-----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, IITnSafzB6CCl4oinVtRmIRxHmZtX8yM5lqhTCF/Ds0DqZ8qGfpRfHqHOhtB6ONF zIT/aM5ssPL5Yz4C6OCy5g== 0000927016-97-002314.txt : 19970814 0000927016-97-002314.hdr.sgml : 19970814 ACCESSION NUMBER: 0000927016-97-002314 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970813 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: 000-17808 FILM NUMBER: 97659470 BUSINESS ADDRESS: STREET 1: 225 FRANKLIN ST 25TH FL CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 6175781200 10-Q 1 FORM 10-Q 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, 1997 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) 225 Franklin Street, 25th Fl. Boston, Massachusetts 02110 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (617) 261-9000 - ------------------------------------------------------------------------------- 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, 1997 PART I FINANCIAL INFORMATION --------------------- BALANCE SHEET (Unaudited)
June 30, 1997 December 31, 1996 ------------- ----------------- ASSETS Real estate investments: Property, net $36,874,640 $42,828,754 Joint ventures 4,781,997 4,722,223 ----------- ----------- 41,656,637 47,550,977 Cash and cash equivalents 7,365,968 4,706,279 Short-term investments 4,987,233 7,332,878 ----------- ----------- $54,009,838 $59,590,134 =========== =========== LIABILITIES AND PARTNERS' CAPITAL Accounts payable $ 124,138 $ 108,026 Accrued management fee 59,425 57,064 Deferred management and disposition fees 965,960 596,583 ----------- ----------- Total liabilities 1,149,523 761,673 ----------- ----------- Commitments to fund real estate investments Partners' capital (deficit): Limited partners ($832 and $924 per unit, respectively; 160,000 units authorized, 82,388 and 82,426 units issued and outstanding, respectively) 52,931,646 58,916,206 General partners (71,331) (87,745) ----------- ----------- Total partners' capital 52,860,315 58,828,461 ----------- ----------- $54,009,838 $59,590,134 =========== ===========
(See accompanying notes to financial statements) STATEMENT OF OPERATIONS (Unaudited)
Six Six Quarter Months Quarter Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 1997 1997 1996 1996 ---------- ---------- ---------- ---------- INVESTMENT ACTIVITY Property rentals $1,766,349 $3,398,150 $1,583,118 $3,199,983 Interest income on loan to ground lessor 36,509 75,077 37,321 74,970 Property operating expenses (360,346) (797,142) (347,160) (758,029) Ground rent expense (97,500) (195,000) (97,500) (195,000) Depreciation and amortization (378,757) (762,227) (381,958) (759,202) ---------- ---------- ---------- ---------- 966,255 1,718,858 793,821 1,562,722 Joint venture earnings 89,566 174,787 94,794 183,651 ---------- ---------- ---------- ---------- Total real estate operations 1,055,821 1,893,645 888,615 1,746,373 Gain on sale of wholly-owned property 2,160,404 2,160,404 - - ---------- ---------- ---------- ---------- Total real estate activity 3,216,225 4,054,049 888,615 1,746,373 Interest on cash equivalents and short-term investments 186,073 337,283 148,517 296,533 ---------- ---------- ---------- ---------- Total investment activity 3,402,298 4,391,332 1,037,132 2,042,906 ---------- ---------- ---------- ---------- Portfolio Expenses Management fee 118,849 237,753 114,218 228,499 General and administrative 83,578 155,867 80,494 165,463 ---------- ---------- ---------- ---------- 202,427 393,620 194,712 393,962 ---------- ---------- ---------- ---------- Net Income $3,199,871 $3,997,712 $ 842,420 $1,648,944 ========== ========== ========== ========== Net income per weighted average limited partnership unit $38.45 $48.03 $10.11 $19.78 ========== ========== ========== ==========
Cash distributions per limited partnership unit outstanding for the entire period $106.44 $120.30 $ 13.86 $ 25.99 ======= ======= ======= ======= Weighted average number of limited partnership units outstanding during the period 82,388 82,407 82,491 82,514 ======= ======= ======= =======
(See accompanying notes to financial statements) STATEMENT OF PARTNERS' CAPITAL (DEFICIT) (Unaudited)
Quarter Ended Six Months Ended Quarter Ended Six Months Ended June 30, 1997 June 30, 1997 June 30, 1996 June 30, 1996 ---------------------- ---------------------- ---------------------- ----------------------- General Limited General Limited General Limited General Limited Partners Partners Partners Partners Partners Partners Partners Partners -------- ----------- -------- ----------- -------- ----------- --------- ----------- Balance at beginning of period $(91,307) $58,533,701 $(87,745) $58,916,206 $(78,951) $59,835,289 $(76,903) $60,073,460 Repurchase of limited partnership units - - - (29,944) - - - (35,468) Cash distributions (12,023) (8,769,927) (23,563) (9,912,351) (11,554) (1,143,948) (21,667) (2,145,110) Net income 31,999 3,167,872 39,977 3,957,735 8,424 833,996 16,489 1,632,455 -------- ----------- -------- ----------- -------- ----------- --------- ----------- Balance at end of period $(71,331) $52,931,646 $(71,331) $52,931,646 $(82,081) $59,525,337 $ (82,081) $59,525,337 ======== =========== ======== =========== ======== =========== ========= ===========
(See accompanying notes to financial statements) SUMMARIZED STATEMENT OF CASH FLOWS (Unaudited)
Six Months Ended June 30, ------------------------- 1997 1996 --------- ---------- Net cash provided by operating activities $ 2,431,382 $ 2,529,387 ----------- ----------- Cash flows from investing activities: Deferred disposition fees 250,500 - Investment in property (124,871) (20,547) Decrease in short-term investments, net 2,292,204 3,149,790 Repayment of loan to ground lessor 32,702 29,972 Net proceeds from sale of property 7,743,630 - ----------- ----------- Net cash provided by investing activities 10,194,165 3,159,215 ----------- ----------- Cash flows from financing activities: Distributions to partners (9,935,914) (2,166,777) Repurchase of limited partnership units (29,944) (35,468) ----------- ----------- Net cash used in financing activities (9,965,858) (2,202,245) ----------- ----------- Net increase in cash and cash equivalents 2,659,689 3,486,357 Cash and cash equivalents: Beginning of period 4,706,279 3,790,598 ----------- ----------- End of period $ 7,365,968 $ 7,276,955 =========== ===========
Non-cash transactions: Effective January 1, 1996, the Partnership's joint venture investment in University Business Park was converted to a wholly-owned property. The carrying value of this investment at conversion was $5,630,581. 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, 1997 and December 31, 1996 and the results of its operations, its cash flows and partners' capital (deficit) for the interim periods ended June 30, 1997 and 1996. These adjustments are of a normal recurring nature. See notes to financial statements included in the Partnership's 1996 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 six 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 $78,504 and $56,736 at June 30, 1997 and December 31, 1996, respectively. NOTE 2 - REAL ESTATE JOINT VENTURES - ----------------------------------- 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 and the investment has been accounted for as a wholly-owned property since April 1, 1996. Ownership of the Columbia Gateway Corporate Park joint venture is being restructured whereby the Partnership and its affiliate will obtain full control over the business of the joint venture. Although there can be no assurance that this restructuring will occur, the restructuring is expected to be completed during the third quarter. The following summarized financial information is presented in the aggregate for the Partnership's joint venture: Assets and Liabilities ----------------------
June 30, 1997 December 31, 1996 ------------------ ----------------- Assets Real property, at cost less accumulated depreciation of $1,968,382 and $1,852,988, respectively $ 15,939,498 $ 15,670,283 Other 399,179 321,328 ------------- ------------- 16,338,677 15,991,611 Liabilities 191,432 43,521 ------------- ------------- Net Assets $ 16,147,245 $ 15,948,090 =========== ===========
Results of Operations ---------------------
Six Months Ended June 30, ------------------------- 1997 1996 ---- ---- Revenue Rental income $ 940,529 $ 979,813 ----------- ---------- 940,529 979,813 ----------- ---------- Expenses Operating expenses 238,506 248,728 Depreciation and amortization 128,950 128,950 ----------- ---------- 367,456 377,678 ----------- ---------- Net income $ 573,073 $ 602,135 =========== ==========
Liabilities and expenses exclude amounts owed and attributable to the Partnership and its affiliate on behalf of their financing arrangements with the joint ventures. NOTE 3 - PROPERTY - ----------------- 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. 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 and the investment valuation allowance. A settlement with a former tenant at Dahlia for past due rent 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. The University Business Park wholly-owned property was sold on May 28, 1997. The following is a summary of the Partnership's investment in property (five in 1997 and six in 1996):
June 30, 1997 December 31, 1996 --------------- ----------------- Land $ 9,640,690 $ 11,475,045 Building and improvements 30,661,898 34,383,256 Accumulated depreciation (3,223,677) (2,797,876) Investment valuation allowance (3,500,000) (3,500,000) Loan to ground lessor 1,632,024 1,664,726 Lease commissions and other assets, net 1,459,135 1,667,594 Accounts receivable 575,512 576,334 Accounts payable (370,942) (640,325) ----------- ----------- $ 36,874,640 $ 42,828,754 ============ ===========
NOTE 4 - SUBSEQUENT EVENT - ------------------------- Distributions of cash from operations relating to the quarter ended June 30, 1997 were made on July 24, 1997 in the aggregate amount of $1,201,700 ($14.44 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 and one of which was sold in 1997. As a result of the sales, capital of $13,861,500 has been returned to the limited partners through June 30, 1997, including a capital distribution of $7,579,696 ($92 per limited partnership unit) made on June 30, 1997 from the proceeds of the sale of University Business Park. This capital distribution reduces the adjusted capital contribution to $832 per unit. In addition, a portion of the sales proceeds was used to pay previously accrued, but deferred management fees to the advisor ($388,320 in July 1997). The Partnership accrued $250,500 of disposition fees in connection with this sale. At June 30, 1997, the Partnership had $12,353,201 in cash, cash equivalents and short-term investments, of which $1,201,700 was used for cash distributions to partners on July 24, 1997; 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 1997 were made at the annualized rate of 6.25% on the adjusted capital contribution. 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. 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 $78,504 and $56,736 at June 30, 1997 and December 31, 1996, respectively. Through June 30, 1997, the Partnership had repurchased and retired 903 limited partnership units for an aggregate cost of $843,180. 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, 1997, the appraised values of certain investments exceeded their related carrying values by an aggregate of $5,227,000, and the appraised values of the remaining investments were less than their related carrying values by an aggregate of $742,000. 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 - --------------------- Puente Street, Palms Business Center, Santa Rita Plaza and Dahlia are wholly-owned properties. Effective April 1, 1996, the Waters Landing II joint venture was restructured and the venture partner's ownership interest was assigned to the Partnership. Accordingly, these investments have been accounted for as wholly-owned properties since their respective conversion dates. The University Business Park property, which was a wholly-owned property, was sold on May 28, 1997. The remaining investment in the portfolio, Columbia Gateway Corporate Park, is structured as a joint venture with a real estate development/management firm and an affiliate of the Partnership. Operating Factors Overall occupancy at Columbia Gateway Corporate Park remained at 95% during the second quarter of 1997, consistent with March 31, 1997 and up from 92% at June 30, 1996. No leases are due to expire until December 1997. Ownership of the Columbia Gateway Corporate Park joint venture is being restructured whereby the Partnership and its affiliate will obtain full control over the business of the joint venture. Although there can be no assurance that this restructuring will occur, the restructuring is expected to be completed during the third quarter. Occupancy at Puente Street has remained at 100% since the first quarter of 1994. Operations are stable and no leases are due to expire until April 1999. Litigation involving an existing tenant was settled during the quarter. The settlement provides for this tenant to assign its lease to the other existing tenant no later than February 1, 1998. It is expected that there will be no significant effect on the Partnership's financial position. During 1995, the Partnership undertook a number of feasibility studies of alternative development plans for the Waters Landing II site. Based on the results, it was determined that it was not in the best interest of the limited partners to develop this site. Occupancy at the Palms Business Center III and IV was at 100% consistent with June 30, 1996. Rental rates in Las Vegas have increased over the past 12 months. Occupancy at the Dahlia property remained at 100% during the first two quarters of 1997, where it has been since the first quarter of 1994. The Partnership had previously received an interest in land located in Arizona as a rent settlement from a former tenant. During the first quarter of 1996, upon liquidation of this interest in land, the Partnership received cash of approximately $332,000. Occupancy at Santa Rita Plaza was at 96% at June 30, 1997 up from 90% at June 30, 1996. Although occupancy is strong at this time, past 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 1997 increased compared to the same period of 1996 due to the temporary investment of proceeds from the sale of University Business Park. Real estate operating activity for the first six months of 1997 was $1,893,645 compared to $1,746,373 for the same period in 1996. This increase of approximately $147,000 is a result of improvements at Santa Rita Plaza ($81,000) due to an increase in occupancy and improved operating results at Puente Street ($63,000) due to an increase in tenant reimbursement income and lower operating expenses. Operating income at the remainder of the Partnership's investments was relatively stable. On May 28, 1997, the University Business Park wholly-owned property was sold and the Partnership received net proceeds of $7,994,130 and recognized a gain of $2,160,404. Cash flow from operations for the first six months of 1996 included $332,000 from the settlement of past due rents from a former tenant at the Dahlia property. Exclusive of this amount, cash flow from operations increased $234,000 which is consistent with the increase in investment activities between the two periods. 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 slightly between the first six months of 1997 and 1996 due to an increase in distributable cash flow. General and administrative expenses decreased 4% between the respective six-month periods due primarily to lower legal expenses. NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED JUNE 30, 1997 PART II OTHER INFORMATION ------------------- Item 6. Exhibits and Reports on Form 8-K a. Exhibits: None. b. Reports on Form 8-K: The Partnership filed one Current Report on Form 8-K dated June 10, 1997 reporting on Item No. 2 (Acquisition or Disposition of Assets). 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, 1997 /s/ James J. Finnegan ------------------------------- James J. Finnegan Managing Director and General Counsel of Managing General Partner, Fifth Copley Corp. August 13, 1997 /s/ Karin J. Lagerlund -------------------------------- Karin J. Lagerlund Principal Financial and Accounting Officer of Managing General Partner, Fifth Copley Corp. EX-27 2 FINANCIAL DATA SCHEDULE
5 6-MOS DEC-31-1997 JUN-30-1997 7,365,968 4,987,233 0 0 0 12,353,201 41,656,637 0 54,009,838 183,563 965,960 0 0 0 52,860,315 54,009,838 5,808,418 6,145,701 992,142 992,142 1,155,847 0 0 3,997,712 0 3,997,712 0 0 0 3,997,712 48.03 48.03
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