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, 1993 Commission file no. 0-9726
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(Exact name of registrant as specified in its charter)
Illinois 36-3057941
(State of organization)(I.R.S. Employer Identification No.)
900 N. Michigan Ave., Chicago, Illinois 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312-915-1987
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ------------------- ------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
LIMITED PARTNERSHIP INTERESTS
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K 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
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. Not applicable.
Certain pages of the prospectus of the registrant dated May 29, 1980, as
supplemented August 4, 1980, November 12, 1980, November 24, 1980, January 30,
1981 and February 10, 1981, and filed pursuant to Rules 424(b) and 424(c)
under the Securities Act of 1933 are incorporated by reference in Parts I and
III of this Annual Report on Form 10-K.
TABLE OF CONTENTS
Page
----
PART I
Item 1. Business. . . . . . . . . . . . . . . . . . . . 1
Item 2. Properties. . . . . . . . . . . . . . . . . . . 7
Item 3. Legal Proceedings . . . . . . . . . . . . . . . 9
Item 4. Submission of Matters to a Vote of
Security Holders. . . . . . . . . . . . . . . . 9
PART II
Item 5. Market for the Partnership's Limited
Partnership Interests and
Related Security Holder Matters . . . . . . . . 9
Item 6. Selected Financial Data . . . . . . . . . . . . 10
Item 7. Management's Discussion and
Analysis of Financial Condition and
Results of Operations . . . . . . . . . . . . . 17
Item 8. Financial Statements and Supplementary Data . . 22
Item 9. Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure. . . . . . . . . . . . . . 74
PART III
Item 10. Directors and Executive Officers of the
Partnership . . . . . . . . . . . . . . . . . . 74
Item 11. Executive Compensation. . . . . . . . . . . . . 77
Item 12. Security Ownership of Certain Beneficial
Owners and Management . . . . . . . . . . . . . 78
Item 13. Certain Relationships and
Related Transactions. . . . . . . . . . . . . . 80
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K . . . . . . . . . . . . 80
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . 82
i
PART I
ITEM 1. BUSINESS
All references to "Notes" are to Notes to Consolidated Financial
Statements contained in this report.
The registrant, Carlyle Real Estate Limited Partnership - X (the
"Partnership"), is a limited partnership formed in 1979 and currently governed
by the Revised Uniform Limited Partnership Act of the State of Illinois to
invest in improved income-producing commercial and residential real property.
The Partnership sold $82,500,000 in Limited Partnership Interests (the
"Interests") commencing in May 1980 pursuant to a Registration Statement on
Form S-11 under the Securities Act of 1933 (Registration No. 2-66350), which
offering was increased by $17,500,000 pursuant to a new Registration Statement
(No. 2-69818). A total of 100,000 Interests were sold to the public at $1,000
per Interest. The offering closed in February 1981. No Limited Partner has
made any additional capital contribution after such date. The Limited
Partners of the Partnership share in their portion of the benefits of
ownership of the Partnership's real property investments according to the
number of Interests held.
The Partnership is engaged solely in the business of the acquisition,
operation and sale and disposition of equity real estate investments. Such
equity investments are held by fee title, leasehold estates and/or through
joint venture partnership interests. The Partnership's real property
investments are located throughout the nation and it has no real estate
investments located outside of the United States. A presentation of
information about industry segments, geographic regions, raw materials or
seasonality is not applicable and would not be material to an understanding of
the Partnership's business taken as a whole. Pursuant to the Partnership
Agreement, the Partnership is required to terminate on or before December 31,
2030. Accordingly, the Partnership intends to hold the real properties it
acquires for investment purposes until such time as sale or other disposition
appears to be advantageous. Unless otherwise described, the Partnership
expects to hold its properties for long-term investment where, due to current
market conditions, it is impossible to forecast the expected holding period.
At sale of a particular property, the proceeds, if any, are generally
distributed or reinvested in existing properties rather than invested in
acquiring additional properties.
The Partnership has made the real property investments set forth in the
following table:
<TABLE>
<CAPTION>
Sale or Disposal Date
or if Owned at
December 31, 1993,
Name, Type of Property Date of Original Invested
and Location (g) Size Purchase Capital Percentage (a) Type of Ownership
- ---------------------- ---- -------- ---------------------- -----------------
<S> <C> <C> <C> <C>
1. Lone Pine/Bloomfield
Office Center
Bloomfield Hills,
Michigan . . . . 75,300 sq.ft. 8-13-80 6-30-86 fee ownership of land and
n.r.a. improvements (through joint
venture partnership)
2. Graystone Office/
Warehouse
Dallas, Texas. . 97,000 sq.ft. 8-13-80 7-4-89 fee ownership of land and
n.r.a. improvements (through joint
venture partnership)
3. Windmill Park
Apartments
Midland, Texas . 228 units 6-12-80 9-23-92 fee ownership of land and
improvements (through joint
venture partnership) (c)(d)
4. Park Place Towers
Office Center
Birmingham,
Alabama. . . . . 305,900 sq.ft. 7-14-80 6-13-91 fee ownership of land and
n.r.a. improvements (through joint
venture partnership) (d)(e)
5. Centroplex Office
Building
White Plains,
New York . . . . 412,000 sq.ft. 8-1-80 7-10-91 fee ownership of land and
n.r.a. improvements (through joint
venture partnership) (c)(d)
6. Sunrise Mall
Brownsville,
Texas. . . . . . 311,000 sq.ft. 9-1-80 8.55% fee ownership of land and
g.l.a. improvements (through joint
venture partnership) (b)(d)(h)
7. Summit North
Apartments
Atlanta,
Georgia. . . . . 250 units 9-17-80 6-16-83 fee ownership of land and
improvements (through joint
venture partnership)
Sale or Disposal Date
or if Owned at
December 31, 1993,
Name, Type of Property Date of Original Invested
and Location (g) Size Purchase Capital Percentage (a) Type of Ownership
- ---------------------- ---- -------- ---------------------- -----------------
8. Holly Pond
Office Center
Stamford,
Connecticut. . . 64,000 sq.ft. 12-17-80 1.61% fee ownership of land and
n.r.a. improvements (through joint
venture partnership) (b)(d)
9. Main Place
Apartments
Mesa, Arizona. . 336 units 11-27-80 6-27-90 fee ownership of land and
improvements (through joint
venture partnership)
10. Garret Mountain
Office Center
West Paterson,
New Jersey . . . 122,400 sq.ft. 10-29-80 2.95% fee ownership of land and
n.r.a. improvements (through joint
venture partnership) (b)(d)(h)
11. Washington Office
Building
Washington, DC . 260,000 sq.ft. 12-18-80 9-30-88 fee ownership of land and
n.r.a. improvements (through joint
venture partnership)
12. Double Tree Apartments
El Paso, Texas . 284 units 12/17/80 3-18-93 fee ownership of land and
improvements (c)
13. Frontier Mall
Cheyenne,
Wyoming. . . . . 232,000 sq.ft. 12-16-80 10-31-93 fee ownership of land and
g.l.a. improvements (through joint
venture partnership) (c)(d)
14. Union Plaza
Office Building
Oklahoma City,
Oklahoma . . . . 250,000 sq.ft. 12-31-80 8-31-93 fee ownership of land and
n.r.a. improvements (through joint
venture partnership) (d)(f)
15. Seattle Arcade
Office Building
Seattle,
Washington . . . 90,000 sq.ft. 12-30-80 8-8-83 fee ownership of land and
n.r.a. improvements
or if Owned at
December 31, 1993,
Name, Type of Property Date of Original Invested
and Location (g) Size Purchase Capital Percentage (a) Type of Ownership
- ---------------------- ---- -------- ---------------------- -----------------
16. Westwood Plaza
Westwood Plaza
Shopping Center
Westwood,
New Jersey . . . 174,000 sq.ft. 12-17-80 8-22-88 fee ownership of land and
g.l.a. improvements and ground
leasehold interest in land
(through joint venture
partnership)
17. Silvermine
Apartments
Victoria,
Texas. . . . . . 216 units 12-19-80 1.25% fee ownership of land and
improvements (through joint
venture partnership) (b)(d)
18. Sunset Limited
Apartments
Harris County,
Texas. . . . . . 288 units 2-6-81 6-5-90 fee ownership of land and
improvements
19. Highpoint Shopping
Center
Harris County,
Texas. . . . . . 21,000 sq.ft. 2-6-81 2-5-91 fee ownership of land and
g.l.a. improvements (e)
20. Greenway Towers
Office Building
Dallas, Texas. . 185,700 sq.ft. 6-30-81 5% fee ownership of land and
n.r.a. improvements (through joint
venture partnership) (d)
21. First Interstate
Center
Seattle,
Washington . . . 893,000 sq.ft. 12-29-82 12.46% fee ownership of improvements
n.r.a. and ground leasehold interest
in land (through joint
venture partnership) (d)
<FN>
- ---------------
(a) The computation of this percentage for properties held at December 31,
1993 does not include amounts invested from sources other than the original
net proceeds of the public offering as described above and in Item 7.
(b) Reference is made to Note 4 and to Note 3 of Notes to Financial
Statements of Unconsolidated Venture for the current outstanding principal
balances and a description of the long-term mortgage indebtedness secured by
the Partnership's real property investments.
(c) This property or the Partnership's interest in this property has been
sold. Reference is made to Note 7 for a description of the sale of such real
property investment.
(d) Reference is made to Note 3 for a general description of the joint
venture partnership through which the Partnership has made this real property
investment.
(e) The venture transferred title of the property to the lender pursuant
to a legal action by the lender to realize upon its security interest in the
property. Reference is made to Note 4(b).
(f) The lender concluded proceedings to realize upon its security and took
title to the property on August 31, 1993. Reference is made to Note 4(b)(7).
(g) Reference is made to Item 8 - Schedules X and XI filed with this
annual report for further information concerning real estate taxes and
depreciation.
(h) Reference is made to Item 6 - Selected Financial Data for additional
operating and lease expiration data concerning this investment property.
</TABLE>
On March 18, 1993, the Partnership sold the land, building, related
improvements and personal property of the Double Tree Apartments located in El
Paso, Texas. Reference is made to the Partnership's report on Form 8-K (File
No. 0-9726) dated April 26, 1993 and hereby incorporated herein by reference
and also to Note 7(c) for a further description of the transaction.
On August 31, 1993, the lender for the Union Plaza Office Building
realized upon its mortgage security interest and took title to the property.
Reference is made to the description of such transaction in the Partnership's
report on Form 8-K (File No. 0-9726) dated September 15, 1993 and hereby
incorporated herein by reference and also to Note 4(b)(7) for a further
description of the transaction.
On October 31, 1993, the Partnership and an affiliate sold their
interests in the Frontier Mall Venture. Reference is made to the description
of such transaction in the Partnership's report on Form 8-K (File No. 0-9726)
dated November 12, 1993 and hereby incorporated herein by reference and also
to Note 7(d) for a further description of the transaction.
The Partnership's real property investments are subject to competition
from similar types of properties (including in certain areas properties owned
or advised by affiliates of the General Partner) in the respective vicinities
in which they are located. Such competition is generally for the retention of
existing tenants. Additionally, the Partnership is in competition for new
tenants in markets where significant vacancies are present. Approximate
occupancy levels for the properties are set forth in the table in Item 2 below
to which reference is made. The Partnership maintains the suitability and
competitiveness of its properties in their markets primarily on the basis of
effective rents, tenant allowances and service provided to tenants. In the
opinion of the Corporate General Partner of the Partnership, all of the
investment properties held at December 31, 1993 are adequately insured.
Reference is made to Note 8 for a schedule of minimum lease payments to
be received in each of the next five years, and in the aggregate thereafter,
under leases in effect at the Partnership's properties as of December 31,
1993.
The Partnership has one part-time and eight full-time personnel
performing on-site duties at certain of the Partnership's properties, none of
whom are officers or directors of the Corporate General Partner of the
Partnership. Such employees perform on-site duties at certain of the
Partnership's properties.
The terms of transactions between the Partnership, the General Partners
and their affiliates are set forth in Item 11 below to which reference is made
for a description of such terms and transactions.
<TABLE>
ITEM 2. PROPERTIES
The Partnership owns directly or through joint venture partnerships the properties or interests in the properties referred to
under Item 1 above to which reference is made for a description of said properties.
The following is a listing of principal businesses or occupations carried on in and approximate occupancy levels by quarter
during fiscal years 1993 and 1992 for the Partnership's investment properties owned during 1993:
<CAPTION>
1992 1993
------------------------------- ------------------------------
At At At At At At At At
Principal Business 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
------------------ ---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Holly Pond Office Center
Stamford, Connecticut. . . . . . . . Financial Services/
Attorneys 58% 59% 62% 63% 63% 74% 74% 85%
2. Sunrise Mall
Brownsville, Texas . . . . . . . . . Retail 87% 89%(a) 89%(a) 89%(a) 89%(a) 89%(a) 89%(a) 89%(a)
3. Garret Mountain Office
Center West Paterson,
New Jersey. . . . . . . . . . . . . . Utilities/
Food Products 74%(b) 72% 99% 99% 99% 99% 99% 99%
4. Double Tree Apartments
El Paso, Texas . . . . . . . . . . . Apartments 89% 91% 98% 99% N/A N/A N/A N/A
5. Silvermine Apartments
Victoria, Texas. . . . . . . . . . . Apartments 97% 100% 99% 96% 94% 97% 97% 99%
6. Union Plaza Office
Building Oklahoma City,
Oklahoma. . . . . . . . . . . . . . . Banking/Insurance 86% 86% 84% 84% 86% 80% N/A N/A
7. Greenway Towers
Office Building
Dallas, Texas. . . . . . . . . . . . Insurance 68% 72% 67% 75% 75% 70% 66% 80%
8. Frontier Mall
Cheyenne, Wyoming. . . . . . . . . . Retail 87% 87% 87% 87% 87% 89% 89% N/A
9. First Interstate Center
Seattle, Washington. . . . . . . . . Financial Services/
Railroads 95% 95% 95% 96% 96% 96% 97% 97%
<FN>
- --------------------
(a) Occupancy including temporary tenants is 96%.
(b) An additional 26% of the property had been leased to a major tenant who
had vacated the building. The tenant continued to make rental payments
pursuant to its lease obligations up until the Partnership received a lump-sum
payment of $185,000 in June 1992, in exchange for the release of the tenant's
remaining lease obligation (which was to expire September 1992).
An "N/A" indicates that the property was sold or was not owned by the
Partnership at the end of the period.
Reference is made to Item 6, Item 7 and Note 8 for further information
regarding property occupancy, competitive conditions and tenant leases at the
Partnership's investment properties.
</TABLE>
ITEM 3. LEGAL PROCEEDINGS
The Partnership is not subject to any pending material legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during 1992
and 1993.
PART II
ITEM 5. MARKET FOR THE PARTNERSHIP'S LIMITED PARTNERSHIP INTERESTS
AND RELATED SECURITY HOLDER MATTERS
As of December 31, 1993, there were 10,392 record holders of Interests of
the Partnership. There is no public market for Interests, and it is not
anticipated that a public market for Interests will develop. Upon request, the
Corporate General Partner may provide information relating to a prospective
transfer of Interests to an investor desiring to transfer his Interests. The
price to be paid for the Interests, as well as, any economic aspects of the
transaction, will be subject to negotiation by the investor.
Reference is made to Item 6 below for a discussion of cash distributions
made to the Limited Partners.
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
DECEMBER 31, 1993, 1992, 1991, 1990 AND 1989
(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)
<CAPTION>
1993 1992 1991 1990 1989
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Total income . . . . . . . . . . . . . . . $ 9,668,173 12,851,389 19,948,609 27,049,560 29,431,719
============ ============= ============= ============= =============
Operating loss . . . . . . . . . . . . . . $ (3,800,303) (3,056,251) (2,566,748) (3,734,667) (2,567,624)
Partnership's share of operations of
unconsolidated ventures. . . . . . . . . (429,451) 3,012,015 (970,190) (944,088) (957,738)
Venture partners' share of ventures'
operations . . . . . . . . . . . . . . . 522,333 (2,633,434) 65,794 (261,855) (205,082)
------------- ------------- ------------- ------------- -------------
Net operating loss . . . . . . . . . . . . (3,707,421) (2,677,670) (3,471,144) (4,940,610) (3,730,444)
Gain (loss) on sale or disposition of
investment properties, net . . . . . . . 10,367,072 (763,877) 16,929,654 6,221,660 307,956
------------- ------------- ------------- ------------- -------------
Net earnings (loss) before extra-
ordinary items . . . . . . . . . . . . . 6,659,651 (3,441,547) 13,458,510 1,281,050 (3,422,488)
Extraordinary items, net . . . . . . . . . -- 2,411,425 (816,125) -- --
------------- ------------- ------------- ------------- -------------
Net earnings (loss). . . . . . . . $ 6,659,651 (1,030,122) 12,642,385 1,281,050 (3,422,488)
============= ============= ============= ============= =============
1993 1992 1991 1990 1989
------------- ------------- ------------- ------------- -------------
Net earnings (loss) per Interest (b):
Net operating loss. . . . . . . . . . . $ (35.59) (25.70) (33.32) (47.43) (35.81)
Gain (loss) on sale or disposition
of investment properties, net . . . . 102.63 (7.56) 167.60 61.59 3.05
Extraordinary items, net. . . . . . . . -- 23.87 (8.08) -- --
------------ ------------- ------------- ------------- -------------
$ 67.04 (9.39) 126.20 14.16 (32.76)
============ ============= ============= ============= =============
Total assets . . . . . . . . . . . . . . . $ 45,329,353 66,343,472 68,974,767 112,329,612 125,906,871
Long-term debt . . . . . . . . . . . . . . $ 16,530,351 23,234,806 23,551,860 72,673,641 107,079,241
Cash distributions per Interest (c). . . . $ 15.00 6.00 119.00 12.00 12.00
============= ============= ============= ============= =============
<FN>
- -------------
(a) The above selected financial data should be read in conjunction with
the consolidated financial statements and the related notes appearing
elsewhere in this annual report.
(b) The net earnings (loss) per Interest is based upon the Interests
outstanding at the end of the period (100,005).
(c) Cash distributions to the Limited Partners since the inception of the
Partnership have not resulted in taxable income to such Limited Partners and
have therefore represented a return of capital. Each Partner's taxable income
(or loss) from the Partnership in each year is equal to his allocable share of
the taxable income (loss) of the Partnership, without regard to the cash
generated or distributed by the Partnership.
</TABLE>
<TABLE>
SIGNIFICANT PROPERTY - SELECTED RENTAL AND OPERATING DATA AS OF DECEMBER 31, 1993
<CAPTION>
Property
- --------
Garret Mountain
Office Center a) The GLA historical occupancy rate and average base rent per square foot for the last five years were as
follows:
Year Ending GLA Avg. Base Rent Per
December 31, Occupancy Rate (1) Square Foot (2)
------------ ----------------- ------------------
<S> <C> <C> <C> <C>
1989 . . . . . . . 88% $12.98
1990 . . . . . . . 92% 17.34
1991 . . . . . . . 95% 17.42
1992 . . . . . . . 99% 19.24
1993 . . . . . . . 99% 13.50
<FN>
(1) As of December 31 of each year.
(2) Average base rent per square foot is based on GLA occupied as of December 31 of each year.
</TABLE>
<TABLE>
<CAPTION>
Base Rent Scheduled Lease Lease
b) Significant Tenants Square Feet Per Annum Expiration Date Renewal Option(s)
------------------- ----------- --------- --------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Peoples Service 25,010 $450,180 12/1997 N/A
Electric and Gas Co.
(Utility)
Olin Hunt 28,806 504,105 8/1997 N/A
(Food Products)
Pioneer Electronics 14,092 246,610 7/1994 N/A
United States FBI 16,300 282,826 6/1994 N/A
</TABLE>
<TABLE>
<CAPTION>
c) The following table sets forth certain information with respect to the expiration of leases
for the next ten years at Garrett Mountain Office Center:
Annualized Percent of
Number of Approx. Total Base Rent Total 1993
Year Ending Expiring GLA of Expiring of Expiring Base Rent
December 31, Leases Leases (1) Leases Expiring
------------ --------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
1994 4 40,816 $741,219 44,01%
1995 3 4,319 76,230 4.53%
1996 2 31,945 604,399 35.88%
1997 3 35,689 613,137 36.40%
1998 -- -- -- --
1999 1 10,582 232,804 13.82%
2000 -- -- -- --
2001 -- -- -- --
2002 -- -- -- --
2003 -- -- -- --
<FN>
(1) Excludes leases that expire in 1994 for which renewal leases or leases with replacement
tenants have been executed as of March 25, 1994.
</TABLE>
<TABLE>
<CAPTION>
Property
- --------
Sunrise Mall a) The GLA historical occupancy rate and average base rent per square foot for the last five years were as
follows:
Year Ending GLA Avg. Base Rent Per
December 31, Occupancy Rate (1) Square Foot (2)
------------ ----------------- ------------------
<S> <C> <C> <C> <C>
1989 . . . . . . . 86% $6.06
1990 . . . . . . . 86% 5.91
1991 . . . . . . . 87% 5.96
1992 . . . . . . . 89% 5.78
1993 . . . . . . . 89% 6.11
<FN>
(1) As of December 31 of each year.
(2) Average base rent per square foot is based on GLA occupied as of
December 31 of each year.
</TABLE>
<TABLE>
<CAPTION>
Base Rent Scheduled Lease Lease
b) Significant Tenants Square Feet Per Annum Expiration Date Renewal Option(s)
------------------- ----------- --------- --------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
K-Mart 84,180 $266,349 1/2005 N/A
(Department Store)
Beall Brothers 42,000 147,000 1/2000 N/A
(Department Store)
</TABLE>
<TABLE>
<CAPTION>
c) The following table sets forth certain information with respect to the expiration of leases
for the next ten years at Sunrise Mall:
Annualized Percent of
Number of Approx. Total Base Rent Total 1993
Year Ending Expiring GLA of Expiring of Expiring Base Rent
December 31, Leases Leases (1) Leases Expiring
------------ --------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
1994 7 5,605 $ 30,098 1.8%
1995 19 44,218 402,384 23.9%
1996 3 10,125 68,040 4.1%
1997 1 1,350 22,275 1.3%
1998 2 4,920 53,923 3.2%
1999 1 1,054 16,864 1.0%
2000 4 47,196 227,013 13.5%
2001 8 36,207 328,760 19.6%
2002 1 1,750 28,875 1.7%
2003 4 6,023 86,310 5.1%
<FN>
(1) Excludes leases that expire in 1994 for which renewal leases or leases with replacement
tenants have been executed as of March 25, 1994.
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
On May 29, 1980, the Partnership commenced an offering of $82,500,000
pursuant to a Registration Statement on Form S-11 under the Securities Act of
1933, which offering was increased by $17,500,000 by a new Registration
Statement. All Interests were subscribed and issued between May 29, 1980 and
February 11, 1981 from which the Partnership received gross proceeds of
$100,000,000.
After deducting selling expenses and other offering costs, the
Partnership had approximately $90,000,000 with which to make investments in
income-producing commercial and residential real property, to pay legal fees
and other costs (including acquisition fees) related to such investments and
for working capital reserves. A portion of such proceeds was utilized to
acquire the properties described in Item 1 above.
At December 31, 1993, the Partnership and its consolidated ventures had
cash and cash equivalents of approximately $976,000. Such cash and cash
equivalents and short-term investments of approximately $17,287,000 are
available for capital improvements, distributions to partners, and for working
capital requirements including operating deficits at Sunrise Mall and possibly
operating deficits at Garret Mountain Office Center in future periods. The
Partnership and its consolidated ventures have currently budgeted
approximately $408,000 for tenant improvements and other capital expenditures
in 1994. The Partnership's share of such items and its share of such similar
items for its unconsolidated ventures is currently budgeted to be
approximately $619,000 in 1994. Actual amounts expended in 1994 may vary
depending on a number of factors including actual leasing activity, results of
property operations, liquidity considerations and other market conditions over
the course of the year. The Partnership's interest in Frontier Mall
Associates was sold on October 31, 1993. Reference is made to Note 7(d). The
Partnership is undertaking a study to determine the financial and competitive
feasibility of an expansion of Sunrise Mall to accommodate certain retail
tenants who have indicated an interest in possibly opening stores at the mall.
In addition, Greenway Towers Office Building is incurring capital improvements
and operating deficits, which amounts were being funded from its mortgage
loan. This loan was refinanced in October 1992 with a new first mortgage that
allows for advances for tenant improvements, leasing commissions, interest
advances and capital improvements. As of December 31, 1993, $2,512,285 was
available for future advances Reference is made to Note 4(b)(10). The
Greenway Towers Office Building in Dallas, Texas was 80% occupied at December
31, 1993. The second mortgage loan secured by both the Garret Mountain Office
Center and the venture was extended to July 31, 1996 in October 1993.
Reference is made to note 4(b)(11).
Many of the Partnership's investment properties currently operate in
overbuilt markets which are characterized by lower than normal occupancies
and/or reduced rent levels. Such competitive conditions have resulted in the
operating deficits described above.
Although new construction in the Seattle office market has virtually
ceased the overall market remains very competitive due to a significant amount
of sublease space in the market. Although, the occupancy (97% at December 31,
1993) of First Interstate Center has not been adversely affected to date by
the competitive office market, effective rental rates have decreased as a
result. Due to the competitive market conditions and the significant amounts
of expiring square footage over the next several years, the property will
reserve a portion of its cash flow in order to cover the re-leasing costs
required. The first mortgage loan secured by the property is scheduled to
mature in December 1995. The venture anticipates approaching the mortgage
lender regarding an extension or modification of the existing mortgage loan.
There can be no assurance that any such extension or modification will be
obtained.<PAGE>
As described more fully in Notes 3 and 4(b), the Partnership is
negotiating or has received mortgage loan modifications on certain of its
properties. The existing modifications expire at various dates beginning in
December 1995. There can be no assurance that the Partnership will be able to
secure the modifications for which it is negotiating, or that upon the
expiration of the existing modifications the Partnership will be able to
secure further modifications to these loans. Commencing in December 1995,
certain of the mortgage loans securing the properties will begin to mature.
At maturity, there can be no assurances that the Partnership will be able to
obtain replacement financing. If the Partnership does not seek or is unable
to secure new or additional modifications or extensions to the loans, based
upon current and expected future market conditions, the Partnership would
likely decide not to commit any significant additional amounts to any of the
properties which are incurring or in the future do incur, operating deficits.
This would result in the Partnership no longer having an ownership interest in
such properties. Such decisions would be made on a property-by-property basis
and result in gain for financial reporting and Federal income tax purposes to
the Partnership with no corresponding distributable proceeds.
In August 1990, the Holly Pond venture suspended debt service payments at
the Holly Pond Office Building. In addition, the Partnership has accrued
$36,000 for potential future environmental clean-up costs at the Holly Pond
property. (Reference is made to Note 4(b)(6)).
In November 1991, the Energy Plaza venture reduced debt service payments
to the extent of cash flow at the Union Plaza Office Building. On May 27,
1993, the lender posted the property for acceleration of the mortgage and all
accrued interest. Based upon current market conditions and other
considerations relating to the property and the Partnership's portfolio, the
Partnership had decided not to commit any significant additional amounts to
the property. Consequently, the lender realized upon its mortgage security
interest in the property on August 31, 1993. Reference is made to Note
4(b)(7).
The mortgage loan secured by the Double Tree Apartments was scheduled to
mature in April 1992. The Partnership had obtained a one year extension.
Debt service payments were ceased beginning April 1, 1992 in conjunction with
the modification negotiations, but payments were remitted in full upon the
finalization of the extension agreement. The Partnership continued to pay
debt service in accordance with the previously modified terms until the
property was sold in March 1993. Reference is made to Notes 4(b)(5) and 7(c).
The Garret Mountain venture has approached the mortgage lender in an
effort to negotiate debt service relief on the 12-5/8% first mortgage note
secured by the Garret Mountain office building in West Paterson, New Jersey.
Effective November 1, 1993, the venture began making cash flow debt service
payments. The venture will continue to remit cash flow from the property to
the lender; however, such amount will be less than the terms of the current
mortgage loan. If the venture is unable to secure additional relief, the
Partnership may decide, based upon current market conditions and other
considerations relating to the property and the Partnership's portfolio, not
to commit any significant additional amounts to the property. This would
result in the Partnership no longer having an ownership interest in the
property. As a result, the Partnership recorded a provision for value
impairment of $785,084 in the accompanying consolidated financial statements.
Such provision, made as of December 31, 1993 is recorded to reduce the net
carrying value of the investment property to the outstanding balance of the
related non-recourse debt. The loan has been classified at December 31, 1993
as a current liability in the accompanying consolidated Balance Sheet. In
addition, approximately 32% (based on square footage) of tenant leases at the
Garret Mountain office building expire in 1994. There can be no assurance
that all of the expiring tenant space will be renewed.
The sources of capital for items described above and for both short-term
and long-term future liquidity and distributions are expected to be through
net cash generated by the operations of the investment properties and through
the sale of such investments. The Partnership's and its Ventures' mortgage
obligations are all non-recourse except for the second mortgage secured by
both the Garret Mountain Office Center and the venture. Therefore, the
Partnership and its Ventures are not obligated to pay mortgage indebtedness on
the non-recourse obligations unless the related property produces sufficient
net cash flow from operations or sale. There are certain risks associated
with the Partnership's investments made through joint ventures including the
possibility that the Partnership's joint venture partner(s) in an investment
might become unable or unwilling to fulfill its (their) financial or other
obligations, or that such joint venture partner(s) may have economic or
business interests or goals that are inconsistent with those of the
Partnership.
In response to the weakness of the economy and the limited amount of
available real estate financing in particular, the Partnership is taking steps
to preserve its working capital. Therefore, the Partnership is carefully
scrutinizing the appropriateness of any discretionary expenditures,
particularly in relation to the amount of working capital it has available.
By conserving working capital, the Partnership will be in a better position to
meet future needs of its properties without having to rely on external
financing sources.
Due to the factors discussed above and the general lack of buyers of real
estate today, it is likely that the Partnership may hold some of its
investment properties longer than originally anticipated in order to maximize
the return to the Limited Partners. Although sale proceeds from the
disposition of the Partnership's remaining assets are expected, in light of
the current severely depressed real estate markets, without a dramatic
improvement in market conditions, the Limited Partners will not receive a full
return of their original investment.
RESULTS OF OPERATIONS
At December 31, 1993, 1992 and 1991, the Partnership owned six, nine and
ten operating properties, respectively. Reference is made to Notes 3 and 6
for a description of agreements which the Partnership has entered into with
sellers or affiliates of sellers of the Partnership's properties for the
operation and management of such properties.
The decrease in cash and cash equivalents and corresponding increase in
short-term investments at December 31, 1993 as compared to December 31, 1992
is primarily due to the purchase of short-term investments. The increase in
short-term investments is also due to the receipt and temporary investment of
net proceeds of $3,308,699 from the sale of the Partnership's interest in the
Frontier Mall Venture. Reference is made to Note 7(d). A portion of such
proceeds were distributed to the Limited Partners in February 1994. Reference
is made to Note 11.
The decreases in rents and other receivables, land, buildings and
improvements, accumulated depreciation, deferred expenses, current portion of
long-term debt, and tenant security deposits at December 31, 1993 as compared
to December 31, 1992 is due primarily to the sale of Double Tree Apartments in
March 1993 and to the lenders obtaining legal title to the Union Plaza office
building in August 1993. Reference is made to Notes 4(b)(7) and 7(c).
The decrease in escrow deposits at December 31, 1993 as compared to
December 31, 1992 is due primarily to timing of real estate tax payments of
certain investment properties.
The decrease in investment in unconsolidated ventures reflected as assets
at December 31, 1993 as compared to December 31, 1992 is due to losses and
distributions from the Greenway Tower Office Building.
The increase in accrued rents receivable at December 31, 1993 as compared
to December 31, 1992 is due primarily to the Partnership's accrual of rental
income for certain tenant leases over the full period of occupancy rather than
as due per the terms of their respective leases at the Garret Mountain Office
Center.
The decrease in venture partners' deficits in ventures at December 31,
1993 as compared to December 31, 1992 is primarily due to the lenders
obtaining legal title to the Union Plaza office building in August 1993.
Reference is made to Note 4(b)(7).
The increases in accrued interest and accrued real estate taxes at
December 31, 1993 as compared to December 31, 1992 are due primarily to the
suspension of real estate tax payments and debt service payments on the long-
term mortgage loan secured by the Holly Pond Office Center. Reference is made
to Note 4(b)(6). The increases are partially offset by the lenders obtaining
legal title to the Union Plaza office building in August 1993. Reference is
made to Note 4(b)(7).
The increase in investment in unconsolidated ventures reflected as
liabilities at December 31, 1993 as compared to December 31, 1992 is due to
losses and distributions from the First Interstate Center, partially offset by
the sale of the Partnership's interest in the Frontier Mall Venture.
Reference is made to Note 7(d).
The decrease in long-term debt, less current portion at December 31, 1993
as compared to December 31, 1992 is due to the classification of the first
mortgage secured by the Garret Mountain office center as a current liability
in 1993 as described above.
The decreases in rental income, mortgage and other interest,
depreciation, and property operating expenses for the year ended December 31,
1993 as compared to the year ended December 31, 1992 are due primarily to the
sales of Windmill Park Apartments in September 1992 and Double Tree Apartments
in March 1993 and to the lender obtaining legal title to the Union Plaza
office building in August 1993. Reference is made to Notes 4(b)(7) and 7.
The decreases in rental income, mortgage and other interest, depreciation,
property operating expenses, professional services and general and
administrative expenses for the year ended December 31, 1992 as compared to
the year ended December 31, 1991 are due primarily to the lender obtaining
title to the Highpoint Shopping Center in February 1991 and to the Park Place
Towers Office Building in June 1991, the sale of the Centroplex Office
Building in July 1991 and the sale of Windmill Park Apartments in September
1992.
The decrease in interest income for the year ended December 31, 1993 as
compared to the year ended December 31, 1992 and December 31, 1992 as compared
to December 31, 1991 is primarily due to lower interest rates being earned on
U.S. government obligations in 1993 and 1992.
The decrease in amortization of deferred expenses for the years ended
December 31, 1993 and 1992 as compared to the year ended December 31, 1991 is
due primarily to the completion of the amortization periods for deferred
leasing costs of the Greenway Associates investment property.
The decrease in management fees to the Corporate General Partner for the
years ended December 31, 1993 and 1992 as compared to the year ended December
31, 1991 is due primarily to operating distributions being reduced in 1992 and
1993.
The provision for unrealizable venture partner deficit in 1992 is a
result of the elimination of the venture partners' deficit capital account as
of June 30, 1992 at Garret Mountain Office Center.
The decrease in partnership's share of operations of unconsolidated
ventures for the year ended December 31, 1993 as compared to 1992 and increase
for 1992 as compared to 1991 is due primarily to the $410,249 gain recognized
on the refinancing of debt secured by the Greenway Tower Office Building in
1992. Reference is made to Note 4(b)(10).
The decrease in venture partners' share of ventures' operations for the
year ended December 31, 1992 as compared to the year ended December 31, 1991
is due primarily to the venture's sale of the Centroplex Office Building in
July 1991 and the gain recognized on the refinancing of debt secured by the
Greenway Tower Office Building. Reference is made to Notes 7(a) and 4(b)(10).
The $785,084 provision for value impairment for 1993 is due to the
Partnership recording a provision for value impairment at the Garret Mountain
office building at December 31, 1993 to reduce the net carrying value and the
related deferred expenses to the outstanding balance of the related non-
recourse financing due to the uncertainty of the Partnership's ability to
recover the net carrying value of the investment property through future
operations or sale. Reference is made to Note 1.
The gain on sale or disposition of investment properties for 1993 is
related to the sales of the Double Tree Apartment Complex and the
Partnership's interest in the Frontier Mall Venture and to the lenders
obtaining legal title to the Union Plaza Office Building. Reference is made
to Notes 7(c), 7(d) and 4(b)(7). The loss on sale of investment property for
1992 is related to the sale of Windmill Park Apartments. Reference is made to
Note 7(b). The gain on sale or disposition of investments properties for 1991
is related to the lenders obtaining title to the Highpoint Shopping Center and
the Park Place Tower Office Building and the sale of the Centroplex Office
Building. Reference is made to Notes 4(b)(2), 4(b)(9) and 7(a), respectively.
The extraordinary item for 1992 relates to the cancellation of the first
mortgage note secured by Windmill Park Apartments. Reference is made to Note
7(b). The extraordinary item for 1991 relates to a prepayment penalty related
to the retirement of the first mortgage note secured by the Centroplex Office
Building upon the sale of the property and the discounted payment of the
mortgage note secured by the Silvermine Apartments upon refinancing.
Reference is made to Notes 4(b)(4) and 7(a).
INFLATION
Due to the decrease in the level of inflation in recent years, inflation
generally has not had a material effect on rental income or property operating
expenses.
To the extent that inflation in future periods does have an adverse
impact on property operating expenses, the effect will generally be offset by
amounts recovered from tenants as many of the long-term leases at the
Partnership's commercial properties have escalation clauses covering increases
in the cost of operating and maintaining the properties as well as real estate
taxes. Therefore, there should be little effect on operating earnings if the
properties remain substantially occupied. In addition, substantially all of
the leases at the Partnership's shopping center investment contain provisions
which entitle the Partnership to participate in gross receipts of tenants
above fixed minimum amounts.
Future inflation may also cause capital appreciation of the Partnership's
investment properties over a period of time to the extent that rental rates
and replacement costs of properties increase.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
INDEX
Independent Auditors' Report
Consolidated Balance Sheets, December 31, 1993 and 1992
Consolidated Statements of Operations, years ended December 31, 1993, 1992 and
1991
Consolidated Statements of Partners' Capital Accounts (Deficits), years ended
December 31, 1993, 1992 and 1991
Consolidated Statements of Cash Flows, years ended December 31, 1993, 1992 and
1991
Notes to Consolidated Financial Statements
Schedule
--------
Supplementary Income Statement Information X
Consolidated Real Estate and Accumulated Depreciation XI
CARLYLE-SEATTLE
AN UNCONSOLIDATED VENTURE OF
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
INDEX
Independent Auditors' Report
Balance Sheets, December 31, 1993 and 1992
Statements of Operations, years ended December 31, 1993, 1992
and 1991
Statements of Partners' Capital Accounts (Deficits),
years ended December 31, 1993, 1992 and 1991
Statements of Cash Flows, years ended December 31, 1993, 1992
and 1991
Notes to Financial Statements
Schedule
--------
Supplementary Income Statement Information X
Real Estate and Accumulated Depreciation XI
SCHEDULES NOT FILED:
All schedules other than those indicated in the index have been omitted
as the required information is inapplicable or the information is presented in
the financial statements or related notes.<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X:
We have audited the consolidated financial statements of Carlyle Real
Estate Limited Partnership - X (a limited partnership) and consolidated
ventures as listed in the accompanying index. In connection with our audits
of the consolidated financial statements, we also have audited the financial
statement schedules as listed in the accompanying index. These consolidated
financial statements and financial statement schedules are the responsibility
of the General Partners of the Partnership. Our responsibility is to express
an opinion on these consolidated financial statements and financial statement
schedules based on our audits.
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 the General Partners of the Partnership, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Carlyle
Real Estate Limited Partnership - X and consolidated ventures at December 31,
1993 and 1992, and the results of their operations and their cash flows for
each of the years in the three-year period ended December 31, 1993, in
conformity with generally accepted accounting principles. Also in our
opinion, the related financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set forth therein.
KPMG PEAT MARWICK
Chicago, Illinois
March 25, 1994
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
ASSETS
------
<CAPTION>
1993 1992
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 975,562 2,151,619
Short-term investments (note 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,286,680 13,461,464
Rents and other receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373,806 536,854
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208,363 423,756
----------- -----------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,844,411 16,573,693
----------- -----------
Investment properties, at cost (notes 2 and 3) - Schedule XI:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,513,649 6,383,312
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,950,753 65,833,859
----------- -----------
41,464,402 72,217,171
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,580,695 29,365,821
----------- -----------
Total investment properties, net of accumulated depreciation . . . . . . . . . . . . . . . . 21,883,707 42,851,350
----------- -----------
Investment in unconsolidated ventures, at equity (note 1). . . . . . . . . . . . . . . . . . . . . . . 3,056,454 3,341,769
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 591,053 991,594
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391,349 302,848
Venture partners' deficits in ventures (note 3). . . . . . . . . . . . . . . . . . . . . . . . . . . . 562,379 2,282,218
----------- -----------
$45,329,353 66,343,472
=========== ===========
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
1993 1992
----------- -----------
Current liabilities:
Current portion of long-term debt (note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,651,424 32,068,325
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 695,899 671,824
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,369,967 1,678,644
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 859,566 816,255
----------- -----------
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,576,856 35,235,048
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122,687 192,168
Investment in unconsolidated ventures, at equity (note 1). . . . . . . . . . . . . . . . . . . . . . . 3,408,985 3,255,451
Long-term debt, less current portion (note 4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,530,351 23,984,806
----------- -----------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,638,879 62,667,473
Venture partners' subordinated equity in ventures (note 3) . . . . . . . . . . . . . . . . . . . . . . 5,280,977 5,401,077
Partners' capital accounts (deficits) (note 5):
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,550,420) (4,505,794)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (903,693) (878,692)
----------- -----------
(5,453,113) (5,383,486)
----------- -----------
Limited partners (100,005 interests):
Capital contributions, net of offering costs. . . . . . . . . . . . . . . . . . . . . . . . . . . 90,049,709 90,049,709
Cumulative net losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28,852,914) (35,557,191)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (52,334,185) (50,834,110)
----------- -----------
8,862,610 3,658,408
----------- -----------
Total partners' capital deficits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,409,497 (1,725,078)
----------- -----------
Commitments and contingencies (notes 3, 4 and 8)
$45,329,353 66,343,472
=========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
1993 1992 1991
------------ ------------ ------------
<S> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,977,099 12,118,555 18,355,491
Interest income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 691,074 732,834 1,593,118
------------ ------------ ------------
9,668,173 12,851,389 19,948,609
------------ ------------ ------------
Expenses (Schedule X):
Mortgage and other interest. . . . . . . . . . . . . . . . . . . . . . . . . . 4,558,845 5,555,875 7,941,578
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,826,311 2,258,584 3,367,283
Property operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 5,433,301 6,154,665 10,115,560
Professional services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271,376 238,507 315,846
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . 289,712 317,503 396,651
Management fees to corporate general partner . . . . . . . . . . . . . . . . . 41,669 41,669 62,500
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . 262,178 237,912 315,939
Provision for unrealizable venture partner deficit (note 1) . . . . . . . . . -- 1,102,925 --
Provision for value impairment (note 1). . . . . . . . . . . . . . . . . . . . 785,084 -- --
------------ ------------ ------------
13,468,476 15,907,640 22,515,357
------------ ------------ ------------
Operating loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,800,303) (3,056,251) (2,566,748)
Partnership's share of operations of unconsolidated ventures
(notes 1, 3 and 10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (429,451) 3,012,015 (970,190)
Venture partners' share of ventures' operations. . . . . . . . . . . . . . . . . 522,333 (2,633,434) 65,794
------------ ------------ ------------
Net operating loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,707,421) (2,677,670) (3,471,144)
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
TED STATEMENTS OF OPERATIONS - CONTINUED
1993 1992 1991
------------ ------------ ------------
Gain (loss) on sale or disposition of investment properties,
net of venture partner's gain (loss) of $2,048,668 in 1993 and
($763,877) in 1992 (notes 4(b)(7) and 7) . . . . . . . . . . . . . . . . . . . 10,367,072 (763,877) 16,929,654
------------ ------------ ------------
Net earnings (loss) before extraordinary items. . . . . . . . . . . . . . . 6,659,651 (3,441,547) 13,458,510
Extraordinary items, net of venture partners' share of
$2,411,425 in 1992 (notes 4(b)(4) and 7). . . . . . . . . . . . . . . . . -- 2,411,425 (816,125)
------------ ------------ ------------
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,659,651 (1,030,122) 12,642,385
============ ============ ============
Net earnings (loss) per limited partnership interest (note 1):
Net operating loss. . . . . . . . . . . . . . . . . . . . . . . . . . . $ (35.59) (25.70) (33.32)
Gain on sale or disposition of investment
properties, net . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.63 (7.56) 167.60
Extraordinary items, net. . . . . . . . . . . . . . . . . . . . . . . . -- 23.87 (8.08)
------------ ------------ ------------
$ 67.04 (9.39) 126.20
============ ============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION> GENERAL PARTNERS LIMITED PARTNERS (100,005 INTERESTS)
------------------------------------------------------- -----------------------------------------------
CONTRI-
BUTIONS
NET NET OF NET
CONTRI- EARNINGS CASH OFFERING EARNINGS CASH
BUTIONS (LOSS) DISTRIBUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ---------- ------------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance (deficit)
December 31,
1990. . . . . . . $1,000 (4,437,452) (236,993) (4,673,445) 90,049,709 (47,237,796) (38,333,485) 4,478,428
Net earnings
(note 5). . . . . -- 22,289 -- 22,289 -- 12,620,096 -- 12,620,096
Cash distributions
($119.00 per limited
partnership in-
terest) . . . . . -- -- (616,698) (616,698) -- -- (11,900,595) (11,900,595)
------ ----------- -------- ---------- ---------- ----------- ----------- ----------
Balance (deficit)
December 31,
1991. . . . . . . 1,000 (4,415,163) (853,691) (5,267,854) 90,049,709 (34,617,700) (50,234,080) 5,197,929
Net loss
(note 5). . . . . -- (90,631) -- (90,631) -- (939,491) -- (939,491)
Cash distributions
($6.00 per limited
partnership in-
terest) . . . . . -- -- (25,001) (25,001) -- -- (600,030) (600,030)
------ ----------- -------- ---------- ---------- ----------- ----------- ----------
Balance (deficit)
December 31,
1992. . . . . . . 1,000 (4,505,794) (878,692) (5,383,486) 90,049,709 (35,557,191) (50,834,110) 3,658,408
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS) - CONTINUED
GENERAL PARTNERS LIMITED PARTNERS (100,005 INTERESTS)
------------------------------------------------------- ---------------------------------------------
CONTRI-
BUTIONS
NET NET OF NET
CONTRI- EARNINGS CASH OFFERING EARNINGS CASH
BUTIONS (LOSS) DISTRIBUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ---------- ------------- ----------- ----------- ---------- ------------- -----------
Net earnings
(loss) (note 5) . -- (44,626) -- (44,626) -- 6,704,277 -- 6,704,277
Cash distributions
($15.00 per limited
partnership in-
terest) . . . . . -- -- (25,001) (25,001) -- -- (1,500,075) (1,500,075)
------ ----------- -------- ---------- ---------- ----------- ----------- ----------
Balance (deficit)
December 31,
1993. . . . . . . $1,000 (4,550,420) (903,693) (5,453,113) 90,049,709 (28,852,914) (52,334,185) 8,862,610
====== =========== ======== ========== ========== =========== =========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,659,651 (1,030,122) 12,642,385
Items not requiring (providing) cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,826,311 2,258,584 3,367,283
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . 289,712 317,503 396,651
Extraordinary items, net of venture partners' share in 1992
(notes 4(b) and 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (2,411,425) 816,125
Accrued interest expense on accelerated long-term debt . . . . . . . . . . . -- -- 987,726
Long-term debt - deferred accrued interest . . . . . . . . . . . . . . . . . 420,883 708,752 886,109
Provision for unrealizable venture partner deficit . . . . . . . . . . . . . -- 1,102,925 --
Partnership's share of operations of unconsolidated ventures . . . . . . . . 429,451 (3,012,015) 970,190
Venture partners' share of ventures' operations. . . . . . . . . . . . . . . (522,333) 2,633,434 (65,794)
Provision for value impairment . . . . . . . . . . . . . . . . . . . . . . . 785,084 -- --
Loss (gain) on sale or disposition of investment properties, net of
venture partner's share (notes 4(b) and 7) . . . . . . . . . . . . . . . . (10,367,072) 763,877 (16,929,654)
Changes in:
Rents and other receivables. . . . . . . . . . . . . . . . . . . . . . . . . 163,048 388,371 873,736
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215,393 (11,839) 807,554
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . . (88,501) 78,911 272,163
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,074 (658,015) (3,521,214)
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 691,323 863,554 808,813
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 43,311 192,024 (144,851)
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . (69,481) (5,216) (10,553)
----------- ----------- -----------
Net cash provided by operating activities. . . . . . . . . . . . . . . 500,854 2,179,303 2,156,669
----------- ----------- -----------
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1993 1992 1991
----------- ----------- -----------
Cash flows from investing activities:
Net sales (purchases) of short-term investments. . . . . . . . . . . . . . . . (3,825,216) 1,831,886 --
Additions to investment properties . . . . . . . . . . . . . . . . . . . . . . (570,823) (1,241,647) (1,071,631)
Cash proceeds from sale of investment properties, net of selling expenses. . . 4,330,607 500,000 30,390,019
Partnership's contributions to unconsolidated ventures. . . . . . . . . . . . -- (286,008) --
Partnership's distributions from unconsolidated ventures . . . . . . . . . . . 353,633 219,824 320,845
Payment of deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . (200,019) (180,525) (480,318)
----------- ----------- -----------
Net cash provided by investing activities. . . . . . . . . . . . . . . 88,182 843,530 29,158,915
----------- ----------- -----------
Cash flows from financing activities:
Principal payments on long-term debt . . . . . . . . . . . . . . . . . . . . . (313,424) (865,786) (367,005)
Retirement of long-term debt (note 4(b)) . . . . . . . . . . . . . . . . . . . -- -- (3,546,658)
Proceeds from refinancing of long-term debt (note 4(b)). . . . . . . . . . . . -- -- 3,914,700
Venture partner's contributions to venture . . . . . . . . . . . . . . . . . . 117,407 52,174 117,199
Distributions to venture partners. . . . . . . . . . . . . . . . . . . . . . . (44,000) (19,935) (16,007,216)
Distributions to limited partners. . . . . . . . . . . . . . . . . . . . . . . (1,500,075) (600,030) (11,900,595)
Distributions to general partners. . . . . . . . . . . . . . . . . . . . . . . (25,001) (25,001) (616,698)
----------- ----------- -----------
Net cash used in financing activities. . . . . . . . . . . . . . . . . (1,765,093) (1,458,578) (28,406,273)
----------- ----------- -----------
Net increase (decrease) in cash and cash equivalents . . . . . . . . . $(1,176,057) 1,564,255 2,909,311
=========== =========== ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . . . . . . . . $ 1,876,197 3,932,284 5,258,930
=========== =========== ===========
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1993 1992 1991
----------- ----------- -----------
Non-cash investing and financing activities:
Disposition of investment properties (note 4(b)):
Balance due on long-term debt canceled . . . . . . . . . . . . . . . . . . $ 18,556,048 -- 17,056,456
Balance due on long-term debt - deferred accrued interest canceled . . . . 1,151,206 -- 543,686
Accrued interest expense on accelerated long-term debt . . . . . . . . . . 2,774,579 -- 713,568
Reduction of investment properties . . . . . . . . . . . . . . . . . . . . (279,694) -- (17,030,892)
Reduction of deferred expenses . . . . . . . . . . . . . . . . . . . . . . (15,510,251) -- (53,412)
----------- ----------- -----------
Non-cash gain recognized due to lender realizing upon security . . . $ 6,691,888 -- 1,229,406
=========== =========== ===========
Sale of investment properties (note 7):
Total sales proceeds, net of selling expenses. . . . . . . . . . . . . . . $13,152,621 -- 56,589,691
Prepayment penalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- -- (1,853,000)
Principal balance due on mortgage payable. . . . . . . . . . . . . . . . . (8,382,042) -- (24,072,514)
Accrued interest due on mortgage payable . . . . . . . . . . . . . . . . . (439,972) -- (274,158)
----------- ----------- -----------
Cash proceeds from sale of investment properties,
net of selling expenses. . . . . . . . . . . . . . . . . . . . . . . $ 4,330,607 -- 30,390,019
=========== =========== ===========
Sale of investment property (note 7(b)):
Principal balance due on first mortgage. . . . . . . . . . . . . . . . . . $ -- 4,315,564 --
Reduction of land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (525,235) --
Reduction of buildings and improvements. . . . . . . . . . . . . . . . . . -- (1,499,632) --
Reduction of furniture and fixtures. . . . . . . . . . . . . . . . . . . . -- (2,887) --
Reduction of accrued interest payable. . . . . . . . . . . . . . . . . . . -- 1,007,286 --
----------- ----------- -----------
Non-cash net gain recognized on sale . . . . . . . . . . . . . . . . . $ -- 3,295,096 --
=========== =========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993, 1992 AND 1991
(1) BASIS OF ACCOUNTING
The accompanying consolidated financial statements include the accounts
of the Partnership and its ventures (note 3), Midland-Carlyle Partnership
("Midland") (note 4(b)(3)), Park Place Associates ("Park Place") (note
4(b)(8)), Centroplex Associates ("Centroplex") (note 7(a)), Holly Pond
Associates ("Holly Pond"), Sunrise Brownsville Associates, Ltd. ("Sunrise"),
Garret Mountain Office Center Associates I ("Garret Mountain"), Victoria
Apartments Partnership ("Victoria"), Energy Plaza Associates Limited
Partnership ("Energy Plaza") (note 4(b)(7)), and Greenway Associates
("Greenway"). The effect of all transactions between the Partnership and the
ventures has been eliminated.
The equity method of accounting has been applied in the accompanying
consolidated financial statements with respect to the Partnership's interests
in Carlyle Seattle Associates ("Carlyle Seattle"), Carlyle Frontier Associates
("Carlyle/Frontier") (note 7(c)) and Greenway Tower Joint Venture ("Greenway
Tower"). Accordingly, the accompanying consolidated financial statements do
not include the accounts of Carlyle Seattle and Carlyle Seattle's venture,
Wright-Carlyle Seattle ("First Interstate"), Carlyle/Frontier and
Carlyle/Frontier's venture, Frontier Mall Associates, or Greenway's venture,
Greenway Tower.
The Partnership records are maintained on the accrual basis of accounting
as adjusted for Federal income tax reporting purposes. The accompanying
consolidated financial statements have been prepared from such records after
making appropriate adjustments to present the Partnership's accounts in
accordance with generally accepted accounting principles ("GAAP") and to
consolidate the accounts of the ventures as described above. Such adjustments
are not recorded on the records of the Partnership. The effect of these items
is summarized as follows:
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
<CAPTION>
1993 1992
------------------------------ ------------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Total assets . . . . . . . . . . . . . . . . . . . . . . . $45,329,353 28,228,481 66,343,472 31,635,059
Partners' capital accounts (deficit) (note 5):
General partners . . . . . . . . . . . . . . . . . . . . (5,453,113) (3,267,228) (5,383,486) (4,785,679)
Limited partners . . . . . . . . . . . . . . . . . . . . 8,862,610 10,985,707 3,658,408 3,977,259
Net earnings (loss) (note 5):
General partners . . . . . . . . . . . . . . . . . . . . (44,626) 1,543,452 (90,631) 14,525
Limited partners . . . . . . . . . . . . . . . . . . . . 6,704,277 8,508,524 (939,491) 265,116
Net earnings (loss) per limited partnership interest . . . 67.04 85.08 (9.39) 2.65
=========== ========== ========== ============
</TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The net earnings (loss) per limited partnership interest is based upon
the Interests outstanding at the end of each period (100,005). Deficit
capital accounts will result, through the duration of the Partnership, in net
gain for financial reporting and income tax purposes.
Statement of Financial Accounting Standards No. 95 requires the
Partnership to present a statement which classifies receipts and payments
according to whether they stem from operating, investing or financing
activities. The required information has been segregated and accumulated
according to the classification specified in the pronouncement. Partnership
distributions from unconsolidated ventures are considered cash flow from
operating activities only to the extent of the Partnership's cumulative share
of net earnings. The Partnership records amounts held in U.S. Government
obligations at cost which approximates market. For the purposes of these
statements, the Partnership's policy is to consider all such amounts held with
original maturities of three months or less as cash equivalents with any
remaining amounts reflected as short-term investments. The Partnership's
investments at December 31, 1993 and 1992 all have original maturities of
greater than three months and have been classified as short-term investments.
Deferred expenses consist primarily of leasing fees incurred in
connection with procuring tenants and loan fees incurred in connection with
the acquisition of the properties. Deferred leasing fees are amortized using
the straight-line method over the terms stipulated in the related agreements.
Deferred loan fees are amortized over the related loan periods.
Although certain leases of the Partnership provide for tenant occupancy
during periods for which no rent is due and/or increases in minimum lease
payments over the term of the lease, the Partnership accrues rental income for
the full period of occupancy on a straight-line basis.
Certain 1992 and 1991 amounts have been reclassified to conform to the
1993 presentation.
Due to the uncertainty of the Partnership's ability to recover the net
carrying value of the Garret Mountain office building through future
operations or sale, the Partnership made a provision for value impairment on
such investment property of $785,084. Such provision at December 31, 1993 was
recorded to reduce the net carrying value of the investment property to the
outstanding balance of the related non-recourse debt (note 4(b)(11)). Also,
as a result of the deteriorated economic condition of the West Paterson, New
Jersey real estate market and the uncertainty of the venture recovering its
deficit capital account from future operations and ultimate sale of the
property, the Partnership made a provision for unrealizable venture partner
deficit capital of $1,102,925. Such provision was recorded as of June 30,
1992 to eliminate the venture partners' deficit capital account.
No provision for state or Federal income taxes has been made as the
liability for such taxes is that of the Partners rather than the Partnership.
However, in certain instances, the Partnership has been required under
applicable law to remit directly to the taxing authorities amounts
representing withholding from distributions paid to Partners.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(2) INVESTMENT PROPERTIES
The Partnership originally acquired, either directly or through joint
ventures (note 3), six apartment complexes, four shopping centers, ten office
buildings and one office/warehouse center. Fifteen properties have been sold
or disposed by the Partnership. All of the Partnership's remaining property
investments at December 31, 1993 were operating. The cost of the investment
properties represents the total cost to the Partnership and its ventures plus
miscellaneous acquisition costs.
Depreciation on the operating properties has been provided over the
estimated useful lives of 5 to 30 years using the straight-line method.
All investment properties are pledged as security for the long-term debt
(note 4), for which there is no recourse to the Partnership.
Maintenance and repair expenses are charged to operations as incurred.
Significant betterments and improvements are capitalized and depreciated over
their estimated useful lives.
(3) VENTURE AGREEMENTS
(a) General
The Partnership originally entered into eighteen joint venture agreements
of which twelve, Arcade Associates, Lone Pine/Bloomfield Office Center
Associates, Carlyle-Graystone Associates, Summit North Associates, Ltd., Place
VIII Associates, 13th and L Associates, Consut Westwood Associates, Park Place
Associates, Centroplex Associates, Midland-Carlyle Partnership, Energy Plaza
Associates, and Carlyle Frontier Associates have been terminated. Pursuant to
such venture agreements, the Partnership made capital contributions
aggregating $79,625,550 through December 31, 1993. In general, the joint
venture partners, who were either the sellers (or their affiliates) of the
property investments acquired, or parties who contributed an interest in the
property being developed, made no cash contributions to the ventures, but
their retention of an interest in the property, through the joint venture, was
taken into account in determining the purchase price of the Partnership's
interest, which was determined by arm's-length negotiations. Under certain
circumstances, either pursuant to the venture agreements or due to the
Partnership's obligations as a general partner, the Partnership may be
required to make additional cash contributions to the ventures.
The Partnership has acquired, through the above ventures, four apartment
complexes, three shopping centers, ten office buildings and one office/-
warehouse center. In most instances, the properties were acquired (as
completed) for a fixed purchase price. However, certain properties were
developed by the ventures and in those instances, the contributions of the
Partnership were generally fixed. The joint venture partner (who was
primarily responsible for constructing the property) contributed any excess of
cost over the aggregate amount available from Partnership contributions and
financing and, to the extent such funds exceeded the aggregate costs, was
entitled to retain such excesses. The venture properties have been financed
under various long-term debt arrangements as described in note 4.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The Partnership generally has a cumulative preferred interest in net cash
receipts (as defined) from the properties. Such preferential interest relates
to a negotiated rate of return on contributions made by the Partnership.
After the Partnership receives its preferential return, the venture partner is
generally entitled to a non-cumulative return on its interest in the venture;
net cash receipts are generally shared in a ratio relating to the various
ownership interests of the Partnership and its venture partners. During 1993,
1992 and 1991, two, five and six, respectively, of the ventures' properties
produced net cash receipts. In addition, the Partnership generally has
preferred positions (related to the Partnership's cash investment in the
ventures) with respect to distribution of sale or refinancing proceeds from
the ventures. In general, operating profits and losses are shared in the same
ratio as net cash receipts; however, if there are no net cash receipts,
substantially all profits or losses are allocated to the partners in
accordance with their respective economic interests.
There are certain risks associated with the Partnership's investments
made through joint ventures including the possibility that the Partnership's
joint venture partner(s) in an investment might become unable or unwilling to
fulfill its (their) financial or other obligations, or that such joint venture
partner(s) may have economic or business interests or goals that are
inconsistent with those of the Partnership.
(b) Carlyle Seattle
During 1982, the Partnership acquired, through a joint venture ("First
Interstate") between a joint venture ("Carlyle Seattle") described below and
the developer, a fee ownership of improvements and a leasehold interest in an
office building in Seattle, Washington. Carlyle Seattle is a joint venture
between the Partnership and Carlyle Real Estate Limited Partnership - XII, an
affiliated partnership sponsored by the Corporate General Partner of the
Partnership. Under the terms of the First Interstate venture agreement,
Carlyle Seattle made initial cash contributions aggregating $30,000,000.
The terms of the Carlyle Seattle venture agreement provide that all the
capital contributions will be made in the proportion of 26.7% by the
Partnership and 73.3% by the affiliated partner. The initial required
contribution by the Partnership to the Carlyle Seattle venture was
$10,125,000. The Carlyle Seattle venture agreement further provides that all
of the venture's share of the First Interstate joint venture's annual cash
flow, sale or refinancing proceeds, operating profits and losses, and tax
items will be allocated 26.7% to the Partnership and 73.3% to the affiliated
partner.
Carlyle Seattle will generally be entitled to receive a preferred
distribution (on a cumulative basis) of annual cash flow equal to 8% of its
capital contributions to the First Interstate joint venture. Cash flow in
excess of this preferred distribution will be distributable to the First
Interstate joint venture partner up to the next $400,000 and any remaining
annual cash flow will be distributable 50% to Carlyle Seattle and 50% to the
First Interstate joint venture partner. Operating deficits, if any, will be
shared 50% by Carlyle Seattle and 50% by the First Interstate joint venture
partner. Operating profits or losses of the First Interstate joint venture
generally are allocated in the same ratio as the allocation of annual cash
flow; however, the joint venture partner will be allocated not less than 25%
of such profits and losses. As of December 31, 1993, $20,049,000 of
cumulative preferred distributions due to Carlyle Seattle were unpaid.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The First Interstate joint venture agreement provides that upon sale of
the property, Carlyle Seattle will be, in general, entitled to receive the
first $39,000,000 of net sale proceeds plus an amount equal to any
deficiencies (on a cumulative basis) in distributions of Carlyle Seattle's
preferred return of annual cash flow. The First Interstate joint venture
partner will be entitled to receive the next $5,000,000 and any remaining
proceeds will be distributable 50% to Carlyle Seattle and 50% to the First
Interstate joint venture partner.
The First Interstate venture owns a net leasehold (which expires in 2052)
in the land underlying the Seattle, Washington office building subject to a
20-year extension. The lease provides for an annual rental of $670,000 and
has been determined to be an operating lease.
The office building is managed by an affiliate of the First Interstate
joint venture partner for a fee computed at 2% of base and percentage rents.
(c) Greenway
Effective July 31, 1985, Greenway's venture agreement was amended
concurrent with the admission of a new venture partner. In conjunction with
this amendment to the venture agreement, the venture obtained a commitment for
financing in the amount of $3,471,000. The initial proceeds received from
such financing were used to pay deferred mortgage interest of $974,872 in
1985. In July 1987, the Partnership, through a capital contribution to the
venture, retired such financing plus accrued interest.
In September 1987, Greenway entered into an agreement with an additional
venture partner to form a new venture, Greenway Tower. The terms of the
Greenway Tower agreement called for contributions of the property, subject to
the amounts due on the original first mortgage loan (which was retired in
1987), plus $525,000 by Greenway and $525,000 by the additional venture
partner. Profits and losses were allocated 50% to Greenway and 50% to the
additional venture partner. Net cash flow and net sale or refinancing
proceeds (as defined) would have generally be distributed 50% to Greenway and
50% to the additional venture partner.
Additionally, in September 1987, the Greenway Tower venture obtained a
commitment to fund a new first mortgage loan up to $11,600,000. The loan bore
interest at a floating rate and contained certain accrual provisions. In
addition, the venture obtained a second mortgage note in the amount of
$2,650,000 in September 1987. This loan also bore interest at a floating
rate. Both loans matured in September 1992. In October 1992, the Greenway
Tower venture refinanced the outstanding first and second mortgage notes. The
notes were satisfied in full through a discounted payment (see note 4(b)(10)).
Pursuant to the replacement financing, the Greenway Tower venture agreement
was amended to reflect a 45% interest for Greenway and 55% interest for the
additional venture partner.
In conjunction with the formation of Greenway Tower, management
responsibilities were assumed in September 1987 by an affiliate of the
additional venture partner for a fee based on a percentage of gross receipts.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(d) Park Place
In April 1986, as a result of defaults by the venture partner in its
obligations under the joint venture partnership and related agreements, the
venture partner transferred its interest in the joint venture to the
Partnership and the two individual principals of the venture partner signed
non-interest bearing promissory notes in the aggregate amount of $1,000,000
payable to the joint venture on April 24, 1991. The notes have not been
recorded in the accompanying consolidated financial statements due to the
unlikelihood of their collection. However, the Partnership is pursuing
collection and has obtained judgments against the makers of the notes
aggregating $1,024,000 for which enforcement is now being pursued. However,
it is uncertain whether these individuals have sufficient assets to satisfy
these judgments in whole or in part. As of December 31, 1993, no amounts have
been collected from the makers of the notes (see also note 4(b)(8)).
(e) Union Plaza
On August 31, 1993, the lender concluded proceedings to realize upon its
security and took title to the property (see note 4(b)(7)).
Effective October 1, 1985, the joint venture agreement was amended
concurrent with the admission of an additional venture partner. The terms of
the amended agreement provided for contributions by the new venture partner of
$2,500,000 through March 1988, all of which were received through December 31,
1989.
The capital contributions of the new venture partner were used by the
venture to first fund operating deficits at the Union Plaza Office Building
and secondly to the extent available, to repay any advances from the
Partnership plus interest. Due to the inability of the original venture
partner to meet its ongoing obligation to contribute capital to fund the
aforementioned operating deficits and tenant improvement and lease commission
costs, the Partnership advanced funds to the venture. As of August 31, 1993,
the Partnership had advanced approximately $4,000,000 to the venture.
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(4) LONG-TERM DEBT
(a) Long-term debt of the Partnership and its consolidated ventures consists of the following at December 31, 1993 and 1992:
<CAPTION>
1993 1992
----------- -----------
<S> <C> <C>
10-1/2% mortgage note; secured by the Double Tree apartment complex in El Paso,
Texas; satisfied in full upon sale of the property; payable in monthly
installments of interest only of $29,078 through May 1, 1991, $34,458
through April 1, 1992 then principal and interest of $48,014 until
April 1, 1993 when the remaining balance was payable (as modified in
1987 and subsequent; see notes 4(b)(5) and 7(c)) . . . . . . . . . . . . . . . . . . . . . $ -- 4,499,964
11-1/2% mortgage note; secured by the Holly Pond office building in Stamford,
Connecticut; payable in monthly installments of $53,009, (including interest)
subject to call on June 1, 1997 when the remaining balance of approximately
$4,792,000 is payable; see note 4(b)(6) . . . . . . . . . . . . . . . . . . . . . . . . . 5,196,401 5,196,401
9-3/8% mortgage note; secured by the Sunrise Mall shopping center in Brownsville,
Texas; payable in monthly installments of $113,415 (including interest)
until January 1, 2001 when the remaining balance of $10,149,489 is payable . . . . . . . . 12,245,437 12,447,976
12-5/8% mortgage note; secured by the Garret Mountain office building in
West Paterson, New Jersey; payable in monthly installments of $81,983
(including interest) until July 1, 1997 when the remaining balance of
$6,769,779 is payable; see note 4(b)(11) . . . . . . . . . . . . . . . . . . . . . . . . . 7,147,162 7,211,278
8% second mortgage note; secured by the Garret Mountain office building in
West Paterson, New Jersey; payable in monthly installments of interest
and monthly principal payments of $1,000 until April 30, 1994 and $6,000 thereafter
until July 31, 1996 when the remaining balance of approximately $571,000 is
payable; see note 4(b)(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 736,914 750,000
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
1993 1992
----------- -----------
8-3/4% mortgage note; secured by the Silvermine apartment complex in Victoria,
Texas; payable in monthly installments of principal and interest of $30,797
until December 1, 1998 when the then remaining balance of approximately
$3,659,000 is due; see note 4(b)(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,855,861 3,886,562
Mortgage note; secured by the Union Plaza office building in Oklahoma City,
Oklahoma; (satisfied in 1993 by virtue of the lender realizing upon its
security (see note 4(b)(7)) payable in monthly installments of varying
amounts until December 1, 1998 when the remaining balance and any
unpaid interest was payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 22,060,950
----------- -----------
Total debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,181,775 56,053,131
Less current portion of long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . 12,651,424 32,068,325
----------- -----------
Total long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,530,351 23,984,806
=========== ===========
</TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
Included in the above current portion of long-term debt is $3,944,875 at
December 31, 1992, which represents the deferred balance of mortgage interest
accrued but currently payable due to the maturities of the long-term notes.
Five year maturities of long-term debt are as follows:
1994 . . . . . . . . . $12,651,424
1995 . . . . . . . . . 352,679
1996 . . . . . . . . . 920,819
1997 . . . . . . . . . 337,774
1998 . . . . . . . . . 4,025,489
==========
(b) Modifications/Refinancings
(1) General
As described below, the Partnership is seeking or has received mortgage
note modifications on certain properties which expire on various dates
commencing December 1995. Upon expiration of such modifications, should the
Partnership not seek or be unable to secure new or additional modifications to
the loans, based upon current and anticipated future market conditions and
other considerations relating to the properties and the Partnership's
portfolio, the Partnership may decide not to commit any significant additional
amounts to these properties. This would result in the Partnership no longer
having an ownership interest in such properties and may result in gain for
financial reporting and federal income tax purposes without any net
distributable proceeds. Such decisions would be made on a property-by-
property basis.
(2) Highpoint Shopping Center
Effective July 1, 1988, the long-term mortgage note secured by the
Highpoint Shopping Center located in Harris County, Texas was modified for a
twenty-four month period. The modification required monthly payments of
$9,053 through June 30, 1990, and monthly payments of $9,726 thereafter.
Additionally, annual payments were due on the first day of July equal to the
lesser of cash flow (as defined) or unpaid interest. Interest accrued on the
principal and unpaid interest at a rate of 10-3/8% per annum. On July 1,
1993, the entire unpaid balance of the note plus any accrued but unpaid
interest was scheduled to be due. Because the modification on the underlying
indebtedness (which expired in June 1990) was not extended and other
considerations related to the property, the market in which the property is
located and the Partnership's portfolio, the Partnership ceased making the
scheduled debt service payments effective May 1990. The Partnership was served
in December 1990 with a notice to cure the default. The Partnership's
negotiations for further debt relief were not successful and on February 5,
1991, the lender concluded proceedings to realize upon its security and took
title to the property. Since the Partnership had received, through the date
of disposition, losses and distributions from the property in the aggregate in
excess of its original cash investment in the property, the Partnership has
recognized a gain of approximately $174,000 for financial reporting purposes.
The Partnership also recognized a gain of approximately $460,000 for tax
reporting purposes in 1991 with no corresponding distributable proceeds.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
(3) Windmill Park Apartments
Effective June 1, 1986, the long-term mortgage note secured by the
Windmill Park Apartments located in Midland, Texas was modified from a 12%
note, payable in monthly installments of principal and interest, to an 8%
note, payable in monthly installments of interest only. Pursuant to this
modification, as extended, monthly interest payments from late 1988 to August
1, 1991 had been limited to the operating cash flow generated from the
property. In 1991, the modification period was further extended through
August 1, 1992 by an agreement in principle with the lender. In the event
that the property did not generate cash flow sufficient to cover the modified
interest payments during the forty-eight month period ending August 1, 1992,
the difference between the amount paid and the modified rate would accrue and
would be due upon subsequent sale of the property or maturity of the note. In
conjunction with the extension of the modification period, the maturity date
of the long-term note (November 3, 1991) had been extended to August 1, 1992.
The lender notified the venture that it was unwilling to further extend the
modification or maturity date of the note. The joint venture continued to pay
debt service in accordance with the previously modified terms until the
property was sold in September 1992 (see note 7(b)).
(4) Silvermine Apartments
In November 1991, the Victoria venture refinanced the outstanding first
mortgage note with a new first mortgage note of $3,914,700 secured by the
Silvermine Apartments located in Victoria, Texas. The refinanced note had an
outstanding balance at the date of refinancing of approximately $3,768,000 and
was satisfied in full through a discounted payment of approximately
$3,547,000. The discounted payment resulted in a gain of approximately
$221,000 on the extinguishment of the mortgage note and the Partnership's
share was fully recognized in 1991 as an extraordinary item. The Partnership
received net refinancing proceeds of $29,255 (after retirement of the original
first mortgage note, payment of loan fees, certain other costs and the venture
partner's distribution).
(5) Double Tree Apartments
Effective June 1, 1987, the wrap-around mortgage note secured by Double
Tree Apartments located in El Paso, Texas was modified, and this modification
was further extended in 1990. Monthly installments of interest only from June
1, 1990 through May 1, 1991 were agreed to be $29,078 (9% per annum), then
$34,458 (10-1/2% per annum) from June 1, 1991 through April 1, 1992 when the
entire unpaid balance of the note plus any previously deferred interest was
due. In September 1992, the underlying mortgage note holder agreed to extend
the maturity date by one year to April 1, 1993 with monthly installments of
principal and interest in the amount of $43,532 based on a 10.5%, 15-year
amortization retroactive to April 1, 1992. An agreement to extend the wrap-
around mortgage note maturity by one year to April 1, 1993 was also obtained
and was retroactive to April 1, 1992. In addition, beginning April 1, 1992,
the Partnership had been required to remit monthly installments of principal
in the amount of $4,482 to the wrap-around mortgage note holder. Debt service
payments were ceased, beginning April 1, 1992, in conjunction with the
modification negotiations, but payments were remitted in full upon the
finalization of the extension agreement. The Partnership had initiated
discussions with the note holders to extend further the terms of the loans
and, in addition, the Partnership had been pursuing other financing
alternatives. The Partnership continued to pay debt service in accordance
with the previously modified terms until the property was sold in March 1993
(see note 7(c)).
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
(6) Holly Pond Office Center
The Holly Pond venture ceased making debt service payments, effective
August 1, 1990, on the long-term, non-recourse mortgage note secured by Holly
Pond Office Center located in Stamford, Connecticut and sought a modification
of the note terms. In November 1991, the lender posted the property for
acceleration of the mortgage and commenced proceedings to obtain title to the
property. In conjunction with the lender's actions, it came to the venture's
attention that there are traces of petroleum-based contaminant on a small
portion of the property. The venture's initial environmental investigation
indicated that, although the contamination is currently on the property, the
cause of the problem was most likely a result of certain activities of the
owner of a neighboring land parcel. The Partnership has notified the owner of
the neighboring land parcel regarding its responsibility for the clean-up of
the contaminant. As a result, the lender has temporarily suspended its
efforts to obtain title to the property pending the results of the venture's
investigation. Although the Partnership believes the owner of the neighboring
parcel will ultimately bear financial responsibility for the clean-up, the
Partnership has accrued $36,000 for potential future costs related to the
clean-up. Such accrual is reflected in accounts payable in the accompanying
1993 consolidated balance sheet. Because the venture has been unable to
secure debt service relief, the Partnership has decided, based upon current
and anticipated future market conditions and other considerations relating to
the property and the Partnership's portfolio, not to commit any additional
amounts to the property. This will result in the Partnership no longer having
an ownership interest in the property. When the lender realizes upon its
security in the property, the Partnership will recognize a gain for financial
reporting and federal income tax purposes without any corresponding
distributable proceeds. Therefore, the loan has been classified at December
31, 1993 and December 31, 1992 as a current liability in the accompanying
consolidated financial statements.
(7) Union Plaza Office Building
On August 31, 1993, the lender concluded proceedings to realize upon its
security and took title to the property as described below.
Effective October 1, 1988, the long-term mortgage secured by the Union
Plaza office building in Oklahoma City, Oklahoma was modified. The maturity
date of the note was changed from December 1, 1993 to December 1, 1998, when
the outstanding principal balance and any unpaid interest was scheduled to be
due. The modification reduced the interest accrual rate from 13-1/2% to 6%
through September 30, 1990, then 7% as of October 1, 1990 and increasing
annually to 8% and 8.5% through September 30, 1993. The monthly installments
of $217,629 were reduced to $52,721 commencing November 1988, and were to
increase annually to $64,821, $77,875, $108,555 and $125,028 through October
31, 1993. Thereafter, the accrual rate and the pay rate would be a specified
market rate plus 3% adjusted annually. The excess of the interest accrued
over amounts paid would be deferred without interest. The Partnership,
through the Energy Plaza venture, had agreed to deposit all "excess cash
flow", as defined, into a savings account with the lender. Any amount in
excess of $500,000 in this account would have been used to pay deferred
interest. As of August 31, 1993 (the title transfer date), no such excess
cash flow had been deposited.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
The Energy Plaza venture approached the mortgage lender in an effort to
negotiate further debt service relief. Effective November 1, 1991, the debt
service payment increased and the venture began making cash flow debt service
payments. The Partnership decided, based upon current market conditions and
other considerations relating to the property and the Partnership's portfolio,
not to commit any significant additional amounts to this property. On May 27,
1993, the lender posted the property for acceleration of the mortgage and all
accrued interest. The lender subsequently commenced proceedings to realize
upon its mortgage security and appointed a receiver to take over management of
the property upon foreclosure. On August 31, 1993, the lender concluded such
proceedings and took title to the property. Since the Partnership had
received, through the date of disposition, losses and distributions from the
property in the aggregate in excess of its original cash investment in the
property, the Partnership recognized a gain for financial reporting purposes
of $4,643,220 (net of the venture partner's share of $2,048,668) in 1993. In
addition, the Partnership recognized a gain in 1993 of $2,921,252 (net of the
venture partner's share of $9,011,723) for federal income tax purposes, with
no corresponding distributable proceeds. The loan was classified at December
31, 1992 as a current liability in the accompanying consolidated balance
sheet. The venture remitted approximately $854,000 of cash flow debt service
payments in 1993.
(8) Park Place Towers Office Center
The venture had been negotiating with the lender to modify the long-term
mortgage note secured by the Park Place Towers Office Center located in
Birmingham, Alabama. Due to these negotiations and other considerations
related to the property and the Partnership's portfolio, the Park Place
venture ceased making the scheduled debt service payments effective November
1, 1990. The venture was notified on February 20, 1991 of its default on the
long-term mortgage note. Park Place venture's negotiations for further debt
relief were not successful and, on June 13, 1991, the venture transferred
title of the Park Place Tower Office Center to the lender pursuant to legal
action by the lender to realize upon its security interest in the property.
Since the Partnership had received, through the date of disposition, losses
and distributions from the property in the aggregate in excess of its original
cash investment in the property, the Partnership recognized a gain in 1991 of
approximately $1,055,000 for financial reporting purposes. The Partnership
also recognized a gain of approximately $6,912,000 for tax reporting purposes
in 1991 with no corresponding distributable proceeds.
(9) Carlyle/Frontier
On October 31, 1993, the Partnership sold its interest in Frontier Mall
Associates (see note 7(d)).
In November 1991, Frontier Mall Associates refinanced the existing first
mortgage notes (originally due August 1, 1991 but extended through December
31, 1991) secured by Frontier Mall located in Cheyenne, Wyoming, which had a
balance at the date of refinancing of approximately $13,400,000 (including
accrued interest). The new first mortgage note of $14,000,000 provided for
monthly payments of principal and interest of $185,012, computed at the rate
of 10% per annum, until maturity on December 1, 2001. Pursuant to the
Frontier Mall Associates venture agreement, Carlyle/Frontier received net
refinancing proceeds of approximately $235,000 (after retirement of the
existing first mortgage notes, payment of loan fees, certain other costs and
the venture partner's share of refinancing proceeds), $117,000 of which was
allocated to the Partnership.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
(10) Greenway
In October 1992, the Greenway Tower venture refinanced the first and
second mortgage notes with a new first mortgage note of $9,000,000. The
initial advance of the note was $5,750,000 and allows for additional advances
of up to $3,250,000 for approved tenant improvements, leasing commissions,
interest advances, capital improvements and under certain circumstances
borrower equity repayments. As of December 31, 1993, the balance of the note
is $6,487,715 and $2,512,285 is available for future advances. Such
replacement financing matures October 31, 1999 and requires monthly
installments of interest equal to 3.75% per annum in excess of the lender's
composite commercial paper rate ("Contract Index Rate", 6.94% at December 31,
1993). To the extent such rate exceeds 9% in year one, 9.5% in year two, 10%
in years three and four and 10.5% in years five through seven ("Applicable
Base Percentage Rate"), the venture may defer the difference for a given month
provided that the total interest deferred does not exceed 10% of the existing
loan balance. Any deferred interest is due when and to the extent that in any
one month the Contract Index Rate is less than the Applicable Base Percentage
Rate along with the existing principal balance upon maturity of the loan. In
addition, the lender participates in 50% of the net cash flow from the
property as well as in 50% of any net proceeds resulting from the sale of the
property. In order to secure the replacement financing, the venture has been
required to make a capital contribution of $635,574 ($286,008 of which was
paid by the Partnership); however, portions of this contribution may be
refunded to the venture. In 1993, the Partnership received a partial refund
(approximately $104,000) of its original contribution. The refinanced notes
had outstanding balances at the date of refinancing of approximately
$14,255,000 and were satisfied in full through a discounted payment of
$6,050,000. The discounted payment resulted in a gain in 1992 of
approximately $8,204,000 on the extinguishment of the mortgage note and the
Partnership's share of $410,249 was recognized for financial reporting
purposes in 1992. In addition, the Partnership recognized a gain for Federal
income tax purposes in 1992 without the Partnership receiving any
distributable proceeds.
(11) Garret Mountain Office Center
The Garret Mountain venture has approached the mortgage lender in an
effort to negotiate debt service relief on the 12-5/8% first mortgage note
secured by the Garret Mountain office building in West Paterson, New Jersey.
Effective November 1, 1993, the venture began making cash flow debt service
payments. The venture will continue to remit cash flow from the property to
the lender; however, such amount will be less than the terms of the current
mortgage loan. If the venture is unable to secure additional relief, the
Partnership may decide, based upon current market conditions and other
considerations relating to the property and the Partnership's portfolio, not
to commit any significant additional amounts to the property. This would
result in the Partnership no longer having an ownership interest in the
property. As a result, the Partnership recorded a provision for value
impairment of $785,084 in the accompanying consolidated financial statements.
Such provision, made as of December 31, 1993, is recorded to reduce the net
carrying value of the investment property to the outstanding balance of the
related non-recourse debt. The loan has been classified at December 31, 1993
as a current liability in the accompanying consolidated Balance Sheet.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
In October 1989, the venture obtained a short-term (one year) second
mortgage in the amount of $1,000,000 secured by the Garret Mountain Office
Center located in West Paterson, New Jersey. The second mortgage was
subsequently extended to September 1, 1991, August 1, 1992, August 1, 1993 and
July 31, 1996. The second mortgage balance as of December 31, 1993 is
$736,914. The second mortgage is payable in monthly installments of interest
at the rate of 8% along with monthly payments of principal of $1,000 through
April 30, 1994 and $6,000 thereafter until maturity and is classified as long-
term debt, less current portion as of December 31, 1993 and December 31, 1992.
(5) PARTNERSHIP AGREEMENT
Pursuant to the terms of the Partnership Agreement, net profits and
losses of the Partnership from operations are allocated 96% to the Limited
Partners and 4% to the General Partners. Profits from the sale, refinancing
or other disposition of investment properties are to be allocated to the
General Partners to the greater of any cash distributions of the proceeds of
any such sale, refinancing or other disposition (as described below) or 1% of
the profits from the sale, refinancing or other disposition. Losses from the
sale, refinancing or other disposition of investment properties are to be
allocated 1% to the General Partners. The remaining sale, refinancing or
other disposition profits and losses are to be allocated to the Limited
Partners.
The General Partners are not required to make any capital contributions
except under certain limited circumstances upon dissolution and termination of
the Partnership. Distributions of "net cash receipts" of the Partnership are
to be allocated 90% to the Limited Partners and 10% to the General Partners
(of which 6.25% constitutes a management fee to the Corporate General Partner
for services in managing the Partnership). Distributions of "sale proceeds"
and "financing proceeds" are to be allocated to the General Partners in an
amount equal to 3% of the gross sales price of any property sold, then the
balance 15% to the General Partners and 85% to the Limited Partners. However,
distribution of "sale proceeds" and "financing proceeds" to the General
Partners is subordinated to the Limited Partners' receipt of their contributed
capital plus a stipulated return thereon.
The Partnership Agreement provides that the General Partners shall
receive as a distribution from the sale of a real property by the Partnership
3% of the selling price, and that the remaining proceeds (net after expenses
and retained working capital) be distributed 85% to the Limited Partners and
15% to the General Partners. However, the Limited Partners shall receive 100%
of such net sale proceeds until the Limited Partners (i) have received cash
distributions of sale or refinancing proceeds in an amount equal to the
Limited Partners' aggregate initial capital investment in the Partnership and
(ii) have received cumulative cash distributions from the Partnership's
operations which, when combined with sale or refinancing proceeds previously
distributed, equal a 6% annual return on the Limited Partners' average capital
investment for each year (their initial capital investment as reduced by sale
or refinancing proceeds previously distributed) commencing with the third
calendar quarter of 1981. The Limited Partners have not received cash
distributions to satisfy the requirements above.
An amendment to the Partnership Agreement, effective January 1, 1991,
generally provides that notwithstanding any allocation contained in this
Agreement, if, at any time profits are realized by the Partnership, any
current or anticipated event would cause the deficit balance in absolute
amount in the Capital Account of the General Partners to be greater than their
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
share of the Partnership's indebtedness (as defined) after such event, then
the allocation of Profits to the General Partners shall be increased to the
extent necessary to cause the deficit balance in the Capital Account of the
General Partners to be no less than their respective shares of the
Partnership's indebtedness after such event. A portion of the 1991 and 1993
Partnership gains for Federal income tax purposes were reallocated to the
General Partners in accordance with this provision. In general, the effect of
this amendment is to allow the deferral of recognition of taxable gain to the
Limited Partners.
(6) MANAGEMENT AGREEMENTS
Physical management of the properties is performed by the joint venture
partners or their affiliates or by an affiliate of the General Partners. Cash
flow deficits are normally the responsibility of each of the ventures and
compensation to the managers is generally calculated at a percentage of gross
receipts, a portion of which may be subordinated to the Partnership's receipt
of its preferential returns.
At December 31, 1993, an affiliate of the General Partners of the
Partnership was managing the Sunrise Mall in Brownsville, Texas. Management
fees are calculated at a percentage of the gross income from the property.
(7) SALE OF INVESTMENT PROPERTIES
(a) Centroplex Office Building
On July 10, 1991, the Partnership through its venture, Centroplex
Associates, sold the land, building, related improvements and personal
property of the Centroplex Office Building located in White Plains, New York
pursuant to a purchase agreement dated June 19, 1991. The purchaser, Power
Authority of the State of New York (a major tenant), was not affiliated with
the Partnership or its General Partners and the sale price was determined by
arm's-length negotiations. The sale price of the land, building, related
improvements and personal property was $61,750,000 (before selling costs and
prorations), all of which was paid in cash at closing. A portion of the cash
proceeds ($25,925,514, including a $1,853,000 prepayment penalty) was utilized
to retire the first mortgage note secured by the property. The penalty (net
of the venture partner's share) resulted in an extraordinary item of $926,500.
As a result of the sale, the Partnership recognized a gain in 1991 of
$14,774,000 and $24,764,000 (net of the venture partner's share of $14,298,000
and $18,882,000) for financial reporting and Federal income tax purposes,
respectively.
(b) Windmill Park Apartments
Based upon the current and anticipated future market conditions in
Midland, Texas and the venture's inability to obtain suitable replacement
financing, the Partnership decided not to commit any significant additional
amounts to this property. This prompted the venture to enter into a sale
contract on September 23, 1992 under which the venture received $500,000 of
cash sale proceeds from this disposition and the Partnership earned a $25,000
fee for providing consultation to the venture regarding the sale. As a
condition precedent to the sale, the Partnership's existing mortgage
indebtedness and deferred accrued mortgage interest (net of the Partnership's
payments of such interest totaling $2,478 in 1992) secured by the property was
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
discharged by the mortgage lender upon payment of $500,000 consideration to
the lender. Accordingly, the Partnership, the venture and the purchaser have
no further liability or obligations under such mortgage note. The sale of
this property has resulted in the Partnership's recognition in 1992 of a net
gain of $1,647,548 (comprised of an extraordinary gain of $2,411,425 due to
the discharge of the mortgage indebtedness and a loss on sale of investment
property of $763,877) in 1992 for financial reporting purposes, net of the
venture partner's share of $1,647,547. In addition, the Partnership
recognized a gain in 1992 of approximately $1,833,000 for Federal income tax
purposes without the Partnership receiving any distributable sale proceeds.
(c) Double Tree Apartments
On March 18, 1993, the Partnership sold the land, building, related
improvements and personal property of the Double Tree Apartments located in El
Paso, Texas. The sale price of the land, building, related improvements and
personal property was $5,550,000 (before selling costs and prorations), all of
which was paid in cash at closing. A portion of the cash proceeds was
utilized to retire the first mortgage note with an outstanding balance
including principal and deferred interest of $4,496,984. As a result of the
sale, the Partnership recognized gains in 1993 of $2,070,917 for financial
reporting purposes and $4,026,621 for federal income tax purposes. Pursuant
to the sale, the Partnership received net sale proceeds of approximately
$1,022,000 (after retirement of the existing first mortgage note, payment of
loan fees, and certain other costs).
(d) Carlyle Frontier
Effective October 31, 1993, the Partnership and an affiliate (Carlyle
Real Estate Limited Partnership - IX, a partnership sponsored by the General
Partners) sold through Carlyle/Frontier their interests in Frontier Mall
Associates, L.P. representing a total of a 70% interest in the Frontier Mall
property, to the Partnership's unaffiliated joint venture partner.
The sale price of the Partnership's 35% interest in Frontier Mall was
$7,825,030 of which $4,325,030 represented the Partnership's 35% portion of
the first mortgage note and $3,500,000 represented sale proceeds (before costs
of sale and prorations). Approximately $3,300,000 was received in cash on
November 3, 1993. As a result of the sale, the Partnership recognized a gain
of $3,652,935 for financial reporting purposes and $5,825,970 for federal
income tax purposes.
(8) LEASES - AS PROPERTY LESSOR
At December 31, 1993, the Partnership and its consolidated ventures'
principal assets are one shopping center, two office buildings and one
apartment complex. The Partnership has determined that all leases relating to
these properties are properly classified as operating leases; therefore,
rental income is reported when earned, and the cost of each of the properties,
excluding the cost of land, is depreciated over their estimated useful
lives. Leases with office and shopping center tenants range in term from one
to twenty-eight years and provide for fixed minimum rent and partial
reimbursement of operating costs. In addition, leases with shopping center
tenants generally provide for additional rent based upon percentages of
tenants' sales volumes. With respect to the Partnership's shopping center
investments, a substantial portion of the ability of retail tenants to honor
their leases is dependent upon the retail economic sector.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
Costs and accumulated depreciation of the leased assets are summarized as
follows at December 31, 1993:
Apartment complex:
Cost . . . . . . . . . . . . . . . . $ 4,509,867
Accumulated depreciation . . . . . . 1,892,568
-----------
2,617,299
-----------
Shopping center:
Cost . . . . . . . . . . . . . . . . 18,603,606
Accumulated depreciation . . . . . . 11,370,772
-----------
7,232,834
-----------
Office Buildings:
Cost. . . . . . . . . . . . . . . . . 18,350,929
Accumulated depreciation. . . . . . . 6,317,355
-----------
12,033,574
-----------
Total cost less accumulated
depreciation. . . . . . . . . . . . $21,883,707
===========
Minimum lease payments including amounts representing executory costs
(e.g., taxes, maintenance, insurance) and any related profit in excess of
specific reimbursements, to be received in the future under the operating
leases at the shopping center and office buildings are as follows:
1994. . . . . . . . . . . . . . $ 4,385,434
1995. . . . . . . . . . . . . . 3,525,459
1996. . . . . . . . . . . . . . 3,125,842
1997. . . . . . . . . . . . . . 2,309,097
1998. . . . . . . . . . . . . . 1,795,152
Thereafter. . . . . . . . . . . 5,688,731
-----------
Total . . . . . . . . . . $20,829,715
===========
Apartment complex leases in effect at December 31, 1993 are generally for
a term of one year or less and provide for annual rents of approximately
$1,112,000.
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
(9) TRANSACTIONS WITH AFFILIATES
Fees, commissions and other expenses required to be paid by the Partnership to the General Partners and their affiliates as of
December 31, 1993 and for the years ended December 31, 1993, 1992 and 1991 are as follows:
<CAPTION>
UNPAID AT
DECEMBER 31,
1993 1992 1991 1993
-------- -------- -------- --------------
<S> <C> <C> <C> <C>
Property management and leasing fees . . . . . . . . . . . . . . $221,779 302,888 301,430 --
Disbursement agent fees. . . . . . . . . . . . . . . . . . . . . -- 4,104 4,104 --
Management fees to corporate general partner . . . . . . . . . . 41,669 41,669 62,500 --
Insurance commissions. . . . . . . . . . . . . . . . . . . . . . 28,343 28,103 39,020 --
Reimbursement (at cost) for accounting services. . . . . . . . . 77,323 97,100 84,114 77,323
Reimbursement (at cost) for legal services . . . . . . . . . . . 7,103 10,313 10,920 7,103
Reimbursement (at cost) for data processing services . . . . . . 86 -- -- --
Reimbursement (at cost) for out-of-pocket expenses . . . . . . . 15,852 8,019 9,645 --
Reimbursement (at cost) for out-of-pocket salary and
salary related expenses relating to on-site and
other costs for the Partnership and its investment
properties. . . . . . . . . . . . . . . . . . . . . . . . . . . 117,756 40,615 72,427 --
-------- -------- -------- -------
$509,911 532,811 584,160 84,426
======== ======== ======== =======
</TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
In November 1991, the Partnership paid all the previously deferred items
as follows: approximately $2,525,000 of property management fees to an
affiliate of the General Partners and $1,027,832 of management fees to the
General Partners. Any amounts currently payable to the General Partners and
their affiliates do not bear interest and are expected to be paid in future
periods.
(10) INVESTMENT IN UNCONSOLIDATED VENTURE
Summary financial information for the Carlyle-Seattle venture (note 3) as
of and for the years ended December 31, 1993 and 1992, follows:
1993 1992
------------ ------------
Current assets . . . . . . . . . . . $ 2,088,736 2,251,082
Current liabilities. . . . . . . . . 1,502,843 2,369,456
------------ ------------
Working capital surplus (deficit) 585,893 (118,374)
------------ ------------
Investment property, net . . . . . . 69,926,060 73,654,677
Long-term accrued rent
receivable . . . . . . . . . . . . 5,114,243 4,742,285
Deferred expenses. . . . . . . . . . 4,885,802 5,880,276
Long-term debt . . . . . . . . . . . (97,131,235) (97,493,927)
Other liabilities. . . . . . . . . . (2,117,311) (2,198,921)
Venture partners' equity . . . . . . 14,932,465 12,409,680
------------ ------------
Partner's capital deficit. . . . $ (3,804,083) (3,124,304)
============ ============
Represented by:
Invested capital . . . . . . . . . $ 8,000,000 8,000,000
Cumulative distributions . . . . . (1,653,978) (1,404,149)
Cumulative loss. . . . . . . . . . (10,150,105) (9,720,155)
------------ ------------
$ (3,804,083) (3,124,304)
============ ============
Total income . . . . . . . . . . . . $ 20,796,157 20,101,736
============ ============
Expenses applicable to
operating loss . . . . . . . . . . $ 23,027,341 23,558,049
============ ============
Net loss . . . . . . . . . . . . . . $ 2,231,184 3,456,313
============ ============
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Concluded
Total income, expenses applicable to operating loss and net loss from the
above-mentioned venture for the year ended December 31, 1991 were $20,546,658,
$23,077,480 and $2,530,822, respectively.
(11) SUBSEQUENT EVENTS
Distributions
In February 1994, the Partnership paid an operating distribution of
$150,007 ($1.50 per interest) to the Limited Partners and $6,250 to the
General Partners. Also, in February 1994, the Partnership paid a sales
distribution of $3,300,165 ($33 per interest) to the Limited Partners.
SCHEDULE X
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
CHARGED TO COSTS AND EXPENSES
----------------------------------------------
1993 1992 1991
------------ ------------ ------------
Maintenance and
repairs. . . . . . . . $ 996,069 1,166,046 2,615,946
Depreciation . . . . . . 1,826,311 2,258,584 3,367,283
Taxes:
Real Estate. . . . . 974,857 875,850 1,537,941
Other. . . . . . . . 29,360 4,796 2,778
Advertising. . . . . . . 80,536 91,193 115,396
========== =========== ==========
<TABLE>
SCHEDULE XI
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
<CAPTION>
COSTS
CAPITALIZED
CAPITALIZED
INITIAL COST TO SUBSEQUENT TO GROSS AMOUNT AT WHICH CARRIED
PARTNERSHIP (A) TO ACQUISITION AT CLOSE OF PERIOD (B)
-------------------------- -------------- --------------------------------------
BUILDINGS LAND AND LAND AND BUILDINGS
AND BUILDINGS AND LEASEHOLD AND
ENCUMBRANCE LAND IMPROVEMENTS IMPROVEMENTS INTEREST IMPROVEMENTS TOTAL (C)
----------- ----------- ------------ ------------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
APARTMENT COMPLEX:
Victoria, Texas . . $3,855,861 382,160 3,986,924 140,783 382,160 4,127,707 4,509,867
SHOPPING CENTER:
Brownsville,
Texas. . . . . . . 12,245,437 2,610,306 15,391,072 648,194 2,564,340 16,039,266 18,603,606
OFFICE BUILDINGS:
West Paterson,
New Jersey . . . . 7,884,076 1,215,000 7,768,441 1,515,271(C) 1,096,181 9,402,531 10,498,712
Stamford,
Connecticut. . . . 5,196,401 470,968 6,477,211 904,038 470,968 7,381,249 7,852,217
----------- --------- ---------- --------- --------- ---------- ----------
Total. . . . . . $29,181,775 4,678,434 33,623,648 3,208,286 4,513,649 36,950,753 41,464,402
=========== ========= ========== ========= ========= ========== ==========
SCHEDULE XI - CONTINUED
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
LIFE ON WHICH
DEPRECIATION
IN LATEST
STATEMENT OF 1993
ACCUMULATED DATE OF DATE OPERATION REAL ESTATE
DEPRECIATION(D) CONSTRUCTION ACQUIRED IS COMPUTED TAXES
---------------- ------------ ---------- --------------- -----------
APARTMENT COMPLEX:
Victoria, Texas . . . . . . . . . . . . . . $1,892,568 1981 12/19/80 5-30 years 91,530
SHOPPING CENTER:
Brownsville,
Texas. . . . . . . . . . . . . . . . . . . 11,370,772 1979 9/1/80 5-30 years 217,804
OFFICE BUILDINGS:
West Paterson,
New Jersey . . . . . . . . . . . . . . . . 3,543,293 1982 10/29/80 5-30 years 304,370
Stamford,
Connecticut. . . . . . . . . . . . . . . . 2,774,062 1981 12/17/80 5-30 years 315,489
----------- --------
Total. . . . . . . . . . . . . . . . . . $19,580,695 929,193
=========== ========
SCHEDULE XI - CONTINUED
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
<FN>
(A) The cost to the Partnership represents the initial purchase price of the properties, including amounts
incurred subsequent to acquisition which were contemplated at the time the property was acquired.
(B) The aggregate cost of real estate owned at December 31, 1993 for Federal income tax purposes was
approximately $39,649,000.
(C) In 1993, the Partnership recorded a provision for value impairment of $785,084 (of which $753,923
was recorded as a reduction to land and buildings and improvements). See Note 1.
(D) Reconciliation of real estate owned:
</TABLE>
<TABLE>
<CAPTION>
1993 1992 1991
------------ ------------ -----------
<S> <C> <C> <C>
Balance at beginning of period . . . . . . . $72,217,171 74,896,127 133,795,491
Additions during period. . . . . . . . . . . 570,823 1,241,647 1,071,631
Reductions during period . . . . . . . . . . (30,569,669) (3,920,603) (59,970,995)
Provision for value impairment . . . . . . . (753,923) -- --
----------- ----------- -----------
Balance at end of period . . . . . . . . . . $41,464,402 72,217,171 74,896,127
=========== =========== ===========
(E) Reconciliation of accumulated depreciation:
Balance at beginning of period . . . . . . . $29,365,821 29,000,085 43,627,009
Depreciation expense . . . . . . . . . . . . 1,826,311 2,258,584 3,367,283
Reductions during period . . . . . . . . . . (11,611,437) (1,892,848) (17,994,207)
----------- ----------- -----------
Balance at end of period . . . . . . . . . . $19,580,695 29,365,821 29,000,085
=========== =========== ===========
</TABLE>
INDEPENDENT AUDITORS' REPORT
The Partners
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X:
We have audited the financial statements of Carlyle-Seattle (First
Interstate), an unconsolidated venture of Carlyle Real Estate Limited
Partnership - X (Partnership) as listed in the accompanying index. In
connection with our audits of the financial statements, we also have audited
the financial statement schedules as listed in the accompanying index. These
financial statements and financial statement schedules are the responsibility
of the General Partners of the Partnership. Our responsibility is to express
an opinion on these financial statements and financial statement schedules
based on our audits.
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 the General Partners of the Partnership, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of First Interstate,
an unconsolidated joint venture of Carlyle Real Estate Limited Partnership - X
as of December 31, 1993 and 1992, and the results of its operations and its
cash flows for each of the years in the three-year period ended December 31,
1993, in conformity with generally accepted accounting principles. Also in
our opinion, the related 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.
KPMG PEAT MARWICK
Chicago, Illinois
March 25, 1994
<TABLE>
CARLYLE-SEATTLE
(AN UNCONSOLIDATED VENTURE OF CARLYLE REAL ESTATE LIMITED PARTNERSHIP-X)
BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
ASSETS
------
<CAPTION>
1993 1992
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,773,906 1,922,391
Interest, rents and other receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 302,699 317,956
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,131 10,735
------------ ------------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,088,736 2,251,082
------------ ------------
Investment property, at cost (note 1) -- Schedule XI:
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108,027,762 107,964,201
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,101,702 34,309,524
------------ ------------
Total investment properties, net of accumulated depreciation . . . . . . . . . . . . . . . 69,926,060 73,654,677
------------ ------------
Deferred expenses (note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,885,802 5,880,276
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,114,243 4,742,285
------------ ------------
$ 82,014,841 86,528,320
============ ============
CARLYLE-SEATTLE
(AN UNCONSOLIDATED VENTURE OF CARLYLE REAL ESTATE LIMITED PARTNERSHIP-X)
BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
1993 1992
------------ ------------
Current liabilities:
Current portion of long-term debt (note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 362,692 325,075
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 390,601 1,292,332
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 749,550 752,049
------------ ------------
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,502,843 2,369,456
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,300 41,237
Lease assumption payable and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,062,011 2,157,684
Long-term debt, less current portion (note 3). . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,131,235 97,493,927
------------ ------------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,751,389 102,062,304
Partners' capital accounts (deficits) (note 2):
Carlyle-X. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,804,083) (3,124,304)
Venture partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,932,465) (12,409,680)
------------ ------------
Total partners' capital accounts (deficits). . . . . . . . . . . . . . . . . . . . . . . . (18,736,548) (15,533,984)
------------ ------------
Commitments and contingencies (notes 1, 2, 3 and 4)
$ 82,014,841 86,528,320
============ ============
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
CARLYLE-SEATTLE
(AN UNCONSOLIDATED VENTURE OF CARLYLE REAL ESTATE LIMITED PARTNERSHIP-X)
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,747,075 20,037,183 20,475,322
Interest income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,082 64,553 71,336
----------- ----------- -----------
20,796,157 20,101,736 20,546,658
----------- ----------- -----------
Expenses (Schedule X):
Mortgage and other interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,753,857 10,844,825 10,805,249
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,585,711 4,461,680 4,365,782
Property operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,590,379 7,126,106 6,682,987
Professional services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,620 32,080 65,510
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . 1,064,774 1,093,358 1,157,952
----------- ----------- -----------
23,027,341 23,558,049 23,077,480
----------- ----------- -----------
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,231,184 3,456,313 2,530,822
=========== =========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
CARLYLE-SEATTLE
(AN UNCONSOLIDATED VENTURE OF CARLYLE REAL ESTATE LIMITED PARTNERSHIP-X)
STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
VENTURE
CARLYLE-X PARTNERS TOTAL
----------- ----------- -----------
<S> <C> <C> <C>
Balance (deficits) at December 31, 1990. . . . . . . . . . . . . . . . . . . . . . . $(1,769,914) (6,935,035) (8,704,949)
Cash distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (153,525) (421,475) (575,000)
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (489,952) (2,040,870) (2,530,822)
----------- ----------- -----------
Balance (deficits) at December 31, 1991. . . . . . . . . . . . . . . . . . . . . . . (2,413,391) (9,397,380) (11,810,771)
Cash distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (35,631) (231,269) (266,900)
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (675,282) (2,781,031) (3,456,313)
----------- ----------- -----------
Balance (deficits) at December 31, 1992. . . . . . . . . . . . . . . . . . . . . . . (3,124,304) (12,409,680) (15,533,984)
Cash distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (249,829) (721,551) (971,380)
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (429,950) (1,801,234) (2,231,184)
----------- ----------- -----------
Balance (deficits) at December 31, 1993. . . . . . . . . . . . . . . . . . . . . . . $(3,804,083) (14,932,465) (18,736,548)
=========== =========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
CARLYLE-SEATTLE
(AN UNCONSOLIDATED VENTURE OF CARLYLE REAL ESTATE LIMITED PARTNERSHIP-X)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(2,231,184) (3,456,313) (2,530,822)
Items not requiring cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,585,711 4,461,680 4,365,782
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . 1,064,774 1,093,358 1,157,952
Changes in:
Interest, rents and other receivables. . . . . . . . . . . . . . . . . . . . . . 15,257 163,025 322,320
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,396) 10,296 1,714
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . (371,958) (87,501) (286,651)
Accounts payable and accrued interest. . . . . . . . . . . . . . . . . . . . . . (904,230) 236,690 (15,048)
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,063 (16,187) 29,133
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (95,673) (208,995) (194,321)
----------- ----------- -----------
Net cash provided by operating activities. . . . . . . . . . . . . . . . . 2,075,364 2,196,053 2,850,059
----------- ----------- -----------
Cash flows from investing activities:
Principal payments on notes receivable . . . . . . . . . . . . . . . . . . . . . . -- -- 171,925
Additions to investment properties . . . . . . . . . . . . . . . . . . . . . . . . (857,094) (937,748) (674,557)
Payment of deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . (70,300) (262,263) (652,853)
----------- ----------- -----------
Net cash used in investing activities. . . . . . . . . . . . . . . . . . . (927,394) (1,200,011) (1,155,485)
----------- ----------- -----------
CARLYLE-SEATTLE
(AN UNCONSOLIDATED VENTURE OF CARLYLE REAL ESTATE LIMITED PARTNERSHIP-X)
STATEMENTS OF CASH FLOWS - CONTINUED
1993 1992 1991
----------- ----------- -----------
Cash flows from financing activities:
Principal payments on long-term debt . . . . . . . . . . . . . . . . . . . . . . . (325,075) (291,359) (261,141)
Distributions to partners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (971,380) (266,900) (575,000)
----------- ----------- -----------
Net cash used in financing activities. . . . . . . . . . . . . . . . . . . (1,296,455) (558,259) (836,141)
----------- ----------- -----------
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . $ (148,485) 437,783 858,433
=========== =========== ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . . . . . . . . . . $10,756,356 10,847,065 11,562,249
=========== =========== ===========
Disposal of fully amortized assets . . . . . . . . . . . . . . . . . . . . . . . . $ 793,533 321,023 517,584
=========== =========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
CARLYLE-SEATTLE
(AN UNCONSOLIDATED VENTURE OF
CARLYLE REAL ESTATE LIMITED PARTNERSHIP-X)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993, 1992 AND 1991
(1) BASIS OF ACCOUNTING
The accompanying financial statements have been prepared for the
purpose of complying with Rule 3.09 of Regulation S-X of the Securities and
Exchange Commission. They include the accounts of the unconsolidated joint
venture, First Interstate ("Venture"), in which Carlyle Real Estate Limited
Partnership - X ("Carlyle-X") owns a direct interest.
The records of the Venture are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying financial statements have been prepared from such records
after making appropriate adjustments to present the Venture's accounts in
accordance with generally accepted accounting principles ("GAAP"). Such
adjustments are not recorded on the records of the Venture. The net effect
of these items for the years ended December 31, 1993 and 1992 is summarized
as follows:
<TABLE>
CARLYLE-SEATTLE
(AN UNCONSOLIDATED VENTURE OF
CARLYLE REAL ESTATE LIMITED PARTNERSHIP-X)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
1993 1992
----------------------------- -----------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Total assets . . . . . . . . . . . . . . . . . . . . . . . $82,014,841 43,297,885 86,528,320 49,622,978
Partners' capital accounts (deficits). . . . . . . . . . . (18,736,548) (95,437,665) (15,533,984) (86,140,689)
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . 2,231,184 7,389,906 3,456,313 7,821,166
=========== =========== =========== ===========
</TABLE>
CARLYLE-SEATTLE
(AN UNCONSOLIDATED VENTURE OF
CARLYLE REAL ESTATE LIMITED PARTNERSHIP-X)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
Statement of Financial Accounting Standards No. 95 requires the Venture
to present a statement which classifies receipts and payments according to
whether they stem from operating, investing or financing activities. The
required information has been segregated and accumulated according to the
classification specified in the pronouncement. For the purposes of these
statements, the Venture's policy is to consider all short-term investments
held with maturities of three months or less as cash equivalents. Deficit
capital accounts will result, through the duration of the Partnership, in net
gain for financial reporting and income tax purposes.
Deferred expenses are comprised of deferred leasing costs, which are
amortized using the straight-line method over the terms of the related leases
and financing costs which are amortized over the term of the related loan
agreement.
Although certain leases of the Venture provide for increases in minimum
lease payments over the term of the lease, the Venture accrues rental income
for the full period of occupancy on a straight-line basis.
Depreciation on the investment property has been provided over the
estimated useful lives of 5 to 40 years using the straight-line method.
The investment property has been pledged as security for the long-term
debt, for which there is generally no recourse to the venture partners.
As of December 31, 1993, total lease assumptions payable are reflected
net of estimated sublease revenues of $2,612,000.
Maintenance and repair expenses are charged to operations as incurred.
Significant betterments and improvements are capitalized and depreciated over
their estimated useful lives.
No provision for state or Federal income taxes has been made as the
liability for such taxes is that of the venture partners rather than the
Venture.
(2) VENTURE AGREEMENTS
A description of the venture agreement and the management agreement is
contained in Note 3(b) of Carlyle Real Estate Limited Partnership - X for the
year ended December 31, 1993. Such note is incorporated herein by reference.
Under certain circumstances, Carlyle-X may be required to make additional cash
contributions to the Venture.
There are certain risks associated with Carlyle-X's investment made
through the joint venture including the possibility that the joint venture
partners in an investment might become unable or unwilling to fulfill their
financial or other obligations, or that such joint venture partners may have
economic or business interests or goals that are inconsistent with those of
Carlyle-X.
CARLYLE-SEATTLE
(AN UNCONSOLIDATED VENTURE OF
CARLYLE REAL ESTATE LIMITED PARTNERSHIP-X)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(3) LONG-TERM DEBT
Long-term debt consists of the following at December 31, 1993 and 1992:
1993 1992
----------- -----------
11% mortgage note, secured by the
First Interstate Center office
building in Seattle, Washington;
payable in monthly installments
of principal and interest of
$922,425 until December 15, 1995
at which time the remaining
principal balance of $96,275,082
will be payable . . . . . . . . . . . . . . $97,493,927 97,819,002
Less current portion of
long-term debt . . . . . . . . . . . . 362,692 325,075
----------- -----------
Total long-term debt . . . . . . . $97,131,235 97,493,927
=========== ===========
Five year maturities of long-term debt are summarized as follows:
1994. . . . . . . . . . . $ 362,692
1995. . . . . . . . . . . 97,131,235
1996. . . . . . . . . . . --
1997. . . . . . . . . . . --
1998. . . . . . . . . . . --
===========
- -------------------
The venture anticipates approaching the lender regarding an extension or
modification of the existing mortgage loan. There can be no assurance that
the venture will be successful in replacing or refinancing the loan when it
comes due.
(4) LEASES
(a) As Property Lessor
At December 31, 1993, the Venture's principal asset is an office
building. The Venture has determined that all leases relating to this
property are properly classified as operating leases; therefore, rental income
is reported when earned and the cost of the property, excluding cost of land,
is depreciated over the estimated useful life. Leases with tenants range in
terms from one to twenty years and provide for fixed minimum rent and partial
reimbursement of operating costs.
Minimum lease payments including amounts representing executory costs
(e.g., taxes, maintenance, insurance), and any related profit to be received
in the future under the above operating leases are as follows:
1994. . . . . . . . . . . $ 16,442,301
1995. . . . . . . . . . . 15,425,851
1996. . . . . . . . . . . 13,859,082
1997. . . . . . . . . . . 12,531,286
1998. . . . . . . . . . . 12,171,318
Thereafter. . . . . . . . 50,292,685
------------
$120,722,523
============
CARLYLE-SEATTLE
(AN UNCONSOLIDATED VENTURE OF
CARLYLE REAL ESTATE LIMITED PARTNERSHIP-X)
NOTES TO FINANCIAL STATEMENTS - CONCLUDED
(b) As Property Lessee
The Venture owns a net leasehold interest which expires in 2052 in the
land underlying the Seattle, Washington office building, subject to a 20-year
extension. The lease provides for an annual rental of $670,000 and has been
determined to be an operating lease.
(c) Capital Lease
The Venture is obligated on a capital lease obligation relating to the
net cost associated with a lighting retrofit program performed in 1993. The
total cost of this program was approximately $1,065,000, and the Venture
received energy rebates totalling $781,000 from Seattle City Light. The
rebates were used as a reduction to the basis of the equipment. The capital
lease obligation is payable in monthly installments through 1996.
SCHEDULE X
CARLYLE-SEATTLE
(AN UNCONSOLIDATED VENTURE OF
CARLYLE REAL ESTATE LIMITED PARTNERSHIP-X)
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
CHARGED TO COSTS AND EXPENSES
----------------------------------------------
1993 1992 1991
---------- ------------ ------------
Maintenance and
repairs. . . . . . . . $1,809,109 1,666,240 1,562,805
Depreciation . . . . . . 4,585,711 4,461,680 4,365,782
Amortization of
deferred expenses. . . 1,064,774 1,093,358 1,157,952
Taxes:
Real estate taxes. . . 1,704,719 2,097,359 2,171,029
Other. . . . . . . . . 640 444,891 275
========== ============ ============
<TABLE>
SCHEDULE XI
CARLYLE-SEATTLE
(AN UNCONSOLIDATED VENTURE OF CARLYLE REAL ESTATE LIMITED PARTNERSHIP-X)
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
<CAPTION>
COSTS
CAPITALIZED
INITIAL COST TO SUBSEQUENT TO GROSS AMOUNT AT WHICH CARRIED
PARTNERSHIP (A) TO ACQUISITION AT CLOSE OF PERIOD (B)(C)(D)
-------------------------- -------------- --------------------------------------
BUILDINGS BUILDINGS
AND BUILDINGS AND AND
ENCUMBRANCE LAND IMPROVEMENTS IMPROVEMENTS LAND IMPROVEMENTS TOTAL
----------- ----------- ------------ ------------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
OFFICE BUILDING:
Seattle,
Washington . . . . $97,493,927 -- (c) 91,387,111 16,640,651 -- 108,027,762 108,027,762
=========== ========== ========== ========== ========== =========== ===========
SCHEDULE XI - CONTINUED
CARLYLE-SEATTLE
(AN UNCONSOLIDATED VENTURE OF CARLYLE REAL ESTATE LIMITED PARTNERSHIP-X)
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
LIFE ON WHICH
DEPRECIATION
IN LATEST
INCOME 1993
ACCUMULATED DATE OF DATE STATEMENT IS REAL ESTATE
DEPRECIATION CONSTRUCTION ACQUIRED COMPUTED TAXES
------------ ------------ ---------- --------------- -----------
OFFICE BUILDING:
Seattle,
Washington . . . . . . . . . . . . . . . . $38,101,702 1983 3/10/82 5-40 years 1,704,719
=========== ==========
SCHEDULE XI - CONTINUED
CARLYLE-SEATTLE
(AN UNCONSOLIDATED VENTURE OF CARLYLE REAL ESTATE LIMITED PARTNERSHIP-X)
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
<FN>
Notes:
(A) The initial cost to the Venture represents the original purchase price of the property, including amounts
incurred subsequent to acquisition which were contemplated at the time the property was acquired.
(B) The aggregate cost of real estate owned at December 31, 1993 for Federal income tax purposes was approximately
$101,055,799.
(C) Property operated under ground lease; see Note 4(b) of Notes to Financial Statements.
(D) Reconciliation of real estate owned at December 31, 1993, 1992 and 1991:
</TABLE>
<TABLE>
<CAPTION>
1993 1992 1991
------------ ----------- -----------
<S> <C> <C> <C>
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . $107,964,201 107,347,477 107,190,504
Additions during period. . . . . . . . . . . . . . . . . . . . . . . . . 857,094 937,748 674,557
Retirements during period. . . . . . . . . . . . . . . . . . . . . . . . (793,533) (321,024) (517,584)
------------ ----------- -----------
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . $108,027,762 107,964,201 107,347,477
============ =========== ===========
(E) Reconciliation of accumulated depreciation:
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . $ 34,309,524 30,168,868 26,320,670
Depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . . . 4,585,711 4,461,680 4,365,782
Retirements during the period. . . . . . . . . . . . . . . . . . . . . . (793,533) (321,024) (517,584)
------------ ----------- -----------
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . $ 38,101,702 34,309,524 30,168,868
============ =========== ===========
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
There were no changes of or disagreements with accountants during fiscal
year 1992 and 1993.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
The Corporate General Partner of the Partnership is JMB Realty
Corporation ("JMB"), a Delaware corporation. JMB has responsibility for all
aspects of the Partnership's operations, subject to the requirement that sales
of real property must be approved by the Associate General Partner of the
Partnership, Realty Associates-X, L.P., an Illinois limited partnership with
JMB as the sole general partner. The Associate General Partner shall be
directed by a majority in interest of its limited partners (who are generally
officers, directors and affiliates of JMB or its affiliates) as to whether to
provide its approval of any sale of real property (or any interest therein) of
the Partnership. Various relationships of the Partnership to the Corporate
General Partner and its affiliates are described under the caption "Conflicts
of Interest" at pages 9-13 of the Prospectus, which descriptions are
incorporated herein by reference to Exhibit 3-A to the Partnership's Report
for December 31, 1992 on Form 10-K (File No. 0-9726) dated March 19, 1993.
The names, positions held and length of service therein of each director
and executive officer and certain officers of the Managing General Partner of
the Partnership are as follows:
SERVED IN
NAME OFFICE OFFICE SINCE
- ---- ------ ------------
Judd D. Malkin Chairman 5/03/71
Director 5/03/71
Neil G. Bluhm President 5/03/71
Director 5/03/71
Jerome J. Claeys III Director 5/09/88
Burton E. Glazov Director 7/01/71
Stuart C. Nathan Executive Vice President 5/08/79
Director 3/14/73
A. Lee Sacks Director 5/09/88
John G. Schreiber Director 3/14/73
H. Rigel Barber Chief Executive Officer 8/01/93
Jeffrey R. Rosenthal Chief Financial Officer 8/01/93
Gary Nickele Executive Vice President 1/01/92
General Counsel 2/27/84
Ira J. Schulman Executive Vice President 6/01/88
Gailen J. Hull Senior Vice President 6/01/88
Howard Kogen Senior Vice President 1/02/86
Treasurer 1/01/91
There is no family relationship among any of the foregoing directors or
officers. The foregoing directors have been elected to serve one-year terms
until the annual meeting of the Corporate General Partner to be held on June
7, 1994. All of the foregoing officers have been elected to serve one-year
terms until the first meeting of the Board of Directors held after the annual
meeting of the Corporate General Partner to be held on June 7, 1994. There
are no arrangements or understandings between or among any of said directors
or officers and any other person pursuant to which any director or officer was
elected as such.
JMB is the corporate general partner of Carlyle Real Estate Limited
Partnership-VII ("Carlyle-VII"), Carlyle Real Estate Limited Partnership-IX
("Carlyle -IX"), Carlyle Real Estate Limited Partnership-XI ("Carlyle-XI"),
Carlyle Real Estate Limited Partnership-XII ("Carlyle-XII"), Carlyle Real
Estate Limited Partnership-XIII ("Carlyle-XIII"), Carlyle Real Estate Limited
Partnership-XIV ("Carlyle-XIV"), Carlyle Real Estate Limited Partnership-XV
("Carlyle-XV"), Carlyle Real Estate Limited Partnership-XVI ("Carlyle-XVI"),
Carlyle Real Estate Limited Partnership-XVII ("Carlyle-XVII"), JMB Mortgage
Partners, Ltd. ("Mortgage Partners"), JMB Mortgage Partners, Ltd.-II
("Mortgage Partners -II"), JMB Mortgage Partners, Ltd.-III ("Mortgage
Partners-III"), JMB Mortgage Partners, Ltd.-IV ("Mortgage Partners-IV"),
Carlyle Income Plus, Ltd. ("Carlyle Income Plus"), Carlyle Income Plus, Ltd.-
II ("Carlyle Income Plus-II"), and the managing general partner of JMB Income
Properties, Ltd.-II ("JMB Income-II"), JMB Income Properties, Ltd.-IV ("JMB
Income-IV"), JMB Income Properties, Ltd.-V ("JMB Income-V"), JMB Income
Properties, Ltd.-VI ("JMB Income-VI"), JMB Income Properties, Ltd.-VII ("JMB
Income-VII"), JMB Income Properties, Ltd.-VIII ("JMB Income-VIII"), JMB Income
Properties, Ltd.-IX ("JMB Income-IX"), JMB Income Properties, Ltd. -X ("JMB
Income-X"), JMB Income Properties, Ltd.-XI ("JMB Income-XI"), JMB Income
Properties, Ltd.-XII ("JMB Income-XII") and JMB Income Properties, Ltd.-XIII
("JMB Income-XIII"). Most of the foregoing directors and officers are also
officers and/or directors of various affiliated companies of JMB including
Income Growth Managers, Inc. (the corporate general partner of IDS/JMB
Balanced Income Growth, Ltd. ("IDS/BIG")), Arvida/JMB Managers, Inc. (the
general partner of Arvida/JMB Partners, L.P. ("Arvida")) and Arvida/JMB
Managers-II, Inc. (the general partner of Arvida/JMB Partners, L.P.-II
("Arvida-II")). Most of such directors and officers are also partners of
certain partnerships which are associate general partners in the following
real estate limited partnerships: Carlyle-VII, Carlyle-IX, Carlyle-XI,
Carlyle-XII, Carlyle-XIII, Carlyle-XIV, Carlyle-XV, Carlyle-XVI, Carlyle-XVII,
JMB Income-VI, JMB Income-VII, JMB Income-VIII, JMB Income-IX, JMB Income-X,
JMB Income-XI, JMB Income-XII, JMB Income-XIII, Mortgage Partners, Mortgage
Partners-II, Mortgage Partners-III, Mortgage Partners-IV, Carlyle Income Plus,
Carlyle Income Plus-II and IDS/BIG.
The business experience during the past five years of each such director
and officer of the Corporate General Partner of the Partnership in addition to
that described above is as follows:
Judd D. Malkin (age 56) is an individual general partner of JMB Income-IV
and JMB Income-V. Mr. Malkin has been associated with JMB since October
1969. He is a Certified Public Accountant.
Neil G. Bluhm (age 56) is an individual general partner of JMB Income-IV
and JMB Income-V. Mr. Bluhm has been associated with JMB since August 1970.
He is a member of the Bar of the State of Illinois and a Certified Public
Accountant.
Jerome J. Claeys III (age 51) (Chairman and Director of JMB Institutional
Realty Corporation) has been associated with JMB since September 1977. He
holds a Masters degree in Business Administration from the University of Notre
Dame.
Burton E. Glazov (age 55) has been associated with JMB since June 1971
and served as an Executive Vice President of JMB until December 1990. He is a
member of the Bar of the State of Illinois and a Certified Public Accountant.
Stuart C. Nathan (age 52) has been associated with JMB since July 1972.
He is a member of the Bar of the State of Illinois.
A. Lee Sacks (age 60) (President and Director of JMB Insurance Agency,
Inc.) has been associated with JMB since December 1972.
John G. Schreiber (age 47) has been associated with JMB since December
1970 and served as an Executive Vice President of JMB until December 1990. He
holds a Masters degree in Business Administration from Harvard University
Graduate School of Business.
H. Rigel Barber (age 44) has been associated with JMB since March, 1982.
He holds a J.D. degree from the Northwestern Law School and is a member of the
Bar of the State of Illinois.
Jeffrey R. Rosenthal (age 42) has been associated with JMB since
December, 1987. He is a Certified Public Accountant.
Gary Nickele (age 41) has been associated with JMB since February, 1984.
He holds a J.D. degree from the University of Michigan Law School and is a
member of the Bar of the State of Illinois.
Ira J. Schulman (age 42) has been associated with JMB since February,
1983. He holds a Masters degree in Business Administration from the
University of Pittsburgh.
Gailen J. Hull (age 45) has been associated with JMB since March, 1982.
He holds a Masters degree in Business Administration from Northern Illinois
University and is a Certified Public Accountant.
Howard Kogen (age 58) has been associated with JMB since March, 1973. He
is a Certified Public Accountant.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no officers or directors. The Partnership is
required to pay a management fee to the Corporate General Partner and the
General Partners are entitled to receive a share of cash distributions, when
and as cash distributions are made to the Limited Partners, and a share of
profits or losses as described under the caption "Compensation and Fees" at
pages 6-9, "Cash Distributions" at pages 101-103, "Allocation of Profits or
Losses for Tax Purposes" at page 101 and "Distributions and Compensations;
Allocations of Profits and Losses" at pages A-5 to A-9 of the Prospectus,
which descriptions are incorporated herein by reference to Exhibit 3-A to the
Partnership's Report for December 31, 1992 on Form 10-K (File No. 0-9726)
dated March 19, 1993. Reference is also made to Notes 5 and 9 for a
description of such transactions, distributions and allocations. In 1993 and
1992, the General Partners received distributions of $25,001. The General
Partners received a distribution of $616,698 in 1991. Management fees earned
by the Corporate General Partner in 1993, 1992 and 1991 were $41,669, $41,669
and $62,500, respectively. Reference is made to Note 9. In addition, the
General Partners received a share of Partnership operating losses in 1993.
Such losses may benefit the General Partners to the extent that such losses
may be offset against taxable income from the Partnership or other sources.
The Partnership is permitted to engage in various transactions involving
affiliates of the Corporate General Partner of the Partnership, as described
under the captions "Compensation and Fees" at pages 6-9, "Conflicts of
Interest" at pages 9-13 and "Powers, Rights and Duties of the General
Partners" at pages A-11 to A-17 of the Prospectus, which descriptions are
hereby incorporated herein by reference to Exhibit 3-A to the Partnership's
Report for December 31, 1992 on Form 10-K (File No. 0-9726) dated March 19,
1993. The relationship of the Corporate General Partner to its affiliates is
set forth in Item 10 above.
JMB Properties Company, an affiliate of the Corporate General Partner,
provided property management services to the Partnership for all or part of
1993, the Double Tree Apartments, the Sunrise Mall and the Union Plaza Office
Building. In 1993, such affiliate earned property management fees amounting
to $221,779 for such services, all of which were paid as of December 31,
1993. As set forth in the Prospectus of the Partnership, the Corporate
General Partner must negotiate such agreements on terms no less favorable to
the Partnership than those customarily charged for similar services in the
relevant geographical area (but in no event at rates greater than 5% of the
gross income from a property), and such agreements must be terminable by
either party thereto, without penalty, upon 60 days' notice.
JMB Insurance Agency, Inc., an affiliate of the Corporate General
Partner, earned and received insurance brokerage commissions in 1993
aggregating $28,343 in connection with the provision of insurance coverage for
certain of the real property investments of the Partnership. Such commissions
are at rates set by insurance companies for the classes of coverage provided.
The General Partners may be reimbursed for their direct expenses relating
to the administration of the Partnership and the operation of the
Partnership's real property investments. In 1993, the Corporate General
Partner of the Partnership was due reimbursement for such out-of-pocket
expenses in the amount of $117,756, all of which was paid at December 31,
1993.
Additionally, the General Partners may be reimbursed for salaries and
direct expenses of officers and employees of the Corporate General Partner and
its affiliates while directly engaged in the administration of the Partnership
and in the operation of the Partnership's real property investments. In 1993,
such costs were approximately $84,426, all of which were unpaid as of December
31, 1993.
<TABLE>
<CAPTION>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) The following or group is known by the Partnership to own beneficially more than 5% of the outstanding Interests of the
Partnership.
NAME AND
ADDRESS OF AMOUNT AND NATURE
BENEFICIAL OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
- -------------- ---------- ----------------- --------
<S> <C> <C> <C>
Limited Partnership
Interest Liquidity Fund Investment 6,138.50 Interests 6.14%
Corporation indirectly (as in-
1900 Powell Street vestment manager or,
Suite 730 through affiliated
Emeryville, California entities, general
partner partner of 14 general
94608 investment funds)
(b) The Corporate General Partner and its officers and directors own the following Interests of the Partnership:
NAME OF AMOUNT AND NATURE
BENEFICIAL OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
- -------------- ----------- ----------------- --------
Limited Partnership
Interests JMB Realty Corporation 95 Interests directly Less than 1%
Limited Partnership
Interests Corporate General 103 Interests directly (1) Less than 1%
Partner and its
officers and directors
as a group
<FN>
(1) Includes 8 Interests owned by officers or their relatives for which
each officer has investment and voting power as to such interests so owned.
No officer or director of the Corporate General Partner of the
Partnership possesses a right to acquire beneficial ownership of Interests of
the Partnership.
(c) There exists no arrangement, known to the Partnership, the operation
of which may at a subsequent date result in a change in control of the
Partnership.
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no significant transactions or business relationships with the
Corporate General Partner, affiliates or their management other than those
described in Items 10 and 11 above.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
(1) Financial Statements (See Index to Financial Statements filed
with this annual report).
(2) Exhibits.
3-A. The Prospectus of the Partnership dated May 29, 1980,
as supplemented on August 4, 1980, November 12, 1980, November 24, 1980,
January 30, 1981 and February 10, 1981, as filed with the Commission pursuant
to Rules 424(b) and 424(c), is incorporated herein by reference to Exhibit 3-A
to the Partnership's Report for December 31, 1992 on Form 10-K (File No. 0-
9726) dated March 19, 1993. Copies of pages 6-13, 101-103, A-5 to A-9 and A-
11 to A-17 are hereby incorporated herein by reference to Exhibit 3-A to the
Partnership's Report for December 31, 1992 on Form 10-K (File No. 0-9726)
dated March 19, 1993.
3-B. Amended and Restated Agreement of Limited Partnership
set forth as Exhibit A to the Prospectus incorporated herein by reference to
the Partnership's Registration Statement on Form S-11 (File No. 0-9726) dated
November 24, 1980.
4-A. Modification documents relating to the long-term
mortgage note secured by the Union Plaza Office Building are incorporated
herein by reference to Exhibit 4-A to the Partnership's report on Form 10-K
for December 31, 1992 (File No. 0-9726) dated March 19, 1993.
4-B. Long-term mortgage note documents relating to the
note secured by the Sunrise Mall located in Brownsville, Texas are
incorporated herein by reference to the Partnership's Registration Statement
on Post-Effective Amendment No. 2 dated November 24, 1980 to Form S-11 (File
No. 0-9726).
4-C. Long-term mortgage note documents relating to the
first mortgage note secured by the Garret Mountain Office Center located in
West Paterson, New Jersey are incorporated herein by reference to the
Partnership's Registration Statement on Post-Effective Amendment No. 2 dated
November 24, 1980 to Forms S-11 (File No. 0-9726).
4-D. Long-term mortgage note documents relating to the
second mortgage note secured by the Garret Mountain Office Center located in
West Paterson, New Jersey and by the Garret Mountain venture are incorporated
herein by reference to Exhibit 4-D to the Partnership's Report for December
31, 1992 on Form 10-K (File No. 0-9726) dated March 19, 1993.
4-E. Modification documents relating to the long term
second mortgage note secured by the Garret Mountain Office Center located in
West Paterson, New Jersey are incorporated herein by reference to Exhibit 4-E
to the Partnership's Report for December 31, 1992 on Form 10-K (File No. 0-
9726) dated March 19, 1993.
10-A. Acquisition documents relating to the purchase by the
Partnership of an interest in the Union Plaza Office Building located in
Oklahoma City, Oklahoma are incorporated herein by reference to the
Partnership's Registration Statement on Post-Effective Amendment No. 3 to Form
S-11 (File No. 0-9726) dated May 29, 1980.
10-B. Acquisition documents relating to the purchase by the
Partnership of an interest in the Sunrise Mall located in Brownsville, Texas
are incorporated herein by reference to the Partnership's Registration
Statement on Post-Effective Amendment No. 2 dated November 24, 1980 to Form S-
11 (File No. 0-9726).
10-C. Acquisition documents relating to the purchase by the
Partnership of an interest in the Garret Mountain Office Center located in
West Paterson, New Jersey are incorporated by reference herein to the
Partnership's Registration Statement on Post-Effective Amendment No. 2 dated
November 24, 1980 to Form S-11 (File No. 0-9726).
21. List of Subsidiaries.
24. Powers of Attorney
---------------
Although certain additional long-term debt instruments of the
Registrant have been excluded from Exhibit 4 above, pursuant to Rule
601(b)(4)(iii), the Registrant commits to provide copies of such agreements to
the Securities and Exchange Commission upon request.
(b) The following report on Form 8-K was filed since the beginning of
the last quarter of the period covered by this report.
(i) The Partnership's Report on Form 8-K for October 31, 1993
(describing the sale of the Partnership's interest in Frontier Mall in
Cheyenne, Wyoming) was filed. This report was dated November 12, 1993.
No annual report for the fiscal year 1993 or proxy material has been sent to
the Partners of the Partnership. An annual report will be sent to the
Partners subsequent to this filing.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Partnership has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
By: JMB Realty Corporation
Corporate General Partner
GAILEN J. HULL
By: Gailen J. Hull
Senior Vice President
Date: March 25, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: JMB Realty Corporation
Corporate General Partner
JUDD D. MALKIN*
By: Judd D. Malkin, Chairman and Director
Date: March 25, 1994
NEIL G. BLUHM*
By: Neil G. Bluhm, President and Director
Date: March 25, 1994
H. RIGEL BARBER*
By: H. Rigel Barber, Chief Executive Officer
Date: March 25, 1994
JEFFREY R. ROSENTHAL*
By: Jeffrey R. Rosenthal, Chief Financial Officer
Principal Financial Officer
Date: March 25, 1994
GAILEN J. HULL
By: Gailen J. Hull, Senior Vice President
Principal Accounting Officer
Date: March 25, 1994
A. LEE SACKS*
By: A. Lee Sacks, Director
Date: March 25, 1994
STUART C. NATHAN*
By: Stuart C. Nathan, Executive Vice President
and Director
Date: March 25, 1994
*By: GAILEN J. HULL, Pursuant to Powers of Attorney
GAILEN J. HULL
By: Gailen J. Hull, Attorney-in-Fact
Date: March 25, 1994
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
EXHIBIT INDEX
DOCUMENT
INCORPORATED
BY REFERENCE PAGE
3-A. Pages 6-13, 101-103, A-5
to A-9 and A-11 to A-17
of the Prospectus of the
Partnership dated May 29, 1980 Yes
3-B. Amended and Restated Agreement
of Limited Partnership Yes
4-A. Modification documents related
to the Union Plaza Office Building Yes
4-B. Long-term mortgage note documents
related to the Sunrise Mall Yes
4-C. Long-term first mortgage note
related to the Garret Mountain
Office Center Yes
4-D. Long-term second mortgage note
related to the Garret Mountain
Office Center Yes
4-E. Modification documents related
to the Garret Mountain
Office Center Yes
10-A. Acquisition documents related
to the Union Plaza Office Building Yes
10-B. Acquisition documents related to
the Sunrise Mall Yes
10-C. Acquisition documents related to
the Garret Mountain Office Center Yes
21. List of Subsidiaries No
24. Powers of Attorney No
EXHIBIT 21
LIST OF SUBSIDIARIES
The Partnership is a partner of Sunrise Brownsville Associates, Ltd., a
limited partnership which holds title to the Sunrise Mall in Brownsville,
Texas. The seller of the property is a partner in the joint venture. The
Partnership is a partner of Holly Pond Associates, a limited partnership which
holds title to the Holly Pond Office Center in Stamford, Connecticut. The
seller of the property is a partner in the joint venture. The Partnership is
a partner of Garret Mountain Office Center Associates I, a general partnership
which holds title to the Garret Mountain Office Center in West Paterson, New
Jersey. An affiliate of the seller of the property is a partner in the joint
venture. The Partnership is a partner of DMC-Silvermine Apartments Limited, a
limited partnership which holds title to the Silvermine Apartments in
Victoria, Texas. The developer of the property is a partner in the joint
venture. The Partnership is a partner of Greenway Associates, a general
partnership which is a partner in Greenway Tower Joint Venture, a general
partnership which holds title to the Greenway Towers Office Building in
Dallas, Texas. The Partnership is a partner of Carlyle Seattle Associates, a
general partnership which is a partner of Wright-Carlyle Seattle, a general
partnership which holds title to the First Interstate Center office building
in Seattle, Washington. The developer of the property is a partner of
Wright-Carlyle Seattle. Reference is made to Note 3 for a description of the
terms of such joint venture partnerships.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and
directors of JMB Realty Corporation, the managing general partner of
Carlyle Real Estate,Ltd. - X, do hereby nominate, constitute and appoint
GARY NICKELE, GAILEN J. HULL, DENNIS M. QUINN or any of them, attorneys and
agents of the undersigned with full power of authority to sign in the name
and on behalf of the undersigned officer or directors a Report on Form 10-K
of said partnership for the fiscal year ended December 31, 1993, and any and
all amendments thereto, hereby ratifying and confirming all that said attorneys
and agents and any of them may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 23rd day of March, 1994.
JUDD D. MALKIN
- ------------------- Chairman and Director
Judd D. Malkin
NEIL G. BLUHM
- ------------------- President and Director
Neil G. Bluhm
H. RIGEL BARBER
- ------------------- Chief Executive Officer
H. Rigel Barber
JEFFREY R. ROSENTHAL
- ----------------------- Chief Financial Officer
Jeffrey R. Rosenthal
The undersigned hereby acknowledge and accept such power of authority
to sign, in the name and on behalf of the above named officer and directors,
a Report on Form 10-K of said partnership for the fiscal year ended
December 31, 1993, and any and all amendments thereto, the 23rd day of
March, 1994.
GARY NICKELE
------------
Gary Nickele
GAILEN J. HULL
--------------
Gailen J. Hull
DENNIS M. QUINN
--------------
Dennis M. Quinn
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and
directors of JMB Realty Corporation, the managing general partner of CARLYLE
REAL ESTATE, LTD. - X, do hereby nominate, constitute and appoint
GARY NICKELE, GAILEN J. HULL, DENNIS M. QUINN or any of them, attorneys and
agents of the undersigned with full power of authority to sign in the name and
on behalf of the undersigned officer or directors a Report on Form 10-K of
said partnership for the fiscal year ended December 31, 1993, and any and all
amendments thereto, hereby ratifying and confirming all that said attorneys
and agents and any of them may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney
the 26th day of January, 1994.
STUART C. NATHAN
_________________________ Executive Vice President and Director of
Stuart C. Nathan General Partner
A. LEE SACKS
_________________________ Director of General Partner
A. Lee Sacks
The undersigned hereby acknowledge and accept such power of authority to
sign, in the name on behalf of the above named officer and directors, a Report
on Form 10-K of said partnership for the fiscal year ended December 31, 1993,
and any and all amendments thereto, the 26th day of January, 1994.
GARY NICKELE
______________________
Gary Nickele
GAILEN J. HULL
______________________
Gailen J. Hull
DENNIS M. QUINN
___________________________
Dennis M. Quinn
