FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
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 0-768
GARMENT CAPITOL ASSOCIATES
(Exact name of registrant as specified in its
charter)
A New York Partnership 13-6083208
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
60 East 42nd Street, New York, New York 10165
(Address of principal executive offices)
(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 14 of this Report.
Number of pages (including exhibits) in this filing: 14<PAGE>
2.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Garment Capitol Associates
Condensed Statement of Income
(Unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1996 1995 1996 1995
Income:
Rent income, from a related
party (Note B) $272,500 $272,500 $817,500 $817,500
Dividend income 11 76 32 3,002
Interest income 56,723 -0- 83,542 -0-
-------- -------- -------- --------
Total income 329,234 272,576 901,074 820,502
-------- -------- -------- --------
Expenses:
Interest on mortgage 138,084 81,813 330,122 247,807
Supervisory services, to a
related party (Note C) 10,625 10,625 31,875 31,875
Amortization of mortgage
refinancing costs 7,042 7,042 21,126 21,127
-------- -------- -------- --------
Total expenses 155,751 99,480 383,123 300,809
-------- -------- -------- --------
Net income $173,483 $173,096 $517,951 $519,693
======== ======== ======== ========
Earnings per $5,000 partici-
pation unit, based on 1,050
participation units outstand-
ing during the year $ 165.22 $ 164.85 $ 493.29 $ 494.95
======== ======== ======== ========
Distributions per $5,000 parti-
cipation unit consisted of the
following:
Income $ 142.36 $ 145.74 $ 427.08 $ 437.22
======== ======== ======== ========
At September 30, 1996 and 1995, there were $5,250,000 of participations
outstanding.<PAGE>
3.
Garment Capitol Associates
Condensed Balance Sheet
(Unaudited)
Assets September 30, 1996 December 31, 1995
Current assets
Cash $ 115,981 $ 88,199
Due from lessee 2,093,679 -0-
---------- ----------
Total current assets 2,209,660 88,199
---------- ----------
Real Estate
Land 2,500,000 2,500,000
---------- ----------
Building 8,000,000 8,000,000
Less, allowance for depreciation 8,000,000 8,000,000
---------- ----------
-0- -0-
---------- ----------
Intangible assets
Mortgage refinancing costs 107,050 107,050
Less, allowance for amortization 74,151 53,025
---------- ----------
32,899 54,025
---------- ----------
Total assets $4,742,559 $2,642,224
========== ==========
Liabilities and Capital
Current liabilities
Accrued interest payable $ 44,612 $ 26,906
Prepaid interest 8,923 -0-
Principal payments of first mortgage
payable within one year 5,050,177 133,052
---------- ----------
Total current liabilities 5,103,712 159,958
Long-term debt -0- 2,912,936
---------- ----------
Total liabilities 5,103,712 3,072,894
---------- ----------
Capital
Capital deficit, January 1, (430,670) (512,096)
Add, Net income:
January 1, 1996 through Sept. 30, 1996 517,951
January 1, 1995 through Dec. 31, 1995 693,538
Less, Distributions:
Monthly distributions,
January 1, 1996 through Sept. 30, 1996 448,434
January 1, 1995 through Dec. 31, 1995 612,112
---------- ----------
Capital deficit:
September 30, 1996 (361,153)
December 31, 1995 (430,670)
---------- ----------
Total liabilities and capital deficit:
September 30, 1996 $4,742,559
December 31, 1995 $2,642,224
========== ========== <PAGE>
4.
Garment Capitol Associates
Condensed Statement of Cash Flows
(Unaudited)
January 1, 1996 January 1, 1995
through through
September 30, 1996 September 30, 1995
Cash flows from operating activities:
Net income $ 517,951 $ 519,693
Adjustments to reconcile net income
to cash provided by operating activities:
Amortization of mortgage refinancing costs 21,126 21,127
Change in accrued interest payable 17,706 (38,190)
Change in prepaid interest 8,923 -0-
---------- ---------
Net cash provided by
operating activities 565,706 502,630
Cash flows from financing activities:
Cash distributions (448,434) (459,084)
Change in due from lessee (2,093,679) -0-
Change in first mortgage 2,004,189 (235,578)
Mortgage refinancing costs -0- (37,568)
---------- ---------
Net cash used in financing activities (537,924) (732,230)
---------- ---------
Net increase (decrease) in cash 27,782 (229,600)
Cash, beginning of period 88,199 321,323
---------- ---------
Cash, end of period $ 115,981 $ 91,723
========== =========
January 1, 1996 January 1, 1995
through through
September 30, 1996 September 30, 1995
Cash paid for:
Interest $ 312,416 $ 285,997
========== ========= <PAGE>
Garment Capitol Associates 5.
September 30, 1996
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
presented therein not misleading.
Note B - Interim Period Reporting
The results for the interim period are not necessarily
indicative of the results to be expected for a full year.
Registrant was organized on January 10, 1957. On May 1,
1957, Registrant acquired fee title to the Garment Capitol
Building (the "Building") and the land thereunder, located at 498
Seventh Avenue, New York, New York (the "Property"). Registrant's
partners are Stanley Katzman, John L. Loehr and Peter L. Malkin
(collectively the "Partners"), each of whom also acts as an agent
for holders of participations in their respective partnership
interests in Registrant (the "Participants").
Registrant does not operate the Property. Registrant leased
the Property to 498 Seventh Avenue Associates (the "Original
Lessee") under a net operating lease (the "Lease") which commenced
as of May 1, 1957 and currently was to expire on April 30, 2007.
The Lease provides for one 25-year renewal option which had not
been exercised and which, if exercised, would have extended the
Lease to April 30, 2032.
In 1994 and 1995, the Original Lessee made capital calls on
its partners in the aggregate amount of $1,300,000 to defray
certain operating expenses and improvement costs at the Property.
Despite these new capital infusions, however, the Original Lessee
concluded that to return the Property to profitability would
require a very large additional capital investment, estimated by<PAGE>
Garment Capitol Associates 6.
September 30, 1996
the Original Lessee to be as high as $16,000,000. Therefore, on
December 29, 1995, in accordance with the terms of the Operating
Lease, the Original Lessee assigned the Operating Lease to 4987
Corporation (the "New Lessee"), thereby effectively terminating
the liability of the Original Lessee and its partners under the
Lease. The shares in the New Lessee are owned by the partners in
the Original Lessee except that a substantial portion of the
shares owned by Peter L. Malkin is held by him for the benefit of
members of his family but he retains voting control.
The New Lessee has paid basic rent under the Lease through
November 1, 1996. Registrant applied or reserved these rents to
cover (1) its monthly mortgage payments to the Apple Bank for
Savings ("Apple Bank") on Registrants' fee mortgage on the
Property (the "Mortgage Loan"), (2) its monthly fee for
supervisory services and (3) its distributions to the Participants
in Registrant. The New Lessee did not pay the New York City real
estate taxes and Business Improvement District ("BID") assessments
in the amounts of $936,180.00 and $29,695.14, respectively, and
certain other minor assessments and charges aggregating less than
$1,500, all of which were due on January 1, 1996 or shortly
thereafter. The New Lessee also failed to pay the New York City
real estate taxes and BID assessments in the amounts of
$1,053,254.50 and $28,529.26, respectively, which were due on July
1, 1996. As a result, although payment of the January 1, 1996 and
July 1, 1996 real estate taxes and BID assessments has been made
as described below, the New Lessee was in default of the Operating
Lease as of January 1, 1996.
The New Lessee requested that Registrant forbear from
exercising its rights and remedies under the Lease, including
termination of the Lease, by reason of the failure to pay the
January 1, 1996 and July 1, 1996 real estate taxes and BID
assessments, while Registrant solicited the consent of the
Participants to a sale of the Property. On July 26, 1996, the
Partners mailed to the Participants a STATEMENT ISSUED BY THE
AGENTS IN CONNECTION WITH THE SOLICITATION OF CONSENTS OF THE
PARTICIPANTS (the "Statement") requesting their authorization for
a sale of the Property and forbearance in favor of the New Lessee.
The details of the Partners' proposal are provided in the
Definitive Proxy Statement which was filed with the Securities and
Exchange Commission as Schedule 14-A on July 25, 1996, and is
incorporated herein by reference. If Registrant did forbear, the
New Lessee agreed to cooperate fully with Registrant in connection
with the sale of the Property and to continue to perform its other
obligations under the Lease, including payment of basic rent, to
enable Registrant to continue its monthly distributions to the
Participants, pay its supervisory fee and pay its monthly mortgage
obligation. The continuation of the Lease will also serve to
insulate Registrant from third party liabilities attendant on
property operations. Because the consent<PAGE>
Garment Capitol Associates 7.
September 30, 1996
solicitation program included the continuation of the Lease with
the New Lessee, Registrant did not send a notice of default under
the Lease based on the failure of the New Lessee to pay the
January 1, 1996 and July 1, 1996 real estate taxes and BID
assessments.
Although the failure to pay the January 1, 1996 and July 1,
1996 real estate taxes and BID assessments also constitutes a
breach of Registrant's obligations under the Mortgage Loan, Apple
Bank had agreed to forbear from exercising its rights and remedies
during the period of the solicitation of consents through a sale
of the Property based on arrangements consummated in March 1996
between the shareholders of the New Lessee (or designees on their
behalf) and Apple Bank to fund the January 1, 1996 real estate
taxes and BID assessments and certain future real estate taxes and
BID assessments on the Property (together with the January 1, 1996
real estate taxes, the "Real Estate Taxes") through protective
advances under the Mortgage Loan. The shareholders of the New
Lessee (or designees on their behalf) have personally borrowed
from Apple Bank (a) on April 2, 1996, the sum of $1,012,274.18,
equal to the January 1, 1996 real estate taxes and BID assessments
and interest thereon to the date of the borrowing, and certain
other minor city charges and interest aggregating less than $1,500
and (b) on June 28, 1996, the sum of $1,081,783.76 equal to the
July 1, 1996 real estate taxes and BID assessment. The April 2,
1996 borrowing was used to fund a protective advance by Apple Bank
to pay the January 1, 1996 real estate taxes and BID assessments,
interest thereon and such minor charges, through the purchase of a
subordinate participating interest in the Mortgage Loan in such
amount. The June 28, 1996 borrowing was used to fund a protective
advance by Apple Bank to pay the July 1, 1996 Real Estate Taxes
and BID assessments through the purchase of an additional
subordinate participating interest in the Mortgage Loan in such
amount. Interest and principal required to be paid on the
protective advances and on any future protective advances will be
paid by the New Lessee so long as the Lease continues in effect.
As to future Real Estate Taxes, Apple Bank has agreed to make
additional personal loans to such individual shareholders (or
their designees) to fund further protective advances to cover the
Real Estate Taxes due January 1, 1997 (covering the period to June
30, 1997). Those individual borrowers intend to borrow the funds
from Apple Bank and fund the protective advances as required to
pay the January 1, 1997 Real Estate Taxes so long as the Lease
continues in effect. <PAGE>
Garment Capitol Associates 8.
September 30, 1996
Registrant has received the consent of the Participants for
the sale and forbearance program and for the liquidation of
Registrant, as described in the Statement. Registrant is
currently in discussion with a number of prospective purchasers
for the property and anticipates signing a contract shortly. It
is likely that the sale will be consummated after January 1, 1997.
The Original Lessee was a partnership in which Peter L.
Malkin was among the partners. The stockholders in the New Lessee
are the partners in the Original Lessee except that a substantial
portion of the shares owned by Peter L. Malkin is held by him for
the benefit of members of his family but he retains voting
control. The Partners in Registrant are also members of the law
firm of Wien, Malkin & Bettex, 60 East 42nd Street, New York, New
York, counsel to Registrant and to Original Lessee ("Counsel").
Under the Lease, New Lessee must pay (i) annual basic rent of
$1,090,000 (the "Basic Rent") to Registrant and (ii) additional
rent equal to 50% of New Lessee's net operating profit in excess
of $200,000 for each Lease year (the "Additional Rent").
Additional Rent income is recognized when earned from the New
Lessee, at the close of the lease years ending April 30. Such
income, if any, is not determinable until the New Lessee, pursuant
to the Lease, renders to Registrant a certified report on the
operation of the Property. The Lease does not provide for the New
Lessee to render interim reports to Registrant, so no Additional
Rent income is reflected for the period between the end of the
lease year and the end of Registrant's fiscal year.
The current term of the Lease expires on April 30, 2007, and
the Lease is subject to the renewal option described above.
Pursuant to the Lease, the lessee has the option of surrendering
its leasehold interest, at any time, upon 60 days' prior written
notice without further liability after the date of surrender. In
addition, the New Lessee has the right to assign the Lease,
without Registrant's consent, so long as the assignee assumes, in
writing, all of the obligations of the Lease.
On March 23, 1995, Registrant entered into a Modification
and Extension Agreement (the "Modification"), as of December 1,
1992, with Apple Bank concerning the Mortgage Loan, which was
originally made on November 30, 1987 in the principal amount of
$3,485,000. The Mortgage Loan is secured by a first mortgage on
the Property.
The New Lessee reported net loss of $1,862,412 for the lease
year ended April 30, 1996; therefore, there was no additional rent
payable for such lease year. Consequently, no additional payments
for supervisory services were payable to Counsel for the lease
year ended April 30, 1996. See Note C below.<PAGE>
Garment Capitol Associates 9.
September 30, 1996
Note C - Supervisory Services
Registrant pays Counsel for supervisory services and
disbursements (i) the basic payment of $42,500 per annum ("Basic
Payment"); (ii) an additional annual basic payment of the first
$37,500 of Additional Rent paid by Lessee in any lease year
("Additional Basic Payment"); and (iii) an additional payment of
10% of all distributions to Participants in any year in excess of
the amount representing a return at the rate of 18% per annum on
their remaining cash investment in any year (the "Additional
Payment"). The Additional Basic Payment will be payable in each
year only from Additional Rent received by Registrant from New
Lessee. If Additional Rent in any year is inadequate to cover the
Additional Basic Payment, such deficiency shall be payable in the
following year in which Additional Rent is sufficient.
No remuneration was paid during the three and nine month
periods ended September 30, 1996 by Registrant to any of the
Partners as such. Pursuant to the fee arrangements described
herein, Registrant paid Counsel $42,500 during the fiscal year
ended December 31, 1995. Registrant also paid Counsel $10,625 and
$31,875, respectively, of the Basic Payment for supervisory
services for the three and nine month periods ended September 30,
1996.
The supervisory services provided to Registrant by Counsel
include legal and administrative services and financial services.
The legal and administrative services include acting as general
counsel to Registrant, maintaining all of its partnership and
Participant records, performing physical inspections of the
Building, reviewing insurance coverage and conducting annual
partnership meetings. Financial services include monthly receipt
of rent from the New Lessee, 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 New Lessee 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.
Reference is made to Note B of Item 1 ("Note B") for a
description of the terms of the Lease between Registrant and New
Lessee. <PAGE>
Garment Capitol Associates 10.
September 30, 1996
As of September 30, 1996, Mr. and Mrs. Peter L. Malkin own
shares in the New Lessee. Mr. Malkin disclaims any beneficial
ownership of Mrs. Malkin's interest in the New Lessee.
The respective interests of Messrs. Katzman, Loehr and
Malkin, if any, in Registrant arise solely from the ownership of
their respective participations in Registrant. The Partners
receive no extra or special benefit not shared on a pro rata basis
with all other Participants in Registrant or shareholders in the
New Lessee. 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 the
New Lessee.
As of September 30, 1996, the Partners owned of record and
beneficially an aggregate $50,000 of Participations, representing
less than 1% of the currently outstanding Participations in
Registrant.
In addition, as of September 30, 1996, certain of the
Partners in Registrant (or their respective spouses) held
additional Participations in Registrant as follows:
Peter L. Malkin owned of record as trustee, but not
beneficially, $5,000 of Participations. Mr. Malkin
disclaims any beneficial ownership of such Participations.
Isabel Malkin, the wife of Peter L. Malkin, owned of record
and beneficially, $21,250 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.
Registrant was organized solely for the purpose of acquiring
the Property subject to the Lease. Registrant is required to pay
from Basic Rent the annual charges due under the Mortgage Loan and
the Basic Payment for supervisory services, and to distribute the
balance to the Participants. Additional Rent is distributed to
the Participants after the Additional Basic Payment and the
Additional Payment are made to Counsel. See Note C of Item 1
("Note C"). Pursuant to the Lease, the New Lessee has assumed
responsibility for the condition, operation, repair, maintenance
and management of the Property. Registrant need not maintain
substantial reserves or otherwise maintain liquid assets to defray
any operating expenses of the Property.<PAGE>
Garment Capitol Associates 11.
September 30, 1996
Registrant does not pay dividends. During the three and
nine month periods ended September 30, 1996, Registrant made
regular monthly distributions of $47.45 for each $5,000
participation ($569.40 per annum for each $5,000 participation).
As a result of no Additional Rent being payable to Registrant for
the lease year ended April 30, 1996, there was no additional
distribution for 1996. 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 New
Lessee to make monthly payments of Basic Rent and Additional Rent
to Registrant in accordance with the terms of the Lease.
Registrant expects to make distributions so long as it receives
the payments provided for under the Lease. See Note B.
Registrant's results of operations are affected primarily by
the amount of rent payable to it under the Lease. The following
summarizes, with respect to the current period and the
corresponding period of the previous year, the material factors
affecting Registrant's results of operations for such periods:
Total income increased for the three and nine month
periods ended September 30, 1996, as compared with
the three and nine month periods ended September
30, 1995. Such increase resulted mainly from
interest income on a receivable from the Lessee.
Total expenses increased for the three and nine
month periods ended September 30, 1996, as compared
with the three and nine month periods ended
September 30, 1995. Such increase resulted from an
increase in interest expense on the first mortgage
reflecting interest on additional principal
advanced for the payment of Real Estate Taxes. See
Note B.
Liquidity and Capital Resources
There has been no significant change in Registrant's
liquidity for the three and nine month periods ended September 30,
1996 as compared with the three and nine month periods ended
September 30, 1995. As stated in Note B, Apple Bank has extended
the Mortgage Loan until December 1, 1997.
Registrant believes that the value of the Property is
currently in excess of the amount of the mortgage balance and
anticipates that the value of the Property will be in excess of
the mortgage balance at maturity. Changes in the short-term or
long-term financial liquidity position of Registrant are dependent
on the payments made by New Lessee under the Lease. Registrant
foresees no need for it to make material commitments for capital
expenditures while the Lease is in effect.<PAGE>
Garment Capitol Associates 12.
September 30, 1996
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,
1995, 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 Registrant is the subject of the following pending
litigation:
On October 4, 1996, the alleged holder of a $20,000
original participation in Registrant brought suit in the U.S.
District Court for the Southern District of New York against
New Lessee, Original Lessee, the Partners, and Counsel.
Registrant is a nominal defendant. The suit claims that
defendants violated the federal proxy rules, committed
breaches of fiduciary duty and fraud in relation to the
Partners' solicitation of consents of the Participants for
the sale and forbearance program and for the liquidation of
Registrant, as described in the Statement. The suit is
styled as a class action, but the plaintiff has not applied
for class certification to date. The suit seeks to enjoin
the allocation of sale proceeds to New Lessee approved by the
Participants, money damages and related relief. Defendants'
response to the complaint is currently due by November 25,
1996. The complaint does not seek any relief against
Registrant, and, accordingly, Registrant's counsel is of the
opinion that no loss or other unfavorable outcome of the
action against Registrant is anticipated.
Item 6. Exhibits and Reports on Form 8-K.
(a) The exhibits hereto are being incorporated by
reference.
(b) Registrant has not filed any report on Form 8-K
during the quarter for which this report is being
filed. <PAGE>
Garment Capitol Associates 13.
September 30, 1996
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
April 10, 1996 (the "Power").
GARMENT CAPITOL ASSOCIATES
(Registrant)
By: /s/ Stanley Katzman
Stanley Katzman, Attorney-in-fact*
Date: November 14, 1996
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*
Date: November 14, 1996
______________________
* Mr. Katzman supervises accounting functions for
Registrant.<PAGE>
Garment Capitol Associates 14.
September 30, 1996
EXHIBIT INDEX
Number Document Page*
2(a) Proxy Statement issued by the Agents
in connection with the solicitation
of consents of the Participants, which
was filed on Schedule 14A by Registrant
on July 25, 1996 and is incorporated
herein by reference.
2(b) Letter to Participant dated August 8,
1996 and accompanying financial reports
for the lease years ended April 30, 1996
and April 30, 1995. Foregoing material
shall not be deemed to be "filed" with
the Commission or otherwise subject to
the liabilities of Section 18 of the
Securities Exchange Act of 1934.
25 Power of Attorney dated April 10, 1996
between Peter L. Malkin, John L. Loehr
and Stanley Katzman as Partners in
Registrant and Richard A. Shapiro and
Stanley Katzman, which was filed as
Exhibit 25 to Registrant's 10-Q for
the quarter ended March 31, 1996 and
is incorporated herein by reference.
______________________
* Page references are based on a sequential numbering system.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's Balance Sheet as of September 30, 1996 and the Statement Of Income
for the period ended September 30, 1996, and is qualified in its entirety by
reference to such financial statements
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 115,981
<SECURITIES> 0
<RECEIVABLES> 2,093,679<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,209,660
<PP&E> 10,500,000
<DEPRECIATION> 8,000,000
<TOTAL-ASSETS> 4,742,559<F2>
<CURRENT-LIABILITIES> 5,103,712<F3>
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> (361,153)
<TOTAL-LIABILITY-AND-EQUITY> 4,742,559
<SALES> 817,500<F4>
<TOTAL-REVENUES> 901,074<F5>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 53,001<F6>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 330,122
<INCOME-PRETAX> 517,951
<INCOME-TAX> 0
<INCOME-CONTINUING> 517,951
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 517,951
<EPS-PRIMARY> 493.29<F7>
<EPS-DILUTED> 493.29<F7>
<FN>
<F1>Due from lessee
<F2>Includes unamortized mortgage refinancing costs
<F3>Accrued interest and first mortgage principal payment due
within one year and prepaid interest
<F4>Rental income
<F5>Includes dividend income and interest income
<F6>Supervisory services and amortization of mortgage refinancing costs
<F7>Earnings per $5,000 participation unit, based on 1,050 participation
units outstanding during the period
</FN>
</TABLE>
