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 March 31, 1998
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 March 31, At December 31,
1998 1997
Assets
Real estate, at cost:
Land $ 1,348,365 $ 1,348,365
Buildings and improvements 10,562,735 10,562,735
11,911,100 11,911,100
Less accumulated depreciation (6,646,005) (6,516,375)
5,265,095 5,394,725
Real estate assets held for disposition _ 7,359,706
Cash and cash equivalents 16,436,857 1,023,370
Restricted cash 24,566 50,567
Prepaid expenses, net of accumulated
amortization of $145,757 in 1998
and $132,997 in 1997 156,546 205,922
Rent and other receivables 23,045 439
Deferred rent receivable 104,737 113,664
Total Assets $ 22,010,846 $ 14,148,393
Liabilities and Partners' Capital (Deficit)
Liabilities:
Accounts payable and accrued expenses $ 314,158 $ 220,073
Due to affiliates 5,000 4,922
Security deposits payable _ 60,521
Mortgage note payable 3,907,073 3,930,621
Total Liabilities 4,226,231 4,216,137
Minority interest 10,604 13,865
Partners' Capital (Deficit):
General Partners (77,513) (156,069)
Limited Partners (51,234 units outstanding) 17,851,524 10,074,460
Total Partners' Capital 17,774,011 9,918,391
Total Liabilities and Partners' Capital $ 22,010,846 $ 14,148,393
Consolidated Statement of Partners' Capital (Deficit)
For the three months ended March 31, 1998
General Limited
Partners Partners Total
Balance at December 31, 1997 $ (156,069) $ 10,074,460 $ 9,918,391
Net income 78,556 7,777,064 7,855,620
Balance at March 31, 1998 $ (77,513) $ 17,851,524 $ 17,774,011
Consolidated Statements of Operations
For the three months ended March 31, 1998 1997
Income
Rental $ 477,683 $ 759,357
Other 21,671 85,083
Interest 143,663 02,694
Total income 643,017 847,134
Expenses
Property operating 309,930 379,902
Depreciation and amortization 142,390 142,453
Interest 102,974 105,311
General and administrative 65,304 58,706
Total expenses 620,598 686,372
Income before minority interest and
gain on sale of real estate 22,419 160,762
Minority interest 3,261 1,469
Income before gain on sale of real estate 25,680 162,231
Gain on sale of real estate 7,829,940 _
Net Income $ 7,855,620 $ 162,231
Net Income Allocated:
To the General Partners $ 78,556 $ 2,139
To the Limited Partners 7,777,064 160,092
$ 7,855,620 $ 162,231
Per limited partnership unit
(51,234 outstanding) $151.79 $3.12
Consolidated Statements of Cash Flows
For the three months ended March 31, 1998 1997
Cash Flows From Operating Activities:
Net income $ 7,855,620 $ 162,231
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization 142,390 142,453
Gain on sale of real estate (7,829,940) _
Minority interest (3,261) (1,469)
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Restricted cash 26,001 173,227
Prepaid expenses _ 22,141
Rent and other receivables (22,606) (5,738)
Deferred rent receivable 8,927 6,129
Accounts payable and accrued expenses 97,317 (112,838)
Prepaid rent _ (15,212)
Due to affiliates 78 (4,415)
Security Deposit payable (60,521) _
Net cash provided by operating activities 214,005 366,509
Cash Flows From Investing Activities:
Proceeds from sale of real estate 15,223,030 _
Net cash provided by investing activities 15,223,030 _
Cash Flows From Financing Activities:
Distributions paid to partners _ (339,817)
Principal payments on mortgage note payable (23,548) (21,210)
Net cash used for investing activities (23,548) (361,027)
Net increase (decrease) in cash and
cash equivalents 15,413,487 5,482
Cash and cash equivalents, beginning of period 1,023,370 383,531
Cash and cash equivalents, end of period $ 16,436,857 $ 389,013
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest $ 102,974 $ 105,311
Supplemental Disclosure of Non Cash Investing Activities:
Write-off of fully depreciated tenant improvements $ _ $ 346,039
Supplemental Disclosure of Cash Flow Information:
Prepaid rent - net of $3,232 included in accounts payable was classified to
net proceeds from sale of property.
Notes to the Consolidated Financial Statements
The unaudited consolidated financial statements should be read in
conjunction with the Partnership's annual 1997 audited
consolidated financial statements within Form 10-K.
The unaudited consolidated financial statements include all
normal and recurring adjustments which are, in the opinion of
management, necessary to present a fair statement of financial
position as of March 31, 1998 and the results of operations and
cash flows for the three months ended March 31, 1998 and 1997 and
the statement of partners' capital (deficit) for the three months
ended March 31, 1998. Results of operations for the period are
not necessarily indicative of the results to be expected for the
full year.
Certain prior year amounts have been reclassified to conform to
the current year's presentation.
The following significant event occurred subsequent to fiscal
year 1997, which requires disclosure in this interim report per
Regulation S-X, Rule 10-01, Paragraph (a)(5).
On February 2, 1998, Qualified Properties 80, L.P. (the
"Partnership") closed on the sale of Stevens Creek Office
Building (the "Property"). The Property was sold for net
proceeds of $15,223,030 to an entity controlled by Invesco Realty
Advisors, Inc. (the "Buyer"), a Delaware Corporation unaffiliated
with the Partnership. The selling price was determined by arm's
length negotiations between the Partnership and the Buyer. The
transaction resulted in a gain on sale of approximately $7.8
million, which is reflected in the Partnership's statement of
operations for the three months ending March 31, 1998.
Part I, Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
On February 2, 1998 the sale of Stevens Creek Office Building was
completed. The property was sold for net proceeds of $15,223,030
and resulted in a gain on sale of approximately $7.8 million,
which is reflected in the Partnership's statement of operations
for the three months ending March 31, 1998.
The Partnership is in the process of selecting a real estate
brokerage firm to assist in selling the Partnership's two
remaining properties, 889 Ridgelake Office Building and 959
Ridgeway Office Building. While it is currently anticipated that
the properties will be sold and the Partnership liquidated in
1998, there can be no assurance that either property will be sold
within this time frame, or that the sales will result in a
particular price.
The Partnership had cash and cash equivalents totaling
$16,436,857 at March 31, 1998, compared to $1,023,370 at December
31, 1997. The increase is primarily due to net cash provided by
operating activities and net proceeds from the sale of Stevens
Creek Office Building exceeding mortgage principal payments.
The Partnership also had a restricted cash balance of $24,566 at
March 31, 1998, compared to $50,567 at December 31, 1997. The
Partnership had prepaid expenses of $156,546 at March 31, 1998
compared to $205,922 at December 31, 1997. The Partnership had
security deposits payable of $0 at March 31, 1998, compared to
$60,521 at December 31, 1997. The decreases in each of these
accounts are largely due to the sale of Stevens Creek Office
Building.
Rent and other receivables was $23,045 at March 31, 1998,
compared to $439 at December 31, 1997. The increase primarily
represents amounts due to the Partnership related to the sale of
Stevens Creek Office Building. Accounts payable and accrued
expenses totaled $314,158 at March 31, 1998, compared to $220,073
at December 31, 1997. The increase is largely due to rents
prepaid for the month of February at Stevens Creek which are to
be reimbursed to the buyer of the property.
On April 7, 1998, the Partnership paid a special cash
distribution to Limited Partners from the net proceeds from the
sale of Stevens Creek in the amount of $261.45 per Unit to
Unitholders of record as of April 1, 1998.
Results of Operations
The Partnership's operations resulted in net income of $7,855,620
for the three months ended March 31, 1998, compared to $162,231
for the three months ended March 31, 1997. The increase is
primarily attributable to the sale of Stevens Creek Office
Building. Excluding the gain on sale of real estate, the
Partnership's operations resulted in income before gain on sale
of real estate of $25,680 for the three months ended March 31,
1998, compared to $162,231 for the comparable period a year ago.
The decrease is mainly due to the sale of Swenson Business Park -
Building A in November 1997 and Stevens Creek Office Building in
February 1998.
Rental income totaled $477,683 for the three months ended
March 31, 1998, compared to $759,357 a year earlier. The
decrease is mainly attributable to the sale of Swenson Business
Park - Building A and Stevens Creek Office Building in November
1997 and February 1998, respectively. Other income totaled
$21,671 for the three months ended March 31, 1998, compared to
$85,083 for the comparable period in 1997. The 1997 amount
reflects the receipt of late fees paid by two tenants at Stevens
Creek Office Building in 1997. Interest income totaled $143,663
for the three months ended March 31, 1998, compared to $2,694 a
year earlier, reflecting the Partnership's higher cash balances
in 1998.
Property operating expenses totaled $309,930 for the three months
ended March 31, 1998, compared to $379,902 for the comparable
1997 period. The decrease is largely due to the sale of Swenson
Business Park - Building A and Stevens Creek Office Building.
Depreciation and amortization was $142,390 for the three months
ended March 31, 1998, largely unchanged from $142,453 for the
three months ended March 31, 1997.
As of March 31, 1998, lease levels at each of the Properties were
as follows: 959 Ridgeway Office Building - 63%; and 889
Ridgelake Office Building - 100%.
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 -
On February 17, 1998, the Partnership filed a
Form 8-K reporting that the sale of Stevens Creek
Office Building closed on February 2, 1998.
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: May 14, 1998 BY: /s/Jeffrey C. Carter
Director and President
Date: May 14, 1998 BY: /s/ Michael T. Marron
Vice President and
Chief Financial Officer
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-END> Mar-31-1998
<CASH> 16,461,423
<SECURITIES> 000
<RECEIVABLES> 23,045
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 16,745,751
<PP&E> 11,911,100
<DEPRECIATION> (6,646,005)
<TOTAL-ASSETS> 22,010,846
<CURRENT-LIABILITIES> 319,158
<BONDS> 3,907,073
<COMMON> 000
000
000
<OTHER-SE> 17,774,011
<TOTAL-LIABILITY-AND-EQUITY> 22,010,846
<SALES> 477,683
<TOTAL-REVENUES> 643,017
<CGS> 000
<TOTAL-COSTS> 309,930
<OTHER-EXPENSES> 207,694
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 102,974
<INCOME-PRETAX> 25,680
<INCOME-TAX> 000
<INCOME-CONTINUING> 25,680
<DISCONTINUED> 000
<EXTRAORDINARY> 7,829,940
<CHANGES> 000
<NET-INCOME> 7,855,620
<EPS-PRIMARY> 151.79
<EPS-DILUTED> 151.79
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