[.TX]1-16
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the period ended June 30, 1994
-------------------------------------------
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 0-10743
MCNEIL REAL ESTATE FUND XII, LTD.
- - ----------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 94-2717957
- - ----------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
13760 Noel Road, Suite 700, LB70, Dallas, Texas, 75240
- - ----------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number,including area code (214) 448-5800
--------------------
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
and (2) has been subject to such filing requirements for the past
90 days. Yes X No
---- ----
<PAGE>
MCNEIL REAL ESTATE FUND XII, LTD.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- - ------- --------------------
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
-------- -----------
<C> <C>
<S>
ASSETS
- - ------
Real estate investments:
Land $ 6,390,069 $ 7,108,968
Building and improvements 82,003,612 89,085,041
---------- ----------
88,393,681 96,194,009
Less: Accumulated depreciation
and amortization (41,593,239)(43,889,170)
----------- ----------
46,800,442 52,304,839
Assets held for sale 15,221,407 11,421,936
Cash and cash equivalents ($219,761
and $347,986 segregated for security
deposits at June 30, 1994 and
December 31, 1993, respectively) 1,133,695 5,286,015
Accounts receivable, less allowance
for doubtful accounts of $36,410
at June 30, 1994 and December 31,
1993, respectively 352,890 381,737
Prepaid expenses and other assets 283,698 289,275
Escrow deposits 1,846,230 1,504,609
Deferred borrowing costs, net of
accumulated amortization of $774,265
and $715,830 at June 30, 1994
and December 31, 1993, respectively 1,616,011 1,641,689
---------- ----------
$67,254,373 $72,830,100
========== ==========
LIABILITIES AND PARTNERS' DEFICIT
- - ---------------------------------
Mortgage notes payable, net $79,140,189 $79,867,507
Mortgage notes payable - affiliate - 1,603,135
Accounts payable 618,931 647,869
Accrued expenses 60,183 128,240
Accrued interest 1,796,493 1,599,238
Accrued property taxes 1,350,206 1,224,990
Advances from Southmark 31,580 30,655
Advances from affiliates - General
Partner 1,739,398 3,346,441
Payable to affiliates - General Partner 5,415,898 5,292,511
Security deposits and deferred rental
income 674,801 684,379
---------- ----------
90,827,679 94,424,965
---------- ----------
Partners' deficit:
Limited partners - 240,000 limited
partnership units authorized; 230,584
and 230,817 limited partnership units
issued and outstanding at June 30, 1994
and December 31, 1993, respectively (14,450,147)(13,138,511)
General Partner (9,123,159) (8,456,354)
---------- ----------
(23,573,306)(21,594,865)
---------- ----------
$67,254,373 $72,830,100
========== ==========
</TABLE>
The financial information included herein has been prepared by
management without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
MCNEIL REAL ESTATE FUND XII, LTD.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ -------------------------
1994 1993 1994 1993
----------- ----------- ----------- ------------
<C> <C> <C> <C>
<S>
Revenue:
Rental revenue $ 5,382,671 $ 5,958,299 $10,814,456 $11,854,058
Interest 16,028 7,310 29,200 21,599
---------- ---------- ---------- ----------
Total revenue 5,398,699 5,965,609 10,843,656 11,875,657
---------- ---------- ---------- ----------
Expenses:
Interest 1,882,700 2,370,725 3,750,580 4,732,985
Interest - affiliates 33,106 78,190 64,111 166,039
Depreciation and
amortization 1,145,877 1,179,335 2,291,754 2,348,987
Property taxes 448,749 543,524 897,498 1,088,424
Personnel expenses 620,321 770,815 1,338,805 1,427,409
Utilities 426,207 469,445 1,025,909 1,085,965
Repairs and maintenance 636,418 1,019,158 1,332,781 1,694,333
Property management
fees - affiliates 271,500 295,966 539,473 592,787
Other property operating
expenses 337,986 400,496 659,078 690,444
General and administrative 29,726 120,891 72,254 212,591
General and administrative
- affiliates 122,614 204,936 252,082 456,637
---------- ---------- ---------- ----------
Total expenses 5,955,204 7,453,481 12,224,325 14,496,601
---------- ---------- ---------- ----------
Net loss $ (556,505) $(1,487,872) $(1,380,669) $(2,620,944)
========== ========== ========== ==========
Net loss allocable to
limited partners $ (528,680) $(1,413,478) $(1,311,636) $(2,489,897)
Net income allocable to
General Partner (27,825) (74,394) (69,033) (131,047)
---------- ---------- ---------- ----------
Net loss $ (556,505) $(1,487,872) $(1,380,669) $(2,620,944)
========== ========== ========== ==========
Net loss per limited
partnership unit $ (2.29) $ (6.12) $ (5.69) $ (10.78)
========== ========= ========= =========
</TABLE>
The financial information included herein has been prepared by
management without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
MCNEIL REAL ESTATE FUND XII, LTD.
STATEMENTS OF PARTNERS' DEFICIT
(Unaudited)
For the Six Months Ended June 30, 1994 and 1993
<TABLE>
<CAPTION>
Total
General Limited Partners'
Partner Partners Deficit
----------- ------------ ------------
<C> <C> <C>
<S>
Balance at December 31, 1992 $(7,473,458) $(17,108,329) $(24,581,787)
Net loss (131,047) (2,489,897) (2,620,944)
Contingent Management Incentive
Distribution (8,426) - (8,426)
---------- ----------- -----------
Balance at June 30, 1993 $(7,612,931) $(19,598,226) $(27,211,157)
========== =========== ===========
Balance at December 31, 1993 $(8,456,354) $(13,138,511) $(21,594,865)
Net loss (69,033) (1,311,636) (1,380,669)
Contingent Management Incentive
Distribution (597,772) - (597,772)
---------- ----------- -----------
Balance at June 30, 1994 $(9,123,159) $(14,450,147) $(23,573,306)
========== =========== ===========
</TABLE>
The financial information included herein has been prepared by
management without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
MCNEIL REAL ESTATE FUND XII, LTD.
STATEMENTS OF CASH FLOWS
(Unaudited)
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------------
1994 1993
----------- -----------
<C> <C>
<S>
Cash flows from operating activities:
Cash received from tenants $10,778,643 $11,897,162
Cash paid to suppliers (4,374,237) (4,706,407)
Cash paid to affiliates (1,265,940) (586,394)
Interest received 29,200 21,599
Interest paid (3,395,878) (4,306,824)
Interest paid to affiliates (470,489) (35,994)
Property taxes paid (1,204,829) (1,438,876)
---------- ----------
Net cash provided by operating activities 96,470 844,266
---------- ----------
Cash flows used in investing activities:
Additions to real estate investments (586,829) (995,603)
---------- ----------
Cash flows from financing activities:
Principal payments on mortgage notes
payable (825,405) (637,811)
Additions to deferred borrowing costs (32,757) (307,858)
Mortgage loans from affiliates - 1,220,535
Repayment of mortgage loans from affiliates (1,603,135) -
Advances from affiliates - General Partner - 78,734
Repayment of advances from affiliates -
General Partner (1,200,664) -
---------- ----------
Net cash provided by (used in) financing
activities (3,661,961) 353,600
---------- ----------
Net increase (decrease) in cash and cash
equivalents (4,152,320) 202,263
Cash and cash equivalents at beginning of
period 5,286,015 665,160
---------- ----------
Cash and cash equivalents at end of period $ 1,133,695 $ 867,423
========== ==========
</TABLE>
The financial information included herein has been prepared by
management without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
MCNEIL REAL ESTATE FUND XII, LTD.
STATEMENTS OF CASH FLOWS
(Unaudited)
Reconciliation of Net Loss to Net Cash Provided by
Operating Activities
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-------------------------
1994 1993
----------- -----------
<C> <C>
<S>
Net loss $(1,380,669) $(2,620,944)
---------- ----------
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Depreciation and amortization 2,291,754 2,348,987
Amortization of deferred borrowing costs 58,435 133,486
Amortization of discounts on mortgage
notes payable 98,087 149,499
Net interest added on advances from
affiliates - General Partner 57,011 130,045
Net interest added on advances from
Southmark 925 868
Changes in assets and liabilities:
Accounts receivable 28,848 (1,350)
Prepaid expenses and other assets 5,577 50,065
Escrow deposits (341,622) (325,808)
Accounts payable (28,938) 142,642
Accrued expenses (68,057) (92,658)
Accrued interest (266,134) 142,308
Accrued property taxes 125,216 219,543
Payable to affiliates - General Partner (474,385) 463,029
Security deposits and deferred rental
income (9,578) 104,554
---------- ----------
Total adjustments 1,477,139 3,465,210
---------- ----------
Net cash provided by operating activities $ 96,470 $ 844,266
========== ==========
</TABLE>
The financial information included herein has been prepared by
management without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XII, LTD.
Notes to Financial Statements
(Unaudited)
June 30, 1994
NOTE 1.
- - ------
McNeil Real Estate Fund XII, Ltd. (the "Partnership") was
organized February 2, 1981 as a limited partnership organized
under the provisions of the California Uniform Limited
Partnership Act. The general partner of the Partnership is
McNeil Partners, L.P. (the "General Partner"), a Delaware limited
partnership, an affiliate of Robert A. McNeil ("McNeil"). The
Partnership is governed by an amended and restated limited
partnership agreement, dated September 6, 1991 (the "Amended
Partnership Agreement"). The principal place of business for the
Partnership and the General Partner is 13760 Noel Road, Suite
700, LB70, Dallas, Texas, 75240.
In the opinion of management, the financial statements reflect
all adjustments necessary for a fair presentation of the
Partnership's financial position and results of operations. All
adjustments were of a normal recurring nature. However, the
results of operations for the six months ended June 30, 1994 are
not necessarily indicative of the results to be expected for the
year ending December 31, 1994.
NOTE 2.
- - ------
The financial statements should be read in conjunction with the
financial statements contained in the Partnership's Annual Report
on Form 10-K for the year ended December 31, 1993, and the notes
thereto, as filed with the Securities and Exchange Commission,
which is available upon request by writing to McNeil Real Estate
Fund XII, Ltd. c/o McNeil Real Estate Management, Inc., Investor
Services, 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240.
NOTE 3.
- - ------
The accompanying financial statements have been prepared assuming
that the Partnership will continue as a going concern. The
Partnership has suffered recurring losses from operations and has
a net Partners' deficit that raise substantial doubt about its
ability to continue as a going concern. The financial statements
do not include any adjustments that might result from the outcome
of this uncertainty.
NOTE 4.
- - ------
Certain reclassifications have been made to prior period amounts
to conform with current period presentation.
NOTE 5.
- - ------
The Partnership pays property management fees equal to 5% of the
gross rental receipts of the Partnership's properties to McNeil
Real Estate Management, Inc. ("McREMI"), an affiliate of the
General Partner, for providing property management services for
the Partnership's residential and commercial properties and
leasing services for its residential properties. McREMI may
choose to provide leasing services for the Partnership's
commercial properties, in which case McREMI will receive a
property management fee from such commercial properties equal to
3% of the property's gross rental receipts plus commissions based
on the prevailing market rate for such services where the
property is located.
The Partnership reimburses McREMI for its costs, including
overhead, of administering the Partnership's affairs.
Affiliates of the General Partner have advanced funds to the
Partnership to meet working capital requirements. These advances
and mortgage loans accrue interest at a rate equal to the prime
lending rate plus 1%.
<PAGE>
Under terms of the Amended Partnership Agreement, the Partnership
is paying a Management Incentive Distribution ("MID") to the
General Partner. The maximum MID is calculated as 1% of the
tangible asset value of the Partnership. Tangible asset value is
determined by using the greater of (i) an amount calculated by
applying a capitalization rate of 9% to the annualized net
operating income of each property or (ii) a value of $10,000 per
apartment unit for residential property and $50 per gross square
foot for commercial property to arrive at the property tangible
asset value. The property tangible asset value is then added to
the book value of all other assets excluding intangible items.
Prior to July 1, 1993, the MID consists of two components: (i)
the fixed portion which is payable without respect to the net
income of the Partnership and is equal to 25% of the maximum MID
(the "Fixed MID") and (ii) a contingent portion which is payable
only to the extent of the lesser of the Partnership's excess cash
flow, as defined, or net operating income (the "Entitlement
Amount") and is equal to up to 75% of the maximum MID (the
"Contingent MID"). The maximum MID percentage decreases
subsequent to 1999.
The General Partner amended the Amended Partnership Agreement as
a settlement to a class action complaint. This amendment
eliminates the Fixed MID portion and makes the entire MID payable
to the extent of the Entitlement Amount. In all other respects
the calculation and payment of the MID will remain the same.
This modified MID became effective July 1, 1993.
Fixed MID was payable in limited partnership units ("Units")
unless the Entitlement Amount exceeded the amount necessary to
pay the Contingent MID in which case, at the General Partner's
option, the Fixed MID could have been paid in cash to the extent
of such excess.
Contingent MID will be paid to the extent of the Entitlement
Amount, and may be paid (i) in cash, unless there is insufficient
cash to pay the distribution in which event any unpaid portion
not taken in Units will be deferred and is payable, without
interest, from the first available cash and/or (ii) in Units. A
maximum of 50% of the MID may be paid in Units. The number of
Units issued in payment of the MID is based on the greater of $50
per unit or the net tangible asset value, as defined, per Unit.
Any amount of the MID that is paid to the General Partner in
Units will be treated as if cash is distributed to the General
Partner and is then contributed to the Partnership by the General
Partner. The Fixed MID is treated as a fee payable to the
General Partner by the Partnership for services rendered. The
Contingent MID is treated as a distribution to the General
Partner in compliance with terms of the Amended Partnership
Agreement.
Compensation and reimbursements paid to or accrued for the
benefit of the General Partner and its affiliates are as follows:
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------------
1994 1993
--------- -----------
<C> <C>
<S>
Charged to other assets:
Prepaid expenses $ - $ 2,105
Property management fees - affiliates 539,473 592,787
Interest - affiliates 64,111 166,039
Charged to general and administrative -
affiliates:
Partnership administration 252,082 303,614
Fixed MID - 153,023
-------- ---------
$ 855,666 $1,217,568
======== =========
Charged to General Partner's deficit:
Contingent MID $ 597,772 $ 8,426
======== =========
</TABLE>
<PAGE>
NOTE 6.
- - ------
The mortgages encumbering two of the Partnership's properties,
Channingway and Village East, contain provisions which may give
the lenders the right to accelerate the mortgage debt as a result
of the approved restructuring. The General Partner has requested
that the lenders waive their right to accelerate the mortgage
debt. The lenders may require the payment of fees or additional
interest as a condition to granting such waiver. In the event
the waiver is not obtained as to any mortgage, and the mortgage
debt is accelerated, the Partnership will be required to satisfy
the outstanding mortgage debt, which approximated $15.9 million
at June 30, 1994. In such event, the Partnership will attempt to
arrange alternative sources of mortgage financing. However, any
such refinancing may be at an interest rate which is higher or is
otherwise on terms which are less favorable than those provided
by the current mortgage. Furthermore, if alternative financing
cannot be obtained, each lender could foreclose on the property
securing its mortgage amount.
NOTE 7.
- - ------
On June 1, 1994, the Partnership stopped making the debt service
payments on Fox Run's mortgage notes due to recurring operating
deficits at the property. This constitutes an event of default
under terms of Fox Run's mortgage notes and the lenders could
foreclose on Fox Run.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- - ------ ----------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- - -------------------
The Partnership was formed to acquire, operate and ultimately
dispose of a portfolio of income-producing properties. At June
30, 1994, the Partnership owned nine apartment properties and two
shopping centers. All of the Partnership's properties are
subject to mortgage notes.
There has been no significant change in financial condition of
the Partnership since December 31, 1993. The Partnership
reported a net loss of $1,380,669 for the first six months of
1994 as compared to a net loss of $2,620,944 for the same period
in 1993. Revenues declined in 1994 to $10,843,656 as compared to
$11,875,657 in 1993, at the same time expenses decreased to
$12,224,325 from $14,496,601.
Net cash provided by operating activities was $96,470 for the
period. After expenditures of $586,829 for capital improvements,
$825,405 in principal payments on mortgage notes, and $32,757 in
deferred borrowing costs plus payment of mortgage loans and
advances from affiliates of $2,803,799, the net decrease in cash
of $4,152,320 was deducted from cash and cash equivalents, giving
a balance of $1,113,695 at June 30, 1994 as compared to $867,423
at June 30, 1993.
The balances of cash and cash equivalents held at June 30, 1994
include $219,761 for tenant security deposits held in interest
bearing accounts, whereas at December 31, 1993, $347,986 was
segregated.
There has been no significant change in the operations of the
Partnership's properties since December 31, 1993. See "Revenue"
and "Expenses" below for additional information regarding changes
between years.
<PAGE>
RESULTS OF OPERATIONS
- - ---------------------
Revenue:
Rental revenue for the six months of 1994 was $10,814,456 as
compared to $11,854,058 for the same period in 1993. This
decrease of $1,039,602 or 8.8% is primarily due to the loss of
$1,743,180 in rental revenue generated from Cedar Mill Crossing,
which was sold in December 1993. This decrease was offset by
rental increases at ten of the remaining eleven properties.
Expenses:
Partnership expenses decreased by $2,272,276 for the first six
months of 1994 as compared to the same period last year primarily
due to the sale of Cedar Mill Crossing. The effects from this
transaction were declines of $654,900 for interest, $214,452 for
depreciation, $164,820 for property taxes, $155,636 for personnel
expenses, $156,177 for utilities, $204,860 for repair and
maintenance, $86,956 for property management fees - affiliates,
and $98,501 other property operating expenses.
In addition to the sale of Cedar Mill Crossing, other factors
affected the level of expenses reported by the remaining
properties. Interest expense decreased $327,505 or 8% due to the
refinancing of the mortgage note payable at Brendon Way, and the
reduction of the mortgage principal balance through the sale of a
parcel of land at Plaza Westlake in 1993. Interest expense -
affiliates decreased by $101,928 or 61.4% for the first six
months of 1994 as compared to the same period in 1993 due to the
repayment of $2,803,799 of affiliate loans and advances.
Depreciation expense increased by $157,219 or 7.4% for the six
months ended June 30, 1994 as compared to the same period in 1993
due to the increase in capital improvements made at the
properties.
Personnel expenses increased by $67,032 or 5.3% for the first six
months of 1994 as compared to the same period in 1993 due to
additional part-time staff, an increase in maintenance employee
hours, and an increase in incentive bonus' paid. Personnel
expenses, excluding the sale of Cedar Mill Crossing, decreased by
$42,936 for the three month period ending June 1994 as compared
to the same period in 1993 due to replacement of on-site staff at
lower salaries.
Utilities increased by $96,121 or 10.3% for the first six months
of 1994 as compared to the same period in 1993 due to an increase
in the cost and usage of gas and oil during the winter months.
Repairs and maintenance decreased by $156,692 or 10.5% for the
first six months of 1994 as compared to the same period in 1993
because the increased expenditures for capital improvements the
Partnership incurred have reduced certain repairs and maintenance
expenditures.
Other property operating expenses increased by $67,135 or 11.3%
for the first six months of 1994 as compared to the same period
in 1993 primarily due to increases in professional services, bad
debt and hazard insurance.
General and administrative decreased by $140,336 or 66% for the
first six months of 1994 as compared to the same period in 1993
primarily due to a reduction in tax preparation and legal costs
incurred by the partnership in 1994.
General and administrative - affiliates decreased $204,555 or
44.8% for the first six months of 1994 as compared to 1993,
primarily due to an amendment to the Amended Partnership
Agreement which eliminated the Fixed MID effective July 1993 and
also due to a reduction in the Partnership's portion of
reimbursable costs.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- - -------------------------------
At June 30, 1994, the Partnership held cash and cash equivalents
of $1,133,695 (of which $219,761 was segregated for tenant
security deposits), down $4,152,320 from the balance at December
31, 1993. In January, the Partnership paid $2,400,000 to the
General Partner for repayment of advances, accrued interest and
fees. Also, the Partnership repaid all mortgage loans to McNeil
Real Estate Fund XXVII, L.P. ("Fund XXVII") totaling $1,603,135.
The Partnership's working capital needs have been supported by
advances from affiliates during the past several years. Some of
that support was provided on a short-term basis to meet monthly
operating requirements, with repayment occurring as funds became
available; other advances were longer term in nature due to lack
of funds for repayment. The General Partner has also allowed the
Partnership to defer payment of Contingent MID and reimbursements
until such time as the Partnership's cash reserves allow
payments. Finally, the Partnership operations have also been
supported by affiliate funding in the form of mortgage notes
payable. As previously discussed, $2,809,799 of these advances
and loans were repaid in January 1994. The Partnership also
repaid $1,193,336 in accrued interest and Fixed MID in January
1994.
Operations of the Partnership's properties in 1994, however, are
not expected to provide significant levels of cash necessary to
complete routine repairs, maintenance, and capital improvements
and replacements to preserve and enhance the value of the
properties. The Partnership holds $390,207 in escrow accounts
for property improvements at specific properties. Because of the
low level of cash reserves after the January 1994 payments made
to affiliates, capital expenditures other than those which can be
recovered from the escrow accounts will be closely reviewed
before any funds are committed. No expenditures are expected to
exceed the revenues that the properties earn from operations.
During 1994, the Partnership is faced with mortgage principal
payments and mortgage maturities on Fox Run, Millwood Park and
Village East, totalling approximately $7,938,000. It is
management's policy to negotiate extensions of such maturities
when possible. Management has negotiated a one year extension on
Millwood Park and is currently negotiating refinancing for
Village East. Management has also ceased making debt service
payments on Fox Run. Additionally, the Partnership is faced with
approximately $27,275,000 of mortgage principal payments and
mortgage maturities in 1995. In the event the Partnership is
unable to arrange refinancing or other arrangements for payment
or extensions of the remaining loans, the properties securing the
mortgages may be lost through foreclosure.
McNeil has established a revolving credit facility not to exceed
$5,000,000 in the aggregate which will be available on a "first-
come, first-served" basis to the Partnership and other affiliated
partnerships if certain conditions are met. Borrowings under the
facility may be used to fund deferred maintenance, refinancing
obligations and working capital needs. There is no assurance
that the Partnership will receive additional funds under the
facility because no amounts will be reserved for any particular
partnership. As of June 30, 1994, $1,664,971 remained available
for borrowing under the facility, however, additional funds could
become available as other partnerships repay borrowings. The
General Partner is not obligated to advance funds to the Partner-
ship and there is no assurance that the Partnership will receive
additional funds.
Should market conditions change and operations deteriorate,
present cash resources may be insufficient to meet current needs.
Other than available portions of the $5,000,000 revolving credit
facility and any additional financing from Fund XXVII, which may
not be available when required by the Partnership, the
Partnership has no existing lines of credit from outside sources.
Other sources of working capital may be required and no such
other sources have been identified.
<PAGE>
Possible actions to resolve operating deficiencies include sales
of properties, refinancing or renegotiating terms of existing
loans, deferring major capital expenditures, except where
improvements are expected to enhance the competitiveness or
marketability of the properties, or arranging additional support
from affiliates. Additional affiliate support is not assured,
since neither the General Partner nor any affiliates have
obligations to make advances in excess of any unused portion of
the revolving credit facility. Sales of properties are
possibilities, and Fox Run, Village East, Lamar Plaza and Plaza
Westlake are currently held for sale. There is no assurance that
a sale can be completed, nor that a closing could be timed to
coincide with the Partnership's cash needs.
The mortgages encumbering two of the Partnership's properties,
Channingway and Village East, contain provisions which may give
the lenders the right to accelerate the mortgage debt as a result
of the approved restructuring. The General Partner has requested
that the lenders waive their right to accelerate the mortgage
debt. The lenders may require the payment of fees or additional
interest as a condition to granting such waiver. In the event
the waiver is not obtained as to any mortgage, and the mortgage
debt is accelerated, the Partnership will be required to satisfy
the outstanding mortgage debt, which approximated $15.9 million
at June 30, 1994. In such event, the Partnership will attempt to
arrange alternative sources of mortgage financing. However, any
such refinancing may be at an interest rate which is higher or is
otherwise on terms which are less favorable than those provided
by the current mortgage. Furthermore, if alternative financing
cannot be obtained, each lender could foreclose on the property
securing its mortgage amount.
Distributions to limited partners, last paid in 1984, will remain
suspended until Partnership cash reserves are rebuilt to an
adequate level, and will resume only if clearly supported by
property operations. A distribution of $597,772 for the
Contingent MID has been accrued by the Partnership at June 30,
1994 for the General Partner.
<PAGE>
PART II. OTHER INFORMATION
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
- - ------ -------------------------------
The Partnership is in default on certain terms of Fox Run's
mortgage notes. Fox Run's mortgage notes requires monthly debt
service payments of $35,328. In addition, the Partnership is
required to pay certain escrow amounts on a monthly basis for
property taxes. These additional payments total $8,293 for Fox
Run. Due to recurring operating deficits at Fox Run Apartments,
the real estate securing these mortgage notes, the Partnership
stopped making debt service payments with the payment due June 1,
1994. As of August 12, 1994 the amount of the arrearage on Fox
Run's mortgage notes is $130,863.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- - ------ --------------------------------
(a) Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Description
<C> <S>
3.3 Amended and Restated Partnership Agreement, dated
September 6, 1991 (Incorporated by reference to
the Quarterly Report on Form 10-Q for the quarter
ended September 30, 1991).
11. Statement regarding computation of net loss per
limited partnership unit: net loss per limited
partnership unit is computed by dividing net loss
allocated to the limited partners by the number
of limited partnership units outstanding. Per
unit information has been computed based on
230,584 and 230,817 limited partnership units
outstanding in 1994 and 1993.
</TABLE>
(b) Reports on Form 8-K. There were no reports on Form 8-K
filed during the quarter ended June 30, 1994.
<PAGE>
McNEIL REAL ESTATE FUND XII, LTD.
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:
McNEIL REAL ESTATE FUND XII, Ltd.
By: McNeil Partners, L.P., General Partner
By: McNeil Investors, Inc., General Partner
August 10, 1994 By: /s/ Donald K. Reed
- - ------------------------ -------------------------------------
Date Donald K. Reed
President and Chief Executive Officer
August 10, 1994 By: /s/ Robert C. Irvine
- - ------------------------ -------------------------------------
Date Robert C. Irvine
Chief Financial Officer of McNeil
Investors, Inc.
Principal Financial Officer
August 10, 1994 By: /s/ Brandon K. Flaming
- - ------------------------ ------------------------------------
Date Brandon K. Flaming
Chief Accounting Officer of McNeil
Real Estate Management, Inc.
