At December 31, 2000, such amount is approximately $914,000 and the Partnership believes circumstances will be such that the general partners will be required to re-contribute this amount. The general partners were allocated taxable gain and loss in accordance with the Partnership Agreement. 3. ASSET TO BE DISPOSED OF AND FORECLOSURE OF PROPERTY At December 31, 1998, the Partnership's remaining property, the Residence Inn -- Nashville (the "Hotel"), was classified as an asset to be disposed of and an impairment provision, in the amount of $195,000, was recorded to reduce the carrying value to the estimated fair value less estimated disposal costs. The estimated fair value for this property was 16 17 determined to be equivalent to the estimated principal balance on the non-recourse mortgage note payable at the expected date for the transfer of the property to the lender via deed in lieu of foreclosure or through foreclosure as discussed in Note 4 below. In deciding to sell or dispose of the property, the Partnership considered the deterioration of the Nashville market in conjunction with the substantial capital improvements that would be required under the Marriott contract over the next several years and which would be necessary for the hotel to remain competitive. On June 18, 1999, the improvements of the Hotel owned by the Partnership and the land on which it is located, which was under lease to the Partnership, were sold through foreclosure for $9,050,000, with net proceeds of approximately $450,000 after deduction of the outstanding principal and other costs. The purchaser was the holder of the mortgage note payable encumbering the Hotel (the "Lender"). The Partnership had been in default under the mortgage note payable since April, 1998, when it did not pay the balloon mortgage payment due at that date. In the foreclosure sale, the lessor on the ground lease also bid for the property. The lessor filed suit against the foreclosure trustee, asserting that the trustee denied him his alleged right to redeem the property by paying the debt through the foreclosure. The suit was settled in a mediation meeting on February 29, 2000, as further discussed below. In the foreclosure sale the allocation of the $9,050,000 price was not specified. The Partnership claimed its right to a portion of the net proceeds from the sale because of its ownership of the personal property sold. The estimated net cost of foreclosure to the Partnership was $311,000 (including a write-off of net current assets held by Marriott on behalf of the Partnership and relating to the property at the time of foreclosure). The carrying value of the Hotel at the time of sale was $8,236,000 (net of the $195,000 impairment of value provision recognized in 1998) and the note payable balance, adjusted for amounts in the impound account, was $8,207,000, resulting in a $340,000 loss on foreclosure of property recognized in 1999. These matters were settled in the February 2000 mediation meeting, as discussed below. With respect to the ground lease, on May 20, 1999, the lessor issued a letter notifying the Partnership that it had terminated the ground lease as the Partnership had defaulted under the terms of the mortgage note for the Hotel, thereby violating a term of the ground lease agreement. However, the Lender took the position that the ground lease was not terminated until June 18, 1999, when it was terminated as a result of the foreclosure. On February 29, 2000 a mediation meeting was held for the purposes of settling the issues among the lender, the former lessor on the ground lease and the Partnership. At that meeting, the parties agreed to the terms of a settlement agreement ("Settlement") that was subsequently signed in March 2000. The Settlement provided for (i) payment by the Partnership to the former lessor of the ground lease the $655,000 deferred ground rent liability (including interest which the Partnership earned on that amount until date of actual payment) and (ii) collection of $125,000 by the Partnership representing its share of proceeds from the sale of personal property. In addition, the parties agreed that the Partnership is entitled to operations to the date of foreclosure plus any cash and cash reserves held by Marriott pertaining to the Partnership's ownership period to the date of foreclosure of the Hotel. In March 2000 the Partnership paid $681,000 to the former lessor of the ground lease representing the $655,000 mentioned above plus interest earned on the $655,000 from date of foreclosure to date of payment. While the $655,000 was reflected in the outstanding liabilities at December 31, 1999, the $26,000 interest expense was recorded in the first quarter of 2000. Also in March, the Partnership received the $125,000 representing its proceeds from the sale of personal property. Of this amount, $10,000 had been reflected in the 1999 audited financial statements and the remaining $115,000 was recorded in the first quarter of 2000 as an adjustment to loss on foreclosure of property. The $115,000 was reduced by $10,000 to $105,000 due to an increase in the expected legal reimbursement due to Marriott pertaining to the new management agreement for Marriott's continued management of the property subsequent to the foreclosure. In September, pursuant to an agreement with Marriott with respect to the Residence Inn -- Nashville, the Partnership received $306,000. This was recorded net of related expenses of $1,000 in the third quarter of 2000 as an adjustment to loss on foreclosure of property. Subsequent to the foreclosure, Marriott issued a notice requiring the Partnership to pay a $1,415,000 termination fee, computed as per the management agreement, plus certain employee costs not specified in amount. However, Marriott and the Lender subsequently entered into a management agreement for Marriott's continued management of the property and Marriott has verbally acknowledged that a termination fee is not due. The Partnership will be required to pay a 17 18 minimal amount of less than $20,000 for costs incurred by Marriott in renegotiating and signing a new management agreement with the Lender. 18 19 4. NOTES PAYABLE The note payable on the Hotel became due on April 1, 1998, and a balloon payment of $8,491,000 was due. The Partnership did not make the payment and has since been in default. The Partnership was unable to negotiate an extension of the loan with the lender. However, the lender entered into a six-month forbearance agreement with the Partnership, while the Partnership was in negotiations for a potential sale, in exchange for a principal reduction payment of $100,000 and reimbursement of $20,000 to the lender for certain costs. In addition, the Partnership made the regular monthly debt service payments through November 1, 1998, including payments to the tax impound account. At that time, however, negotiations with a potential buyer, for a sale at a contract price equal to approximately the outstanding note payable balance, had terminated and the buyer had withdrawn its offer, as the title company was unable to issue acceptable title insurance to the buyer with respect to the land on which the hotel is built. The forbearance agreement had expired and the Partnership concluded that permitting the lender to foreclose was in the best interest of the investors. The Partnership discontinued the monthly debt service payments effective with the payment due December 1, 1998. In January 1999, the lender contacted the Partnership and it was agreed that the Partnership 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 and assuming the management contract with Marriott (with Marriott's consent), thereby relieving the Partnership of a potential obligation to pay approximately $1,400,000 in termination fees plus other costs, and relief from the ground lease. Consequently, on February 5, 1999, the Partnership paid $265,000 to cover the monthly payments (including impound) due through February 1, 1999. The Partnership has also paid the $88,000 due March 1, 1999 and April 1, 1999. On June 18, 1999 the lender foreclosed on the property, as discussed in Note 3 above, and the payoff was settled. The outstanding principal at the time of sale was $8,224,000. In the accompanying financial statements, the adjusted balance was $8,207,000 after applying the amount held in an impound by the lender. The Hotel note payable with an original balance of $9,250,000 originally wrapped an existing loan, which had a balance of approximately $9,336,000 at the time the Partnership acquired the property. However, on April 15, 1996, the Partnership made a payment of approximately $176,000 to the lender of the underlying mortgage of the wrap note on the Hotel. The payment was made to cure defaults by that lender to the holder of the wrap note for non-payment of the debt and impound payments due on January 1, 1996 and February 1, 1996. As described in Note 7, the Partnership became the direct obligor to the first note holder and the note payable balance was increased by $74,000, the difference between the balance of the first note and the balance of the wrap note on April 15, 1996. The $74,000 cost incurred to prevent foreclosure and to eliminate the wrap note was recorded in 1996 as a general and administrative expense in the financial statements. The terms of the first note varied slightly from those of the wrap note. The interest rate was 9.5% per annum on the first note compared to 9.9433% on the wrap note and monthly payments of interest and principal were approximately $2,600 lower on the first note. Similar to the wrap note, the first note matured in April 1998, and required a balloon payment. As a further consequence of the Partnership becoming a direct obligor to the first note holder, the payments due under the land lease on the Hotel were reduced by $50,000 per year (see Note 5). 5. MINIMUM FUTURE RENTAL COMMITMENTS The Hotel was subject to a land lease that extended through May 25, 2049, with an option to purchase the land. The annual payments on the lease were $100,000 plus additional payments equal to 1.8% of the Hotel's revenues. The 1.8% additional payments requirement expired on April 15, 1998. The $100,000 annual payment is due based upon the property achieving certain operating results and any amounts not paid currently are accrued. The balance of accrued rent was subject to interest charges at ten percent per annum, compounded annually. At December 31, 1999, the balance of accrued rent plus interest was $655,000. Accrued rent and accrued interest are included in other liabilities and accrued interest, respectively, in the accompanying financial statements. Rental expense (including 1.8% of revenues through April 15, 1998) for this lease was $46,000 and $114,000 in 1999 and 1998, respectively. 6. SALE OF PROPERTIES The Partnership sold the Residence Inns - Ontario, Columbus (East), Fort Wayne, Indianapolis, Lexington, Louisville, Winston-Salem and Altamonte Springs on December 30, 1997. The combined sales price, for the package of these eight Residence Inns, was $59,500,000. After payment of the outstanding balances on the loans totaling $33,819,000 and expenses of sale totaling $1,294,000, including $438,000 of prepayment penalties on certain of the loans, the net 19 20 proceeds to the Partnership were $24,387,000. Pursuant to an agreement with the lender on six of the eight Residence Inns, the outstanding balances on the related six notes totaling $18,469,000, and the required prepayment penalties of $438,000, were not paid until January 2, 1998. To secure payment to the lender of the six notes mentioned, a portion of the net sales proceeds was retained in an escrow account on December 30, 1997, sufficient to pay off the outstanding principal balances, prepayment penalties due pursuant to the loan agreements and interest accrued to date of payoff, and was reflected in Cash in Escrow on the December 31, 1997 balance sheet. The Partnership was required by the purchaser, under the terms of the sales contract, not to distribute $7,500,000 of the sales proceeds for a period of one year from the date of sale, which amount represented the maximum possible liability of the Partnership for any breach of the sales agreement. There were no known contingencies with respect to potential claims that could be brought against the Partnership nor were any presented during the aforementioned period, which expired on December 30, 1998. The Partnership sold the Residence Inn-Atlanta (Perimeter West) on October 3, 1995. The net sales price was $11,350,000 after deducting $300,000 that was deposited into an escrow account (the "Shortfall Guaranty Account"). The Partnership guaranteed certain income levels to the buyer for the years from 1996 through 1998. To the extent these income levels were not attained, the buyer would receive the deficiency, up to the maximum $300,000, from the Shortfall Guaranty Account. The buyer did not make any demands on the Shortfall Guaranty Account and, therefore, on December 31, 1998 the contingency was removed and the deferred gain on sale of $300,000 was recognized in 1998. Pursuant to an escrow agreement, the $300,000 (plus interest earned thereon) was returned to the Partnership on March 31, 1999. 7. LEGAL PROCEEDINGS Metric Partners Growth Suite Investors, L.P. vs. Kenneth E. Nelson, The Nelson Group, et al., San Francisco County Superior Court, Case No. 928065 (the "SF Lawsuit"). [The lawsuits described below are related. Terms defined in the description of one case may be used in the description of the other cases.] This lawsuit related to disputes in connection with management of the Partnership's Residence Inn -Ontario by an entity controlled by Kenneth E. Nelson ("Nelson") from April 1988 to February 1991. In March 1993, the Partnership and Nelson verbally agreed to settle the SF Lawsuit at a settlement conference (the "SF Settlement"), whereby the Partnership would purchase, at a discount, the land (the "Land") underlying the Hotel then leased by the Partnership from Nashville Lodging Company ("NLC"), an entity controlled by Nelson. Various disagreements between the Partnership and Nelson regarding the SF Settlement arose after March 1993, and documents to effectuate the SF Settlement were never executed. While the Court maintains jurisdiction to supervise the SF Settlement, this action is no longer active. Nashville Lodging Company vs. Metric Partners Growth Suite Investors, L.P. et al., Circuit Court, State of Wisconsin, Case No. 94CV001212. In February 1994, NLC served this lawsuit on the Partnership. NLC alleges fraud, breach of settlement contract and breach of good faith and fair dealing and seeks compensatory, punitive and exemplary damages in an unspecified amount for the Partnership's failure to consummate the SF Settlement. In February 1994, the Partnership filed an answer and requested that the Court stay the action pending resolution of the SF Lawsuit including all appeals. The Court refused to stay the action and discovery commenced. In February 1995, the Court determined that the Partnership could be sued in Wisconsin but stayed the case until the settlement of the SF Lawsuit has been finalized. Orlando Residence Ltd. vs. 2300 Elm Hill Pike, Inc. and Nashville Lodging Company vs. Metric Partners Growth Suite Investors, L.P., Chancery Court for Davidson County, in Nashville, Tennessee, Case No. 94-1911-I ("Nashville Case I"). Orlando Residence Inn Ltd. ("Orlando") filed this action against 2300 Elm Hill Pike, Inc. ("2300") and NLC in the Davidson County Chancery Court to attempt to execute a judgment against Nelson, NLC and 2300 in another action in Chancery Court by subjecting the Land to sale. In May 1995, 2300 and NLC ("TP Plaintiffs") filed a third-party complaint against the Partnership, alleging it had refused to purchase the Land as required by the SF Settlement. TP Plaintiffs demanded payment by the Partnership of 2300 and NLC's costs of defending the case in which the judgment that Orlando was attempting to enforce had been obtained and indemnification for any loss resulting from the claims of Orlando, among other claims of damage. 20 21 In February 1996, the Court granted a motion filed by TP Plaintiffs for partial summary judgment, ruling that the Partnership had breached the SF Settlement. The action continues to determine damages and other issues. The Partnership does not believe it breached the SF Settlement and will appeal this ruling at an appropriate time. However, no assurance can be given that its appeal will be successful. In late October 1997, TP Plaintiffs filed a motion for an injunction to prohibit the Partnership from distributing proceeds from the sale of the Residence Inns owned by the Partnership, pending a final judgment in this case. A hearing on this motion was held in February 1998 and the Court enjoined the Partnership from conveying, transferring, distributing or otherwise disposing of its cash to any extent which would leave less than $5 million available for payment of any judgment obtained by TP Plaintiffs. TP Plaintiffs filed an amended complaint against the Partnership in April 1998, asserting, among other things, a bad faith breach of contract by the Partnership. In May 1998, the Court granted a motion by the Partnership to dismiss these bad faith allegations and to dismiss certain claims for specific damages made by TP Plaintiffs, including attorneys' fees and the value of Nelson's time relating to efforts to enforce the SF Settlement. In late October 1998, TP Plaintiffs filed a second amended complaint, asserting that a certain 1989 three-party agreement among NLC, the Partnership and the holder of a mortgage on the Hotel and the Land entitles TP Plaintiffs to obtain judgment for, among other things, the cost, including attorney's fees, of this action and of Nelson's time and efforts on behalf of NLC in this action. In November 1998, the Court granted a motion filed by the Partnership, dismissing the claim of TP Plaintiffs to recover for the value of Nelson's time and efforts on behalf of NLC in this and related litigation. In December 1998, the Court granted a motion for partial summary judgment filed by the Partnership, dismissing most of the remaining damage claims of TP Plaintiffs, including claims for indemnification for any loss resulting from the claims of Orlando. After these claims were dismissed, TP Plaintiffs amended their damage claim to seek to recover the alleged differential between the price that the Partnership agreed to pay for the Land and its alleged fair market value. The amount of this claim is approximately $1.6 million. In addition, TP Plaintiffs sought to recover attorneys' fees to enforce the SF Settlement. In November 1999, the Partnership filed a motion for summary judgment seeking dismissal of TP Plaintiffs' claim for attorneys' fees. This motion was granted by the Court on February 25, 2000. The Partnership filed a motion in February 2000 to disqualify the law firm representing the TP Plaintiffs based on a conflict of interest that arose when a partner of the Partnership's counsel with knowledge of this case left that firm and joined the law firm representing TP Plaintiffs. As a result of the motion, counsel for TP Plaintiffs filed a motion to withdraw as counsel in March 2000, which motion was subsequently granted by the Court. New counsel for TP Plaintiffs has been selected and the Partnership expects the trial to commence on December 17, 2001. On December 21, 2000, the TP Plaintiffs filed a motion requesting that the Court reconsider its order of December 1998, granting partial summary judgment to the Partnership. This motion was denied by the Court on January 26, 2001. Metric Partners Growth Suite Investors, L.P., vs. Nashville Lodging Co., 2300 Elm Hill Pike, Inc., Orlando Residence Ltd., and LaSalle National Bank, as trustee under that certain pooling and servicing agreement, dated July 11, 1995 for the holders of the WHP Commercial Mortgage Pass Through Certificates, Series 1995C1 and Robert Holland, Trustee, Chancery Court for Davidson County, in Nashville, Tennessee, Case No. 96-1405-III ("Nashville Case II"). The Partnership filed this action on May 3, 1996 to obtain, among other things, a judicial determination of the rights and obligations of the Partnership and NLC under the senior mortgage on the Hotel ("Senior Mortgage"), a note held by NLC "wrapped around" the Senior Mortgage (the "Wrap Note") and the Lease as a consequence of the Partnership's cure of certain defaults by NLC under the Senior Mortgage. The Partnership believed that as a result of such a cure, it became the direct obligor to the lender under the Senior Mortgage and that the Wrap Note had been satisfied and the payments due under Lease reduced by $50,000 per year. NLC and 2300 filed an answer in June, together with a counterclaim against the Partnership. NLC and 2300 claimed damages from the Partnership and asked the Court to permit acceleration of the Wrap Note and termination of the Lease. In July 1996, the Partnership filed a motion for summary judgment in this case, asking that the Court award the relief sought by it and that the Court dismiss the counterclaim of NLC and 2300. At a hearing on this motion held in August 1996 the Court granted the Partnership's motion. The defendants appealed all judgments for the Partnership in this case. The Partnership and the defendants agreed on an attorneys' fee award to the Partnership of $60,000, but no payment was expected until the defendants' appeal is resolved. Oral arguments regarding this appeal were held in July 1998, and in September 1998 the appellate court affirmed the judgments for the Partnership. Defendants moved for rehearing, 21 22 which was denied in early October 1998. Defendants then filed an application with the Tennessee Supreme Court for permission to appeal the appellate court decision. This application was denied by the Tennessee Supreme Court in early March 1999. Subsequently, Defendants petitioned the Tennessee Supreme Court to reconsider its denial. This petition was denied by the Tennessee Supreme Court on May 10, 1999. The Partnership's $60,000 attorneys' fee award is now due and owing by the defendants. Kenneth E. Nelson and Nashville Lodging Co. vs. Metric Realty et al., Chancery Court for Davidson County in Nashville, Tennessee, Case No. 97-2189-III (the "Inducement Action"). In the second quarter of 1997, Nelson alleged that Metric Realty and GHI Associates II, L.P., the Managing and Associate General Partners, respectively, of the Partnership, and certain of Metric Realty's affiliates (the "Affiliates") and certain former and current employees of Metric Realty or its affiliates (the "Employees") had improperly induced the Partnership to breach the SF Settlement. In June 1997, Nelson and NLC filed the Inducement Action in the Chancery Court for Davidson County in Nashville, Tennessee (the "Chancery Court") against Metric Realty, GHI Associates II, L.P., the Affiliates and certain of the Employees (the "Inducement Action Defendants"), seeking unspecified compensatory, treble and punitive damages for the alleged improper inducement of breach of contract. In June 1998 the Inducement Action Defendants filed a motion to dismiss the complaint against the Employees and one of the Affiliates named in the action based on lack of jurisdiction and against the remaining Affiliates based on failure to state a claim. The Chancery Court in September 1998 dismissed the complaint against all Affiliates but one and denied the remaining requests for dismissal. A motion for summary judgment to dismiss the action on the basis of the statute of limitations was filed in January 1999 by the Inducement Action Defendants and was argued at a hearing held in February 1999. In April 1999, the Court denied the motion. Discovery is ongoing and the case has not been set for trial. The Inducement Action Defendants filed a motion in February 2000 to disqualify the law firm representing Nelson and NLC ("Nelson's Counsel") based on a conflict of interest that arose when a partner of the Inducement Action Defendants' counsel with knowledge of issues related to this case left that firm and joined Nelson's Counsel. This motion was heard on March 6, 2000 and on April 15, 2000, the Court declined to rule on this motion to disqualify Nelson's Counsel and instead referred the entire case to the Tennessee Chancellor who is now presiding over Nashville Case I (see above). Subsequently, Nelson's Counsel withdrew from the case and new counsel for Nelson and NLC was substituted. Nelson and NLC filed a summary judgment motion seeking to bar the affirmative defense of manager's privilege asserted by the Inducement Action Defendants. In response to the motion, all of the remaining Inducement Action Defendants filed a cross-motion for summary judgment, seeking dismissal of all claims on the grounds that actions of the Inducement Action Defendants taken in connection with the SF Settlement were privileged by virtue of the manager's privilege. On October 13, 2000, the Court held a hearing on the parties' motions for summary judgment. At the conclusion of the hearing, the Court orally denied the motion of Nelson and NLC, and granted the cross-motion of the remaining Inducement Action Defendants, dismissing all remaining claims. On November 28, 2000, Nelson and NLC filed an appeal of the Court's action to the Tennessee Court of Appeals. The legal and other expenses of the Inducement Action Defendants in the Inducement Action arising as a result of the allegations made by Nelson are being paid by the Partnership pursuant to the indemnification provisions of the Partnership's limited partnership agreement and subject to the conditions set forth in those provisions. Metric Partners Growth Suite Investors, L.P. vs. James Reuben et al., San Francisco County Superior Court, Case No. 998214. On September 30, 1998, the Partnership filed this lawsuit against James Reuben and several law corporations of which he is or has been a member (the "Reuben Defendants"), alleging breach of their professional obligations and fiduciary duty as attorneys for the Partnership to adequately and competently represent and advise the Partnership in connection with the SF Settlement. The Partnership seeks unspecified damages from the Reuben Defendants arising from such breach. The Reuben Defendants answered the complaint in January 1999. Discovery has yet to commence and no trial date for this action has been set. 22 23 8. RECONCILIATION TO INCOME TAX METHOD OF ACCOUNTING The differences between the method of accounting for income tax reporting and the accrual method of accounting used in the financial statements are as follows:
2000 1999 1998 ------------ ------------ ------------ Net income (loss) -- financial statements ............ $ 584,000 $ 134,000 $ (123,000) Differences resulted from: Loss on foreclosure of property .................. - 129,000 - Gain on sale of property ......................... - - (300,000) Impairment provision for asset to be disposed of ............................................... - - 195,000 Depreciation ..................................... - (220,000) 34,000 Prepayment penalties ............................. - - - Amortization of notes payable discount ........... - - - Interest ......................................... - - 10,000 Other ............................................ - (294,000) (61,000) ------------ ------------ ------------ Net income (loss) -- income tax method ............... $ 584,000 $ (251,000) $ (245,000) ============ ============ ============ Taxable income (loss) per limited partnership assignee unit after giving effect to the allocation to the general partners ................... $ 10 $ (4) $ (4) ============ ============ ============ Net assets and liabilities - financial statements .... $ 7,220,000 $ 6,636,000 $ 11,700,000 Cumulative differences resulted from: Gain on sale of property ......................... - - - Impairment provision for asset to be disposed of ............................................... - - 195,000 Depreciation ..................................... - - 124,000 Interest ......................................... - - 86,000 Other ............................................ - - (20,000) ------------ ------------ ------------ Net assets and liabilities - income tax method ....... $ 7,220,000 $ 6,636,000 $ 12,085,000 ============ ============ ============
23 24 9. SUMMARIZED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) The following represents selected financial data for the Partnership, for the years ended December 31, 2000 and 1999. The data should be read in conjunction with the financial statements included elsewhere herein.
FOR THE THREE MONTHS ENDED --------------------------------------------------------------- MARCH JUNE SEPTEMBER DECEMBER 2000 31 30 30 31 ----------- ----------- ----------- ----------- Total Revenues ........................................... $ 108,000 $ 105,000 $ 113,000 $ 121,000 Total Expenses ........................................... 119,000 46,000 52,000 56,000 ----------- ----------- ----------- ----------- Net Income (Loss): Income (Loss) Before Gain on Foreclosure of Property ............................................ (11,000) 59,000 61,000 65,000 Gain on Foreclosure of Property ....................... 105,000 - 305,000 - ----------- ----------- ----------- ----------- Net Income (Loss) ........................................ $ 94,000 $ 59,000 $ 366,000 $ 65,000 =========== =========== =========== =========== Net Income (Loss) per Limited Partnership Assignee Unit (1): Income (Loss) Before Gain on Foreclosure of Property ............................................ $ - $ 1 $ 1 $ 1 Gain on Foreclosure of Property ....................... $ 2 - 5 - ----------- ----------- ----------- ----------- Net Income (Loss) per Limited Partnership Assignee Unit ................................................... $ 2 $ 1 $ 6 $ 1 =========== =========== =========== =========== Total Assets ............................................. $ 6,837,000 $ 6,855,000 $ 7,208,000 $ 7,281,000 =========== =========== =========== =========== Long Term Obligations: Note Payable .......................................... $ - $ - $ - $ - =========== =========== =========== =========== Cash Distributions per Limited Partnership Assignee Unit . $ - $ - $ - $ - =========== =========== =========== ===========
(1) $1,000 original contribution per limited partnership Assignee Unit, based on 59,932 limited partnership Assignee Units outstanding during the period, after allocation to the General Partners. 24 25
FOR THE THREE MONTHS ENDED ------------------------------------------------------------------ MARCH JUNE SEPTEMBER DECEMBER 1999 31 30 30 31 ------------ ------------ ----------- ------------ Total Revenues ......................................... $ 1,143,000 $ 1,166,000 $ 138,000 $ 119,000 Total Expenses ......................................... 996,000 841,000 131,000 124,000 ------------ ------------ ----------- ------------ Net Income (Loss): Income (Loss) Before Gain (Loss) on Foreclosure of Property ......................... 147,000 325,000 7,000 (5,000) Gain (Loss) on Foreclosure of Property .............. - (1,460,000) - 1,120,000 ------------ ------------ ----------- ------------ Net Income (Loss) ...................................... $ 147,000 $ (1,135,000) $ 7,000 $ 1,115,000 ============ ============ =========== ============ Net Income (Loss) per Limited Partnership Assignee Unit (1): Income (Loss) Before Gain (Loss) on Foreclosure of Property ......................... $ 2 $ 6 $ - $ - Gain (Loss) on Foreclosure of Property .............. - (11) - 5 ------------ ------------ ----------- ------------ Net Income (Loss) per Limited Partnership Assignee Unit ................................................. $ 2 $ (5) $ - $ 5 ============ ============ =========== ============ Total Assets ........................................... $ 21,786,000 $ 13,193,000 $ 7,725,000 $ 7,374,000 ============ ============ =========== ============ Long Term Obligations: Note Payable ........................................ $ 8,224,000 $ - $ - $ - ============ ============ =========== ============ Cash Distributions per Limited Partnership Assignee Unit ........................................ $ - $ - $ 85 $ - ============ ============ =========== ============
(1) $1,000 original contribution per limited partnership Assignee Unit, based on 59,932 limited partnership Assignee Units outstanding during the period, after allocation to the General Partners. 25 26 METRIC PARTNERS GROWTH SUITE INVESTORS, L.P. A CALIFORNIA LIMITED PARTNERSHIP REAL ESTATE AND ACCUMULATED DEPRECIATION ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. 26 27 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. The Partnership has no directors or executive officers. For informational purposes only, the following are the names and additional information relating to the directors and executive officers of SSR Realty Advisors, Inc. ("SSR Realty"), the managing partner of Metric Realty, the Managing General Partner of the Partnership. (a) DIRECTORS THOMAS P. LYDON, JR. Director, President and Chief Executive Officer, SSR Realty Mr. Lydon, age 52, has been President and Chief Executive Officer of SSR Realty, or one of its predecessor companies since February 1995. From March 1997, he was also Chairman of the Board and Chief Executive Officer of Metric Income Trust Series, Inc., a publicly-held real estate investment trust, of which SSR Realty was the Advisor and which has been dissolved. Prior to joining SSR Realty, Mr. Lydon was from April 1992, an Executive Vice President of MBL Life Assurance Corporation ("MBL") (formerly Mutual Benefit Life Insurance Company) chosen by the New Jersey Department of Insurance to oversee and reorganize the real estate investment division of MBL. Mr. Lydon's experience before joining MBL included serving as Executive Vice President and Principal of Manhattan Capital Realty Corporation, an investment banking firm, from 1990 to 1992; and as Senior Vice President of Unicorp American Corporation, a real estate and banking firm, from 1985 to 1990. Mr. Lydon graduated from Syracuse University with a Bachelor's Degree in Business Administration in 1970. RICHARD S. DAVIS Chairman of the Board, SSR Realty Mr. Davis, age 55, was elected to his position with SSR Realty in November 2000. He joined State Street Research and Management Company ("State Street"), a subsidiary of Metropolitan Life Insurance Company ("MetLife"), in November 2000, as Chairman of the Board, Chief Executive Officer and President. He also serves as President and CEO of SSRM Holdings, Inc., a wholly owned subsidiary of MetLife, which in turn serves as a holding company for several of MetLife's investment management subsidiaries. Prior to joining State Street, Mr. Davis was Senior Vice President, Fixed Income Investments for MetLife, responsible for the firm's $110 billion fixed income portfolio. Prior to this, Mr. Davis spent 8 years at J.P. Morgan Securities and J.P. Morgan Investment Management, where his responsibilities spanned from global fixed income sales management to client business, risk management and product development for the firm's money management division. He previously held successive management positions for 19 years at First Boston Corporation, where he was ultimately responsible for leading sales, trading and research for all fixed income products. He holds a Bachelor's Degree from Georgetown University and a Master's Degree in Business Administration from Columbia University. GERARD P. MAUS Director, SSR Realty Mr. Maus, age 49, was elected as a director of a predecessor company of SSR Realty in March 1993. He joined State Street as Executive Vice President, Chief Financial Officer and Chief Administrative Officer in February 1993. Prior to joining State Street, Mr. Maus served since 1983 as a financial officer of New England and its subsidiary, New England Investment Companies ("NEIC"), most recently as Executive Vice President and Chief Financial Officer of NEIC from 1990 to January 1993. Prior to holding these positions, Mr. Maus held financial positions with Bank of New England, Coopers & Lybrand, and Liberty Mutual Life Insurance Company. He received a Bachelor of Arts Degree in Business Administration from Rutgers University in 1973 and is a certified public accountant. 27 28 (b) EXECUTIVE OFFICERS WILLIAM A. FINELLI Managing Director and Chief Financial Officer, SSR Realty Mr. Finelli, age 43, has been Managing Director, and Vice President, Chief Financial Officer and Treasurer of SSR Realty or one of its predecessor companies since August 1995. He is responsible for overseeing the day-to-day activity of the accounting, finance, legal, technology and valuation areas of SSR Realty. Before he joined SSR Realty, Mr. Finelli served from November 1983 as a financial executive of MBL. His last position with MBL was Vice President - Real Estate Accounting. Prior to his years at MBL, Mr. Finelli was with Ernst & Young, a public accounting firm. Mr. Finelli graduated from Rutgers University with a Bachelor's Degree in Accounting in 1979 and is a certified public accountant. HERMAN H. HOWERTON Managing Director and General Counsel, SSR Realty Mr. Howerton, age 57, has served as General Counsel of SSR Realty or its predecessor companies since 1988. From 1984 to 1988, he was employed by Fox Capital Management Corporation ("FCMC") in various legal positions. He was employed by Cushman & Wakefield in commercial leasing from 1983 to 1984. Prior to that, from 1972 to 1982, Mr. Howerton held various positions with Itel Corporation, including those of Vice President-Administration and Vice President, General Counsel and Secretary. He received a Bachelor of Arts Degree from California State University at Fresno in 1965 and a Juris Doctorate Degree from Harvard Law School in 1968. He is a member of the State Bar of California. RONALD E. ZUZACK Executive Managing Director, SSR Realty Mr. Zuzack, age 57, has been in charge of the Multi-Housing Operating Company of SSR Realty since its organization in April 1997 and in charge of acquisitions firm-wide since January 1, 1999, and was in charge of Portfolio Services for certain predecessor companies since March 1988. From 1981 to 1988, he was employed by FCMC in various portfolio management positions. Prior to 1981 he was employed by Union Bank as Vice President/Manager Real Estate, Sacramento Region, and acted as Vice President, Development and Property Management while employed by Inter-Cal Real Estate Corporation. He received his Bachelor of Science Degree and Master's Degree in Business Administration from the University of Missouri. He is a licensed California real estate broker. ITEM 11. EXECUTIVE COMPENSATION. The Partnership does not pay or employ any directors or officers. Compensation to the directors and officers of SSR Realty, the managing partner of Metric Realty (the managing general partner of the Partnership), is paid by SSR Realty or its affiliates and is not related to the results of the Partnership. The Partnership has not established any plans pursuant to which plan or non-plan compensation has been paid or distributed during the last fiscal year or is proposed to be paid or distributed in the future, nor has the Partnership issued or established any options or rights relating to the acquisition of its securities or any plan relating to such options or rights. However, SSR Realty is expected to receive certain allocations, distributions and other amounts pursuant to the Partnership's limited partnership agreement. In addition, included in the expense reimbursements made to such general partner or affiliates by the Partnership is an allocation for a portion of the compensation (including employee benefit plans) paid to personnel rendering asset management services to the Partnership. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. There is no person known to the Partnership who owns beneficially or of record more than five percent of the voting securities of the Partnership. Neither the Partnership's Managing General Partner nor affiliates of the Partnership's Managing General Partner have contributed capital to the Partnership. The Partnership is a limited partnership and has no officers or directors. The Managing General Partner has discretionary control over most of the decisions made by or for the Partnership in accordance with the terms of the 28 29 Partnership Agreement. Each of the directors and officers of the Managing Partner of the Partnership's Managing General Partner, and all of these individuals as a group, own less than one percent of the Partnership's voting securities. There are no arrangements known to the Partnership, the operations of which may, at a subsequent date, result in a change in control of the Partnership. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. None; except that the Partnership in 2000 paid and in 2001 will pay expense reimbursements to Metric Realty for services provided to the Partnership. See the Prospectus filed pursuant to Rule 424(b) of the Securities Act of 1933, which is incorporated by reference herein, and Note 2 to the Financial Statements in Item 8. All of the individuals listed in Item 10 above are officers and employees of and receive compensation from SSR Realty or an affiliate. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K. (a) 1., 2. and 3. See Item 8 of Form 10-K for Financial Statements for the Partnership, Notes thereto, and Financial Statement Schedules. (A table of contents to Financial Statements and Financial Statement Schedules is included in Item 8 and incorporated herein by reference.) (b) No reports on Form 8-K were required to be filed during the last quarter of the period covered by this Report. (c) Financial Statement Schedules, if required by Regulation S-K, are included in Item 8. 29 30 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. REGISTRANT 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/ Thomas P. Lydon, Jr. ------------------------------- Thomas P. Lydon, Jr. President and Chief Executive Officer, SSR Realty Advisors, Inc. Date: March 30, 2001 ----------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated. By: /s/ William A. Finelli By: /s/ Richard S. Davis ------------------------------- ------------------------------- William A. Finelli Richard S. Davis Managing Director and Chief Financial Chairman of the Board, SSR Realty Advisors, Inc. Officer, SSR Realty Advisors, Inc. By: /s/ Gerard P. Maus By: /s/ Thomas P. Lydon, Jr. ------------------------------- ------------------------------- Gerard P. Maus Thomas P. Lydon Director, SSR Realty Advisors, Inc. Director, SSR Realty Advisors, Inc.
Date: March 30, 2001 ---------------- -----END PRIVACY-ENHANCED MESSAGE-----