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 QUARTERLY PERIOD ENDED JUNE 30, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from_______to _____.
Commission File Number: 0-10980
PAINE WEBBER INCOME PROPERTIES FOUR LIMITED PARTNERSHIP
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 04-2738053
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
265 Franklin Street, Boston, Massachusetts 02110
- ------------------------------------------ -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-8118
--------------
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 |_|.
<PAGE>
PAINE WEBBER INCOME PROPERTIES FOUR LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
June 30, 1997 and September 30, 1996 (Unaudited)
(In thousands)
ASSETS
June 30 September 30
------- ------------
Operating investment property:
Land $ 1,300 $ 1,300
Buildings, improvements and equipment 11,853 11,842
--------- --------
13,153 13,142
Less: accumulated depreciation (5,214) (4,877)
--------- --------
7,939 8,265
Investment in unconsolidated joint venture,
at equity 242 -
Cash and cash equivalents 582 654
Prepaid and other assets 212 233
Deferred financing costs, net 162 168
--------- --------
$ 9,137 $ 9,320
========= ========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and other liabilities $ 102 $ 105
Accrued real estate taxes 82 115
Mortgage interest payable 36 37
Tenant security deposits 81 65
Equity in losses of unconsolidated joint venture
in excess of investments and advances - 32
Long-term debt 4,801 4,852
Partners' capital 4,035 4,114
--------- --------
$ 9,137 $ 9,320
========= ========
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
For the nine months ended June 30, 1997 and 1996 (Unaudited)
(In thousands)
General Limited
Partners Partners
-------- --------
Balance at September 30, 1995 $ (150) $ 3,883
Cash distributions - (514)
Net income 19 1,937
------ --------
Balance at June 30, 1996 $ (131) $ 5,306
====== ========
Balance at September 30, 1996 $ (141) $ 4,255
Net loss (1) (78)
------ --------
Balance at June 30, 1997 $ (142) $ 4,177
====== ========
See accompanying notes.
<PAGE>
PAINE WEBBER INCOME PROPERTIES FOUR LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and nine months ended June 30, 1997 and 1996 (Unaudited)
(In thousands, except per Unit data)
Three Months Ended Nine Months Ended
June 30, June 30,
------------------ -----------------
1997 1996 1997 1996
---- ---- ---- ----
Revenues:
Rental revenues $ 542 $ 514 $1,590 $1,567
Interest and other income 10 6 48 18
------- ------- ------ ------
552 520 1,638 1,585
Expenses:
Property operating expenses 360 322 1,086 935
Interest expense and related
fees 111 113 334 339
Depreciation expense 112 106 337 318
Real estate taxes 34 34 103 101
General and administrative 53 48 131 169
------- ------- ------ ------
670 623 1,991 1,862
------- ------- ------ ------
Operating loss (118) (103) (353) (277)
Partnership's share of
unconsolidated ventures'
income 75 82 274 67
Gain on sale of joint venture
investment - - - 2,166
------- ------- ------ ------
Net income (loss) $ (43) $ (21) $ (79) $1,956
======= ======= ====== ======
Net income (loss) per Limited
Partnership Unit $(1.65) $(0.79) $(3.04) $75.38
====== ====== ====== ======
Cash distributions per Limited
Partnership Unit $ - $ - $ - $20.00
====== ====== ====== ======
The above net income (loss) and cash distributions per Limited Partnership
Unit are based upon the 25,698 Units of Limited Partnership Interest outstanding
for each period.
See accompanying notes.
<PAGE>
PAINE WEBBER INCOME PROPERTIES FOUR LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended June 30, 1997 and 1996 (Unaudited)
Increase (Decrease) in Cash and Cash Equivalents
(In thousands)
1997 1996
---- ----
Cash flows from operating activities:
Net income (loss) $ (79) $ 1,956
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities:
Gain on sale of joint venture investment - (2,166)
Depreciation expense 337 318
Amortization of deferred financing fees 6 5
Partnership's share of unconsolidated
ventures' income (274) (67)
Changes in assets and liabilities:
Prepaid and other assets 33 (117)
Accounts payable and other liabilities (3) (79)
Accrued real estate taxes (33) 101
Mortgage interest payable (1) -
Tenant security deposits 16 (1)
-------- ---------
Total adjustments 81 (2,006)
-------- ---------
Net cash provided by (used in) operating
activities 2 (50)
-------- ---------
Cash flows from investing activities:
Proceeds received from sale of joint venture investment - 1,000
Additions to buildings, improvements and equipment (11) (53)
Net (deposits to) withdrawals from repair escrow (12) 11
-------- --------
Net cash (used in) provided by investing
activities (23) 958
-------- --------
Cash flows from financing activities:
Distributions to limited partners - (514)
Principal repayments on long-term debt (51) (46)
-------- ---------
Net cash used in financing activities (51) (560)
-------- ---------
Net (decrease) increase in cash and cash equivalents (72) 348
Cash and cash equivalents, beginning of period 654 129
-------- ---------
Cash and cash equivalents, end of period $ 582 $ 477
======== =========
Cash paid during the period for interest $ 329 $ 334
======== =========
See accompanying notes.
<PAGE>
PAINE WEBBER INCOME PROPERTIES FOUR LIMITED PARTNERSHIP
Notes to Consolidated Financial Statements
(Unaudited)
1. General
The accompanying financial statements, footnotes and discussion should be
read in conjunction with the financial statements and footnotes contained in
the Partnership's Annual Report for the year ended September 30, 1996. In
the opinion of management, the accompanying financial statements, which have
not been audited, reflect all adjustments necessary to present fairly the
results for the interim period. All of the accounting adjustments reflected
in the accompanying interim financial statements are of a normal recurring
nature.
The accompanying financial statements have been prepared on the accrual
basis of accounting in accordance with generally accepted accounting
principles which require management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities as of June 30, 1997 and September 30, 1996
and revenues and expenses for the three and nine months ended June 30, 1997
and 1996. Actual results could differ from the estimates and assumptions
used.
2. Related Party Transactions
Included in general and administrative expenses for the nine-month periods
ended June 30, 1997 and 1996 is $64,000 and $65,000, respectively,
representing reimbursements to an affiliate of the Managing General Partner
for providing certain financial, accounting and investor communication
services to the Partnership.
Also included in general and administrative expenses for the nine months
ended June 30, 1997 and 1996 is $2,000 and $1,000, respectively,
representing fees earned by an affiliate, Mitchell Hutchins Institutional
Investors, Inc., for managing the Partnership's cash assets.
3. Investments in Unconsolidated Joint Ventures
At June 30, 1997 and September 30, 1996, the Partnership had an investment
in one unconsolidated joint venture, Charter Oak Associates, which owns an
operating investment property as more fully described in the Partnership's
Annual Report. Prior to December 29, 1995, the Partnership had owned
interests in two unconsolidated ventures. On December 29, 1995, the
Partnership assigned its interest in the Braesridge Apartments joint venture
to an affiliate of the co-venture partner for net cash proceeds of
$1,000,000. The Partnership made a special distribution of $513,960, or $20
per original $1,000 investment, to the Limited Partners on February 15, 1996
from the proceeds of this transaction. The remaining net sale proceeds of
$486,040 were retained by the Partnership for Partnership reserves and to
fund potential future capital needs of its remaining investments.
The unconsolidated joint ventures are accounted for on the equity method in
the Partnership's financial statements because the Partnership does not have
a voting control interest in the ventures. Under the equity method, the
assets, liabilities, revenues and expenses of the joint venture do not
appear in the Partnership's financial statements. Instead, the investment is
carried at cost adjusted for the Partnership's share of the venture's
earnings, losses and distributions.
<PAGE>
Summarized operating results of the unconsolidated joint ventures for
the three and nine months ended June 30, 1997 and 1996 are as follows. The
summary of operations for the nine months ended June 30, 1996 includes the
Partnership's share of the Braesridge joint venture's net loss through
December 29, 1995:
Condensed Combined Summary of Operations
For the three and nine months ended June 30, 1997 and 1996 (in thousands)
Three Months Ended Nine Months Ended
June 30, June 30,
------------------ -----------------
1997 1996 1997 1996
---- ---- ---- ----
Rental revenues and
expense recoveries $ 617 $ 630 $1,878 $2,527
Interest and other income 23 26 104 118
------ ------ ------ ------
640 656 1,982 2,645
Property operating expenses 210 242 645 1,181
Interest expense 186 187 559 785
Depreciation and amortization 113 92 336 348
Real estate taxes 42 39 121 180
------ ------ ------ ------
551 560 1,661 2,494
------ ------ ------ ------
Net income $ 89 $ 96 $ 321 $ 151
====== ====== ====== ======
Net income:
Partnership's share of
combined income $ 76 $ 83 $ 276 $ 125
Co-venturers' share of
combined income 13 13 45 26
------ ------ ------ ------
$ 89 $ 96 $ 321 $ 151
====== ====== ====== ======
Reconciliation of Partnership's Share of Operations
For the three
and nine months ended June 30, 1997 and 1996 (in thousands)
Three Months Ended Nine Months Ended
June 30, June 30,
------------------ -----------------
1997 1996 1997 1996
---- ---- ---- ----
Partnership's share of
combined income, as shown
above $ 76 $ 83 $ 276 $ 125
Amortization of excess basis (1) (1) (2) (58)
------ ------- ------- -------
Partnership's share of
unconsolidated ventures'
income $ 75 $ 82 $ 274 $ 67
====== ====== ======= ======
<PAGE>
4. Operating Investment Property
Operating investment property at June 30, 1997 and September 30, 1996
represents the land, buildings, improvements and equipment of Arlington Towne
Oaks Associates, a joint venture in which the Partnership has a controlling
interest. As discussed further in the Annual Report, during fiscal 1991 the
Partnership's co-venture partner in Arlington Towne Oaks Associates withdrew
from the venture and assigned its interest to the Managing General Partner of
the Partnership in return for a release from any further obligations. As a
result, the Partnership assumed control over the affairs of the joint
venture. Accordingly, the accompanying financial statements present the
financial position and results of operations of the joint venture on a
consolidated basis. The joint venture owns and operates a 320-unit apartment
complex in Arlington, Texas known as the Bristol Pointe Apartments (formerly
Towne Oaks Apartments).
The Partnership is utilizing a local, unaffiliated property management
company to operate the property under the direction of the Managing General
Partner. The following is a summary of property operating expenses for the
three and nine months ended June 30, 1997 and 1996 (in thousands):
Three Months Ended Nine Months Ended
June 30, June 30,
------------------ -----------------
1997 1996 1997 1996
---- ---- ---- ----
Property operating expenses:
Salaries and related costs $ 75 $ 68 $ 215 $ 194
Repairs and maintenance 134 105 360 268
Utilities 88 98 312 308
Management fees 22 21 64 63
Administrative and other 41 30 135 102
------ ------- ------- ------
$ 360 $ 322 $ 1,086 $ 935
====== ======= ======= ======
5. Long-term Debt
Long-term debt at June 30, 1997 and September 30, 1996 relates to the
consolidated joint venture, Arlington Towne Oaks Associates, and is
summarized as follows (in thousands):
June 30 September 30
------- ------------
9.08% mortgage note due March 1,
2019, payable in monthly
installments of $42, including
interest, collateralized by the
Bristol Pointe operating
investment property. The fair
value of this note payable
approximated its carrying value as
of June 30, 1997 and September 30,
1996. $ 4,801 $ 4,852
======== ========
<PAGE>
PAINE WEBBER INCOME PROPERTIES FOUR LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
- -------------------------------
As discussed further in the Annual Report, on December 29, 1995 the
Partnership assigned its interest in the Braesridge Apartments joint venture to
an affiliate of its co-venture partners for net cash proceeds of $1,000,000.
This net sale price for the Partnership's equity interest reflected the
deduction of the outstanding first mortgage loan and certain co-venture partner
operating loans from an agreed upon effective sale price of $11,750,000, which
was supported by the most recent independent appraisal of the property. The
Partnership distributed approximately $514,000 of the net sale proceeds, or $20
per original $1,000 investment, in a special distribution to the Limited
Partners on February 15, 1996. The remaining net sale proceeds of approximately
$486,000 were retained by the Partnership to increase cash reserves maintained
to fund working capital requirements and potential future capital needs of the
two remaining real estate investments. Due to the fiscal 1996 sale of the
Partnership's interest in the Braesridge joint venture, which represented 31% of
the original investment portfolio, for an amount which was substantially lower
than the Partnership's investment in the joint venture, combined with the fiscal
1991 foreclosure loss of the Yorktown investment, which represented 16% of the
original investment portfolio, the Partnership will be unable to return the full
amount of the original capital contributed by the Limited Partners. The amount
of capital which will be returned will depend upon the proceeds received from
the liquidation of the two Partnership's remaining investments. The amount of
such proceeds will ultimately depend upon the value of the underlying investment
properties at the time of their final disposition, which cannot presently be
determined.
Occupancy at the Partnership's two remaining multi-family apartment
properties, Bristol Pointe (formerly Towne Oaks) and Charter Oak, averaged 95%
and 88%, respectively, for the third quarter of fiscal 1997 compared to 88% and
89%, respectively, for the prior quarter. The 7% increase in occupancy at
Bristol Pointe is attributable to an aggressive marketing program involving the
use of rental concessions implemented by the property management team in the
prior quarter. Although the local apartment rental market in the greater Dallas,
Texas area has softened recently, improvements made to the unit interiors at
Bristol Pointe over the past two years and other recent improvements made to the
property in conjunction with the new marketing program have increased
prospective tenant traffic at Bristol Pointe dramatically over the past several
months. The increase in traffic has brought the property's occupancy up to a
level which is consistent with the competition in the local market. In addition,
effective rental rates at the Bristol Pointe property have improved over the
past six months. Cash flow from Bristol Pointe continues to be applied to the
program begun in fiscal 1995 to upgrade the apartment interiors on a turnover
basis. This work is scheduled to continue over approximately the next 2 years
until all of the units have been upgraded. The interior upgrades range from
repainting and carpet replacement, where needed, to the complete retrofit of the
fixtures, cabinets, heating and air conditioning equipment and the replacement
of all appliances in each unit. Other capital improvement work planned at
Bristol Pointe during the fourth quarter of fiscal 1997 includes a resurfacing
of the property's parking lot. Management is currently reviewing cost estimates
for completing this work. Based on a preliminary review of several contractor
proposals for this resurfacing project, management expects this work to cost
approximately $200,000. At Charter Oak, refinancing reserves continue to be used
as part of a program to upgrade individual units and the property as a whole. As
with Bristol Pointe, the work to renovate the individual apartment units is
being done on a turnover basis and will continue until all of the units have
been upgraded. To date 42% of the units have been upgraded. The upgraded units
are generating additional rental rates of $50 to $100 per month, depending on
the type of unit. The current capital improvement plan at Charter Oak calls for
the renovation and re-leasing of three to five units per month.
Over the past 18-to-24 months, development activity for multi-family
properties in many markets, including the greater Dallas area in which the
Bristol Pointe Apartments is located, has increased significantly. The general
increase in development activity may be an indication that market values for
multi-family properties are nearing their peak for the current market cycle. To
date, Charter Oak has not experienced a significant increase in the supply of
apartment units in its sub-market, but management continues to monitor this
situation closely. As a result of the current market conditions, management will
likely explore the market for potential sales opportunities for the Charter Oak
and Bristol Pointe properties in the near term as the renovation programs
discussed above at both properties approach completion. Depending on the
availability of favorable sales opportunities for the two remaining properties,
the Partnership could be positioned for a possible liquidation within the next
2-to-3 years. There are no assurances, however, that the Partnership will be
able to achieve the sale of its remaining assets within this time frame.
<PAGE>
At June 30, 1997, the Partnership and its consolidated joint venture had
available cash and cash equivalents of $582,000. Such cash and cash equivalents
will be utilized for the Partnership's working capital requirements and, if
necessary, to fund property operating deficits and capital improvements of the
two remaining joint ventures in accordance with the respective joint venture
agreements. The source of future liquidity and distributions to the partners is
expected to be through cash generated from operations of the Partnership's
investment properties and proceeds from the sale or refinancing of such
properties. Such sources of liquidity are expected to be sufficient to meet the
Partnership's needs through its expected liquidation within the next 2- to-3
years.
Results of Operations
Three Months Ended June 30, 1997
- --------------------------------
The Partnership reported a net loss of $43,000 for the three months ended
June 30, 1997, as compared to a net loss of $21,000 for the same period in the
prior year. This increase in the Partnership's net loss for the current
three-month period is the result of an increase in the Partnership's operating
loss of $15,000 and a decrease in the Partnership's share of unconsolidated
ventures' income of $7,000. The increase in the Partnership's operating loss is
primarily attributable to an increase in property operating expenses at the
consolidated Bristol Pointe Apartments. Property operating expenses at Bristol
Pointe increased primarily due to increases in repairs and maintenance,
advertising and administrative expenses stemming from the new management team's
marketing efforts to improve the property's appearance and increase occupancy,
as discussed further above.
The Partnership's share of unconsolidated ventures' income for the three
months ended June 30, 1996 and 1997 includes only the operations of Charter Oak
Associates, which owns and operates the Charter Oak Apartments. The
Partnership's share of unconsolidated ventures' income decreased in the current
three-month period primarily due to an increase in depreciation and amortization
expense as well as a decline in rental revenues and expense recoveries, which
were partially offset by a decline in property operating expenses. The increase
in depreciation expense is attributable to the ongoing capital improvement
program at the property. Rental revenues and expense recoveries decreased due to
a 6% decline in average occupancy when compared to the same period in the prior
year. Property operating expenses decreased mainly due to declines in salaries,
marketing and administrative expenses.
Nine Months Ended June 30, 1997
- -------------------------------
The Partnership reported a net loss of $79,000 for the nine-month period
ended June 30, 1997 as compared to net income of $1,956,000 for the same period
in the prior year. This unfavorable change is the result of a $2,166,000 gain
recognized by the Partnership from the sale of the Braesridge joint venture on
December 29, 1995 and a $76,000 increase in the Partnership's operating loss
which were partially offset by a $207,000 increase in the Partnerships' share of
unconsolidated ventures' income. Despite recovering less than 15% of its
original cash investment in Braesridge, the Partnership recognized a gain of
$2,166,000 in connection with the sale of its venture interest in the first
quarter of fiscal 1996 because the losses and distributions recorded in prior
years under the equity method had exceeded the Partnership's investments in the
venture.
The Partnership's operating loss increased primarily due to an increase in
property operating expenses at the consolidated Bristol Pointe Apartments for
the current nine-month period which was partially offset by a decrease in
general and administrative expenses and an increase in rental revenues and
interest and other income. Property operating expenses at Bristol Pointe
increased primarily due to an increase in repairs and maintenance, advertising
and administrative expenses related to the new marketing program referred to
above. Rental revenues from Bristol Pointe increased by $23,000 for the current
three-month period due to an increase in average occupancy over same period in
the prior year. Interest and other income increased by $30,000 for the current
nine-month period largely due to an increase in the Partnership's average
invested cash reserve balance as a result of the retention of a portion of the
Braesridge sale proceeds, as discussed further above. General and administrative
expenses decreased by $38,000 mainly due to a reduction in certain required
professional services for the nine months ended June 30, 1997.
<PAGE>
The Partnership's share of unconsolidated ventures' income for the nine
months ended June 30, 1997 improved in comparison to the same period in the
prior year due to the inclusion of the net loss attributable to the operations
of the Braesridge joint venture through the date of the sale in the prior period
results. The Partnership's share of unconsolidated ventures' income in the
current nine-month period includes only the operations of Charter Oak
Associates, which owns and operates the Charter Oak Apartments. The
Partnership's share of the operations of the Charter Oak joint venture improved
by $46,000 for the current nine-month period primarily due an increase in rental
revenues and a reduction in property operating expenses which were partially
offset by higher non-cash depreciation charges. Rental revenues increased due to
increases in rental rates over the past 21 months. Depreciation expense
increased primarily due to the ongoing capital improvement program at the
property.
<PAGE>
PART II
Other Information
Item 1. Legal Proceedings
As previously disclosed, the Partnership's General Partners were named as
defendants in a class action lawsuit against PaineWebber Incorporated
("PaineWebber") and a number of its affiliates relating to PaineWebber's sale of
70 direct investment offerings, including the offering of interests in the
various limited partnership investments and REIT stocks, including those offered
by the Partnership. In January 1996, PaineWebber signed a memorandum of
understanding with the plaintiffs in the class action outlining the terms under
which the parties have agreed to settle the case. Pursuant to that memorandum of
understanding, PaineWebber irrevocably deposited $125 million into an escrow
fund under the supervision of the United States District Court for the Southern
District of New York to be used to resolve the litigation in accordance with a
definitive settlement agreement and a plan of allocation. On July 17, 1996,
PaineWebber and the class plaintiffs submitted a definitive settlement agreement
which provides for the complete resolution of the class action litigation,
including releases in favor of the Partnership and PWPI, and the allocation of
the $125 million settlement fund among investors in the various partnerships and
REITs at issue in the case. As part of the settlement, PaineWebber also agreed
to provide class members with certain financial guarantees relating to some of
the partnerships and REITs. The details of the settlement are described in a
notice mailed directly to class members at the direction of the court. A final
hearing on the fairness of the proposed settlement was held in December 1996,
and in March 1997 the court announced its final approval of the settlement. The
release of the $125 million of settlement proceeds has not occurred to date
pending the resolution of an appeal of the settlement agreement by two of the
plaintiff class members. As part of the settlement agreement, PaineWebber has
agreed not to seek indemnification from the related partnerships and real estate
investment trusts at issue in the litigation (including the Partnership) for any
amounts that it is required to pay under the settlement. Based on the settlement
agreement discussed above covering all of the outstanding shareholder
litigation, and notwithstanding the appeal of the class action settlement
referred to above, management does not expect that the resolution of this matter
will have a material impact on the Partnership's financial statements, taken as
a whole.
Item 2. through 5.
NONE
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: NONE
(b) Reports on Form 8-K:
No reports on Form 8-K have been filed by the registrant during the quarter
for which this report is filed.
<PAGE>
PAINE WEBBER INCOME PROPERTIES FOUR LIMITED PARTNERSHIP
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.
PAINE WEBBER INCOME PROPERTIES FOUR
LIMITED PARTNERSHIP
By: FOURTH INCOME PROPERTIES FUND, INC.
Managing General Partner
By:/s/ Walter V. Arnold
--------------------
Walter V. Arnold
Senior Vice President and Chief
Financial Officer
Date: August 14, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Partnership's audited financial statements for the quarter ended June 30, 1997
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 582
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 794
<PP&E> 13,395
<DEPRECIATION> 5,214
<TOTAL-ASSETS> 9,137
<CURRENT-LIABILITIES> 301
<BONDS> 4,801
0
0
<COMMON> 0
<OTHER-SE> 4,035
<TOTAL-LIABILITY-AND-EQUITY> 9,137
<SALES> 0
<TOTAL-REVENUES> 1,912
<CGS> 0
<TOTAL-COSTS> 1,657
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 334
<INCOME-PRETAX> (79)
<INCOME-TAX> 0
<INCOME-CONTINUING> (79)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (79)
<EPS-PRIMARY> (3.04)
<EPS-DILUTED> (3.04)
</TABLE>
