UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1995. Commission file number 0-11200
GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP
Minnesota 41-1398390
3800 West 80th Street - Suite 750
Minneapolis, Minnesota 55431
Registrant's telephone number (612) 896-3800
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
------------------- ------------------------
None None
Securities registered pursuant to Section 12(g) of the act: $11,000,000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes _x_ No ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (229.405 of this chapter) is not contained herein, and will
not be contained to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this form 10-K. [ ]
Forms 8-K dated October 1, 1991 with an amendment dated October 16, 1991 and May
12, 1992 are incorporated by reference in this report.
GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP
TABLE OF CONTENTS
PAGE
PART I
Item 1 Business................................................ 1
Item 2 Properties.............................................. 1
Item 3 Legal Proceedings....................................... 1
Item 4 Submission of Matters to a Vote
of Limited Partner...................................... 2
PART II
Item 5 Market for the Partnership's Limited Partnership
Interests and Related Limited Partner Matters........... 2
Item 6 Selected Financial Data................................. 2-3
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operations........... 3-5
Item 8 Financial Statements and Supplementary Data............. 6
Item 9 Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure..................... 6
PART III
Item 10 The General Partner of the Partnership.................. 6-8
Item 11 Management Remuneration and Transactions................ 8-9
Item 12 Limited Partnership Ownership of Certain
Beneficial Owners and Management........................ 9
Item 13 Certain Relationships and Related
Transactions............................................ 10
PART IV
Item 14 Exhibits, Financial Statement Schedules
and Reports on Form 8-K................................. 10
SIGNATURES................................................................ 11
GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP
PART I
Item 1. Business
The registrant, Griffin Real Estate Fund-II, A Limited Partnership (the
"Partnership"), was organized on September 19, 1980 under the laws of the State
of Minnesota. The Partnership was formed by the general partner, Investment
Associates, a Minnesota general partnership, to acquire existing,
income-producing real properties for rental purposes. On February 2, 1981 the
Partnership commenced an offering of $10,000,000 pursuant to a Registration
Statement on Form S-11 under the Securities Act of 1933. The offering terminated
December 15, 1982 upon the acceptance of 2200 units $11,000,000), the maximum
allowed under the registration.
The Partnership is engaged solely in the business of real estate
investment. A presentation of information about industry segments is not
applicable and would not be material to an understanding of the Partnership's
business taken as a whole.
As of December 31, 1995 the Partnership has made the real property
investments set forth in the following table:
<TABLE>
<CAPTION>
Name, type of property Date of Type of
and location (a) Size Purchase Ownership (b)
------------ ---- -------- -------------
<S> <C> <C> <C>
1. Villas of Patricia Park Apts. 120 units 12/30/81 Mortgage Note
Urbandale, Iowa
2. Candleridge Apartments 138 units 12/30/81 Mortgage Note
Urbandale, Iowa
3. Lunnonhaus Village Apts. 285 units 5/06/82 Mortgage Note
Golden, Colorado
4. Olde English Village Apts. 264 units 8/31/82 Mortgage Note
West Des Moines, Iowa
</TABLE>
(a) Reference is made to Schedule III of this annual report.
(b) Reference is made to Note 3 of Notes to Financial Statements
filed with this annual report for the current outstanding
principal balances and a description of the long-term
indebtedness secured by the Partnership's real property
investments;
The Terms of Transactions between the Partnership and affiliates of the
General Partner are described in Item 11 to which reference is hereby made.
Item 2. Properties
The Partnership owns the real properties referred to in Item 1 to which
reference is hereby made.
Item 3. Legal Proceedings
On September 20, 1995 Everest Investors, LLC ("Everest") filed a
lawsuit against Investment Associates ("General Partner"), the general partner
of Griffin Real Estate Fund-II, A Limited Partnership ("Partnership"). The
lawsuit alleged that the General Partner had wrongfully denied Everest access to
the books and records of the Partnership. The court granted, in part, Everest's
request for access to the books and records and ordered the General Partner to
provide Everest access to these records. The General Partner complied with this
court order. Everest continued to seek access to additional books and records of
the Partnership beyond the scope of the court order. The General Partner
vigorously defended the Partnership's right to keep its proprietary records from
being reviewed by Everest, who is not a limited partner of the Partnership. The
General Partner filed for a dismissal of the matter. The court heard arguments
on September 29, 1995, October 26, 1995 and November 17, 1995. On November 27,
1995 the court dismissed Everest's lawsuit. Everest appealed the dismissal on
March 12, 1996 and a decision is pending.
Item 4. Submission of Matters to a Vote of Limited Partners
There were no matters submitted to a vote of the Limited Partners.
PART II
Item 5. Market for the Partnership's Limited Partnership Interests and
Related Limited Partner Matters
There are approximately 707 holders of record of units of the
Partnership. There is no public market for units and it is not anticipated that
a public market for units will develop. The General Partner will not redeem or
repurchase units except upon death of the original limited partner.
Reference is made to Item 6 in this annual report for a discussion of
cash distributions made to the Limited Partners.
Item 6. Selected Financial Data
Griffin Real Estate Fund-II, A Limited
Partnership For the Years Ended December 31,
1995, 1994, 1993, 1992, and 1991
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Total revenues $ 5,472,890 $ 5,148,672 $ 4,885,147 $ 4,991,815 $ 5,433,785
Income (Loss) before
extraordinary
item (d) 324,981 151,515 199,138 (409,243) (967,255)
Income (Loss) before
extraordinary item
per limited partner
unit (c) 141.10 65.76 86.34 (176.91) (417.68)
Extraordinary Item:
Gain on foreclosure
of property -- -- -- 739,559 --
Extraordinary item:
Gain on foreclosure of
property per limited
partner unit (c) -- -- -- 319.72 --
Net income (loss) 324,981 151,515 199,138 330,316 (967,255)
Net income (loss) per
limited partner
unit (c) 141.10 65.76 86.34 142.81 (417.68)
Total assets 14,837,677 15,184,304 15,175,828 15,154,826 19,840,493
Mortgages and
contracts for deed 14,801,452 15,067,907 15,245,768 15,201,883 19,458,092
Cash distributions
per limited
partner unit (b) $ 187.35 -- -- -- --
</TABLE>
(a) The above selected financial data should be read in conjunction with
the financial statements and the related notes appearing in Exhibit I
in this annual report.
(b) Cash distributions of $1,500 per Limited Partnership unit have been
made to the Limited Partners since the inception of the Partnership.
These distributions have not resulted in taxable income to such Limited
Partners and have therefore represented a return of capital. Each
Partner's taxable income (or loss) from the Partnership in each year is
equal to his allocable share of the taxable income (loss) of the
Partnership, without regard to cash generated or distributed by the
Partnership.
(c) Income (loss) before extraordinary item, extraordinary item, and net
income (loss) per limited partnership unit is based upon the number of
limited partnership units outstanding during the period (2,188 for
current year, using weighted average).
(d) 1992 figures reflect the foreclosure of Raintree Apartments on May 1,
1992.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Everest Investors, LLC, A California Limited Liability Company
("Everest") commenced a tender offer to purchase up to 600 of the outstanding
limited partnership interests ("units") at a purchase price of $2,387.50 per
unit net to the seller in cash, subject to the terms and conditions set forth in
an offer to purchase dated April 21, 1995. The General Partner of the
Partnership determined that the offer price was inadequate in comparison to the
liquidation value of the units and recommended to the Limited Partners that they
not tender any units in response to the Everest Offer to Purchase. The tender
offer expired on July 12, 1995, with Everest acquiring a total of 126 units.
Everest was also attempting to change the Partnership Agreement in
several ways by sending the Limited Partners a solicitation of consent, which
expired on August 18, 1995. The General Partner had determined that the proposed
changes were not in the interests of the Limited Partners and recommended that
consent to change not be given. The solicitation of consent was unsuccessful.
RESULTS OF OPERATIONS
Summary of Operations - 1995 Compared to 1994
During 1995, the Partnership and its properties turned in another solid
year of performance. As a result of the improved performance of the property
portfolio, the Partnership was able to continue distributions in 1995. Units
held of record for calendar year 1995 received a distribution of $320 per unit
(including distributions paid in January 1996) or an annual return of 6.4%.
Physical occupancy increased an average of 1.1% from 96.8% to 97.7%.
Individually physical occupancy increased at two of the four properties.
Candleridge Apartments increased from an average of 95% to 97.5% and Olde
English Village Apartments increased from an average of 95.5% to 98.3%.
Lunnonhaus Apartments physical occupancy remained the same at an average of
99.5% for both years. Physical occupancy at Villas of Patricia Park Apartments
declined from an average of 97% to 95.5%.
Rental rates of the property portfolio increased 4.7%. Individually
rental rates increased at all properties, with increases ranging from the
smallest increase of 3.5% at Villas of Patricia Park Apartments to the greatest
increase of 6.2% at Lunnonhaus Village Apartments.
As a result of increased rental rates and improved occupancy, plus the
increase in interest and other income, overall revenue increased by
approximately $324,200.
Interest expense increased as a result of the increased interest rate
on the Olde English Village Apartments mortgage debt. The Olde English Village
loan terms include an adjustable rate of interest which adjusts every three
months based on three month treasury bills. Interest rate increased from 7.8% in
1994 to a high of 9.3% in May of 1995. Interest rates began to decline again in
1995 ending the year at 8.8%. The mortgage debt on the other three properties
have a fixed rate of interest which was the same in both years.
Real estate tax expense declined in total by approximately $29,400 as a
result of overestimating the real estate tax liability for 1994. Actual assessed
values in 1995 were not increased materially from that of 1994.
The decline in utilities expense was essentially due to the approximate
$39,000 decline in utility expense at Lunnonhaus Village Apartments. The decline
in utilities was a result of two factors. A milder winter heating season during
the winter of 1994-1995 versus 1993-1994. Also savings resulted from prior
expenditures on energy saving devices in the heating system throughout the
property.
The approximate $133,000 increase in administrative expenses was
essentially due to the legal fees incurred by the Partnership in connection with
Everest's tender offer and solicitation of consent.
Despite the overall increase in total expense, the Partnership
increased its Net Operating Income by approximately $173,500.
During the year, the Partnership invested approximately $597,000 in
physical improvements to the properties. The majority of these expenditures were
made for physical improvements to the Olde English Village Apartments and
Lunnonhaus Village Apartments. At Olde English Village, the exterior renovations
were completed and a major landscaping project was also completed. At Lunnonhaus
Village, the expenditures were incurred for landscaping. At Candleridge and
Villas of Patricia Park Apartments, expenditures were made for improvements to
the garages and landscaping.
Summary of Operations - 1994 Compared to 1993
Rental rates for the property portfolio on average increased 3.7%.
Physical occupancy for the property portfolio on average increased from 95.8% to
96.8%. Due to improved occupancy and collections, total revenue increased by
approximately $263,500. Individually, each property in the portfolio experienced
an increase in revenue.
The approximate $39,400 decline in interest expense is essentially due
to the refinancing of Olde English Village Apartments, which was completed on
June 30, 1994. The refinancing reduced the blended interest rate for the retired
first and second mortgages from 9.3% to 7.8%. The monthly debt service was
initially reduced from $48,674 to $44,675, a savings of $3,999 per month,
however, rising short term interest rates have caused the loan's adjustable
interest rate to increase correspondingly.
Real estate tax expense increased by approximately $81,300 due to
rising property assessments. Assessed valuations are used as a base for the
computation of the real estate taxes. Assessed valuations have increased because
of improved property operations throughout the portfolio.
Repairs and maintenance expense increased by approximately $281,800 as
a result of additional expenditures made at all properties which were not
required to be capitalized as additional property purchases. The majority of
these expenditures were made at Lunnonhaus and Olde English Village Apartments
for various building repairs and cosmetic improvements.
Although revenue for the year increased, increasing expenses, in
particular in the repair and maintenance categories resulted in a decline in Net
Income.
Improved operating results in the last quarter of 1994 allowed the
Partnership to resume distributions to holders of record on December 31, 1994 in
the amount of $62.50 per unit or an annualized return of 5%.
LIQUIDITY
The Partnership had approximately $1,044,300 of cash reserves on hand
at December 31, 1995. This should provide the Partnership with ample liquidity
with which to operate the properties and provide for capitol improvements to the
property portfolio in the near term and into the future. The Partnership will be
committing approximately $250,000 to external improvements to Lunnonhaus Village
Apartments and approximately $150,000 to the remodeling of the entry ways at
Olde English Apartments.
Although there can be no assurance of continuing cash flow from
property operations, if anticipated cash flow is realized, the Partnership
intends on continuing distributions in 1996 at an annual rate of $300 or 6% per
unit.
Although there can be no assurance that a sale will be completed,
Partnership plans call for the sale of Candleridge and Villas of Patricia Park
Apartments during 1996. Upon the successful completion of the sale of these
properties, sales proceeds will be distributed.
OCCUPANCY TABLE
<TABLE>
<CAPTION>
Lunnonhaus Olde English Raintree
Candleridge Village Village Villas of Patricia Apartments
Apartments Apartments Apartments Park Apartments Little Rock
Urbandale, IA Golden, CO W. Des Moines, IA Urbandale, IA Arkansas
------------- ---------- ----------------- ------------- --------
<S> <C> <C> <C> <C> <C>
3/31/95 95% 100% 97% 93% *
6/30/95 99% 99% 99% 96% *
9/30/95 97% 99% 100% 98% *
12/31/95 99% 100% 97% 95% *
3/31/94 92% 100% 93% 97% *
6/30/94 98% 99% 92% 95% *
9/30/94 96% 100% 99% 98% *
12/31/94 94% 99% 98% 98% *
3/31/93 94% 99% 90% 95% *
6/30/93 99% 98% 97% 100% *
9/30/93 99% 99% 97% 98% *
12/31/93 92% 99% 94% 94% *
3/31/92 97% 95% 92% 98% 89%
6/30/92 93% 87% 92% 97% *
9/30/92 97% 94% 98% 97% *
12/31/92 94% 96% 91% 95% *
3/31/91 94% 89% 91% 98% 94%
6/30/91 96% 88% 98% 98% 93%
9/30/91 98% 94% 99% 99% 88%
12/31/91 96% 95% 93% 94% 94%
</TABLE>
* Indicates the Partnership did not own the property at the end of the quarter.
Item 8. Financial Statements and Supplementary Data
The Table of Contents to Financial Statements, Financial Statements and
Supplementary Data listed in Item 14 are referenced herein as included in the
exhibits attached to this report and are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
There have been no changes in independent auditors and as of the date
of the filing, there were no material disagreements with the current independent
auditors (Larson, Allen, Weishair & Co., LLP) regarding any of the following:
1) Accounting principles or practices
2) Extent and quality of financial statement disclosure
3) Auditing scope or procedures
PART III
Item 10. The General Partner of the Partnership
The General Partner of the Partnership is Investment Associates, a
Minnesota general partnership formed in September of 1980 by certain directors
and officers of Griffin Companies for the sole purpose of acting as General
Partner of the Partnership. As General Partner, Investment Associates manages
and controls the affairs of the Partnership and has general responsibility and
authority in all matters affecting its business.
Griffin Companies, A Minnesota corporation organized in 1969, is
engaged in real estate brokerage, real estate investment counseling, and
management of commercial and multi-family real estate. Griffin Companies and its
Affiliates have organized and served as general partners in thirty-two privately
placed partnerships and six publicly offered partnerships, which were formed for
the purpose of real estate investment.
The General Partner and its Affiliates provide executive, supervisory
and certain administrative services for the Partnership's operations and the
General Partner is responsible for determining whether, when and on what terms
properties should be sold or refinanced. In addition, the books and records of
the Partnership are maintained by Griffin Companies, and are subject to audit by
independent certified public accountants. The partners of the General Partner
intend to devote only as much of their time to the business of the Partnership
as they determine to be reasonably required. Limited Partners have no right to
participate in the management of the Partnership.
Effective December 31, 1994 James R. Wadsworth, one of the partners of
the General Partner, withdrew as a partner. His share of ownership and his share
of future profits and losses were assigned to and split equally between Larry D.
Fransen and Robert S. Dunbar. Mr. Fransen and Mr. Dunbar were already partners
of the General Partner.
The identity and business experience of each of the partners of the
General Partner is as follows:
Larry D. Fransen (age 55) founded Griffin Companies in 1969. He is a
Director and senior officer of each of its operating entities, in addition to
serving as Chairman.
Since 1969, he has acted as general partner in many partnerships
investing in apartments, office buildings, warehouses, land and motels.
Acting on behalf of Griffin Companies' clients, Mr. Fransen has
negotiated the acquisition and disposition of more than one billion dollars in
investment real estate properties nationwide.
He is a member of numerous professional organizations, including the
Greater Minneapolis Area Board of Realtors, the Minnesota Association of
Realtors, the National Association of Realtors (NAR), Minnesota Multi Housing
Association (MHA), National MultiHousing Council (NMHC), the National Apartment
Association (NAA), Commercial and Investment Institute, National Association of
Real Estate Investment Trusts (NAREIT), and the Pension Real Estate Association
(PREA).
Mr. Fransen holds the CCIM (Certified Commercial Investment Member)
designation of the Commercial Investment Institute, as well as the SRS
(Specialist in Real Estate Securities) designation. For 13 years, he was an
instructor for the Commercial Investment Institute and served as the group's
national president in 1983. He has been awarded the Omega Tau Rho Medal of
Service for his years of service to the National Association of Realtors.
Robert S. Dunbar (age 56) is Chief Executive Officer of Griffin
Companies.
Following several years with Control Data Corporation where he held
various administrative and management positions, he was named Executive Vice
President of the U.S. Jaycees in 1970, with responsibility for planning,
budgeting and administration of the national organization. In 1972, he joined
Ed. Phillips & Sons Company in Minneapolis, Minnesota as a sales manager. In
1975 he was elected President of Westland Capital Corporation, a Minneapolis
venture capital firm, where he was responsible for analyzing various companies
for potential investment opportunities. He joined Griffin Companies in 1977.
Mr. Dunbar is a member of the Institute of Real Estate Management
(IREM) and the Minnesota Multi Housing Association (MHA). He holds the Certified
Apartment Manager (CAM) designation of the National Apartment Association and is
a Certified Property Manager (CPM) as designated by the National Association of
Realtors. Mr. Dunbar also holds a Minnesota Real Estate Broker's License and has
completed the necessary course work for their prestigious Certified Commercial
Investment Member (CCIM) designation conferred by the Commercial Investment
Institute. He is a member of the national MultiHousing Council and The Executive
Committee (T.E.C.). He also serves on the Board of Trustees of Northwestern
College.
Frederick R. Lamb (age 59) left Griffin Companies during 1982,
returning to a position he had previous to joining Griffin Companies. He became
Senior Vice President and Director of the Griffin Companies in July of 1979. He
began his real estate career in 1965 when he represented the Minneapolis
Institute of Arts in the acquisition of several city blocks, a portion of which
ultimately became the site of the Minneapolis Institute of Arts Building and the
Minneapolis College of Arts and Design.
In 1968, Mr. Lamb was employed as a sales associate at a Minneapolis,
Minnesota brokerage company. In 1972, Mr. Lamb was promoted to Vice President
and Manager of the Commercial-Investment Division of the company and served in
this capacity until 1976. In 1977, Mr. Lamb became Vice President and Sales
Manager of another Minneapolis, Minnesota brokerage company. In 1978, he became
President of the Commercial Industrial Multiple Listing Service of the Greater
Minneapolis Area Board of Realtors. He has taught commercial investment real
estate courses.
Mr. Lamb holds the professional designation Certified Commercial
Investment Member (CCIM) of the Realtors National Marketing Institute and is a
member of the Greater Minneapolis Area Board of Realtors, the Minnesota
Association of Realtors and the National Association of Realtors. In 1979, he
was elected to the Board of Directors of the Greater Minneapolis Area Board of
Realtors for a three year term.
Thomas A. Robeson (age 64) served as a Senior Vice President of Griffin
Companies, which he joined in April 1980, until his departure on February 29,
1988.
Mr. Robeson's previous business experience includes service in the
Investment Division of a national insurance company, from 1955 to 1957, and from
1957 to 1972, with IBM Corporation, where he held various sales and management
positions.
Mr. Robeson entered the real estate field in 1972 when he joined a real
estate firm in St. Paul, Minnesota. His responsibilities included brokerage,
management and syndication of various types of real estate. In 1975, Mr. Robeson
joined a Minneapolis investment company where he was involved in the brokerage
of a wide range of commercial, industrial, and investment real estate. In 1978,
he was promoted to Vice President and Manager of the Commercial-Investment
Division of that company. He has experience in the acquisition and disposition
of shopping centers, apartment buildings, commercial office buildings, motels,
net leased industrial warehouse and manufacturing facilities, and industrial,
commercial and residential unimproved property.
Mr. Robeson holds the professional designation CCIM (Certified
Commercial Investment Member of the Realtors National Marketing Institute). He
is a member of the International Association for Financial Planning and of
several real estate organizations, including the National Association of
Industrial and Office Parks, the Upper Midwest Chapter of the Realtors National
Marketing Institute, the Greater Minneapolis Area Board of Realtors, the
Minnesota Association of Realtors and the National Association of Realtors.
Messrs. Fransen and Dunbar together own 100% of the issued and
outstanding shares of common stock of Griffin Companies. The partners of the
General Partner represent and warrant that they have a collective personal net
worth on an unaudited cost basis and on an unaudited estimated current value
basis (measured as total assets at estimated current value less all liabilities)
in excess of $1,500,000. The assets of the partners of the General Partner are
largely invested in interests in real property and in Griffin Companies
Therefore, it may be difficult to precisely value such assets or to liquidate
such assets expeditiously or on terms favorable to the seller.
Item 11. Management Remuneration and Transactions
Partners of the General Partner receive no current or proposed direct
remuneration in such capacity. The Partnership is required to pay a management
fee to Griffin Companies and the General Partner is entitled to receive a share
of cash distributions, when and as cash distributions are made to the Limited
Partners, and a share of profits or losses as described below:
* Profits, losses, and cash flow distributions, other than from
refinancing or from the sale of Partnership properties, are
allocated 95% to the limited partners and 5% to the general
partner.
* Net proceeds from refinancing or from the sale of property
other than upon liquidation, less any necessary liability
reserves or debt payments, will be distributed in the
following order subject to the general partner receiving at
least 1% of the distributions:
** First, to the limited partners to the extent that
prior distributions are less than the original
capital contribution plus 6% per annum (as defined in
the Partnership Agreement);
** Second, any unpaid real estate commissions due to the
general partner on the resale of the Partnership
properties;
** Third, any remaining balance, 80% to the limited
partners and 20% to the general partner.
The Partnership is entitled to engage in various transactions involving
affiliates of the General Partner of the Partnership.
Griffin Companies ("Griffin"), an affiliate of the General Partner, may
be reimbursed for direct expenses relating to the administration of the
Partnership and operation of the Partnership real property investments. Griffin
received approximately $20,918, $12,827 and $11,174 in 1995, 1994, and 1993
respectively, for these expenses.
Reference is made to Note 4 of Notes to Financial Statements appearing
elsewhere in this annual report for a description of related party transactions.
Item 12. Limited Partnership Ownership of Certain Beneficial Owners and
Management
Everest Investors, LLC is the only person or "group" known by the
Partnership to own beneficially more than 5% of the outstanding units of the
Partnership. Their interest in the Partnership is as follows:
Amount and Nature Percent of Class
of Beneficial Outstanding at
Title of Class Ownership December 31, 1995
-------------- ----------------- -----------------
Limited Partnership Units 126 units, purchased at 5.8%
$2,387.50 per unit
The individual general partners of the General Partner as a group have
the following interest in the Partnership:
Amount and Nature Percent of Class
of Beneficial Outstanding at
Title of Class Ownership December 31, 1995
-------------- ----------------- -----------------
Limited Partnership Units 26 units purchased at 1.2%
$4,462 per unit
No partner of the General Partner possesses a right to acquire
beneficial ownership of interest of the Partnership.
There exists no arrangement, known to the Partnership, the operation of
which may at subsequent date result in a change in control of the Partnership.
Item 13. Certain Relationships and Related Transactions
The partners of Investment Associates, the general partner of the
Partnership, are also owners and employees of Griffin Companies, a Minnesota
corporation. Accounts payable - affiliates consists of unpaid management fees to
and advances from Griffin Companies. The following is a summary of approximate
fees incurred for the years ended December 31:
1995 1994 1993
-------- -------- --------
Property management fees $292,361 $269,439 $254,764
Major improvement
supervisory fees 98,705 96,865 41,195
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
The following documents are filed as part of this report:
Exhibit 13: Financial Statements and Schedules.
Exhibit 27: Financial Data Schedule.
No annual report or proxy material for the fiscal year 1995 has been
sent to the Partners of the Partnership. An annual report will be sent to the
Partners subsequent to this filing substantially similar to this form 10K.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Dated: March 24, 1996 Griffin Real Estate Fund-II,
A Limited Partnership
By: /s/ Larry D. Fransen
Larry D. Fransen
for the General Partner
Investment Associates
Pursuant to the requirements of the Securities and Exchange Act of 1934, this
Report has been signed below by the following person on behalf of the Registrant
and in the capacity and on the date indicated.
Dated: March 24, 1996 By: /s/ Larry D. Fransen
Larry D. Fransen
Managing General Partner
of the General Partner
Investment Associates
EXHIBIT 13
GRIFFIN REAL ESTATE FUND-II,
A LIMITED PARTNERSHIP
FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
INCLUDED IN ANNUAL REPORT (FORM 10-K)
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
TABLE OF CONTENTS
Page
Independent Auditor's Report............................................. 1
Balance Sheets, December 31, 1995 and 1994............................... 2
Statements of Operations for the Years Ended
December 31, 1995, 1994 and 1993......................................... 3
Statements of Cash Flows for the Years
Ended December 31, 1995, 1994 and 1993................................... 4
Statements of Changes in Partners' Deficit
for the Years Ended December 31, 1995, 1994 and 1993..................... 5
Notes to Financial Statements............................................ 6-10
Financial Statement Schedules............................................ 11
III Real Estate and Accumulated Depreciation,
December 31, 1995.......................................... 11
All schedules other than those indicated in the Table of Contents have
been omitted as the required information is inapplicable or the
information is presented in the financial statements or related notes.
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Griffin Real Estate Fund-II,
A Limited Partnership
Minneapolis, Minnesota
We have audited the accompanying balance sheets of Griffin Real Estate Fund-II,
A Limited Partnership, as of December 31, 1995 and 1994, and the related
statements of operations, changes in partner's deficit, and cash flows for each
of the years in the three-year period ended December 31, 1995. Our audits also
included the financial statement schedules listed in the table of contents at
Exhibit I. These financial statements and financial statement schedules 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 audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Griffin Real Estate Fund-II, A
Limited Partnership, as of December 31, 1995 and 1994, and the results of its
operations and its cash flows of each of the years in the three-year period
ended December 31, 1995 in conformity with generally accepted accounting
principles. Also, in our opinion, the financial statement schedules, when
considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
LARSON, ALLEN, WEISHAIR & CO., LLP
Minneapolis, Minnesota
March 11, 1996
-1-
<PAGE>
GRIFFIN REAL ESTATE FUND-II,
A LIMITED PARTNERSHIP
BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
1995 1994
------------ ------------
ASSETS
Cash and cash equivalents $ 1,044,305 $ 742,672
Escrow deposits 331,948 625,910
Receivables and other assets 45,562 49,902
------------ ------------
Total 1,421,815 1,418,484
------------ ------------
PROPERTY AND EQUIPMENT:
Land 2,160,676 2,160,676
Buildings and improvements 22,028,985 21,432,061
Furniture and equipment 2,076,669 2,076,669
------------ ------------
Total 26,266,330 25,669,406
Less accumulated depreciation 13,062,669 12,183,949
------------ ------------
Property and equipment - net 13,203,661 13,485,457
------------ ------------
Debt financing costs (net of accumulated
amortization - 1995, $158,997;
1994, $77,350) 212,201 280,363
------------ ------------
TOTAL ASSETS $ 14,837,677 $ 15,184,304
============ ============
LIABILITIES AND PARTNERS' DEFICIT
LIABILITIES:
Accounts payable:
Affiliate $ 27,712 $ 24,778
Other 151,350 125,637
Security deposits 143,572 131,777
Accrued expenses:
Real estate taxes 559,044 569,145
Interest 100,506 95,976
Mortgage notes payable 14,801,452 15,067,907
------------ ------------
Total liabilities 15,783,636 16,015,220
------------ ------------
PARTNERS' DEFICIT:
General Partner (521,918) (516,592)
Limited Partners (424,041) (314,324)
Total Partners' Deficit (945,959) (830,916)
------------ ------------
TOTAL LIABILITIES AND PARTNERS'
DEFICIT $ 14,837,677 $ 15,184,304
============ ============
See Notes to Financial Statements
-2-
<PAGE>
GRIFFIN REAL ESTATE FUND-II,
A LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993
----------- ----------- -----------
REVENUES:
Rent (less vacancies:
1995, $117,629; 1994, $190,560;
1993, $237,699) $ 5,142,356 $ 4,833,598 $ 4,605,304
Interest 47,135 34,108 16,661
Other 283,399 280,966 263,182
----------- ----------- -----------
Total revenues 5,472,890 5,148,672 4,885,147
----------- ----------- -----------
EXPENSES:
Interest 1,239,396 1,233,398 1,272,829
Depreciation and amortization 960,367 911,261 886,031
Real estate taxes 546,083 575,493 494,179
Repairs and maintenance 716,057 703,387 421,603
Utilities 460,305 498,909 487,086
Salaries and employee benefits 509,800 502,232 540,271
Management fees to related parties 292,361 269,439 254,764
Administrative 260,500 127,508 149,957
Insurance 151,849 163,071 162,676
Bad debts (227) 6,495 16,613
Other 11,418 5,964 --
----------- ----------- -----------
Total expenses 5,147,909 4,997,157 4,686,009
----------- ----------- -----------
NET INCOME $ 324,981 $ 151,515 $ 199,138
=========== =========== ===========
NET INCOME ALLOCATED
TO GENERAL PARTNER $ 16,249 $ 7,576 $ 9,957
=========== =========== ===========
NET INCOME ALLOCATED
TO LIMITED PARTNERS $ 308,732 $ 143,939 $ 189,181
=========== =========== ===========
PER UNIT:
NET INCOME $ 141.10 $ 65.76 $ 86.34
=========== =========== ===========
See Notes to Financial Statements
-3-
<PAGE>
GRIFFIN REAL ESTATE FUND-II,
A LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 324,981 $ 151,515 $ 199,138
Adjustments to reconcile net
income to net cash
provided by operating
activities:
Depreciation and amortization 960,367 911,261 886,031
Decrease (increase) in:
Receivables and other assets 4,340 9,416 (9,542)
Escrows 293,962 (243,562) (33,246)
Increase (decrease) in:
Accounts payable 28,647 2,271 (160,733)
Security deposits 11,795 9,741 8,538
Accrued expenses (5,571) 22,810 (44,351)
----------- ----------- -----------
Net cash provided by operating
activities 1,618,521 863,452 845,835
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (596,924) (771,276) (315,883)
----------- ----------- -----------
Net cash used by
investing activities (596,924) (771,276) (315,883)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from mortgage notes and
contracts for deed payable -- 5,600,000 257,700
Repurchase of limited
partner units (8,530) -- (25,475)
Distributions to partners (431,494) -- --
Payments on mortgages
and contracts for deed (266,455) (5,777,861) (213,814)
Payments for debt
financing costs (13,485) (183,629) --
----------- ----------- -----------
Net cash provided (used) by financing
activities (719,964) (361,490) 18,411
----------- ----------- -----------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 301,633 (269,314) 548,363
CASH AND CASH EQUIVALENTS
- BEGINNING OF YEAR 742,672 1,011,986 463,623
----------- ----------- -----------
CASH AND CASH EQUIVALENTS
- END OF YEAR $ 1,044,305 $ 742,672 $ 1,011,986
=========== =========== ===========
CASH PAID FOR INTEREST $ 1,234,866 $ 1,243,216 $ 1,272,477
=========== =========== ===========
</TABLE>
See Notes to Financial Statements
-4-
<PAGE>
GRIFFIN REAL ESTATE FUND-II,
A LIMITED PARTNERSHIP
CHANGES IN PARTNERS' DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
GENERAL LIMITED
PARTNER'S PARTNERS'
EQUITY EQUITY
(DEFICIT) (DEFICIT) TOTAL
----------- ----------- -----------
PARTNERS' DEFICIT
DECEMBER 31, 1992 $ (534,125) $ (621,969) $(1,156,094)
NET INCOME 9,957 189,181 199,138
REPURCHASE OF SEVEN UNITS -- (25,475) (25,475)
----------- ----------- -----------
PARTNERS' DEFICIT
DECEMBER 31, 1993 (524,168) (458,263) (982,431)
NET INCOME 7,576 143,939 151,515
----------- ----------- -----------
PARTNERS' DEFICIT
DECEMBER 31, 1994 (516,592) (314,324) (830,916)
NET INCOME 16,249 308,732 324,981
REPURCHASE OF TWO UNITS -- (8,530) (8,530)
DISTRIBUTIONS (21,575) (409,919) (431,494)
----------- ----------- -----------
PARTNERS DEFICIT
DECEMBER 31, 1995 $ (521,918) $ (424,041) $ (945,959)
=========== =========== ===========
See Notes to Financial Statements
-5-
<PAGE>
GRIFFIN REAL ESTATE FUND-II,
A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of the Partnership - Griffin Real Estate Fund-II, A Limited
Partnership (the Partnership), was organized on September 18, 1980
under the laws of the State of Minnesota. As of December 31, 1995 there
are 2,200 limited partnership units authorized and 2,187 outstanding.
Statements of Cash Flows - For the purpose of the statements of cash
flows, the Partnership considers all highly liquid debt instruments
with an original maturity of three months or less to be cash
equivalents. Cash equivalents of $1,044,305, and $742,672 at December
31, 1995 and 1994 respectively, consist of government money market
portfolios with banks and are recorded at cost which approximates
market value. The Partnership places its temporary cash investments
with high credit quality financial institutions. At times such
investments may be in excess of the FDIC insurance limit.
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 reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements. Estimates also
affect the reported amounts of revenue and expense during the reported
period. Actual results could differ from those estimates.
Financial Instruments - The carrying amounts for all financial
instruments approximates fair value. The carrying amounts for cash,
receivables, accounts payable and accrued liabilities, and loans
payable approximate fair value because of the short maturity of these
instruments. The fair value of long-term debt approximates the current
rates at which the Partnership could borrow funds with similar
remaining maturities.
Properties and Depreciation - Properties are stated at cost including
capitalized acquisition fees and are depreciated using a straight-line
method over the estimated useful lives of the related assets
(buildings, 25 years; furnishings and equipment, 5 years). For income
tax purposes, the Partnership depreciates the buildings over 15 to 19
years using the Accelerated Cost Recovery System. Building improvements
made subsequent to January 1, 1987 are depreciated over 27.5 years
using the Modified Cost Recovery System for tax purposes.
Escrow Deposits - The escrow deposits consist of funds held for future
payment of real estate taxes, insurance premiums and replacement
reserves for major expenditures.
Leases - Apartment leases are generally renewable on a six month to one
year basis.
Offering Costs - Expenses incurred in connection with the registration
and offering of the partnership units syndication costs, including
selling commissions and advertising, are recorded as a reduction of
Partners' Equity. Such costs are not deductible for income tax purposes
by the Partnership nor its partners.
Debt Financing Costs - Costs incurred in connection with securing
financing on Partnership properties have been capitalized and are being
amortized on the straight-line basis over the remaining life of the
related financing agreement.
Income Taxes - The financial statements of the Partnership do not
include a provision for income taxes as the income and losses of the
Partnership are allocated to the individual partners for inclusion in
their income tax returns.
-6-
<PAGE>
GRIFFIN REAL ESTATE FUND II,
A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
Net Income Per Limited Partnership Unit - The net income per limited
partnership unit is computed by dividing the net income allocated to
limited partners by the weighted average number of limited partnership
units outstanding during the year.
Recently Issued Accounting Standards - The Financial Accounting
Standards Board ("FASB") issued Statement No. 121 Accounting for the
Impairment of Long Lived Assets, which requires the recognition of
impairments on long lived assets in the Statements of Operations. This
statement is effective for years beginning after December 15, 1995.
This SFAS is not expected to have a material effect on the Partnership.
2. ORGANIZATION
The Partnership was formed by the general partner, Investment
Associates, a Minnesota general partnership, to acquire existing,
income-producing real properties for rental purposes. Investment
Associates is not required to make any capital contributions to the
Partnership.
The Limited Partnership Agreement and Certificate of Limited
Partnership (Partnership Agreement) contains certain provisions, among
others, described as follows:
* The management and general responsibility of operating the
Partnership business shall be vested exclusively in the
general partner.
* Profits, losses, and cash flow distributions, other than from
refinancing or from the sale of Partnership properties, are
allocated 95% to the limited partners and 5% to the general
partner.
* Net proceeds from refinancing or from the sale of property
other than upon liquidation, less any necessary liability
reserves or debt payments, will be distributed in the
following order subject to the general partner receiving at
least 1% of the distributions:
** First, to the limited partners to the extent that
prior distributions are less than the original
capital contribution plus 6% per annum (as defined in
the Partnership Agreement);
** Second, any unpaid real estate commissions due to the
general partner on the resale of the Partnership
properties;
** Third, any remaining balance, 80% to the limited
partners and 20% to the general partner.
* The Partnership will terminate on December 31, 2021 or earlier
upon the sale of substantially all of the properties or the
occurrence of certain other events as stated in the
Partnership Agreement.
-7-
<PAGE>
GRIFFIN REAL ESTATE FUND-II,
A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
3. MORTGAGE NOTES PAYABLE
Mortgage notes payable consist of the following at December 31:
1995 1994
----------- -----------
Mortgage note (Villas of Patricia Park),
monthly installments of $20,717
including interest at 8.375% due
August 2001; callable August 1998 $ 2,485,192 $ 2,523,888
Mortgage note (Candleridge)
monthly installments of $23,917
including interest at 8.375%
due August 2001; callable August 1998 2,869,029 2,913,700
Mortgage Note (Olde English Village)
monthly installments of $47,909
including interest at 8.76%
due June 30, 1997 5,474,346 5,565,082
Mortgage note (Lunnonhaus)
monthly installments of $31,166
including interest at 7%,
due June 2014 3,972,885 4,065,237
----------- -----------
Total mortgage notes payable $14,801,452 $15,067,907
=========== ===========
All property is pledged as collateral to the mortgage notes payable.
Future principal maturities are as follows:
1996 $ 291,917
1997 5,576,778
1998 220,948
1999 238,500
2000 257,459
Later 8,215,850
---------
Total $14,801,452
On June 30, 1994, the Partnership refinanced the Olde English Village
Mortgage Note. On June 15, 1995, the prepayment provision of the
Candleridge Apartments contract for deed and the Villas of Patricia
Park mortgage note were modified. Terms of these refinancings and
prepayment provisions, as modified, are as follows:
Candleridge Apartments: Prepayment of the note is subject to a
prepayment premium ranging from 1% to 3% depending on the year of the
loan in which it is prepaid. The prepayment premium does not apply if
the lender calls the note.
Villas of Patricia Park: Prepayment of the note is subject to a
prepayment premium ranging from 1% to 3% depending upon the year of the
loan in which it is prepaid. The prepayment premium does not apply if
the lender calls the note.
Olde English Village: Loan amount of $5,600,000 with monthly
installments of $47,909 at December 31, 1995, including interest which
is adjusted quarterly to 350 basis points above the Treasury yield, due
June 30, 1997. The mortgage note carries an option to extend the
maturity date for an additional term of 3 years to July 1, 2000. An
extension would require an extension fee payment equal to 1/2 of 1% of
the outstanding principal balance at the time of extension.
-8-
<PAGE>
GRIFFIN REAL ESTATE FUND-II,
A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994, AND 1993
The lender has the right to call the Candleridge and Villas of Patricia
Park notes on August 31, 1998, with no prepayment premium. The lender
has the right to call the Olde English Village note upon certain
events. The Lunnonhaus mortgage is subject to The Department of Housing
and Urban Development regulations.
All of the above debt is non-recourse to the individual partners.
4. RELATED PARTY TRANSACTIONS
The partners of Investment Associates, the general partner of the
Partnership, are also owners and employees of Griffin Companies, a
Minnesota corporation. Accounts payable - affiliates consists of unpaid
management fees to and advances from Griffin Companies. The following
is a summary of approximate fees incurred for the years ended December
31:
1995 1994 1993
-------- -------- --------
Property management fees $292,361 $269,439 $254,764
Major improvement
supervisory fees 98,705 96,865 41,195
5. TAXABLE INCOME (LOSS)
The net income shown on the financial statements is reconciled to the
taxable income (loss) as follows:
<TABLE>
<CAPTION>
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Net income per
financial statements $ 324,981 $ 151,515 $ 199,138
Excess of tax depreciation
over book depreciation (211,027) (200,367) (194,170)
Interest income for tax purposes
in excess of (less than) interest
for financial statements -- (1,898) 2,828
Excess of tax mortgage insurance
over financial statement
mortgage insurance -- (3,066) --
Financial statement expense
for real estate taxes
less than deduction
for tax purposes -- -- (581,220)
Rental income for financial
statements in excess of
rental income for tax purposes (5,670) -- --
Rental income for tax purposes
in excess of rental
income for financial statements -- 11,144 9,740
--------- --------- ---------
Taxable income (loss) $ 108,284 $ (42,672) $(563,684)
========= ========= =========
</TABLE>
-9-
<PAGE>
GRIFFIN REAL ESTATE FUND-II,
A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994, AND 1993
6. PARTNERS' DEFICIT RECONCILIATION
Reconciliation of financial statement deficit to tax return deficit is
as follows:
<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Deficit per
financial statements $ (945,959) $ (830,916) $ (982,431)
Cumulative excess of tax
depreciation over financial
statement depreciation (7,703,316) (7,492,289) (7,291,922)
Cumulative excess of tax interest
income over financial
statement interest income -- -- 1,898
Excess of financial statement
mortgage insurance over tax
mortgage insurance -- -- 3,066
Prepaid rent recognized as
income for tax purposes 70,820 76,491 65,347
----------- ----------- -----------
Deficit per tax return $(8,578,455) $(8,246,714) $(8,204,042)
=========== =========== ===========
</TABLE>
-10-
<PAGE>
SCHEDULE III
GRIFFIN REAL ESTATE FUND-II,
A LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Costs
Capitalized
Subsequent
Initial Cost to to Gross Amount at Which Carried
Partnership (a) Acquisition at Close of Period (b) (c)
--------------- ----------- ------------------------------ Date
Bldgs/ Land/Bldg Buildings Accumulated of Date
Description Encumbrances Land Improve Improve Land & Improve Total Deprec. (d) Const Acquired
- ----------- ------------ ---- ------- ------- ---- --------- ----- ----------- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
URBANDALE, IA
Candleridge $ 2,869,029 $ 372,378 $ 3,580,857 $ 372,244 $ 372,378 $3,953,101 $ 4,325,479 $ 2,249,693 1979 12/30/81
Villas of
Patricia Park 2,485,192 258,924 2,984,746 193,371 258,924 3,178,117 3,437,041 1,816,378 1979 12/30/81
GOLDEN, CO
Lunnonhaus
Village 3,972,885 714,045 8,049,914 1,058,299 714,045 9,108,213 9,822,258 4,824,691 1975 5/06/82
W. DES MOINES, IA
Olde English
Village 5,474,346 815,329 6,745,860 1,120,363 815,329 7,866,223 8,681,552 4,171,907 1972 8/31/82
--------- --------- ---------- ---------- ---------- ---------- --------- ----------
Total $14,801,452 $2,160,676 $21,361,377 $ 2,744,277 $ 2,160,676 $24,105,654 $26,266,330 $13,062,669
========== ========= ========== ========== ========== ========== ========== ==========
</TABLE>
(a) The cost to the Partnership represents the original purchase price of
the properties.
(b) The aggregate cost of real estate owned at December 31, 1995 for
federal income tax purposes is $26,266,330.
(c) Reconciliation of property:
<TABLE>
<CAPTION>
1993 1994 1995
----------- ----------- -----------
<S> <C> <C> <C>
Balance at beginning of period $24,582,247 $24,898,130 $25,669,406
Additions during period -- -- --
Improvements 315,883 771,276 596,924
----------- ----------- -----------
Balance at end of period $24,898,130 $25,669,406 $26,266,330
=========== =========== ===========
(d) Reconciliation of accumulated depreciation:
Balance at beginning of period $10,490,327 $11,330,522 $12,183,949
Depreciation expense for period 840,195 853,427 878,720
----------- ----------- -----------
Balance at end of period $11,330,522 $12,183,949 $13,062,669
=========== =========== ===========
Depreciation calculated on 5-27.5 year lives.
</TABLE>
-11-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 1,044,305
<SECURITIES> 0
<RECEIVABLES> 45,562
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,421,815
<PP&E> 26,266,330
<DEPRECIATION> 13,062,669
<TOTAL-ASSETS> 14,837,677
<CURRENT-LIABILITIES> 982,184
<BONDS> 14,801,452
0
0
<COMMON> 0
<OTHER-SE> (945,959)<F1>
<TOTAL-LIABILITY-AND-EQUITY> 14,837,677
<SALES> 0
<TOTAL-REVENUES> 5,425,755
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,908,513
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,192,261
<INCOME-PRETAX> 324,981
<INCOME-TAX> 0
<INCOME-CONTINUING> 324,981
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 324,981
<EPS-PRIMARY> 141.10<F2>
<EPS-DILUTED> 0
<FN>
<F1>This entity is a limited partnership. The Other Stockholders Equity line
represents total Partnership equity.
<F2>The EPS-Primary line represents net income per limited partnership unit.
</FN>
</TABLE>
