Leasing Activities

9 Months Ended

Sep. 30, 2013

Leases [Abstract]

Leasing Activities

NOTE 3 - LEASING ACTIVITIES

The Partnership leases three properties for operation of restaurants to Del Taco on a triple net basis. One property has been subleased to a Del Taco franchisee. The leases are for terms of 32 years commencing with the completion of the restaurant facility located on each property and require monthly rentals equal to 12 percent of the gross sales of the restaurants. The leases expire in the years 2021 to 2022.

Pursuant to the lease agreements, minimum rentals of $3,500 per month are due to the Partnership during the first six months of any non-operating period caused by an insured casualty loss.

For the three months ended September 30, 2013, the two restaurants operated by Del Taco, for which the Partnership is the lessor, had combined, unaudited sales of $586,926 and unaudited net losses of $5,195 as compared to unaudited sales of $568,310, and unaudited net income of $4,127, respectively, for the corresponding period in 2012. Net income or loss of each restaurant includes charges for general and administrative expenses incurred in connection with supervision of restaurant operations and interest expense and the decrease in net income from the corresponding period of the prior year primarily relates to increases in operating costs. For the three months ended September 30, 2013, the one restaurant operated by a Del Taco franchisee, for which the Partnership is the lessor, had unaudited sales of $337,015 as compared with $335,936 during the same period in 2012.

For the nine months ended September 30, 2013, the two restaurants operated by Del Taco, for which the Partnership is the lessor, had combined, unaudited sales of $1,716,457 and unaudited net losses of $5,700 as compared to $1,663,410 and unaudited net income of $1,170 for the corresponding period in 2012. Net income or loss of each restaurant includes charges for general and administrative expenses incurred in connection with supervision of restaurant operations and interest expense and the decrease in net income from the corresponding period of the prior year primarily relates to increases in operating costs. For the nine months ended September 30, 2013, the one restaurant operated by a Del Taco franchisee, for which the Partnership is the lessor, had unaudited sales of $993,862 as compared with $974,550 during the same period in 2012.