-----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, EoQaFBdmfrqwA7zIbCTq7A74Hyu3Rmxf5MUo3WnUl/Ag0lO4ZhZSl6mpWXqsYhtw y/qYhT86QdfGWx25Y28dFQ== 0000927016-98-002017.txt : 19980514 0000927016-98-002017.hdr.sgml : 19980514 ACCESSION NUMBER: 0000927016-98-002017 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980513 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: SEC FILE NUMBER: 000-17808 FILM NUMBER: 98617653 BUSINESS ADDRESS: STREET 1: 225 FRANKLIN ST 25TH FL CITY: BOSTON STATE: MA ZIP: 02110 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 March 31, 1998 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 MARCH 31, 1998 PART I FINANCIAL INFORMATION ---------------------- BALANCE SHEETS (Unaudited)
March 31, 1998 December 31, 1997 -------------- ----------------- ASSETS Real estate investments: Property, net $27,109,784 $27,287,367 Joint venture 4,843,634 4,836,039 ----------- ----------- 31,953,418 32,123,406 Cash and cash equivalents 10,303,446 6,303,386 Short-term investments - 4,362,030 ----------- ----------- $42,256,864 $42,788,822 =========== =========== LIABILITIES AND PARTNERS' CAPITAL Accounts payable $ 97,971 $ 129,158 Accrued management fee 36,438 48,078 Deferred management and disposition fees 1,142,731 1,106,292 ----------- ----------- Total liabilities 1,277,140 1,283,528 ----------- ----------- Commitments to fund real estate investments Partners' capital (deficit): Limited partners ($616 per unit; 160,000 units authorized, 82,336 units issued and outstanding) 40,991,642 41,511,957 General partners (11,918) (6,663) ----------- ----------- Total partners' capital 40,979,724 41,505,294 ----------- ----------- $42,256,864 $42,788,822 =========== ===========
(See accompanying notes to financial statements) STATEMENTS OF OPERATIONS (Unaudited)
Quarter Ended March 31, ------------------------- 1998 1997 ----------- ------------ INVESTMENT ACTIVITY Property rentals $ 919,407 $1,631,801 Interest income on loan to ground lessor 36,256 38,568 Property operating expenses (256,769) (436,796) Ground rent expense (97,500) (97,500) Depreciation and amortization (235,425) (383,470) --------- ---------- 365,969 752,603 Joint venture earnings 86,372 85,221 --------- ---------- Total real estate operations 452,341 837,824 Interest on cash equivalents and short-term investments 134,876 151,210 --------- ---------- Total investment activity 587,217 989,034 --------- ---------- PORTFOLIO EXPENSES Management fee 72,877 118,904 General and administrative 67,680 72,289 --------- ---------- 140,557 191,193 --------- ---------- Net Income $ 446,660 $ 797,841 ========= ========== Net income per weighted average limited partnership unit $5.37 $9.58 ========= ========== Cash distributions per limited partnership unit outstanding for the entire period $11.69 $13.86 ========= ========== Weighted average number of limited partnership units outstanding during the period 82,336 82,426 ========= ==========
(See accompanying notes to financial statements) STATEMENTS OF PARTNERS' CAPITAL (DEFICIT) (Unaudited)
Quarter Ended March 31, --------------------------------------------- 1998 1997 -------- -------- General Limited General Limited Partners Partners Partners Partners --------- ----------- ---------- ---------- Balance at beginning of period $(6,663) $41,511,957 $(87,745) $58,916,206 Repurchase of limited partnership units - - - (29,944) Cash distributions (9,722) (962,508) (11,540) (1,142,424) Net income 4,467 442,193 7,978 789,863 --------- ----------- ---------- ---------- Balance at end of period $(11,918) $40,991,642 $(91,307) $58,533,701 ========= =========== ========= ============
(See accompanying notes to financial statements) SUMMARIZED STATEMENTS OF CASH FLOWS (Unaudited)
Quarter Ended March 31, ---------------------------- 1998 1997 ----------- --------------- Net cash provided by operating activities $ 624,690 $ 1,234,812 ----------- ----------- Cash flows from investing activities: Investment in property (32,076) (61,195) Decrease in short-term investments, net 4,362,030 3,471,891 Repayment of loan to ground lessor 17,646 16,173 ----------- ----------- Net cash provided by investing activities 4,347,600 3,426,869 ----------- ----------- Cash flows from financing activities: Distributions to partners (972,230) (1,153,964) Repurchase of limited partnership units - (29,944) ----------- ----------- Net cash used in financing activities (972,230) (1,183,908) ----------- ----------- Net increase in cash and cash equivalents 4,000,060 3,477,773 Cash and cash equivalents: Beginning of period 6,303,386 4,706,279 ----------- ----------- End of period $10,303,446 $ 8,184,052 =========== ===========
(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 March 31, 1998 and December 31, 1997 and the results of its operations, its cash flows and partners' capital (deficit) for the interim periods ended March 31, 1998 and 1997. These adjustments are of a normal recurring nature. See notes to financial statements included in the Partnership's 1997 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 five 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 has engaged AEW Real Estate Advisors, Inc. (the "Advisor") to provide asset management services. 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 $113,131 and $96,937 at March 31, 1998 and December 31, 1997, respectively. NOTE 2 - REAL ESTATE JOINT VENTURES - ----------------------------------- Ownership of the Columbia Gateway Corporate Park joint venture has been restructured whereby the Partnership and its affiliate obtained full control over the business of the joint venture effective January 1, 1998. The following summarized financial information is presented in the aggregate for the Partnership's remaining joint venture: Assets and Liabilities ----------------------
March 31, 1998 December 31, 1997 -------------- ----------------- Assets Real property, at cost less accumulated depreciation of $1,570,496 and $1,506,022, respectively $16,016,779 $15,781,399 Other 705,446 739,025 ----------- ----------- 16,722,225 16,520,424 Liabilities 368,124 192,816 ----------- ----------- Net Assets $16,354,101 $16,327,608 =========== ===========
Results of Operations ---------------------
Quarter ended March 31, ----------------------------- 1998 1997 ----------- ---------- Revenue Rental income $471,279 $462,031 -------- ---------- 471,279 462,031 -------- ---------- Expenses Operating expenses 123,616 118,144 Depreciation and amortization 64,475 64,475 -------- ---------- 188,091 182,619 -------- ---------- Net income $283,188 $279,412 ======== ==========
Liabilities and expenses exclude amounts owed and attributable to the Partnership and its affiliate on behalf of their financing arrangements with the joint venture. NOTE 3 - PROPERTY - ----------------- The following is a summary of the Partnership's four investments in property:
March 31, 1998 December 31, 1997 --------------- ------------------ Land $ 7,445,208 $ 7,445,208 Building and improvements 22,968,823 22,936,747 Accumulated depreciation (3,005,871) (2,805,296) Investment valuation allowance (3,500,000) (3,500,000) Loan to ground lessor 1,580,220 1,597,866 Lease commissions and other assets, net 1,405,880 1,388,391 Accounts receivable 464,173 515,182 Accounts payable (248,649) (290,731) ----------- ----------- $27,109,784 $27,287,367 =========== ===========
NOTE 4 - SUBSEQUENT EVENT - ------------------------- Distributions of cash from operations relating to the quarter ended March 31, 1998 were made on April 29, 1998 in the aggregate amount of $736,866 ($8.86 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, four of which have been sold: two in 1994 and two in 1997. As a result of the sales, capital of $31,646,076 has been returned to the limited partners through March 31, 1998. The adjusted capital contribution was reduced to $952 from $1,000 per unit in 1994, to $924 in 1995, and then to $616 in 1997. At March 31, 1998, the Partnership had $10,303,446 in cash and cash equivalents, of which $736,866 was used for cash distributions to partners on April 29, 1998; 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 invested cash and cash equivalents and real estate investments. Distributions of cash from operations relating to the first quarter of 1998 were made at the annualized rate of 5.75% on the adjusted capital contribution. Distributions of cash from operations relating to the first quarter of 1997 were made at the annualized rate of 6.25% on the adjusted capital contribution. The distribution rate was decreased due to the sale of properties during 1997. 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 $113,131 and $96,937 at March 31, 1998, and December 31, 1997, respectively. Through March 31, 1998, the Partnership repurchased and retired 955 limited partnership units for an aggregate cost of $880,412. 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 March 31, 1998, the appraised values of certain investments exceeded their related carrying values by an aggregate of $4,300,000, and the appraised values of the remaining investments were less than their related carrying values by an aggregate of $41,000. 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, Santa Rita Plaza, Dahlia, and Waters Landing II are wholly- owned properties. 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 Occupancy at University Business Park was 100% at March 31, 1997. The University Business Park was sold on May 28, 1997, and the Partnership recognized a gain of $2,160,404. The property was 100% leased at the time of sale. Overall occupancy at Columbia Gateway Corporate Park increased to 100% during the first quarter of 1998 compared to 95% at March 31, 1997. Ownership of the Columbia Gateway Corporate Park joint venture has been restructured whereby the Partnership and its affiliate have obtained full control over the business of the joint venture. This restructuring was effective January 1, 1998. One lease is due to expire in October, 1998 but an existing tenant has expressed an interest in exercising their right of first refusal and expand into this space upon the lease expiration. 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. As a result of a settlement of previous litigation, a former tenant of Puente Street assigned its lease to the other existing tenant on February 1, 1998. The former tenant now sub-leases the space from the existing tenant. There was no material effect on the Partnership's financial position or results of operations as a result of this lease assignment. During 1997, negotiations were finalized for a 53,000 square-foot build-to-suit facility to be built on Partnership land for a tenant of an affiliated partnership. A 10-year lease will commence upon completion of the building, which is scheduled for the third quarter of 1998. The Waters Landing II property is presently zoned and permitted for the development of 144 apartment units. However, based on studies previously undertaken by the Partnership, the Partnership has no plans at this time to develop this site. Occupancy at the Palms Business Center III and IV was 100% at March 31, 1997. The Palms Business Center III and IV was sold on October 24, 1997, and the Partnership recognized a gain of $8,016,586. At the time of sale, the property was 100% leased. Occupancy at the Dahlia property remained at 100% during the first quarter of 1998, where it has been since the first quarter of 1994. The lease of a tenant that occupies approximately 30% of the space expires in May 1998. The tenant is not expected to renew and therefore an agreement has been executed allowing for the lease to be terminated by the Partnership any time after February 1, 1998. The marketing process for this space has been initiated. Occupancy at Santa Rita Plaza during the first quarter of 1998 was 97%, consistent with March 31, 1997. Although occupancy is strong at this time, two tenants which in total occupy approximately 20% of the space may depart during 1998. Investment Activity Interest on cash equivalents and short-term investments for the first quarter of 1998 decreased 11% compared to the same period of 1997 due to lower investment balances as a result of less cash generated by real estate investments due to the sale of two such investments during 1997. Real estate operations decreased $385,483 between the first quarter of 1998 and the comparable quarter of 1997. This decrease is primarily due to the sales of University Business Park and Palms Business Center III and IV during 1997. Cash flow from operations decreased by $610,122 between the first quarter of 1998 and 1997. This increase is largely attributable to the decrease in real estate operations, discussed above. 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 decreased between the first quarter of 1997 and 1998 due to a decrease in distributable cash flow. General and administrative expenses decreased 6% between the respective quarters, primarily due to lower appraisal expenses resulting from the sale of two assets during 1997. NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED MARCH 31, 1998 PART II OTHER INFORMATION ------------------- Item 6. Exhibits and Reports on Form 8-K a. Exhibits: (27) Financial Data Schedule b. Reports on Form 8-K: No Current Reports on Form 8-K were filed during the quarter ended March 31, 1998. 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) May 13, 1998 /s/ Wesley M. Gardiner, Jr. ------------------------------------------ Wesley M. Gardiner, Jr. President, Chief Executive Officer and Director of Managing General Partner, Fifth Copley Corp. May 13, 1998 /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 3-MOS DEC-31-1998 MAR-31-1998 10,303,446 0 0 0 0 10,303,446 31,953,418 0 42,256,864 134,409 1,142,731 0 0 0 40,979,724 42,256,864 1,042,035 1,176,911 354,269 354,269 375,982 0 0 446,660 0 446,660 0 0 0 446,660 5.37 5.37
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