<PAGE> 1
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, 1995
Commission File Number
2-60561
REAL ESTATE ASSOCIATES LIMITED
A CALIFORNIA LIMITED PARTNERSHIP
I.R.S. Employer Identification No. 95-3187912
9090 WILSHIRE BOULEVARD, SUITE 201, BEVERLY HILLS, CALIFORNIA 90211
Registrant's Telephone Number, Including Area Code (310) 278-2191
Securities Registered Pursuant to Section 12(b) or 12(g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed with the Commission by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding twelve months (or 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 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]
<PAGE> 2
PART I.
ITEM 1. BUSINESS:
Real Estate Associates Limited ("REAL" or the "Partnership") is a limited
partnership which was formed under the laws of the State of California on
September 15, 1977. On October 27, 1978, REAL offered 16,500 Limited
Partnership Interests through a public offering managed by Lehman Brothers Inc.
The general partners of Real Estate Associates Limited are Charles H.
Boxenbaum, an individual residing in California, and National Partnership
Investments Corp. ("NAPICO"), a California Corporation (the Corporate General
Partner). The business of REAL is conducted primarily by its general partners
as REAL has no employees of its own.
Casden Investment Corporation ("CIC") owns 100 percent of NAPICO's stock. The
current members of NAPICO's Board of Directors are Charles H. Boxenbaum, Bruce
E. Nelson, Alan I. Casden, Henry C. Casden and Brian D. Goldberg.
REAL holds limited partnership interests in eighteen local limited partnerships
as of December 31, 1995. Each of these limited partnerships owns a single low
income housing project which is subsidized and/or has a mortgage note payable
to or insured by agencies of the federal or local government.
In order to stimulate private investment in low income housing, the federal
government and certain state and local agencies have provided significant
ownership incentives, including among others, interest subsidies, rent
supplements, and mortgage insurance, with the intent of reducing certain market
risks and providing investors with certain tax benefits, plus limited cash
distributions and the possibility of long-term capital gains. There remains,
however, significant risks. The long-term nature of investments in government
assisted housing limits the ability of REAL to vary its portfolio in response
to changing economic, financial and investment conditions; such investments are
also subject to changes in local economic circumstances and housing patterns,
as well as rising operating costs, vacancies, rent collection difficulties,
energy shortages and other factors which have an impact on real estate values.
These Projects also require greater management expertise and may have higher
operating expenses than conventional housing projects.
The partnerships in which REAL has invested were, at least initially, organized
by private developers who acquired the sites, or options thereon, and applied
for applicable mortgage insurance and subsidies. REAL became the principal
limited partner in these local limited partnerships pursuant to arm's-length
negotiations with these developers, or others, who act as general partners. As
a limited partner, REAL's liability for obligations of the local limited
partnership is limited to its investment. The local general partner of the
local limited partnership retains responsibility for developing, constructing,
maintaining, operating and managing the project. Under certain circumstances,
REAL has the right to replace the general partner of the local limited
partnerships.
<PAGE> 3
Although each of the partnerships in which REAL has invested owns a project
which must compete in the market place for tenants, interest subsidies and rent
supplements from governmental agencies make it possible to offer these dwelling
units to eligible "low income" tenants at a cost significantly below the market
rate for comparable conventionally financed dwelling units in the area.
During 1995, all of the projects in which REAL had invested were substantially
rented. The following is a schedule of the status as of December 31, 1995, of
the projects owned by local limited partnerships in which REAL is a limited
partner.
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL HAS AN INVESTMENT
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Units Authorized
For Rental
Assistance Under
Section 8 or
Other Rent
No. of Supplement Units Percentage of
Name & Location Units Program Occupied Total Units
- --------------- ------- ------------ ---------- -------------
<S> <C> <C> <C> <C>
Bedford House 48 48/ 0 45 94%
Falmouth, KY
Belleville Manor 32 32/ 0 32 100%
Marion, KY
Bethel Towers 146 93/ 53 137 94%
Detroit, MI
Cherry Hill Place 186 186/ 0 177 95%
Inkster, MI
Chidester Place 151 151/ 0 140 93%
Ypsilanti, MI
Clinton Apts. 32 32/ 0 32 100%
Clinton, KY
East Central Twrs 166 166/ 0 158 95%
Fort Wayne, IN
Gadsden Towers 101 101/ 0 100 99%
Gadsden, AL
Norristown Housing 175 175/ 0 175 100%
for the Elderly
Norristown, PA
Northwood Village 72 72/ 0 69 96%
Emporia, VA
</TABLE>
<PAGE> 4
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL HAS AN INVESTMENT
DECEMBER 31, 1995
(CONTINUED)
<TABLE>
<CAPTION>
Units Authorized
For Rental
Assistance Under
Section 8 or
Other Rent
No. of Supplement Units Percentage of
Name & Location Units Program Occupied Total Units
- --------------- ------- -------------- ----------- -------------
<S> <C> <C> <C> <C>
Park View Apts. 97 97/ 0 96 99%
Sacramento, CA
Ridgeview Estates 32 0/ 32 32 100%
Lewisburg, W. VA.
Ridgewood/LaLoma 75 75/ 0 75 100%
Sacramento, CA
Riverside Towers 200 200/ 0 200 100%
Medford, MA
Van Nuys Bldg. 299 299/ 0 296 99%
Los Angeles, CA
Wedgewood Village 32 0/ 32 31 97%
Ripley, W. VA
W. Lafayette Apts. 49 49/ 0 49 100%
W. Lafayette, OH
Williamson Towers 76 76/ 0 75 99%
Williamson, W. VA
------ --------- ------ ----
1,969 1,852/117 1,919 97%
====== ========= ======
</TABLE>
<PAGE> 5
ITEM 2. PROPERTIES:
Through its investments in local limited partnerships, REAL holds interests in
real estate properties. See Item 1 and Schedule XI for information pertaining
to these properties.
ITEM 3. LEGAL PROCEEDINGS:
As of December 31, 1995, REAL's Corporate General Partner was a plaintiff or
defendant in several lawsuits. None of these suits were related to REAL.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
Not applicable.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS AND RELATED
SECURITY HOLDER MATTERS:
The Limited Partnership Interests are not traded on a public exchange but were
sold through a public offering managed by Lehman Brothers Inc. It is not
anticipated that any public market will develop for the purchase and sale of
any partnership interest. Limited Partnership Interests may be transferred
only if certain requirements are satisfied. At December 31, 1995, there were
1,108 registered holders of units in REAL. Distributions have not been made
from the inception of the Partnership to December 31, 1995. The Partnership
has invested in certain government assisted projects under programs which in
many instances restrict the cash return available to project owners. The
Partnership was not designed to provide cash distributions to investors in
circumstances other than refinancing or disposition of its investments in
limited partnerships.
<PAGE> 6
ITEM 6. SELECTED FINANCIAL DATA:
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------------------------
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Loss from Partnership
Operations $ (490,021) $ (462,078) $ (483,950) $ (478,213) $ (444,075)
Distributions from Limited
Partnerships Recognized
as Income 1,373,243 321,584 590,286 301,975 451,595
Equity in Income of
Limited Partnerships
and Amortization of
Acquisition Costs 384,476 226,840 317,720 114,649 205,659
------------ ------------ ------------ ------------ ------------
Net Income (Loss) $ 1,267,698 $ 86,346 $ 424,056 $ (61,589) $ 213,179
============ ============ ============ ============ ============
Net Income (Loss) per limited
Partnership Interest $ 77 $ 5 $ 25 $ (4) $ 13
============ ============ ============ ============ ============
Total assets $ 2,715,836 $ 2,491,676 $ 2,318,253 $ 1,790,584 $ 1,742,600
============ ============ ============ ============ ============
Investments in Limited
Partnerships $ 2,191,335 $ 1,843,340 $ 1,643,500 $ 1,352,780 $ 1,261,681
============ ============ ============ ============ ============
Accrued Fees and Expenses
Due General Partner $ 1,014,337 $ 1,396,997 $ 1,989,657 $ 1,882,317 $ 1,774,978
============ ============ ============ ============ ============
</TABLE>
<PAGE> 7
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS:
LIQUIDITY
The Partnership's primary sources of funds include interest income on money
market accounts and certificates of deposit and distributions from local
partnerships in which the Partnership has invested. It is not expected that
any of the local limited partnerships in which the Partnership has invested
will generate cash flow sufficient to provide for distributions to the
Partnership's limited partners in any material amount.
CAPITAL RESOURCES
REAL received $16,500,000 in subscriptions for units of Limited Partnership
Interests (at $1,000 per unit) during the period October 27, 1978 through
August 31, 1979 pursuant to a registration statement on Form S-11.
RESULTS OF OPERATIONS
The Partnership was formed to provide various benefits to its partners as
discussed in Item 1. It is anticipated that the local limited partnerships in
which REAL has invested could produce tax losses for as long as 20 years. The
Partnership will seek to defer income taxes from a sale by not selling any
projects or project interests within 10 years, except to qualified tenant
cooperatives, or when proceeds of the sale would supply sufficient cash to
enable the partners to pay applicable taxes.
Tax benefits will decline over time as the advantages of accelerated
depreciation are greatest in the earlier years, as deductions for interest
expense decrease as mortgage principal is amortized and as the Tax Reform Act
of 1986 limits the deductions available.
The Partnership accounts for its investments in the local limited partnerships
on the equity method, thereby adjusting its investment balance by its
proportionate share of the income or loss of the local limited partnerships.
The equity in income of limited partnerships is realized from two investee
limited partnerships. All other investee limited partnerships have reduced
their investment balances to zero and as a result thereof, the Partnership does
not recognize equity in losses from those investments.
Distributions received from limited partnerships are recognized as a return of
capital until the investment balance has been reduced to zero or to a negative
amount equal to future capital contributions required. Subsequent
distributions received are recognized as income.
In 1994, the Partnership received a cash distribution from a limited
partnership (Van Nuys Associates) in the amount of $672,626. The distribution
was in part the result of a settlement for rent subsidy payments from prior
periods awarded to a group of property owners (including Van Nuys Associates)
who participated in a lawsuit against the U.S. Department of Housing and Urban
Development ("HUD"). HUD demanded the return of a substantial portion of these
funds based on the 9th Circuit Court's decision to overturn the injunctions
granted against HUD. As a result, the distribution was recorded as a liability
at December 31, 1994. Van Nuys Associates engaged Alexander Consultants Inc.
("ACI") to review the demand by HUD and perform an independent accounting of
the amounts due pursuant to the 9th Circuit Court's decision. Based on ACI's
findings, HUD agreed that the local partnership would be required to pay HUD
only $489,039, over the remaining seven year term of the Housing Assistance
Payments Contract.
Since the Partnership's investment account in Van Nuys Associates has been
reduced to zero and the Partnership is not required to return any of the funds
received, the distribution of $672,626 has been recognized as income in 1995.
<PAGE> 8
The limited partnership which owns Chidester Place Apartments, has executed,
with the Corporate General Partner's consent, an Agreement for Purchase and
Sale of the Chidester Place apartment complex. The pending sale is predicated
on a $4,800,000 purchase offer from a Tennessee Limited Partnership sponsored
by Brencor Capital Funding ("Brencor").
Brencor has obtained preliminary approval from the Ypsilanti Downtown
Development Authority to finance the acquisition of the property with a new
tax-exempt bond issue which will qualify the prospective buyer to receive an
allocation of Low Income Housing Tax Credits. If the sale is completed, it is
anticipated that the Partnership will receive sale proceeds more than
sufficient to return the Partnership's original capital investment and to
offset the projected tax liability associated with the Partnership's
disposition of the property. The Partnership has a zero carrying value for
this investment at December 31, 1995 and 1994.
Except for certificates of deposit and money market funds, the Partnership's
investments are entirely interests in other limited partnerships owning
government assisted projects. Available cash is invested in short-term
investments and cash equivalents, earning interest income as reflected in the
statements of operations. These short-term investments and cash equivalents
can be converted to cash to meet obligations as they arise. The Partnership
intends to continue investing available funds in this manner.
A recurring Partnership expense is the annual management fee. The fee is
payable to the Corporate General Partner of the Partnership and is calculated
as a percentage of the Partnership's invested assets. The management fee
represents the annual recurring fee which is paid to the Corporate General
Partner for its continuing management of Partnership affairs.
Operating expenses, other than management fees of the Partnership, consist
substantially of professional fees for services rendered to the Partnership.
The Partnership, as a Limited Partner in the local limited partnerships in
which it has invested, is subject to the risks incident to the construction,
management, and ownership of improved real estate. The Partnership investments
are also subject to adverse general economic conditions, and accordingly, the
status of the national economy, including substantial unemployment and
concurrent inflation, could increase vacancy levels, rental payment defaults,
and operating expenses, which in turn, could substantially increase the risk of
operating losses for the projects.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:
The Financial Statements and Supplementary Data are listed under Item 14.
ITEM 9. CHANGES WITH AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE:
Not applicable.
<PAGE> 9
REAL ESTATE ASSOCIATES LIMITED
(A California limited partnership)
FINANCIAL STATEMENTS,
FINANCIAL STATEMENT SCHEDULES
AND INDEPENDENT PUBLIC ACCOUNTANTS' REPORT
DECEMBER 31, 1995
<PAGE> 10
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of
Real Estate Associates Limited
(A California limited partnership)
We have audited the accompanying balance sheets of Real Estate Associates
Limited (a California limited partnership) as of December 31, 1995 and 1994,
and the related statements of operations, partners' equity (deficiency) and
cash flows for each of the three years in the period ended December 31, 1995.
Our audits also included the financial statement schedules listed in the index
on item 14. These financial statements and financial statement schedules are
the responsibility of the management of the Partnership. Our responsibility is
to express an opinion on these financial statements and financial statement
schedules based on our audits. We did not audit the financial statements of
certain limited partnerships, the investments in which are reflected in the
accompanying financial statements using the equity method of accounting. The
investments in these limited partnerships represent 1 percent of total assets
as of December 31, 1995, and the equity in income of these limited
partnerships represents 8 percent of the total net income of the Partnership
for the year ended December 31, 1995, and represent a substantial portion of
the investee information in Note 2 and the financial statement schedules. The
financial statements of these limited partnerships are audited by other
auditors. Their reports have been furnished to us and our opinion, insofar as
it relates to the amounts included for these limited partnerships, is based
solely on the reports of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards 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. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe our audits and the reports of other
auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material
respects, the financial position of Real Estate Associates Limited as of
December 31, 1995 and 1994, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1995 in
conformity with generally accepted accounting principles. Also, in our
opinion, based on our audits and the reports of other auditors, such financial
statement schedules, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.
DELOITTE & TOUCHE LLP
Los Angeles, California
March 29, 1996
<PAGE> 11
REAL ESTATE ASSOCIATES LIMITED
(a California limited partnership)
BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
ASSETS
1995 1994
---------- ----------
<S> <C> <C>
INVESTMENTS IN LIMITED PARTNERSHIPS (Note 2) $2,191,335 $1,843,340
CASH AND CASH EQUIVALENTS (Note 1) 250,570 406,711
SHORT TERM INVESTMENTS (Note 1) 125,000 125,000
RECEIVABLES FROM LIMITED
PARTNERSHIPS (Note 2) 148,931 116,625
---------- ----------
TOTAL ASSETS $2,715,836 $2,491,676
========== ==========
LIABILITIES AND PARTNERS' DEFICIENCY
LIABILITIES:
Accounts payable $ 20,036 $ 8,287
Accrued fees and expenses due
general partner (Notes 3 and 6) 1,014,337 1,396,997
Deferred distribution (Note 2) - 672,627
---------- ----------
1,034,373 2,077,911
---------- ----------
COMMITMENTS AND CONTINGENCIES (Notes 3 and 4)
PARTNERS' EQUITY (DEFICIENCY):
General partners (110,255) (122,932)
Limited partners 1,791,718 536,697
---------- ----------
1,681,463 413,765
---------- ----------
TOTAL LIABILITIES AND PARTNERS'
EQUITY (DEFICIENCY) $2,715,836 $2,491,676
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 12
REAL ESTATE ASSOCIATES LIMITED
(a California limited partnership)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
---------- --------- ---------
<S> <C> <C> <C>
INTEREST INCOME $ 20,135 $ 22,596 $ 22,834
---------- --------- ---------
OPERATING EXPENSES:
Legal and accounting 53,400 29,198 53,024
Management fees - general partner (Note 3) 407,340 407,340 407,340
Administrative (Note 3) 49,416 48,136 46,420
---------- --------- ---------
Total operating expenses 510,156 484,674 506,784
---------- --------- ---------
LOSS FROM OPERATIONS (490,021) (462,078) (483,950)
DISTRIBUTIONS FROM LIMITED
PARTNERSHIPS RECOGNIZED AS
INCOME (Note 2) 1,373,243 321,584 590,286
EQUITY IN INCOME OF LIMITED
PARTNERSHIPS AND AMORTIZATION
OF ACQUISITION COSTS (Note 2) 384,476 226,840 317,720
---------- --------- ---------
NET INCOME (LOSS) $1,267,698 $ 86,346 $ 424,056
========== ========= =========
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP INTEREST (Note 1) $ 77 $ 5 $ 25
========== ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 13
REAL ESTATE ASSOCIATES LIMITED
(a California limited partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
-------- -------- ----------
<S> <C> <C> <C>
EQUITY (DEFICIENCY),
January 1, 1993 $(128,035) $ 31,398 $ (96,637)
Net income for 1993 4,240 419,816 424,056
--------- ---------- ----------
EQUITY (DEFICIENCY),
December 31, 1993 (123,795) 451,214 327,419
Net income for 1994 863 85,483 86,346
--------- ---------- ----------
EQUITY (DEFICIENCY),
December 31, 1994 (122,932) 536,697 413,765
Net income for 1995 12,677 1,255,021 1,267,698
--------- ---------- ----------
EQUITY (DEFICIENCY),
December 31, 1995 $(110,255) $1,791,718 $1,681,463
========= ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 14
REAL ESTATE ASSOCIATES LIMITED
(a California limited partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $1,267,698 $ 86,346 $ 424,056
Adjustments to reconcile net income (loss) to
net cash provided by (used in)
operating activities:
Equity in income of limited partnerships
and amortization of acquisition costs (384,476) (226,840) (317,720)
Increase (decrease) in accrued fees and
expenses due general partner (382,660) (592,660) 107,340
Increase (decrease) in accounts payable 11,749 7,110 (3,727)
Increase (decrease) in deferred distributions (672,627) 672,627 -
Increase in receivables from limited
partnership (32,306) (13,626) -
---------- --------- ---------
Net cash provided by (used in)
operating activities (192,622) (67,043) 209,949
---------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in short term investments -- (125,000) -
Distributions from limited partnership
recognized as return of capital 36,481 27,000 27,000
---------- --------- ---------
Net cash provided by (used in) investing
activities 36,481 (98,000) 27,000
---------- --------- ---------
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS (156,141) (165,043) 236,949
CASH AND CASH EQUIVALENTS, beginning of year 406,711 571,754 334,805
---------- --------- ---------
CASH AND CASH EQUIVALENTS, end of year $ 250,570 $ 406,711 $ 571,754
========== ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 15
REAL ESTATE ASSOCIATES LIMITED
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Real Estate Associates Limited (the "Partnership") was
formed under the California Limited Partnership Act on
September 15, 1977. The Partnership was formed to
invest in other limited partnerships which own and
operate primarily federal, state and local
government-assisted housing projects. The general
partners are National Partnership Investments Corp.
(NAPICO), the corporate general partner, and Charles H.
Boxenbaum, an officer of NAPICO. Casden Investment
Corporation owns 100 percent of NAPICO'S stock.
The Partnership issued 16,505 units of limited
partnership interests through a public offering. The
general partners have a 1 percent interest in the
profits and losses of the Partnership. The limited
partners have the remaining 99 percent interest which
is allocated in proportion to their respective
individual investments.
The Partnership shall be dissolved only upon the
expiration of 53 complete calendar years (December 31,
2031) from the date of the formation of the Partnership
or the occurrence of various other events as specified
in the terms of the Partnership agreement.
Upon total or partial liquidation of the Partnership or
the disposition or partial disposition of a project or
project interest and distribution of the proceeds, the
general partners will be entitled to a liquidation fee
as stipulated in the Partnership agreement. The
limited partners will have a priority return equal to
their invested capital attributable to the project(s)
or project interest(s) sold and shall have received an
amount from the sale of the project(s) or project
interest(s) sufficient to pay state and federal income
taxes, if any, calculated at the maximum rate then in
effect. The general partners' liquidation fee may
accrue but shall not be paid until the limited partners
have received distributions equal to 100 percent of
their capital contributions.
Use of Estimates
The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that
affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at
the date of the financial statements and reported
amounts of revenues and expenses during the reporting
period. Actual results could differ from those
estimates.
Method of Accounting for Investments in Limited Partnerships
The investments in limited partnerships are accounted
for on the equity method. Acquisition, selection and
other costs related to the acquisition of the projects
are capitalized to the investment account and are being
amortized on a straight line basis over the estimated
lives of the underlying assets, which is generally 30
years.
5
<PAGE> 16
REAL ESTATE ASSOCIATES LIMITED
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Net Income Per Limited Partnership Interest
Net income per limited partnership interest was
computed by dividing the limited partners' share of net
income by the number of limited partnership interests
outstanding during the year. The number of limited
partnership interests was 16,505 for all years
presented.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash and bank
certificates of deposit with an original maturity of
three months or less.
Short Term Investments
Short term investments consist of bank certificates of
deposit with original maturities ranging from more than
three months to twelve months. The fair value of these
securities, which have been classified as held for
sale, approximates their carrying value.
2. INVESTMENTS IN LIMITED PARTNERSHIPS
The Partnership holds limited partnership interests in
18 limited partnerships. The limited partnerships own
residential low income rental projects consisting of
1,969 apartment units. The mortgage loans of these
projects are payable to or insured by various
governmental agencies.
The Partnership, as a limited partner, is entitled to
between 50 percent and 99 percent of the profits and
losses in the limited partnerships.
Equity in losses of limited partnerships are recognized
in the financial statements until the limited
partnership investment account is reduced to a zero
balance. Losses incurred after the limited partnership
investment account is reduced to zero are not
recognized. The cumulative amount of the unrecognized
equity in losses of certain limited partnerships was
approximately $12,403,000 and $12,396,000 as of
December 31, 1995 and 1994, respectively.
Distributions from the limited partnerships are
accounted for as a return of capital until the
investment balance is reduced to zero. Subsequent
distributions received are recognized as income.
In 1994, the Partnership received a cash distribution
from a limited partnership (Van Nuys Associates) in the
amount of $672,626. The distribution was in part the
result of a settlement for rent subsidy payments from
prior periods awarded to a group of property owners
(including Van Nuys Associates) who participated in a
lawsuit against the U.S. Department of Housing and
Urban Development ("HUD"). HUD demanded the return of
a substantial portion of these funds based on the 9th
Circuit Court's
6
<PAGE> 17
REAL ESTATE ASSOCIATES LIMITED
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
decision to overturn the injunctions granted against
HUD. As a result, the distribution was recorded as a
liability at December 31, 1994. Van Nuys Associates
engaged Alexander Consultants Inc. ("ACI") to review
the demand by HUD and perform an independent accounting
of the amounts due pursuant to the 9th Circuit Court's
decision. Based on ACI's findings, HUD agreed that
the local partnership would be required to pay HUD only
$489,039, by reducing the monthly rental assistance
receipts from HUD over the remaining seven year term of
the Housing Assistance Payments Contract. Since the
Partnership's investment account in Van Nuys Associates
has been reduced to zero and the Partnership is not
required to return any of the funds received, the
distribuiton of $672,626 has been recognized as income
in 1995.
The limited partnership which owns Chidester Place
Apartments, has executed, with NAPICO's consent, an
Agreement for Purchase and Sale of the Chidester Place
apartment complex. The pending sale is predicated on a
$4,800,000 purchase offer from a Tennessee Limited
Partnership sponsored by Brencor Capital Funding
("Brencor").
Brencor has obtained preliminary approval from the
Ypsilanti Downtown Development Authority to finance the
acquisition of the property with a new tax-exempt bond
issue which will qualify the prospective buyer to
receive an allocation of Low Income Housing Tax
Credits. If the sale is completed, it is anticipated
that the Partnership will receive sale proceeds more
than sufficient to return the Partnership's original
capital investment and to offset the projected tax
liability associated with the Partnership's disposition
of the property. The Partnership has a zero carrying
value for this investment at December 31, 1995 and
1994.
The following is a summary of the investments in
limited partnerships and reconciliation to the limited
partnership accounts:
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Investment balance, beginning of year $1,843,340 $1,643,500
Equity in income of limited partnerships 387,262 229,626
Amortization of capitalized acquisition costs and fees (2,786) (2,786)
Cash distributions recognized as return of capital (36,481) (27,000)
----------- ------------
Investment balance, end of year $2,191,335 $1,843,340
========== ==========
</TABLE>
The difference between the investment per the
accompanying balance sheets at December 31, 1995 and
1994, and the deficiency per the limited partnerships'
combined financial statements is due primarily to
cumulative unrecognized equity in losses of certain
limited partnerships, costs capitalized to the
investment account and cumulative distributions
recognized as income.
7
<PAGE> 18
REAL ESTATE ASSOCIATES LIMITED
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
Selected financial information from the combined
financial statements of the limited partnerships at
December 31, 1995 and 1994 and for each of three years
in the period ended December 31, 1995 is as follows:
Balance Sheets
<TABLE>
<CAPTION>
1995 1994
--------- ---------
(in thousands)
<S> <C> <C>
Land and buildings, net $ 36,863 $ 38,599
======== =========
Total assets $ 50,498 $ 51,675
======== =========
Mortgages payable $ 64,896 $ 66,145
======== =========
Total liabilities $ 69,877 $ 70,467
======== =========
Deficiency of Real Estate Associates Limited $(15,662) $(15,304)
======== ========
Deficiency of other partners $ (3,717) $ (3,488)
======== ========
</TABLE>
Statements of Operations
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
(in thousands)
<S> <C> <C> <C>
Total revenues $ 16,566 $ 16,783 $ 16,896
======== ======== ========
Interest expense $ 4,774 $ 5,009 $ 5,302
======== ======== ========
Depreciation and amortization $ 2,679 $ 2,725 $ 2,746
======== ======== ========
Total expenses $ 16,246 $ 16,241 $ 16,196
======== ======== ========
Net income $ 320 $ 542 $ 700
======== ======== ========
Net income allocable to the Partnership $ 380 $ 503 $ 677
======== ======== ========
</TABLE>
8
<PAGE> 19
REAL ESTATE ASSOCIATES LIMITED
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
NAPICO, or one of its affiliates, is the general partner in five of the
limited partnerships included above, and another affiliate receives
property management fees of approximately 5 to 6 percent of the revenue
from three of these partnerships. The affiliate received property
management fees of $215,133, $195,590 and $185,771 in 1995, 1994 and
1993, respectively. The following sets forth significant data for the
partnerships, in which an affiliate of NAPICO was the general partner,
reflected in the accompanying financial statements using the equity
method of accounting:
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ---------
(in thousands)
<S> <C> <C> <C>
Total assets $ 17,959 $ 18,790
======== ========
Total liabilities $ 25,669 $ 25,331
======== ========
Deficiency of Real Estate Associates Limited $ (7,401) $ (6,403)
======== ========
Deficiency of other partners $ (309) $ (138)
======== ========
Total revenue $ 3,922 $ 4,408 $ 4,599
======== ======== =======
Net loss $ (768) $ (272) $ (52)
======== ======== =======
</TABLE>
In certain cases, the Partnership is making loans to fund deficits at
the limited partnerships.
3. FEES AND EXPENSES DUE GENERAL PARTNER
Under the terms of the Restated Certificate and Agreement of Limited
Partnership, the Partnership is obligated to NAPICO for an annual
management fee equal to .5 percent of the original invested assets of
the limited partnerships. Invested assets is defined as the costs of
acquiring project interests, including the proportionate amount of the
mortgage loans related to the Partnership's interest in the capital
accounts of the respective partnerships.
As of December 31, 1995, the fees and expenses due NAPICO exceeded the
Partnership's cash. NAPICO, during the forthcoming year, will not
demand payment of amounts due in excess of such cash or such that the
Partnership would not have sufficient operating cash.
The Partnership reimburses NAPICO for certain expenses. The
reimbursement to NAPICO was $20,617, $19,871 and $19,804 in 1995, 1994
and 1993, respectively, and is included in operating expenses.
9
<PAGE> 20
REAL ESTATE ASSOCIATES LIMITED
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
4. CONTINGENCIES
The corporate general partner of the Partnership is a plaintiff in
various lawsuits and has also been named a defendant in other lawsuits
arising from transactions in the ordinary course of business. In the
opinion of management and the corporate general partner, the claims will
not result in any material liability to the Partnership.
5. INCOME TAXES
No provision has been made for income taxes in the accompanying
financial statements since such taxes, if any, are the liability of the
individual partners. The major differences in tax and financial
reporting result from the use of different bases and depreciation
methods for the properties held by the limited partnerships.
Differences in tax and financial reporting also arise as losses are not
recognized for financial reporting purposes when the investment balance
has been reduced to zero.
6. FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosure about
Fair Value of Financial Instruments," requires disclosure of fair value
information about financial instruments, when it is practicable to
estimate that value. The operations generated by the investee limited
partnerships, which account for the Partnership's primary source of
revenues, are subject to various government rules, regulations and
restrictions which make it impracticable to estimate the fair value of
accrued fees and expenses due general partner. The carrying amount of
other assets and liabilities reported on the balance sheets that require
such disclosure approximates fair value due to their short-term
maturity.
7. FOURTH QUARTER ADJUSTMENT
The Partnership's policy is to record its equity in the income of
limited partnerships on a quarterly basis, using estimated financial
information furnished by the various local operating general partners.
The equity in income of limited partnerships reflected in the
accompanying annual financial statements is based primarily upon audited
financial statements of the investee limited partnerships. The
increase, approximately $210,000, between the estimated nine-month
equity in income and the actual 1995 year end equity in income has been
recorded in the fourth quarter.
10
<PAGE> 21
SCHEDULE
REAL ESTATE ASSOCIATES LIMITED
INVESTMENT IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
Year Ended December 31, 1995
---------------------------------------------------------------
Cash
Balance Capital Distri- Equity Balance
January Contri- butions in December
Limited Partnerships 1, 1995 butions Received Income/(Loss) 31, 1995
- -------------------- ------- ------- -------- ------------- --------
<S> <C> <C> <C> <C> <C>
Bedford House, Ltd. $ $ $ $ $
Belleville Manor Apts. Ltd.
Bernroe, Ltd. (Wedgewood)
Bethel Towers, Ltd.
Cherry Hill, Ltd.
Dividend Housing Assn. 1,843,340 (27,000) 203,080 2,019,420
Chidester Place, Ltd.
Dividend Housing Assn.
Clinton Apts., Ltd.
East Central Towers
Associates
Emporia Ltd. (Northwood) (9,481) 181,396 171,915
Gadsden Towers, Ltd.
LaLoma Assoc., Ltd.
Parkview Assoc.,
Pennsylvania Assoc.
(Norristown)
Riverside Towers Assoc.
Roebern, Ltd.
(Ridgeview)
Van Nuys Assoc.
West Lafayette, Ltd.
Williamson Towers, Ltd.
---------- ----------- ---------- -------- ----------
$1,843,340 $ - $ (36,481) $384,476 $2,191,335
========== =========== ========== ======== ==========
</TABLE>
<PAGE> 22
SCHEDULE (CONTINUED)
REAL ESTATE ASSOCIATES LIMITED
INVESTMENT IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
Year Ended December 31, 1994
---------------------------------------------------------------------------
Cash
Balance Capital Distri- Equity Balance
January Contri- butions in December
Limited Partnerships 1, 1994 butions Received Income/(Loss) 31, 1994
- -------------------- ------- --------- -------- ------------- --------
<S> <C> <C> <C> <C> <C>
Bedford House, Ltd. $ $ $ $ $
Belleville Manor Apts. Ltd.
Bernroe, Ltd. (Wedgewood)
Bethel Towers, Ltd.
Cherry Hill, Ltd.
Dividend Housing Assn. 1,643,500 (27,000) 226,840 1,843,340
Chidester Place, Ltd.
Dividend Housing Assn.
Clinton Apts., Ltd.
East Central Towers
Associates
Emporia Ltd. (Northwood)
Gadsden Towers, Ltd.
LaLoma Assoc., Ltd.
Parkview Assoc.,
Pennsylvania Assoc.
(Norristown)
Riverside Towers Assoc.
Roebern, Ltd.
(Ridgeview)
Van Nuys Assoc.
West Lafayette, Ltd.
Williamson Towers, Ltd.
---------- ----------- ---------- -------- ----------
$1,643,500 $ - $ (27,000) $226,840 $1,843,340
========== =========== ========== ======== ==========
</TABLE>
<PAGE> 23
SCHEDULE
(CONTINUED)
REAL ESTATE ASSOCIATES LIMITED
INVESTMENT IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
Year Ended December 31, 1993
---------------------------------------------------------------------------
Cash
Balance Capital Distri- Equity Balance
January Contri- butions in December
Limited Partnerships 1, 1993 butions Received Income/(Loss) 31, 1993
- -------------------- ------- ------- -------- ------------- --------
<S> <C> <C> <C> <C> <C>
Bedford House, Ltd. $ $ $ $ $
Belleville Manor Apts. Ltd.
Bernroe, Ltd. (Wedgewood)
Bethel Towers, Ltd.
Cherry Hill, Ltd.
Dividend Housing Assn. 1,352,780 (27,000) 317,720 1,643,500
Chidester Place, Ltd.
Dividend Housing Assn.
Clinton Apts., Ltd.
East Central Towers
Associates
Emporia Ltd. (Northwood)
Gadsden Towers, Ltd.
LaLoma Assoc., Ltd.
Parkview Assoc.,
Pennsylvania Assoc.
(Norristown)
Riverside Towers Assoc.
Roebern, Ltd.
(Ridgeview)
Van Nuys Assoc.
West Lafayette, Ltd.
Williamson Towers, Ltd.
---------- ----------- -------- ---------- ----------
$1,352,780 $ - $(27,000) $ 317,720 $1,643,500
========== =========== ======== ========== ==========
</TABLE>
<PAGE> 24
SCHEDULE
(Continued)
REAL ESTATE ASSOCIATES LIMITED
INVESTMENT IN, EQUITY IN EARNINGS OF, AND DIVIDENDS RECEIVED
FROM AFFILIATES AND OTHER PERSONS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
NOTES: 1. Equity in income (losses) of the limited
partnerships represents the Partnership's allocable
share of the net results of operations from the
limited partnerships for the year. Equity in
losses of the limited partnerships will be
recognized until the investment balance is reduced
to zero or a negative balance equal to further
commitments by the Partnership.
2. Cash distributions from the limited partnerships
are treated as a return of the investment and
reduce the investment balance until such time as
the investment is reduced to zero or a negative
balance equal to further commitments by the
Partnership. Distributions subsequently received
are recognized as income.
<PAGE> 25
SCHEDULE III
REAL ESTATE ASSOCIATES LIMITED
REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL HAS INVESTMENTS
DECEMBER 31, 1994
<TABLE>
<CAPTION>
Buildings, Furnishings
& Equipment - Initial
Cost to Partnership
Number Outstanding and Amount Carried
of Mortgage at Close of Accumulated Construction
Partnership/Location Units Loan Land Year Total Depreciation Period
- -------------------- ------ ----------- ---- --------------------- ----- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
The Bedford House, Ltd. 48 $ 1,142,439 $ 22,055 $ 1,263,745 $ 1,285,800 $ 840,019 1978-1979
Pendleton Co, KY
Belleville Manor, Ltd. 32 587,187 - 707,931 707,931 393,704 1978-1979
Benton, KY
Bethel Towers, Ltd. 146 3,399,034 67,400 4,085,867 4,153,267 2,796,055 (A)
Detroit, MI
Cherry Hill, Ltd. 186 5,425,589 377,122 7,460,638 7,837,760 3,874,524 1978-1980
Dividend Housing Assn.
Southfield, MI
Chidester Place, Ltd. 151 3,725,000 180,130 4,496,418 4,676,548 2,827,534 1979-1980
Ypsilanti, MI
Clinton Apts. Ltd. 32 408,030 - 644,894 644,894 481,799 1977-1980
Calvert City, KY
East Central Twrs. Ass. 166 4,023,375 37,600 4,839,631 4,877,231 2,483,373 1979-1980
Fort Wayne, IN
Gadsden Towers, Ltd. 101 2,139,791 51,700 3,008,908 3,060,608 2,455,651 1978-1980
Knoxville, TN
Pennsylvania Assoc. 175 5,719,874 279,400 7,887,361 8,166,761 5,421,564 1978-1980
(Norristown)
Montgomery Co., PA
Emporia, Ltd. (Northwood) 72 1,358,080 39,500 2,327,220 2,366,720 1,674,646 1978-1980
Greensville Co., VA
Parkview Assoc., Ltd. 97 3,321,210 424,196 3,433,461 3,857,657 2,547,781 1979-1980
Sacramento, CA
Roebern, Ltd. (Ridgeview) 32 699,599 26,000 1,005,309 1,031,309 764,560 1978-1979
Columbus, OH
LaLoma Assoc., Ltd 75 2,399,315 226,729 2,542,497 2,769,226 1,868,678 1979-1980
Sacramento, CA
Riverside Towers, Assoc. 200 7,713,394 230,264 10,200,449 10,430,713 6,719,479 1979-1980
Medford, MA
Van Nuys Assoc. 299 18,599,579 700,000 23,375,878 24,075,878 10,217,023 1980-1983
Los Angeles, CA
Bernroe, Ltd. (Wedgewood) 32 688,089 45,000 1,035,966 1,080,966 794,953 1978-1979
Columbus, OH
West Lafayette, Ltd. 49 980,098 35,000 1,255,470 1,290,470 906,156 1979-1980
West Lafayette, OH
Williamson Towers, Ltd. 76 2,565,932 - 3,177,605 3,177,605 1,560,421 1979-1981
Minroe Co., WV
----- ----------- ---------- ----------- ----------- -----------
TOTAL 1,969 $64,895,615 $2,742,096 $82,749,248 $85,491,344 $48,627,920
===== =========== ========== =========== =========== ===========
</TABLE>
(A) This project was complete when REAL entered the Partnership.
<PAGE> 26
SCHEDULE III
(Continued)
REAL ESTATE ASSOCIATES LIMITED
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL HAS INVESTMENTS
DECEMBER 31, 1995
NOTES: 1. Each local limited partnership has developed, owns and
operates the housing project. Substantially all project
costs, including construction period interest expense, were
capitalized by the limited partnerships.
2. Depreciation is provided for by various methods over the
estimated useful lives of the Projects. The estimated
composite useful lives of the buildings are from 25 to 40
years.
3. Investments in property and equipment:
<TABLE>
<CAPTION>
Buildings,
Furnishings
And
Land Equipment Total
------ ----------- -------
<S> <C> <C> <C>
Balance at January 1, 1993 $2,665,199 $81,412,533 $84,077,732
Net additions (deletions) during 1993 45,601 (121,025) (75,424)
---------- ----------- -----------
Balance at December 31, 1993 2,710,800 81,291,508 84,002,308
Net additions during 1994 8,813 604,200 613,013
---------- ----------- -----------
Balance at December 31, 1994 2,719,613 81,895,708 84,615,321
Net additions during 1995 22,483 853,540 876,023
---------- ----------- -----------
Balance at December 31, 1995 $2,742,096 $82,749,248 $85,491,344
========== =========== ===========
</TABLE>
<PAGE> 27
SCHEDULE III
(Continued)
REAL ESTATE ASSOCIATES LIMITED
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL HAS INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Buildings,
Furnishings
And
Equipment
-----------
Accumulated Depreciation:
- -------------------------
<S> <C>
Balance at January 1, 1993 $41,228,303
Net additions during 1993 2,122,636
-----------
Balance at December 31, 1993 43,350,939
Net additions during 1994 2,665,494
-----------
Balance at December 31, 1994 46,016,433
Net additions during 1995 2,611,487
-----------
Balance at December 31, 1995 $48,627,920
===========
</TABLE>
<PAGE> 28
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:
REAL ESTATE ASSOCIATES LIMITED (the "Partnership") has no directors or
executive officers of its own.
National Partnership Investment Corp. ("NAPICO" or "the Managing General
Partner") is a wholly-owned subsidiary of Casden Investment Corporation, an
affiliate of The Casden Company. The following biographical information is
presented for the directors and executive officers of NAPICO with principal
responsibility for the Partnership's affairs.
CHARLES H. BOXENBAUM, 66, Chairman of the Board of Directors and Chief
Executive Officer of NAPICO.
Mr. Boxenbaum has been associated with NAPICO since its inception. He has been
active in the real estate industry since 1960, and prior to joining NAPICO was
a real estate broker with the Beverly Hills firm of Carl Rhodes Company.
Mr. Boxenbaum has been a guest lecturer at national and state realty
conventions, certified properties exchanger's seminars, Los Angeles Town Hall,
National Association of Home Builders, International Council of Shopping
Centers, Society of Conventional Appraisers, California Real Estate
Association, National Institute of Real Estate Brokers, Appraisal Institute,
various mortgage banking seminars, and the North American Property Forum held
in London, England. In 1963, he was the winner of the Snyder Award, the
highest annual award offered by the National Association of Real Estate Boards
for Best Exchange. He is one of the founders and a past director of the First
Los Angeles Bank, organized in November 1974. Mr. Boxenbaum was a member of
the Board of Directors of the National Housing Council. Mr. Boxenbaum received
his Bachelor of Arts degree from the University of Chicago.
BRUCE E. NELSON, 44, President and a director of NAPICO.
Mr. Nelson joined NAPICO in 1980 and became President in February 1989. He is
responsible for the operations of all NAPICO sponsored limited partnerships.
Prior to that he was primarily responsible for the securities aspects of the
publicly offered real estate investment programs. Mr. Nelson is also involved
in the identification, analysis, and negotiation of real estate investments.
From February 1979 to October 1980, Mr. Nelson held the position of Associate
General Counsel at Western Consulting Group, Inc., private residential and
commercial real estate syndicators. Prior to that time, Mr. Nelson was engaged
in the private practice of law in Los Angeles. Mr. Nelson received his
Bachelor of Arts degree from the University of Wisconsin and is a graduate of
the University of Colorado School of Law. He is a member of the State Bar of
California and is a licensed real estate broker in California and Texas.
ALAN I. CASDEN, 50, Chairman of The Casden Company, an affiliate of Casden
Properties (formerly CoastFed Properties), a director and member of the audit
committee of NAPICO, and chairman of the Executive Committee of NAPICO.
Mr. Casden is Chairman of the Board, Chief Executive Officer and sole
shareholder of The Casden Company and Casden Investment Company. Prior to
that, he was the president and chairman of Mayer Group, Inc., which he joined
in 1975. He is also chairman of Mayer Management, Inc., a real estate
management firm. Mr. Casden has been involved in approximately $3 billion of
real estate financings and sales and has been responsible for the development
and construction of more than 12,000 apartment units and 5,000 single-family
homes and condominiums.
<PAGE> 29
Mr. Casden is a member of the American Institute of Certified Public
Accountants and of the California Society of Certified Public Accountants. Mr.
Casden is a member of the advisory board of the National Multi-Family Housing
Conference, the Multi-Family Housing Council, and the President's Council of
the California Building Industry Association. He also serves on the advisory
board to the School of Accounting of the University of Southern California. He
holds a Bachelor of Science degree and a Masters in Business Administration
degree from the University of Southern California.
HENRY C. CASDEN, 52, President, Chief Operating Officer and Secretary of The
Casden Company and a director and secretary of NAPICO.
Mr. Casden has been President and Chief Operating Officer of The Casden
Company, as well as a director of NAPICO since February 1988. He became
secretary of both companies in late 1994. From 1982 to 1988, Mr. Casden was of
counsel and a partner in the Los Angeles law firm of Troy, Casden & Gould.
From 1978 to 1981, he was of counsel and a partner in the Los Angeles law firm
of Loeb & Loeb. From 1972 to 1978, Mr. Casden was a member of the Beverly
Hills law firm of Fink & Casden, Professional Corporation.
Mr. Casden received his Bachelor of Arts degree from the University of
California at Los Angeles, and is a graduate of the University of San Diego Law
School. Mr. Casden is a member of the State Bar of California and has numerous
professional affiliations.
BRIAN D. GOLDBERG, 32, Chief Financial Officer of The Casden Company and a
director of NAPICO.
Mr. Goldberg joined The Casden Company in 1990 as Vice President of Finance and
became Chief Financial Officer in March 1991. Prior to joining The Casden
Company, Mr. Goldberg was with Arthur Andersen & Co., an international public
accounting firm, from August 1985 until July 1990 in their Los Angeles office.
He received his bachelor of science degree in Accounting from the University of
Denver. Mr. Goldberg is a member of the American Institute of Certified Public
Accountants and the California Society of Certified Public Accountants.
SHAWN HORWITZ, 36, Executive Vice President and Chief Financial Officer.
Mr. Horwitz joined NAPICO in 1990 and is responsible for the financial affairs
of NAPICO and the limited partnerships sponsored by NAPICO. Prior to joining
NAPICO, Mr. Horwitz was President for approximately one year of Star Sub Shops,
Inc., a corporation engaged in the business of selling fast food franchises,
was an audit manager in the real estate industry group for Altschuler, Melvin &
Glasser for six years, and was an auditor with Arthur Young & Co. for 3 years.
Mr. Horwitz received his Bachelor of Commerce degree in accounting from Rhodes
University in South Africa and is a member of the Illinois Society of Certified
Public Accountants, the American Institute of Certified Public Accountants and
the South African Institute of Chartered Accountants.
BOB SCHAFER, 54, Vice President and Corporate Controller.
Mr. Schafer joined NAPICO in 1984 and is the Corporate Controller responsible
for the financial reporting function of the Company. Prior to this, he was a
Group and Division Controller at Bergen Brunswig for over eight years,
Controller at a Flintkote subsidiary for over four years, and Assistant
Controller at an electronics subsidiary of General Electric for two years.
Mr. Schafer is a member of the California Society of Certified Public
Accountants. He holds a Bachelor of Science degree in accounting from Woodbury
University, Los Angeles.
<PAGE> 30
PATRICIA W. TOY, 66, Senior Vice President - Communications and Assistant
Secretary.
Mrs. Toy joined NAPICO in 1977, following her receipt of an MBA from the
Graduate School of Management, UCLA. From 1952 to 1956, Mrs. Toy served as a
U.S. Naval Officer in communications and personnel assignments. She holds a
Bachelor of Arts Degree from the University of Nebraska.
MARK L. WALTHER, 35, Executive Vice President, General Counsel and Assistant
Secretary.
Mr. Walther joined NAPICO in 1987 and is responsible for the legal affairs of
the NAPICO sponsored limited partnerships. Prior to joining NAPICO, Mr.
Walther worked in the San Francisco law firm of Browne and Kahn which
specialized in construction litigation. Mr. Walther received his Bachelor of
Arts Degree in Political Science from the University of California, Santa
Barbara and is a graduate of the University of California, Davis, School of
Law. He is a member of the State Bar of Hawaii.
<PAGE> 31
ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS:
Real Estate Associates Limited has no officers, employees, or directors.
However, under the terms of the Restated Certificate and Agreement of Limited
Partnership, the Partnership is obligated to pay the Corporate General Partner
an annual management fee. The annual management fee is approximately equal to
.5 percent of the invested assets, including the Partnership's allocable share
of the mortgages related to real estate properties held by local limited
partnerships. The fee is earned beginning in the month the Partnership makes
its initial contribution to the limited partnership. In addition, the
Partnership reimburses the Corporate General Partner for certain expenses.
An affiliate of the Corporate General Partner is responsible for the on-site
property management for certian properties owned by the limited partnerships in
which the Partnership has invested.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT:
(a) Security Ownership of Certain Beneficial Owners
The general partners own all of the outstanding general partnership
interests of REAL; no person is known to own beneficially in excess
of 5 percent of the outstanding limited partnership interests.
(b) None of the officers or directors of the Corporate General Partner own
directly or beneficially any limited partnership interests in REAL.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:
The Partnership has no officers, directors, or employees of its own. All of
its affairs are managed by the Corporate General Partner, National Partnership
Investments Corp. The transactions with the Corporate General Partner are
primarily in the form of fees paid by the Partnership to the general partner
for services rendered to the Partnership, as discussed in Item 11 and in the
notes to the accompanying financial statements.
<PAGE> 32
PART IV.
ITEM 14. FINANCIAL STATEMENTS, SCHEDULES, EXHIBITS AND REPORTS ON FORM
8-K:
FINANCIAL STATEMENTS
Report of Independent Public Accountants.
Balance Sheets as of December 31, 1995 and 1994.
Statements of Operations for the years ended December 31, 1995, 1994 and 1993.
Statements of Partners' Equity (Deficiency) for the years ended December 31,
1995, 1994 and 1993.
Statements of Cash Flows for the years ended December 31, 1995, 1994 and 1993.
Notes to Financial Statements.
FINANCIAL STATEMENT SCHEDULES
APPLICABLE TO REAL ESTATE ASSOCIATES LIMITED AND THE LIMITED PARTNERSHIPS IN
WHICH REAL ESTATE ASSOCIATES LIMITED HAS INVESTMENTS:
Schedule - Investments in Limited Partnerships, December 31, 1995, 1994 and
1993.
Schedule III - Real estate and accumulated depreciation, December 31, 1995.
The remaining schedules are omitted because the required information is
included in the financial statements and notes thereto as they are not
applicable or not required.
EXHIBITS
(3) Articles of incorporation and bylaws: The registrant is not
incorporated. The Partnership Agreement was filed with Form S-11
Registration # 260561 incorporated herein by reference.
(10) Material contracts: The registrant is not party to any material
contracts, other than the Restated Certificate and Agreement of
Limited Partnership dated September 15, 1979 previously filed and
which is hereby incorporated by reference.
(13) Annual report to security holders: Pages __ to __.
REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the year ended December 31, 1995.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
PARTNERSHIP'S STATEMENTS OF EARNINGS AND BALANCE SHEETS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
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0
0
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</TABLE>
