SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________
FORM 10-Q
(Mark One)
_X_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter period ended August 31, 1999
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OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from To
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Commission file number 0-10287
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NOONEY REAL PROPERTY INVESTORS-TWO, L.P.
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(Exact name of Registrant as specified in its charter)
Missouri 43-1182535
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Memorial Drive, Suite 1000, St. Louis, MO 63102-2449
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 206-4600
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500 N. Broadway, Suite 1200, St. Louis, MO 63102
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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 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 ___
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12,13, or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes___ No ___
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding
of each of the issuer's classes of common stock, as of the latest practicable
date _______.
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PART I
ITEM 1 - FINANCIAL STATEMENTS:
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NOONEY REAL PROPERTY INVESTORS-TWO, L.P.
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(A LIMITED PARTNERSHIP)
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BALANCE SHEETS
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August 31, November 30,
1999 1998
(Unaudited)
----------- ------------
ASSETS:
Cash and cash equivalents $ 324,275 $ 486,156
Accounts receivable 125,942 119,039
Prepaid expenses and deposits 95,334 55,880
Investment property
Land 1,886,042 1,886,042
Buildings and improvements 14,187,934 14,137,031
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16,073,976 16,023,073
Less accumulated depreciation 9,527,219 9,189,847
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6,546,757 6,833,226
Deferred expenses-At amortized cost 27,488 80,303
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$ 7,119,796 $ 7,574,604
============ ============
LIABILITIES AND PARTNERS' DEFICIT:
Liabilities:
Accounts payable and accrued expenses $ 456,280 $ 518,876
Mortgage notes payable 6,915,722 7,236,825
Refundable tenant deposits 97,717 80,086
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7,469,719 7,835,787
Partners' Deficit (349,923) (261,183)
------------ ------------
$ 7,119,796 $ 7,574,604
============ ============
SEE NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
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NOONEY REAL PROPERTY INVESTORS-TWO, L.P.
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(A LIMITED PARTNERSHIP)
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STATEMENTS OF OPERATIONS AND PARTNERS' DEFICIT
----------------------------------------------
(UNAUDITED)
-----------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
Aug. 31, Aug. 31, Aug. 31, Aug. 31,
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
REVENUES:
Rental and other income $ 542,361 $ 470,709 $ 1,623,040 $ 1,931,072
Interest 15 553 33 4,964
----------- ----------- ----------- -----------
542,376 471,262 1,623,073 1,936,036
EXPENSES:
Interest 164,680 175,353 500,688 517,155
Depreciation and amortization 122,962 124,854 366,823 413,493
Real estate taxes 90,500 98,250 271,588 293,536
Property management fees paid to
American Spectrum Midwest 26,733 23,913 79,353 97,471
Reimbursement to American Spectrum Midwest
for partnership management
services and indirect expenses 7,500 7,500 22,500 22,500
Insurance 16,613 10,775 38,999 34,974
Parking Lot 18,140 18,526 54,013 40,584
Repairs & Maintenance 10,372 8,288 42,714 58,981
Office - General 10,134 9,471 35,779 27,879
Payroll 23,214 23,940 68,390 64,503
Professional Services 62,387 18,767 108,811 45,892
Vacancy Expense 6,416 95,084 40,990 203,963
Other operating expenses (512) 10,985 81,163 62,381
----------- ----------- ----------- -----------
559,139 625,706 1,711,811 1,883,312
----------- ----------- ----------- -----------
NET (LOSS) INCOME $ (16,763) $ (154,444) $ (88,740) $ 52,724
=========== =========== =========== ===========
NET (LOSS) INCOME PER LIMITED
PARTNERSHIP UNIT $ (1.38) $ (12.74) $ (7.32) $ 4.35
=========== =========== =========== ===========
PARTNERS' EQUITY (DEFICIT):
Beginning of Period $ (333,160) $ 5,410 $ (261,183) $ (201,758)
Net (Loss) Income (16,763) (154,444) (88,740) 52,724
----------- ----------- ----------- -----------
End of Period $ (349,923) $ (149,034) $ (349,923) $ (149,034)
=========== =========== =========== ===========
</TABLE>
SEE NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
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NOONEY REAL PROPERTY INVESTORS-TWO, L.P.
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(A LIMITED PARTNERSHIP)
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STATEMENTS OF CASH FLOWS
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(UNAUDITED)
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Nine Months Ended
Aug. 31, Aug. 31,
1999 1998
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss) Income $ (88,740) $ 52,724
Adjustments to reconcile net (loss) income to
net cash provided by operating activities:
Depreciation and amortization 366,823 413,493
Changes in assets and liabilities:
(Increase) Decrease in accounts receivable (6,903) 36,345
Increase in prepaid expenses and deposits (39,454) (133,702)
Decrease (Increase) in deferred expenses 25,559 (6,502)
Increase in refundable tenant deposits 17,631 3,159
(Decrease) Increase in accounts payable
and Accrued expenses (62,596) 82,628
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Total Adjustments 301,060 395,421
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Net cash from operating activities 212,320 448,145
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CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to investment property (53,098) (55,187)
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Net cash used in investing activities (53,098) (55,187)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on mortgage notes payable (321,103) (293,878)
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Net cash used in financing activities (321,103) (293,878)
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NET (DECREASE)INCREASE IN CASH
AND CASH EQUIVALENTS (161,881) 99,080
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CASH AND CASH EQUIVALENTS, beginning of period 486,156 448,898
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CASH AND CASH EQUIVALENTS, end of period $ 324,275 $ 547,978
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION - Cash paid during period for
interest $ 500,688 $ 517,155
========= =========
SEE NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
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NOONEY REAL PROPERTY INVESTORS-TWO, L.P.
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(A LIMITED PARTNERSHIP)
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NOTES TO UNAUDITED FINANCIAL STATEMENTS
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THREE AND NINE MONTHS ENDED AUGUST 31, 1999 AND 1998
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NOTE A:
Refer to the Registrant's financial statements for the year ended November 30,
1998, which are contained in the Registrant's Annual Report on Form 10-K, for a
description of the accounting policies which have been continued without change.
Also, refer to the footnotes to those statements for additional details of the
Registrant's financial condition. The details in those notes have not changed
except as a result of normal transactions in the interim or as noted below.
NOTE B:
The financial statements include only those assets, liabilities, and results of
operations of the partners which relate to the business of Nooney Real Property
Investors-Two, L.P. The statements do not include assets, liabilities, revenues
or expenses attributable to the partners' individual activities. No provision
has been made for federal and state income taxes since these taxes are the
responsibility of the partners. In the opinion of the general partners, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and changes in
financial position at August 31, 1999 and for all periods presented have been
made. The results of operations for the three-month and nine-month period ended
August 31, 1999 are not necessarily indicative of the results which may be
expected for the entire year.
NOTE C:
The Registrant's properties are managed by American Spectrum Midwest (formerly
Nooney, Inc.), a wholly-owned subsidiary of CGS Real Estate Company. Nooney
Investors, Inc., a general partner, is a wholly-owned subsidiary of S-P
Properties, Inc. S-P Properties, Inc is a wholly-owned subsidiary of CGS Real
Estate Company.
NOTE D:
The income (loss) per limited partnership unit for the three and nine months
ended August 31, 1999 and 1998 was computed based on 12,000 units, the number of
units outstanding during the periods.
NOTE E:
The Registrant has no other comprehensive income items, accordingly,
comprehensive income and net income are the same for all periods presented.
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ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
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AND RESULTS OF OPERATIONS
-------------------------
It should be noted that this 10-Q contains forward-looking information (as
defined in the Private Securities Litigation Reform Act of 1995) that involves
risk and uncertainty, including trends in the real estate investment market,
projected leasing and sales, and the future prospects for Registrant. Actual
results could differ materially from those contemplated by such statements.
Liquidity and Capital Resources
- -------------------------------
Cash on hand as of August 31, 1999 is $324,275, a decrease of $161,881 from year
ended November 30, 1998. The decrease in cash can primarily be attributed to a
lower occupancy level at Jackson Industrial, therefore creating a decrease in
revenues. Cash produced from operating activities for the nine months ended
August 31, 1999 was $212,320. Capital additions in the amount of $53,098 and
payments on mortgage notes of $321,103 were made during the first three quarters
of 1999. The Registrant plans to maintain adequate cash reserves and fund
capital expenditures from operations during the remainder of 1999. The capital
expenditures by property anticipated for the balance of 1999 are as follows:
Leasing Capital Other Capital Total
--------------- ------------- -----
Park Plaza I & II $20,430 $ 0 $20,430
Maple Tree Shopping Center 0 0 0
Jackson Industrial 0 18,500 18,500
Morenci Professional Park 8,400 0 8,400
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$28,830 $18,500 $47,330
======= ======= =======
Leasing Capital at Park Plaza I & II and Morenci Professional Park will fund
tenant alterations for both new and renewal tenants. Other Capital at Jackson
Industrial will be for separating suite utilities and updating exterior
entrance. The Registrant reviews cash reserves on a regular basis prior to
beginning scheduled capital improvements. In the event there is not adequate
funds, the capital improvement will be postponed until such funds are available.
The first mortgage debt on Morenci Professional Park and Park Plaza I & II have
maturity dates of October 2005 and December 2003, respectively. The first
mortgage on Jackson Industrial and Maple Tree Shopping Center expire in November
2000 and July 2009, respectively. The second mortgages secured by Park Plaza I &
II, Morenci Professional Park and Maple Tree Shopping Center were extended in
August 1999 and will expire in February 2000. The Registrant anticipates the
lender will continue to renew these loans on a semi-annual basis. The interest
rate on these two second mortgages is the current prime rate plus 1.5%. The
interest rate on this debt as of August 31, 1999, was 9.5%. The balance of the
second mortgage debt on Park Plaza I & II and Morenci Professional Park as of
August 31, 1999, is $208,845. The balance of the second mortgage debt on Maple
Tree Shopping Center as of August 31, 1999, is $235,700.
The future liquidity of the Registrant is dependent on its ability to fund
future capital expenditures and mortgage payments from operations and cash
reserves, maintain occupancy, and negotiate with lenders the refinancing of the
mortgage debt as it matures.
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Results of Property Operations
- ------------------------------
The results of operations of the Registrant's properties for the quarter ended
August 31, 1999 and 1998 are detailed in the schedule below. Revenues and
expenses of the Registrant are not presented:
Jackson Maple Tree Park Plaza Morenci
Industrial Shopping Center I and II Prof. Park
---------- --------------- ---------- ----------
1999
----
Revenues $ 120,722 $ 150,872 $ 123,648 $ 139,424
Expenses 199,124 109,105 69,192 112,821
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Net (Loss) Income $ (78,402) $ 41,767 $ 54,456 $ 26,603
========= ========= ========= =========
1998
----
Revenues $ 73,866 $ 142,664 $ 122,315 $ 139,399
Expenses 299,879 115,942 76,649 114,892
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Net (Loss) Income $(226,013) $ 26,722 $ 45,666 $ 24,507
========= ========= ========= =========
The operating results at Jackson Industrial reflect an increase in revenue when
comparing the quarter ended August 31, 1999 to the quarter ended August 31,
1998. This increase of $46,856 is primarily due to a rise in the occupancy
level, than that of prior year. Expenses decreased $100,755 when comparing the
two quarters. This decrease was primarily due to a decrease in vacancy related
expenses from that of prior year ($89,509). In addition to the lower vacancy
expenses, there was also a decrease in advertising ($3,879) and repairs &
maintenance related expenses ($4,648).
At Maple Tree Shopping Center, revenues increased when comparing the two
periods. This increase of $8,208 is due to slight increases in rental revenue,
common area maintenance reimbursements, and tax revenue. Expenses for the
quarter ended August 31, 1999, decreased $6,837 when compared to the quarter
ended August 31, 1998. This decrease can primarily be attributed to a decrease
in interest expense ($2,616) and legal services ($5,170).
Revenues at Park Plaza I & II were relatively stable when comparing quarter
ended August 31, 1999 to 1998, reflecting only a $1,333 increase primarily due
to increased rental rates. Expenses decreased when comparing the two quarters by
$7,457 due mainly to decreases in interest and real estate tax expense.
The results of operations at Morenci Professional Park remained relatively
stable when comparing the third quarters from 1999 to 1998. Revenues remained
consistent and expenses decreased $2,071. The decreased expenses is a result of
decreases in interest ($3,043) and depreciation/amortization ($6,451). These
decreases were partially offset by increases in repairs and maintenance related
expenses ($2,485) and various other operating expenses ($4,900).
The occupancy levels of the Registrant's properties at August 31, 1999, 1998 and
1997 are as follows:
Occupancy levels as of August 31,
Property 1999 1998 1997
-------- ---- ---- ----
Park Plaza I & II 92% 98% 98%
Morenci Professional Park 93% 94% 91%
Maple Tree Shopping Center 100% 100% 100%
Jackson Industrial 61% 39% 100%
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At Park Plaza I & II, occupancy remained consistent during the quarter. Leasing
activity consisted of the renewal of three tenants occupying 12,120 square feet.
At Park Plaza I & II no tenant occupies more than 10% of the available space.
At Morenci Professional Park, occupancy remained stable at 93% during the
quarter. Leasing activity consisted of the Registrant entering into a new lease
with one new tenant for 1,200 square feet, renewing two tenants in 8,400 square
feet, while one tenant in 1,200 square feet vacated their space. No tenant
occupies more than 10% of the available space at Morenci Professional Park.
At Maple Tree Shopping Center, occupancy remained at 100% throughout the
quarter. Leasing activity during the quarter consisted of two tenants renewing
their leases for a total of 35,648 square feet. The property has two major
tenants who occupy approximately 18% and 42% of the available space with lease
expirations of April 30, 2000 and July 31, 2004, respectively.
Jackson Industrial remained 61% occupied during the quarter. The property has
two tenants who lease 61% of the available space. One of the tenants occupies
40% of the available space with a lease expiring July 2002. The other tenant
occupies 21% with a lease expiring November 2001. Currently, the Registrant has
had preliminary discussions with two potential tenants who could occupy 18% &
21% of remaining available space. If the Registrant is successful, the property
would be fully leased.
The Registrant reviews long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of a property may not
be recoverable. The Registrant considers a history of operating losses or a
change in occupancy to be primary indicators of potential impairment. The
Registrant deems the Property to be impaired if a forecast of undiscounted
future operating cash flows directly related to the Property, including disposal
value, if any, is less than its carrying amount. If the Property is determined
to be impaired, the loss is measured as the amount by which the carrying amount
of the Property exceeds its fair value. Fair value is based on quoted market
prices in active markets, if available. If quoted market prices are not
available, an estimated of fair value is based on the best information
available, including prices for similar properties or the results of valuation
techniques such as discounting estimated future cash flows. Considerable
management judgement is necessary to estimate fair value. Accordingly, actual
results could vary significantly from such estimates.
Year 2000 Issues
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Information Technology Systems
- ------------------------------
The Registrant utilizes computer software for its corporate and real property
accounting records and to prepare its financial statements, as well as for
internal accounting purposes. The vendor of the Registrant's software has
informed the Registrant that it is Year 2000 compliant. The Registrant believes
after reasonable investigation that its information technology hardware is Year
2000 compliant. However, in the event that such systems should fail, as a
contingency plan, the Registrant could prepare all required accounting entries
manually, without incurring material additional operating expenses.
Non-Information Technology Systems
- ----------------------------------
At the request of the Registrant, its property managers have completed their
review of the major date-sensitive non-information technology systems such as
elevators, heating, ventilation, air conditioning and cooling ("HVAC") systems,
locks, and other like systems in the Registrant's properties and have determined
that such systems are materially Year 2000 compliant. In some of the
Registrant's properties, its property managers have utilized the services of
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third-party consultants in making this determination, while in other properties,
the property managers have internally made such determinations. The Registrant
does separately track the internal costs incurred for its Year 2000 project. The
Registrant does not believe that the Year 2000 issue will pose significant
problems to the Registrant's Information technology systems and non-Information
technology systems, or that resolution of any potential problems with respect to
such systems will have a material effect on the Registrant's financial condition
or results of operations.
Material Third Parties' Systems Failures
- ----------------------------------------
The most reasonable likely worst case scenario facing the Registrant as a result
of the Year 2000 problem would be the inability of its tenants to pay rent as a
result of a breakdown in such tenants' (or other financial service providers')
computer or the refusal of such tenants to pay their rent as a result of the
Registrant's inability to provide services due to non-Information technology
systems failure. Failure in a tenant's computer systems may cause delays in such
tenant's ability to process its accounting records and to make timely rent
payments. However, any such delays in rent payments, whether caused by systems
failure of tenant, property manager or a combination of the two, should not have
a materially adverse effect on the Registrant's business or results of
operations.
Risks
- -----
While delays caused by the failure of the tenants' or the property managers'
accounting or supply systems would likely not adversely affect the Registrant's
business or results of operations, non-Information technology systems failure in
the Registrants's properties could lead to tenants attempting to withhold their
rent payments, which could materially adversely effect the Registrant's
business, results of operations and financial conditions as a result of
increased legal costs. The Registrant believes that such material effect is
primarily limited to items of a utility nature furnished by third parties to the
Registrant and a wide universe of other customers. Included are such items as
electricity, natural gas, telephone service, and water, all of which are not
readily susceptible to alternate sources and which in all likelihood should be
available in some form. The Registrant has been unable to obtain assurances from
such utility companies as to their Year 2000 compliance, and does not expect
that such assurances will be forthcoming.
Such non-Information technology systems failure could force tenants to use the
stairs in such properties, rather than the elevators. However, none of the
properties owned by the Registrant is a high-rise building where such an
elevator failure could cause a material adverse effect to the operations of its
tenants, although such failure could make it impossible for any disabled tenants
or any disabled customers to access such properties. Moreover, as previously
discussed, the Registrant may suffer adverse effects in its results of
operations and financial condition as a result of utility or HVAC failures, for
example. Such events could lead the tenants of the Registrant to withhold rent,
in the event that the Registrant's properties are not usable for their intended
purposes. The Registrant does not believe that rent abatement would be a lawful
tenant remedy for short term obligations unless such failure extend for a period
of 30 consecutive days. The Registrant intends to pursue its remedies for any
such breach of its rent obligations by a Tenant expeditiously and to the full
extend permitted by law.
1999 Comparisons
- ----------------
Revenues for the quarter ended August 31, 1999 and 1998 are $542,376 and
$471,262, respectively. For the nine month period ended August 31, 1999 and
1998, revenues are $1,623,073 and $1,936,036, respectively. For the quarter
ended, revenues increased $71,114 when comparing August 31, 1999 to 1998 and for
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the nine month period ended revenues decreased $312,963 when compared to prior
year. The increase in consolidated revenues for the three month periods can be
attributed to increases in rental revenue ($59,103), miscellaneous revenues
($6,108), common area maintenance reimbursements ($2,602), and real estate tax
reimbursement ($2,840). The increase in rental revenue is primarily due to the
increased occupancy level at Jackson Industrial from that of same quarter in the
prior year. The significant decrease in consolidated revenues for the nine month
period can be attributed to decreases in miscellaneous revenues ($141,010),
rental revenue ($151,248), common area maintenance reimbursements ($14,456),
interest revenue ($4,931), and debt recovery ($6,663). These decreases in
revenue were partially offset by an increase in percentage rent ($3,730). Both
the decrease in miscellaneous and rental revenue are due to termination and
early cancellation fees received at Jackson Industrial during second quarter
1998 from a former major tenant. These fees were not received during 1999 and
Jackson Industrial has yet to become fully leased as it was in early 1998. The
decrease in common area maintenance reimbursements is primarily due to lower
reimbursable expenses reflected at Morenci Professional Park ($12,488). The
decrease in debt recovery can be attributed to the lack of recovery in 1999 at
Maple Tree Shopping Center compared to the collection of previously written off
rents in 1998.
As of August 31, 1999 and 1998 consolidated expenses for the quarter ended were
$559,139 and $625,706, respectively. For the nine month period ended August 31,
1999 and 1998 consolidated expenses were $1,711,811 and $1,883,312,
respectively. For the quarter ended, expenses decreased $66,567. This decrease
can primarily be attributed to decreases in interest expense ($10,673), real
estate tax ($7,750), vacancy related expenses ($88,668), and other operating
expenses ($11,497). These decreased expenses were partially offset by increases
in management fee expense ($2,820), insurance ($5,838), and professional
services ($43,620). The decrease in interest expense is due to a decreased
principal balance outstanding. The decreased real estate tax expense is due to
lower annual tax at Park Plaza I & II. The vacancy expense decrease can be
attributed to the costs incurred in 1998 in relation to the former major tenant
at Jackson Industrial, as previously mentioned. These costs were not necessary
in 1999. The decrease in other operating expenses is primarily due to reduced
costs and the write off of a previously disputed liability ($9,804). The
increase in professional services is primarily due to appraisals performed at
all the properties within the partnership and related professional costs. For
the nine month period ending August 31, 1999, expenses decreased $171,501. This
was primarily due to decreases in interest ($16,467), depreciation/amortization
expense ($46,670), real estate tax expense ($21,948), management fees ($18,118),
repairs and maintenance related expenses ($16,267), and vacancy related expenses
($162,973). These decreases were partially offset by increases in insurance
($4,025), parking lot ($13,429), office related expenses ($7,900), payroll
($3,887), professional services ($62,919), and other operating expenses
($18,782). The decreases in interest, real estate tax, and vacancy expenses, as
well as the increase in professional services have been addressed in the above
three month expense comparison. The decrease in depreciation and amortization is
due to equipment and leasehold improvements becoming fully depreciated and
amortized during 1998 and not requiring depreciation in 1999 The lower
management fee expense is directly related to the lower year to date income in
1999 when compared to that of prior year. The decrease in repairs and
maintenance is primarily due to repair costs in 1998 at Jackson Industrial
associated with the vacating of previously mentioned major tenant. These costs
were also not necessary in 1999. The increase in parking lot is primarily due to
parking lot landscaping improvements at Maple Tree Shopping Center incurred in
second quarter 1999. Office related expenses increased from prior year due to
computer hardware and software costs incurred in 1999. The increase in other
operating expense is primarily due to the increased amount of snow removal
necessary in first quarter 1999 than that of prior year, due to harsh weather
conditions.
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1998 Comparisons
- ----------------
Revenues for the quarter ended August 31, 1998 and 1997 are $471,262 and
606,313, respectively. For the nine month period ended August 31, 1998 and 1997
revenues are $1,936,036 and $1,790,096, respectively. For the quarter ended,
revenues decreased $135,051 when comparing August 31, 1998 to 1997 and for the
nine month period ended revenues increased $145,940 when compared to prior year.
The decrease in consolidated revenues for the quarter is primarily due to the
lack of rental income received attributable to the vacancy of a former major
tenant at Jackson Industrial. The amount of income normally reflected from this
tenant during a three month period is $145,000. The increase in revenues for the
nine month period is primarily due to the termination fees received at Jackson
Industrial during the 2nd quarter of 1998, related to the same former tenant.
As of August 31, 1998 and 1997 consolidated expenses for the quarter ended were
$625,706 and $559,263, respectively. For the nine month period ended August 31,
1998 and 1997 consolidated expenses were $1,883,312 and $1,750,072,
respectively. For the quarter ended, expenses increased $66,443. This increase
can primarily be attributed to increases in vacancy expense ($91,236),
professional services ($6,968), and payroll ($44,311). These increases were
partially offset by decreases in interest ($6,719), depreciation and
amortization ($6,732), management fees ($6,014), parking lot ($6,625), and
repairs and maintenance ($8,451). The substantial increase in vacancy expense is
due to the Jackson Industrial rehabilitation of recently vacated space. For the
nine month period ending August 31, 1998, expenses increased $133,240. This was
primarily due to increases in depreciation and amortization ($22,602),
management fees ($8,489), repairs and maintenance ($9,715), and vacancy expense
($179,311). These increases were partially offset by decreases in interest
expense ($39,855), parking lot ($9,714), professional services ($32,365), and
other operating expenses ($5,409). The increase in depreciation and amortization
is due to the additional amortization necessary at Jackson Industrial in
relation to the early termination of a major tenant. The increase in vacancy
expense can be attributed to additional expenses incurred at Jackson Industrial,
as mentioned previously.
Inflation
- ---------
The effects of inflation did not have material impact upon the Registrant's
operations in fiscal year 1998 and are not expected to materially affect the
Registrant's operations in 1999.
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PART II. OTHER INFORMATION
- ---------------------------
Item 6. Exhibits and Reports on Form 8-K
- ----------------------------------------
(a) Exhibits
See Exhibit Index on Page 13
(b) Reports on Form 8-K
None
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.
Dated: October 15, 1999 NOONEY REAL PROPERTY INVESTORS-TWO, L.P.
-----------------------
By: NOONEY INVESTORS, INC.
General Partner
By: /s/ Gregory J. Nooney, Jr.
--------------------------
Gregory J. Nooney, Jr.
Vice Chairman
By: /s/ Patricia A. Nooney
----------------------
Patricia A. Nooney
President and Secretary
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EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
3.1 Amended and Restated Agreement and Certificate of
Limited Partnership dated November 5, 1979, is
incorporated by reference to the Prospectus
contained in Amendment No. 1 to the Registration
Statement on Form S-11 under the Securities Act of
1933 (File No. 2-65006).
27 Financial Data Schedule (provided for the
information of U.S. Securities and Exchange
Commission only)
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR NOONEY REAL PROPERTY INVESTORS-TWO, L.P. AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000312155
<NAME> NOONEY REAL PROPERTY INVESTORS-TWO, L.P.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-START> DEC-01-1998
<PERIOD-END> AUG-31-1999
<CASH> 324,275
<SECURITIES> 0
<RECEIVABLES> 125,942
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 545,551
<PP&E> 16,073,976
<DEPRECIATION> 9,527,219
<TOTAL-ASSETS> 7,119,796
<CURRENT-LIABILITIES> 456,280
<BONDS> 6,915,722
<COMMON> 0
0
0
<OTHER-SE> (349,923)
<TOTAL-LIABILITY-AND-EQUITY> 7,119,796
<SALES> 1,623,040
<TOTAL-REVENUES> 1,623,073
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,211,123
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 500,688
<INCOME-PRETAX> (88,740)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (88,740)
<EPS-BASIC> (7.32)
<EPS-DILUTED> 0
</TABLE>
