United States Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarterly Period Ended June 30, 1996
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: 0-10222
QUALIFIED PROPERTIES 80, L.P.
---------------------------------
Exact Name of Registrant as Specified in its Charter
Virginia
---------- 13-3046808
State or Other Jurisdiction of --------------
Incorporation or Organization I.R.S. Employer Identification No.
3 World Financial Center, 29th Floor,
New York, NY Attn: Andre Anderson
- -------------------------------------- 10285
Address of Principal Executive Offices -------
Zip Code
(212) 526-3237
-----------------
Registrant's Telephone Number, Including Area Code
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 ____
Consolidated Balance Sheets
At June 30, At December 31,
1996 1995
Assets
Real estate:
Land $ 3,642,847 $ 3,642,847
Buildings and improvements 21,077,542 21,780,615
24,720,389 25,423,462
Less accumulated depreciation (9,968,692) (10,186,201)
14,751,697 15,237,261
Cash and cash equivalents 344,246 1,062,602
Cash restricted 153,015 115,521
497,261 1,178,123
Prepaid expenses, net of accumulated
amortization of $229,124 in 1996 and
$409,161 in 1995 480,729 456,924
Rent and other receivables 38,152 31,458
Deferred rent receivable 436,522 423,953
Total Assets $ 16,204,361 $ 17,327,719
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 154,270 $ 182,346
Prepaid rent 16,929 -
Due to affiliates 8,042 10,938
Security deposits payable 68,288 68,288
Distribution payable 339,817 339,817
Mortgage note payable 4,059,687 4,098,403
Total Liabilities 4,647,033 4,699,792
Minority interest 22,157 25,519
Partners' Capital (Deficit):
General Partners (127,769) (123,029)
Limited Partners (51,234 units outstanding) 11,662,940 12,725,437
Total Partners' Capital 11,535,171 12,602,408
Total Liabilities and Partners'
Capital $ 16,204,361 $ 17,327,719
Consolidated Statement of Partners' Capital (Deficit)
For the six months ended June 30, 1996
General Limited
Partners Partners Total
Balance at December 31, 1995 $ (123,029) $12,725,437 $12,602,408
Net income 18,471 74,898 93,369
Distributions (23,211) (1,137,395) (1,160,606)
Balance at June 30, 1996 $ (127,769) $11,662,940 $11,535,171
Consolidated Statements of Operations
Three months ended June 30, Six months ended June 30,
1996 1995 1996 1995
Income
Rental $ 851,154 $ 983,681 $1,696,191 $1,908,144
Other 74,114 64,106 146,131 193,548
Interest 2,874 17,492 13,106 47,587
Total income 928,142 1,065,279 1,855,428 2,149,279
Expenses
Property operating 380,306 421,810 821,716 851,318
Depreciation and
amortization 308,509 383,123 623,430 758,576
Interest 106,911 108,858 214,328 218,171
General and administrative 34,134 36,041 105,947 72,164
Total expenses 829,860 949,832 1,765,421 1,900,229
Income before minority
interest and gain on sale
of real estate 98,282 115,447 90,007 249,050
Minority interest in loss
of consolidated venture 1,397 (1,122) 3,362 1,341
Income before gain on sale
of real estate 99,679 114,325 93,369 250,391
Gain on sale of real estate - - - 1,838,645
Net Income $ 99,679 $ 114,325 $ 93,369 $ 2,089,036
Net Income Allocated:
To the General Partners $ 18,597 $ 6,180 $ 18,471 $ 27,287
To the Limited Partners 81,082 108,145 74,898 2,061,749
$ 99,679 $ 114,325 $ 93,369 $ 2,089,036
Per limited partnership
unit (51,234 outstanding) $1.58 $2.11 $1.46 $40.24
Consolidated Statements of Cash Flows
For the six months ended June 30, 1996 1995
Cash Flows From Operating Activities
Net income $ 93,369 $ 2,089,036
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 572,005 675,236
Amortization 51,425 83,340
Gain on sale of real estate - (1,838,645)
Minority interest in loss
of consolidated venture (3,362) (1,341)
Increase (decrease) in cash arising from changes
in operating assets and liabilities
Cash restricted (37,494) 15,500
Prepaid expenses (75,230) (269,089)
Rent and other receivables (6,694) (76,238)
Deferred rent receivable (12,569) (123,094)
Accounts payable and accrued expenses (28,076) (86,895)
Prepaid rent 16,929 5,000
Due to affiliates (2,896) 5,925
Security deposits payable - (20,676)
Net cash provided by operating activities 567,407 458,059
Cash Flows From Investing Activities
Proceeds from sale of real estate - 2,982,138
Additions to real estate (86,441) (520,100)
Net cash provided by (used for) investing activities (86,441) 2,462,038
Cash Flows From Financing Activities
Distributions paid to partners (1,160,606) (3,498,386)
Principal payments on mortgage note payable (38,716) (34,873)
Net cash used for financing activities (1,199,322) (3,533,259)
Net decrease in cash and cash equivalents (718,356) (613,162)
Cash and cash equivalents, beginning of period 1,062,602 1,468,010
Cash and cash equivalents, end of period $ 344,246 $ 854,848
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest $ 214,328 $ 218,171
Supplemental Disclosure of Non-Cash Investing
Activities
Write-off of fully depreciated tenant improvements $ 789,514 $ 310,659
Notes to the Consolidated Financial Statements
The unaudited financial statements should be read in conjunction with the
Partnership's annual 1995 audited financial statements within Form 10-K.
The unaudited financial statements include all adjustments which are, in the
opinion of management, necessary to present a fair statement of financial
position as of June 30, 1996 and the results of operations for the three and
six months ended June 30, 1996 and 1995, cash flows for the six months ended
June 30, 1996 and 1995, and the statement of changes in partners' capital
(deficit) for the six months ended June 30, 1996. Results of operations
for the period are not necessarily indicative of the results to be expected
for the full year.
No significant events have occurred subsequent to fiscal year 1995, and no
material contingencies exist which would require disclosure in this interim
report per Regulation S-X, Rule 10- 01, Paragraph (a)(5).
Part I, Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
The Partnership had cash and cash equivalents totaling $344,246 at June 30,
1996, compared with $1,062,602 at December 31, 1995. The decrease is primarily
due to the payment of cash distributions, real estate additions and mortgage
principal payments exceeding net cash provided by operating activities. The
cash and cash equivalents balance includes funds held as a working capital
reserve to fund tenant improvements and leasing commissions, in addition to
cash generated from operations. The Partnership also had a restricted cash
balance of $153,015 at June 30, 1996, which consists of funds reserved for
property tax payments.
At 959 Ridgeway Office Building, a tenant occupying 3,143 square feet or
approximately 9% of the property's leasable area pursuant to a lease which
expired March 31, 1996, executed a five-year lease renewal during the quarter.
As a result, the property remained 68% leased at June 30, 1996. The property's
two remaining leases, with a single tenant, are scheduled to expire in December
1996. While the tenant has indicated that it will likely vacate its space, the
Partnership has not received formal notice from the tenant. The General
Partners continue to market the property's currently vacant space and
potentially available future space. However, it should be noted that this is a
small property compared to the Partnership's other three properties, and as
such, it is not anticipated that these expirations will materially affect the
Partnership's revenues.
Accounts payable and accrued expenses totaled $154,270 at June 30, 1996
compared with $182,346 at December 31, 1995. The decrease is largely due to
differences in the timing of invoice payments for the respective periods.
A cash distribution in the amount of $6.50 per Unit will be paid to the Limited
Partners on or about August 15, 1996. This distribution will be funded from
Partnership operations and was declared after a review of the Partnership's
1996 second quarter operations, anticipated future cash needs and current cash
position.
Results of Operations
The Partnership's operations resulted in net income of $99,679 and $93,369 for
the three and six months ended June 30, 1996, respectively, compared with net
income of $114,325 and $2,089,036 for the three and six months ended June 30,
1995, respectively. The decrease for the six-month period is primarily
attributable to the $1,838,645 gain recognized on the March 1, 1995 sale of
Diamond Springs Warehouse.
Rental income totaled $851,154 and $1,696,191 for the three and six months
ended June 30, 1996, respectively, compared with $983,681 and $1,908,144 for
the comparable periods a year earlier. The decrease for the three-month period
is primarily attributable to lower occupancy at 959 Ridgeway Office Building,
while the decrease for the six-month period is attributable to the sale of
Diamond Springs on March 1, 1995 and the lower occupancy at 959 Ridgeway Office
Building. Other income totaled $74,114 and $146,131 for the three and six
months ended June 30, 1996, respectively, compared with $64,106 and $193,548
for the comparable periods in 1995. The decrease for the six-month period is
primarily due to the receipt in 1995 of a nonrefundable deposit associated with
the sale of Diamond Springs Warehouse and real estate tax recovery income at
the Diamond Springs property.
Property operating expenses totaled $380,306 and $821,716 for the three and six
months ended June 30, 1996 compared with $421,810 and $851,318 for the
respective 1995 periods. The decrease is primarily attributable to lower real
estate taxes paid at 889 Ridgelake Office Building and 959 Ridgeway Office
Building. Depreciation and amortization declined from $383,123 and $758,576 for
the three and six months ended June 30, 1995, respectively, to $308,509 and
$623,430 for the three and six months ended June 30, 1996, respectively,
primarily as a result of certain tenant improvements at 5300 Stevens Creek
becoming fully depreciated as of October 1995. General and administrative
expenses totaled $34,134 and $105,947 for the three and six months ended June
30, 1996, respectively, versus $36,041 and $72,164 for the three and six months
ended June 30, 1995. The increase for the six- month period is largely due to
the payment of 1995 cash distributions to the coventurers of 5300 Stevens Creek
in 1996.
As of June 30, 1996, lease levels at each of the Properties were as follows:
Swenson Business Park-Building A - 100%; Stevens Creek Office Building - 100%;
959 Ridgeway Office Building 68%; and 889 Ridgelake Office Building - 98%.
Part II Other Information
Items 1-5 Not applicable.
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits -
(27) Financial Data Schedule
(b) Reports on Form 8-K - No reports on Form 8-K were filed
during the quarter ended June 30, 1996.
SIGNATURES
-------------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
QUALIFIED PROPERTIES 80, L.P.
BY: QP80 REAL ESTATE SERVICES, INC.
General Partner
Date: August 13, 1996 BY: /s/ Kenneth L. Zakin
Director and President
Date: August 13, 1996 BY: /s/William Caulfield
Vice President and
Chief Financial Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-END> June-30-1996
<CASH> 344,246
<SECURITIES> 000
<RECEIVABLES> 38,152
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 000
<PP&E> 24,720,389
<DEPRECIATION> (9,968,692)
<TOTAL-ASSETS> 16,204,361
<CURRENT-LIABILITIES> 154,270
<BONDS> 4,059,687
<COMMON> 000
000
000
<OTHER-SE> 11,535,171
<TOTAL-LIABILITY-AND-EQUITY> 16,204,361
<SALES> 1,696,191
<TOTAL-REVENUES> 1,855,428
<CGS> 000
<TOTAL-COSTS> 821,716
<OTHER-EXPENSES> 729,377
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 214,328
<INCOME-PRETAX> 90,007
<INCOME-TAX> 000
<INCOME-CONTINUING> 90,007
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> 90,007
<EPS-PRIMARY> 1.46
<EPS-DILUTED> 1.46
</TABLE>
