-----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, R6GWsaFyHoWpeaeEaWHmrbqS6l73Q7QeE2ThxlmXZSABb+HvscHQJbKryHEgG7lB ANLigmml547PXVdwKZ2/Ew== 0000927016-98-001285.txt : 19980401 0000927016-98-001285.hdr.sgml : 19980401 ACCESSION NUMBER: 0000927016-98-001285 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980331 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-K405 SEC ACT: SEC FILE NUMBER: 000-17808 FILM NUMBER: 98581083 BUSINESS ADDRESS: STREET 1: 225 FRANKLIN ST 25TH FL CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6175781200 10-K405 1 10-K-405 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 __________________ FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1997 Commission File No. 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 incorporation or organization) Identification No) 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 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Units of Limited Partnership Interest (Title of Class) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ___ --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] No voting stock is held by nonaffiliates of the Registrant. DOCUMENTS INCORPORATED BY REFERENCE None Item 1. Business. -------- New England Pension Properties V; A Real Estate Limited Partnership (the "Partnership") was organized under the Uniform Limited Partnership Act of the Commonwealth of Massachusetts on October 23, 1986, to invest primarily in to-be-developed, newly-constructed and existing income-producing real properties. The Partnership was initially capitalized with contributions of $2,000 in the aggregate from Fifth Copley Corp. (the "Managing General Partner") and ECOP Associates Limited Partnership (the "Associate General Partner") (collectively, the "General Partners") and $10,000 from Copley Real Estate Advisors, Inc. (the "Initial Limited Partner"). The Partnership filed a Registration Statement on Form S-11 (the "Registration Statement") with the Securities and Exchange Commission on November 12, 1986, with respect to a public offering of 60,000 units of limited partnership interest at a purchase price of $1,000 per unit (the "Units") with an option to sell up to an additional 60,000 Units (an aggregate of $120,000,000). The Registration Statement was declared effective on January 9, 1987. The first sale of Units occurred on July 23, 1987, at which time the Initial Limited Partner withdrew its contribution from the Partnership. Investors were admitted to the Partnership thereafter at monthly closings; the offering terminated and the last group of subscription agreements was accepted by the Partnership on December 31, 1987. As of January 31, 1988, a total of 83,291 Units had been sold, a total of 12,900 investors had been admitted as limited partners (the "Limited Partners") and a total of $82,761,530 had been contributed to the capital of the Partnership. The remaining 36,709 Units were de-registered on March 17, 1988. The Partnership makes available 2% of Cash Flow, as defined in the Partnership's Amended and Restated Agreement of Limited Partnership dated July 23, 1987, for the purpose of repurchasing Units. See Note 1 of the Financial Statements in Item 8 hereof. At December 31, 1997, the Partnership owned the five real property investments described in A., B., D., E., and F. below. Two investments were sold in 1994 and two investments were sold in 1997 (see C. & G. below). Sales proceeds were distributed in the amount of $48 per Unit in 1994, $28 per Unit in 1995, and $308 per Unit in 1997, after the Partnership made certain strategic decisions on projects yet to be developed. The Partnership has no current plan to renovate, improve or further develop any of its real property other than as described in E. below. In the opinion of the Managing General Partner, the properties are adequately covered by insurance. The Partnership has no employees. Services are performed for the Partnership by the Managing General Partner and affiliates of the Managing General Partner. A. Land in Germantown, Maryland ("Waters Landing II"). ------------------------------------------------- On May 26, 1987, the Partnership acquired a 60% interest in a joint venture with Waters Landing Two - Oxford Limited Partnership ("Oxford"). As of April 1, 1996, the Partnership had contributed $1,403,112 to the capital of the joint venture out of a maximum commitment of $4,682,400. The joint venture agreement entitles the Partnership to receive a monthly preferred return on its invested capital at the rate of 10.5% per annum. Prior to December 1, 1994, such monthly preferred return was permitted to accrue to the extent that the joint venture did not have sufficient cash to pay it. The joint venture agreement also entitled the Partnership to receive 60% of all remaining cash flow from operations and 60% of net sale and refinancing proceeds following the return of the Partnership's equity. The Partnership also committed to make a loan of up to $3,121,600 to Oxford for investment in the venture of which $935,408 had been funded as of April 1, 1996. Interest only on the loan was payable monthly at the rate of 10.5% per annum. The loan was due upon the sale of the joint venture's assets or the sale of Oxford's interest in the joint venture. Oxford was required to apply any cash flow received from operations of the joint venture to interest payments on the loan and must apply proceeds of financings or sales received from the joint venture to payments of the interest on and principal of the loan. The loan was secured by Oxford's interest in the joint venture. Effective April 1, 1996, Oxford's ownership interest was transferred and assigned to the Partnership and an affiliate. The joint venture owns approximately 8.5 acres of land in Germantown, Maryland and originally intended to construct a 144-unit apartment complex. Development had been postponed due to the excess supply of apartment units in the Germantown area. During 1995, after a number of feasibility studies of alternative development proposals for the site, it was determined development would not yield a sufficient return to justify the investment risk. B. Warehouse Building in Fontana, California ("Dahlia"). --------------------------------------------------- On September 21, 1987, the Partnership acquired a 60% interest in a joint venture formed with an affiliate of Investment Building Group. As of December 31, 1997, the Partnership had contributed $7,081,593 to the capital of the joint venture out of a maximum commitment of $7,250,000. The joint venture agreement entitles the Partnership to receive a monthly preferred return on its invested capital at the rate of 10% per annum. The joint venture agreement also entitles the Partnership to receive 60% of the remaining cash flow and 60% of sale and refinancing proceeds following the return of the Partnership's equity. On September 1, 1995, the joint venture was converted into a limited partnership with the Partnership as the general partner and the affiliate of Investment Building Group as the limited partner. The limited partnership owns approximately 12.9 acres of land in Fontana, California and has completed construction thereon of a one-story warehouse building containing approximately 278,220 square feet of space. As of December 31, 1997, the building was 100% leased. C. Office/Warehouse Buildings in Phoenix, Arizona (" University ------------------------------------------------------------ Business Park"). -------------- On September 30, 1987, the Partnership acquired a 60% interest in a joint venture formed with an affiliate of The Hewson Company. The Partnership contributed $7,976,784 to the capital of the joint venture out of a maximum commitment of $9,450,000. The joint venture agreement entitled the Partnership to receive a monthly preferred return on its invested capital at the rate of 10% per annum. The joint venture agreement also entitled the Partnership to receive 60% of the remaining cash flow and 60% of sale and refinancing proceeds following return of the Partnership's equity. Effective January 1, 1996, the joint venture was dissolved and ownership of the joint venture assets consisting of approximately 8.5 acres of land in Phoenix, Arizona improved with five warehouse buildings containing approximately 109,930 square feet of space, was assigned to the Partnership. On May 28, 1997, the property was sold at which time the Partnership received net proceeds of $7,994,130. On June 30, 1997, the Partnership made a capital distribution of $7,579,696 ($92 per limited partnership unit) from sale proceeds. D. Office/Research and Development Buildings in Columbia, Maryland --------------------------------------------------------------- ("Columbia Gateway Corporate Park"). --------------------------------- On December 21, 1987, the Partnership acquired a 33% interest in a joint venture formed with New England Life Pension Properties IV; A Real Estate Limited Partnership, an affiliate of the Partnership (the "Affiliate"), which had a 17% interest, and M.O.R. Gateway 51 Associates Limited Partnership. As of April 20, 1989, the joint venture agreement was amended and restated to reflect a decrease in the Partnership's interest in the joint venture to 15.25% and an increase in the Affiliate's interest in the joint venture to 34.75%. In addition, the amended and restated joint venture agreement increased the Affiliate's maximum obligation to contribute capital to the joint venture and reallocated the capital contributed to the joint venture by the Partnership and the Affiliate. As of December 31, 1997, the Partnership had contributed $6,181,690 to the capital of the joint venture out of a maximum commitment of $6,402,000. The joint venture agreement entitles the Partnership and the Affiliate to receive a preferred return on their respective invested capital at the rate of 10.5% per annum. Such preferred return will be payable currently until the Partnership and the Affiliate have received an aggregate of $8,865,000; thereafter, if sufficient cash flow is not available therefor, the preferred return will accrue and bear interest at the rate of 10.5% per annum, compounded monthly. The joint venture agreement also entitles the Partnership to receive 15.25% of cash flow following payment of the preferred return and 15.25% of the net proceeds of sales and refinancings following return of the Partnership's and the Affiliate's equity. Ownership of the joint venture has been restructured whereby the Partnership and the Affiliate will obtain full control over the business of the joint venture. The restructuring will be effective January 1, 1998. The joint venture owns approximately 20.85 acres of land in the Columbia Gateway Corporate Park in Columbia, Maryland. The intended development plan for this land was for a two-stage development of seven office and research and development buildings. The first phase of this development was completed in 1992 and included the construction of four, one-story office and research and development buildings containing 142,545 square feet. The second phase of this development commenced in the spring of 1994 in which a 46,000 square-foot building was constructed and leased to a single tenant for a lease term of ten years. As of December 31, 1997 the property was 98% leased. E. Industrial Building in Brea, California ("Puente Street"). -------------------------------------------------------- On April 28, 1988, the Partnership acquired a 60% interest in a joint venture formed with an affiliate of The Muller Company. In April, 1990, the Partnership increased its commitment to the joint venture by $625,000 to $13,725,000 of which $13,475,000 had been contributed as of June 1, 1991. The joint venture agreement entitled the Partnership to receive a monthly preferred return on its invested capital at the rate of 10.5% per annum. The joint venture agreement also entitled the Partnership to receive 60% of the remaining cash flow and 60% of sale and refinancing proceeds following the return of the Partnership's equity. As of June 1, 1991, because of the developer partner's inability to fund its share of capital contributions, the Partnership assumed 100% ownership of the joint venture's assets. The Partnership owns approximately 16.75 acres of land in Brea, California and has completed renovation of an existing building thereon containing 181,200 square feet. Construction of an approximately 37,320 square foot addition was completed during the first quarter of 1989. As of December 31, 1997, the existing building was 100% leased to two tenants. During 1997, negotiations were finalized for a 53,000 square-foot build-to-suit facility to be built on the remaining land for Nature's Best. A 10-year lease will commence upon completion of the building. On December 8, 1995 the Partnership was named as a defendant in a complaint filed in the Superior Court of the State of California for the County of Orange by an existing tenant, Bridgeport Management Services, Inc. alleging breach of lease. On January 17, 1996 the Partnership filed an answer denying the allegations presented by the plaintiff. A settlement was reached with Bridgeport Management, resulting in its agreement to transfer its leasehold interest to 20th Century Plastics, the other tenant, no later than February 1, 1998. This transfer has occurred and Bridgeport Management Services is now sub-leasing the space from 20th Century Plastics. F. Shopping Center in Salinas, California ("Santa Rita Plaza"). ---------------------------------------------------------- On February 1, 1989, the Partnership acquired a 60% interest in a joint venture formed with Rodde McNellis/Salinas. On July 20, 1990, the Partnership committed to increase its maximum contribution from $9,500,000 to $11,350,000, of which $6,500,000 is characterized as Senior Capital and $4,850,000 is characterized as Junior Capital. As of December 31, 1997, the Partnership had contributed $11,119,840 to the capital of the joint venture. The joint venture agreement entitles the Partnership to receive a monthly preferred return on its Senior Capital at the rate of 10.5% per annum during months 1-24 of the joint venture's operations and a monthly preferred return to reduce its outstanding Senior Capital, together with a return at the rate of 10.5% per annum, based on a 27-year amortization schedule, during months 25-120 of the joint venture's operations. The entire outstanding Senior Capital is due and payable ten years after the date of the Partnership's first investment of Senior Capital. The joint venture agreement also entitles the Partnership to receive a priority return payment on its Junior Capital at the rate of 10.5% per annum. Such junior priority return payment will accrue and bear interest at the rate of 10.5% per annum, if sufficient cash is not available therefor. At such time as the aggregate of accrued junior priority return payments total $1,000,000, all junior priority return payments and the return on the accrued junior priority return payments will thereafter be paid currently; provided, however, that the $1,000,000 threshold will be increased by each dollar of Junior Capital which the Partnership elects not to contribute to fund its return. The Junior Capital will be due and payable after the fifteenth year of the joint venture's operations. On August 1, 1995 the joint venture was converted into a California limited partnership with the Partnership as the general partner with a 63% ownership interest and an affiliate of Rodde/McNellis Salinas as the limited partner with a 37% interest. The joint venture agreement also entitles the Partnership to receive 63% of cash flow remaining after payment of the preferred return and 63% of sale and refinancing proceeds following the return of the Partnership's equity. The limited partnership has a leasehold interest in approximately 10.56 acres of land in Salinas, California (the "Land") and has completed construction thereon of five one-story retail buildings containing a total of approximately 125,247 square feet. The ground lease has a term of 75 years with two options to extend, for ten years each. Under the ground lease, fixed rent of $390,000 per annum is payable. A percentage rent equal to 11.55% of rents in excess of $1,400,000 received by the ground lessee from subtenants, excluding expense reimbursements, is also payable. As of December 31, 1997, the buildings were 95% leased . On August 1, 1995 the Partnership made a $1,750,000 loan to Nielsen Properties, Ltd., which is the ground lessor, for a term of 15 years. The loan earns interest at the rate of 8.75% per annum and the Partnership can require full payment of the note on or after August 1, 2000. The note is secured by a deed of trust on the Land. In conjunction with this loan, Nielsen Properties, Ltd. repaid the limited partnership $1,299,052, representing full payment of two outstanding notes receivable. G. Office/Retail/Industrial Buildings in Las Vegas, Nevada ("Palms --------------------------------------------------------------- Business Center III and IV"). --------------------------- On March 7, 1988, the Partnership acquired a 60% interest in a joint venture formed with an affiliate of B.H. Miller Companies. As of January 1, 1995, the Partnership had contributed $11,589,888 to the capital of the joint venture out of a maximum commitment of $11,700,000. The joint venture agreement entitled the Partnership to receive a monthly preferred return at the rate of 11% per annum on the daily balance of its invested capital during each month, of which 9.5% per annum was to be paid currently and up to 1.5% per annum was to be deferred if sufficient cash was not available therefor. All invested capital, monthly payments of preferred return and deferred monthly payments of preferred return were due and payable at the end of the tenth year of the joint venture's operations. The joint venture agreement also entitled the Partnership to receive 60% of net cash flow and 60% of sale and refinancing proceeds following the return of the Partnership's equity capital. Effective January 1, 1995, the joint venture partner's ownership interest was transferred and assigned to the Partnership. The Partnership owned approximately 11.75 acres of land in Las Vegas, Nevada improved with twelve single-story office/industrial buildings and one single-story retail building containing a total of approximately 173,574 square feet. On October 24, 1997, the Partnership sold the Palms Business Center property for $18,000,000. The Partnership received net proceeds of $17,823,259. On November 25, 1997, the Partnership made a capital distribution of $17,784,576 ($216 per limited partnership unit) from the sale proceeds. Item 2. Properties ---------- The following table sets forth the annual realty taxes for the Partnership's properties and information regarding tenants who occupy 10% or more of gross leasable area (GLA) in Partnership's properties.
- ---------------------------------------------------------------------------------------------------------------------------------- ESTIMATED 1998 NUMBER OF ANNUAL ANNUAL TENANTS WITH SQUARE FEET CONTRACT REALTY 10% OR MORE NAME(S) OF OF EACH RENT PER PROPERTY TAXES OF GLA TENANT(S) TENANT SQUARE FOOT - ---------------------------------------------------------------------------------------------------------------------------------- Office/R&D Bldgs in Columbia, MD $163,974 4 Wiltel 27,480 $10.50 Columbia National 45,951 $8.95 EVI, Inc. 38,225 $9.57 Avnet 21,991 $8.20 Land in Germantown, MD $ 18,309 N/A N/A N/A N/A Warehouse Bldg. in Fontana, CA $ 82,248 3 M.W. Kasch 172,972 $3.21 Aromatics Industries 84,660 $2.64 Building Materials Distributor 20,888 $3.56 Industrial Bldg. in Brea, CA $108,000 2 20th Century Plastics 152,576 $3.74 Bridgeport Management 65,944 $3.72 Shopping Ctr in Salinas, CA $134,874 2 Food Maxx 51,008 $7.30 Ross Dress for Less 17,068 $11.03 - ---------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------- LEASE RENEWAL LINE OF BUSINESS PROPERTY EXPIRATION OPTIONS OF PRINCIPAL TENANTS - -------------------------------------------------------------------------------------------------------- Office/R&D Bldgs in Columbia, MD 11/2007 Two for 5 Years Telecommunications 8/2004 Two for 5 Years Home Mortgages 2/2006 One for 5 Years Environmental/Testing 10/1999 One for 5 Years Telecommunications Land in Germantown, MD N/A N/A N/A Warehouse Bldg. in Fontana, CA 5/2003 One for 5 Years Distribution 5/1998 None Distribution 12/1999 None Distribution Industrial Bldg. in Brea, CA 3/2004 Two for 5 Years Plastics Manuf./Assembler 4/1999 None Rec. Vehicle Storage/Svc Shopping Ctr in Salinas, CA 8/2010 Three for 5 Years Supermarket 1/2001 Three for 5 Years Apparel Retailer - --------------------------------------------------------------------------------------------------------
The following table sets forth for each of the last five years the gross leasable area, occupancy rates, rental revenue, and net effective rent for the Partnership's properties:
- --------------------------------------------------------------------------------------------------------------- PROPERTY GROSS LEASABLE YEAR-END RENTAL NET EFFECTIVE AREA OCCUPANCY REVENUE RENT RECOGNIZED ($/SF/YR)* - --------------------------------------------------------------------------------------------------------------- Office/ R&D Buildings in Columbia, MD - ------------------------------------- 1993 142,545 73% $1,334,767 $13.01 1994 188,649 92% $1,496,175 $ 9.61 1995 188,649 92% $1,870,329 $10.78 1996 188,649 94% $1,959,621 $11.23 1997 188,649 98% $1,953,724 $10.70 Land in Germantown, MD - ---------------------- 1993 N/A N/A N/A N/A 1994 N/A N/A N/A N/A 1995 N/A N/A N/A N/A 1996 N/A N/A N/A N/A 1997 N/A N/A N/A N/A Warehouse Building in Fontana, CA - --------------------------------- 1993 278,220 89% $1,026,506 $ 4.59 1994 278,220 100% $ 990,796 $ 3.77 1995 278,220 100% $1,001,121 $ 3.60 1996 278,220 100% $1,019,558 $ 3.66 1997 278,220 100% $1,012,957 $ 3.66 Industrial Building in Brea, CA - ------------------------------- 1993 218,520 70% $ 161,378 $ 4.25 1994 218,520 100% $ 882,870 $ 4.75 1995 218,520 100% $ 949,389 $ 4.34 1996 218,520 100% $ 930,938 $ 4.26 1997 218,520 100% $ 946,719 $ 4.33 Shopping Center in Salinas, CA - ------------------------------ 1993 125,247 92% $1,759,243 $10.72 1994 125,247 90% $1,874,676 $16.45 1995 125,247 91% $1,657,425 $14.31 1996 125,247 98% $1,718,737 $14.56 1997 125,247 95% $1,759,594 $14.60 - ---------------------------------------------------------------------------------------------------------------
Note: N/A for commercial properties indicates property was not constructed as of this date. * Net Effective Rent calculation is based on average occupancy during the respective years. Following is a schedule of lease expirations for each of the next years for the Partnership's properties based on the annual contract rent in effect at December 31, 1997:
- -------------------------------------------------------------------------------- TENANT AGING REPORT - -------------------------------------------------------------------------------- PROPERTY # OF LEASE TOTAL TOTAL PERCENTAGE OF EXPIRATIONS SQUARE FEET ANNUAL CONTRACT GROSS ANNUAL RENT RENTAL* - -------------------------------------------------------------------------------- Office/R&D Building in Columbia, MD - ----------------------------------- 1998 1 8,781 $ 93,077 5% 1999 2 32,570 $270,257 15% 2000 1 14,825 $146,026 8% 2001 0 0 $ 0 0% 2002 2 20,987 $245,855 14% 2003 0 0 $ 0 0% 2004 1 45,951 $411,261 23% 2005 0 0 $ 0 0% 2006 4 38,225 $350,904 19% 2007 1 27,480 $288,540 16% Land in Germantown, MD - ---------------------- 1998 N/A N/A N/A N/A 1999 N/A N/A N/A N/A 2000 N/A N/A N/A N/A 2001 N/A N/A N/A N/A 2002 N/A N/A N/A N/A 2003 N/A N/A N/A N/A 2004 N/A N/A N/A N/A 2005 N/A N/A N/A N/A 2006 N/A N/A N/A N/A 2007 N/A N/A N/A N/A Warehouse Building in Fontana, CA - --------------------------------- 1998 1 84,660 $223,502 26% 1999 1 20,888 $ 74,361 9% 2000 0 0 $ 0 0% 2001 0 0 $ 0 0% 2002 0 0 $ 0 0% 2003 1 172,972 $555,240 65% 2004 0 0 $ 0 0% 2005 0 0 0 0% 2006 0 0 $ 0 0% 2007 0 0 $ 0 0% - --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- Industrial Building in Brea, CA - ------------------------------- 1998 0 0 $ 0 0% 1999 1 65,944 $ 245,311 30% 2000 0 0 $ 0 0% 2001 0 0 $ 0 0% 2002 0 0 $ 0 0% 2003 0 0 $ 0 0% 2004 1 152,576 $ 570,984 70% 2005 0 0 $ 0 0% 2006 0 0 $ 0 0% 2007 0 0 $ 0 0% Shopping Center in Salinas, CA - ------------------------------ 1998 7 13,888 $ 282,420 21% 1999 4 5,150 $ 80,301 6% 2000 7 18,513 $ 440,140 33% 2001 6 32,698 $ 518,777 40% 2002 0 0 $ 0 0% 2003 0 0 $ 0 0% 2004 0 0 $ 0 0% 2005 0 0 $ 0 0% 2006 0 0 $ 0 0% 2007 0 0 $ 0 0% - --------------------------------------------------------------------------------
* Does not include expenses paid by tenants. Note: N/A denotes that the disclosure is not applicable based on the nature of the property. The following table sets forth for each of the Partnership's properties the: (i) federal tax basis, (ii) rate of depreciation, (iii) method of depreciation, (iv) life claimed, and (v) accumulated depreciation, with respect to each property or component thereof for purposes of depreciation:
- --------------------------------------------------------------------------------------------------------------------- Rate Life Accumulated Entity/Property Tax Basis Depreciation Method in Years Depreciation - --------------------------------------------------------------------------------------------------------------------- Office/Research and Development Buildings, Columbia, MD - --------------------------------- Land Improvements $ 94,022 N/A 150% DB 15 $ 28,050 Land Improvements 3,685,502 2.56% SL 39 45,712 Building & Improvements 7,829,962 3.18% SL 31.5 1,950,016 ----------- ---------- Total Depreciable Assets 11,609,486 2,023,778 Warehouse Building, Fontana, CA - --------------------------------- Building & Improvements 5,141,883 2.50% SL 40 974,497 ----------- ---------- Total Depreciable Assets 5,141,883 974,497 Industrial Building, Brea, CA - --------------------------------- Building & Improvements 7,976,123 3.18% SL 31.5 2,314,747 Building Improvements 771,373 2.56% SL 39 77,943 ----------- ---------- Total Depreciable Assets 8,747,496 2,392,690 Land, Germantown, MD - --------------------------------- No Depreciable Property 0 0.00% 0 - - Total Depreciable Assets 0 0 Shopping Center, Salinas, CA - --------------------------------- Building & Improvements 305,868 2.5% SL 40 12,701 Building & Improvements 8,989,174 3.18% SL 31.5 1,988,534 ----------- ---------- Total Depreciable Assets 9,295,042 2,001,235 Total Depreciable Assets $ 34,793,907 $7,392,200 =========== ========== - ---------------------------------------------------------------------------------------------------------------------
SL= Straight Line DB= Declining Balance Following is information regarding the competitive market conditions for each of the Partnership's properties. This information has been gathered from sources deemed reliable. However, the Partnership has not independently verified the information and, as such, cannot guarantee its accuracy or completeness. Industrial Buildings in Brea, California - ---------------------------------------- The property is located within the Orange County industrial market. Brea is a desirable industrial location due to its close proximity to Los Angeles County and the central portion of Orange County. The North Orange County market has approximately 7.6 million square feet of space available, an increase which is primarily due to the completion of more than 35 new industrial buildings, adding over 2.6 million square feet of new space to the market. In addition, another 54 buildings should be completed by year-end 1998, adding approximately twice the square footage added during 1997. Average asking rental rates over the last year have increased 19%, with average vacancy in the County of 7.11%. Shopping Center in Salinas, California - -------------------------------------- The city of Salinas has a population of approximately 120,000 people. Due to the fact that most of the city's growth is occurring in north Salinas, the north end of the city continues to be the focus of most major retailers. Santa Rita Plaza is in the heart of this retail core; however, it must compete for tenants with power centers such as the Northridge Mall (1.2 million square feet) and Harden Ranch Plaza (680,000 square feet). Office/Research and Development Buildings in Columbia, Maryland - --------------------------------------------------------------- The property is located within the Howard County R&D submarket, which has a base of 8.9 million square feet and a 6.3% vacancy rate as of year-end 1997. Due to limited space in the marketplace, tenants continue to seek space that will accommodate their growth needs and are moving from Washington, D.C. to the Baltimore suburbs. The Columbia flex submarket contains 6.8 million square feet of space and has a 6.5% vacancy rate. Planned construction of 300,000 square feet of speculative office space in this market is showing offering rates on new product that are setting new highs. As a result, 1997 rents for Howard County averaged in the $10.00 - $10.50 range. Warehouse Building in Fontana, California - ----------------------------------------- The property is located within the Riverside metropolitan industrial market, which consists of approximately 115 million square feet of space. Occupancy for this product type is approximately 93%. With employment growing at approximately 4% per year and a jobless rate below 7%, Riverside's economy continues to expand. Part of the area's strength has been derived from population migration out of Los Angeles and Orange Counties. However, if relocating businesses in Southern California opt for peripheral regions such as Nevada, Arizona, Utah or Oregon instead of the Riverside market, growth in the area may be adversely affected. Item 3. Legal Proceedings. ----------------- The Partnership is not a party to, nor are any of its properties subject to, any material pending legal proceedings. Item 4. Submission of Matters to a Vote of Security Holders. --------------------------------------------------- No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this Annual Report on Form 10-K. PART II ------- Item 5. Market for Registrant's Common Equity and Related Stockholder Matters. --------------------------------------------------------------------- There is no active market for the Units. Trading in the Units is sporadic and occurs solely through private transactions. As of December 31, 1997, there were 12,524 holders of Units. The Partnership's Amended and Restated Agreement of Limited Partnership dated July 23, 1987, as amended to date (the "Partnership Agreement"), requires that any Distributable Cash (as defined therein) be distributed quarterly to the Partners in specified proportions and priorities. There are no restrictions on the Partnership's present or future ability to make distributions of Distributable Cash. Cash distributions paid in 1997 or distributed after year end with respect to 1997 to the Limited Partners as a group totaled $30,179,538, including $25,364,272 of returned capital from the proceeds of property sales. Cash distributions paid in 1996 or distributed after year end with respect to 1996 to the Limited Partners as a group totaled $4,573,024. Cash distributions exceeded net income in 1997 and, therefore, resulted in a reduction of partners' capital. Operating cash distributions exceeded net cash provided by operating activities. Reference is made to the Partnership's Statement of Partners' Capital (Deficit) and Statement of Cash Flows in Item 8 hereof. Item 6. Selected Financial Data -----------------------
For Year For Year For Year For Year For Year Ended or Ended or Ended or Ended or Ended or as of as of as of as of as of 12/31/97(1) 12/31/96 12/31/95(2) 12/31/94(3) 12/31/93(4) Revenues $ 17,197,366 $ 7,716,609 $ 5,522,086 $ 6,096,743 $ 3,190,972 Net Income $ 13,153,920 $ 3,392,534 $ 2,248,715 $ 3,375,406 $ 50,380 Net Income per Weighted Average Limited Partnership Unit $ 158.07 $ 40.72 $ 26.96 $ 40.42 $ .60 Total Assets $ 42,788,822 $ 59,590,134 $ 60,535,231 $ 64,530,075 $ 69,345,524 Total Cash Distributions per Limited Partnership Unit outstanding for the entire period, including amounts distributed after year end with respect to such year $ 366.45 $ 55.44 $ 77.36 $ 87.44 $ 32.50
(1) During 1997, net income includes a gain of $10,176,990 recognized on the sale of two investments. Cash distributions include a return of capital of $308 per Unit. (2) During 1995, the Partnership recorded a valuation provision on one property totaling $600,000 ($7.19 per Weighted Average Limited Partnership Unit). Cash distributions include a return of capital of $28 per Unit. (3) During 1994, the Partnership recorded a valuation provision on one property totaling $1,400,000 ($16.76 per Weighted Average Limited Partnership Unit). Net income also includes a gain of $1,790,470 recognized on the sale of two investments. Cash distributions include a return of capital of $48 per Unit. (4) During 1993, the Partnership recorded a valuation provision on two properties totaling $2,000,000 ($23.93 per Weighted Average Limited Partnership Unit). Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources The Partnership completed its offering of units of limited partnership interest 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 the real estate investments described in Item 1 herein. Four investments have been sold, one in each of June 1994, August 1994, May 1997 and October 1997. As a result of the sales, capital of $31,646,076 has been returned to the limited partners through December 31, 1997. The adjusted capital contribution was reduced to $952 from $1,000 per unit in 1994, then to $924 in July 1995, then to $616 in 1997. A portion of the sales proceeds was used to pay previously accrued, but deferred, management fees to the advisor ($447,745 in 1997, $183,426 in 1995 and $1,259,988 in 1994). At December 31, 1997, the Partnership had $10,665,416 in cash, cash equivalents and short-term investments, of which $972,230 was used for cash distributions to partners on January 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 or cash distributions to partners will be cash generated by the Partnership's real estate and short-term investments. Quarterly distributions of cash from operations relating to 1997 and 1996 were made at the annualized rate of 6.25% and 6%, respectively, on the weighted average adjusted capital contribution during the period. 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 $96,937 and $56,736 at December 31, 1997 and 1996, respectively. Through December 31, 1997 the Partnership had 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 at December 31, 1997 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 December 31, 1997, the appraised value of certain investments exceeded the related carrying values by an aggregate of approximately $3,600,000, and the remaining investments had carrying values which exceeded their appraised values by a total of approximately $40,000. 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. The Year 2000 Issue is the result of computer programs being written using two digits rather than four to define the applicable year. Any of the partnership's computer programs that have date-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a system failure or miscalculations causing disruptions of operations, including, among other things, a temporary inability to process transactions or engage in normal business operations. The Managing General Partner and its affiliates are assessing the modifications or replacements of its software that may be necessary for its computer systems to function properly with respect to the dates in the year 2000 and thereafter. The Managing General Partner and its affiliates do not believe that the cost of either modifying existing software or converting to new software will be significant or that the year 2000 issue will pose significant operational problems for its computer systems. Results of Operations Form of Real Estate Investments Effective January 1, 1996, the University Business Park joint venture was dissolved and ownership of the joint venture assets was assigned to the Partnership. This property was sold during 1997. Effective April 1, 1996, the Waters Landing II joint venture was restructured and the venture partner's ownership interest was assigned to the Partnership. Effective January 1, 1995, Palms Business Center joint venture was restructured and the venture partner's ownership interest was assigned to the Partnership. This property was also sold during 1997. 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. Accordingly, these investments have been accounted for as wholly-owned properties since those dates. The Puente Street investment is also a wholly-owned property. 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 As previously discussed, 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, consistent with December 31, 1996. Overall occupancy at the Columbia Gateway Corporate Park was 98% at December 31, 1997, an increase from both 94% at December 31, 1996 and 92% at December 31, 1995. Ownership of the Columbia Gateway Corporate Park joint venture has been restructured whereby the partnership and its affiliate will obtain full control over the business of the joint venture. This restructuring will be effective January 1, 1998. Occupancy at Puente Street has been 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 second quarter of 1997. The settlement provided for this tenant to assign its lease to the other existing tenant no later than February 1, 1998. This lease assignment has occurred and the former tenant now sub-leases the space from the latter one. There was no material effect on the Partnership's financial position or results of operations. 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. As previously discussed, the Palms Business Center was sold on October 24, 1997 and the Partnership recognized a gain of $8,016,586. At the time of the sale, the property was 100% leased compared to 98% and 95% at December 31, 1996 and 1995, respectively. Occupancy at the Dahlia property has been 100% since the first quarter of 1994. The lease of a tenant that occupies approximately 30% of the space expires in May 1998. This 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. 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 95% at December 31, 1997, a slight decrease from 98% at December 31, 1996 and an increase from 91% at December 31, 1995. Although occupancy is strong, past performance at the Plaza has been affected by tenant delinquencies and turnover due to business failures. Investment Results Interest on short-term investments and cash equivalents increased in 1997 as compared to 1996 as a result of higher average investment balances due to the temporary investment of proceeds from the sale of both University Business Park in May 1997 and the Palms Business Center in October 1997. Interest on short- term investments and cash equivalents decreased in 1996 as compared to 1995 as a result of lower average investment balances and lower average yields because 1995 average investment balances included the temporary investment of sale proceeds from the C.S. Graham and Lakewood sales in 1994. 1997 Compared to 1996 Real estate operations decreased by $506,603 between 1997 and 1996. This decrease is primarily due to lower operating results from both University Business Park and Palms Business Center due to the sale of these assets during 1997. Operating results at Dahlia also decreased due to higher operating expenses in 1997 and the 1996 non-recurring gain on sale of land mentioned in Operating Factors above. Exclusive of the proceeds from the settlement of past due tenant receivables at Dahlia in 1996 ($332,000), and the payment of deferred management fees in 1997 ($447,745), cash flow from operations decreased by $915,000 between 1997 and 1996. This decrease is due to the decrease in operating results discussed above, along with an increase in working capital. 1996 Compared to 1995 The Managing General Partner determined during the second quarter of 1995 not to develop the Waters Landing II site. Accordingly, the carrying value of this investment was reduced to its estimated fair market value less cost of sale with a $600,000 charge to operations. Exclusive of the investment valuation allowance of $600,000 on Waters Landing II discussed above, total real estate operations were $3,542,491 in 1996 and $2,828,940 in 1995. This increase of approximately $714,000 resulted from improved operating results at University Business Park ($461,000) and Palms Business Center III and IV ($281,000). These improvements were primarily attributable to increased rental income due to higher rental rates and occupancies at both properties, as well as a decrease in amortization expense at University Business Park. Operating results at Salinas also improved by $66,000. These increases were partially offset by a decline in net operating income at Puente Street ($74,000) primarily caused by non-recurring revenue recognized in 1995. Exclusive of the proceeds from the settlement of past due tenant receivables at Dahlia in 1996 ($332,000), and the payment of deferred management fees in 1995 ($183,426), cash flow from operations decreased by $71,000 between 1996 and 1995. This change is inconsistent with the increase in operating results between the respective years primarily due to the timing of cash distributions from joint ventures. In addition, cash flow from operations decreased as a result of increases in working capital items. 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. 1997 Compared to 1996 The Partnership management fee increased due to an increase in distributable cash flow from operations. General and administrative expenses were remained stable between the two periods. 1996 Compared to 1995 The Partnership management fee increased due to an increase in distributable cash flow from operations. General and administrative expenses decreased $29,000 or 9%, primarily due to a decrease in legal costs. Inflation By their nature, real estate investments tend not to be adversely affected by inflation. Inflation may result in appreciation in the value of the Partnership's real estate investments over time if rental rates and replacement costs increase. Declines in real property values during the period of Partnership operations, due to market and economic conditions, have overshadowed the positive effect inflation may have on the value of the Partnership's investments. Item 8. Financial Statements and Supplementary Data. ------------------------------------------- See the Financial Statements of the Partnership included as a part of this Annual Report on Form 10-K. Item 9. Changes in and Disagreements with Accountants on Accounting and --------------------------------------------------------------- Financial Disclosure. - -------------------- The Partnership has had no disagreements with its accountants on any matters of accounting principles or practices or financial statement disclosure. PART III -------- Item 10. Directors and Executive Officers of the Registrant. -------------------------------------------------- (a) and (b) Identification of Directors and Executive Officers. -------------------------------------------------- The following table sets forth the names of the directors and executive officers of the Managing General Partner and the age and position held by each of them as of December 31, 1997.
Name Position(s) with the Managing General Partner Age - ---- --------------------------------------------- --- Wesley M. Gardiner, Jr. President, Chief Executive Officer and Director 39 Pamela J. Herbst Vice President and Director 42 J. Grant Monahon Vice President and Director 52 James J. Finnegan Vice President 37 Karin J. Lagerlund Treasurer and Principal Financial and Accounting Officer 33
(c) Identification of Certain Significant Employees. ----------------------------------------------- None. (d) Family Relationships. -------------------- None. (e) Business Experience. ------------------- The Managing General Partner was incorporated in Massachusetts on October 23, 1986. The background and experience of the executive officers and directors of the Managing General Partner are as follows: Wesley M. Gardiner, Jr. joined AEW Real Estate Advisors, Inc. ("AEW") , formerly known as Copley Real Estate Advisors, Inc., in 1990 and has been a Vice President at AEW since January, 1994. AEW is a subsidiary of AEW Capital Management, L.P. ("AEW Capital Management"). From 1982 to 1990, he was employed by Metric Realty, a nationally-known real estate investment advisor and syndication firm, as a portfolio manager responsible for several public and private limited partnerships. His career at AEW has included asset management responsibility for the company's Georgia and Texas holdings. Presently, Mr. Gardiner has overall responsibility for all the partnerships advised by AEW whose securities are registered under the Securities and Exchange Act of 1934. He received a B.A. in Economics from the University of California at San Diego. Pamela J. Herbst directs AEW Capital Management's Portfolio Advisory Services, with oversight responsibility for the asset and portfolio management areas. Ms. Herbst is a member of AEW Capital Management's Investment Policy Group and Management Committee. She came to AEW Capital Management in December 1996 as a result of the firm's merger with Copley Real Estate Advisors, Inc. where she held various senior level positions in asset and portfolio management, acquisitions and corporate operations since 1982. Ms. Herbst is a graduate of the University of Massachusetts (B.A.) and Boston University (M.B.A.). J. Grant Monahon is AEW Capital Management's General Counsel and a member of the firm's Management Committee and Investment Policy Group. He has over 25 years of experience in real estate law and investments. Prior to joining AEW Capital Management in 1987, Mr. Monahon was a partner with a major Boston law firm. As the head of that firm's real estate finance department, he represented a wide variety of institutional clients, both domestic and international, in complex equity and debt transactions. He is the former Chairman of the General Counsel section of the National Association of Real Estate Investment Managers. Mr. Monahon is a graduate of Dartmouth College (B.A.) and Georgetown University Law Center (J.D.). James J. Finnegan is the Assistant General Counsel of AEW Capital Management. Mr. Finnegan served as Vice President and Assistant General Counsel of Aldrich, Eastman & Waltch, L.P., a predecessor to AEW Capital Management. Mr. Finnegan has over ten years of experience in real estate law, including seven years of experience in private practice with major New York City and Boston law firms. Mr. Finnegan also serves as AEW's securities and regulatory compliance officer. Mr. Finnegan is a graduate of the University of Vermont (B.A.) and Fordham University School of law (J.D.). Karin J. Lagerlund directs the Advisory Services Portfolio Accounting Group at AEW Capital Management, overseeing portfolio accounting, performance measurement and client financial reporting for AEW's private equity investment portfolios. Ms. Lagerlund is a Certified Public Accountant and has over ten years experience in real estate consulting and accounting. Prior to joining AEW Capital Management in 1994, she was an Audit Manager at EY/Kenneth Leventhal LLP. Ms. Lagerlund is a graduate of Washington State University (B.A.). (f) Involvement in Certain Legal Proceedings. ---------------------------------------- None. Item 11. Executive Compensation. ---------------------- Under the Partnership Agreement, the General Partners and their affiliates are entitled to receive various fees, commissions, cash distributions, allocations of taxable income or loss and expense reimbursements from the Partnership. See Note 1, Note 2 and Note 6 of Notes to Financial Statements. The following table sets forth the amounts of the fees and cash distributions and reimbursements for out-of-pocket expenses which the Partnership paid to or accrued for the account of the General Partners and their affiliates for the year ended December 31, 1997. Cash distributions to General Partners include amounts distributed after year end with respect to 1997.
Amount of Compensation and Receiving Entity Type of Compensation Reimbursement - ---------------- -------------------- ------------- General Partners Share of Distributable Cash $ 48,639 AEW Real Estate Advisors, Inc. Management Fees and 498,050 (formerly known as Copley Real Reimbursement of Expenses Estate Advisors, Inc.) New England Securities Corporation Servicing Fees plus out-of- pocket reimbursements 19,601 ---------- TOTAL $ 566,290 ==========
For the year ended December 31, 1997 the Partnership allocated $122,666 of taxable income to the General Partners. Item 12. Security Ownership of Certain Beneficial Owners and Management. -------------------------------------------------------------- (a) Security Ownership of Certain Beneficial Owners ----------------------------------------------- No person or group is known by the Partnership to be the beneficial owner of more than 5% of the outstanding Units at December 31, 1997. Under the Partnership Agreement, the voting rights of the Limited Partners are limited and, in some circumstances, are subject to the prior receipt of certain opinions of counsel or judicial decisions. Except as expressly provided in the Partnership Agreement, the right to manage the business of the Partnership is vested exclusively in the Managing General Partner. (b) Security Ownership of Management. -------------------------------- The General Partners of the Partnership owned no Units at December 31, 1997. (c) Changes in Control. ------------------ There exists no arrangement known to the Partnership the operation of which may at a subsequent date result in a change in control of the Partnership. Item 13. Certain Relationships and Related Transactions. - -------------------------------------------------------- The Partnership has no relationships or transactions to report other than as reported in Item 11, above. PART IV ------- Item 14. Exhibits, Financial Statements, and Reports on Form 8-K. ------------------------------------------------------- (a) The following documents are filed as part of this report: (1) Financial Statements--The Financial Statements listed on the accompanying Index to Financial Statements and Schedule are filed as part of this Annual Report. (2) Financial Statement Schedule - The Financial Statement Schedule listed on the accompanying Index to Financial Statements and Schedule are filed as part of this Annual Report. (3) Exhibits--The Exhibits listed in the accompanying Exhibit Index are filed as a part of this Annual Report and incorporated in this Annual Report as set forth in said Index. (b) Reports on Form 8-K. During the last quarter of the year ending December 31, 1997, the Partnership filed one Current Report on Form 8-K dated October 24, 1997 reporting on Item No. 2 (Acquisition or Disposition of Assets) and Item No. 7 (Financial Statements and Exhibits), relating in both cases to the sale of the Palms Business Center III and IV property. New England Pension Properties V; A Real Estate Limited Partnership Financial Statements * * * * * * * * December 31, 1997 NEW ENGLAND PENSION PROPERTIES V; -------------------------------- A REAL ESTATE LIMITED PARTNERSHIP --------------------------------- INDEX TO FINANCIAL STATEMENTS AND SCHEDULE ------------------------------------------ Report of Independent Accountants Financial Statements: Balance Sheet - December 31, 1997 and 1996 Statement of Operations - Years ended December 31, 1997, 1996 and 1995 Statement of Partners' Capital (Deficit) - Years ended December 31, 1997, 1996 and 1995 Statement of Cash Flows - Years ended December 31, 1997, 1996 and 1995 Notes to Financial Statements Financial Statement Schedule: Schedule III - Real Estate and Accumulated Depreciation at December 31, 1997, 1996 and 1995 REPORT OF INDEPENDENT ACCOUNTANTS --------------------------------- To the Partners New England Pension Properties V; A Real Estate Limited Partnership In our opinion, based upon our audits and the reports of other auditors for the years ended December 31, 1997, 1996 and 1995, the financial statements listed in the accompanying index present fairly, in all material respects, the financial position of New England Pension Properties V; A Real Estate Limited Partnership (the "Partnership") at December 31, 1997 and 1996, and the results of its operation and its cash flows for each of the three years in the period ended December 31, 1997, in conformity with generally accepted accounting principles. These financial statements are the responsibility of Fifth Copley Corp., the Managing General Partner of the Partnership; our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements of the Partnership's investments in Santa Rita Plaza, Palms Business Center III and IV, Puente Street and Dahlia for the years ended December 31, 1996 and 1995. Operating income for these investments aggregated $3,667,940 and $2,397,128 for the years ended December 31, 1996 and 1995. We also did not audit the financial statements of the Partnership's investment in University Business Park for the year ended December 31, 1996. Operating income for this investment totaled $732,439 for the year ended December 31, 1996. We also did not audit the financial statements of the Partnership's Columbia Gateway Corporate Park joint venture investee for the years ended December 31, 1996 and 1995, which results of operations are recorded using the equity method of accounting in the Partnership's financial statements. Equity in joint venture income for this venture was $360,214 and $371,986 for the years ended December 31, 1996 and 1995. Those statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included for operating income and equity in joint venture income for Santa Rita Plaza, Palms Business Center III and IV, Puente Street and Dahlia for the years ended December 31, 1996 and 1995, for University Business Park for the year ended December 31, 1996, and for Columbia Gateway Corporate Park for the years ended December 31, 1996 and 1995, is based solely on the reports of the other auditors. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by the Managing General Partner, and evaluating the overall financial statement presentation. We believe that our audits and the reports of other auditors for the years ended December 31, 1997, 1996 and 1995 provide a reasonable basis for the opinion expressed above. /s/ Price Waterhouse LLP - ------------------------ Boston, Massachusetts March 19, 1998 NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP BALANCE SHEETS
December 31, --------------------------- 1997 1996 ------------ ----------- ASSETS Real estate investments: Property, net $ 27,287,367 $ 42,828,754 Joint ventures 4,836,039 4,722,223 ------------ ------------ 32,123,406 47,550,977 Cash and cash equivalents 6,303,386 4,706,279 Short-term investments 4,362,030 7,332,878 ------------ ------------ $ 42,788,822 $ 59,590,134 ============ ============ LIABILITIES AND PARTNERS' CAPITAL Accounts payable $ 129,158 $ 108,026 Accrued management fees 48,078 57,064 Deferred management and disposition fees 1,106,292 596,583 ------------ ------------ Total liabilities 1,283,528 761,673 ------------ ------------ Commitments to fund real estate investments Partners' capital (deficit): Limited partners ($616 and $924 per unit; 160,000 units authorized, 82,336 and 82,426 issued and outstanding, respectively) 41,511,957 58,916,206 General partners (6,663) (87,745) ------------ ------------ Total partners' capital 41,505,294 58,828,461 ------------ ------------ $ 42,788,822 $ 59,590,134 ============ ============
(See accompanying notes to financial statements) NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS
Year ended December 31, ------------------------------------------------------------------ 1997 1996 1995 ----------------- ------------------- ------------------ INVESTMENT ACTIVITY Property rentals $ 5,775,821 $ 6,566,057 $ 3,400,015 Interest income on loan to ground lessor 180,821 185,379 63,455 Property operating expenses (1,559,211) (1,775,678) (839,565) Ground rent expense (390,000) (390,000) (162,500) Depreciation and amortization (1,315,384) (1,403,481) (937,015) ------------ ------------ ------------ 2,692,047 3,182,277 1,524,390 Joint venture earnings 343,841 360,214 1,304,550 Investment valuation allowances - - (600,000) ------------ ------------ ------------ Total real estate operations 3,035,888 3,542,491 2,228,940 Gain on sales of property 10,176,990 - 6,209 ------------ ------------ ------------ Total real estate activity 13,212,878 3,542,491 2,235,149 Interest on cash equivalents and short-term investments 719,893 604,959 747,857 ------------ ------------ ------------ Total investment activity 13,932,771 4,147,450 2,983,006 ------------ ------------ ------------ PORTFOLIO EXPENSES Management fee 481,045 456,846 407,217 General and administrative 297,806 298,070 327,074 ------------ ------------ ------------ 778,851 754,916 734,291 ------------ ------------ ------------ NET INCOME $ 13,153,920 $ 3,392,534 $ 2,248,715 ============ ============ ============ Net income per weighted average limited Partnership unit $ 158.07 $ 40.72 $ 26.96 ============ ============ ============ Cash distributions per limited partnership unit outstanding for the entire year $ 368.62 $ 53.73 $ 74.75 ============ ============ ============ Weighted average number of limited partnership units outstanding during the year $ 82,385 $ 82,486 $ 82,582 ============ ============ ============
(See accompanying notes to financial statements) NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
YEAR ENDED DECEMBER 31, ------------------------------------------------------------------------------------- 1997 1996 1995 --------------------------- --------------------------- ------------------------- GENERAL LIMITED GENERAL LIMITED GENERAL LIMITED PARTNERS PARTNERS PARTNERS PARTNERS PARTNERS PARTNERS Balance at beginning of year $ (87,745) $58,916,206 $ (76,904) $ 60,073,461 $(60,383) $64,086,525 Repurchase of limited partnership units - (67,176) - (84,104) - (64,360) Cash distributions (50,457) (30,359,454) (44,766) (4,431,760) (39,008) (6,174,932) Net income 131,539 13,022,381 33,925 3,358,609 22,487 2,226,228 --------- ------------ ---------- ------------ -------- ----------- Balance at end of year $ (6,663) $ 41,511,957 $ (87,745) $ 58,916,206 $(76,904) $60,073,461 ========= ============ ========== ============ ======== ===========
(See accompanying notes to financial statements) NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS
Year ended December 31, -------------------------------------- 1997 1996 1995 ------------ ----------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $13,153,920 $3,392,534 $2,248,715 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,315,384 1,403,481 937,015 Gain on sales of property (10,176,990) - (6,209) Investment valuation allowances - - 600,000 Increase in deferred lease commissions (106,319) (126,625) (85,768) Equity in joint venture earnings (343,841) (360,214) (1,304,550) Cash distributions from joint ventures 228,086 335,500 1,850,619 Decrease (increase) in investment income receivable 19,093 (36,107) 16,323 Decrease (increase) in property working capital (333,224) 350,402 447,121 Payment of deferred management fee (447,745) - (183,426) Increase in operating liabilities 179,100 222,999 218,167 ------------ ----------- ---------- Net cash provided by operating activities 3,487,464 5,181,970 4,738,007 ------------ ----------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Return of capital from joint venture - - 1,305,765 Net proceeds from sale of investments 25,026,889 - 6,209 Deferred disposition fees 790,500 - - Investment in joint ventures - - (138,242) Investments in property (249,274) (334,973) (100,739) Loan to ground lessor - - (1,750,000) Repayments received on loan to ground lessor 66,860 61,278 - Decrease (increase) in short-term investments, net 2,951,755 568,036 (2,967,346) ------------ ----------- ---------- Net cash provided by (used in) investing activities 28,586,730 294,341 (3,644,353) ------------ ----------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Distributions to partners (30,409,911) (4,476,526) (6,213,940) Repurchase of limited partnership units (67,176) (84,104) (64,360) ------------ ----------- ---------- Net cash used in financing activities (30,477,087) (4,560,630) (6,278,300) ------------ ----------- ---------- Net increase (decrease) in cash and cash equivalents 1,597,107 915,681 (5,184,646) Cash and cash equivalents: Beginning of year 4,706,279 3,790,598 8,975,244 ------------ ----------- ---------- End of year $ 6,303,386 4,706,279 $3,790,598 ============ =========== ==========
NON-CASH TRANSACTIONS: Two of the Partnership's joint venture investments were converted to wholly- owned properties in 1996. The carrying value of these investments at their respective conversion dates totalled $7,122,323. Three of the Partnership's joint venture investments were converted to wholly-owned properties in 1995. The carrying value of these investments at their respective conversion dates totalled $27,938,099. (See accompanying notes to financial statements) NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS Note 1 - Organization and Business - ---------------------------------- General 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. 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. It intends to dispose of its investments within twelve years of their acquisition, and then liquidate. The Managing General Partner of the Partnership is Fifth Copley Corp., a wholly-owned subsidiary of AEW Real Estate Advisors, Inc. ("AEW"), formerly known as Copley Real Estate Advisors, Inc. ("Copley"). The associate general partner is ECOP Associates Limited Partnership, a Massachusetts limited partnership. Subject to the Managing General Partner's overall authority, the business of the Partnership is managed by AEW pursuant to an advisory contract. On December 10, 1996, Copley's parent, New England Investment Companies, Limited Partnership ("NEIC"), a publicly traded master limited partnership, acquired certain assets subject to then existing liabilities from Aldrich, Eastman & Waltch, Inc. and its affiliates and principals (collectively "the AEW Operations"). Simultaneously, a new entity, AEW Capital Management, L.P. was formed into which NEIC contributed its interest in Copley and its affiliates. As a result, the AEW Operations were combined with Copley to form the business operations of AEW Capital Management, L.P. At year end 1997, NEIC completed a restructuring plan under which it contributed all of its operations to a newly formed private partnership, NEIC Operating Partnership, L.P., in exchange for a general partnership interest in the newly formed entity. As such, at December 31, 1997, AEW Capital Management, L.P. is wholly owned by NEIC Operating Partnership, L.P. AEW is a subsidiary of AEW Capital Management, L.P. Prior to August 30, 1996, New England Mutual Life Insurance Company ("The New England") was NEIC's principal unit holder and owner of all the outstanding stock of NEIC's general partner. On August 30, 1996, The New England merged with and into Metropolitan Life Insurance Company ("Met Life"). Met Life is the surviving entity and, therefore, through a wholly-owned subsidiary, became the owner of the units of partnership interest previously owned by The New England and of the stock of NEIC's general partner. 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 $96,937 and $56,736 at December 31, 1997 and 1996, respectively. As of December 31, 1997 and 1996, the Partnership had cumulatively repurchased and retired 955 units and 865 units, respectively. Management AEW, as advisor, is entitled to receive stipulated fees from the Partnership in consideration of services performed in connection with the management of the Partnership and the acquisition and disposition of Partnership investments in real property. Partnership management fees are 9% of distributable cash flow from operations, as defined, before deducting such fees. Payment of 50% of management fees is deferred until cash distributions to limited partners exceed a specified rate or until payable from sales proceeds. AEW is also reimbursed for expenses incurred in connection with administering the Partnership ($17,004 in 1997, $15,740 in 1996, and $20,081 in 1995). Acquisition fees were based on 2% of gross proceeds from the offering. Disposition fees are limited to the lesser of 3% of the selling price of property or 50% of the standard real estate commission customarily charged by an independent real estate broker. Payment of disposition fees are subject to the prior receipt by the limited partners of their capital contributions plus a stipulated return thereon. Deferred disposition fees were $1,058,215 and $267,715 at December 31, 1997 and 1996, respectively. New England Securities Corporation, an indirect subsidiary of Met Life, is engaged by the Partnership to act as its unit holder servicing agent. Fees and out-of pocket expenses for such services totaled $19,601, $18,733 and $16,774, in 1997, 1996 and 1995, respectively. Note 2 - Summary of Significant Accounting Policies - --------------------------------------------------- Accounting Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires the Managing General Partner to make estimates affecting the reported amounts of assets and liabilities, and of revenues and expenses. In the Partnership's business, certain estimates require an assessment of factors not within management's control, such as the ability of tenants to perform under long-term leases and the ability of the properties to sustain their occupancies in changing markets. Actual results, therefore, could differ from those estimates. Real Estate Joint Ventures Investments in joint ventures, including loans made to venture partners, which are in substance real estate investments, are stated at cost plus (minus) equity in undistributed joint venture income (losses). Allocations of joint venture income (losses) were made to the Partnership's venture partners as long as they had substantial economic equity in the project. Currently, the Partnership has one joint venture jointly owned by an affiliate of the Partnership which has substantial economic equity in the project. Joint ventures are consolidated with the accounts of the Partnership if, and when, the venture partner no longer shares in the control of the business. Property Property includes land and buildings and improvements, which are stated at cost, less accumulated depreciation, and other operating net assets (liabilities). The initial carrying value of a property previously owned by a joint venture equals the Partnership's carrying value of the predecessor investment on the conversion date. Capitalized Costs, Depreciation, and Amortization Maintenance and repair costs are expensed as incurred. Significant improvements and renewals are capitalized. Depreciation is computed using the straight-line method based on estimated useful lives of the buildings and improvements. Leasing costs are also capitalized and amortized over the related lease terms. Acquisition fees have been capitalized as part of the cost of real estate investments. Amounts not related to land are amortized using the straight-line method over the estimated useful lives of the underlying property. Tenant leases at the properties provide for rental increases over the respective lease terms. Rental revenue is being recognized on a straight-line basis over the lease terms. Realizability of Real Estate Investments The Partnership considers a real estate investment to be impaired when it determines the carrying value of the investment is not recoverable through expected undiscounted cash flows generated from the operations and disposition of property. The impairment loss is based on the excess of the investment's carrying value over its estimated fair market value. For investments being held for sale, the impairment loss also includes estimated costs of sale. Property held for sale is not depreciated during the holding period. The Waters Landing II investment was reduced to its estimated fair market value, less costs of sale, during 1995. (See Notes 3 and 4.) The carrying value of an investment may be more or less than its current appraised value. At December 31, 1997 and 1996, the appraised values of certain investments exceeded their related carrying values by an aggregate of $3,600,000 and $6,900,000, respectively, and the appraised values of the remaining investments were less than their related carrying values by an aggregate of $40,000 and $1,100,000, respectively. 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. Cash Equivalents and Short-Term Investments Cash equivalents are stated at cost, plus accrued interest. The Partnership considers all highly liquid debt instruments purchased with a maturity of ninety days or less to be cash equivalents; otherwise, they are classified as short- term investments. The Partnership has the positive intent and ability to hold all short-term investments to maturity; therefore, short-term investments are carried at cost plus accrued interest which approximates market value. At December 31, 1997 and 1996, all investments were in commercial paper with less than six months and three months, respectively, remaining to maturity. Deferred Disposition Fees Disposition fees due to AEW related to sales of investments are included in the determination of gains or losses resulting from such transactions. According to the terms of the advisory contract, payment of such fees has been deferred until the limited partners first receive their capital contributions, plus a stipulated return thereon. Income Taxes A partnership is not liable for income taxes and, therefore, no provision for income taxes is made in the financial statements of the Partnership. A proportionate share of the Partnership's income is reportable on each partner's tax return. Per Unit Computations Net income per unit is computed based on the weighted average number of units of limited partnership interest outstanding during the year. The actual per unit amount will vary by partner depending on the date of admission to, or withdrawal from, the Partnership. Effective January 1, 1998, the Partnership adopted FAS 128 "Earnings per Share," which simplifies the standards of reporting earnings per share (EPS) previously found in APB Opinion No. 15. It provides guidance on the computation and disclosure of basic and diluted EPS and requires restatement of prior periods for comparative purposes. The adoption of FAS 128 did not have a material impact on the Partnership's financial statements. Note 3 - Real Estate Joint Ventures - ----------------------------------- The Partnership had invested in eight real estate joint ventures, each organized as general partnerships with a real estate development/management firm and, in two cases, with an affiliate of the Partnership. Two joint venture projects were sold in 1994, three joint ventures were converted to wholly-owned investments in 1995 and two joint ventures were converted to wholly-owned investments in 1996. Joint venture investments are in either of two forms. In one form, the Partnership makes an equity contribution which is subject to preferential cash distributions at a specified rate and to priority distributions with respect to sale or refinancing transactions. In the second form of joint venture, the Partnership makes an equity contribution to the venture, subject to preferential returns, and also makes a loan to its venture partner which, in turn, contributes the proceeds to the venture. The loans bear interest at a specified rate, mature in full in ten years, and are secured by the venture partner's interest in the venture. These loans have been accounted for as a real estate investment due to the attendant risks of ownership. The joint venture agreements provide for the funding of cash flow deficits in proportion to ownership interests and for the dilution of ownership share in the event a venture partner does not contribute proportionately. The respective real estate management/development firm is responsible for day-to-day development and operating activities, although overall authority and responsibility for the business is shared by the venturers. The real estate development/management firms or their affiliates also provide various services to the respective joint ventures for a fee. The following is a summary of cash invested in the Partnership's remaining joint venture, net of returns of capital and excluding acquisition fees:
Original December 31, Investment/ Rate of Ownership ------------------------ Location Return/Interest Interest 1997 1996 - ----------- --------------- -------- ---------- ---------- Columbia Gateway Corporate Park Columbia, MD 10.5% 15.25% $5,517,497 $5,517,497
Waters Landing II On May 26, 1987, the Partnership entered into a joint venture with an affiliate of Oxford Development Corporation to acquire land and develop an apartment complex. The Waters Landing II joint venture was restructured, and the investment is being accounted for as a wholly-owned property effective April 1, 1996. (See Note 4.) University Business Park On September 30, 1987, the Partnership entered into a joint venture agreement with an affiliate of The Hewson Company. Effective January 1, 1996, the joint venture was dissolved and the venture partner's ownership interest was assigned to the Partnership. (See Note 4.) Columbia Gateway Corporate Park On December 21, 1987, the Partnership entered into a joint venture agreement with an affiliate of the Partnership and an affiliate of Manekin Corporation to construct and operate seven research and development /office buildings, of which six have been constructed to date. The Partnership committed to make a $6,402,000 equity contribution to the joint venture. The Partnership and its affiliate collectively have a 50% ownership interest in the joint venture. Ownership of the Columbia Gateway Corporate Park joint venture has been restructured whereby the Partnership and its affiliate will obtain full control over the business of the joint venture effective January 1, 1998. The minimum future rental payments to the venture under non-cancelable operating leases are: $1,510,900 in 1998; $1,408,027 in 1999; $707,156 in 2000; $602,419 in 2001 and $475,580 in 2002. Sale of C.S. Graham and Lakewood On June 30, 1987, the Partnership entered into a joint venture agreement with an affiliate of Connell Scott and Associates to own and operate a warehouse facility. The Partnership contributed a total of $3,185,246 to the venture. On June 17, 1994, the joint venture sold its property. The total sales price was $3,925,000. After closing costs, the Partnership received proceeds of $3,720,076 and recognized a gain of $409,982 ($4.91 per weighted average limited partnership unit). A disposition fee of $117,750 was accrued but not paid to the advisor. On August 12, 1988, the Partnership entered into a joint venture with an affiliate of the Partnership and with an affiliate of Evans Withycombe Company to construct and operate an apartment complex. The Partnership's total equity contribution was $ 3,167,615. On August 17, 1994, the joint venture sold its property to a real estate investment trust sponsored by Evans Withycombe. After closing costs, the payment of preferential returns to the Partnership, and the allocation to the venture partner, the Partnership received proceeds of $4,297,367, which resulted in a gain of $1,380,488 ($16.53 per weighted average limited partnership unit). A disposition fee of $149,965 was accrued but not paid to the advisor. An additional $6,209 was received in 1995 in final settlement of the Lakewood sale. 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. A second capital distribution of $2,313,164 ($28 per limited partnership unit) was made in July, 1995. A portion of the proceeds was used to pay previously accrued, but deferred, management fees due to the advisor ($183,426 in 1995 and $1,259,988 in 1994). Summarized Financial Information The following summarized financial information is presented in the aggregate for the joint venture: Assets and Liabilities ----------------------
December 31, ------------------------------------- 1997 1996 ------------ ----------- Assets Real property, at cost less accumulated depreciation of $1,506,022 and $1,852,988, respectively $ 15,781,399 $ 15,670,283 Other 739,025 321,328 ------------ -------------- 16,520,424 15,991,611 Liabilities 192,816 43,521 ------------ -------------- Net assets $ 16,327,608 $ 15,948,090 ============ ==============
Result of Operations --------------------
Year ended December 31, --------------------------------------- 1997 1996 1995 --------- ---------- ---------- Revenue Rental income $ 1,953,704 $ 1,941,458 $ 4,437,415 Other income 20 18,163 146,660 ----------- ----------- ----------- 1,953,724 1,959,621 4,584,075 ----------- ----------- ----------- Expenses Operating expenses 461,780 482,749 1,402,041 Depreciation and amortization 364,595 295,841 1,032,349 ----------- ----------- ----------- 826,375 778,590 2,434,390 ----------- ----------- ----------- Net Income $ 1,127,349 $ 1,181,031 $ 2,149,685 =========== =========== ===========
Liabilities and expenses exclude amounts owed and attributable to the Partnership and its affiliates on behalf of its various financing arrangements with the joint venture. Note 4 - Property - ----------------- Palms Business Center III and IV Effective January 1, 1995, the Palms Business Center joint venture was restructured and the venture partner's ownership interest was assigned to the Partnership. The carrying value at conversion ($10,308,265) was allocated to land, building and improvements and other net operating assets. The buildings and improvements (thirteen commercial buildings in Las Vegas, Nevada) were being depreciated over 25 years, beginning January 1, 1995. On October 24, 1997, the Partnership sold the Palm Business Center III & IV property for $18,000,000. The Partnership received net proceeds of $17,823,259 and recognized a gain of $8,016,586 ($96.39 per limited partnership unit at December 31, 1997). A disposition fee of $540,000 was accrued but not paid to AEW. On November 25, 1997, the Partnership made a capital distribution of $17,784,576 ($216 per limited partnership unit) from the sale proceeds. In addition, a portion of the proceeds was used to pay previously accrued but deferred management fees to AEW of $59,424. Santa Rita Plaza 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, the investment is being accounted for as a wholly-owned property as of that date. 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. The Partnership can require full payment of the loan after August 1, 2000. The ground lease requires an annual base payment of $390,000 per year through 2063, plus 11.55% of rents, as defined. The buildings and improvements (a shopping center in Salinas, California) are being depreciated over 25 years beginning August 1, 1995. The loan to the 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. Dahlia Effective September 1, 1995, the Dahlia joint venture was restructured into a limited partnership, whereby the Partnership was granted control over management decisions. Accordingly, the investment is being accounted for as a wholly-owned property as of that date. 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 Arizona. During the first quarter of 1996, the land was liquidated. The Partnership received $332,489, which exceeded the carrying value of the receivable by approximately $32,000. The buildings and improvements (a warehouse facility in Fontana, California) are being depreciated over 25 years beginning September 1, 1995. Puente Street Effective June 1, 1991, the Partnership assumed total ownership of this property due to the venture partner's inability to fund its proportionate share of operating deficits. The property includes an industrial building, together with a parking lot and storage area in Brea, California. The Managing General Partner determined that the carrying value of this investment exceeded its estimated net realizable value because of the effect of depressed market conditions on rental rates. Accordingly, the carrying value was reduced to its estimated net realizable value by $2,900,000 prior to January 1, 1995. The building and improvements are being depreciated over 30 years beginning June 1, 1991. In 1995, the Partnership was named as a defendant in a complaint filed in the Superior Court of the State of California for the County of Orange by an existing tenant, Bridgeport Management Services, Inc. alleging breach of lease. The Partnership filed an answer denying the allegations presented by the plaintiff. This litigation was settled during the second quarter of 1997. The settlement provided for this tenant to assign its lease to the other existing tenant, 20th Century Plastics, This transfer has occurred and Bridgeport Management Services, Inc. is now sub-leasing the space from 20th Century Plastics. University Business Park Effective January 1, 1996, the University Business Park joint venture was dissolved and the venture partner's ownership interest was assigned to the Partnership. 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. The building and improvements (five industrial buildings in Phoenix, Arizona) are being depreciated over 25 years, beginning January 1, 1996. The University Business Park property was sold on May 28, 1997. The Partnership received net proceeds of $7,994,130 and recognized a gain of $2,160,404 ($25.96 per limited partnership unit at June 30, 1997). A disposition fee of $250,500 was accrued but not paid to AEW. On June 30, 1997, the Partnership made a capital distribution of $7,579,696 ($92 per limited partnership unit) from the proceeds. In addition, a portion of the proceeds was used to pay previously accrued but deferred management fee to AEW of $388,320. Waters Landing II 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. During the second quarter of 1995, the Managing General Partner determined that it was not in the best interest of the limited partners to develop the Waters Landing II site, which is located in Germantown, Maryland. Accordingly, the carrying value of the joint venture investment was reduced to its estimated net fair market value with the recognition of an investment valuation allowance of $600,000. The following is a summary of the Partnership's investments in property (four in 1997 and six in 1996):
December 31, ------------------------------- 1997 1996 -------------- ----------- Land $ 7,445,208 $ 11,475,045 Buildings and improvements 22,936,747 34,383,256 Accumulated depreciation (2,805,296) (2,797,876) Impairment provision (3,500,000) (3,500,000) Loan to ground lessor 1,597,866 1,664,726 Lease commissions and other assets, net 1,388,391 1,667,594 Accounts receivable 515,182 576,334 Accounts payable (290,731) (640,325) ------------ ------------ $ 27,287,367 $ 42,828,754 ============ ============
Tenant leases provide for minimum rents, subject to periodic adjustment. Tenants are also generally obligated to reimburse their pro-rata share of operating expenses. The minimum rents due under non-cancelable operating leases at all of the Partnership's properties are as follows: $3,060,079 in 1998; $2,775,186 in 1999; $2,606,067 in 2000; $2,206,179 in 2001; $2,062,911 in 2002 and $6,123,085 thereafter. Note 5 - Income Taxes - --------------------- The Partnership's income for federal income tax purposes differs from that reported in the accompanying statement of operations as follows:
Year ended December 31, -------------------------------------- 1997 1996 1995 ------------- ---------- ---------- Net income per financial statements $ 13,153,920 $ 3,392,534 $ 2,248,715 Timing differences: Joint venture earnings 48,147 87,002 1,532,140 Property rentals (11,223) (77,972) (1,844,941) Expenses (258,142) 230,364 31,747 Depreciation and amortization (51,506) (61,668) 602,925 Investment valuation allowances - - 600,000 Gain on sale (614,595) - - ------------ --------- ----------- Taxable income $ 12,266,601 3,570,260 $ 3,170,586 ============ ========= ===========
Note 6 - Partners' Capital - -------------------------- Allocation of net income from operations and distributions of distributable cash from operations, as defined, are in the ratio of 99% to the limited partners and 1% to the general partners. Cash distributions are made quarterly. Net sale proceeds and financing proceeds are allocated first to limited partners to the extent of their contributed capital plus a stipulated return thereon, as defined, second to pay disposition fees, and then 85% to the limited partners and 15% to the general partners. The adjusted capital contribution per limited partnership unit was reduced from $1,000 to $952 in 1994, then to $924 in 1995, and further reduced to $616 in 1997, as a result of the return of capital from the sale of four investments. No capital distributions have been made to the general partners. Income from a sale is allocated in proportion to the distribution of related proceeds, provided that the general partners are allocated at least 1%. Income or losses from a sale, if there are no residual proceeds after the repayment of the related debt, will be allocated 99% to the limited partners and 1% to the general partners. Note 7 - Subsequent Event - ------------------------- Distributions of cash from operations relating to the quarter ended December 31, 1996 were made on January 29, 1998 in the aggregate amount of $972,230 ($11.69 per weighted average limited partnership unit). NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION AT DECEMBER 31, 1997
Initial Cost to the Partnership ---------------------------------------------------------------------------- Lease Comm. Buildings & & Other Other Net Description Land Improvements Capital Costs Assets (Liabilities) - -------------------------------------------------- ---------------------------------------------------------------------------- Brea, CA. - Puente Street (See Note A) $3,985,498 $8,542,701 $1,273,000 ($619) Las Vegas, NV. - Palms Business Center III and IV (See Note A) 2,195,482 7,783,981 115,493 213,309 Fontana, CA. - Dahlia (See Note A) 1,367,969 5,471,878 227,625 345,703 Salinas, CA. - Santa Rita Plaza (See Note A) 0 8,056,722 196,574 1,963,363 Germantown, MD - Waters Landing II (See Note A) 2,091,742 0 0 0 Phoeniz, AZ - University Business Park 1,834,355 3,724,297 86,200 (14,271) ---------------------------------------------------------------------- Total Wholly-Owned Property $11,475,046 $33,579,579 $1,898,892 $2,507,485 ====================================================================== Costs Subsequent to Acquisition ---------------------------------------------------------------------------------- Write off of Buildings Write off of Lease Commissions Change in and Tenant & Other Write down Other Net Description Improvements Improvements Cap. Costs of Property Assets (Liabilities) - ----------------------------------------------- ---------------------------------------------------------------------------------- Brea, CA. - Puente Street (See Note A) $1,038,078 ($409,228) ($1,273,000) ($2,900,000) $1,168,223 Las Vegas, NV. - Palms Business Center III and IV (See Note A) 65,573 0 0 0 (80,044) Fontana, CA. - Dahlia (See Note A) 6,727 0 0 0 (294,600) Salinas, CA. - Santa Rita Plaza (See Note A) 229,868 0 0 0 123,366 Germantown, MD - Waters Landing II (See Note A) 0 0 0 (600,000) 0 Phoeniz, AZ - University Business Park 121,932 0 0 0 139,566 ---------------------------------------------------------------------------- Wholly-Owned Property $1,462,178 ($409,228) ($1,273,000) ($3,500,000) $1,056,511 ============================================================================ Balance at end of year -------------------------------------------------------------------------------- Accumulated Buildings & Other Disposal Depreciation Description Land Improvements Net Assets of Asset Total and Amortization - ------------------------------------------------- -------------------------------------------------------------------------------- Brea, CA. - Puente Street (See Note A) $3,985,498 $6,271,551 $1,167,604 0 $11,424,653 ($1,764,286) Las Vegas, NV. - Palms Business Center III and IV (See Note A) 2,195,482 7,849,554 248,758 (10,298,786) (4,992)(1) $0 Fontana, CA. - Dahlia (See Note A) 1,367,969 5,478,605 278,728 0 7,125,302 ($560,382) Salinas, CA. - Santa Rita Plaza (See Note A) 0 8,286,590 2,283,303 10,569,893 ($1,032,436) Germantown, MD - Waters Landing II (See Note A) 1,491,742 0 0 1,491,742 $0 Phoeniz, AZ - University Business Park 1,834,354 3,846,230 211,495 (5,854,206) 37,873 (1) $0 --------------------------------------------------------------------------------- Total Wholly-Owned Property $10,875,045 $31,732,530 $4,189,888 (16,152,992) $30,644,471 ($3,357,104) ================================================================================= Date of Date Depreciable Description Construction Acquired Life - ------------------------------------------------- ------------ -------- ----------- Brea, CA. - Puente Street (See Note A) 1989 6/1/91 30 Years Las Vegas, NV. - Palms Business Center III and IV (See Note A) Lease-up 3/7/88 25 Years Fontana, CA. - Dahlia (See Note A) 1990 9/21/87 25 Years Salinas, CA. - Santa Rita Plaza (See Note A) 1990 2/1/89 25 Years Germantown, MD To be - Waters Landing II (See Note A) Constructed 5/26/87 Land Phoeniz, AZ - University Business Park 1991 9/30/87 30 Years Total Wholly-Owned Property
(1) Represents remaining working capital at 12/31/97 15.25% interest in Columbia Gateway Corporate Park __________ See Note B _______ $4,836,039 N/A Phase I - 1990 12/21/87 50 Years Partnership. Develop and operate officce/R & D bldgs. in Columbia, MD. Phase II - Under Construction ---------------------------------------- Total Joint Ventures $4,836,039 ========================================
NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP --------------------------------- NOTE A TO SCHEDULE III
------------------------------------------------------------------------------------------ Balance Conversion to Additions to as of Wholly-Owned Lease Additions to Write Down Description 12/31/94 Property Commissions Property of Property - ----------------------------------- ------------------------------------------------------------------------------------------ Brea, CA. - - Puente Street $10,881,546 $ 0 ($4,933) ($426) $ 0 Las Vegas, NV. - - Palms Business Center III and IV 0 10,308,265 90,701 48,665 0 Fontana, CA - - Dahlia 0 7,413,175 0 0 0 Salinas, CA - -Santa Rita Plaza 0 10,216,659 0 52,500 0 ----------------------------------------------------------------------------------------- Total Wholly-Owned Property $10,881,546 $27,938,099 $85,768 $100,739 $ 0 ========================================================================================= ----------------------------------------------------------------------------------------- 12/31/94 Change in Balance Accumulated Property Working Disposal as of Depreciation and DESCRIPTION Capital of Asset 12/31/95 Amortization - ----------------------------------- ---------------------------------------------------------------------------------------- Brea, CA. - - Puente Street $116,300 $10,992,487 $1,019,762 Las Vegas, NV. - - Palms Business Center III and IV (234,273) 10,213,358 0 Fontana, CA - - Dahlia (37,013) 7,376,162 0 Salinas, CA - -Santa Rita Plaza 152,100 10,421,259 0 ---------------------------------------------------------------------------------------- Total Wholly-Owned Property ($2,886) $39,003,266 $1,019,762 ======================================================================================== ---------------------------------------------------------------------------------------- 1995 1995 12/31/95 Depreciation Depreciation Accumulated and Amortization and Amortization Disposal Depreciation and Description Expense Subtotal of Asset Amortization - --------------------------------- ---------------------------------------------------------------------------------------- Brea, CA. - - Puente Street ($248,175) $1,267,937 $1,267,937 Las Vegas, NV. - - Palms Business Center III and IV (395,448) $ 395,448 $ 395,448 Fontana, CA - - Dahlia (42,908) $ 42,908 $ 42,908 Salinas, CA - -Santa Rita Plaza (238,920) $ 238,920 $ 238,920 ---------------------------------------------------------------------------------------- Total Wholly-Owned Property ($925,451) $1,945,213 $ 0 $1,945,213 ========================================================================================
------------------------------------------------------------------------------------------ Balance Conversion to Additions to as of Wholly-Owned Lease Additions to Write Down Description 12/31/95 Property Commissions Property of Property - ----------------------------------- ------------------------------------------------------------------------------------------ Brea, CA. - - Puente Street $10,992,487 $ 0 $58,848 $ 0 $ 0 Las Vegas, NV. - - Palms Business Center III and IV 10,213,358 0 18,908 16,908 0 Fontana, CA - - Dahlia 7,376,162 0 1,860 0 0 Salinas, CA - -Santa Rita Plaza 10,421,259 0 27,868 253,368 0 Germantown, MD - - Waters Landing II 0 1,491,742 0 0 0 Phoenix, AZ - -University Business Park 0 5,630,581 19,141 64,697 0 ----------------------------------------------------------------------------------------- Total Wholly-Owned Property $39,003,266 $ 7,122,323 $126,625 $ 334,973 $ 0 ========================================================================================= ----------------------------------------------------------------------------------------- 12/31/95 Change in Balance Accumulated Property Working Disposal as of Depreciation and DESCRIPTION Capital of Asset 12/31/96 Amortization - ----------------------------------- ---------------------------------------------------------------------------------------- Brea CA, - - Puente Street $ 42,589 $11,093,924 $1,267,937 Las Vegas, NV. - - Palms Business Center III and IV 63,181 10,312,355 395,448 Fontana, CA - - Dahlia (290,044) 7,087,978 42,908 Salinas, CA - -Santa Rita Plaza (156,141) 10,546,354 238,920 Germantown, MD - - Waters Landing II 0 1,491,742 0 Phoenix, AZ - -University Business Park (71,265) 5,643,154 0 ----------------------------------------------------------------------------------------- Total Wholly-Owned Property (411,680) $46,175,507 $1,945,213 ========================================================================================= ---------------------------------------------------------------------------------------- 1996 1996 12/31/96 Depreciation Depreciation Accumulated and Amortization and Amortization Disposal Depreciation and Description Expense Subtotal of Asset Amortization - --------------------------------- ---------------------------------------------------------------------------------------- Brea CA, - - Puente Street (248,209) $1,516,146 $1,516,146 Las Vegas, NV. - - Palms Business Center III and IV (346,036) $ 741,484 $ 741,484 Fontana, CA - - Dahlia (258,685) $ 301,593 $ 301,593 Salinas, CA - -Santa Rita Plaza (365,154) $ 604,074 $ 604,074 Germantown, MD - - Waters Landing II 0 $ 0 $ 0 Phoenix, AZ - -University Business Park (183,456) $ 183,456 $ 183,456 ----------------------------------------------------------------------------------------- Total Wholly-Owned Property ($1,401,540) $3,346,753 $ 0 $3,346,753 =========================================================================================
------------------------------------------------------------------------------------------ Balance Conversion to Additions to Additions/ as of Wholly-Owned Lease Deletions to Write Down Description 12/31/96 Property Commissions Property of Property - ----------------------------------- ------------------------------------------------------------------------------------------ Brea, CA. - - Puente Street $11,093,924 $ 0 $88,482 $ 261,312 $ 0 Las Vegas, NV. - - Palms Business Center III and IV 10,312,355 0 5,011 0 0 Fontana, CA - - Dahlia 7,087,978 0 0 6,727 0 Salinas, CA - -Santa Rita Plaza 10,546,354 0 5,273 (76,000) 0 Germantown, MD - - Waters Landing II 1,491,742 0 0 0 0 Phoenix, AZ - -University Business Park 5,643,154 0 7,553 57,235 0 ----------------------------------------------------------------------------------------- Total Wholly-Owned Property $46,175,507 $ 0 $106,319 $ 249,274 $ 0 ========================================================================================= ----------------------------------------------------------------------------------------- 12/31/96 Change in Balance Accumulated Property Working Disposal as of Depreciation and DESCRIPTION Capital of Asset 12/31/97 Amortization - ----------------------------------- ---------------------------------------------------------------------------------------- Brea CA, - - Puente Street ($19,065) $11,424,653 $1,516,146 Las Vegas, NV. - - Palms Business Center III and IV (23,572) (10,298,786) (4,992) (1) 741,484 Fontana, CA - - Dahlia 30,597 7,125,302 301,593 Salinas, CA - -Santa Rita Plaza 94,266 10,569,893 604,074 Germantown, MD - - Waters Landing II 0 1,491,742 0 Phoenix, AZ - -University Business Park 184,137 (5,854,206) 37,873 (1) 183,456 ----------------------------------------------------------------------------------------- Total Wholly-Owned Property $ 266,363 (16,152,992) $30,644,471 $3,346,753 ========================================================================================= ---------------------------------------------------------------------------------------- 1997 1997 12/31/97 Depreciation Depreciation Accumulated and Amortization and Amortization Disposal Depreciation and Description Expense Subtotal of Asset Amortization - --------------------------------- ---------------------------------------------------------------------------------------- Brea CA, - - Puente Street ($248,140) $1,764,286 $1,764,286 Las Vegas, NV. - - Palms Business Center III and IV (290,629) $1,032,113 (1,032,113) 0 Fontana, CA - - Dahlia (258,789) $ 560,382 560,382 Salinas, CA - -Santa Rita Plaza (428,362) $1,032,436 1,032,436 Germantown, MD - - Waters Landing II 0 $ 0 0 Phoenix, AZ - -University Business Park (87,524) $ 270,980 (270,980) 0 ----------------------------------------------------------------------------------------- Total Wholly-Owned Property ($1,313,444) $4,660,197 ($1,303,093) $3,357,104 =========================================================================================
(1) Represents remaining working capital at 12/31/97 NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP ------------------------------------ NOTE B TO SCHEDULE III
BALANCE CASH EQUITY IN PERCENT OF AS OF INVESTMENTS IN INCOME/ DESCRIPTION OWNERSHIP 12/31/94 JOINT VENTURES (LOSS) - ---------------------------------- ---------- -------------- -------------- ----------- Waters Landing II 60% $ 2,073,501 $ 18,241 $ 0 Dahlia (3) 60% 7,542,262 0 517,485 University Business Park 60% 5,802,686 120,001 89,582 Columbia Gateway Corporate Park 15.25% 4,695,528 0 371,986 Palms Business Center III and IV (1) 100% 10,308,265 0 0 Santa Rita Plaza (2) 63% 10,357,021 0 325,497 ------------- --------- ---------- $ 40,779,263 $ 138,242 $1,304,550 ============= ========= ==========
(1) Effective January 1, 1995 converted to wholly-owned property. (2) Effective August 1, 1995 the Joint Venture was restructured into a Limited Partnership. (3) Effective September 1, 1995 the Joint Venture was restructured into a Limited Partnership.
BALANCE CASH EQUITY IN PERCENT OF AS OF INVESTMENTS IN INCOME/ DESCRIPTION OWNERSHIP 12/31/95 JOINT VENTURES (LOSS) - -------------------------------------- ----------- ----------- -------------- ---------- Waters Landing II (2) 60% $ 1,491,742 $0 $ 0 University Business Park (1) 60% 5,630,581 0 0 Columbia Gateway Corporate Park 15.25% 4,699,450 0 360,214 ----------- -------------- -------- $11,821,773 $0 $360,214 =========== ============== ========
(1) Effective January 1, 1996 converted to wholly-owned property. (2) Effective April 1, 1996 converted to wholly-owned property.
BALANCE CASH EQUITY IN PERCENT OF AS OF INVESTMENTS IN INCOME/ DESCRIPTION OWNERSHIP 12/31/96 JOINT VENTURES (LOSS) - ------------------------------------- ---------- ------------ --------------- ----------- Columbia Gateway Corporate Park 15.25% 4,722,223 0 343,841 ------------ --------------- ----------- $4,722,223 $0 $343,841 ============ =============== ===========
CASH 1995 AMORTIZATION DISTRIBUTED CONVERSION TO BALANCE OF DEFERRED FROM WRITE-DOWN WHOLLY-OWNED AS OF DESCRIPTION ACQUISITION FEES JOINT VENTURE OF PROPERTY PROPERTY 12/31/95 - ------------------------------------ ----------------- ------------- -------------- ------------- ---------- Waters Landing II $0 $0 ($600,000) $0 $1,491,742 Dahlia (3) (1,572) (645,000) 0 (7,413,175) 0 University Business Park (4,888) (376,800) 0 0 5,630,581 Columbia Gateway Corporate Park (2,064) (366,000) 0 0 4,699,450 Palms Business Center III and IV (1) 0 0 0 (10,308,265) 0 Santa Rita Plaza (2) (3,040) (462,819) 0 (10,216,659) 0 ----------------- ------------- -------------- --------------- ------------ ($11,564) ($1,850,619) ($600,000) ($27,938,099) $11,821,773 ================= ============= ============== =============== ============
1996 AMORTIZATION DISTRIBUTED CONVERSION TO BALANCE OF DEFERRED FROM WRITE-DOWN WHOLLY-OWNED AS OF DESCRIPTION ACQUISITION FEES JOINT VENTURE OF PROPERTY PROPERTY 12/31/96 - ----------------------------------- ----------------- ------------- ----------- ------------- ----------- Waters Landing II (2) $ 0 $ 0 $0 ($1,491,742) $ 0 University Business Park (1) 0 0 0 (5,630,581) 0 Columbia Gateway Corporate Park (1,941) (335,500) 0 0 4,722,223 ----------------- ------------- ----------- ------------- ----------- ($1,941) ($335,500) $0 ($7,122,323) $4,722,223 ================= ============= =========== ============= ===========
CASH 1997 AMORTIZATION DISTRIBUTED CONVERSION TO BALANCE OF DEFERRED FROM WRITE-DOWN WHOLLY-OWNED AS OF DESCRIPTION ACQUISITION FEES JOINT VENTURE OF PROPERTY PROPERTY 12/31/97 - ----------------------------------- ----------------- -------------- ------------- --------------- ------------ Columbia Gateway Corporate Park (1,939) (226,086) 0 0 4,838,039 ---------------- -------------- -------------- -------------- ----------- ($1,939) ($226,086) $0 $0 $ 4,838,039 ================ ============== ============== ============== ===========
EXHIBIT INDEX -------------
Exhibit Page Number Exhibit Number - ------ ------- ------ 10A. Joint Venture Agreement of Waters Landing * Partners Two, dated as of May 26, 1987 between the Partnership and Waters Landing Two-Oxford Limited Partnership, a Maryland limited partnership ("Oxford"). 10B. Promissory Note dated May 26, 1987 from Oxford * to the Partnership in the original principal amount of $3,121,600. 10C. Joint Venture Interest Pledge and Security * Agreement, dated as of May 26, 1987, between the Partnership and Oxford. 10D. Joint Venture Agreement of Graham Road Joint * Venture, dated as of June 30, 1987, between the Partnership and Connell-Scott Ventures V. 10E. General Partnership Agreement of IBG Dahlia * Associates, dated as of September 21, 1987, between the Partnership and 20 Dahlia Partnership. 10F. General Partnership Agreement of Hewson University * Associates, dated as of September 30, 1987, between Hewson Properties, Inc. and the Partnership. 10G. General Partnership Agreement of Gateway 51 * Partnership, dated as of December 21, 1987, among M.O.R. Gateway 51 Associates Limited Partnership, the Partnership and New England Life Pension Properties IV; A Real Estate Limited Partnership. 10H. Ground Lease dated January 23, 1988 between * Nielson Properties, LTD., a California limited partnership ("Landlord"), and Rodde McNellis/Salinas, a California general partnership ("Tenant"). 10I. Leasehold Indenture dated February 12, 1988 by * Rodde McNellis/Salinas, Borrower, to Santa Clara Land Title Company, Trustee, for New England Pension Properties V, A Real Estate Limited Partnership ("NEPP V"), Beneficiary.
___________________________________________________________ * Previously filed and incorporated herein by reference. EXHIBIT INDEX -------------
Exhibit Page Number Exhibit Number - ------ ------- ------ 10J. Promissory Note dated February 12, 1988 in * the principal amount of $1,800,000 by Rodde McNellis/Salinas to NEPP V. 10K. Pledge of Note and Security Agreement dated as * of February 12, 1988 by and between Rodde McNellis/Salinas and NEPP V. 10L. R/M Salinas Predevelopment Agreement dated * February 12, 1988 by and between NEPP V and Rodde McNellis/Salinas. 10M. Joint Venture Agreement of Rancho Road * Associates II dated as of March 7, 1988 by and between NEPP V and Commerce Centre Partners. 10N. Pledge and Security Agreement dated as of * March 7, 1988 by and between Commerce Centre Partners and NEPP V. 10O. General Partnership Agreement of Muller Brea * Associates dated as of April 29, 1988 between Tar Partners and the Registrant. 10P. Lakewood Associates General Partnership * Agreement dated August, 1988 between EW Lakewood Limited Partnership, Copley Pension Properties VI; A Real Estate Limited Partnership and Registrant. 10Q. First Amendment to Rancho Road Associates II Joint * Venture Agreement dated as of May 31, 1988 by and between the Registrant and Commerce Centre Partners. 10R. First Amendment to Pledge and Security Agreement * dated as of May 31, 1988 by and between the Registrant and Commerce Centre Partners. 10S. Joint Venture Agreement of R/M Salinas Venture dated * as of February 1, 1989 by and between New England Pension Properties V; A Real Estate Limited Partnership and Rodde McNellis/Salinas.
____________________________________________________________ * Previously filed and incorporated herein by reference. EXHIBIT INDEX -------------
Exhibit Page Number Exhibit Number - ------ ------- ------ 10T. First Amendment to Joint Venture Agreement of R/M * Salinas Venture dated as of February 1, 1989 by and between New England Pension Properties V; A Real Estate Limited Partnership and Rodde McNellis/Salinas. 10U. Amended and Restated General Partnership Agreement * of Gateway 51 Partnership dated as of April 20, 1989 between M.O.R. Gateway 51 Associates Limited Partnership, New England Life Pension Properties IV; a Real Estate Limited Partnership and New England Pension Properties V; a Real Estate Limited Partnership. 10V. Second Amendment to Pledge and Security * Agreement dated as of June 20, 1990 by and between Commerce Centre Partners, a California general partnership and Registrant. 10W. Second Amendment to Rancho Road Associates * II Joint Venture Agreement dated as of June 20, 1990 by and between Registrant and Commerce Centre Partners. 10X. Second Amendment to Joint Venture Agreement of * R/M Salinas Venture dated as of July 20, 1990 by and between the Registrant and Rodde McNellis/ Salinas. 10Y. Agreement for Dissolution, Distribution and * Winding-up of Muller Brea Associates dated May 31, 1991 by and between TAR Partners, a California partnership, and the Registrant. 10Z. Property Management Agreement effective as of * May 31, 1991 by and between TAR Partners, a California general partnership, and the Registrant. 10AA. Asset Contribution Agreement by and among Evans * Withycombe Residential, Inc., a Maryland Corporation, and Evans Withycombe Residential, L.P., a Delaware limited partnership, as Purchasers and Lakewood Associates, an Arizona limited Partnership composed of Registrant, Copley Pension Properties VI and EW Lakewood L.P., as Sellers dated June 9, 1994.
____________________________________________________________ * Previously filed and incorporated herein by reference. EXHIBIT INDEX -------------
Exhibit Page Number Exhibit Number - ------ ------- ------ 10BB. Purchase and Sale Agreement between Graham Road * Joint Venture and Prentiss Properties Atlanta Industrial Properties, L.P., dated June 17, 1994. 10CC. $1,750,000 note secured by Deed of Trust between * the Partnership, as Lender, and Nielsen Properties, Ltd, as Borrower dated August 1, 1995. 10DD. Third Amendment to Agreement of Lease dated August * 1, 1995 by and between Nielsen Properties, Ltd., a California limited partnership, R/M Salinas Venture, a California general partnership, and R/M Salinas, L.P., a California limited partnership. 10EE. R/M Salinas L.P. Limited Partnership Agreement dated * August 1, 1995 between Rodde McNellis/Salinas, a California general partnership and Registrant. 10FF. Limited Partnership Agreement of IBG Dahlia Associates * dated September 1, 1995 between Registrant and 20 Dahlia Partnership, a California limited partnership. 27. Financial Data Schedule
__________________________________________________________________ * Previously filed and incorporated herein by reference. SIGNATURES ---------- Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP Date: March 30, 1998 By: /s/ Wesley M. Gardiner, Jr. ------------------------------- Wesley M. Gardiner, Jr. President of the Managing General Partner Chief Executive Officer and Director Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- President /s/ Wesley M. Gardiner, Jr. Chief Executive Officer March 30, 1998 - ------------------------------ Wesley M. Gardiner, Jr. and Director Vice President /s/ Pamela J. Herbst and Director March 30, 1998 - ------------------------------ Pamela J. Herbst Vice President /s/ J. Grant Monahon and Director March 30, 1998 - ------------------------------ J. Grant Monahon /s/ James J. Finnegan Vice President March 30, 1998 - ------------------------------ James J. Finnegan Treasurer and Principal Financial and /s/ Karin J. Lagerlund Accounting Officer March 30, 1998 - ------------------------------ Karin J. Lagerlund EX-27 2 FINANCIAL DATA SCHEDULE
5 12-MOS DEC-31-1997 DEC-31-1997 6,303,386 4,362,030 0 0 0 10,665,416 32,123,406 0 42,788,822 177,236 1,106,292 0 0 0 41,505,294 42,788,822 16,477,473 17,197,366 1,949,211 1,949,211 2,094,235 0 0 13,153,920 0 13,153,920 0 0 0 13,153,920 158.07 158.07
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