UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995, or
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission file number 0-9680
CENTURY PROPERTIES FUND XV
(Exact name of Registrant as specified in its charter)
CALIFORNIA 94-2625577
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One Insignia Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (864) 239-1000
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Units
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]
No market for the Limited Partnership Units exists and therefore a market
value for such Units cannot readily be determined.
DOCUMENTS INCORPORATED HEREIN BY REFERENCE:
Prospectus of Registrant dated May 1, 1980, as revised May 29, 1980, and
thereafter supplemented incorporated in Parts I and IV.
CENTURY PROPERTIES FUND XV
(A limited partnership)
PART I
Item 1. Business.
Century Properties Fund XV (the "Registrant") was organized in December
1979 as a California limited partnership under the Uniform Limited Partnership
Act of the California Corporations Code. Fox Capital Management Corporation
(the "Managing General Partner"), a California corporation, and Fox Realty
Investors ("FRI"), a California general partnership, are the general
partners of the Registrant.
The Registrant's Registration Statement, filed pursuant to the Securities
Act of l933 (No. 2-66459), was declared effective by the Securities and Exchange
Commission on May 1, 1980. The Registrant marketed its securities pursuant to
its Prospectus dated May 1, 1980, as revised May 29, 1980, and thereafter
supplemented (hereinafter the "Prospectus"). This Prospectus filed with the
Securities and Exchange Commission pursuant to Rule 424(b) of the Securities Act
of 1933.
The principal business of the Registrant is and has been to acquire, hold
for investment and ultimately sell income-producing real property. The
Registrant is a "closed" limited partnership real estate syndicate of the
unspecified asset type. For a further description of the business of the
Registrant see the sections entitled "Risk Factors" and "Investment Objectives
and Policies" of the Prospectus filed pursuant to Rule 424(b) under the
Securities Act of 1933.
Beginning in July 1980 through April 1981 the Registrant offered
$90,000,000 and sold $89,980,000 in Limited Partnership Units. The net proceeds
of this offering were used to purchase seventeen income-producing real
properties, or interests therein. The Registrant's original property portfolio
was geographically diversified with properties located in eight states.
Two of these properties are or were owned by joint ventures in which the
Registrant has or had interests of 80 percent and 90 percent. In June 1986 the
Registrant purchased the joint venture partner's ten percent interest in one of
these properties. The Registrant's acquisition activities were completed in
June 1982 and since then the principal activity of the Registrant has been
managing its portfolio. In the period from 1986 through January 1992, six office
buildings, three apartment buildings and one shopping center were sold or
otherwise disposed of. The Registrant sold two of its properties in 1995 and an
additional property in the first quarter of 1996. See "Property Matters" and
"Subsequent Events". See "Item 2, Properties" below for a description of the
Registrant's properties.
The Registrant is involved in only one industry segment, as described
above. The business of the Registrant is not seasonal. The Registrant does not
engage in any foreign operations or derive revenues from foreign sources.
Both the income and the expenses of operating the properties owned by the
Registrant are subject to factors outside of the Registrant's control, such as
oversupply of similar rental facilities resulting from overbuilding, increases
in unemployment or population shifts, changes in zoning laws or changes in
patterns of needs of the users. Expenses, such as local real estate taxes and
management expenses, are subject to change and cannot always be reflected in
rental increases due to market conditions or existing leases. The profitability
and marketability of developed real property may be adversely affected by
changes in general and local economic conditions and in prevailing intere st
rates, and favorable changes in such factors will not necessarily enhance the
profitability or marketability of such properties. Even under the most
favorable market conditions there is no guarantee that any property owned by the
Registrant can be sold or, if sold, that such sale can be made upon favorable
terms.
It is possible that legislation on the state or local level may be enacted
in the states where the Registrant's properties are located which may include
some form of rent control. There have been, and it is possible there may be
other, Federal, state and local legislation and regulations enacted relating to
the protection of the environment. The Managing General Partner is unable to
predict the extent, if any, to which such new legislation or regulations might
occur and the degree to which such existing or new legislation or regulations
might adversely affect the properties still owned by the Registrant.
The Registrant monitors its properties for evidence of pollutants, toxins
and other dangerous substances, including the presence of asbestos. In certain
cases environmental testing has been performed, which resulted in no material
adverse conditions or liabilities. In no case has the Registrant received
notice that it is a potentially responsible party with respect to an
environmental clean up site.
The Registrant maintains property and liability insurance on its properties
and believes such coverage to be adequate.
At this time, it appears that the original investment objective of capital
growth from the inception of the Registrant will not be attained and that
investors will not receive a return of all their invested capital. The extent
to which invested capital is returned to investors is dependent upon the success
of the Registrant's strategy as set forth in "Item 7" as well as upon
significant improvement in the performance of the Registrant's remaining
properties and the markets in which such properties are located and on the sales
price of the remaining properties. In this regard, it is anticipated at this
time that remaining properties have been held longer than originally expected.
The ability to hold and operate these properties is dependent on the
Registrant's ability to obtain refinancing or debt modification as required.
Property Matters
Farmers Lane - On December 29, 1995, the Registrant sold its Farmers Lane
property located in Santa Rosa, California to an unaffiliated third party. The
purchase price for the properties was $8,750,000. Net proceeds to the
Registrant after payment of closing costs and existing debt were approximately
$3,429,000. The sale resulted in a gain of $3,995,000.
Plumtree - On April 12, 1995, the Registrant's Joint Venture Partner, the
Prowswood Corporation, elected to exercise its option pursuant to the Joint
Venture Agreement to acquire Plumtree Apartments. The Registrant held an 80%
interest in the joint venture. The purchase price for the property was
$12,500,000. Net proceeds to the Registrant after payment of closing costs,
existing debt and payment to the Registrant's joint venture partner of its pro
rata interest in the proceeds were $6,229,000. The sale resulted in a gain of
$7,335,000.
Lakeside Place Apartments - On June 15, 1994, the Registrant obtained a new
first mortgage encumbering the Lakeside Place Apartments in the amount of
$14,868,000. The new loan requires monthly principal and interest payments of
approximately $126,000, bears interest at 9.60% per annum, is being amortized
over 30 years and matures on July 1, 2001. As required by the lender, the
Registrant established a repair reserve in the amount of $212,000 to ensure
payment of all expenses incurred in connection with the completion of certain
required renovations. In addition, the Registrant was required to establish a
replacement reserve in the amount of $110,000 and is required to make monthly
payments of $9,000 to this reserve. In connection with this loan, the lender
required that the property be placed in a single-asset entity. Accordingly, the
Registrant transferred ownership of this property to Century Lakeside Place,
L.P., a wholly-owned subsidiary of the Registrant. See "Item 8, Consolidated
Financial Statements and Supplementary Data - Note 5."
Phoenix Business Park - On September 10, 1994, the Registrant modified the
existing mortgage encumbering Phoenix Business Park. As modified, the mortgage
requires monthly payments in the amount of approximately $27,000, bears interest
at 8.625% per annum and is being amortized over 16 years. In connection with
the modification, the maturity date of the loan was extended to September 10,
1999. the Registrant was required to establish a repair reserve into which the
Registrant is required to deposit $8,000 per month. See "Item 8, Consolidated
Financial Statements and Supplementary Data - Note 5."
Subsequent Event
Northbank - On February 1, 1996, the Registrant sold its Northbank Complex
property located in Eugene, Oregon to an unaffiliated third party. The purchase
price for the property was $4,605,000. The sale resulted in a gain of
approximately $750,000. Net proceeds to the Registrant after payment of closing
costs and existing debt were approximately $1,900,000.
Employees
Services are performed for the Registrant at its apartment complexes (other
than Plumtree Apartments) by on-site personnel all of whom are employees of
NPI-AP Management, L.P. ("NPI-AP"), an affiliate of the Managing General
Partner, which directly manages the Registrant's apartment complexes (other than
Plumtree Apartments). All payroll and associated expenses of such on-site
personnel are fully reimbursed by the Registrant to NPI-AP. Pursuant to a
management agreement, NPI-AP provides certain property management services to
the Registrant in addition to providing on-site management. With respect to the
Registrant's commercial properties, management is performed by unaffiliated
third party management companies pursuant to management agreements with such
third parties. The Registrant's joint venture partner at Plumtree Apartments
provided management services at Plumtree Apartments until it was sold.
Change in Control
From March 1988 through December 1993, the Registrant's affairs were
managed by Metric Management, Inc. ("MMI") or a predecessor. On December 16,
1993, the services agreement with MMI was modified and, as a result thereof,
the Managing General Partner began directly providing real estate advisory and
asset management services to the Regi strant. As advisor, such affiliate
provides all partnership accounting and administrative services, investment
management, and supervisory services over property management and leasing.
On December 6, 1993, the shareholders of the Managing General Partner
entered into a Voting Trust Agreement with NPI Equity Investments II, Inc.
("NPI Equity II") pursuant to which NPI Equity II was granted the right to vote
100% of the outstanding stock of the Managing General Partner. In addition, NPI
Equity II became the managing partner of FRI. As a result, NPI Equity II
indirectly became responsible for the operation and management of the business
and affairs of the Registrant and the other investment partnerships originally
sponsored by the Managing General Partner and/or FRI. The individuals who had
served previously as partners of FRI and as officers and directors of the
Managing General Partner contributed their general partnership interests in FRI
to a newly formed limited partnership, Portfolio Realty Associates, L.P.
("PRA"), in exchange for limited partnership interests in PRA. The shareholders
of the Managing General Partner and the prior partners of FRI, in their capacity
as limited partners of PRA, continue to hold indirectly certain economic
interests in the Registrant and such other investment limited partnerships, but
have ceased to be responsible for the operation and management of the Registrant
and such other partnerships.
On August 10, 1994, an affiliate of Apollo Real Estate Advisors, L.P.
("Apollo") obtained general and limited partnership interests in NPI-AP.
On October 12, 1994, Apollo acquired one-third of the stock of National
Property Investors, Inc. ("NPI"), the parent corporation of NPI Equity II.
Pursuant to the terms of the stock acquisition, Apollo was entitled to designate
three of the seven directors of the Managing General Partner and NPI Equity II.
In addition, the approval of certain major actions on behalf of the Registrant
required the affirmative vote of at least five directors of the Managing General
Partner.
On August 17, 1995, the stockholders of NPI entered into an agreement to
sell to IFGP Corporation, a Delaware corporation, an affiliate of Insignia
Financial Group, Inc., a Delaware corporation ("Insignia"), all of the issued
and outstanding common stock of NPI, for an aggregate purchase price of
$1,000,000. NPI is the sole shareholder of NPI Equity II, the general partner
of FRI, and the entity which controls the Managing General Partner. The closing
of the transactions contemplated by the above mentioned agreement (the
"Closing") occurred on January 19, 1996.
Upon the Closing, the officers and directors of NPI, NPI Equity II and the
Managing General Partner resigned and an affiliate of Insignia caused new
officers and directors of each of those entities to be elected. See "Item 10,
Directors and Executive Officers of the Registrant."
The Tender Offer
On October 12, 1994, affiliates of Apollo acquired (i) one-third of the
stock of the respective general partners of DeForest Ventures I L.P. ("DeForest
I") and DeForest Ventures II L.P. and (ii) an additional equity interest in
NPI-AP (bringing its total equity interest in such entity to one-third). NPI-AP
is a limited partner of DeForest I which was formed for the purpose of
making tender offers for limited partnership units in the Registrant as well as
eleven affiliated limited partnerships.
On January 19, 1996, DeForest I and certain of its affiliates sold all of
its interest in the Registrant to Riverside Drive L.L.C. ("Riverside"), an
affiliate of Insignia. Pursuant to a Schedule 13-D filed by Riverside with the
Securities and Exchange Commission, Riverside acquired 35,473.17 limited
partnership units or approximately 39.4% of the total limited partnership
units of the Registrant. (See "Item 12, Security Ownership of Certain
Beneficial Owners and Management.")
Competition
The Registrant is affected by and subject to the general competitive
conditions of the residential, office and commercial real estate industries.
Many of the Registrant's properties which are or were located in oil industry
dependent and other weakened markets have been adversely affected by unfavorable
economic conditions in these markets. In addition, each of the Registrant's
properties competes in an area which normally contains numerous other real
properties which may be considered competitive.
Item 2. Properties.
A description of the properties in which the Registrant has an ownership
interest is as follows. Except as indicated, all of the Registrant's remaining
properties are owned in fee.
Date of
Name and Location Purchase Type Size
- ----------------- -------- ---- ----
Lakeside Place Apartments 12/80 Apartment Building 734 units
201 Wilcrest Drive
Houston, Texas
Summerhill Apartments 08/81 Apartment Building 240 units
10010 Whitehurst Drive
Dallas, Texas
Preston Creek Apartments 08/81 Apartment Building 228 units
5902 Preston Oaks Road
Dallas, Texas
Phoenix Business Park 05/82 Business Park 111,000 sq. ft.
2700 N.E. Expressway
Atlanta, Georgia
_______________
See, "Item 8, Consolidated Financial Statements and Supplementary Data" for
information regarding any encumbrances to which the properties of the Registrant
are subject.
The following chart sets forth the occupancy rate at December 31, 1995,
1994, 1993, 1992 and 1991 for the Registrant's remaining properties:
OCCUPANCY SUMMARY
Average
Occupancy Rate(%)
for the Year Ended
December 31,
---------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
Lakeside Place Apartments 94 96 90 89 92
Summerhill Apartments 96 91 90 94 91
Preston Creek Apartments 97 98 94 97 96
Phoenix Business Park 87 80 93 87 81
SIGNIFICANT TENANTS (1)
December 31, 1995
Annualized
Square Nature of Expiration Base Rent
Property Footage Business of Lease(2) Per Year(3)
- -------- ------- --------- ----------- -----------
Phoenix Business Park
Viacom 26,073 TV Station (4) $254,480
Bethco 14,498 Computer Sales/Serv (5) $227,460
General Services 26,039 IRS Office 2001(6) $176,705
- ------------
(1) Tenant occupying 10% or more of total rentable square footage of the
property.
(2) None of the listed tenants have renewal options in their respective leases.
(3) Represents annualized base rent excluding additional rent due as operating
expense reimbursements, percentage rents and future contractual
escalations.
(4) This tenant occupies two office suites at the property. The lease with
respect to 20,773 sq. ft. expires in 2005 with a five year renewal option
and the lease with respect to 5,300 sq. ft. expires in 1996.
(5) This tenant occupies two office suites at the property. The lease with
respect to 11,803 sq. ft. expires in 1997 and the lease with respect to
13,985 sq. ft. expires in 2000.
(6) Tenant has the right to terminate this lease upon 120 days written notice
at any time after January 14, 1998.
Item 3. Legal Proceedings.
Lawrence M. Whiteside, on behalf of himself and all others similarly
situated, v. Fox Capital Management Corporation et, al., Superior Court of the
State of California, San Mateo County, Case No. 390018. ("Whiteside")
Bonnie L. Ruben and Sidney Finkel, on behalf of themselves and all others
similarly situated, v. DeForest Ventures I L.P., DeForest Capital I Corporation,
MRI Business Properties Fund, Ltd. II, MRI Business Properties Fund, Ltd. III,
NPI Equity Investments II, Inc., Montgomery Realty Company-84, MRI Associates,
Ltd. II, Montgomery Realty Company-85 and MRI Associates, Ltd. III, United
States District Court, Northern District of Georgia, Atlanta Division("Ruben").
Roger L. Vernon, individually and on behalf of all similarly situated
persons v. DeForest Ventures I L.P. et. al., Circuit Court of Cook County,
County Departments, Chancery Division, Case No. 94CH0100592. ("Vernon")
James Andrews, et al., on behalf of themselves and all others similarly
situated v. Fox Capital Management Corporation, et al., United States District
Court, Northern District of Georgia, Atlanta Division, Case No.
1-94-CV-3351-JEC. ("Andrews")
In the fourth quarter of fiscal 1994, limited partners in certain limited
partnerships affiliated with the Registrant, commenced actions against, among
others, the Managing General Partner. The actions alleged, among other things,
that the tender offers made by DeForest Ventures I L.P. ("DeForest I") and
DeForest Ventures II L.P. ("DeForest II") in October 1994 constituted (a) a
breach of the fiduciary duty owed by the Managing General Partner to the limited
partners of the Registrant, and (b) a breach of, and an inducement to breach,
the provisions of the Partnership Agreement of the Registrant. The actions,
which had been brought as class actions on behalf of limited partners sought
monetary damages in an unspecified amount and, in the Whiteside action, to
enjoin the tender offers. The temporary restraining order sought in the
Whiteside action was denied by the court on November 3, 1994, and on November
18, 1994, the court denied Whiteside a preliminary injunction.
On March 16, 1995, the United States Court for the Northern District of
Georgia, Atlanta, Division, entered an order which granted preliminary approval
to a settlement agreement (the "Settlement Agreement") in the Ruben and Andrews
actions, conditionally certified two classes for purpose of settlement, and
authorized the parties to give notice to the classes of the terms of the
proposed settlement. Plaintiffs counsel in the Vernon and Whiteside action
joined in the Settlement Agreement as well. The Settlement Agreement received
final approval on May 19, 1995, and the actions were dismissed subject to
satisfaction of the terms of the Settlement Agreement. The two certified
classes constituted all limited partners of the Registrant and the eighteen
other affiliated partnerships who either tendered their units in connection with
the October tender offers or continued to hold their units in the Registrant and
the other affiliated partnerships. Pursuant to the terms of the Settlement
Agreement, which were described in the notice sent to the class members
in March 1995, (and more fully described in the Amended Stipulation of
Settlement submitted in the court on March 14, 1995) all claims which either
were made or could have been asserted in any of the class actions would be
dismissed with prejudice and/or released. In consideration for the dismissal
and/or release of such claims, among other things, DeForest I paid to each unit
holder who tendered their units in the Registrant an amount equal to 15% of the
original tender offer price less attorney's fees and expenses. In addition,
DeForest I commenced a second tender offer on June 2, 1995, for an aggregate
number of units of the Registrant (including the units purchased in the initial
tender) constituting up to 49% of the total number of units of the Registrant at
a price equal to the initial tender price plus 15% less attorney's fees and
expenses. Furthermore, under the terms of the Settlement Agreement, the
Managing General Partner agreed, among other things, to provide the Registrant a
credit line of $150,000 per property which would bear interest at the lesser of
the prime rate plus 1% and the rate permitted under the partnership agreement of
the Registrant. The second tender offer closed on June 30, 1995.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of security holders during the period
covered by this report.
PART II
Item 5. Market for the Registrant's Equity and Related Security Holder Matters.
The Limited Partnership Unit holders are entitled to certain distributions
as provided in the Partnership Agreement. To date, unit holders have received
an average of $243 in distributions for each original unit invested. In
addition, a distribution of $43.57 per Unit was declared and paid in the first
quarter of 1996 which distribution was primarily from the Farmer's Lane sale
proceeds. No market for Limited Partnership Units exists, nor is any expected
to develop.
As of March 1, 1996, the approximate number of holders of Limited
Partnership Units was 5,527.
During the years ended December 31, 1995 and 1994, the Registrant has made
the following cash distributions with respect to the Units to holders thereof as
of the dates set forth below in the amounts set forth opposite such dates:
Distribution with Amount of Distribution
Respect to Quarter Ended Per Unit(*)
------------------------ ----------------------
1995 1994
---- ----
March 31 -- --
June 30 -- --
September 30 70.00 --
December 31 -- --
(*) The amounts listed represent distributions of cash from operations and
cash from sales. (See "Item 7, Management's Discussion and Analysis of
Financial Condition and Results of Operations", for information relating to the
Registrant's future distributions.)
Item 6. Selected Financial Data.
The following represents selected financial data for the Registrant for
the years ended December 31, 1995, 1994, 1993, 1992 and 1991. The data should
be read in conjunction with the Consolidated Financial Statements included
elsewhere herein. This data is not covered by the independent auditors' report.
For the Year Ended December 31,
------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
(Amounts in thousands except per unit data)
TOTAL REVENUES $22,863 $12,596 $11,755 $11,743 $12,358
======= ======= ======= ======= =======
INCOME (LOSS) BEFORE MINORITY
INTEREST IN JOINT VENTURE'S
OPERATIONS $10,780 $ (758) $(1,263) $ (803) $ (837)
MINORITY INTEREST IN JOINT
VENTURE'S OPERATIONS $ (868) (145) (132) (93) (63)
------- ------- ------- ------- -------
INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM $ 9,912 $ (903) $(1,395) $ (896) $ (900)
EXTRAORDINARY ITEM:
LOSS ON EXTINGUISHMENT OF DEBT $ (720) $ -- $ -- $ -- $ --
------- ------- ------- ------- -------
NET INCOME (LOSS) $ 9,192 $ (903) $(1,395) $ (896) $ (900)
NET INCOME PER LIMITED
PARTNERSHIP UNIT(1):
INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM $105.69 $ (9.84) $(15.19) $ (9.76) $ (9.80)
EXTRAORDINARY ITEM $ (7.85) $ -- $ -- $ -- $ --
------- ------- ------- ------- -------
NET INCOME (LOSS) $ 97.84 $ (9.84) $(15.19) $ (9.76) $ (9.80)
======= ======= ======= ======= =======
DISTRIBUTIONS PER LIMITED
PARTNERSHIP UNIT $ 70.00 $ -- $ -- $ -- $ --
TOTAL ASSETS $42,837 $49,291 $49,586 $50,874 $54,328
======= ======= ======= ======= =======
LONG-TERM OBLIGATIONS:
Notes Payable $25,831 $34,229 $33,737 $33,533 $35,840
======= ======= ======= ======= =======
- -----------
(1) $1,000 original contribution per unit, based on weighted average units
outstanding during the year after giving effect to the allocation of net income
(loss) to the general partners.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Capital Resources
As of March 1, 1996, the Registrant's real estate properties consist of one
commercial building and three residential apartment complexes. The properties
are located in Texas and Georgia. The properties are leased to tenants subject
to leases with original lease terms ranging from six months to one year for the
residential properties and with remaining lease terms currently ranging up to
ten years for the commercial properties. The Registrant receives rental income
from its properties and is responsible for operating expenses, administrative
expenses, capital improvements and debt service payments. As of March 1, 1996,
thirteen of the seventeen properties originally purchased by The Registrant were
sold or otherwise disposed.
The Registrant's joint venture property, Plumtree Apartments, was sold in
April 1995 for $12,500,000. After repayment of existing loans of $4,595,000, a
prepayment premium of $42,000 and closing expenses of $113,000, net proceeds
received by the joint venture were $7,750,000. The Registrant retained
$6,229,000 of the $7,750,000 of proceeds in accordance with the joint venture
agreement. For financial statement purposes, the sale resulted in a gain of
$7,866,000. On December 29, 1995, the Registrant's Farmer's Lane Plaza property
was sold to an unaffiliated third party for $8,750,000. After satisfaction of
the existing first and second notes payable totaling $4,444,000, a prepayment
premium of $36,000 and closing expenses of $275,000, the Registrant received
approximately $3,995,000 of net proceeds. For financial statement purposes, the
sale resulted in a gain of $3,618,000. In connection with the sale of properties
and the repayment of the related outstanding debt, the Registrant recognized an
extraordinary loss on extinguishment of debt of $720,000, consisting of the
write-off of unamortized discounts, deferred loan costs, and prepayment
premiums. On February 1, 1996, the Registrant sold its Northbank Complex
property to an unaffiliated third party for $4,605,000. The Registrant received
approximately $1,900,000 of net proceeds from the sale and will record a gain
for financial reporting purposes of approximately $850,000 in the first quarter
of 1996. The Registrant continues to market selected properties for sale.
The Registrant's Lakeside Place Apartments, Farmer's Lane Plaza and
Northbank Complex properties generated positive cash flow from operations during
the year ended December 31, 1995. The Registrant's Preston Creek Apartments and
Phoenix Business Park experienced negative cash flow due to substantial
improvements in connection with renovation projects.
The Registrant uses working capital reserves provided from any
undistributed cash flow from operations, sales and refinancing proceeds as its
primary sources of liquidity. On July 26, 1995, the Registrant distributed
$6,299,000 ($70 per unit) to the limited partners and $128,000 to the general
partners from the proceeds of the sale of The Registrant's joint venture
property, Plumtree Apartments. On January 11, 1996, the Registrant distributed
$3,920,000 ($43.57 per unit) to the limited partners and $80,000 to the general
partners, from the proceeds from the sale of the Registrant's Farmer's Lane
Plaza property. The Managing General Parter is currently evaluating the
Registrant' s cash needs to determine if any portion of the Northbank Complex
net proceeds can be distributed to its partners in the near future.
The level of liquidity based upon cash and cash equivalents experienced a
$3,402,000 increase at December 31, 1995, as compared to 1994. The Registrant's
$1,436,000 of net cash from operating activities and $19,418,000 of net cash
provided by investing activities, were substantially offset by $17,452,000 of
net cash used in financing activities. Cash provided by investing activities
consisted of $20,875,000 of proceeds from the sale of the Registrant's Farmer's
Lane Plaza property and Plumtree Apartments joint venture property, which was
partially offset by $1,457,000 of improvements to real estate, primarily at the
Registrant's Phoenix Business Park, Preston Creek and Lakeside Place
properties. Cash used in financing activities consisted of $6,427,000 of
distributions to partners, $99,000 of financing costs paid, $1,640,000 of joint
venture partner distributions, $608,000 of notes payable principal payments and
$11,121,000 paid in satisfaction of the mortgages encumbering the Registrant's
Farmer's Lane Plaza, Northbank Complex and Plumtree Joint Venture properties,
which were partially offset by the $2,443,000 of proceeds from the refinancing
of the Registrant's Northbank Complex property.
The Registrant's major renovation projects at Preston Creek Apartments and
Phoenix Business Park are substantially complete. The cash required to renovate
these properties was provided from working capital reserves. All other
increases (decreases) in certain assets and liabilities are the result of the
timing of receipt and payment of various operating activities.
Working capital reserves are invested in a money market account or in
repurchase agreements secured by United States Treasury obligations. The
Managing General Partner believes that, if market conditions remain relatively
stable, cash flow from operations, when combined with working capital reserves,
will be sufficient to fund required capital improvements and regular debt
service payments (excluding balloon payments beginning in September 1999) during
1996 and the foreseeable future.
As required by the terms of the settlement of the actions brought against,
among others, DeForest Ventures I L.P. ("DeForest I") relating to the tender
offer made by DeForest I in October 1994 (the "First Tender Offer") for units of
limited partnership interest in the Registrant and certain affiliated
partnerships, DeForest I commenced a second tender offer (the "Second Tender
Offer") on June 2, 1995 for units of limited partnership interest in the
Registrant. Pursuant to the Second Tender Offer, DeForest I acquired an
additional 819 units of the Registrant which, when added to the units acquired
during the First Tender Offer, represents approximately 39% of the total number
of outstanding units of the Registrant. The Managing General Partner believes
that the tender will not have a significant impact on future operations or
liquidity of the Registrant. Also in connection with the settlement, an
affiliate of the Managing General Partner has made available to the Registrant a
credit line of up to $150,000 per property owned by the Registrant. The
Registrant has no outstanding amounts due under this line of credit. Based on
present plans, management does not anticipate the need to borrow in the near
future. Other than cash and cash equivalents the line of credit is the
Registrant's only unused source of liquidity.
On January 19, 1996, the stockholders of NPI, the sole shareholder of NPI
Equity II, sold to IFGP Corporation all of the issued and outstanding stock of
NPI. In addition, an affiliate of Insignia purchased the limited partnership
units held by DeForest I and certain of its affiliates. IFGP Corporation caused
new officers and directors of NPI Equity II and the Managing General Partner to
be elected. The Managing General Partner does not believe these transactions
will have a significant effect on the Registrant's liquidity or results of
operations. See "Item 1 Business-Change in Control".
At this time, it appears that the original investment objective of capital
growth from the inception of the Registrant will not be attained and that
investors will not receive a return of all of their invested capital. The
extent to which invested capital is returned to investors is dependent upon the
performance of the Registrant's properties and the markets in which such
properties are located and on the sales price of the remaining properties. In
this regard, it is anticipated at this time that some of the remaining
properties have been held longer than originally expected. The ability to hold
and operate these properties is dependent on the Registrant's ability to obtain
refinancing or debt modification as required.
Real Estate Market
The business in which the Registrant is engaged is highly competitive, and
the Registrant is not a significant factor in its industry. Each investment
property is located in or near a major urban area and, accordingly, competes for
rentals not only with similar properties in its immediate area but with hundreds
of similar properties throughout the urban area. Such competition is primarily
on the basis of location, rents, services and amenities. In addition, the
Registrant competes with significant numbers of individuals and organizations
(including similar partnerships, real estate investment trusts and financial
institutions) with respect to the sale of improved real properties , primarily
on the basis of the prices and terms of such transactions.
Results of Operations
1995 Compared to 1994
Income (loss), before minority interest in joint venture's operations and
extraordinary item, improved by $11,538,000 for the year ended December 31,
1995, as compared to 1994, due to an increase in revenues of $10,267,000 and a
decrease in expenses of $1,271,000. Net income (loss) improved primarily due to
the $11,484,000 gain on the sale of the Registrant's Farmer's Lane Plaza
property and Plumtree Apartments joint venture property.
With respect to the remaining properties, rental revenues increased by
$399,000, primarily due to an increase in rental rates at the Registrant's
Summerhill, Preston Creek and Lakeside apartment properties coupled with
increased occupancy at the Registrant's Phoenix Business Park and Summerhill
Apartment properties. Occupancy remained relatively constant at the
Registrant's remaining properties. In addition, interest income increased by
$51,000 primarily due to the investment of proceeds from the sale of the
Registrant's joint venture property, Plumtree Apartments.
With respect to the remaining properties, expenses decreased due to a
decrease in interest expense of $103,000, which was partially offset by
increases in depreciation expense of $57,000 and operating expenses of $6,000.
Interest expense decreased primarily due to the modification obtained in
September 1994, on the mortgage encumbering th e Registrant's Phoenix Business
Park property and additional interest paid on the mortgage encumbering the
Registrant's Lakeside Place property in the prior year. Depreciation expense
increased due to significant fixed asset additions in conjunction with the major
renovation project during 1995 at the Registrant's Phoenix Business Park
property. Operating expenses remained relatively constant. In addition, general
and administrative expenses decreased by $157,000 primarily due to a reduction
in asset management costs, effective July 1, 1994.
1994 Compared to 1993
Loss, before minority interest in joint venture's operations, improved by
$505,000 for the year ended December 31, 1994, as compared to 1993, due to
increases in revenues of $841,000 and in expenses of $336,000.
Revenues increased by $841,000 for the year ended December 31, 1994, as
compared to 1993, due to an increase of $851,000 in rental income, which was
slightly offset by a decrease of $10,000 in interest income. Rental revenue
increased primarily due to an increase in rental rates and occupancy at Lakeside
Place Apartments, Preston Creek Apartments, Farmer's Lane Plaza and the
Registrant's Plumtree Apartments joint venture property, which was partially
offset by a decline in occupancy at the Phoenix Business Park and Northbank
Complex properties. Interest income decreased due to a decline in average
working capital reserves available for investment.
Expenses increased by $336,000 for the year ended December 31, 1994, as
compared to 1993, as increases in operating expenses of $706,000 and
depreciation expense of $47,000 were partially offset by decreases in interest
expense of $344,000 and general and administrative expenses of $73,000.
Operating expenses increased due to an increase in rent up expenses and general
repairs and maintenance at Preston Creek Apartments, Farmers Lane Plaza and the
Registrant's Plumtree Apartments joint venture property, along with required
repair expenditures in connection with the Lakeside Place refinancing.
Depreciation expense increased due to the effect of additions to real estate,
primarily at The Registrant's Lakeside Place Apartments and Phoenix Business
Park properties. Interest expense declined primarily due to the discount on the
note payable encumbering the Registrant's Summerhill Apartments property
becoming fully amortized in 1993, in connection with the replacement financing
obtained in October 1993. General and administrative expenses decreased due to a
reduction in asset management costs in July 1994.
Item 8. Consolidated Financial Statements and Supplementary Data.
CENTURY PROPERTIES FUND XV
(A Limited Partnership)
CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1995
INDEX
Page
Independent Auditors' Reports. . . . . . . . . . . . . . . . . . . . . F - 2
Consolidated Financial Statements:
Balance Sheets at December 31, 1995 and 1994 . . . . . . . . . . . . F - 4
Statements of Operations for the Years Ended December 31, 1995,
1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . F - 5
Statements of Partners' Equity for the Years Ended
December 31, 1995, 1994 and 1993. . . . . . . . . . . . . . . . . F - 6
Statements of Cash Flows for the Years Ended December 31, 1995,
1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . F - 7
Notes to Consolidated Financial Statements . . . . . . . . . . . . . F - 8
Financial Statement Schedule:
Schedule III - Real Estate and Accumulated Depreciation at
December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . F - 18
Financial statements and financial statement schedules not included have been
omitted because of the absence of conditions under which they are required or
because the information is included elsewhere in the consolidated financial
statements.
To the Partners
Century Properties Fund XV
Greenville, South Carolina
Independent Auditors' Report
We have audited the accompanying consolidated balance sheets of Century
Properties Fund XV (a limited partnership) (the "Partnership") and
subsidiaries as of December 31, 1995 and 1994, and the related consolidated
statements of operations, partners' equity and cash flows for the years
then ended. Our audits also included the additional information supplied
pursuant to Item 14(a)(2). These consolidated financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall consolidated 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 consolidated financial
position of Century Properties Fund XV and subsidiaries as of December 31,
1995 and 1994, and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting
principles. Also in our opinion, the related financial statement schedule,
when considered in relation to the basic consolidated financial statements
taken as a whole, presents fairly, in all material respects, the
information set forth therein.
Imowitz Koenig & Co., LLP
Certified Public Accountants
New York, N.Y.
February 4, 1996
INDEPENDENT AUDITORS' REPORT
Century Properties Fund XV:
We have audited the accompanying consolidated statements of operations,
partners' equity and cash flows of Century Properties Fund XV (a limited
partnership) (the "Partnership") and its joint venture for the year ended
December 31, 1993. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the results of operations and cash flows of the Partnership
and its joint venture for the year ended December 31, 1993 in conformity with
generally accepted accounting principles.
The accompanying 1993 consolidated financial statements have been prepared
assuming that the Partnership will continue as a going concern. As discussed in
the first paragraph of Note 9 to the financial statements, the Partnership has
balloon payments totaling $17,000,000 due in May 1994, which raises substantial
doubt about the Partnership's ability to continue as a going concern.
Management's plans in regard to this matter are also described in Note 9. The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
DELOITTE & TOUCHE LLP
San Francisco, California
March 18, 1994
CENTURY PROPERTIES FUND XV
(A Limited Partnership)
CONSOLIDATED BALANCE SHEETS
DECEMBER 31,
-------------------------
ASSETS 1995 1994
- ------ ----------- -----------
Cash and cash equivalents $ 5,008,000 $ 1,606,000
Other assets 1,757,000 1,378,000
Real Estate:
Real estate 59,945,000 74,737,000
Accumulated depreciation (24,490,000) (29,112,000)
----------- -----------
Real estate, net 35,455,000 45,625,000
Deferred costs, net 617,000 682,000
----------- -----------
Total assets $42,837,000 $49,291,000
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
Notes payable $25,831,000 $34,229,000
Accrued expenses and other liabilities 1,298,000 1,347,000
----------- -----------
Total liabilities 27,129,000 35,576,000
----------- -----------
Minority interest in joint venture -- 772,000
----------- -----------
Partners' Equity (Deficit):
General partners (1,015,000) (1,275,000)
Limited partners (89,980 units outstanding
at December 31, 1995 and 1994) 16,723,000 14,218,000
----------- -----------
Total partners' equity 15,708,000 12,943,000
----------- -----------
Total liabilities and partners' equity $42,837,000 $49,291,000
=========== ===========
See notes to consolidated financial statements.
CENTURY PROPERTIES FUND XV
(A Limited Partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31,
--------------------------------------
1995 1994 1993
----------- ----------- -----------
Revenues:
Rental $11,249,000 $12,517,000 $11,666,000
Interest income 130,000 79,000 89,000
Gain on sale of properties 11,484,000 -- --
----------- ----------- -----------
Total revenues 22,863,000 12,596,000 11,755,000
----------- ----------- -----------
Expenses (including $897,000,
$610,000 and $95,000 paid to the
joint venture partner, general
partners and affiliates in 1995,
1994 and 1993, respectively):
Operating 6,019,000 6,542,000 5,836,000
Interest 3,603,000 4,073,000 4,417,000
Depreciation 2,250,000 2,371,000 2,324,000
General and administrative 211,000 368,000 441,000
----------- ----------- -----------
Total expenses 12,083,000 13,354,000 13,018,000
----------- ----------- -----------
Income (loss) before minority
interest in joint venture's
operations and extraordinary
item 10,780,000 (758,000) (1,263,000)
Minority interest in joint
venture's operations (868,000) (145,000) (132,000)
----------- ----------- -----------
Income (loss) before
extraordinary item 9,912,000 (903,000) (1,395,000)
Extraordinary item:
Loss on extinguishment of debt (720,000) -- --
----------- ----------- -----------
Net income (loss) $ 9,192,000 $ (903,000) $(1,395,000)
=========== =========== ===========
Net income (loss) per limited
partnership unit:
Income (loss) before
extraordinary item $ 105.69 $ (9.84) $ (15.19)
Extraordinary item (7.85) -- --
----------- ----------- -----------
Net income (loss) $ 97.84 $ (9.84) $ (15.19)
=========== =========== ===========
Distributions per limited
partnership unit $ 70.00 $ -- $ --
=========== =========== ===========
See notes to consolidated financial statements.
CENTURY PROPERTIES FUND XV
(A Limited Partnership)
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
General Limited Total
partners' partners' partners'
(deficit) equity equity
----------- ----------- -----------
Balance -- January 1, 1993 $(1,229,000) $16,470,000 $15,241,000
Net loss (28,000) (1,367,000) (1,395,000)
----------- ----------- -----------
Balance -- December 31, 1993 (1,257,000) 15,103,000 13,846,000
Net loss (18,000) (885,000) (903,000)
----------- ----------- -----------
Balance -- December 31, 1994 (1,275,000) 14,218,000 12,943,000
Net income 388,000 8,804,000 9,192,000
Distributions (128,000) (6,299,000) (6,427,000)
----------- ----------- -----------
Balance -- December 31, 1995 $(1,015,000) $16,723,000 $15,708,000
=========== =========== ===========
See notes to consolidated financial statements.
CENTURY PROPERTIES FUND XV
(A Limited Partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31,
--------------------------------------
1995 1994 1993
----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
- -------------------------------------
Net income (loss) $ 9,192,000 $ (903,000) $(1,395,000)
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Depreciation and amortization 2,781,000 2,912,000 3,174,000
Provision for doubtful
receivables -- -- 32,000
Gain on sale of properties (11,484,000) -- --
Extraordinary item 720,000 -- --
Deferred costs paid (122,000) (23,000) (250,000)
Minority interest in joint
venture's operations 868,000 145,000 132,000
Changes in operating assets
and liabilities:
Other assets (379,000) (621,000) (259,000)
Accrued expenses and other
liabilities (140,000) 114,000 (109,000)
----------- ----------- -----------
Net cash provided by operating
activities 1,436,000 1,624,000 1,325,000
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
- -------------------------------------
Note receivable repayments from
property sale -- -- 22,000
Additions to real estate (1,457,000) (905,000) (1,658,000)
Proceeds from cash investments -- -- 496,000
Purchase of cash investments -- -- (496,000)
Net proceeds from sale of rental
properties 20,875,000 -- --
Property sales expenses paid -- -- (2,000)
----------- ----------- -----------
Net cash provided by (used in)
investing activities 19,418,000 (905,000) (1,638,000)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
- -------------------------------------
Notes payable proceeds 2,443,000 14,868,000 3,300,000
Financing costs paid (99,000) (436,000) --
Satisfaction of notes payable (11,121,000) (14,200,000) (3,309,000)
Notes payable principal payments (608,000) (569,000) (457,000)
Joint venture partner
distributions (1,640,000) (143,000) (120,000)
Cash distributions to partners (6,427,000) -- --
----------- ----------- -----------
Net cash used in financing
activities (17,452,000) (480,000) (586,000)
----------- ----------- -----------
Increase (Decrease) in Cash
and Cash Equivalents 3,402,000 239,000 (899,000)
Cash and Cash Equivalents at
Beginning of Year 1,606,000 1,367,000 2,266,000
----------- ----------- -----------
Cash and Cash Equivalents at
End of Year $ 5,008,000 $ 1,606,000 $ 1,367,000
=========== =========== ===========
Supplemental Disclosure of
Cash Flow Information:
Interest paid in cash during
the year $ 3,600,000 $ 3,482,000 $ 3,645,000
=========== =========== ===========
Supplemental Disclosure of
Non-cash Investing and
Financing Activities:
Property sale expenses accrued $ 91,000 $ -- $ --
=========== =========== ===========
Disposition of rental
properties in 1995 -- see Note 6
See notes to consolidated financial statements.
CENTURY PROPERTIES FUND XV
(A Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Century Properties Fund XV (the "Partnership") is a limited
partnership organized under the laws of the State of California to
acquire, hold for investment and ultimately sell income-producing real
estate. The Partnership currently owns three apartment complexes in
Texas and a commercial building located in Georgia. The general
partners of the Partnership are Fox Realty Investors ("FRI"), a
California general partnership, and Fox Capital Management Corporation
("FCMC"), a California Corporation. The original capital contributions
of $89,980,000 ($1,000 per unit) were made by the limited partners,
including 100 limited partnership units purchased by FCMC.
On December 6, 1993, the shareholders of FCMC entered into a Voting
Trust Agreement with NPI Equity Investments II, Inc. ("NPI Equity" or
the "Managing General Partner") pursuant to which NPI Equity was
granted the right to vote 100 percent of the outstanding stock of FCMC
and NPI Equity became the managing general partner of FRI. As a
result, NPI Equity became responsible for the operation and management
of the business and affairs of the Partnership and the other
investment partnerships originally sponsored by FCMC and/or FRI. NPI
Equity is a wholly-owned subsidiary of National Property Investors,
Inc. ("NPI, Inc."). The shareholders of FCMC and the partners in FRI
retain indirect economic interests in the Partnership and such other
investment limited partnerships, but have ceased to be responsible for
the operation and management of the Partnership and such other
partnerships.
In October 1994, DeForest Ventures I L.P. ("DeForest I") made a tender
offer for limited partnership interests in the partnership, as well as
eleven affiliated limited partnerships. DeForest Ventures II, L.P.
("DeForest II") made tender offers for limited partnership interests in
seven affiliated limited partnerships. Shareholders who controlled
DeForest Capital I Corporation, the sole general partner of DeForest
I, also controlled NPI, Inc. As of December 31, 1995, DeForest I had
acquired approximately 39% of total limited partnership units of the
Partnership (see Note 10).
On January 19, 1996, the stockholders of NPI, Inc. sold all of the
issued and outstanding stock of NPI, Inc. to an affiliate of Insignia
Financial Group, Inc. ("Insignia"). In addition, an affiliate of
Insignia acquired the limited partnership interests of the Partnership
held by DeForest I and certain of its affiliates (see Note 10).
CENTURY PROPERTIES FUND XV
(A Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Distributions
On July 26, 1995, the Partnership distributed $6,299,000 ($70 per
unit) to the limited partners and $128,000 to the general partners
from the proceeds of the sale of the Partnership's joint venture
property, Plumtree Apartments.
On January 11, 1996, the Partnership distributed $3,920,000 ($43.57
per unit) to the limited partners and $80,000 to the general partners
primarily from the proceeds from the sale of the Partnership's
Farmer's Lane Plaza property (see Note 6).
Consolidation
The consolidated financial statements include the statements of the
Partnership, its wholly owned subsidiaries and its joint venture,
Plumtree Apartments (80 percent owned) which was sold on April 12,
1995 (see Note 6). All significant intercompany transactions and
balances have been eliminated.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from
those estimates.
Fair Value of Financial Instruments
In 1995, the Partnership implemented Statement of Financial Accounting
Standards ("SFAS") No. 107, "Disclosures about Fair Value of Financial
Instruments," as amended by SFAS No. 119, "Disclosures about Derivative
Financial Instruments and Fair Value of Financial Instruments," which
requires disclosure of fair value information about financial
instruments, whether or not recognized in the balance sheet, for which
it is practicable to estimate fair value. Fair value is defined in
the SFAS as the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in a forced or
liquidation sale. The Partnership believes that the carrying amount
of its financial instruments (except for long term debt) approximates
fair value due to the short term maturity of these instruments. The
fair value of the Partnership's long term debt, after discounting the
scheduled loan payments to maturity, is approximately $29,336,000.
The carrying amount of long term debt includes notes whereby the
Partnership would be required to pay an amount significantly in excess
of their fair value in order to prepay such notes. Consequently, the
Partnership would be unable to refinance these properties to obtain
the aforementioned calculated debt amounts.
CENTURY PROPERTIES FUND XV
(A Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Real Estate
Real estate is stated at cost. Acquisition fees are capitalized as a
cost of real estate. In 1995, the Partnership adopted SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of ", which requires impairment losses to be
recognized for long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows are not
sufficient to recover the asset's carrying amount. The impairment
loss is measured by comparing the fair value of the asset to its
carrying amount. The adoption of the SFAS had no effect on the
Partnership's financial statements.
Cash and Cash Equivalents
The Partnership considers all highly liquid investments with an
original maturity of three months or less at the time of purchase to
be cash equivalents.
Concentration of Credit Risk
The Partnership maintains cash balances at institutions insured up to
$100,000 by the Federal Deposit Insurance Corporation. Balances in
excess of $100,000 are usually invested in repurchase agreements,
which are collateralized by United States Treasury obligations. Cash
balances exceeded these insured levels during the year. At December
31, 1995, the Partnership had approximately $1,100,000 invested in
overnight repurchase agreements, secured by United States Treasury
obligations, which are included in cash and cash equivalents.
Depreciation
Depreciation is computed by the straight-line method over estimated
useful lives currently ranging from 27.5 to 39 years for buildings and
improvements and six to seven years for furnishings.
Deferred Costs
Deferred costs represent deferred financing costs, leasing commissions
and lease buyout fees. Deferred financing costs are amortized as
interest expense over the lives of the related loans or expensed, if
financing is not obtained. Deferred leasing commissions and deferred
lease buyout fees are amortized over the life of the applicable lease.
Such amortization is charged to operating expenses. At December 31,
1995 and 1994, accumulated amortization of deferred costs was $346,000
and $508,000, respectively.
CENTURY PROPERTIES FUND XV
(A Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Net Income (Loss) Per Limited Partnership Unit
The net income (loss) per limited partnership unit is computed by
dividing net income (loss) allocated to the limited partners by 89,980
units outstanding.
Income Taxes
Taxable income or loss of the Partnership is reported in the income
tax returns of its partners. Accordingly, no provision for income
taxes is made in the financial statements of the Partnership.
Reclassification
Certain amounts from 1994 have been reclassified to conform to the
1995 presentation.
2. TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES
In accordance with the partnership agreement, the Partnership may be
charged by the general partners and affiliates for services provided
to the Partnership. From March 1988 to December 1992, such amounts
were assigned pursuant to a services agreement by the general partners
and affiliates to Metric Realty Services, L.P. ("MRS"), which
performed partnership management and other services for the
Partnership.
On January 1, 1993, Metric Management, Inc. ("MMI"), successor to MRS,
a company which is not affiliated with the general partners, commenced
providing certain property and portfolio management services to the
Partnership under a new services agreement. As provided in the new
services agreement effective January 1, 1993, no reimbursements were
made to the general partner and affiliates after December 31, 1992.
Subsequent to December 31, 1992, reimbursements were made to MMI. On
December 16, 1993, the services agreement with MMI was modified and,
as a result thereof, the Managing General Partner began directly
providing cash management and other Partnership services on various
dates commencing December 23, 1993. On March 1, 1994, an affiliate of
NPI Equity commenced providing certain property management services
(see Notes 1 and 10). Related party expenses for the years ended
December 31, 1995, 1994 and 1993 were as follows:
1995 1994 1993
-------- -------- --------
Property management fees $399,000 $319,000 $ --
Real estate tax reduction fees 57,000 -- --
Reimbursement of expenses:
Partnership accounting and investor
services 152,000 162,000 --
Professional services -- 25,000 --
-------- -------- ---------
Total $608,000 $506,000 $ --
======== ======== =========
CENTURY PROPERTIES FUND XV
(A Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
2. TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES (Continued)
Property management fees and real estate tax reduction fees are
included in operating expenses. Reimbursed expenses are primarily
included in general and administrative expenses. In addition,
approximately $259,000 of insurance premiums which were paid to an
affiliate of NPI Inc. under a master insurance policy arranged by such
affiliate, are included in operating expenses for the year ended
December 31, 1995.
In accordance with the partnership agreement, the general partners
were allocated their two percent continuing interest in the
Partnership's net income (loss) and taxable income (loss). Gains from
dispositions of the Partnership's properties were allocated first to
the general partners to the extent of distributions received or they
were entitled to receive, then two percent of the remainder.
3. RELATED PARTY TRANSACTIONS
Apart from the reimbursements paid to the general partners and
affiliates as set forth above, the Partnership also has an agreement
with its joint venture partner to provide for the management and
operation of the joint venture property. Fees paid pursuant to this
agreement, generally based upon a percentage of gross revenues from
the operation of the property, were $30,000, $104,000 and $95,000 in
1995, 1994 and 1993, respectively.
4. REAL ESTATE
Real estate, at December 31, 1995 and 1994, is summarized as follows:
Residential Commercial
Properties Properties Total
----------- ----------- -----------
1995:
Land $ 6,765,000 $ 1,607,000 $ 8,372,000
Buildings and improvements 36,020,000 11,824,000 47,844,000
Furnishings 3,609,000 120,000 3,729,000
----------- ----------- -----------
Total 46,394,000 13,551,000 59,945,000
Accumulated depreciation (19,394,000) (5,096,000) (24,490,000)
----------- ----------- -----------
Real estate, net $27,000,000 $ 8,455,000 $35,455,000
=========== =========== ===========
CENTURY PROPERTIES FUND XV
(A Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
4. REAL ESTATE (Continued)
Residential Commercial
Properties Properties Total
----------- ----------- -----------
1994:
Land $ 7,416,000 $ 3,063,000 $10,479,000
Buildings and improvements 42,361,000 17,308,000 59,669,000
Furnishings 4,444,000 145,000 4,589,000
----------- ----------- -----------
Total 54,221,000 20,516,000 74,737,000
Accumulated depreciation (21,973,000) (7,139,000) (29,112,000)
----------- ----------- -----------
Real estate, net $32,248,000 $13,377,000 $45,625,000
=========== =========== ===========
Subsequent to the balance sheet date, the Partnership sold its
Northbank Complex (see Note 10).
5. NOTES PAYABLE
Individual rental properties are pledged as collateral for the related
notes payable. Interest rates on the notes payable ranged from 8.5 to
11 percent during the year ended December 31, 1995. Certain notes have
been discounted to yield interest from 14.5 percent to 16.5 percent
during the year ended December 31, 1995. Amortization of these
discounted amounts was $347,000, $393,000 and $670,000 for 1995, 1994
and 1993, respectively. The notes are payable monthly.
Principal payments at December 31, 1995 are required as follows:
1996 $ 2,905,000
1997 506,000
1998 555,000
1999 2,852,000
2000 536,000
Thereafter 19,371,000
Unamortized discount (894,000)
-----------
Total $25,831,000
===========
CENTURY PROPERTIES FUND XV
(A Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
5. NOTES PAYABLE (Continued)
Principal payments for Northbank Complex, which was sold in the first
quarter of 1996, are reflected in 1996 regardless of their original due
date (see Note 10).
On June 15, 1994, the Partnership obtained a new first mortgage
encumbering the Lakeside Place Apartments in the amount of $14,868,000.
The loan requires monthly payments of $126,000 at 9.60% interest and is
being amortized over 30 years. The loan matures on July 1, 2001 with a
balloon payment of $14,043,000. As specified in the loan agreement,
the Partnership was required to establish a reserve account to be used
for the completion of certain renovations. The Partnership incurred
closing costs and fees of $393,000 in connection with this refinancing.
As part of the agreement, the Partnership was required to form a
wholly-owned subsidiary, Century Lakeside L.P., and transfer the assets
and liabilities of Lakeside Place Apartments to the subsidiary.
On September 10, 1994, the Partnership obtained a modification of the
existing mortgage encumbering the Phoenix Business Park property in the
amount of $2,778,000. The mortgage, as modified, requires monthly
payments of $27,000 at 8.625% interest and is being amortized over 16
years. As specified in the loan agreement, the Partnership was
required to establish a repair reserve account. The loan matures on
September 10, 1999 with a balloon payment of $2,284,000. The
Partnership incurred closing costs and fees of $43,000 in connection
with the modification.
On November 16, 1995, the Partnership obtained a new first mortgage
encumbering the Northbank Complex in the amount of $2,443,000. The
partnership incurred closing costs and fees of $99,000 in connection
with this refinancing. On January 30, 1996, the Partnership sold its
Northbank Complex (see Note 10).
Amortization of deferred financing costs totaled $100,000, $71,000 and
$104,000 for 1995, 1994 and 1993, respectively.
6. DISPOSITION OF RENTAL PROPERTIES
On April 12, 1995, an affiliate of the Partnership's joint venture
partner in Plumtree Apartments acquired, pursuant to a right of first
refusal, Plumtree Apartments for $12,500,000. After repayment of
existing loans of $4,595,000, a prepayment premium of $42,000 and
closing expenses of $113,000, net proceeds received by the joint
venture were $7,750,000. The Partnership retained $6,229,000 of the
$7,750,000 proceeds in accordance with the joint venture agreement.
For financial statement purposes, the sale resulted in a gain of
$7,866,000.
On December 29, 1995, the Partnership's Farmer's Lane Plaza property
was sold to an unaffiliated third party for $8,750,000. After
satisfaction of the existing first and second notes payable totaling
$4,444,000, a prepayment premium of $36,000 and closing expenses of
$275,000, the Partnership received approximately $3,995,000 of net
proceeds. For financial statement purposes, the sale resulted in a
gain of $3,618,000.
CENTURY PROPERTIES FUND XV
(A Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
6. DISPOSITION OF RENTAL PROPERTIES (Continued)
In connection with the sale of properties and the repayment of the
related outstanding debt, the Partnership recognized an extraordinary
loss on extinguishment of debt of $720,000, consisting of th write-off
of unamortized discounts, deferred loan costs and prepayment premiums.
7. MINIMUM FUTURE RENTAL REVENUES
Minimum future rental revenues from operating leases having
non-cancelable lease terms in excess of one year are as follows:
1996 $ 683,000
1997 638,000
1998 466,000
1999 435,000
2000 330,000
Thereafter 1,345,000
----------
Total $3,897,000
==========
Subsequent to the balance sheet date, the Partnership sold its
Northbank Complex (see Note 10). The minimum future rental revenues
from Northbank Complex have been excluded.
Amortization of deferred leasing commissions and deferred lease buyout
fees totaled $84,000, $77,000 and $76,000 for 1995, 1994 and 1993,
respectively.
8. RECONCILIATION TO INCOME TAX METHOD OF ACCOUNTING
The differences between the accrual method of accounting for income tax
reporting and the accrual method of accounting used in the consolidated
financial statements are as follows:
1995 1994 1993
----------- ----------- -----------
Net income (loss) -- financial
statements $ 9,192,000 $ (903,000) $(1,395,000)
Differences resulted from:
Depreciation (935,000) (973,000) (900,000)
Gain on property dispositions
-- net 3,510,000 -- --
Unearned revenue (4,000) (16,000) (9,000)
Amortization of notes payable
discount 347,000 393,000 670,000
Minority interest (1,873,000) (18,000) (14,000)
Other (80,000) 82,000 64,000
----------- ----------- -----------
Net income (loss) -- income
tax method $10,157,000 $(1,435,000) $(1,584,000)
=========== =========== ===========
CENTURY PROPERTIES FUND XV
(A Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
8. RECONCILIATION TO INCOME TAX METHOD OF ACCOUNTING (Continued)
Taxable income (loss) per limited
partnership unit after giving
effect to the allocation
to the general partners $ 118 $ (16) $ (17)
=========== =========== ===========
Partners' equity -- financial
statements $15,708,000 $12,943,000 $13,846,000
Differences resulted from:
Sales commissions and
organization expenses 10,322,000 10,322,000 10,322,000
Depreciation (16,714,000 (19,218,000) (18,245,000)
Payments credited to rental
properties 332,000 464,000 464,000
Unearned revenue (2,000) 2,000 18,000
Amortization of notes
payable discount 7,224,000 8,662,000 8,269,000
Minority interest -- (187,000) (169,000)
Other 43,000 195,000 113,000
----------- ----------- -----------
Partners' equity -- income
tax method $16,913,000 $13,183,000 $14,618,000
=========== =========== ===========
9. BASIS OF PRESENTATION AND OPERATING STRATEGY FOR THE YEAR ENDED
DECEMBER 31, 1993
The accompanying consolidated financial statements for the year ended
December 31, 1993 have been prepared on a going concern basis which
contemplates the realization of assets and satisfaction of liabilities
in the normal course of business. The Partnership holds investments in
and operates properties in real estate markets that are or were
experiencing unfavorable economic conditions. Each of the
Partnership's properties competes in an area which normally contains
numerous other real properties which may be considered competitive.
Markets in many areas remain depressed due in part to overbuilding,
which continues to depress commercial, office and residential rental
rates. In addition, the availability of favorable financing rates, as
well as affordable prices for the purchase of single family homes has
created increased competition for the declining tenant base and has
inhibited rate growth at certain of the apartment properties. The
level of sales of existing properties has been affected by the limited
availability of financing and buyers in real estate markets. Balloon
payments of $14,200,000 on Lakeside Place Apartments and $2,800,000 on
Phoenix Business Park were due in May 1994. The consolidated financial
statements do not include any adjustments that might have resulted from
the ultimate outcome of these uncertainties.
The Partnership refinanced the mortgage encumbering Lakeside Place
Apartments and obtained a modification of the Phoenix Business Park
debt during 1994 (see Note 5).
CENTURY PROPERTIES FUND XV
(A Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
10. SUBSEQUENT EVENTS
On January 19, 1996, the stockholders of NPI, Inc. sold all of the issued
and outstanding stock of NPI, Inc. to an affiliate of Insignia. In
addition, an affiliate of Insignia acquired the limited partnership
interests of the Partnership held by DeForest I and certain of its
affiliates (see Note 1). As a result of the transaction, the Managing
General Partner of the Partnership is controlled by Insignia. Insignia
affiliates now provide property management services to the Partnership's
residential properties, asset management services to the Partnership,
maintain its books and records and oversee its operations.
On February 1, 1996, the Partnership's Northbank Complex property was
sold to an unaffiliated third party for $4,605,000. After satisfaction
of the notes payable and closing costs, the Partnership received net
proceeds of approximately $1,900,000. For financial reporting purposes,
the Partnership will record a gain on sale of approximately $850,000
during the first quarter of 1996.
CENTURY PROPERTIES FUND XV
(A Limited Partnership)
REAL ESTATE AND ACCUMULATED DEPRECIATION SCHEDULE III
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
- -------- -------- -------- -------- --------
Cost capitalized Gross amount
Initial cost subsequent to carried at
to Partnership acquisition close of period (1)
-------------------------- ----------------------- ------------------------------------
Buildings and Carrying Buildings and
Description Encumbrances (4) Land Improvements Improvements Costs Land Improvements Total (2)
- ----------- ---------------- ---- ------------- ------------ -------- ---- ------------- ---------
(Amounts in thousands)
----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PARTNERSHIP:
Preston Creek
Apartments
Dallas, Texas $ 2,917 $ 2,118 $ 5,793 $1,166 $ (39) $2,107 $ 6,931 $ 9,038
Northbank Complex
Eugene, Oregon 2,443 897 4,605 440 (251) 861 4,830 5,691
Phoenix Business
Park
Atlanta, Georgia 2,672 746 5,176 1,938 -- 746 7,114 7,860
SUBSIDIARIES:
Lakeside Place
Apartments
Houston, Texas 14,738 3,659 21,481 4,369 -- 3,659 25,850 29,509
Summerhill
Apartments
Dallas, Texas 3,061 1,003 6,069 817 (42) 999 6,848 7,847
---------------- -------- ------------- ------------ -------- -------- ------------- ---------
TOTAL $25,831 $8,423 $43,124 $8,730 $(332) $8,372 $51,573 $59,945
================ ======== ============= ============ ======== ======== ============= =========
<CAPTION>
Column A Column F Column G Column H Column I
- -------- ------------ ------------ -------- -------------
Life
on which
depreciation
is computed
Accumulated in latest
Depreciation Date of Date statement of
Description (3) Construction Acquired operations
- ----------- ------------ ------------ -------- -------------
(Amounts in thousands)
----------------------
<S> <C> <C> <C> <C>
PARTNERSHIP:
Preston Creek
Apartments
Dallas, Texas $ 3,208 10/79 8/81 6-27.5 Yrs.
Northbank Complex
Eugene, Oregon 2,205 8/79 12/81 6-39 Yrs.
Phoenix Business
Park
Atlanta, Georgia 2,891 6/80 5/82 6-39 Yrs.
SUBSIDIARIES:
Lakeside Place
Apartments 10/76
Houston, Texas 12,835 10/78 (5) 12/80 6-27.5 Yrs.
Summerhill
Apartments
Dallas, Texas 3,351 9/79 8/81 6-27.5 Yrs.
------------
TOTAL $24,490
============
</TABLE>
See accompanying notes.
SCHEDULE III
CENTURY PROPERTIES FUND XV
(A Limited Partnership)
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
NOTES:
(1) The aggregate cost for Federal income tax purposes
is $68,411,000.
(2) Balance, January 1, 1993 $72,174,000
Improvements capitalized subsequent to acquisition 1,658,000
-----------
Balance, December 31, 1993 73,832,000
Improvements capitalized subsequent to acquisition 905,000
-----------
Balance, December 31, 1994 74,737,000
Improvements capitalized subsequent to acquisition 1,457,000
Cost of rental properties sold (16,249,000)
-----------
Balance December 31, 1995 $59,945,000
===========
(3) Balance, January 1, 1993 $24,417,000
Additions charged to expense 2,324,000
-----------
Balance, December 31, 1993 26,741,000
Additions charged to expense 2,371,000
-----------
Balance, December 31, 1994 29,112,000
Additions charged to expense 2,250,000
Accumulated depreciation of rental properties sold (6,872,000)
-----------
Balance, December 31, 1995 $24,490,000
===========
(4) Encumbrances shown are net of discounts totaling
$894,000.
(5) Construction completed in two phases.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures.
Effective April 22, 1994, the Registrant dismissed its prior Independent
Auditors, Deloitte & Touche, LLP ("Deloitte") and retained as its new
Independent Auditors, Imowitz Koenig & Company, LLP. Deloitte's Independent
Auditors' Report on the Registrant's financial statements for the calendar year
ended December 31, 1993 did not contain an adverse opinion or a disclaimer of
opinion, and were not qualified or modified as to audit scope or accounting
principles. However, Deloitte's Independent Auditors' Report for the calendar
year ended December 31, 1993 was modified due to the uncertainty regarding the
Registrant's ability to continue as a going concern since the Registrant had sub
stantial balloon payments due on Notes in 1994; the financial statements did not
include any adjustments that might result from the outcome of this uncertainty.
The decision to change Independent Auditors was approved by the Managing General
Partner's Directors. During calendar year 1993 and through April 22, 1994 there
were no disagreements bet ween the Registrant and Deloitte on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope of procedure which disagreements if not resolved to the satisfaction of
Deloitte, would have caused it to make reference to the subject matter of the
disagreements in connection with its reports.
Effective April 22, 1994, the Registrant engaged Imowitz Koenig & Company,
LLP as its Independent Auditors. The Registrant did not consult Imowitz Koenig
& Company, LLP regarding any of the matters or events set forth in Item
304(a)(2)(i) and (ii) of Regulation S-K prior to April 22, 1994.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The Registrant does not have any officer or directors. The managing
general partner of the Registrant, Fox Capital Management Corporation (the
"Managing General Partner"), manages and controls substantially all of the
Registrant's affairs and has general responsibility and ultimate authority in
all matters affecting its business. NPI Equ ity Investments II, Inc., which
controls the Managing General Partner, is a wholly-owned affiliate of National
Property Investors, Inc., which in turn is owned by an affiliate of Insignia
(See Item 1, "Business -- Change in Control"). Insignia is a full service real
estate service organization performing property management, commercial and
retail leasing, investor services, partnership administration, mortgage
banking, and real estate investment banking services for various entities.
Insignia commenced operations in December 1990 and is the largest manager of
multifamily residential properties in the United States and is a significant
manager of commercial property. It currently provides property and/or asset
management services for over 2,000 properties. Insignia's properties consist of
approximately 300,000 units of multifamily residential housing and approximately
64 million square feet of commercial space.
As of March 1, 1996, the names and positions held by the officers and
directors of the Managing General Partner are as follows:
Has served as a
Director and/or
Officer of the Managing
Name Positions Held General Partner since
- ---- -------------- -----------------------
William H. Jarrard, Jr. President and Director January 1996
Ronald Uretta Vice President and January 1996
Treasurer
John K. Lines, Esquire Vice President, January 1996
Secretary and Director
Thomas R. Shuler Director January 1996
Kelley M. Buechler Assistant Secretary January 1996
William H. Jarrard, Jr., age 49, has been President and a Director of the
Managing General Partner since January 1996. Mr. Jarrard has been a Managing
Director -- Partnership Administration of Insignia since January 1991.
Ronald Uretta, age 40, has been Insignia's Chief Financial Officer and
Treasurer since January 1992. Since September 1990, Mr. Uretta has also served
as the Chief Financial Officer and Controller of Metropolitan Asset Group.
John K. Lines, Esquire, age 36, has been a Director and Vice President and
Secretary of the Managing General Partner since January 1996, Insignia's General
Counsel since June 1994, and General Counsel and Secretary since July 1994.
From May 1993 until June 1994, Mr. Lines was the Assistant General Counsel and
Vice President of Ocwen Finan cial Corporation, West Palm Beach, Florida. From
October 1991 until May 1993, Mr. Lines was a Senior Attorney with Banc One
Corporation, Columbus, Ohio. From May 1984 until October 1991, Mr. Lines was an
attorney with Squire Sanders & Dempsey, Columbus, Ohio.
Thomas R. Shuler, age 50, has been Managing Director -- Residential
Property Management of Insignia since March 1991 and Executive Managing
Director of Insignia and President of Insignia Management Services since
July 1994.
Kelley M. Buechler, age 38, has been Assistant Secretary of the Managing
General Partner since January 1996 and Assistant Secretary of Insignia since
1991.
No family relationships exist among any of the officers or directors of the
Managing General Partner.
Each director and officer of the Managing General Partner will hold office
until the next annual meeting of stockholders of the Managing General Partner
and until his successor is elected and qualified.
Item 11. Executive Compensation.
The Registrant is not required to and did not pay any compensation to the
officers or directors of the Managing General Partner. The Managing General
Partner does not presently pay any compensation to any of its officers or
directors. (See "Item 13, Certain Relationships and Related Transactions.")
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The Registrant is a limited partnership and has no officers or directors.
The Managing General Partner has discretionary control over most of the
decisions made by or for the Registrant in accordance with the terms of the
Partnership Agreement. The Managing General Partner directly owns 100 limited
partnership units of the Registrants.
The following table sets forth certain information regarding limited
partnership units of the Registrant owned by each person who is known by the
Registrant to own beneficially or exercise voting or dispositive control over
more than 5% of the Registrant's limited partnership units, by each of the
Managing General Partner's directors and by all directors and executive
officers of the Managing General Partner as a group as of March 1, 1996.
Name and address of Amount and nature of
Beneficial Owner Beneficial Ownership % of Class
- ------------------- -------------------- ----------
Riverside Drive L.L.C. (1) 35,473.17(2) 39.4
All directors and executive
officers as a group
(5 persons) -- --
_______________
(1) The business address for Riverside Drive L.L.C. is One Insignia
Financial Plaza, Greenville, South Carolina 29602.
(2) Based upon information supplied to the Registrant by Riverside Drive
L.L.C.
There are no arrangements known to the Registrant, the operation of
which may, at a subsequent date, result in a change in control of the
Registrant.
Item 13. Certain Relationships and Related Transactions.
In accordance with the Registrant's partnership agreement, the Registrant
may be charged by the general partners and affiliates for services provided to
the Registrant. On January 1, 1993, Metric Management, Inc. ("MMI"), a company
which is not affiliated with the general partners, commenced providing certain
property and portfolio management services to the Registrant under a new
services agreement. As provided in the new services agreement effective January
1, 1993, no reimbursements were made to the general partner and affiliates after
December 31, 1992. Subsequent to December 31, 1992, reimbursements were made to
MMI. On December 16, 1993, the services agr eement with MMI was modified and,
as a result thereof, NPI Equity II began directly providing cash management and
other partnership services on various dates commencing December 23, 1993. On
March 1, 1994, an affiliate of NPI Equity II commenced providing certain
property management services (see Notes 1 and 10). Related party expenses for
the ye ars ended December 31, 1995, 1994 and 1993 were as follows:
1995 1994 1993
-------- -------- ---------
Property management fees $399,000 $319,000 $ --
Real estate tax reduction fees 57,000 -- --
Reimbursement of expenses:
Partnership accounting and
investor services 152,000 162,000 --
Professional services -- 25,000 --
-------- -------- ---------
Total $608,000 $506,000 $ --
======== ======== =========
Property management fees and real estate tax reduction fees are included in
operating expenses. Reimbursed expenses are primarily included in general and
administrative expenses. In addition, approximately $259,000 of insurance
premiums which were paid to an affiliate of NPI under a master insurance policy
arranged by such affiliate, are included in operating expenses for the year
ended December 31, 1995.
In accordance with the Registrant's partnership agreement, the general
partners were allocated their two percent continuing interest in the
Registrant's net income (loss) and taxable income (loss). Gains from
dispositions of the Registrant's properties were allocated first to the general
partners to the extent of distributions received or they were entitled to
receive, then two percent of the remainder.
Apart from the reimbursements paid to the general partners and affiliates
as set forth above, the Registrant also has an agreement with its joint venture
partner to provide for the management and operation of the joint venture
property. Fees paid pursuant to this agreement, generally based upon a
percentage of gross revenues from the oper ation of the property, were $30,000,
$104,000 and $95,000 in 1995, 1994 and 1993, respectively.
As a result of its ownership of 35,473.17 limited partnership units,
Riverside Drive L.L.C. ("Riverside") could be in a position to significantly
influence all voting decisions with respect to the Registrant. Under the
Partnership Agreement, unitholders holding a majority of the Units are entitled
to take action with respect to a variety of matters. When voting on matters,
Riverside would in all likelihood vote the Units it acquired in a manner
favorable to the interest of the Managing General Partner because of its
affiliation with the Managing General Partner. However, Riverside has agreed
for the benefit of non-tendering unitholders, that it will vote its Units: (i)
against a ny proposal to increase the fees and other compensation payable by the
Registrant to the Managing General Partner and any of its affiliates; and (ii)
with respect to any proposal made by the Managing General Partner or any of its
affiliates, in proportion to votes cast by other unitholders. Except for the
foregoing, no other limitations are impos ed on Riverside's right to vote each
Unit acquired.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a)(1)(2) Consolidated Financial Statements and Financial Statement
Schedules:
See Item 8 of this Form 10-K for Consolidated Financial Statements
of the Registrant, Notes thereto, and Financial Statement
Schedules. (A Table of Contents to Consolidated Financial
Statements and Financial Statement Schedules is included in Item 8
and incorporated herein by reference.)
(a) (3) Exhibits
2.1 NPI, Inc. Stock Purchase Agreement, dated as of August 17,
1995, incorporated by reference to the Registrant's Current
Report on Form 8-K dated August 17, 1995.
2.2 Partnership Units Purchase Agreement dated as of August 17,
1995 incorporated by reference to Exhibit 2.1 to Form 8-K
filed by Insignia Financial Group, Inc. ("Insignia) with the
Securities and Exchange Commission on September 1, 1995.
2.3 Management Purchase Agreement dated as of August 17, 1995
incorporated by reference to Exhibit 2.2 to Form 8-K filed by
Insignia with the Securities and Exchange Commission on
September 1, 1995.
2.4 Limited Liability Company Agreement of Riverside Drive
L.L.C., dated as of August 17, 1995 incorporated by reference
to Exhibit 2.4 to Form 8-K filed by Insignia with the
Securities and Exchange Commission on September 1, 1995.
2.5 Master Indemnity Agreement dated as of August 17, 1995
incorporated by reference to Exhibit 2.5 to Form 8-K filed by
Insignia with the Securities and Exchange Commission on
September 1, 1995.
3.4 Agreement of Limited Partnership, incorporated by reference to
Exhibit A to the Prospectus of the Registrant dated May 1,
1980, as revised May 29, 1980, and thereafter supplemented
June 25, 1979 and thereafter supplemented, included in the
Registrant's Registration Statement on Form S-11 (Reg. No.
2-66459).
10.(a)Deed of Trust Note dated June 1, 1994 made by Century Lakeside
Place, L.P. ("Lakeside Place") in favor of Value Line Mortgage
Corporation ("Value Line"), incorporated by reference to the
Registrant's Form 10-Q for the fiscal quarter ended June 30,
1994.
(b)Deed of Trust, Security Agreement and Assignment of Leases and
Rents dated June 1, 1994 from Lakeside Place to Jeffrey H.
Gelman for the benefit of Value Line, incorporated by
reference to the Registrant's Form 10-Q for the fiscal quarter
ended June 30, 1994.
(c)Fifth Amendment to Note dated as of September 14, 1994,
between the Registrant and New York Life Insurance Company
("New York Life"), incorporated by reference to the
Registrant's Form 10-Q for the fiscal quarter ended September
30, 1994.
(d)Fifth Modification to Deed to Secure Debt and Security
Agreement dated as of September 14, 1994, between the
Registrant and New York Life, incorporated by reference to the
Registrant's Form 10-Q for the fiscal quarter ended September
30, 1994.
(e)Amended and Restated Assignment of Leases and Rents dated as
of September 14, 1994, between the Registrant and New York
Life Insurance, incorporated by reference to the Registrant's
Form 10-Q for the fiscal quarter ended September 30, 1994.
(f)Agreement of Purchase and Sale, dated October 20, 1995,
between the Registrant and Northbank Partners incorporated by
reference to Exhibit 10 to the Registrant's Current Report on
Form 8-K filed with the Securities and Exchange Commission on
February 15, 1996.
16. Letter dated April 27, 1994 from the Registrant's Former
Independent Auditors incorporated by reference to the
Registrant's Current Report on Form 8-K dated April 22, 1994.
(b) Reports on Form 8-K:
None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized this 28 day of
March, 1996.
CENTURY PROPERTIES FUND XV
By: FOX CAPITAL MANAGEMENT CORPORATION
A General Partner
By: /s/ William H. Jarrard, Jr
---------------------------
William H. Jarrard, Jr.
President and Director
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 date indicated.
Signature/Name Title Date
- -------------- ----- ----
/s/ William H. Jarrard, Jr. President and March 28, 1996
- --------------------------- Director
William H. Jarrard, Jr.
/s/ Ronald Uretta Principal Financial March 28, 1996
- --------------------------- Officer and Principal
Ronald Uretta Accounting Officer
/s/ John K. Lines Director March 28, 1996
- ---------------------------
John K. Lines
Exhibit Index
Exhibit Page
2.1 NPI,Inc. Stock Purchase Agreement (1)
2.2 Partnership Units Purchase Agreement (2)
2.3 Management Purchase Agreement (3)
2.4 Limited Liability Company Agreement of (4)
Riverside Drive L.L.C.
2.5 Master Indemnity Agreement (5)
3.4. Agreement of Limited Partnership (6)
10.1 Deed of Trust Note dated June 1, 1994 made (7)
by Century Lakeside Place, L.P. ("Lakeside Place")
in favor of Value Line Mortgage Corporation
("Value Line")
10.2 Deed of Trust, Security Agreement and Assignment (8)
of Leases and Rents dated June 1, 1994 from
Lakeside Place to Jeffrey H. Gelman for the benefit
of Value Line
10.3 Fifth Amendment to Note dated as of September 14, (8)
1994, between the Registrant and New York Life
Insurance Company ("New York Life")
10.4 Fifth Modification to Deed to Secure Debt and (8)
Security Agreement dated as of September 14, 1994,
between the Registrant and New York Life
10.5 Amended and Restated Assignment of Leases and (8)
Rents dated as of September 14, 1994, between
the Registrant and New York Life Insurance
10.6 Agreement of Purchase and Sale, dated October 20, 1995, (9)
between the Registrant and Northbank Partners
16 Letter dated April 27, 1994 from the Registrant's (10)
Former Independent Auditor's
___________________
(1) Incorporated by reference to Exhibit 2 to the Registrant's Current Report
on Form 8-K dated August 17, 1995.
(2) Incorporated by reference to Exhibit 2.1 to Form 8-K filed by Insignia
Financial Group, Inc. with the Securities and Exchange Commission on
September 1, 1995.
(3) Incorporated by reference to Exhibit 2.2 to Form 8-K filed by Insignia
Financial Group, Inc. with the Securities and Exchange Commission on
September 1, 1995.
(4) Incorporated by reference to Exhibit 2.4 to Form 8-K filed by Insignia
Financial Group, Inc. with the Securities and Exchange Commission on
September 1, 1995.
(5) Incorporated by reference to Exhibit 2.5 to Form 8-K filed by Insignia
Financial Group, Inc. with the Securities and Exchange Commission on
September 1, 1995.
(6) Incorporated by reference to Exhibit A to the Prospectus of the
Registrant dated May 1, 1980, as revised May 9, 1980, and thereafter
supplemented June 25, 1979 and thereafter supplemented, included in the
Registrant's Registration Statement on Form S-11 (Reg. No. 2-66459).
(7) Incorporated by reference to the Registrant's Form 10-Q for the fiscal
quarter ended June 30, 1994.
(8) Incorporated by reference to the Registrant's Form 10-Q for the fiscal
quarter ended September 30, 1994.
(9) Incorporated by reference to Exhibit 10 to the Registrant's Current
Report on Form 8-K filed with the Securities and Exchange Commission on
February 15, 1996.
(10) Incorporated by reference to Exhibit 10 to the Registrant's Current
Report on Form 8-K dated April 22, 1994.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Century
Properties Fund XV and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 5,008,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 59,945,000
<DEPRECIATION> (24,490,000)
<TOTAL-ASSETS> 42,837,000
<CURRENT-LIABILITIES> 0
<BONDS> 25,831,000
<COMMON> 0
0
0
<OTHER-SE> 15,708,000
<TOTAL-LIABILITY-AND-EQUITY> 42,837,000
<SALES> 0
<TOTAL-REVENUES> 22,733,000 <F1>
<CGS> 0
<TOTAL-COSTS> 8,269,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,603,000
<INCOME-PRETAX> 9,912,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 9,912,000
<DISCONTINUED> 0
<EXTRAORDINARY> (720,000)
<CHANGES> 0
<NET-INCOME> 9,192,000
<EPS-PRIMARY> 97.84
<EPS-DILUTED> 97.84
<FN>
<F1> Revenues include gain on sale of properties of $11,484,000
</FN>
</TABLE>
