FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
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 0-827
EMPIRE STATE BUILDING ASSOCIATES
(Exact name of registrant as specified in its charter)
A New York Partnership 13-6084254
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
60 East 42nd Street, New York, New York
(Address of principal executive offices)
10165
(Zip Code)
(212) 687-8700
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if
changed since last report)
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 [ ].
An Exhibit Index is located on Page 15 of this Report.
Number of pages (including exhibits) in this filing: 15 <PAGE>
2.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Empire State Building Associates
Condensed Statement of Income
(Unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1997 1996 1997 1996
Income:
Rent income, from a related
party (Note B) $1,504,688 $1,504,688 $4,514,063 $4,514,063
Dividend income 2,647 2,090 7,781 6,345
---------- ---------- ---------- ----------
Total income 1,507,335 1,506,778 4,521,844 4,520,408
---------- ---------- ---------- ----------
Expenses:
Leasehold rent 492,500 492,500 1,477,500 1,477,500
Supervisory services, to a
related party (Note C) 39,854 39,854 119,563 119,563
Amortization of leasehold 52,117 52,117 156,351 156,351
Miscellaneous -0- -0- -0- 47
---------- ---------- ---------- ----------
Total expenses 584,471 584,471 1,753,414 1,753,461
---------- ---------- ---------- ----------
Net income $ 922,864 $ 922,307 $2,768,430 $2,766,947
========== ========== ========== ==========
Earnings per $10,000 partici-
pation unit, based on 3,300
participation units out-
standing during the year $ 279.66 $ 279.49 $ 838.92 $ 838.47
========== ========== ========== ==========
Distributions per $10,000
participation consisted
of the following:
Income $ 279.66 $ 279.49 $ 838.92 $ 838.47
Return of capital 14.99 15.16 45.02 45.47
--------- ---------- ---------- ----------
Total distributions $ 294.65 $ 294.65 $ 883.94 $ 883.94
========= ========== ========== ==========
At September 30, 1997 and 1996, there were $33,000,000 of participations
outstanding.<PAGE>
Empire State Building Associates
Condensed Balance Sheet
(Unaudited) 3.
Assets September 30, 1997 December 31, 1996
Current assets
Cash $ 375,933 $ 368,152
Prepaid rent 23,831 23,831
---------- ----------
Total current assets 399,764 391,983
Real Estate
Leasehold on Empire State Building 39,000,000 39,000,000
Less, allowance for amortization 35,820,840 35,664,489
---------- ----------
3,179,160 3,335,511
---------- ----------
Total assets $3,578,924 $3,727,494
========== ==========
Capital
Capital January 1, 3,727,494 3,927,316
Add, Net income:
January 1, 1997 through September 30, 1997 2,768,430 -0-
January 1, 1996 through December 31, 1996 -0- 3,689,511
---------- -----------
6,495,924 7,616,827
Less, Distributions:
Monthly distributions,
January 1, 1997 through September 30, 1997 2,917,000 -0-
January 1, 1996 through December 31, 1996 -0- 3,889,333
---------- -----------
2,917,000 3,889,333
---------- -----------
Capital 3,578,924 3,727,494
---------- -----------
Total liabilities and capital $3,578,924 $ 3,727,494
========== ===========<PAGE>
4.
Empire State Building Associates
Condensed Statement of Cash Flows
(Unaudited)
January 1, 1997 January 1, 1996
through through
September 30, 1997 September 30, 1996
Cash flows from operating activities:
Net income $2,768,430 $2,766,947
Adjustments to reconcile net income
to cash provided by operating
activities:
Amortization of leasehold 156,351 156,351
Change in deferred credit -0- 501,563
---------- ----------
Net cash provided by operating
activities 2,924,781 3,424,861
---------- ----------
Cash flows from financing activities:
Cash distributions (2,917,000) (2,917,000)
---------- ----------
Net cash used in financing
activities (2,917,000) (2,917,000)
---------- ----------
Net increase (decrease) in cash and
cash equivalents 7,781 507,861
Cash and cash equivalents
beginning of period 368,152 359,505
---------- ----------
Cash and cash equivalents
end of period $ 375,933 $ 867,366
========== ========== <PAGE>
Empire State Building Associates 5.
September 30, 1997
Notes to Condensed Financial Statements (unaudited)
Note A - Basis of Presentation
The accompanying unaudited condensed financial
statements have been prepared in accordance with the instructions
to Form 10-Q and therefore do not include all information and
footnotes necessary for a fair presentation of financial position,
results of operations and statement of cash flows in conformity
with generally accepted accounting principles. The accompanying
unaudited condensed financial statements include all adjustments
(consisting only of normal recurring accruals) which are, in the
opinion of the partners in Registrant, necessary for a fair
statement of the results for such interim periods. The partners
in Registrant believe that the accompanying unaudited condensed
financial statements and the notes thereto fairly disclose the
financial condition and results of Registrant's operations for the
periods indicated and are adequate to make the information pre-
sented therein not misleading.
Note B - Interim Period Reporting
The results for the interim periods are not necessarily
indicative of the results to be expected for a full year.
Registrant is a partnership which was organized on July
11, 1961. Registrant owns the tenant's interest in a master
operating leasehold (the "Master Lease") on the Empire State
Building (the "Building") and the land thereunder, located at 350
Fifth Avenue, New York, New York (the "Property"). On November
27, 1991, Prudential Insurance Company of America sold the fee
ownership of the property to EGHolding Co. Inc. which, through
merger and conveyance, reportedly transferred its interest as
lessor to Trump Empire State Partners ("Trump"). Associates'
rights under the master leasehold remain unchanged.
Registrant's partners are Peter L. Malkin, John L. Loehr
and Stanley Katzman (collectively the "Partners"), each of whom
also acts as an agent for holders of participations in his
respective partnership interest in Registrant (the
"Participants").
The initial term of the Master Lease expired on January
5, 1992. On January 30, 1989, Registrant exercised its first of
four 21-year renewal options contained in the Master Lease and
extended the Master Lease through January 5, 2013. The annual
rent payable under Master Lease is $1,970,000 through January 5,
2013 and $1,723,750 annually during the term of each renewal
period thereafter.
The value of the Master Lease is stated at cost. To
reflect Registrant's exercise of the first renewal option under<PAGE>
Empire State Building Associates 6.
September 30, 1997
the Master Lease, the estimated useful life of the Master Lease
has been revised to 25 years, effective January 1, 1988, through
January 5, 2013.
Registrant does not operate the Property. It subleases
the Property to Empire State Building Company ("Sublessee")
pursuant to a net operating sublease (the "Sublease") with a term
and renewal options essentially coextensive with those contained
in the Master Lease. On January 30, 1989, Sublessee elected to
renew the Sublease for a term commencing January 4, 1992 to
January 4, 2013.
Sublessee is required to pay annual basic rent ("Basic
Rent") of $6,018,750 from January 1, 1992 through January 4, 2013
and $5,895,625 from January 5, 2013 through the expiration of all
renewal terms. Sublessee is also required to pay Registrant
overage rent of 50% of Sublessee's net operating profit in excess
of $1,000,000 for each lease year ending December 31 ("Overage
Rent").
Overage Rent and other accumulated interest and dividend
income are distributed annually after payment of any additional
payments for supervisory services to Counsel (as described in Note
C below). For 1996, Sublessee reported net operating loss of
$7,914,032; therefore, there was no Overage Rent.
Sublessee is a New York partnership in which Peter L.
Malkin is a partner. The Partners in Registrant are also members
of the law firm of Wien & Malkin LLP, 60 East 42nd Street, New
York, New York, which acts as counsel to Registrant and Sublessee
("Counsel"). See Note C below.
Note C - Supervisory Services
Registrant pays Counsel for supervisory services and
disbursements (i) the basic payment of $100,000 per annum (the
"Basic Payment") and (ii) an additional payment of 6% of all
distributions to Participants in any year in excess of the amount
representing a return of 9% per annum on their remaining original
cash investment in any year ("Additional Payment"). At
September 30, 1997, such remaining cash investment was
$33,000,000, representing the original cash investment of the
Participants in Registrant.
No remuneration was paid during the three and nine month
periods ended September 30, 1997 by Registrant to any of the Part-
ners as such. Pursuant to the Fee arrangements described herein,
Registrant paid Counsel $25,000 and $75,000, respectively, of the
Basic Payment for supervisory services for the three and nine
month periods ended September 30, 1997, and $4,951 a month as the
Additional Payment for supervisory services. The supervisory
services provided to Registrant by Counsel include legal,<PAGE>
Empire State Building Associates 7.
September 30, 1997
administrative and financial services. The legal and
administrative services include acting as general counsel to
Registrant, maintaining all of its partnership records, performing
physical inspections of the Building, reviewing insurance coverage
and conducting annual partnership meetings. Financial services
include monthly receipt of rent from the Sublessee, payment of
monthly rent to the fee owner, payment of monthly and additional
distributions to the Participants, payment of all other
disbursements, confirmation of the payment of real estate taxes,
and active review of financial statements submitted to Registrant
by the Sublessee and financial statements audited by and tax
information prepared by Registrants' independent certified public
accountant, and distribution of such materials to the
Participants. Counsel also prepares quarterly, annual and other
periodic filings with the Securities and Exchange Commission and
applicable state authorities and distributes to the Participants
quarterly source of distribution reports.
Reference is made to Note B of this Item 1 ("Note B")
for a description of the terms of the Sublease between Registrant
and Sublessee. The respective interests of the Partners in
Registrant and in Sublessee arise solely from ownership of their
respective participations in Registrant and, in the case of Mr.
Malkin, his ownership of a partnership interest in Sublessee. The
Partners receive no extra or special benefit not shared on a pro
rata basis with all other Participants in Registrant or partners
in Sublessee. However, each of the Partners, by reason of his
respective interest in Counsel, is entitled to receive his pro
rata share of any legal fees or other remuneration paid to Counsel
for legal and supervisory services rendered to Registrant and
Sublessee.
As of September 30, 1997, the Partners owned of record
and beneficially an aggregate of $158,750 of participations in
Registrant, representing less than 1% of the currently outstanding
participations therein totaling $33,000,000.
In addition, as of September 30, 1997 certain of the
Partners (or their respective spouses) held additional
Participations as follows:
Stanley Katzman owned of record as trustee, but not
beneficially, $27,500 of Participations. Mr. Katzman
disclaims any beneficial ownership of such
Participations.
Peter L. Malkin owned of record as trustee or
co-trustee, but not beneficially, $175,000 of
Participations. Mr. Malkin disclaims any beneficial
ownership of such Participations.<PAGE>
Empire State Building Associates 8.
September 30, 1997
Isabel W. Malkin, the wife of Peter L. Malkin, owned of
record and beneficially $153,333 of Participations. Mr.
Malkin disclaims any beneficial ownership of such
Participations.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
As stated in Note B, Registrant was organized for the
purpose of acquiring the Master Lease of the Property subject to
the Sublease. Basic Rent received by Registrant is used to pay
annual rent due under the Master Lease, the Basic Payment and the
Additional Payment for supervisory services; the balance of such
Rent is distributed to the Participants. Overage Rent and any
interest and dividends accumulated thereon are distributed to the
Participants after the Additional Payment is made to Counsel. See
Note C of Item 1 above. Pursuant to the Sublease, Sublessee has
assumed responsibility for the condition, operation, repair,
maintenance and management of the Property. Registrant is not
required to maintain substantial reserves or otherwise maintain
liquid assets to defray any operating expenses of the Property.
Registrant does not pay dividends. During the three and
nine month periods ended September 30, 1997, Registrant made
regular monthly distributions of $98.21 for each $10,000 par-
ticipation ($1,178.52 per annum for each $10,000 participation).
There are no restrictions on Registrant's present or future
ability to make distributions; however, the amount of such
distributions depends solely on the ability of Sublessee to make
payments of Basic Rent and Overage Rent to Registrant in
accordance with the terms of the Sublease. Registrant expects to
make distributions in the future so long as it receives the
payments provided for under the Sublease. See Note B.
Registrant's results of operations are affected
primarily by the amount of rent payable to it under the Sublease.
The amount of Overage Rent payable to Registrant is affected by
(i) the cycles in the New York City economy and real estate rental
market and (ii) the cost of the Property improvement program
described herein under Other Information. It is anticipated that
the remaining expenses for the improvement program to the
Building, which commenced in 1990, will negatively impact Overage
Rent otherwise payable for 1997. It is difficult for management
to forecast the New York City real estate market over the next few
years.
Total income increased for the three and nine month
periods ended September 30, 1997 as compared with the three and
nine month periods ended September 30, 1996. Such increase
resulted from an increase in dividend income earned on funds
temporarily invested in Fidelity U.S. Treasury Income Portfolio.
Total expenses remained the same for the three-month period ended<PAGE>
Empire State Building Associates 9.
September 30, 1997
September 30, 1997 as compared with the three-month period ended
September 30, 1996. Total expenses decreased for the nine-month
period ended September 30, 1997 as compared with the nine-month
period ended September 30, 1996. Such decrease resulted from
miscellaneous expenses incurred in the nine-month period ended
September 30, 1997.
The State of New York has asserted utility tax
deficiencies through December 31, 1992 in connection with water,
steam and non-metered electricity rent inclusion charges to
tenants, plus estimated accrued interest. The Supreme Court, New
York County, granted summary judgment in favor of the State, which
ruling was affirmed by the Appellate Division, First Department,
holding that the State utility tax applies to such rent inclusion
charges. Sublessee sought permission to appeal the Appellate
Division's decision and order to the Court of Appeals. The Court
of Appeals denied Sublessee's motion. In May 1996, Sublessee
entered into a settlement agreement with the State. Pursuant to
the terms of the settlement agreement, Sublessee agreed to pay the
State's assessed tax in the sum of $979,109, plus interest of
approximately $605,000 through July 31, 1996. The State has
agreed to payment of the aforesaid liability over a period of four
years, commencing August, 1996, in equal monthly installments of
$40,000, including interest on the unpaid balance at the statutory
rate. Installment payments to the State of $40,000 per month have
been made by Sublessee commencing on August 1, 1996. It is
anticipated that New York State will seek to impose liability on
Sublessee for State utility tax for periods after December 31,
1992. The amount of such additional tax has yet to be determined.
The City of New York has asserted a utility tax
deficiency in the amount of $277,125 against Sublessee, through
December 31, 1994, in connection with water, steam and non-metered
electricity rent inclusion charges to tenants, plus accrued
interest of approximately $138,380 through July 31, 1997.
Sublessee is contesting the calculation of the City's proposed
utility tax deficiency before the New York City Tax Appeals
Tribunal. The final outcome of Sublessee's appeal cannot
presently be determined. It is anticipated that New York City
will also seek to impose liability on Sublessee for additional New
York City utility tax for periods after December 31, 1994. The
amount of such additional tax has yet to be determined.
Liquidity and Capital Resources
There has been no significant change in Registrant's
liquidity for the three and nine month periods ended September 30,
1997, as compared with the three and nine month periods ended
September 30, 1996.<PAGE>
Empire State Building Associates 10.
September 30, 1997
Assuming that the Building continues to generate an
annual net profit in future years comparable to that in the
current year, Registrant anticipates that the value of the
Building and the Property will exceed the indicated balance sheet
value at September 30, 1997.
Registrant anticipates that funds for working capital
will be generated by operations of the Building by Sublessee,
which entity in turn is required to make payments of Basic Rent
and Overage Rent under the Sublease and, to the extent necessary,
from additional capital investment by the partners in Sublessee
and/or external financing. Registrant foresees no need to make
material commitments for capital expenditures while the Sublease
is in effect.
Inflation
Registrant believes that there has been no material
change in the impact of inflation on its operations since the
filing of its report on Form 10-K for the year ended December 31,
1996, which report and all exhibits thereto are incorporated
herein by reference and made a part hereof.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Property of Registrant is the subject of the
following pending litigation:
Studley v. Empire State Building Associates: This
action was filed in October 1991, in New York Supreme Court.
Plaintiff holds a $20,000 original participation in
Registrant. The defendants are the partner Agents of
Registrant and Wien, Malkin & Bettex (now Wien & Malkin LLP).
Plaintiff has claimed that defendants have committed breaches
of fiduciary duty in connection with a solicitation of
consents of participants in Registrant in September, 1991,
and in respect to other matters affecting Registrant. By
order and decision dated July 14, 1997, the Court denied
plaintiff's motion for partial summary judgment, granted the
defendants' motion for summary judgment and dismissed the
action. The plaintiff has filed an appeal with respect to
the foregoing order. The appeal is scheduled to be heard by
the Appellate Court in early 1998.
Proceedings Involving Trump Empire State Partners: In
December 1994, Registrant received a notice of default from
Trump Empire State Partners ("Trump"), claiming that
Registrant is in violation of the Master Lease because of
extensive work which Sublessee has undertaken as part of an
improvement program that commenced before Trump reportedly
acquired its interest in the Property in 1994. Trump's
notice also complains that the building is in need of<PAGE>
Empire State Building Associates 11.
September 30, 1997
repairs. On February 14, 1995, Registrant and Sublessee
filed an action in New York State Supreme Court against Trump
and a related entity for a declaratory judgment that none of
the matters set forth in the notice of default constitutes a
violation of the Master Lease or Sublease, and that the
notice of default is entirely without merit. Registrant's
and Sublessee's suit also seeks an injunction to prevent
Trump from implementing the notice of default. On March 24,
1995, the Court granted Registrant a preliminary injunction
against Trump. The injunction prohibits Trump from acting on
its notice of default to Registrant, at any time, pending the
prosecution of claims by Registrant and Sublessee for a final
declaratory judgment and an injunction and other relief
against the Trump defendants.
On February 15, 1995, Trump filed an action against
Registrant, Sublessee, Counsel, Harry B. Helmsley,
Helmsley-Spear, Inc. and the Agents for Registrant in New
York Supreme Court, alleging that the notice of default is
valid and seeking damages and related relief based thereon.
On October 24, 1996, the Court dismissed all of Trump's
claims in their entirety against all defendants in the
action. Trump has appealed this dismissal.
In May 1995, Registrant and Sublessee filed a separate
legal action against Trump and various affiliated persons for
breach of the Master Lease and Sublease and for disparagement
of the Property in violation of Registrant's and Sublessee's
leasehold rights. The action was amended to include
additional claims by Registrant and Sublessee seeking a
declaratory judgment that they may act as an owner of the
Property for purposes of making applications and related
activities pursuant to the New York City Building Code. By
decision and order dated October 24, 1996, the Court
sustained Registrant's and Sublessee's claims concerning the
parties who may act as owner of the property under the
Building Code. Trump noticed an appeal of the foregoing
order. The Court directed that the remaining claims should
proceed to trial. At the same time, the Court dismissed
Registrant's and Sublessee's claims against Trump and co-
defendants for money damages. Registrant and Sublessee have
taken an appeal from that portion of the Court's order
dismissing their claims for money damages.
Wien & Malkin LLP, et. al. v. Helmsley-Spear, Inc., et.
al. On June 19, 1997 Wien & Malkin LLP and Peter L. Malkin
filed an action in the Supreme Court of the State of New
York, on behalf of themselves and various partnerships,
including Registrant, against Helmsley-Spear, Inc. and Leona
Helmsley. The filing of the action was accompanied by a
motion for a Temporary Restraining Order and a Preliminary
Injunction by which the plaintiffs sought the return of over<PAGE>
Empire State Building Associates 12.
September 30, 1997
$5,000,000 in Empire State Building Company funds which were
being wrongfully held by Helmsley-Spear, Inc., an order
preventing Leona Helmsley from further violations of the
partnership agreements of the partnerships, and expedited
discovery of Helmsley-Spear, Inc. and Leona Helmsley
regarding the financial status of Helmsley-Spear, Inc. In
their complaint, plaintiffs sought the same relief requested
in the motion for a Temporary Restraining Order and
Preliminary Injunction, as well as the removal of Helmsley-
Spear, Inc. as managing and leasing agent for all of the
buildings owned by the partnerships on whose behalf the
action was brought. Plaintiffs also sought an order
precluding Leona Helmsley from exercising any partner
management powers in the partnerships. In August, 1997, the
Supreme Court directed that the foregoing claims proceed to
arbitration. As a result, Mr. Malkin and Wien & Malkin LLP
have filed an arbitration complaint against Helmsley-Spear,
Inc. and Mrs. Helmsley before the American Arbitration
Association. Helmsley-Spear, Inc. and Mrs. Helmsley have
served answers denying liability and asserting various
affirmative defenses and counterclaims. Mr. Malkin and Wien
& Malkin LLP intend to file a reply denying the
counterclaims; the reply is due December 1997.
Item 5. Other Information
The Sublessee maintains the Building as a high-class
office building as required by the terms of the Sublease.
In 1990, Sublessee commenced its latest improvement
program which is estimated to be completed in 1997 at a total cost
in excess of $60,000,000. Under this program, approximately 6,400
windows are being replaced and this portion of the program is
completed. In addition, the elevators have been upgraded through
the installation of a computerized control system and replacement
of all electrical and mechanical equipment. The elevator
modernization program has increased elevator speed from 800 to 950
feet per minute to 1200 feet per minute. Also included is water-
proofing the Building's exterior, resetting and repairing the
limestone facade, upgrading the Building's security system,
upgrading and replacing the Building's fire safety system and
making substantial further improvement to the air-conditioning,
domestic pump and water systems, waterproofing the mooring mast
and installing a new observation deck ticket office.
The Sublessee anticipates that the costs of improvements
to be incurred will reduce or eliminate Overage Rent otherwise
payable for 1997 through 1999, but should have no effect on the
payment of Basic Rent in those years.<PAGE>
Empire State Building Associates 13.
September 30, 1997
Under Sublessee's management, the Building recently won
three awards from the Building Owners and Management Association
("BOMA") (BOMA/NY Award 1989; BOMA Middle Atlantic Region Award
1990/91 and the BOMA International Award for excellence 1992/93).
The New York Landmarks Conservancy recently awarded a Merit
Citation to the Building. In 1994, Metaloptics recognized the
Building for excellence in lighting efficiency. In December 1994,
Energy User News, a national publication, awarded a Certificate of
Merit in the lighting category for excellence and innovation in
energy efficiency and management of the Building.
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibit hereto is incorporated by reference.
(b) Registrant filed a report on Form 8-K on July 1,
1997 reporting the commencement of an action against Helmsley-
Spear, Inc. and Leona M. Helmsley. See Item 1.<PAGE>
Empire State Building Associates 14.
September 30, 1997
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.
The individual signing this report on behalf of
Registrant is Attorney-in-Fact for Registrant and each of the
Partners in Registrant, pursuant to a Power of Attorney, dated
August 6, 1996 (the "Power").
EMPIRE STATE BUILDING ASSOCIATES
(Registrant)
By: /s/ Stanley Katzman
Stanley Katzman, Attorney-in-Fact*
Dated: November 25, 1997
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed by the undersigned as
Attorney-in-Fact for each of the Partners in Registrant, pursuant
to the Power, on behalf of Registrant and as a Partner in
Registrant, on the date indicated.
By: /s/ Stanley Katzman
Stanley Katzman, Attorney-in-Fact*
Dated: November 25, 1997
______________________
* Mr. Katzman supervises accounting functions for Registrant<PAGE>
Empire State Building Associates 15.
September 30, 1997
EXHIBIT INDEX
Number Document Page*
25 Power of Attorney dated August 6, 1996
between Stanley Katzman, Peter L.
Malkin and John L. Loehr as Partners
of Registrant and Stanley Katzman and
Richard A. Shapiro.
______________________
* Page references are based on sequential numbering system.<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's Balance Sheet as of September 30, 1997 and the Statement Of Income
for the period ended September 30, 1997, and is qualified in its entirety by
reference to such financial statements.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 375,933
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 399,764<F1>
<PP&E> 39,000,000
<DEPRECIATION> 35,820,840
<TOTAL-ASSETS> 3,578,924
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 3,578,924
<TOTAL-LIABILITY-AND-EQUITY> 3,578,924
<SALES> 4,514,063<F2>
<TOTAL-REVENUES> 4,521,844<F3>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,753,414<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,768,430
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,768,430
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,768,430
<EPS-PRIMARY> 838.92<F5>
<EPS-DILUTED> 838.92<F5>
<FN>
<F1>Includes prepaid rent
<F2>Rental income
<F3>Includes dividend income
<F4>Leasehold rent, supervisory fees and amortization of leasehold
<F5>Earnings per $10,000 participation unit, based on 3,300 participation
units outstanding during the year
</FN>
</TABLE>
