FORM 10-KSB--ANNUAL OR TRANSITIONAL REPORT
UNDER SECTION 13 OR 15(d)
(As last amended by 34-31905, eff. 4/26/93)
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [Fee Required]
For the fiscal year ended December 31, 1995
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [No Fee Required]
For the transition period.........to.........
Commission file number 0-10255
SHELTER PROPERTIES I LIMITED PARTNERSHIP
(Name of small business issuer in its charter)
South Carolina 57-0707398
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (864) 239-1000
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Units of Limited Partnership Interest
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 during the past 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
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will 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-KSB or any
amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year. $4,604,515
State the aggregate market value of the voting partnership interests by non-
affiliates computed by reference to the price at which the partnership interests
were sold, or the average bid and asked prices of such partnership interests, as
of December 31, 1995. $4,986,117
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of the Prospectus of Registrant dated July 3, 1980 (included in
Registration Statement, No.2-67384, of Registrant) are incorporated by reference
into Parts I and III.
PART I
Item 1. Description of Business
Shelter Properties I Limited Partnership (the "Registrant" or the
"Partnership") is engaged in the business of acquiring, operating and holding
real properties for investment. The Registrant acquired seven existing
apartment properties during 1980 and subsequently sold one property in 1983 and
two properties in 1984.
Commencing July 3, 1980, the Registrant offered through E. F. Hutton &
Company Inc. ("Hutton"), up to 14,900 Units of Limited Partnership Interest (the
"Units") at $1,000 per Unit with a minimum purchase of 5 Units ($5,000). An
additional 100 Units were purchased by the Corporate General Partner. Limited
partners are not required to make any additional capital contributions.
The Units were registered under the Securities Act of 1933 via
Registration Statement No. 2-67384 (the "Registration Statement"). Reference is
made to the Prospectus of Registrant dated July 3, 1980, (the "Prospectus")
contained in the Registration Statement, which is incorporated herein by
reference thereto.
The offering terminated on September 10, 1980. Upon termination of the
offering, the Registrant had accepted subscriptions for 15,000 Units, including
100 Units purchased by the Corporate General Partner, for an aggregate of
$15,000,000. The Registrant invested approximately $11,000,000 of such proceeds
in seven existing apartment properties and thereby completed its acquisition
program in December 1980 at approximately the expenditure level estimated in the
Prospectus. Funds not expended because they are held as reserves have been
invested by the Registrant, in accordance with the policy described in the
Prospectus, in U.S. Government securities or other highly liquid, short-term
investments where there is appropriate safety of principal.
In November 1983, the Partnership sold Yorktown Apartments in Lynchburg,
Virginia. Also, in May 1984 and August 1984, the Partnership sold both
Lamplighter Apartments in Sumter, South Carolina and Middle Plantation
Apartments in Charlotte, North Carolina, respectively.
A further description of the Partnership's business is included in
Management's Discussion and Analysis or Plan of Operation included in Item 6 of
this Form 10-KSB.
The Registrant has no employees. Management and administrative services
are performed by Shelter Realty Corporation, the Corporate General Partner and
by Insignia Management Group, L.P., an affiliate of Insignia Financial Group,
Inc. ("Insignia"), the ultimate parent company of the Corporate General
Partner. Pursuant to a management agreement between them, Insignia provides
property management services to the Registrant.
The real estate business in which the Partnership is engaged is highly
competitive, and the Partnership is not a significant factor in this industry.
The Registrant's four investment properties are subject to competition from
similar properties in the vicinity in which the properties are located. In
addition, various limited partnerships have been formed by the General Partners
and/or their affiliates to engage in business which may be competitive with the
Registrant.
Item 2. Description of Properties:
The following table sets forth the Registrant's investments in properties:
<TABLE>
<CAPTION>
Date of
Property Purchase Type of Ownership Use
<S> <C> <C> <C>
Quail Hollow Apartments 09/01/80 Fee ownership subject Apartment
West Columbia, South Carolina to first mortgage 215 units
Windsor Hills Apartments 09/01/80 Fee ownership subject Apartment
Blacksburg, Virginia to first and second mortgage 300 units
Rome Georgian Apartments 09/15/80 Fee ownership subject to Apartment
Rome, Georgia first mortgage 149 units
Stone Mountain West Apartments 12/31/80 Fee ownership subject to Apartment
Stone Mountain, Georgia first mortgage 142 units
</TABLE>
Schedule of Properties:
<TABLE>
<CAPTION>
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
<S> <C> <C> <C> <C> <C>
Quail Hollow Apartments $ 5,147,570 $ 3,236,016 5-34 S/L $1,327,976
Windsor Hills Apartments 6,096,259 4,075,346 5-30 S/L 2,226,163
Rome Georgian Apartments 3,235,871 2,094,872 5-35 S/L 2,190,323
Stone Mountain West Apartments 4,528,546 2,915,381 5-37 S/L 2,136,801
Totals $19,008,246 $12,321,615 $7,881,263
</TABLE>
See Note A of the financial statements included in Item 7 for a
description of the partnership's depreciation policy.
Schedule of Mortgages:
<TABLE>
<CAPTION>
Principal Principal
Balance At Stated Balance
December 31, Interest Period Maturity Due At
Property 1995 Rate Amortized Date Maturity
<S> <C> <C> <C> <C> <C>
Quail Hollow $ 1,766,526 8.50% (1) 04/05/04 $ 148,632
Windsor Hills:
1st mortgage 4,504,605 7.60% (2) 11/15/02 3,488,781
2nd mortgage 148,969 7.60% none 11/15/02 148,969
Rome Georgian 2,036,812 9.36% (3) 06/01/04 1,697,220
Stone Mountain West 1,659,418 8.00% (4) 05/01/06 19,477
10,116,330
Less unamortized
present value discounts (757,289)
Total $ 9,359,041
<FN>
(1) The principal balance is being amortized over 322 months.
(2) The discount is being amortized over 257 months with a balloon payment due
November 15, 2002.
(3) The principal balance is being amortized over 288 months with a balloon
payment due June 1, 2004.
(4) The principal balance is being amortized over 276 months.
</TABLE>
On May 11, 1994, the Partnership refinanced the mortgage encumbering Rome
Georgian Apartments. The refinancing replaced indebtedness on Rome Georgian
Apartments in the amount of $2,076,028 of which $2,068,843 was principal and
$7,185 was interest. The refinanced debt carried a stated interest rate of
11.37% and had a maturity date of January 1, 2001. The new mortgage
indebtedness of $2,074,000, which carries a stated interest rate of 9.36% is
amortized over 24 years with a balloon payment due on June 1, 2004. Total
capitalized loan costs incurred were $54,333 and are being amortized over the
life of the loan. The early extinguishment of debt resulted in a loss of
$56,227 arising from unamortized loan costs of $35,189 and prepayment penalties
of $21,038.
Average annual rental rate and occupancy for 1995 and 1994 for each
property:
Average Annual Average Annual
Rental Rates Occupancy
Property 1995 1994 1995 1994
Quail Hollow $5,913 $5,635 95% 94%
Windsor Hills 4,984 4,992 97% 97%
Rome Georgian 4,968 4,778 92% 90%
Stone Mountain West 7,874 7,350 97% 96%
As noted under Item 1. Description of Business, the real estate
industry is highly competitive. All of the properties of the Partnership are
subject to competition from other residential apartment complexes in the area.
The Corporate General Partner believes that all of the properties are adequately
insured. The multi-family residential properties' lease terms are for one year
or less. No residential tenant leases 10% or more of the available rental
space.
Real estate taxes and rates in 1995 for each property were:
1995 1995
Billings Rate
Quail Hollow $70,529 2.68%
Windsor Hills 75,356 8.90%
Rome Georgian 38,779 6.93%
Stone Mountain West 58,384 4.90%
Item 3. Legal Proceedings
The general partner responsible for management of the Partnership's
business is Shelter Realty Corporation, a South Carolina corporation (the
"Corporate General Partner"). The only other general partner of the
Partnership, N. Barton Tuck, Jr. is effectively prohibited by the Partnership's
partnership agreement (the "Partnership Agreement") from participating in the
management of the Partnership. The Corporate General Partner is an indirect
subsidiary of Insignia Financial Group, Inc. ("Insignia"). The directors and
officers of the Corporate General Partner also serve as executive officers of
Insignia.
The Corporate General Partner owns 100 Limited Partnership Units
("Units"). On May 27, 1995, an affiliate of the Corporate General Partner (the
"Affiliated Purchaser") acquired 3,999 Units at a price of $315.00 per Unit
pursuant to a tender offer (the "Affiliate Offer") described below. The
Corporate General Partner and the Affiliated Purchaser are, therefore, entitled
to participate in cash distributions made by the Partnership to its Unit
holders. The Partnership made a cash distribution of $9.90 per Unit in
February, 1995, but had not made cash distributions to Unit holders during the
previous four years. In addition, the Corporate General Partner is entitled to
certain cash distributions in respect of its general partner interest, and in
February 1995 the Corporate General partner received a cash distribution in
respect of such interest of $1,500. Prior to the February 1995 distribution,
the Corporate General Partner had not received a cash distribution in respect of
its general partner interest since 1988.
As a result of the Affiliated Purchaser's acquisition of 26.7% of the
outstanding Units, the Affiliated Purchaser, an affiliate of the Corporate
General Partner and Insignia, may be in a position to significantly influence
any vote of the Unit holders. The Partnership has paid Insignia Management
Group, L.P. ("IMG"), an affiliate of the Corporate General Partner, property
management fees equal to 5% of the Partnership's apartment revenues for property
management services in each of the two years ended December 31, 1994 and 1995,
pursuant to property management agreements. Property management fees paid to
IMG amounted to $218,197 and $227,855, respectively, for the years ended
December 31, 1994 and 1995. Insignia and its affiliates do not receive any fees
from the Partnership for the asset management or partnership administration
services they provide, although Insignia and its affiliates are reimbursed by
the Partnership for the expenses they incur in connection with providing those
services. The Partnership Agreement also provides for reimbursement to the
Corporate General Partner and its affiliates for costs incurred in connection
with administration of the Partnership's activities. Pursuant to these
provisions and in addition to the property management fees referred to above,
the Partnership paid the Corporate General Partner and its affiliates (including
the reimbursements to Insignia and its affiliates in connection with asset
management and partnership administration services) an aggregate of $55,885 and
$63,412, respectively, for the years ended December 31, 1994 and 1995. In
addition, at various times during the past two fiscal years an affiliate of
Insignia has held preferred stock issued by an unaffiliated company that
provides insurance brokerage services to the Partnership.
The terms of the Affiliated Purchaser's financing of the Affiliate Offer
may result in future potential conflicts of interest. The Affiliated Purchaser
paid for the Units it purchased pursuant to the Affiliate Offer with funds
provided by Insignia, and Insignia, in turn, obtained these funds from its
working capital. It is possible, however, that in connection with its future
financing activities, Insignia may cause or request the Affiliated Purchaser to
pledge its Units as collateral for loans, or otherwise agree to terms which
provide Insignia and the Affiliated Purchaser with incentives to generate
substantial near-term cash flow from the Affiliated Purchaser's investment in
the Units. In such a situation, the Corporate General Partner may experience a
conflict of interest in seeking to reconcile the best interests of the
Partnership with the need of its affiliates for cash flow from the Partnership's
activities.
On April 27, 1995, the Affiliated Purchaser commenced the Affiliate
Offer for up to 30% of the Units at a price of $315.00 per Unit. The Affiliate
Offer expired on May 26, 1995. On May 27, 1995, an affiliate of the Corporate
General Partner, the Affiliated Purchaser, acquired 3,999 Units at a price of
$315.00 per Unit pursuant to the Affiliate Offer. During the Affiliate Offer,
Carl C. Icahn and certain of his associates contacted Insignia about pursuing a
variety of possible transactions on a joint venture basis. During those
discussions, representatives of Insignia advised Mr. Icahn and his
representatives that Insignia did not wish to discourage or prevent any
transaction which would produce additional value for Unit holders. During those
conversations, Mr. Icahn and his representatives expressed a desire to make an
equity investment in the Affiliated Purchaser with a view to sharing in the
economic benefits, if any, to be derived by the Affiliated Purchaser from the
Affiliate Offer. The representatives of Insignia declined to agree to such an
arrangement.
Following those discussions, at approximately 6:45 p.m. on Monday, May
22, 1995, the Corporate General Partner received a letter from High River
Limited Partnership ("High River") which stated that High River was commencing,
by public announcement, a cash tender offer for up to approximately 30% of the
outstanding Units at a price of $362.25 per Unit (the "High River Offer"). High
River sent similar letters to the Insignia affiliated corporate general partners
of five other limited partnerships. On May 23, 1995, Insignia issued a press
release which announced receipt of the letters.
From 12:00 noon on Tuesday, May 23 through late in the evening of
Wednesday, May 24, the Affiliated Purchaser, Insignia, and High River and their
respective counsel had a series of meetings and telephone conversations to
explore a possible joint venture relationship with respect to various real
estate related investment opportunities, including the Affiliate Offer.
Representatives of High River terminated the discussions. No agreement was
reached with respect to the Affiliated Offer or any other matter.
On the afternoon of Thursday, May 25, 1995, the Corporate General
Partner received a second letter from High River stating that High River had
initiated a tender offer for up to 40% of the outstanding Units at a price of
$457.40 per Unit. High River also issued a press release announcing the High
River Offer and that High River was commencing similar tender offers for units
of limited partnership interest in five other partnerships in which other
Insignia affiliates are the corporate general partners. Upon receiving the
letter from High River, Insignia issued its own press release announcing the
terms of the six High River offers.
Also on May 25, 1995, the Corporate General Partner received a copy of a
Complaint (the "High River Complaint") seeking, among other things, an order
from the United States District Court for the District of Delaware enjoining the
closing of the Affiliate Offer. The High River Complaint related to the
Affiliate Offer and to five other tender offers made by affiliates of Insignia
for units of limited partnership interests in other limited partnerships in
which other affiliates of Insignia are general partners. The High River
Complaint named as defendants the Affiliated Purchaser and each of the Insignia
affiliates making the five other tender offers; the Corporate General Partner
and the five other Insignia-affiliated general partners; and Insignia. The High
River Complaint contained allegations that, among other things, the Affiliated
Purchaser sought to acquire Units at highly inadequate prices, and that the
Affiliate Offer contained numerous false and misleading statements and omissions
of material facts. The alleged misstatements and omissions concerned, among
other things, the true value of the units; the true financial conditions of the
Partnership; the factors affecting the likelihood that properties owned by the
Partnership will be sold or liquidated in the near future; the liquidity and
value of the Units; the limited secondary market for Units; and the true nature
of the market for underlying assets. The High River Complaint also alleged that
the Affiliated Purchaser failed to comply with the requirements of Rule 13e-4
under the Securities Exchange Act of 1934.
On Friday, May 26, 1995, the United States District Court for the
District of Delaware denied High River's motion for a temporary restraining
order to postpone the closing of the Affiliate Offer. On May 26, 1995, Insignia
issued a press release announcing the Court's decision. High River subsequently
voluntarily withdrew the High River Complaint without prejudice.
On May 26, 1995, High River filed a Schedule 14D-1 relating to the High
River Offer and containing an Offer to Purchase and a related Assignment of
Partnership Interest. The Affiliate Offer expired as scheduled at midnight on
May 26, 1995. As filed on May 26, 1995, the High River Offer was conditioned
upon the Affiliate Offer being extended by at least 10 business days. High
River issued a press release, dated May 26, 1995, announcing that the extension
of the Affiliate Offer for 10 business days would be eliminated as a condition
to the High River Offer. Also on May 26, the Chairman and Chief Executive
Officer of Insignia received a letter from Mr. Icahn. In the letter, Mr. Icahn
accused Insignia of disregarding its "fiduciary responsibilities."
On Friday June 2, the High River Offer to Purchase and the related
Assignment of Partnership Interests were mailed to Unit holders. On Monday,
June 5, the Corporate General Partner delivered a letter to High River which
requested that High River cure certain alleged critical omissions,
misstatements, and deficiencies in the High River Offer by June 7, 1995. On
June 7, the Corporate General Partner received a letter from Mr. Icahn stating
that High River does not agree with the positions taken in the Corporate General
Partner's June 5 letter.
On June 8, 1995, the Corporate General Partner commenced an action
against High River and Carl C. Icahn in the United States District Court for the
District of South Carolina. The complaint alleged that the High River Offer
misled Unit holders and violated federal securities laws. The Partnership
sought relief from High River's and Mr. Icahn's actions in the form of an
injunction against the High River Offer, a judgment declaring that the untrue
statements in and omissions from the High River Offer constitute violations of
the federal securities laws, and an order requiring High River to make
appropriate disclosures to correct all of the false and misleading statements in
and omissions from the High River Offer.
The Partnership and the Corporate General Partner recommended that the
Unit holders reject the High River Offer and not tender their Units pursuant to
the High River Offer. The Partnership and the Corporate General Partner stated
that they may reconsider their recommendation if High River makes additional
disclosures to the Unit holders as the Corporate General Partner requested. For
further information, see the Partnership's Solicitation/Recommendation Statement
on Schedule 14D-9 which was filed with the Securities and Exchange Commission on
June 9, 1995.
On June 12, 1995, High River filed an amendment to its Schedule 14D-1
containing a Supplement to its Offer to Purchase. The Supplement amended the
High River Offer to increase the number of Units being sought to all of the
outstanding Units and amended certain disclosures in the Offer to Purchase.
Persons claiming to own Units filed a purported class action and
derivative suit in the United States District Court for the District of South
Carolina seeking, among other things, an order enjoining the Affiliate Offer.
On Thursday, May 18, 1995, the Court denied plaintiffs' motion for a temporary
restraining order postponing the closing of the Affiliate Offer, which expired
as scheduled on May 26, 1995. Counsel for the parties are engaged in settlement
discussions and may continue such discussions.
The Complaint applies to the Affiliate Offer and to five other tender
offers being made by affiliates of Insignia for units of limited partnership
interests in other limited partnerships in which other affiliates of Insignia
serve as general partners. The Complaint names as defendants the Affiliated
Purchaser and each of the Insignia affiliates, including the five other tender
offerors; the Corporate General Partner and five other Insignia-affiliated
general partners; and four individuals who are officers and/or directors of
Insignia, the Corporate General Partner and/or the Affiliated Purchaser. The
Complaint contains allegations that, among other things, the defendants have
intentionally mismanaged the Partnership and the five other Partnerships
(collectively the "Partnerships") and acted contrary to the limited partners'
best interests in order to prolong the lives of the Partnerships and thus
continue the revenues derived by Insignia from the Partnerships while at the
same time reducing the demand for the Partnerships' units in the limited resale
market for the units by artificially depressing the trading prices for the
units, in order to create a favorable environment for the Affiliate Offer and
the five other tender offers. In the Complaint the plaintiffs also allege that
in the Affiliate Offer and the five other tender offers, the Affiliated
Purchaser will acquire effective voting control over the Partnerships at highly
inadequate prices, and that the offers to purchase and related tender offer
documents contain numerous false and misleading statements and omissions of
material facts. The alleged misstatements and omissions concern, among other
things, the advantages to Unit holders of tendering Units pursuant to the
Affiliate Offer; the true value of the Units; the true financial condition of
the Partnerships; the factors affecting the likelihood that properties owned by
the Partnerships will be sold or liquidated in the near future; the liquidity
and value of the Units; the limited secondary market for Units; and the true
nature of the market for underlying assets.
On Friday, June 16, plaintiffs filed an amended complaint which
contained allegations that, among other things, the defendants engaged in a plan
by which they misappropriated the Partnerships' assets and fraudulently induced
limited partners to sell units to the defendants at highly inadequate prices by
causing the Partnerships to take actions that artificially depressed the prices
available for units and by knowingly disseminating false and misleading
statements and omissions of material facts. The plaintiffs alleged that the
defendants breached fiduciary duties and violated federal securities law by
closing the Affiliate Offer and the five other tender offers made by affiliates
of Insignia for units in the other Partnerships with the knowledge that the
limited partners were not aware of the High River Offer. The plaintiffs further
alleged that the defendants, since the close of the Affiliate Offer, had caused
the Partnerships to enter into several wasteful transactions that had no
business purpose or benefit to the Partnerships solely in order to entrench
themselves in their positions of control over the Partnerships, with the effect
of impeding and possibly preventing nonaffiliated entities from making tender
offers that offer higher value to unit holders than defendants paid.
Subsequent to the filing of the lawsuit by the Corporate General Partner
against High River and Carl C. Icahn, the Corporate General Partner and High
River began discussions in an attempt to settle the lawsuit. On Friday, June
16, 1995, High River issued a press release announcing that the expiration date
of the High River Offer was extended until 12:00 midnight, New York City time on
Wednesday, June 28, 1995, and that High River and the Corporate General Partner
were engaged in settlement discussions.
On Saturday, June 17, the Affiliated Purchaser and Insignia entered into
an agreement with Carl C. Icahn and High River (the "Agreement") and the
Corporate General Partner, among others, entered into a letter agreement with
High River (together with the Agreement, the "Agreements"). The Agreements
provide generally that Insignia would not, and will not cause or permit its
affiliates to, actively oppose the High River Offer, but rather would take a
neutral stance with respect to the High River Offer, except in the case of a
competing third party bid made prior to the expiration of the High River Offer
or the occurrence of any event materially adversely affecting High River Offer.
The High River Offer would proceed in accordance with its terms, as amended, and
the Corporate General Partner would cooperate to facilitate the admission of
High River as a substitute limited partner with respect to any Units High River
purchases pursuant to the High River Offer in accordance with the terms of the
Partnership Agreement and applicable law. The Agreements limit High River's
ability to amend or extend the High River Offer. Apart from purchases made by
High River pursuant to the High River Offer, neither High River nor Insignia nor
any of their respective affiliates would purchase any additional Units pursuant
to a tender offer and can only purchase additional Units from time to time under
certain conditions specified in the Agreements. High River would vote on
certain matters concerning the Partnership as directed by Insignia. In
addition, High River and its affiliates are prohibited from soliciting proxies
with respect to the Partnership or otherwise making proposals concerning the
Partnership directly to other Unit holders. High River and Insignia have
certain buy-sell rights with respect to the other's Units which may be exercised
18 months after the effective date of the Agreements and annually thereafter and
at earlier or later dates under other circumstances specified in the Agreements,
including the proposal of certain transactions otherwise protected by the
Agreements. The party selling Units pursuant to the buy-sell transaction must
sell or cause to be sold to the other party all Units beneficially owned by the
first party and its affiliates.
Litigation initiated by the Corporate General Partner concerning the
High River Offer and litigation initiated by High River concerning the Affiliate
Offer was dismissed with prejudice and mutual releases were exchanged. On June
20, High River issued a press release announcing that the expiration date of the
High River Offer was extended until 12:00 midnight, New York City time on
Monday, July 3, 1995.
On July 20, 1995, the Partnership mailed a letter to limited partners of
the Partnership who tendered limited partnership units to the Affiliated
Purchaser in the recent tender offer. The letter notifies the limited partners
that the Affiliated Purchaser has offered to increase the amount paid to such
limited partners by an additional 45%.
On September 27, 1995, the parties to the purported class action and
derivative suit described above, filed a stipulation to settle the matter. The
principal terms of the stipulation requires supplemental payments to tendering
limited partners aggregating approximately $6 million; waiver by the Corporate
General Partner and five other Insignia affiliated general partners of any right
to certain proceeds from a sale or refinancing of the Partnership's properties;
some restrictions on Insignia's ability to vote the limited partner interest it
acquired; payment of $1.25 million for plaintiffs' attorney fees and expenses in
the litigation; and general releases of all the defendants. Court approval of
the stipulation is required before it may be distributed to the class members
for review. If a certain number of class members opt out, the settlement may be
cancelled and no assurance can be given that this matter will be settled on the
terms set forth above or otherwise.
Item 4. Submission of Matters to a Vote of Security Holders
During the fiscal year ended December 31, 1995, no matter was submitted
to a vote of Unit holders through the solicitation of proxies or otherwise.
PART II
Item 5. Market for Partnership Equity and Related Partner Matters
As of December 31, 1995 there was minimal trading of the Units in the
secondary market establishing a high and low value of $165 and $125,
respectively, per unit as quoted in the September 1995 Stanger Report. As
disclosed in Item 3., Legal Proceedings, an affiliate of the Corporate General
Partner purchased 3,999 units at a price of $315.00 per Unit. In addition, High
River Limited purchased 1,695 units at $457.40 per Unit. No public trading
market has developed for the Units, and it is not anticipated that such a market
will develop in the future. There are 739 holders of record owning an aggregate
of 15,000 Units. Cash distributions of $150,000 were declared and paid in the
year ended December 31, 1995. Also in 1995, a distribution, which was accrued
at December 31, 1994, was paid on behalf of the partners to the State of South
Carolina related to the 1994 taxable income on Quail Hollow. Future cash
distributions will depend on the levels of net cash generated from operations,
refinancings, property sales and the availability of cash reserves.
Distributions may also be restricted by the requirement to deposit net operating
income (as defined in the mortgage note) into the Reserve Account until the
Reserve Account is funded an amount equal to $1,000 per apartment unit for the
Windsor Hills property.
Item 6. Management's Discussion and Analysis or Plan of Operation
This item should be read in conjunction with the consolidated financial
statements and other items contained elsewhere in this report.
Results of Operations
The Partnership's net income as shown in the financial statements for
the year ended December 31, 1995, was $242,209 versus a net loss of $68,168 for
the same period in 1994 (see Note D of the financial statements for a
reconciliation of these amounts to the Partnership's federal taxable losses).
The increase in net income is primarily attributable to an increase in rental
income due to increased occupancy and periodic rental rate increases at the
Partnership's investment properties. Also contributing to the increase in net
income is a decrease in maintenance expense resulting from renovations at Rome
Georgian which were performed in 1994 as required by the refinancing. In
connection with this refinancing, the Partnership reported an extraordinary loss
on extinguishment of debt of $56,277 in 1994 with no such loss in 1995.
Offsetting the above is an increase in general and administrative expenses due
to an increase in legal fees associated with the lawsuits disclosed in Item 3.
Legal Proceedings and the expenses in connection with the tender offers.
As part of the ongoing business plan of the Partnership, the Corporate
General Partner monitors the rental market environment of each of its investment
properties to assess the feasibility of increasing rents, maintaining or
increasing occupancy levels and protecting the Partnership from increases in
expenses. As part of this plan the Corporate General Partner attempts to
protect the Partnership from the burden of inflation-related increases in
expenses by increasing rents and maintaining a high overall occupancy level.
However, due to changing market conditions, which can result in the use of
rental concessions and rental reductions to offset softening market conditions,
there is no guarantee that the Corporate General Partner will be able to sustain
such a plan.
Liquidity and Capital Resources
At December 31, 1995, the Partnership had unrestricted cash of $529,053
compared to $353,069 at December 31, 1994. Net cash provided by investing
activities increased primarily as a result of increased net income as discussed
above. Also contributing to the increase in net cash provided by operating
activities was a decrease in escrows for taxes and insurance and an increase in
accounts payable. Net cash used in investing activities increased as a result
of cash invested in short-term investments in 1995 as compared to 1994. Net
cash used in financing activities increased due to an increase in distributions
paid in 1995 as compared to 1994.
The Partnership has no material capital programs scheduled to be
performed in 1996, although certain routine capital expenditures and maintenance
expenses have been budgeted. These capital expenditures and maintenance
expenses will be incurred only if cash is available from operations or is
received from the capital reserve account.
The sufficiency of existing liquid assets to meet future liquidity and
capital expenditure requirements is directly related to the level of capital
expenditures required at the various properties to adequately maintain the
physical assets as well as the future maturing mortgage obligations and related
refinancing expenses. Such assets are currently thought to be sufficient for
any near-term needs of the partnership. The mortgage indebtedness of
$9,359,041, net of discount, is amortized over varying periods as previously
disclosed in "Item 2. Description of Properties". In addition, the mortgage
notes require final payments ranging from November 15, 2002, to May 1, 2006, at
which time the individual properties will either be sold or refinanced. Cash
distributions of $150,000 were declared and paid in the year ended December 31,
1995. Also in 1995, a distribution which was accrued at December 31, 1994, was
paid on behalf of the partners to the State of South Carolina related to the
taxable income on Quail Hollow. Future cash distributions will depend on the
levels of net cash generated from operations, refinancings, property sales and
the availability of cash reserves.
Item 7. Financial Statements
SHELTER PROPERTIES I LIMITED PARTNERSHIP
LIST OF FINANCIAL STATEMENTS
Report of Independent Auditors
Consolidated Balance Sheet - December 31, 1995
Consolidated Statements of Operations - Years ended December 31, 1995
and 1994
Consolidated Statements of Changes in Partners' Capital (Deficit) -
Years ended December 31, 1995 and 1994
Consolidated Statements of Cash Flows - Years ended December 31, 1995
and 1994
Notes to Consolidated Financial Statements
Report of Ernst & Young LLP, Independent Auditors
The Partners
Shelter Properties I Limited Partnership
We have audited the accompanying consolidated balance sheet of Shelter
Properties I Limited Partnership as of December 31, 1995, and the related
consolidated statements of operations, changes in partners' capital (deficit)
and cash flows for each of the two years in the period ended December 31, 1995.
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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Shelter
Properties I Limited Partnership as of December 31, 1995, and the consolidated
results of its operations and its cash flows for each of the two years in the
period ended December 31, 1995, in conformity with generally accepted
accounting principles.
/s/ERNST & YOUNG LLP
Greenville, South Carolina
January 28, 1996
SHELTER PROPERTIES I LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEET
December 31, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
Cash:
Unrestricted $ 529,053
Restricted - tenant security deposits 133,728
Investments (Note B) 538,855
Accounts receivable 12,612
Escrow for taxes and insurance 86,323
Restricted escrows 358,447
Other assets 155,571
Investment properties (Notes C & F):
Land $ 1,427,509
Buildings and related personal property 17,580,737
19,008,246
Less accumulated depreciation (12,321,615) 6,686,631
$ 8,501,220
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 141,416
Tenant security deposits 131,886
Other liabilities 283,878
Mortgage notes payable (Note C) 9,359,041
Partners' Deficit
General partners $ (53,520)
Limited partners (15,000 units
issued and outstanding) (1,361,481) (1,415,001)
$ 8,501,220
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
SHELTER PROPERTIES I LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994
<S> <C> <C>
Revenues:
Rental income $4,390,472 $4,219,791
Other income 214,043 221,056
Total revenues 4,604,515 4,440,847
Expenses:
Operating 1,306,410 1,387,853
General and administrative 267,866 112,640
Property management fees 227,855 218,197
Maintenance 612,385 712,632
Depreciation 742,150 770,917
Interest 960,193 1,005,645
Property taxes 245,447 244,904
Total expenses 4,362,306 4,452,788
Income (loss) before extraordinary item 242,209 (11,941)
Extraordinary item-loss on early
extinguishment of debt (Note C) -- (56,227)
Net income (loss) (Note D) $ 242,209 $ (68,168)
Net income (loss) allocated to
general partners (1%) $ 2,422 $ (682)
Net income (loss) allocated to
limited partners (99%) 239,787 (67,486)
$ 242,209 $ (68,168)
Per limited partnership unit:
Income (loss) before
extraordinary item $ 15.99 $ (.79)
Extraordinary item -- (3.71)
Net income (loss) per limited
partnership unit $ 15.99 $ (4.50)
<FN>
See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>
SHELTER PROPERTIES I LIMITED PARTNERSHIP
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 15,000 $ 2,000 $15,000,000 $15,002,000
Partners' deficit at
December 31, 1993 -- $(53,690) $(1,378,354) $(1,432,044)
Distributions payable to
partners -- (70) (6,928) (6,998)
Net loss for the year ended
December 31, 1994 -- (682) (67,486) (68,168)
Partners' deficit at
December 31, 1994 15,000 (54,442) (1,452,768) (1,507,210)
Distributions paid to
partners -- (1,500) (148,500) (150,000)
Net income for the year ended
December 31, 1995 2,422 239,787 242,209
Partners' deficit at
December 31, 1995 15,000 $(53,520) $(1,361,481) $(1,415,001)
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
SHELTER PROPERTIES I LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 242,209 $ (68,168)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation 742,150 770,917
Amortization of discounts and loan costs 120,291 118,118
Extraordinary item-loss on early
extinguishment of debt -- 56,227
Change in accounts:
Restricted cash (8,422) (11,871)
Accounts receivable (3,348) 794
Escrows for taxes and insurance 41,034 (20,351)
Other assets 659 13,737
Accounts payable 39,167 (22,904)
Tenant security deposit liabilities 7,381 11,070
Accrued taxes -- (77,361)
Other liabilities (14,144) (12,711)
Net cash provided by operating activities 1,166,977 757,497
Cash flows from investing activities:
Property improvements and replacements (306,802) (295,316)
Cash invested in short-term investments (2,277,800) (404,232)
Cash received from matured investments 2,143,177 513,478
Deposits to restricted escrows (61,624) (135,481)
Receipts from restricted escrows 31,869 112,879
Net cash used in investing activities (471,180) (208,672)
Cash flows from financing activities:
Payments on mortgage notes payable (362,815) (332,206)
Repayment of mortgage notes payable -- (2,068,843)
Proceeds from long-term borrowings -- 2,074,000
Loan costs -- (54,333)
Debt extinguishment cost -- (21,038)
Distribution paid (156,998) (4,593)
Net cash used in financing activities (519,813) (407,013)
Net increase in cash 175,984 141,812
Cash at beginning of year 353,069 211,257
Cash at end of year $ 529,053 $ 353,069
Supplemental disclosure of cash flow information:
Cash paid for interest $ 843,449 $ 891,123
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
SHELTER PROPERTIES I LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A - Organization and Significant Accounting Policies
Organization: Shelter Properties I Limited Partnership (the "Partnership ) was
organized as a limited partnership under the laws of the State of South Carolina
pursuant to a Certificate and Agreement of Limited Partnership filed April 7,
1980. The general partner responsible for management of the Partnership's
business is Shelter Realty I Corporation, a South Carolina corporation (the
"Corporate General Partner"). The only other general partner of the Partner-
ship, N. Barton Tuck, Jr., is effectively prohibited by the Partnership's
partnership agreement (the "Partnership Agreement") from participating in the
management of the Partnership. The Corporate General Partner is an indirect
subsidiary of Insignia Financial Group, Inc. ("Insignia"). The directors and
officers of the Corporate General Partner also serve as executive officers of
Insignia. The partnership agreement terminates December 31, 2019. The
Partnership commenced operations on September 1, 1980, and completed its
acquisition of apartment properties on December 31, 1980. The Partnership
operates four apartment properties located in the South and Southeast.
Principles of Consolidation: The financial statements include all of the
accounts of the Partnership and its 99.99% owned partnership. All significant
interpartnership 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.
Allocation of Cash Distributions: Cash distributions by the Partnership are
allocated between general and limited partners in accordance with the provisions
of the partnership agreement. The partnership agreement provides that net cash
from operations means revenue received less operating expenses paid, adjusted
for certain specified items which primarily include mortgage payments on debt,
property improvements and replacements not previously reserved, and the effects
of other adjustments to reserves. In the following notes to financial state-
ments, whenever "net cash provided by operations" is used, it has the aforemen-
tioned meaning. The following is a reconciliation of the subtotal in the
accompanying statements of cash flows captioned "net cash provided by operating
activities" to net cash from operations, as defined in the partnership agree-
ment. However, "net cash from operations" should not be considered an alterna-
tive to net income as an indicator of the Partnership's operating performance or
to cash flows as a measure of liquidity.
1995 1994
Net cash provided by operating activities $1,166,977 $ 757,497
Property improvements and replacements (306,802) (295,316)
Payments on mortgage notes payable (362,815) (332,206)
Changes in reserves for net operating
liabilities (62,327) 119,597
Changes in restricted escrows, net (29,755) (22,602)
Additional operating reserves (405,278) (100,000)
Net cash from operations $ -- $ 126,970
Note A - Organization and Significant Accounting Policies (continued)
The Corporate General Partner believes it to be in the best interest of the
Partnership to reserve an additional $405,278 at December 31, 1995, to fund
continuing capital improvements of its investment properties. Distributions
made from reserves no longer considered necessary by the general partners are
considered to be additional net cash from operations for allocation purposes.
During the first quarter of 1995, cash distributions of $150,000 were declared
and paid.
The partnership agreement provides that 99% of distributions of net cash from
operations are allocated to the limited partners until they receive net cash
from operations for such fiscal year equal to 7% of their adjusted capital
values (as defined in the partnership agreement), at which point the general
partners will be allocated all net cash from operations until they have received
distributions equal to 10% of the aggregate net cash from operations distributed
to partners for such fiscal year. Thereafter, the general partners will be
allocated 10% of any distributions of remaining net cash from operations for
such fiscal year.
All distributions of distributable net proceeds (as defined in the partnership
agreement) from property dispositions and refinancings will be allocated to the
limited partners until each limited partner has received an amount equal to a
cumulative 7% per annum of the average of the limited partners' adjusted capital
value, less any prior distributions of net cash from operations and
distributable net proceeds, and has also received an amount equal to the limited
partners' adjusted capital value. Thereafter, the general partners receive 1%
of the selling prices of properties sold where they acted as a broker, and then
the limited partners will be allocated 85% of any remaining distributions of
distributable net proceeds and the general partners will receive 15%.
Undistributed Net Proceeds from Property Sales: At December 31, 1995,
undistributed proceeds from property sales amounted to approximately $234,000,
of which approximately $101,000 was payable to the general partners for related
sales commissions when certain levels of return are received by the limited
partners.
Undistributed Net Proceeds from Refinancing: At December 31, 1995, the
Partnership had $306,000 of undistributed net proceeds from refinancings which
occurred prior to 1993.
Distributions Payable: During 1995 and 1994, the Partnership reported taxable
income related to Quail Hollow. The amount of withholding tax due for the
partners is immaterial for 1995 and 1994, respectively. The 1994 tax of $6,998
was paid to the State of South Carolina during 1995 and the 1995 liability of
$5,394 will be paid to the State of South Carolina during 1996.
Allocation of Profits, Gains and Losses: Profits, gains and losses of the
Partnership are allocated between general and limited partners in accordance
with the provisions of the partnership agreement.
For any fiscal year, to the extent that profits, not including gains from
property dispositions, do not exceed distributions of net cash from operations,
such profits are allocated in the same manner as such distributions. In any
fiscal year in which profits, not including gains from property disposition,
exceed distributions of net cash from operations, such excess is treated on a
cumulative basis as if it constituted an equivalent amount of distributable net
proceeds and is allocated together with, and in the same manner as, that portion
of gain described in the second sentence of the following paragraph.
Note A - Organization and Significant Accounting Policies (continued)
Any gain from property dispositions attributable to the excess, if any, of the
indebtedness relating to a property immediately prior to the disposition of such
property over the Partnership's adjusted basis in the property shall be
allocated to each partner having a negative capital account balance, to the
extent of such negative balance. The balance of any gain shall be treated on a
cumulative basis as if it constituted an equivalent amount of distributable net
proceeds and shall be allocated to the general partners to the extent that
general partners would have received distributable net proceeds in connection
therewith; the balance shall be allocated to the limited partners. However, the
interest of the general partners will be equal to at least 1% of each gain at
all times during the existence of the Partnership.
All losses, including losses attributable to property dispositions, are
allocated 99% to the limited partners and 1% to the general partners.
Accordingly, net losses as shown in the statements of operations and changes in
partners' capital for 1995 and 1994 were allocated 99% to the limited partners
and 1% to the general partners. Net income (loss) per limited partnership unit
for each such year was computed as 99% of net income (loss) divided by 15,000
weighted average units outstanding.
Other Reserves: The general partners may designate a portion of cash generated
from operations as other reserves in determining net cash used in operations.
The general partners designated as other reserves an amount equal to the net
liabilities related to the operations of apartment properties during the current
fiscal year that are expected to require the use of cash during the next fiscal
year. Other reserves increased during 1995 and decreased during 1994 by $62,327
and $119,597, respectively. These amounts were determined by considering
changes in the balances of restricted cash, accounts receivable, other assets,
escrows for taxes and insurance, accounts payable, tenant security deposit
liabilities, accrued taxes and other liabilities. At this time, the Corporate
General Partner expects to continue to adjust other reserves based on the net
change in the aforementioned account balances.
Restricted Escrows:
Capital Replacement Reserves - In connection with the refinancing of
Rome Georgian Apartments in 1994, $108,250 of the proceeds were designated as a
Repair Escrow for the funding of immediately required capital improvements and
repairs as noted in the loan documents. At December 31, 1995, there was no
balance remaining in this account. In addition, the loan documents require that
monthly deposits of $3,105 for the life of the loan are to be made to a Capital
Replacement Reserve to be used for capital improvements and not for normal
maintenance items as detailed in the agreements. At December 31, 1995, the
balance remaining in this account was $50,715.
Reserve Account - A general Reserve Account was established in 1992
with the refinancing proceeds for Windsor Hills. This fund was established to
cover necessary repairs and replacements of existing improvements, debt service,
out of pocket expenses incurred for ordinary and necessary administrative tasks,
and payment of real property taxes and insurance premiums. The Partnership is
required to deposit net operating income (as defined in the mortgage note) from
Windsor Hills to its reserve account until it equals $1,000 per apartment unit
or $300,000 in total. The balance at December 31, 1995, is $303,549, which
includes interest earned on these funds.
Note A - Organization and Significant Accounting Policies (continued)
Escrows for Taxes and Insurance: Currently, these funds are held by the
Partnership for the partnership's properties with the exception of Stone
Mountain West and Rome Georgian. These escrows are held by their respective
lenders. All tax escrow funds are designated for the payment of real estate
taxes. However, Rome Georgian also funds for insurance payments.
Depreciation: Depreciation is provided by the straight-line method over the
estimated lives of the apartment properties and related personal property. For
Federal income tax purposes, the accelerated cost recovery method is used (1)
for real property over 15 years for additions prior to March 16, 1984, 18 years
for additions after March 15, 1984 and before May 9, 1985 and 19 years for
additions after May 8, 1985 and before January 1, 1987 and (2) for personal
property over 5 years for additions prior to January 1, 1987. As a result of
the Tax Reform Act of 1986, for additions after December 31, 1986, the modified
accelerated cost recovery method is used for depreciation of (1) real property
additions over 27 1/2 years and (2) personal property additions over 7 years.
Present Value Discounts: Periodically, the Partnership incurs debt at below
market rates for similar debt. Present value discounts are recorded on the
basis of prevailing market rates and are amortized on an interest method over
the life of the related debt.
Loan Costs: Loan costs are included in other assets and are being amortized on
a straight-line basis over the life of the loans.
Cash: The Partnership considers only unrestricted cash to be cash.
Certificates of deposit are considered to be investments. At certain times, the
amount of cash deposited at a bank may exceed the limit on insured deposits.
Investments: Securities held-to-maturity and available-for-sale: The Corporate
General Partner determines the appropriate classification of debt securities at
the time of purchase and reevaluates such designation as of each balance sheet
date. Debt securities are classified as held-to-maturity when the Partnership
has the positive intent and ability to hold the securities to maturity. Held-
to-maturity securities are stated at amortized cost, adjusted for amortization
of premiums and accretion of discounts to maturity. Such amortization is
included in investment income. Interest on securities classified as held-to-
maturity is included in investment income.
Marketable equity securities and debt securities not classified as held-to-
maturity are classified as available-for-sale. Presently, all of the
Partnership's investments are classified as held-to-maturity. Available-for-
sale securities are carried at fair value, with the unrealized gains and losses,
net of tax, reported in a separate component of shareholders' equity. The
amortized cost of debt securities in this category is adjusted for amortization
of premiums and accretion of discounts to maturity. Such amortization is
included in investment income. Realized gains and losses and declines in value
judged to be other-than-temporary on available-for-sale securities are included
in investment income. The cost of securities sold is based on the specific
identification method. Interest and dividends on securities classified as
available-for-sale are included in investment income.
Note A - Organization and Significant Accounting Policies (continued)
Leases: The Partnership generally leases apartment units for twelve-month terms
or less. The Partnership recognizes income as earned on its leases. In
addition, the Corporate General Partner's policy is to offer rental concessions
during particularly slow months or in response to heavy competition from other
similar complexes in the area. Concessions are charged to expense as incurred.
Restricted Cash--Tenant Security Deposits: The Partnership requires security
deposits from all lessees for the duration of the lease and all such deposits
are considered restricted cash. Deposits are refunded when the tenant vacates
the apartment if there has been no damage to the unit.
Investment Properties: During the fourth quarter of 1995, the Partnership
adopted FASB Statement 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 recorded on long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets' carrying amount. For the year ended
December 31, 1995, no adjustments for impairment of value were recorded. The
impairment loss is measured by comparing the fair value of the asset to its
carrying amount. The effect of adoption was not material.
Reclassifications: Certain reclassifications have been made to the 1994
information to conform to the 1995 presentation.
Fair Value: In 1995, the Partnership implemented Statement of Financial
Accounting Standards No. 107, "Disclosure about Fair Value of Financial
Instruments," which requires disclosure of fair value information about
financial instruments for which it is practicable to estimate that value. The
carrying amount of the Partnership's cash and investments approximates fair
value due to short-term maturities. The Partnership estimates the fair value of
its fixed rate mortgages by discounted cash flow analysis, based on estimated
borrowing rates currently available to the Partnership.
Note B - Investments
Investments, stated at cost, consist of the following at December 31, 1995:
Interest Face Maturity
Rate Amount Cost Date
First Union
Certificate of Deposit 5.25% $150,656 $150,000 01/10/96
First Union
Certificate of Deposit 5.25% 75,328 75,000 01/10/96
Ford Motor Credit Corporation
Commercial Paper 5.60% 315,000 310,756 02/07/96
$540,984 535,756
Accrued Interest 3,099
$538,855
Note B - Investments (continued)
The Corporate General Partner has determined these investments should be
classified as held-to-maturity. The Corporate General Partner believes the
market value of the investments is approximately the same as the cost.
Note C - Mortgage Notes Payable
The principal terms of mortgage notes payable are as follows:
<TABLE>
<CAPTION>
Principal Monthly Principal
Balance At Payment Stated Balance
December 31, Including Interest Maturity Due At
Property 1995 Payment Rate Date Maturity
<S> <C> <C> <C> <C> <C>
Quail Hollow $ 1,766,526 $ 23,845 8.50% 04/05/04 $ 148,632
Windsor Hills:
1st mortgage 4,504,605 38,016 7.60 11/15/02 3,488,781
2nd mortgage 148,969 943 7.60 11/15/02 148,969
Rome Georgian 2,036,812 18,109 9.36 06/01/04 1,697,220
Stone Mountain West 1,659,418 19,608 8.00 05/01/06 19,477
10,116,330 $100,521
Less unamortized
discounts (757,289)
Total $ 9,359,041
</TABLE>
The estimated fair values of the Partnership's aggregate debt is $10,283,000.
This estimate is not necessarily indicative of the amounts the Partnership may
pay in actual market transactions.
The Partnership exercised an interest rate buy-down option for the refinanced
mortgage notes payable of Windsor Hills, reducing the stated rate from 8.76% to
7.6%. The fee for the interest rate reduction amounted to $345,617 and is being
amortized as a loan discount on the interest method over the life of the loan.
The discount fee is reflected as a reduction of the mortgage notes payable and
increases the effective rate of the debt to 8.76%.
On May 11, 1994, the Partnership refinanced the mortgage encumbering Rome
Georgian Apartments. The refinancing replaced indebtedness on Rome Georgian
Apartments in the amount of $2,076,028 of which $2,068,843 was principal and
$7,185 was interest. The refinanced debt carried a stated interest rate of
11.37% and had a maturity date of January 1, 2001. The new mortgage
indebtedness of $2,074,000, which carries a stated interest rate of 9.36% is
amortized over 24 years with a balloon payment due on June 1, 2004. Total
capitalized loan costs incurred were $54,333 and are being amortized over the
life of the loan. The early extinguishment of debt resulted in a loss of
$56,227 arising from unamortized loan costs of $35,189 and prepayment penalties
of $21,038.
Note C - Mortgage Notes Payable (continued)
The mortgage notes payable are nonrecourse and are secured by pledge of the
respective apartment properties and by pledge of revenues from the respective
apartment properties. Also, all of the notes require prepayment penalties if
repaid prior to maturity and prohibit resale of the properties subject to
existing indebtedness.
Scheduled principal payments of mortgage notes payable subsequent to December
31, 1995 are as follows:
1996 $ 393,533
1997 426,862
1998 463,026
1999 502,264
2000 544,841
Thereafter 7,785,804
$10,116,330
Note D - Income Taxes
The Partnership has received a ruling from the Internal Revenue Service that it
will be classified as a partnership for Federal income tax purposes.
Accordingly, no provision for income taxes is made in the financial statements
of the Partnership. Taxable income or loss of the Partnership is reported in
the income tax returns of its partners.
The following is a reconciliation of reported net loss and Federal taxable loss:
1995 1994
Net income (loss) as reported $ 242,209 $ (68,168)
Add (deduct):
Amortization of present value discounts 65,240 63,119
Depreciation differences 12,144 24,459
Change in prepaid rental (3,076) (14,823)
Other (8,172) (11,743)
Accrued legal 37,409 --
Federal taxable income (loss) $ 345,754 $ (7,156)
Federal taxable income (loss) per limited
partnership unit $ 22.82 $ (.47)
Note D - Income Taxes (continued)
The following is a reconciliation between the Partnership's reported amounts and
federal tax basis of net assets and liabilities:
Net deficit as reported $(1,415,001)
Land and buildings 1,891,449
Accumulated depreciation (696,817)
Syndication fees 1,894,991
Other (308,538)
Net assets - tax basis $ 1,366,084
Note E - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the Corporate General
Partner and its affiliates for the management and administration of all
partnership activities. The partnership agreement provides for payments to
affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. Balances and other transactions with
Insignia Financial Group, Inc. and affiliates in 1995 and 1994 are as follows:
1995 1994
Property management fees $ 227,855 $ 218,197
Reimbursement for services of affiliates 63,412 55,885
Due to general partners 100,797 100,797
The Partnership insures its properties under a master policy through an agency
and insurer unaffiliated with the Corporate General Partner. An affiliate of
the Corporate General Partner acquired, in the acquisition of a business,
certain financial obligations from an insurance agency which was later acquired
by the agent who placed the current year's master policy. The current agent
assumed the financial obligations to the affiliate of the Corporate General
Partner, who receives payment on these obligations from the agent. The amount
of the Partnership's insurance premiums accruing to the benefit of the affiliate
of the Corporate General Partner by virtue of the agent's obligations is not
significant.
Note F - Apartment Properties and Accumulated Depreciation
<TABLE>
<CAPTION>
Initial Cost
To Partnership
Cost
Buildings Capitalized
and Related (Removed)
Personal Subsequent to
Description Encumbrances Land Property Acquisition
<S> <C> <C> <C> <C>
Apartment Properties
Quail Hollow Apartments
West Columbia, South Carolina $ 1,766,526 $ 459,203 $ 3,753,664 $ 934,703
Windsor Hills Apartments
Blacksburg, Virginia 4,653,574 519,689 4,575,301 1,001,269
Rome Georgian Apartments
Rome, Georgia 2,036,812 238,397 2,410,458 587,016
Stone Mountain West Apartments
Stone Mountain, Georgia 1,659,418 210,220 3,408,023 910,303
Totals $10,116,330 $1,427,509 $14,147,446 $3,433,291
</TABLE>
<TABLE>
<CAPTION>
Gross Amount At Which Carried
At December 31, 1995
Buildings
And Related
Personal Accumulated Date of Date Depreciable
Description Land Property Total Depreciation Construction Acquired Life-Years
<S> <C> <C> <C> <C> <C> <C> <C>
Quail Hollow Apartments
West Columbia, South Carolina $ 459,203 $ 4,688,367 $ 5,147,570 $ 3,236,016 1973 09/01/80 5-34
Windsor Hill Apartments
Blacksburg, Virginia 519,689 5,576,570 6,096,259 4,075,346 1973 09/01/80 5-30
Rome Georgian Apartments
Rome, Georgia 238,397 2,997,474 3,235,871 2,094,872 1967-1970 09/15/80 5-35
Stone Mountain West Apts.
Stone Mountain, Georgia 210,220 4,318,326 4,528,546 2,915,381 1972 12/31/80 5-37
Totals $1,427,509 $17,580,737 $19,008,246 $12,321,615
</TABLE>
Note F - Apartment Properties and Accumulated Depreciation (continued)
Reconciliation of Real Estate and Accumulated Depreciation :
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994
<S> <C> <C>
Real Estate
Balance at beginning of year $18,727,271 $18,503,775
Property improvements 306,802 295,316
Disposal of property (25,827) (71,820)
Balance at End of Year $19,008,246 $18,727,271
Accumulated Depreciation
Balance at beginning of year $11,605,292 $10,901,396
Additions charged to expense 742,150 770,917
Disposal of property (25,827) (67,021)
Balance at End of Year $12,321,615 $11,605,292
</TABLE>
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1995 and 1994 is $20,899,697 and $20,592,894. The accumulated
depreciation taken for Federal income tax purposes at December 31, 1995 and 1994
is $13,018,434 and $12,288,429.
Note G - Contingencies
The Corporate General Partner owns 100 Limited Partnership Units ("Units"). On
or about April 26 and 27, 1995, six entities ("Affiliated Purchaser") affiliated
with the Partnership commenced tender offers for limited partner interests in
six limited partnerships, including the Partnership (collectively, the "Shelter
Properties Partnerships"). On May 27, 1995, the Affiliated Purchaser acquired
3,999 units of the Partnership pursuant to the tender offer. On or about May
12, 1995, in the United States District Court for the District of South
Carolina, certain limited partners of the Shelter Properties Partnerships
commenced a lawsuit, on behalf of themselves, on behalf of a putative class of
plaintiffs, and derivatively on behalf of the partnerships, challenging the
actions taken by defendants (including Insignia, the acquiring entities and
certain officers of Insignia) in the management of the Shelter Properties
Partnerships and in connection with the tender offers and certain other matters.
The plaintiffs alleged that, among other things: (i) the defendants
intentionally mismanaged the partnerships and acted contrary to the limited
partners' best interests by prolonging the existence of the partnerships in
order to perpetuate the revenues derived by Insignia and its affiliates from the
partnerships, (ii) the defendants' actions reduced the demand for the
partnerships' limited partner interests in the limited resale market by
artificially depressing the trading prices for limited partners interests in
order to create a favorable environment for the tender offers; (iii) through the
tender offers, the acquiring entities sought to acquire effective voting control
over the partnerships while paying highly inadequate prices; and (iv) the
documents disseminated to the class in connection with the tender offers
contained false and misleading statements and omissions of material facts
concerning such issues as the advantages to limited partners of tendering
pursuant to the tender offers, the true value of the interest, the true
financial condition of the partnerships, the factors affecting the likelihood
that properties owned by the partnerships will be sold or liquidated in the
near future, the liquidity and true value of the limited partner interests, the
reasons for the limited secondary market for limited partner interests, and the
true nature of the market for the underlying real estate assets owned by the
partnerships all in violation of the federal securities laws.
On September 27, 1995, the parties entered into a stipulation to settle the
matter. The principal terms of the stipulation require supplemental payments to
tendering limited partners aggregating approximately $6 million to be paid by
Affiliated Purchaser; waiver by the Shelter Properties Partnership's general
partners of any right to certain proceeds from a sale or refinancing of the
partnerships' properties; some restrictions on Insignia's ability to vote the
limited partner interests it acquired; payment of $1.25 million for plaintiffs'
attorney fees and expenses in the litigation; and general releases of all the
defendants. The Partnership has accrued approximately $37,000 as its allocated
share of the $1.25 million. Provisional Court approval of the stipulation is
required before it will be distributed to the class members for review. If a
certain number of class members opt out, the settlement may be cancelled. No
assurance can be given that this matter will be settled on the terms, set forth
above or otherwise.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons, Compliance
with Section 16(a) of the Exchange Act
The Registrant has no officers or directors. The Individual and Corporate
General Partners are as follows:
Individual General Partner - N. Barton Tuck, Jr., age 56, is the Individual
General Partner of the Registrant. Mr. Tuck is Chairman of GolfSouth
Management, Inc. Until August 1990, he served as Chairman and Chief Executive
Officer of U.S. Shelter Corporation ("Shelter"), the former parent of AmReal
Corporation (parent of the Corporate General Partner of the Partnership). For
six years prior to 1966, Mr. Tuck was employed in Greenville, South Carolina by
the certified public accounting firm of S.D. Leidesdorf & Company. From 1966 to
1970, he was a registered representative with the investment banking firm of
Harris Upham & Co., Inc. in Greenville, South Carolina. Since 1970, Mr. Tuck
has been engaged in arranging equity investments for individuals and
partnerships. Mr. Tuck is a graduate of the University of North Carolina. Mr.
Tuck has delegated to the Corporate General Partner all of his authority, as a
general partner of the Partnership, to manage and control the Partnership and
its business and affairs.
Corporate General Partner - The names and ages of, as well as the positions
and offices held by, the executive officers and directors of Shelter Realty
Corporation are set forth below. There are no family relationships between or
among any officers or directors.
Name Age Position
William H. Jarrard, Jr. 49 President
Ronald Uretta 39 Vice President and Treasurer
John K. Lines 36 Vice President and Secretary
Kelley M. Buechler 38 Assistant Secretary
Mr. Jarrard, who had previously served as Vice President, became
President in August 1994. Also, in August 1994, Mr. Lines became Secretary and
Mr. Uretta became Vice President and Treasurer.
William H. Jarrard, Jr. has been Managing Director - Partnership
Administration of Insignia since January 1991. Prior to joining Insignia in
1991 he served in similar capacities for U.S. Shelter.
Ronald Uretta 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, Ltd. From
May 1988 until September 1990, Mr. Uretta was a self-employed financial
consultant. From January 1978 until January 1988, Mr. Uretta was employed by
Veltri Raynor & Company, independent certified public accountants.
John K. Lines, Esq. has been 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
Financial 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 Associate Attorney
with Squire Sanders & Dempsey, Columbus, Ohio.
Kelley M. Buechler is Assistant Secretary of Insignia. Prior to joining
Insignia, she served in similar capacities with U.S. Shelter. Ms. Buechler is
a graduate of the University of North Carolina.
Item 10. Executive Compensation
Neither the Individual General Partner nor any of the directors and
officers of the Corporate General Partner received any remuneration from the
Registrant.
Item 11. Security Ownership of Certain Beneficial Owners and Management
Except as noted below, no person was known by the Registrant to be the
beneficial owner of more than 5% of the Limited Partnership Units of the
Registrant as of December 31, 1995.
Number
Entity of Units Percentage
SP I Acquisition, LLC 3,999 26.66%
High River Limited Partnership 1,695 11.30%
No director or officer of the Corporate General Partner owns any Units.
The Corporate General Partner owns 100 Units as required by the terms of the
partnership agreement.
Item 12. Certain Relationships and Related Transactions
The Individual General Partner and the Corporate General Partner received,
collectively, $1,570 as their prorata share of the distributions made during the
first quarter of 1995. No distributions were made during the remainder of the
year ended December 31, 1995. For a description of the share of cash
distributions from operations, if any, to which the general partners are
entitled, reference is made to the material contained in the Prospectus under
the heading "PROFITS AND LOSSES AND CASH DISTRIBUTIONS."
The Registrant has a property management agreement with Insignia
Management Group, L.P. pursuant to which Insignia Management Group, L.P. has
assumed direct responsibility for day-to-day management of the Partnership's
properties. This service includes the supervision of leasing, rent collection,
maintenance, budgeting, employment of personnel, payment of operating expenses,
etc. Insignia Management Group, L.P. receives a property management fee equal
to 5% of apartment revenues. During the fiscal year ended December 31, 1995,
Insignia Management Group, L.P. received $227,855 in fees for property
management.
For a more detailed description of the management fee that Insignia
Management Group, L.P. is entitled to receive, see the material contained in the
Prospectus under the heading CONFLICTS OF INTEREST - Property Management
Services.
For a further description of payments made by the Registrant to affiliates
for services and as reimbursement of certain expenses incurred by affiliates on
behalf of the Registrant, see Note E of the financial statements included as
part of this report.
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to this
report.
(b) Reports on Form 8-K filed in the fourth quarter of fiscal year
1995:
None.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
SHELTER PROPERTIES I LIMITED PARTNERSHIP
By: Shelter Realty Corporation
Corporate General Partner
By: /s/William H. Jarrard, Jr.
William H. Jarrard, Jr.
President and Director
Date: March 5, 1996
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the Registrant and in the capacities and on
the date indicated.
/s/William H. Jarrard, Jr. Date: March 5, 1996
William H. Jarrard, Jr.
President and Director
/s/Ronald Uretta Date: March 5, 1996
Ronald Uretta
Treasurer (Principal Financial Officer
and Principal Accounting Officer)
EXHIBIT INDEX
Exhibit
3 See Exhibit 4(a)
4 (a) Amended and Restated Certificate and Agreement of Limited
Partnership [included as Exhibit A to the Prospectus of Registrant
dated July 3, 1980 contained in Amendment No. 1 to Registration
Statement No. 2-67384, of Registrant filed July 3, 1980 (the
"Prospectus") and incorporated herein by reference].
(b) Subscription Agreements and Signature Pages [Filed with Amendment
No. 1 of Registration Statement No. 2-67384, of Registrant filed
July 3, 1980 and incorporated herein by reference].
(c) Wrap Around Mortgage Note and South Carolina Mortgage of Real Estate
between Quail Hollow Company and Shelter Properties I to acquire
Quail Hollow Apartments.*
(d) Promissory Note and Deed of Trust and Security Agreement between
Pacific Mutual Life Insurance Company and Shelter Properties I to
refinance the debt on Windsor Hills Apartments.*
(e) Multifamily Note and Multifamily Deed to secure Debt between
Germania Federal Savings and Loan Association and Shelter Properties
I to refinance the debt on Rome Georgian Apartments.*
(f) Promissory Note and Deed to Secure Debt and Security Agreement
between Citizens and Southern Financial Corporation and Stone
Property Associates, Ltd. to acquire Stone Mountain Apartments.*
*Filed as Exhibit 4(c), 4(d), 4(e) and 4(f), respectively, to Form
10-K of Registrant for year ended December 31, 1987 and incorporated
herein by reference.
10(i) Contract related to acquisition or disposition of properties.
(a) Purchase Agreement dated December 5, 1979, between Quail Hollow
Associates Limited Partnership and U.S. Shelter Corporation to
purchase Quail Hollow Apartments.**
(b) Purchase Agreement dated December 5, 1979, between Windsor
Associates and U. S. Shelter Corporation to purchase Windsor Hills
Apartments.**
**Filed as Exhibits 12(c) and 12(d), respectively, to Registration
Statement No. 2-67384, of Registrant filed April 16, 1980 and
incorporated herein by reference.
(c) Purchase Agreement dated June 4, 1980 between Paul Lipman, Trustee
and U.S. Shelter Corporation to purchase Rome Georgian
Apartments.***
***Filed as Exhibit 12(d), to Amendment No. 1 to Registration
Statement, No.2-67384, of Registrant filed July 3, 1980 and
incorporated herein by reference.
(d) Purchase Agreement dated December 17, 1980 between Stone Property
Associates, Ltd. and Shelter Properties I to purchase Stone Mountain
West Apartments. [Filed with Form 8-K of Registrant dated December
18, 1980 and incorporated herein by reference].
(e) Agreement of Sale dated September 30, 1983 between Shelter
Properties I and Case/Edwards Associates to sell Yorktown
Apartments. [Filed with Form 10-K of Registrant for year ended
December 31, 1983 and incorporated herein by reference].
(f) Contact of Sale dated December 29, 1983 between Shelter Properties I
and Volco, Inc. to sell Lamplighter Apartments. [Filed with Form
10-K of Registrant for year ended December 31, 1984 and incorporated
herein by reference].
(g) Agreement of Sale dated May 31, 1984 between Shelter Properties I
and BWIT Fifty-Fifth Street, Inc. to sell Middle Plantation
Apartments. [Filed with Form 10-K of Registrant for year ended
December 31, 1984 and incorporated herein by reference].
(ii) Form of Management Agreement with U.S. Shelter Corporation subsequently
assigned to Shelter Management Group, L.P. (now known as Insignia
Management, L.P.) [Filed with Amendment No. 1 of Registration Statement,
No. 2-67384, of Registrant filed July 3, 1980 and incorporated herein by
reference].
(iii) Contracts related to refinancing the debt:
(a) Restated and Modified of First Deed of Trust and Security Agreement
dated October 28, 1992 between Windsor Hills I, L.P. and Dewey B.
Morris and Richard G. Joynt (Trustee) and First Commonwealth Realty
Credit Corporation, a Virginia Corporation, securing the Windsor
Hill property.****
(b) Second Deed of Trust and Security Agreement dated October 28, 1992
between Windsor Hills I, L.P. and Dewey B. Morris and Richard G.
Joynt (Trustee) and First Commonwealth Realty Credit Corporation, a
Virginia Corporation, securing the Windsor Hills property.****
(c) First Assignment of Leases and Rents dated October 28, 1992 between
Windsor Hills I, L.P. and First Commonwealth Realty Credit
Corporation, a Virginia Corporation, securing the Windsor Hills
property.****
(d) Second Assignment of Leases and Rents dated October 28, 1992 between
Windsor Hills I, L.P. and Dewey B. Morris and Richard G. Joynt
(Trustee) and First Commonwealth Realty Credit Corporation, a
Virginia Corporation, securing the Windsor Hills property.****
(e) Restated and Modified Deed of Trust Note dated October 28, 1992
between Windsor Hills I, L.P. and First Commonwealth Realty Credit
Corporation relating to the Windsor Hills property.****
(f) Second Deed of Trust Note dated October 28, 1992 between Windsor
Hills I, L.P. and First Commonwealth Realty Credit Corporation
relating to the Windsor Hills property.****
****Filed as Exhibit 10(iii)(a) through (f), respectively, to Form
10-KSB of Registrant for year ended December 31, 1992 and
incorporated herein by reference.
(g) Multifamily Note dated May 11, 1994 between Shelter Properties I
Limited Partnership and Financial Federal Savings Bank relating to
Rome Georgian Apartments. *****
(h) Multifamily Deed to secure debt, assignments of rents and security
agreement, dated May 11, 1994 between Shelter Properties I Limited
Partnership and Financial Federal Savings Bank securing Rome
Georgian Apartments. *****
*****Filed as Exhibit 10(iii) (a) and (b), respectively, to Form
10QSB ofRegistrant for the quarter ended June 30, 1994 and
incorporated herein by reference.
22 Subsidiaries of the Registrant.
27 Financial Data Schedule.
99 (a) Prospectus of Registrant dated July 3, 1980 [included in
Registration Statement No. 2-67384, of Registrant] and incorporated
herein by reference.
(b) Agreement of Limited Partnership for Windsor Hills I, L.P. between
Shelter I G.P. Limited Partnership and Shelter I Limited Partnership
dated October 13, 1992. [Filed as Exhibit 28(b) to Form 10-KSB of
Registrant for year ended December 31, 1992 and incorporated herein
by reference].
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Shelter
Propertis I 1995 10-KSB and is qualified in its entirety by reference to such
10-KSB.
</LEGEND>
<CIK> 0000316220
<NAME> SHELTER PROPERTIES I
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 529,053
<SECURITIES> 0
<RECEIVABLES> 12,612
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 19,008,246
<DEPRECIATION> 12,321,615
<TOTAL-ASSETS> 8,501,220
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 9,359,041
0
0
<COMMON> 0
<OTHER-SE> (1,415,001)
<TOTAL-LIABILITY-AND-EQUITY> 8,501,220
<SALES> 0
<TOTAL-REVENUES> 4,604,515
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,362,306
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 960,193
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 242,209
<EPS-PRIMARY> 15.99
<EPS-DILUTED> 0
<FN>
<F1>The Partnership has an unclassifed balance sheet.
</FN>
</TABLE>
EXHIBIT 22
SHELTER PROPERTIES I LIMITED PARTNERSHIP
Subsidiary List
Name of Subsidiary State of Incorporation/Formation Date
Windsor I Limited Partnership Delaware 1992
Shelter I GP Limited Partnership Delaware 1992
