UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 14, 2000
Investment Properties Associates
--------------------------------
(Exact name of registrant as specified in its charter)
New York 0-5537 13-2647723
-------- ------ ----------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
60 East 42nd Street, New York, New York 10165
- --------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 687-6400
-------------------------------------------------------------
(Former name or former address, if changed since last report)
1
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On December 16, 1999, the Company concluded its sale of 1440 Broadway, New York,
New York for $152,000,000 to 1440 Broadway Partners LLC, a Delaware limited
liability company.
The Company used the sale proceeds to first pay mortgage debt, closing costs and
other commitments, aggregating approximately $40,000,000. Thereafter, on
December 20, 1999, one-half of the net proceeds were distributed to the
Company's general and special limited partners. On January 18, 2000, the
remainder of the net proceeds were distributed to holders of record of the
Company's participations of partnership interests (PPIs) as of the close of
business on December 31, 1999.
The special distribution amounted to $78.04878 per PPI. It was primarily paid
using the proceeds from the sale of 1440 Broadway.
DOCUMENTS INCORPORATED BY REFERENCE:
The Exhibits listed below have been heretofore filed by the Company and are
hereby incorporated herein by reference:
13 (a) Form 10-K of Investment Properties Associates previously filed for the
fiscal year ended December 31, 1998.
13 (b) Form 10-Q of Investment Properties Associates previously filed for the
quarterly period ended September 30, 1999.
19 (a) Form 8-K of Investment Properties Associates previously filed on October
7, 1999.
19 (b) Form 8-K of Investment Properties Associates previously filed on December
16, 1999.
2
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) Pro forma financial information.
Investment Properties Associates
Pro Forma Financial Information
(Unaudited)
The accompanying financial statements present the unaudited pro forma balance
sheet of Investment Properties Associates as of September 30, 1999 and the
unaudited pro forma statements of income for the year ended December 31, 1998
and the nine months ended September 30, 1999.
The unaudited pro forma balance sheet as of September 30, 1999 is presented as
if the sale of the 1440 Broadway property had occurred on September 30, 1999.
The unaudited pro forma statements of income for the year ended December 31,
1998 and the nine months ended September 30, 1999 are presented as if the sales
of the 1180 Raymond Boulevard Property (sold on January 22, 1998), the Chicago
properties (sold on September 28, 1998), the Mojud property (sold on April 14,
1999), the Midland property (sold on May 18, 1999), and the 1440 Broadway
property (sold on December 16, 1999) had occurred as of January 1, 1998 and
carried forward through September 30, 1999.
The pro forma information is unaudited and is not necessarily indicative of the
results which actually would have occurred if the aforementioned sales had been
consummated at the beginning of the period presented, nor does it purport to
represent the financial position and results of operations for future periods.
The pro forma information should be read in conjunction with the historical
financial statements of Investment Properties Associates.
3
<PAGE>
Investment Properties Associates
Pro Forma Balance Sheet
September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
IPA /----Pro Forma Adjustments----/
Historical Pro Forma
(A) (B) (C) Condensed
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Real estate at cost $65,370,645 $(23,758,942) $ -- $ 41,611,703
Less: Accumulated depreciation and amortization (41,628,197) 14,668,256 -- (26,959,941)
-------------------------------------------------------------------
23,742,448 (9,090,686) -- 14,651,762
Cash and cash equivalents 13,986,507 -- 129,835,983 143,822,490
Due from managing agent (Helmsley Spear, Inc.) 2,901,928 -- -- 2,901,928
Receivables, principally from rentals 442,000 -- -- 442,000
Deferred rent receivable 1,852,875 -- -- 1,852,875
Other deferred charges, including
deferred leasing commissions 7,196,120 (2,523,605) -- 4,672,515
-------------------------------------------------------------------
$50,121,878 $(11,614,291) $129,835,983 $168,343,570
===================================================================
Liabilities and partners capital (deficiency)
Accounts payable 903,769 -- -- 903,769
Accrued real estate taxes 1,571,171 -- -- 1,571,171
Accrued interest 139,338 -- (111,004) 28,334
Distributions payable to General
Partners, Special Limited
Partners and Limited Partners 81,671 -- -- 81,671
Sundry liabilities and other accrued expenses 884,341 -- -- 884,341
Mortgages payable 21,347,488 -- (17,347,488) 4,000,000
Deposits and rent received in advance 1,782,047 -- -- 1,782,047
-------------------------------------------------------------------
26,709,825 -- (17,458,492) 9,251,333
Partners capital (deficiency): 23,412,053 (11,614,291) 147,294,475 159,092,237
-------------------------------------------------------------------
$50,121,878 $(11,614,291) $129,835,983 $168,343,570
===================================================================
</TABLE>
The accompanying notes and management's assumptions are an integral part of this
statement.
4
<PAGE>
Investment Properties Associates
Notes to Pro Forma Balance Sheet
September 30, 1999
(Unaudited)
(A) Represents the historical balance sheet of Investment Properties
Associates at September 30, 1999.
(B) Represents adjustment to remove the basis of the real estate assets of the
1440 Broadway property as if such had been sold on September 30, 1999.
(C) To record net cash proceeds from sale of the 1440 Broadway property as if
such had been sold on September 30, 1999.
Sales price $152,000,000
Closing Costs (4,705,525)
Principal repayments on mortgages (17,347,488)
Accrued interest on mortgages at
September 30, 1999 (111,004)
------------
$129,835,983
============
5
<PAGE>
<TABLE>
<CAPTION>
Investment Properties Associates
Pro Forma Statement of Income
Nine Months Ended September 30, 1999
(Unaudited)
IPA /------------Pro Forma Adjustments----------------------/
Historical Pro Forma
(A) (B) (C) (D) (E) Condensed
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenue
Gross revenue from real
estate $24,063,487 $ (9,973,482) $ -- $ -- $ -- $14,090,005
Interest 415,780 (6,251) -- -- -- 409,529
---------------------------------------------------------------------------------------------
Total Revenue 24,479,267 (9,979,733) -- -- -- 14,499,534
Expenses
Leasehold rentals -- -- -- -- -- --
Real estate taxes 3,570,645 (1,866,376) -- -- -- 1,704,269
Interest on mortgages 1,302,097 (621,747) (422,517) -- -- 257,833
Other expenses 7,331,350 (2,704,447) -- -- -- 4,626,903
Co-owners share of income -- -- -- -- -- --
Depreciation and
amortization of real estate 1,374,248 (354,462) -- -- -- 1,019,786
Amortization of mortgage
refinancing costs 1,593 (733) -- -- -- 860
---------------------------------------------------------------------------------------------
Total Expenses 13,579,933 (5,547,765) (422,517) -- -- 7,609,651
---------------------------------------------------------------------------------------------
Income before items shown below 10,899,334 (4,431,968) 422,517 -- -- 6,889,883
Gain on sale of real estate 5,995,855 (5,995,855) -- -- -- --
---------------------------------------------------------------------------------------------
16,895,189 (10,427,823) 422,517 -- -- 6,889,883
Guaranteed payments required
under the Limited Partnership
Agreement
To the Limited Partner 11,250 -- -- -- -- 11,250
To the General and Special
Limited Partners 193,699 -- -- (47,124) -- 146,575
---------------------------------------------------------------------------------------------
204,949 -- -- (47,124) -- 157,825
---------------------------------------------------------------------------------------------
Net Income Transferred to the
Partners Capital Accounts $16,690,240 $(10,427,823) $422,517 $47,124 -- $ 6,732,058
=============================================================================================
Net income allocable as follows
(based on terms of the Limited
Partnership Agreement)
General Partners $ 96,235 $ (64,818) $ 31,417
Special Limited Partners 8,652,385 (5,827,666) 2,824,719
Limited Partners 7,941,620 (4,065,698) 3,875,922
------------ ----------- ------------
$16,690,240 $ 9,958,182 $ 6,732,058
============ =========== ============
Net Income per
Participation
Interest (820,000
units outstanding): $ 9.6849 $ 4.7267
============ ============
</TABLE>
The accompanying notes and management's assumptions are an integral part of this
statement.
6
<PAGE>
Investment Properties Associates
Notes to Pro Forma Statement of Income
Nine months ended September 30, 1999
(Unaudited)
(A) Represents the historical statement of income of Investment Properties
Associates for the nine months ended September 30, 1999.
(B) Represents adjustment to remove the results of operations and gain on sale
of the Mojud, Midland and 1440 Broadway properties as if such had been
sold on January 1, 1998.
<TABLE>
<CAPTION>
Mojud Midland 1440 B'way Total
---------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue
Gross revenue from real estate $ 315,445 $ -- $9,658,037 $ 9,973,482
Interest 4,893 -- 1,358 6,251
---------------------------------------------------------
Total Revenue 320,338 -- 9,659,395 9,979,733
Expenses
Real estate taxes 52,813 5,477 1,808,086 1,866,376
Interest on mortgages -- -- 621,747 621,747
Other expenses 127,232 23,099 2,554,116 2,704,447
Co-owners share of income -- -- -- --
Depreciation and amortization of
real estate 7,565 -- 346,897 354,462
Amortization of mortgage
refinancing costs -- -- 733 733
---------------------------------------------------------
Total Expenses 187,610 28,576 5,331,579 5,547,765
---------------------------------------------------------
Income before items shown below 132,728 (28,576) 4,327,816 4,431,968
Gain on sale of real estate 5,580,101 415,754 -- 5,995,855
---------------------------------------------------------
Net Income $5,712,829 $387,178 $4,327,816 $10,427,823
=========================================================
(C) To adjust for interest expense which would have been avoided if mortgage
debt had been repaid using the proceeds from sale of the 1440 Broadway
property if such property had been sold on January 1, 1998.
(D) To adjust the guaranteed payments required under the Limited Partnership
Agreement.
Supervisory fee (.05% of gross revenue from real estate)
Amount reflected in historical statement of income $117,574
Amount as recalculated (14,090,005 x .005) 70,450
--------
Amount of pro forma adjustment $(47,124)
========
(E) To adjust the allocation of income under the Limited Partnership
Agreement.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Investment Properties Associates
Pro Forma Statement of Income
Year Ended December 31, 1998
(Unaudited)
IPA /---------------------- Pro Forma Adjustments ---------------/
Historical
(A) (B) (C) (D) (E)
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue
Gross revenue from real estate $ 43,454,081 $ (12,948,953) $(13,946,074) $ -- $ --
Interest 917,010 (5,095) (3,059)
--------------------------------------------------------------------------------
Total Revenue 44,371,091 (12,954,048) (13,949,133) -- --
Expenses
Leasehold rentals 409,095 (409,095) -- -- --
Real estate taxes 7,149,045 (2,379,429) (2,560,734) -- --
Interest on mortgages 3,842,192 (99) (1,077,085) -- --
Other expenses 17,256,147 (7,980,687) (4,116,070) -- --
Co-owners share of income 25,027 (25,027) -- -- --
Depreciation and amortization of
real estate 3,881,922 (693,501) (537,407) -- --
Amortization of mortgage refinan-
ing costs 24,323 -- (4,396) -- --
--------------------------------------------------------------------------------
Total Expenses 32,587,751 (11,487,838) (8,295,692) -- --
--------------------------------------------------------------------------------
Income before items shown below 11,783,340 (1,466,210) (5,653,441) -- --
Gain on sale of real estate 101,295,596 (101,295,596) -- 106,563,085 135,781,563
--------------------------------------------------------------------------------
113,078,936 (102,761,806) (5,653,441) 106,563,085 135,781,563
Guaranteed payments required under the
Limited Partnership Agreement
To the Limited Partner 15,000 -- -- -- --
To the General and Special Limited
Partners 316,203 -- -- -- --
--------------------------------------------------------------------------------
331,203 -- -- -- --
--------------------------------------------------------------------------------
Net Income Transferred to the Partners
Capital Accounts $112,747,733 $(102,761,806) $ (5,653,441) $106,563,085 $135,781,563
================================================================================
Net income allocable as follows (based on
terms of the Limited Partnership Agreement)
General Partners $ 694,652
Special Limited Partners 62,455,572
Limited Partners 49,597,509
-------------
$112,747,733
=============
Net Income per Participation Interest
(820,000 units outstanding): $ 60.4848
=============
<CAPTION>
/----------- Pro Forma Adjustments ----------/
Pro Forma
(F) (G) (H) Condensed
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue
Gross revenue from real estate $ -- $ -- $ -- $ 16,559,054
Interest 908,856
------------------------------------------------------------------
Total Revenue -- -- -- 17,467,910
Expenses
Leasehold rentals -- -- -- --
Real estate taxes -- -- -- 2,208,882
Interest on mortgages (2,420,286) -- -- 344,722
Other expenses -- -- -- 5,159,390
Co-owners share of income -- -- -- --
Depreciation and amortization of
real estate -- -- -- 2,651,014
Amortization of mortgage refinan-
ing costs -- -- -- 19,927
------------------------------------------------------------------
Total Expenses (2,420,286) -- -- 10,383,935
------------------------------------------------------------------
Income before items shown below 2,420,286 -- -- 7,083,975
Gain on sale of real estate -- -- -- 242,344,648
------------------------------------------------------------------
2,420,286 -- -- 249,428,623
Guaranteed payments required under the
Limited Partnership Agreement
To the Limited Partner -- -- -- 15,000
To the General and Special Limited
Partners -- (131,908) -- 184,295
------------------------------------------------------------------
-- (131,908) -- 199,295
------------------------------------------------------------------
Net Income Transferred to the Partners
Capital Accounts $2,420,286 $131,908 $ -- $249,229,328
==================================================================
Net income allocable as follows (based on
terms of the Limited Partnership Agreement)
General Partners $ 787,888 $ 1,482,540
Special Limited Partners 70,838,286 133,293,858
Limited Partners 64,855,421 114,452,930
------------- -------------
$136,481,595 $249,229,328
============= =============
Net Income per Participation Interest
(820,000 units outstanding): $ 303.9382
=============
</TABLE>
The accompanying notes and management's assumptions are an integral part of this
statement.
8
<PAGE>
Investment Properties Associates
Notes to Pro Forma Statement of Income
Year Ended December 31, 1998
(Unaudited)
(A) Represents the historical statement of income of Investment Properties
Associates for the year ended December 31, 1998.
(B) Represents adjustment to remove the results of operations and gain on sale
of the Chicago properties and the 1180 Raymond Boulevard property as
reflected in the historical statement of income for the year ended
December 31, 1998, as follows:
<TABLE>
<CAPTION>
59 East
Van Stone One North One
Buren Container Dearborne LaSalle
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue
Gross revenue from
real estate $ 689,046 $ 1,159,689 $ 6,057,965 $ 3,967,169
Interest -- -- -- --
-------------------------------------------------------------
Total Revenue 689,046 1,159,689 6,057,965 3,967,169
Expenses
Leasehold rentals -- 66,750 330,517 --
Real estate taxes 97,509 308,791 1,043,986 759,420
Interest on mortgages -- -- -- --
Other expenses 535,771 862,571 3,513,691 2,152,819
Co-owners share of
income -- -- -- --
Depreciation and
amortization of real
estate 16,988 75,512 91,250 442,334
Amortization of
mortgage refinancing
costs -- -- -- --
-------------------------------------------------------------
Total Expenses 650,268 1,313,624 4,979,444 3,354,573
Income before items -------------------------------------------------------------
shown below 38,778 (153,935) 1,078,521 612,596
Gain on sale of real
estate 6,297,424 12,326,387 54,864,876 26,298,712
-------------------------------------------------------------
Net Income $6,336,202 $12,172,452 $55,943,397 $26,911,308
=============================================================
<CAPTION>
6 North Total 1180
Michigan Chicago Raymond Total
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue
Gross revenue from
real estate $1,049,261 $12,923,130 $ 25,823 $ 12,948,953
Interest -- -- 5,095 5,095
--------------------------------------------------------------
Total Revenue 1,049,261 12,923,130 30,918 12,954,048
Expenses
Leasehold rentals -- 397,267 11,828 409,095
Real estate taxes 139,462 2,349,168 30,261 2,379,429
Interest on mortgages -- -- 99 99
Other expenses 882,808 7,947,660 33,027 7,980,687
Co-owners share of
income 25,027 25,027 -- 25,027
Depreciation and
amortization of real
estate 51,919 678,003 15,498 693,501
Amortization of
mortgage refinancing
costs -- -- -- --
-------------------------------------------------------------
Total Expenses 1,099,216 11,397,125 90,713 11,487,838
Income before items -------------------------------------------------------------
shown below (49,955) 1,526,005 (59,795) 1,466,210
Gain on sale of real
estate 896,497 100,683,896 611,700 101,295,596
-------------------------------------------------------------
Net Income $ 846,542 $102,209,901 $ 551,905 $102,761,806
==============================================================
</TABLE>
9
<PAGE>
(C) Represents adjustment to remove the results of operations of the Mojud,
Midland and 1440 Broadway properties as reflected in the historical
statement of income for the year ended December 31, 1998, as follows:
<TABLE>
<CAPTION>
Mojud Midland 1440 B'way Total
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue
Gross revenue from real estate $1,082,386 $ -- $12,863,688 $13,946,074
Interest -- -- 3,059 3,059
------------------------------------------------------------------
Total Revenue 1,082,386 -- 12,866,747 13,949,133
Expenses
Leasehold rentals -- -- -- --
Real estate taxes 187,769 13,140 2,359,825 2,560,734
Interest on mortgages -- -- 1,077,085 1,077,085
Other expenses 401,816 40,350 3,673,904 4,116,070
Co-owners share of income -- -- -- --
Depreciation and amortization of real
estate 27,300 -- 501,107 537,407
Amortization of mortgage refinancing
costs -- -- 4,396 4,396
------------------------------------------------------------------
Total Expenses 616,885 53,490 7,625,317 8,295,692
------------------------------------------------------------------
Income before items shown below 465,501 (53,490) 5,241,430 5,653,441
Gain on sale of real estate -- -- -- --
------------------------------------------------------------------
Net Income $ 465,501 $(53,490) $ 5,241,430 $ 5,653,441
==================================================================
</TABLE>
(D) To reflect the gain on sale of the 1180 Raymond property (sold January 22,
1998), the Chicago properties (sold September 28, 1998), the Mojud
property (sold on April 14, 1999), and the Midland property (sold on May
18, 1999) as if such sales had occurred on January 1, 1998.
<TABLE>
<CAPTION>
1180 Chicago
Raymond Properties Mojud Midland Total
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Gain as originally reported $611,700 $100,683,896 $5,580,101 $415,754 $107,291,451
Deduct: Depreciation and
amortization taken from January 1,
1998 through date of sale:
Year ended December 31, 1998 (15,498) (678,003) (27,300) -- (1,239,700)
Nine months ended September 30, 1999 -- -- (7,565) -- (355,195)
---------------------------------------------------------------------------------------
Amount of pro forma adjustment $596,202 $100,005,893 $5,545,236 $415,754 $106,563,085
=======================================================================================
</TABLE>
(E) To reflect the gain on sale of the 1440 Broadway property (sold on
December 16, 1999) as if such sale had occurred on January 1, 1998.
1440 Broadway
-------------
Gain on sale $136,648,092
Deduct: Depreciation and amortization
taken from January 1, 1998 through
date of sale:
Year ended December 31, 1998 (518,899)
Nine months ended September 30, 1999 (347,630)
------------
Amount of pro forma adjustment $135,781,563
============
10
<PAGE>
(F) To adjust interest expense to reflect mortgage debt which would have been
repaid on January 1, 1998 from the proceeds from the sale of properties.
(G) To adjust supervisory fees to the General and Special Limited Partners
based upon gross revenue from real estate.
Supervisory fee (.05% of gross revenue from real estate)
Amount reflected in historical statement of income $ 214,703
Amount as recalculated (16,559,054 x .005) 82,795
---------
Amount of pro forma adjustment $(131,908)
=========
(H) To adjust the allocation of income among the General Partners, Special
Limited Partners and Limited Partner.
11
<PAGE>
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 hereunto duly authorized.
INVESTMENT PROPERTIES
ASSOCIATES
BY /s/ Irving Schneider
---------------------------------
Irving Schneider, General Partner
Date: February 14, 2000
12
