-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, tmLN8iltPmiPGSyh68WycHKxZgqyHRNg8ew7MxrISXxhxJMkteHkJEtNNqr7eNIm oxDPO0OttjDwGtaATQSLcA== 0000806028-95-000003.txt : 19950814 0000806028-95-000003.hdr.sgml : 19950814 ACCESSION NUMBER: 0000806028-95-000003 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW ENGLAND PENSION PROPERTIES V CENTRAL INDEX KEY: 0000806028 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 042940131 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 033-10128 FILM NUMBER: 95561704 BUSINESS ADDRESS: STREET 1: 399 BOYLSTON ST CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 6175781200 10-Q/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________________ FORM 10-Q/A QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended June 30, 1995 Commission File Number 0-17808 NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP (Exact name of registrant as specified in its charter) Massachusetts 04-2940131 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 399 Boylston Street, 13th Fl. Boston, Massachusetts 02116 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (617) 578-1200 Former Name, former address and former fiscal year if changed since last report 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 twelve (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 ___ NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED JUNE 30, 1995 PART I FINANCIAL INFORMATION NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP BALANCE SHEET (Unaudited) June 30, 1995 December 31, 1994 ASSETS Real estate investments: Joint ventures $ 29,432,654 $ 40,779,263 Property, net 19,811,204 9,861,784 ----------- --------------- 49,243,858 50,641,047 Cash and cash equivalents 11,101,575 8,975,244 Short-term investments 3,366,099 4,913,784 ----------- --------------- $ 63,711,532 $ 64,530,075 =========== =============== LIABILITIES AND PARTNERS' CAPITAL Accounts payable $ 74,220 $ 116,660 Accrued management fee 51,582 39,295 Deferred management and disposition fees 451,140 347,978 ----------- --------------- Total liabilities 576,942 503,933 ----------- --------------- Commitments to fund real estate investments Partners' capital (deficit): Limited partners ($952 per unit; 160,000 units authorized, 82,564 and 82,635 issued and outstanding, respectively) 63,203,470 64,086,525 General partners (68,880) (60,383) ----------- --------------- Total partners' capital 63,134,590 64,026,142 ----------- --------------- $ 63,711,532 $ 64,530,075 =========== =============== (See accompanying notes to financial statements) NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP STATEMENT OF OPERATIONS (Unaudited)
Quarter Ended Six Months Ended Quarter Ended Six Months Ended June 30, 1995 June 30, 1995 June 30, 1994 June 30, 1994 INVESTMENT ACTIVITY Property rentals $ 708,114 $ 1,309,053 $ 216,803 $ 393,035 Property operations expense (153,512) (290,612) (80,000) (261,449) Depreciation and amortization (160,190) (341,716) (80,347) (157,008) ---------- ------------- ---------- ------------- 394,412 676,725 56,456 (25,422) Joint venture earnings 426,936 865,563 780,604 1,357,757 Investment valuation allowance (600,000) (600,000) - - ---------- ------------- ---------- ------------- Total real estate operations 221,348 942,288 837,060 1,332,335 Gain on sale of joint venture investment - - 409,982 409,982 ---------- ------------- ---------- ------------- Total real estate activity 221,348 942,288 1,247,042 1,742,317 Interest on cash equivalents and short-term investments 209,772 415,129 118,479 211,028 ---------- ------------- ---------- ------------- Total investment activity 431,120 1,357,417 1,365,521 1,953,345 ---------- ------------- ---------- ------------- PORTFOLIO EXPENSES Management fee 103,163 206,326 82,598 165,220 General and administrative 80,299 163,116 60,390 125,701 ---------- ------------- ---------- ------------- 183,462 369,442 142,988 290,921 ---------- ------------- ---------- ------------- NET INCOME $ 247,658 $ 987,975 $1,222,533 $ 1,662,424 ========== ============= ========== ============= Net income per weighted average limited partnership unit $ 2.97 $ 11.84 $ 14.64 $ 19.90 ========== ============= ========== ============= Cash distributions per limited partnership unit outstanding for the entire period $ 12.50 $ 22.02 $ 10.00 $ 20.00 ========== ============= ========== ============= Weighted average number of limited partnership units outstanding during the period 82,613 82,613 82,680 82,692 ========== ============= ========== ============= (See accompanying notes to financial statements)
NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP SUMMARIZED STATEMENT OF CASH FLOWS (Unaudited) Six Months Ended June 30, 1995 1994 NET CASH PROVIDED BY OPERATING ACTIVITIES $ 2,509,259 $1,679,575 ----------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Net proceeds from sale of investment - 3,602,326 Increase in deferred disposition fee - 117,750 Investment in joint ventures - (244,991) Investment in property (6,994) (244,582) Decrease in short-term investments, net 1,503,593 4,573,227 ----------- ---------- Net cash provided by investing activities 1,496,599 7,803,730 ----------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Distributions to partners (1,837,726) (1,670,980) Repurchase of limited partnership units (41,801) (21,975) ----------- ---------- Net cash used in financing activities (1,879,527) (1,692,955) ----------- ---------- Net increase in cash and cash equivalents 2,126,331 7,790,350 Cash and cash equivalents: Beginning of period 8,975,244 3,243,164 ----------- ---------- End of period $ 11,101,575 $11,033,514 =========== ========== Non-cash transaction: Effective January 1, 1995, the Partnership's joint venture investment in Palms Business Center was converted to a wholly-owned property. The carrying value of this investment at conversion was $10,308,265. (See accompanying notes to financial statements) NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited)
QUARTER ENDED SIX MONTHS ENDED QUARTER ENDED SIX MONTHS ENDED JUNE 30, 1995 JUNE 30, 1995 JUNE 30, 1994 JUNE 30, 1994 GENERAL LIMITED GENERAL LIMITED GENERAL LIMITED GENERAL LIMITED PARTNERS PARTNERS PARTNERS PARTNERS PARTNERS PARTNERS PARTNERS PARTNERS Balance at beginning of period $(60,926) $ 64,031,311 $(60,383) $64,086,525 $(64,748) $ 67,678,449 $(60,791) $68,092,152 Repurchase of limited partnership units - (40,359) - (41,801) - - - (21,975) Cash dis- tributions (10,431) (1,032,663) (18,377) (1,819,349) (8,354) (827,050) (16,710) (1,654,270) Net income 2,477 245,181 9,880 978,095 12,225 1,210,308 16,624 1,645,800 -------- ----------- -------- ---------- -------- ---------- -------- ----------- Balance at end of period $(68,880) $ 63,203,470 $(68,880) $63,203,470 $(60,877) $68,061,707 $(60,877) $68,061,707 ======== =========== ======== ========== ======== ========== ======== =========== (See accompanying notes to financial statements)
NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS (Unaudited) In the opinion of management, the accompanying unaudited financial statements contain all adjustments necessary to present fairly the Partnership's financial position as of June 30, 1995 and December 31, 1994 and the results of its operations, its cash flows and changes in partners' capital (deficit) for the interim periods ended June 30, 1995 and 1994. These adjustments are of a normal recurring nature. See notes to financial statements included in the Partnership's 1994 Annual Report on Form 10-K for additional information relating to the Partnership's financial statements. NOTE 1 - ORGANIZATION AND BUSINESS New England Pension Properties V; A Real Estate Limited Partnership (the "Partnership") is a Massachusetts limited partnership organized for the purpose of investing primarily in to-be-developed, newly constructed and existing income producing real properties. The Partnership commenced operations in May 1987, and acquired the seven real estate investments it currently owns prior to the end of 1989. It intends to dispose of its investments within eight to twelve years of their acquisition, and then liquidate. The Partnership maintains a repurchase fund for the purpose of repurchasing limited partnership units. Two percent of cash flow, as defined, is designated for this fund which had a balance of $8,044 and $4,447 at June 30, 1995 and December 31, 1994, respectively. NOTE 2 - SALE OF JOINT VENTURE INVESTMENTS On June 17, 1994, the Partnership's C.S. Graham joint venture sold its property located in Atlanta, Georgia. The total sales price was $3,925,000. After closing costs, the Partnership received proceeds of $3,720,076 and recognized a gain on the sale of this investment of $409,982 ($4.91 per limited partnership unit). A disposition fee of $117,750 was accrued but not paid to the advisor. On August 17, 1994, the Partnership's Lakewood Apartments joint venture sold its property located in Lakewood, Arizona. The total sales price was $15,621,399. After closing costs, the Partnership received its share of the proceeds of $4,297,367 and recognized a gain of $1,380,488 ($16.53 per limited partnership unit). A disposition fee of $149,965 was accrued but not paid to the advisor. On September 15, 1994, the Partnership made a capital distribution of $3,968,640 ($48 per limited partnership unit) from the proceeds of the C.S. Graham and Lakewood sales. An additional portion of the proceeds was used to pay the previously accrued, but deferred, management fee due to the advisor of $1,259,988. The remainder of the proceeds were retained by the Partnership pending final strategic decisions on projects yet to be developed. These decisions were recently made, and a second capital distribution was made on July 27, 1995, in the amount of $2,313,164 ($28 per limited partnership unit). NOTE 3 - REAL ESTATE JOINT VENTURES In the second quarter of 1995, the Palms Business Center investment was converted to a wholly-owned property effective January 1, 1995. Accordingly, amounts previously reported as joint venture earnings in the first quarter of 1995 have been reclassified in the Statement of Operations. This reclassification had no effect on the Partnership's operating results. The following summarized financial information is presented in the aggregate for the Partnership's joint ventures: Assets and Liabilities June 30, 1995 December 31, 1994 Assets Real property, at cost less accumulated depreciation of $5,727,344 and $6,358,984, respectively $ 35,952,739 $ 45,272,536 Other 3,060,131 3,525,687 ----------- --------------- 39,012,870 48,798,223 Liabilities (398,665) (440,384) ----------- --------------- Net assets $ 38,614,205 $ 48,357,839 =========== =============== Results of Operations Six Months Ended June 30, 1995 1994 Revenue Rental income $ 2,697,992 $ 4,196,938 Other 49,295 93,803 ----------- --------------- 2,747,287 4,290,741 ----------- --------------- Expenses Operating expenses 875,167 1,450,216 Depreciation and amortization 591,065 1,074,098 ----------- --------------- 1,466,232 2,524,314 ----------- --------------- Net income $ 1,281,055 $ 1,766,427 =========== =============== Liabilities and expenses exclude amounts owed and attributable to the Partnership and (with respect to two joint ventures) its affiliates on behalf of their financing arrangements with the joint ventures. The C.S. Graham and Lakewood investments were sold on June 17, 1994, and August 17, 1994, respectively. The above 1994 amounts include their results of operations. During the second quarter of 1995, the managing general partner determined that it was not in the best interest of the partners to develop the Waters Landing II site. Rather, the property will be listed for sale. Accordingly, the net carrying value of this investment has been reduced to its estimated net fair market value through the recognition of an investment valuation allowance of $600,000. The reduction to net fair market value is pursuant to the Partnership's early application of Statement of Financial Accounting Standards No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of." NOTE 4 - PROPERTY Effective January 1, 1995, the Palms Business Center joint venture was dissolved and the venture partner's ownership interest was assigned to the Partnership. Accordingly, as of this date, the investment is being accounted for as a wholly-owned property. The carrying value of the joint venture investment at conversion ($10,308,265) was allocated to land, building and improvements and other net operating assets. The following is a summary of the Partnership's investment in Palms Business Center and Puente Street at June 30, 1995 and Puente Street at December 31, 1994: June 30, 1995 December 31, 1994 Land $6,180,980 $ 3,985,498 Building and improvements 16,701,640 8,910,665 Accumulated depreciation (1,151,189) (874,768) Investment valuation allowance (2,900,000) (2,900,000) Other assets, net of accumulated amortization 1,059,883 839,815 Accounts receivable 131,940 60,380 Accounts payable (212,050) (159,806) ---------- -------------- $19,811,204 $ 9,861,784 ========== ============== The buildings and improvements of Palms Business Center are being depreciated over 25 years, beginning January 1, 1995. NOTE 5 - SUBSEQUENT EVENTS Distributions of cash from operations relating to the quarter ended June 30, 1995 were made on July 27, 1995 in the aggregate amount of $1,043,093 ($12.50 per limited partnership unit). Additionally, a capital distribution of $2,313,164 ($28 per limited partnership unit) was made from the remaining proceeds from the C.S. Graham and Lakewood sales. On August 1, 1995, the Partnership made a five year loan in the amount of $1,750,000 to the ground lessor at Santa Rita Plaza. The loan bears interest at 8.75%, with payments to be made monthly based on a 15 year amortization schedule, and is secured by the ground lessor's interest in the land. The borrower has used a portion of the proceeds to repay a loan from the Santa Rita venture which, in turn returned $1,360,000 to the Partnership to repay a portion of its capital investment in the venture. NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES The Partnership completed its offering of limited partnership units in December 1988. A total of 83,291 units were sold. The Partnership received proceeds of $74,895,253, net of selling commissions and other offering costs, which are being used for investment in real estate, for the payment of related acquisition costs and for working capital reserves. The Partnership made nine real estate investments, two of which were sold in 1994. At June 30, 1995, the Partnership had $14,467,674 in cash, cash equivalents and short-term investments, of which $3,356,257 ($1,043,093 operating distribution and $2,313,164 return of capital) was used for cash distributions to partners on July 27, 1995; the remainder will primarily be used to complete the funding of real estate investments and for working capital reserves. The source of future liquidity and cash distributions to partners will be cash generated by the Partnership's short-term and real estate investments. Distributions of cash from operations relating to the first and second quarters of 1994 were made at the annualized rate of 4% on capital contributions of $1,000 per limited partnership unit. The distribution rate was increased to 5.25% on the adjusted capital contribution for the first and second quarters of 1995. The distribution rate was increased due to the stabilization of property operations and the attainment of appropriate cash reserve levels. The adjusted capital contribution was reduced from $1,000 to $952 in September, 1994 with the distribution of a portion of the sale proceeds from the C.S. Graham and Lakewood Apartments sales. The capital distribution in July, 1995 of $28 per limited partnership unit represents the distribution of the remaining proceeds from these sales and will further reduce the adjusted capital contribution. The Partnership maintains a fund for the purpose of repurchasing limited partnership units pursuant to the terms and conditions set forth in the Partnership Agreement. Two percent of cash flow, as defined, is designated for this fund which had a balance of $8,044 and $4,447 at June 30, 1995, and December 31, 1994, respectively. Through June 30, 1995, the Partnership repurchased 727 limited partnership units for an aggregate cost of $706,573. On August 1, 1995, the Partnership made an additional cash investment of approximately $400,000 in connection with its Santa Rita Plaza project. The carrying value of real estate investments in the financial statements is determined based on the Partnership's intention to hold or sell the respective properties. Carrying value may be greater or less than current appraised value. At June 30, 1995, the appraised values of certain investments exceeded their related carrying values by an aggregate of $3,400,000, and the appraised values of the remaining investments were less than their related carrying values by an aggregate of $2,700,000. The current appraised value of real estate investments has been estimated by the managing general partner and is generally based on a combination of traditional appraisal approaches performed by the advisor and independent appraisers. Because of the subjectivity inherent in the valuation process, the estimated current appraised value may differ significantly from that which could be realized if the real estate were actually offered for sale in the marketplace. RESULTS OF OPERATIONS Effective January 1, 1995, the Palms Business Center was converted to a wholly-owned property. Prior to this date, it was accounted for as a joint venture. The Puente Street investment is also a wholly- owned property. The other five investments in the portfolio are structured as joint ventures with real estate development/management firms. C.S. Graham and Lakewood Apartments, which were both sold in 1994, were also joint ventures. OPERATING FACTORS Occupancy at University Business Park was 99% at June 30, 1995, an increase from 96% and 90%, one quarter and one year ago, respectively. Rental rates are increasing and occupancy levels have remained high as the Phoenix market appears to have stabilized. However, this property faces leasing exposure during 1995 as leases expire for approximately 10% of the space. Discussions are underway to dissolve the joint venture and obtain control over management decisions. There can be no assurance that these negotiations will be successful. Overall occupancy at the Columbia Gateway Corporate Park remained at 92% during the six months ended June 30, 1995, up from 82% one year ago. Occupancy at Puente Street remained at 100% at June 30, 1995, where it has been since March 31, 1994. As a result of the depressed market conditions, the carrying value of this investment was reduced to its lower net realizable value in 1993 and 1994. During the second quarter of 1995, the managing general partner determined that it was not in the best interest of the partners to develop the Waters Landing II site. Rather, the Partnership will be listing this property for sale. As a result of this changed strategy, the carrying value of this investment has been reduced to its estimated net fair market value through the recognition of an investment valuation allowance of $600,000. Occupancy at the Palms Business Center III and IV increased during the second quarter from 95% to 98% (occupancy was 92% at June 30, 1994). The majority of the tenants are renewing leases upon their expiration, and as a result of demand, rents have increased. During the second quarter of 1995, the joint venture was dissolved. The Partnership now has full ownership of the property and control over management decisions. Occupancy at the Dahlia property increased from 89% to 100% during the first quarter of 1994, where it has remained through the second quarter of 1995. The market conditions for industrial space in this area of California continue to improve. Discussions are underway to restructure this joint venture and obtain control over management decisions. There can be no assurance that these negotiations will be successful, however. Santa Rita Plaza remained 94% leased at June 30, 1995, which approximated the occupancy at December 31, 1994 and one year ago; however, tenant delinquencies and turnover due to business failures have resulted in lower revenues. In July, 1995, two tenants were evicted, reducing occupancy to 90%. Discussions are underway to restructure this joint venture and obtain full ownership of this property and control over management decisions. There can be no assurance that these negotiations will be successful, however. INVESTMENT ACTIVITY Interest on cash equivalents and short-term investments for the first six months of 1995 increased compared to the same period of 1994 as a result of higher average investment balances. The average investment balance increased as a result of the retention of a portion of the sale proceeds from the C.S. Graham and Lakewood sales. The gain on sale of joint venture investment of $409,982 recognized in the second quarter of 1994 relates to the C.S. Graham sale. The investment valuation allowance of $600,000 recognized during the second quarter of 1995 relates to the reduction in net carrying value of the Waters Landing II property to its estimated net fair market value. Exclusive of the investment valuation allowance recognized in 1995 and the operating results from C.S. Graham and Lakewood Apartments recognized in 1994, total real estate operations increased from $1,067,143 for the first half of 1994 to $1,542,288 for the comparable period in 1995. This $475,145 or 45% increase was due primarily to the lease up of the Puente Street investment during the first quarter of 1994 ($240,000) and to the final settlement received in 1995 from a former tenant at this property ($50,000). The increase was also due to improved occupancy at Columbia Gateway Corporate Park ($148,000) and to improved operating results at the Dahlia investment ($66,000), as a result of the realignment of tenant space. These increases were partially offset by a decrease in net operating income from Santa Rita Plaza. Exclusive of operating distributions from Lakewood Apartments and C.S. Graham ($247,019) during 1994, cash flow from operations increased from $1,432,556 to $2,509,259 between the respective six month periods. This $1,076,703 or 75% increase reflects the change in investment results between the respective periods as previously described. In addition, cash flow from Puente Street in 1994 included the payment of a lease commission and rent concessions during the initial months of the lease, for a total of approximately $410,000. These increases were partially offset by Columbia Gateway Corporate Park retaining working capital reserves at the joint venture level during 1995. PORTFOLIO EXPENSES The Partnership management fee is 9% of distributable cash flow from operations after any increase or decrease in working capital reserves as determined by the managing general partner. General and administrative expenses consist primarily of real estate appraisal, printing, legal, accounting and investor servicing fees. The Partnership management fee for the six months ended June 30, 1995 increased compared to the six months ended June 30, 1994 due to an increase in distributable cash flow. General and administrative expenses increased $37,415 or 30% between the respective periods, primarily due to an increase in legal costs associated with the various joint venture restructurings. NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q/A FOR QUARTER ENDED JUNE 30, 1995 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K a. Exhibits: NONE. b. Reports on Form 8-K: No reports on Form 8-K were filed during the quarter ended June 30, 1995. SIGNATURES 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. NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP (Registrant) August 11, 1995 Peter P. Twining Managing Director and General Counsel of Managing General Partner Fifth Copley Corp. August 11, 1995 Marie A. Welch Investment Officer and Chief Accounting Officer of Managing General Partner Fifth Copley Corp. EX-27 2
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