-----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, UvojHu46Y8neYR52V5/h6KpbDPo79bT3RzIrQbUpX3CIWfeyzfhphshggpZDFsnQ bJ7FoO27dOUrVj5JWWrEJg== 0000927016-98-003049.txt : 19980813 0000927016-98-003049.hdr.sgml : 19980813 ACCESSION NUMBER: 0000927016-98-003049 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980812 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW ENGLAND PENSION PROPERTIES V CENTRAL INDEX KEY: 0000806028 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 042940131 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-17808 FILM NUMBER: 98683144 BUSINESS ADDRESS: STREET 1: 225 FRANKLIN ST 25TH FL CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6175781200 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------ FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ---------------------------------------------------------------------- For Quarter Ended June 30, 1998 Commission File Number 0-17808 NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP (Exact name of registrant as specified in its charter) Massachusetts 04-2940131 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 225 Franklin Street, 25th Fl. Boston, Massachusetts 02110 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (617) 261-9000 ---------------------------------------------------------------------- Former name, former address and former fiscal year if changed since last report Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve (12) months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED JUNE 30, 1998 PART I FINANCIAL INFORMATION ---------------------- BALANCE SHEET (Unaudited)
June 30, 1998 December 31, 1997 ------------- ----------------- ASSETS Real estate investments: Property, net $27,101,134 $27,287,367 Joint ventures 4,838,773 4,836,039 ----------- ----------- 31,939,907 32,123,406 Cash and cash equivalents 10,277,706 6,303,386 Short-term investments - 4,362,030 ----------- ----------- $42,217,613 $42,788,822 =========== =========== LIABILITIES AND PARTNERS' CAPITAL Accounts payable $ 89,017 $ 129,158 Accrued management fee 36,438 48,078 Deferred management and disposition fees 1,179,170 1,106,292 ----------- ----------- Total liabilities 1,304,625 1,283,528 ----------- ----------- Commitments to fund real estate investments Partners' capital (deficit): Limited partners ($616 per unit; 160,000 units authorized, 82,336 units issued and outstanding) 40,925,574 41,511,957 General partners (12,586) (6,663) ----------- ----------- Total partners' capital 40,912,988 41,505,294 ----------- ----------- $42,217,613 $42,788,822 =========== ===========
(See accompanying notes to financial statements) STATEMENT OF OPERATIONS (Unaudited)
Quarter Ended Six Months Ended Quarter Ended Six Months Ended June 30, 1998 June 30, 1998 June 30, 1997 June 30, 1997 ------------- ---------------- ------------- ---------------- INVESTMENT ACTIVITY Property rentals $1,094,393 $2,013,800 $1,766,349 $3,398,150 Interest income on loan to ground lessor 35,634 71,890 36,509 75,077 Property operating expenses (223,951) (480,720) (360,346) (797,142) Ground rent expense (97,500) (195,000) (97,500) (195,000) Depreciation and amortization (237,868) (473,293) (378,757) (762,227) ---------- ---------- ---------- ---------- 570,708 936,677 966,255 1,718,858 Joint venture earnings 113,062 199,434 89,566 174,787 ---------- ---------- ---------- ---------- Total real estate operations 683,770 1,136,111 1,055,821 1,893,645 Gain on sale of wholly-owned property - - 2,160,404 2,160,404 ---------- ---------- ---------- ---------- Total real estate activity 683,770 1,136,111 3,216,225 4,054,049 Interest on cash equivalents and short-term investments 133,195 268,071 186,073 337,283 ---------- ---------- ---------- ---------- Total investment activity 816,965 1,404,182 3,402,298 4,391,332 ---------- ---------- ---------- ---------- Portfolio Expenses Management fee 72,877 145,754 118,849 237,753 General and administrative 73,958 141,638 83,578 155,867 ---------- ---------- ---------- ---------- 146,835 287,392 202,427 393,620 ---------- ---------- ---------- ---------- Net Income $ 670,130 $1,116,790 $3,199,871 $3,997,712 ========== ========== ========== ========== Net income per weighted average limited partnership unit $8.06 $13.43 $38.45 $48.03 ========== ========== ========== ========== Cash distributions per limited partnership unit outstanding for the entire period $8.86 $20.55 $106.44 $120.30 ========== ========== ========== ========== Weighted average number of limited partnership units outstanding during the period 82,336 82,336 82,388 82,407 ========== ========== ========== ==========
(See accompanying notes to financial statements) STATEMENT OF PARTNERS' CAPITAL (DEFICIT) (Unaudited)
Quarter Ended Six Months Ended Quarter Ended Six Months Ended June 30, 1998 June 30, 1998 June 30, 1997 June 30, 1997 ---------------------- ---------------------- ---------------------- ---------------------- General Limited General Limited General Limited General Limited Partners Partners Partners Partners Partners Partners Partners Partners -------- ----------- -------- ----------- -------- ----------- -------- ----------- Balance at beginning of period $(11,918) $40,991,642 $(6,663) $41,511,957 $(91,307) $58,533,701 $(87,745) $58,916,206 Repurchase of Limited partnership Units - - - - - - - (29,944) Cash distributions (7,369) (729,497) (17,091) (1,692,005) (12,023) (8,769,927) (23,563) (9,912,351) Net income 6,701 663,429 11,168 1,105,622 31,999 3,167,872 39,977 3,957,735 -------- ----------- -------- ----------- -------- ----------- -------- ----------- Balance at end of period $(12,586) $40,925,574 $(12,586) $(40,925,574) $(71,331) $52,931,646 $(71,331) $52,931,646 ======== =========== ======== =========== ======== =========== ======== ===========
(See accompanying notes to financial statements) SUMMARIZED STATEMENT OF CASH FLOWS (Unaudited)
Six Months Ended June 30, ------------------------- 1998 1997 ----------- ----------- Net cash provided by operating activities $ 1,630,404 $ 2,431,382 ----------- ----------- Cash flows from investing activities: Deferred disposition fees - 250,500 Investment in property (344,698) (124,871) Decrease in short-term investments, net 4,362,030 2,292,204 Repayment of loan to ground lessor 35,680 32,702 Net proceeds from sale of property - 7,743,630 ----------- ----------- Net cash provided by investing activities 4,053,012 10,194,165 ----------- ----------- Cash flows from financing activities: Distributions to partners (1,709,096) (9,935,914) Repurchase of limited partnership units - (29,944) ----------- ----------- Net cash used in financing activities (1,709,096) (9,965,858) ----------- ----------- Net increase in cash and cash equivalents 3,974,320 2,659,689 Cash and cash equivalents: Beginning of period 6,303,386 4,706,279 ----------- ----------- End of period $10,277,706 $ 7,365,968 =========== ===========
(See accompanying notes to financial statements) NOTES TO FINANCIAL STATEMENTS (Unaudited) In the opinion of management, the accompanying unaudited financial statements contain all adjustments necessary to present fairly the Partnership's financial position as of June 30, 1998 and December 31, 1997 and the results of its operations, its cash flows and partners' capital (deficit) for the interim periods ended June 30, 1998 and 1997. These adjustments are of a normal recurring nature. See notes to financial statements included in the Partnership's 1997 Annual Report on Form 10-K for additional information relating to the Partnership's financial statements. NOTE 1 - ORGANIZATION AND BUSINESS - ---------------------------------- New England Pension Properties V; A Real Estate Limited Partnership (the "Partnership") is a Massachusetts limited partnership organized for the purpose of investing primarily in newly constructed and existing income producing real properties. It primarily serves as an investment for qualified pension and profit sharing plans and other entities intended to be exempt from federal income tax. The Partnership commenced operations in May, 1987 and acquired the five real estate investments it currently owns prior to the end of 1989. The Partnership intends to dispose of its investments within eight to twelve years of their acquisition, and then liquidate. The Partnership has engaged AEW Real Estate Advisors, Inc. (the "Advisor") to provide asset management services. The Partnership maintains a repurchase fund for the purpose of repurchasing limited partnership units. Two percent of cash flow, as defined, is designated for this fund which had a balance of $129,326 and $96,937 at June 30, 1998 and December 31, 1997, respectively. NOTE 2 - REAL ESTATE JOINT VENTURES - ----------------------------------- Ownership of the Columbia Gateway Corporate Park joint venture has been restructured to give the Partnership and its affiliate full control over the business of the joint venture effective January 1, 1998. The following summarized financial information is presented in the aggregate for the Partnership's remaining joint venture:
Assets and Liabilities ---------------------- June 30, 1998 December 31, 1997 ------------- ----------------- Assets Real property, at cost less accumulated depreciation of $1,634,771 and $1,506,022, respectively $16,029,627 $15,781,399 Other 528,426 739,025 ----------- ----------- 16,558,053 16,520,424 Liabilities 218,298 192,816 ----------- ----------- Net Assets $16,339,755 $16,327,608 =========== =========== Results of Operations ---------------------- Six Months Ended June 30, ------------------------- 1998 1997 ---------- -------- Revenue Rental income $1,028,012 $940,529 ---------- -------- 1,028,012 940,529 ---------- -------- Expenses Operating expenses 245,180 238,506 Depreciation and amortization 128,950 128,950 ---------- -------- 374,130 367,456 ---------- -------- Net income $ 653,882 $573,073 ========== ========
Liabilities and expenses exclude amounts owed and attributable to the Partnership and its affiliate on behalf of their financing arrangements with the joint venture. NOTE 3 - PROPERTY - ----------------- The following is a summary of the Partnership's four investments in property:
June 30, 1998 December 31, 1997 -------------- ------------------ Land $ 7,445,208 $ 7,445,208 Building and improvements 23,281,444 22,936,747 Accumulated depreciation (3,208,891) (2,805,296) Investment valuation allowance (3,500,000) (3,500,000) Loan to ground lessor 1,562,186 1,597,866 Lease commissions and other assets, net 1,318,804 1,388,391 Accounts receivable 463,235 515,182 Accounts payable (260,852) (290,731) ----------- ----------- $27,101,134 $27,287,367 =========== ===========
NOTE 4 - SUBSEQUENT EVENT - ------------------------- Distributions of cash from operations relating to the quarter ended June 30, 1998 were made on July 30, 1998 in the aggregate amount of $736,866 ($8.86 per limited partnership unit.) Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources - ------------------------------- The Partnership completed its offering of limited partnership units in December 1988. A total of 83,291 units were sold. The Partnership received proceeds of $74,895,253, net of selling commissions and other offering costs, which have been used for investment in real estate, for the payment of related acquisition costs and for working capital reserves. The Partnership made nine real estate investments, four of which have been sold: two in 1994 and two in 1997. As a result of the sales, capital of $31,646,076 has been returned to the limited partners through June 30, 1998. The adjusted capital contribution was reduced from $1,000 to $952 per unit in 1994, to $924 in 1995, and then to $616 in 1997. At June 30, 1998, the Partnership had $10,277,706 in cash and cash equivalents, of which $736,866 was used for cash distributions to partners on July 30, 1998; the remainder will be used to complete the funding of real estate investments or be retained as working capital reserves. The source of future liquidity and cash distributions to partners will be cash generated by the Partnership's invested cash and cash equivalents and real estate investments. Distributions of cash from operations relating to the first two quarters of 1998 were made at the annualized rate of 5.75% on the adjusted capital contribution of $616. Distributions of cash from operations relating to the first and second quarters of 1997 were made at the annualized rate of 6.25% on the adjusted capital contribution of $924. The distribution rate was decreased due to the sale of properties in 1997. The Partnership maintains a fund for the purpose of repurchasing limited partnership units pursuant to the terms and conditions set forth in the Partnership Agreement. Two percent of cash flow, as defined, is designated for this fund which had a balance of $129,326 and $96,937 at June 30, 1998 and December 31, 1997, respectively. Through June 30, 1998, 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 is at depreciated cost, or if the investment's carrying value is determined not to be recoverable through expected undiscounted future cash flows, the carrying value is reduced to estimated fair market value. The fair market value of such investments is further reduced by the estimated cost of sale for properties held for sale. Carrying value may be greater or less than current appraised value. At June 30, 1998, the appraised values of certain investments exceeded their related carrying values by an aggregate of $4,100,000, and the appraised values of the remaining investments were less than their related carrying values by an aggregate of $28,000. The current appraised value of real estate investments has been estimated by the managing general partner and is generally based on a combination of traditional appraisal approaches performed by the Advisor and independent appraisers. Because of the subjectivity inherent in the valuation process, the estimated current appraised value may differ significantly from that which could be realized if the real estate were actually offered for sale in the marketplace. Results of Operations - --------------------- Puente Street, Santa Rita Plaza, Dahlia, and Waters Landing II are wholly- owned properties. Columbia Gateway Corporate Park is structured as a joint venture with an affiliate of the Partnership. Operating Factors The University Business Park was sold on May 28, 1997, and the Partnership recognized a gain of $2,160,404. The property was 100% leased at the time of sale. Overall occupancy at Columbia Gateway Corporate Park remained at 100% during the second quarter of 1998, consistent with March 31, 1998 and up from 95% at June 30, 1997. Ownership of the Columbia Gateway Corporate Park joint venture has been restructured to give the Partnership and its affiliate full control over the business of the joint venture. This restructuring was effective January 1, 1998. One lease is due to expire in October, 1998, but an existing tenant has expressed an interest in exercising its right of first refusal to expand into this space upon the lease expiration. Occupancy at Puente Street has remained at 100% since the first quarter of 1994. Operations are stable and no leases are due to expire until April 1999. As a result of a settlement of previous litigation, a former tenant of Puente Street assigned its lease to the other existing tenant on February 1, 1998. The former tenant sub-leased the space from the existing tenant until June 1, 1998, at which time it vacated the premises. There was no material effect on the Partnership's financial position or results of operations as a result of this lease assignment. During 1997, negotiations were finalized for a 53,000 square- foot build-to-suit facility to be built on Partnership land for a tenant of an affiliated partnership. A 10-year lease will commence upon completion of the building, which is scheduled for the fourth quarter of 1998. The Waters Landing II property is presently zoned and permitted for the development of 144 apartment units. However, based on studies previously undertaken by the Partnership, the Partnership has no plans at this time to develop this site. Occupancy at the Palms Business Center III and IV was 100% at June 30, 1997. The Palms Business Center III and IV was sold on October 24, 1997, and the Partnership recognized a gain of $8,016,586. At the time of sale, the property was 100% leased. Occupancy at the Dahlia property remained at 100% during the second quarter of 1998, where it has been since the first quarter of 1994. The lease of a tenant that occupied approximately 30% of the space expired in May 1998 and has been fully re-leased to two new tenants for 40-month and 72-month leases. Occupancy at Santa Rita Plaza during the second quarter of 1998 was 97%, up slightly from 96% at June 30, 1997. Although occupancy is strong at this time, one lease of approximately 5% of the space expires in December, 1998 and the tenant intends to vacate at that time. Investment Activity Interest on cash equivalents and short-term investments for the first six months of 1998 decreased 20% compared to the same period of 1997 due to the temporary investment of proceeds from the sale of University Business Park in 1997 and due to lower investment balances as a result of less cash generated by real estate investments due to the sale of two such investments during 1997. Real estate operating activity for the first six months of 1998 was $1,136,111 compared to $1,893,645 for the same period in 1997. This decrease of approximately $758,000 is primarily due to the sales of University Business Park and Palms Business Center III and IV during 1997. Cash flow from operations decreased by approximately $801,000 between the first six months of 1997 and 1998. This decrease is largely attributable to the decrease in real estate operations discussed above. Portfolio Expenses The Partnership management fee is 9% of distributable cash flow from operations after any increase or decrease in working capital reserves as determined by the managing general partner. General and administrative expenses consist primarily of real estate appraisal, printing, legal, accounting and investor servicing fees. The Partnership management fee decreased between the first six months of 1998 and 1997 due to a decrease in distributable cash flow. General and administrative expenses decreased 9% between the respective six-month periods due primarily to lower accounting fees as a result of price negotiations and lower appraisal expenses resulting from the sale of two assets in 1997. NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED JUNE 30, 1998 PART II OTHER INFORMATION ------------------- Item 6. Exhibits and Reports on Form 8-K a. Exhibits: (27) Financial Data Schedule b. Reports on Form 8-K: No current reports on Form 8-K were filed during the quarter ended June 30, 1998. SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP (Registrant) August 12, 1998 /s/ Wesley M. Gardiner, Jr. ------------------------------- Wesley M. Gardiner, Jr. President, Chief Executive Officer and Director of Managing General Partner Fifth Copley Corp. August 12, 1998 /s/ Karin J. Lagerlund -------------------------------- Karin J. Lagerlund Principal Financial and Accounting Officer of Managing General Partner, Fifth Copley Corp. EX-27 2 FINANCIAL DATA SCHEDULE
5 6-MOS DEC-31-1998 JUN-30-1998 10,277,106 0 0 0 0 10,277,706 31,939,907 0 42,217,613 125,455 1,179,170 0 0 0 40,912,988 42,217,613 2,285,124 2,553,195 675,720 675,720 760,685 0 0 1,116,790 0 1,116,790 0 0 0 1,116,790 13.43 13.43
-----END PRIVACY-ENHANCED MESSAGE-----