-----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, BYxHiKcI3FJkuHeuAXdsjplbLf+/X5LfymPNRtTd9tK+6JItRlEaW/NHC+JftQJG DD29fs3p89l1gL3ckpXesQ== 0000806028-96-000002.txt : 19960814 0000806028-96-000002.hdr.sgml : 19960814 ACCESSION NUMBER: 0000806028-96-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 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 SEC ACT: 1934 Act SEC FILE NUMBER: 033-10128 FILM NUMBER: 96610001 BUSINESS ADDRESS: STREET 1: 399 BOYLSTON ST CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 6175781200 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------ FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 ---------------------------------------------------------------------- For Quarter Ended June 30, 1996 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, 1996 PART I FINANCIAL INFORMATION ---------------------- BALANCE SHEET (Unaudited)
June 30, 1996 December 31, 1995 -------------- ----------------- ASSETS Real estate investments: Property, net $ 43,382,241 $ 37,058,053 Joint ventures 4,699,069 11,821,773 ------------ ------------ 48,081,310 48,879,826 Cash and cash equivalents 7,276,955 3,790,598 Short-term investments 4,705,547 7,864,807 ------------ ------------ $ 60,063,812 $ 60,535,231 ============ ============ LIABILITIES AND PARTNERS' CAPITAL Accounts payable $ 81,037 $ 120,505 Accrued management fee 57,109 50,008 Deferred management and disposition fees 482,410 368,161 ------------ ------------ Total liabilities 620,556 538,674 ------------ ------------ Commitments to fund real estate investments Partners' capital (deficit): Limited partners ($924 per unit; 160,000 units authorized, 82,514 and 82,536 units issued and outstanding, respectively) 59,525,337 60,073,461 General partners (82,081) (76,904) ------------ ------------ Total partners' capital 59,443,256 59,996,557 ------------ ------------ $ 60,063,812 $ 60,535,231 ============ ============ (See accompanying notes to financial statements)
STATEMENT OF OPERATIONS (Unaudited)
Quarter Ended Six Months Ended Quarter Ended Six Months Ended June 30, 1996 June 30, 1996 June 30, 1995 June 30, 1995 -------------- ---------------- ------------- --------------- INVESTMENT ACTIVITY Property rentals $ 1,583,118 $ 3,199,983 $ 708,114 $ 1,309,053 Interest income on loan to ground lessor 37,321 74,970 - - Property operating expenses (347,160) (758,029) (153,512) (290,612) Ground rent expense (97,500) (195,000) - - Depreciation and amortization (381,958) (759,202) (160,190) (341,716) ------------ ------------ ------------ ------------ 793,821 1,562,722 394,412 676,725 Joint venture earnings 94,794 183,651 426,936 865,563 Investment valuation allowance - - (600,000) (600,000) ------------ ------------ ------------ ------------ Total real estate operations 888,615 1,746,373 221,348 942,288 Interest on cash equivalents and short-term investments 148,517 296,533 209,772 415,129 ------------ ------------ ------------ ------------ Total investment activity 1,037,132 2,042,906 431,120 1,357,417 ------------ ------------ ------------ ------------ Portfolio Expenses Management fee 114,218 228,499 103,163 206,326 General and administrative 80,494 165,463 80,299 163,116 ------------ ------------ ----------- ------------ 194,712 393,962 183,462 369,442 ------------ ------------ ----------- ------------ Net Income $ 842,420 $ 1,648,944 247,658 987,975 ============ ============ ============ ============ Net income per weighted average limited partnership unit $ 10.11 $ 19.78 2.97 11.84 ============ ============ ============ ============ Cash distributions per limited partnership unit outstanding for the entire period $ 13.86 $ 25.99 $ 12.50 $ 22.02 ============ ============ ============ ============ Weighted average number of limited partnership units outstanding during the period 82,491 82,514 82,613 82,613 ============ ============ ============ ============ (See accompanying notes to financial statements)
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited)
Quarter Ended Six Months Ended Quarter Ended Six Months Ended June 30, 1996 June 30, 1996 June 30, 1995 June 30, 1995 -------------------- ------------------- ------------------- ------------------- General Limited General Limited General Limited General Limited Partners Partners Partners Partners Partners Partners Partners Partners --------- --------- --------- --------- --------- --------- --------- --------- Balance at beginning of period $ (78,951) $59,835,289 $(76,903) $60,073,460 $ (60,926) $64,031,311 $ (60,383) $64,086,525 Repurchase of limited partnership units - - - (35,468) - (40,359) - (41,801) Cash distributions (11,554) (1,143,948) (21,667) (2,145,110) (10,431) (1,032,663) (18,377) (1,819,349) Net income 8,424 833,996 16,489 1,632,455 2,477 245,181 9,880 978,095 -------- --------- -------- ---------- --------- ----------- ---------- ----------- Balance at end of period $ (82,081) $59,525,337 $(82,081) $59,525,337 $ (68,880) $63,203,470 $ (68,880) $63,203,470 ======== ========== ======== ========== ========== =========== ========== =========== (See accompanying notes to financial statements)
SUMMARIZED STATEMENT OF CASH FLOWS (Unaudited)
Six Months Ended June 30, ------------------------- 1996 1995 ---------- --------- Net cash provided by operating activities $ 2,529,387 $ 2,509,259 ----------- ----------- Cash flows from investing activities: Investment in property (20,547) (6,994) Decrease in short-term investments, net 3,149,790 1,503,593 Repayment of loan to ground lessor 29,972 - ----------- ----------- Net cash provided by investing activities 3,159,215 1,496,599 ----------- ----------- Cash flows from financing activities: Distributions to partners (2,166,777) (1,837,726) Repurchase of limited partnership units (35,468) (41,801) ----------- ----------- Net cash used in financing activities (2,202,245) (1,879,527) ----------- ----------- Net increase in cash and cash equivalents 3,486,357 2,126,331 Cash and cash equivalents: Beginning of period 3,790,598 8,975,244 ----------- ----------- End of period $ 7,276,955 $11,101,575 =========== =========== Non-cash transactions: Effective January 1, 1996 and January 1, 1995, the Partnership's joint venture investments in University Business Park and Palms Business Center, respectively, were converted to wholly-owned properties. The carrying values of these investments at conversion were $5,630,581 and $10,308,265, respectively. Effective April 1, 1996, for financial reporting purposes, the Partnership's joint venture investment in Waters Landing II was converted to a wholly-owned property. The carrying value of this investment at conversion was $1,491,742. (See accompanying notes to financial statements)
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, 1996 and December 31, 1995 and the results of its operations, its cash flows and changes in partners' capital (deficit) for the interim periods ended June 30, 1996 and 1995. These adjustments are of a normal recurring nature. See notes to financial statements included in the Partnership's 1995 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 newly constructed and existing income producing real properties. It primarily serves as an investment for qualified pension and profit sharing plans and other entities intended to be exempt from federal income tax. The Partnership commenced operations in May, 1987 and acquired the seven real estate investments it currently owns prior to the end of 1989. The Partnership 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 $46,742 and $32,572 at June 30, 1996 and December 31, 1995, respectively. NOTE 2 - REAL ESTATE JOINT VENTURES - ----------------------------------- The Palms Business Center investment was converted to a wholly-owned property for financial reporting purposes effective January 1, 1995. Effective January 1, 1996, the University Business Park investment was dissolved and the venture partner's ownership interest was assigned to the Partnership. Accordingly, this investment is now a wholly-owned property. The Waters Landing II joint venture was restructured to a wholly- owned property for financial reporting purposes effective April 1, 1996. The following summarized financial information is presented in the aggregate for the Partnership's joint ventures:
Assets and Liabilities ---------------------- June 30, 1996 December 31, 1995 ------------------ ----------------- Assets Real property, at cost less accumulated depreciation of $1,748,098 and $4,019,677, respectively $ 15,641,858 $ 22,312,780 Other 391,508 484,715 ------------ ------------ 16,033,366 22,797,495 Liabilities 126,172 187,308 ------------ ------------ Net Assets $ 15,907,194 $ 22,610,187 =========== ===========
Results of Operations --------------------- Six Months Ended June 30, ------------------------ 1996 1995 ---- ---- Revenue Rental income $ 979,813 $ 2,697,992 Other - 49,295 ----------- ------------ 979,813 2,747,287 ------------ ------------ Expenses Operating expenses 248,728 875,167 Depreciation and amortization 128,950 591,065 ------------ ------------ 377,678 1,466,232 ------------ ------------ Net income $ 602,135 $ 1,281,055 ============ ============
Liabilities and expenses exclude amounts owed and attributable to the Partnership and (with respect to one joint venture) its affiliate on behalf of their financing arrangements with the joint ventures. The Santa Rita Plaza and Dahlia investments were converted to wholly- owned properties in the third quarter of 1995. The above amounts include joint venture results of operations through their respective conversion dates. NOTE 3 - PROPERTY - ----------------- In the second quarter of 1995, the Palms Business Center joint venture was restructured and the venture partner's ownership interest was assigned to the Partnership. Since January 1, 1995, 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. Effective August 1, 1995, the Santa Rita Plaza joint venture was restructured into a limited partnership, whereby the Partnership was granted control over management decisions. Accordingly, as of such date, the investment is being accounted for as a wholly-owned property. The carrying value of the joint venture investment at conversion ($10,216,659) was allocated to building and improvements, mortgage loan receivable from the ground lessor and other net operating assets. On this same date, the Partnership made a fifteen-year loan in the amount of $1,750,000 to the ground lessor, which used a portion of the proceeds to repay a loan from the Santa Rita venture which, in turn, paid approximately $1,300,000 to the Partnership as a partial return of its capital investment in the venture. Effective September 1, 1995, the Dahlia joint venture was restructured into a limited partnership, whereby the Partnership was granted control over management decisions. Accordingly, as of this date, the investment is being accounted for as a wholly-owned property. The carrying value at conversion ($7,413,175) was allocated to land, building and improvements, and other net operating assets. During 1993, the joint venture agreed to a settlement with a former tenant for past due rent. This settlement was secured by an attachment on 36 acres of land in Scottsdale, Arizona. During the first quarter of 1996, the land was sold. The Partnership received $332,489 in net proceeds, which exceeded the carrying value of the receivable by approximately $32,000. Effective January 1, 1996, the University Business Park joint venture was dissolved and the venture partner's ownership interest was assigned to the Partnership. Accordingly, as of such date, the investment is being accounted for as a wholly-owned property. The carrying value of the joint venture investment at conversion ($5,630,581) was allocated to land, building and improvements and other net operating assets. In the second quarter of 1996, the Waters Landing II joint venture was restructured and the venture partner's ownership interest was assigned to the Partnership and a subsidiary of the Partnership. Since April 1, 1996, the investment has been accounted for as a wholly-owned property. The carrying value of the joint venture investment at conversion ($1,491,742) was allocated to land. The following is a summary of the Partnership's investment in property (six in 1996 and four in 1995):
June 30, 1996 December 31, 1995 --------------- ----------------- Land $10,575,045 $ 7,548,949 Building and improvements 34,068,830 30,323,985 Accumulated depreciation (2,196,959) (1,596,044) Investment valuation allowance (2,900,000) (2,900,000) Loan to ground lessor 1,687,424 1,726,003 Lease commissions and other assets, net 1,657,070 1,576,781 Accounts receivable 1,032,797 900,017 Accounts payable (541,966) (521,638) ----------- ----------- $43,382,241 $ 37,058,053 =========== ===========
The buildings and improvements are being depreciated over 25 years. The loan to ground lessor 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 Santa Rita Plaza land. NOTE 4 - SUBSEQUENT EVENT - ------------------------- Distributions of cash from operations relating to the quarter ended June 30, 1996 were made on July 25, 1996 in the aggregate amount of $1,154,874 ($13.86 per limited partnership unit.) 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 have been 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. As a result of the sales, capital of $6,281,804 has been returned to the limited partners through June 30, 1996. The adjusted capital contribution was reduced to $952 from $1,000 per unit in 1994, and then to $924 in July 1995. In addition, a portion of the sales proceeds was used to pay previously accrued, but deferred management fees to the advisor ($183,426 in July 1995). At June 30, 1996, the Partnership had $11,982,502 in cash, cash equivalents and short-term investments, of which $1,154,874 was used for cash distributions to partners on July 25, 1996; the remainder will be used to complete the funding of real estate investments or be retained as 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 1996 were made at the annualized rate of 6% on the adjusted capital contribution. Distributions of cash from operations relating to the first and second quarters of 1995 were made at the annualized rate of 5.25% on the adjusted capital contribution. The distribution rate was increased due to the stabilization of property operations and the attainment of appropriate cash reserve levels. 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 $46,742 and $32,572 at June 30, 1996, and December 31, 1995, respectively. Through June 30, 1996, the Partnership repurchased and retired 800 limited partnership units for an aggregate cost of $764,601. The carrying value of real estate investments in the financial statements is at depreciated cost, or if the investment's carrying value is determined not to be recoverable through expected undiscounted future cash flows, the carrying value is reduced to estimated fair market value. The fair market value of such investments is further reduced by the estimated cost of sale for properties held for sale. Carrying value may be greater or less than current appraised value. At June 30, 1996, the appraised values of certain investments exceeded their related carrying values by an aggregate of $5,410,000, and the appraised values of the remaining investments were less than their related carrying values by an aggregate of $2,250,000. 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 Partnership's 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 joint venture was restructured and the venture partner's ownership interest was assigned to the Partnership. Effective August 1, 1995 and September 1, 1995, respectively, the Santa Rita Plaza and Dahlia joint venture investments were restructured to grant the Partnership control over management decisions. Effective January 1, 1996, the University Business Park joint venture was dissolved and the venture partner's ownership interest was assigned to the Partnership. Effective April 1, 1996, the Waters Landing II joint venture was restructured to grant the Partnership control over management decisions. Accordingly, these investments have been accounted for as wholly-owned properties since their respective conversion dates. The Puente Street investment is also a wholly-owned property. The other investment in the portfolio is structured as a joint venture with a real estate development/management firm. Operating Factors Occupancy at University Business Park increased from 98% at March 31, 1996 to 100% at June 30, 1996, with the addition of a short-term tenant. Occupancy was 96% at March 31, 1995, and 99% at June 30, 1995. Rental rates in Phoenix have continued to increase as the market remained strong. Overall occupancy at Columbia Gateway Corporate Park remained at 92% during the first two quarters of 1996, consistent with March 31, 1995 and June 30, 1995. The carrying value of this investment was reduced to estimated net realizable value in 1993. Occupancy at Puente Street remained at 100% at March 31, 1996 and June 30, 1996. As a result of depressed market conditions, the carrying value of this investment was reduced to estimated net realizable value in 1993 and 1994. During 1995, the Partnership undertook feasibility studies of alternative development plans for the Waters Landing II site. Based on the results, it was determined that development of the site was not in the best interest of the limited partners. Accordingly, the carrying value was reduced in 1995 to estimated fair market value less cost of sale. Occupancy at the Palms Business Center III and IV was at 95% and 98% at March 31 and June 30, 1995, respectively. During 1996, occupancy increased from 95% at March 31, 1996 to 100% at June 30, 1996. Rental rates in Las Vegas have been increasing over the past 12 months. Occupancy at the Dahlia property remained at 100% during the first two quarters of 1996, where it was at March 31, 1995 and June 30, 1995. The market conditions for industrial space in this area of California have improved. The Partnership had previously received land as a settlement from a former tenant which had defaulted on its lease obligations. The land in Arizona was sold during the first quarter of 1996 and the Partnership received net sale proceeds of approximately $332,000. Occupancy at Santa Rita Plaza was at 91% at March 31 and 90% at June 30, 1996. Occupancy was 94% at March 31, 1995 and June 30, 1995. Performance at the Plaza has been affected by tenant delinquencies and turnover due to business failures. Investment Activity Interest on cash equivalents and short-term investments for the first six months of 1996 decreased compared to the same period of 1995 as a result of lower average investment balances and lower average yields. The average investment balance decreased as a result of the distribution during the third quarter of 1995 of a portion of the sale proceeds from the sale of two investments in 1994. Exclusive of the investment valuation allowance of $600,000 on Waters Landing II in 1995, real estate operations increased approximately $204,000 between the first six months of 1996 and the comparable six months of 1995. This increase resulted from improved operating results at University Business Park ($194,000) and Palms Business Center III and IV ($52,000). These improvements were primarily attributable to increased rental income due to higher rental rates at both properties, as well as a decrease in amortization expense at University Business Park. Operating results at Santa Rita Plaza declined by $68,000. Operating income at the remainder of the Partnership's investments was relatively stable. Cash flow from operations was relatively unchanged between the first six months of 1995 and 1996, which is consistent with net income levels in the respective years exclusive of the non-cash investment valuation allowance in 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 increased between the first six months of 1996 and 1995 due to an increase in distributable cash flow. General and administrative expenses were relatively unchanged between the respective six-month periods. NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED JUNE 30, 1996 PART II OTHER INFORMATION ------------------- Item 6. Exhibits and Reports on Form 8-K a. Exhibits: None. b. Reports on Form 8-K: No Current Reports on Form 8-K were filed during the quarter ended June 30, 1996. 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 13, 1996 /s/ Peter P. Twining ------------------------------- Peter P. Twining Managing Director and General Counsel of Managing General Partner, Fifth Copley Corp. August 13, 1996 /s/ Daniel C. Mackowiak -------------------------------- Daniel C. Mackowiak Principal Financial and Accounting Officer of Managing General Partner, Fifth Copley Corp. EX-27 2
5 6-MOS DEC-31-1996 JUN-30-1996 7276955 4705547 0 0 0 11982502 48081310 0 60063812 138146 482410 0 0 0 59443256 60063812 3458604 3755137 953029 953029 1153164 0 0 1648944 0 1648944 0 0 0 1648944 19.78 19.78
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