SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Three Months Ended March 31, 1997 Commission File Number 0-5537
INVESTMENT PROPERTIES ASSOCIATES
(Exact name of registrant as specified in its charter)
NEW YORK 13-2647723
(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)
Registrat's telephone number, including area code (212) 880-0389
NOT APPLICABLE
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___
Total Number of Pages 9
<PAGE>
INVESTMENT PROPERTIES ASSOCIATES
(A New York Limited Partnership)
INDEX
Page Number
-----------
PART 1: Financial Statements
Balance Sheets 3
Statements of Operations 4
Statements of Cash Flows 5
Notes of Financial Statements 6
Management's Discussion and Analysis
of Financial Condition and
Results of Operations 7
PART 2: Other Information 8
SIGNATURES 9
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<PAGE>
INVESTMENT PROPERTIES ASSOCIATES
(A New York Limited Partnership)
BALANCE SHEETS
AS AT MARCH 31, 1997 AND DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARCH 31, 1997 DECEMBER 31, 1996
-------------- -----------------
(Unaudited)
<S> <C> <C>
ASSETS
Real estate, at cost $ 139,168,852 $ 138,214,361
Less: Accumulated depreciation and amortization 96,496,060 95,710,079
------------- -------------
42,672,792 42,504,282
Cash and cash equivalents 4,651,244 5,187,591
Due from managing agent (Helmsley-Spear, Inc.)
including tenants, security deposits of
$1,809,824 (1997) and $1,587,384 (1996) 1,570,982 2,081,585
Receivables, principally from rentals 1,252,655 1,443,676
Other deterred charges including deferred
leasing commissions 5,725,013 4,304,324
------------- -------------
$ 55,872,686 $ 55,521,358
============= =============
LIABILITIES AND PARTNERS' CAPITAL/DEFICIENCY
Accounts payable $ 3,060,295 $ 2,755,221
Accrued real estate taxes 3,611,481 4,630,585
Accued interest 407,736 396,153
Distributions payable to General Partners,
Special Limited Partners and Limited Partner 20,761,401 20,889,097
Sundry liabilities and other accrued expenses 3,785,653 3,439,050
Note payable to related parties 18,000,000 18,000,000
Mortgages payable (Note 5) 39,301,643 40,314,558
Deposits and rents received in advance 1,923,420 1,946,639
------------- -------------
90,851,629 92,371,303
------------- -------------
Partners' Capital (Deficiency):
General Partners (8,360,848) (8,388,913)
Special Limited Partners (43,190,961) (44,098,397)
Limited Partner (represented by the equivalent
of 820,000 Participation Interests) 16,572,866 15,637,365
------------- -------------
(34,978,943) (36,849,945)
------------- -------------
$ 55,872,686 $ 55,521,358
============= =============
</TABLE>
See notes to financial statements
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<PAGE>
INVESTMENT PROPERTIES ASSOCIATES
(A New York Limited Partnership)
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED
-------------------------------
MARCH 31, 1997 MARCH 31, 1996
-------------- --------------
Revenues:
Gross revenues from real estate $11,776,052 $12,946,485
Interest 51,684 31,076
----------- -----------
11,827,736 12,977,561
----------- -----------
Expenses:
Leasehold rentals 149,368 314,726
Real estate taxes 2,398,950 2,705,421
Interest on mortgages 1,192,190 1,228,293
Other expenses 5,335,582 5,957,617
Co-owners share of income 3,145 15,855
Depreciation and amortization of real estate 785,978 835,846
Amorization of mortgage refinancing costs 3,251 49,138
----------- -----------
9,868,464 11,106,896
----------- -----------
Income before items shown below 1,959,272 1,870,665
----------- -----------
Payments required under the Limited
Partnership Agreement:
To the Limited Partner 3,750 3,750
To the General and Special Limited Partners 84,520 90,405
----------- -----------
88,270 94,155
----------- -----------
Net income transferred to Partners'
Capital Accounts $ 1,871,002 $ 1,776,510
=========== ===========
Net Income allocable as follows (based on
terms of the Limited Partnership Agreement):
General Partners $ 28,065 $ 26,648
Special Limited Partners 907,436 861,607
Limited Partner (represented by the
equivalent of 820,000 Participation
Interests - unchanged during the periods) 935,501 888,255
----------- -----------
$ 1,871,002 $ 1,776,510
=========== ===========
Per Participation Interest:
Net Income $ 1,1409 $ 1,0832
=========== ===========
See notes to financial statements.
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<PAGE>
INVESTMENT PROPERTIES ASSOCIATES
(A New York Limited Partnership)
UNAUDITED
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND MARCH 31, 1996
1997 1996
---------- -----------
OPERATING ACTIVITIES:
Net income $ 1,871,002 $ 1,776,510
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization of real estate 785,978 835,846
Amortization of mortgage refinancing costs 3,251 49,138
Amortization of deferred leasing commissions 254,553 269,358
Changes in operating assets and liabilities:
Decrease in due from managing agent 510,603 1,231,789
Decrease in receivables 190,921 221,621
(Increase) in other deferred charges (1,678,493) (2,358,248)
Increase in accounts payable 305,074 1,293,578
(Decrease) in accrued real estate tax (1,019,104) (1,152,752)
Increase (Decrease) in accrued interest 11,583 (28,229)
Increase in sundry and other
accrued expenses 346,604 741,236
(Decrease) Increase in deposits
and rents received in advance (23,220) 120,586
----------- -----------
Net Cash Provided by Operating Activities 1,558,752 3,000,433
----------- -----------
INVESTING ACTIVITIES:
Property improvements (954,488) (699,654)
----------- -----------
FINANCING ACTIVITIES:
Distributions of net operating revenues to
General Partners, Special Limited Partners
and Limited Partners (127,696)
Principal payments on mortgage payable (1,012,915) (1,011,900)
----------- -----------
Net Cash Used in Financing Activities (1,140,611) (1,011,900)
----------- -----------
(Decrease) Increase in Cash and
Cash Equivalents (536,347) 1,288,879
Cash and Cash Equivalents at Beginning of Year 5,187,591 3,090,409
----------- -----------
Cash and Cash Equivalents at End of Year $ 4,651,244 $ 4,379,288
=========== ===========
Supplemental disclosure
of cash flow information:
Cash paid during the year for interest $ 1,180,608 $ 1,256,522
=========== ===========
-5-
<PAGE>
INVESTMENT PROPERTIES ASSOCIATES
(A New York Limited Partnership)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1
As permitted by the Securities and Exchange Commission, the accompanying
Unaudited Financial Statements and footnotes have been condensed and therefore,
do not contain all disclosures required by generally accepted accounting
principles. Reference should be made to the Company's Annual Report Form 10-K
for the year ended December 31, 1996, filed with the Securities and Exchange
Commission.
NOTE 2
In the opinion of the Company, the accompanying Unaudited Financial
Statements contain all adjustments (consisting only of normal recurring
accruals) necessary to present fairly its financial position as of March 31,
1997 and 1996.
NOTE 3
The results of operations for the three months ended March 31, 1997 and
1996 are not necessarily indicative of the results to be expected for the full
year.
NOTE 4 - Taxes
The net income for Federal income tax purposes is $2,103,201 (March 31,
1997) and $2,056,573 (March 31, 1996) as compared with net income of $1,871,002
and $1,776,510, respectively, as shown in the statement of operations. The
differences result principally from (a) rents received in advance and recognized
currently for income tax purposes, and (b) differences in depreciation expense
resulting from differences in the basis of real estate for tax and financial
reporting purposes.
NOTE 5 - Mortgage Payable
On March 10, 1997, IPA paid the scheduled March 15, 1997 principal payment
of $1,000,000 to Chase Manhattan Bank. The payment was applied to the 261 Fifth
Avenue, 245 Fifth Avenue and 1440 Broadway, New York, New York.
On November 13, 1995, Registrant and First Fidelity Bank ("Fidelity")
entered into a modification of the mortgage note held by Fidelity on
Registrant's Federal Trust building in Newark, New Jersey. Effective January 1,
1996, the maturity date of the note was extended to June 30, 1997. Interest on
the amended note is based on the weekly average yield on U.S. Treasury
Securities plus 2% and the modification calls for the monthly payment of
principal and interest. The principal balance of the Fidelity loan at December
31, 1996 was $467,070.
NOTE 6 - Ground Lease Termination
On May 1, 1996, IPA exercised its option to terminate the ground lease on
the 744 Broad Street Building. As provided in the lease, the ground lessor,
Newark Building Associates was given 60 days written notice of the company's
plans to terminate the ground lease. The lease which expires August 31, 2002,
has an annual rental of $659,500.
-6-
<PAGE>
INVESTMENT PROPERTIES ASSOCIATES
(A New York Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Gross revenue from rentals for 1997 decreased approximately 9.04% as
compared to 1996. The decrease was due primarily to a ground lease termination
at 744 Broad Street building and a major tenant occupying approximately 92% of
the building's gross leaseable area in 570 Broad Street building, left the
building upon expiration of its lease in December 1996.
The decrease in other expenses in 1997 as compared to 1996 is principally
attributable to the decrease in security labor, heating cost, building repairs,
cleaning and electric.
The decrease in real estate taxes was attributable primarily to decreases
in real estate assessments for properties located in New York City, and ground
lease termination at 744 Broad Street building.
The decrease in leasehold rentals was due to the ground lease termination
at 744 Broad Street building.
The decrease in interest expense was due to the reduction in mortgage
principal balance. The decrease in depreciation and amortization of real estate
was primarily due to the ground lease termination at 744 Broad Street building.
Liquidity and Capital Resources -- IPA's cash generated from operations
plus its ability to refinance certain mortgage obligations provide it with the
resources needed to meet its anticipated obligations including operating
expenses, mortgage amortization and required distributions to partners.
-7-
<PAGE>
INVESTMENT PROPERTIES ASSOCIATES
(A New York Limited Partnership)
PART 2 - OTHER INFORMATION
NONE
-8-
<PAGE>
INVESTMENT PROPERTIES ASSOCIATES
(A New York 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.
INVESTMENT PROPERTIES ASSOCIATES
--------------------------------
(Registrant)
DATE__________________________________
________________________________
(Signature)
IRVING SCHNEIDER
General and Special Limited
Partner
-9-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1997
<PERIOD-START> JAN-01-1996 JAN-01-1997
<PERIOD-END> DEC-31-1996 MAR-31-1997
<CASH> 5,187,591 4,651,244
<SECURITIES> 0 0
<RECEIVABLES> 3,525,161 1,252,655
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 138,214,361 139,168,852
<DEPRECIATION> 95,720,029 96,496,060
<TOTAL-ASSETS> 55,521,358 55,872,686
<CURRENT-LIABILITIES> 0 0
<BONDS> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 55,521,358 55,872,686
<SALES> 0 0
<TOTAL-REVENUES> 52,290,744 11,776,052
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 37,815,471 8,676,274
<LOSS-PROVISION> 765,972 0
<INTEREST-EXPENSE> 4,879,233 1,192,190
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 8,452,009 1,871,002
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
