<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended November 30, 1995
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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
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Commission file number 0-11023
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NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
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(Exact name of Registrant as specified in its charter)
Missouri 43-1250566
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(State or other jurisdiction of (I.R.S. Employer)
incorporation or organization) Identification No.)
7701 Forsyth Boulevard, St. Louis, Missouri 63105
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 863-7700
----------------------------
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
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None Not Applicable
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests
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(Title of Class)
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 1 of 34 Pages
Exhibit Index located on Page 16
<PAGE> 2
[X] Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K.
As of February 1, 1996, the aggregate market value of the Registrant's units of
limited partnership interest (which constitute voting securities under certain
circumstances) held by non-affiliates of the Registrant was $13,529,000. (The
aggregate market value was computed on the basis of the initial selling price
of $1,000 per unit of limited partnership interest, using the number of units
not beneficially owned on February 1, 1996 by the General Partners or holders
of 10% or more of the Registrant's limited partnership interests. The initial
selling price of $1,000 per unit is not the current market value. Accurate
pricing information is not available because the value of the units of limited
partnership interests is not determinable since no active secondary market
exists. The characterization of such General Partners and 10% holders as
affiliates is for the purpose of this computation only and should not be
construed as an admission for any purpose that any such persons are, or other
persons not so characterized are not, in fact, affiliates of the Registrant).
Documents incorporated by reference:
Portions of the Prospectus of the Registrant dated April 8, 1982, as
supplemented and filed pursuant to Rule 424(c) of the Securities Act of 1933,
are incorporated by reference in Part III of this Annual Report on Form 10-K.
<PAGE> 3
PART I
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ITEM 1: BUSINESS
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Nooney Real Property Investors-Four, L.P. (the "Registrant") is a limited
partnership formed under the Missouri Uniform Limited Partnership Law on
February 9, 1982, to invest, on a leveraged basis, in income-producing real
properties such as shopping centers, office buildings, apartment complexes,
office/warehouses and other commercial properties. The Registrant originally
invested in five real property investments described in Item 2 below. During
fiscal 1990, one of the Registrant's properties, Yankee Square I Office
Building in Eagan, Minnesota, was sold to an individual unaffiliated with the
Registrant. During fiscal 1991, one of the Registrant's properties, Courtyard
Office Building in Creve Coeur, Missouri, was conveyed by deed in lieu of
foreclosure to Courtyard Office Building, Inc., the assignee of Courtyard
Associates, in order to satisfy the default that existed under the mortgage
note held by Courtyard Associates. During fiscal 1993, one of the Registrant's
properties, Quad I Warehouse, was sold to a party unaffiliated with the
Registrant.
The Registrant's primary investment objectives are to preserve and protect the
Limited Partners' capital and obtain long-term appreciation in the value of its
properties. The term of the Registrant is until December 31, 2082. It was
originally anticipated that the Registrant would sell or refinance its
properties within approximately five to ten years after their acquisition. The
depression of real estate values experienced nationwide from 1988 to 1993
lengthened this time frame in order to achieve the goal of capital
appreciation.
The real estate investment market began to improve in 1994, continued this
improvement in 1995, and is expected to further continue its improvement over
the next several years. Management believes this trend should increase the
value of the Registrant's properties in the future. The Registrant is
intended to be self-liquidating and proceeds, if any, from the sale or
refinancing of the Registrant's real property investments will not be invested
in new properties but will be distributed to the Partners or, at the discretion
of the General Partners, applied to capital improvements to, or the payment of
indebtedness with respect to, existing properties, the payment of other
expenses or the establishment of reserves. (See Item 7: Management's
Discussion and Analysis of Financial Condition and Results of Operations.)
The business in which the Registrant is engaged is highly competitive. The
Registrant's investment properties are located in or near major urban areas and
are subject to competition from other similar types of properties in such
areas. The Registrant competes for tenants for its properties with numerous
other real estate limited partnerships, as well as with individuals,
corporations, real estate investment trusts and other entities engaged in real
estate investment activities. Such competition is based on such factors as
location, rent schedules and services and amenities provided.
The Registrant has no employees. Property management services for the
Registrant's investment properties are provided by Nooney Krombach Company, an
affiliate of the General Partners.
<PAGE> 4
ITEM 2: PROPERTIES
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On February 16, 1982, the Registrant purchased the Cobblestone Court Shopping
Center ("Cobblestone"), located at 14150 Nicollet Avenue South in Burnsville,
Minnesota, a suburb of Minneapolis. Cobblestone, which contains approximately
98,000 net rentable square feet, was constructed in 1980 of brick and concrete
with a wood facade covering a portion of an enclosed pedestrian walkway.
Cobblestone is located on an 11 acre site which provides paved parking for 605
cars. Cobblestone was 92% leased by 18 tenants at year end. The purchase
price of Cobblestone was $5,882,318.
On July 28, 1982, the Registrant purchased the Woodhollow Apartments
("Woodhollow"), a 402-unit garden apartment complex located on Dorsett Road in
west St. Louis County, Missouri. The complex, which was constructed in phases
in 1971 and 1972, consists of 17 buildings containing one, two and three
bedroom apartments. The complex is located on a 26 acre site which provides
paved parking for 707 cars. Woodhollow was 93% occupied at year end. The
purchase price of Woodhollow was $12,665,147.
On December 22, 1983, the Registrant purchased the Quad I Office/Warehouse
Building ("Quad I") located at 1680-1758 Westbelt Drive in Columbus, Ohio.
During fiscal 1993, Quad I Warehouse was sold to a party unaffiliated with the
Registrant.
Reference is made to Note 3 to Notes to Financial Statements filed herewith as
Exhibit 99.3 in response to Item 8 for a description of the mortgage
indebtedness secured by the Registrant's real property investments.
The following table sets forth certain information as of November 30, 1995,
relating to the properties owned by the Partnership.
<TABLE>
<CAPTION>
AVERAGE
ANNUALIZED
EFFECTIVE
TOTAL BASE RENT PRINCIPAL TENANTS
SQUARE ANNUALIZED PER PERCENT OVER 10% OF PROPERTY BASE LEASE
PROPERTY FEET BASE RENT SQUARE FOOT LEASED RENT REVENUES (%) EXPIRATION
- ------------------ --------- ---------- ----------- ------- ------------------------------ -----------
<C> <C> <C> <C> <C> <C> <C>
Cobblestone Court
S.C. 97,718 $ 672,000 $7.48 92% T.J. Maxx (16%) 2001
Old Country Buffet (10%) 2000
Touch of Countree (10%) 1996
Woodhollow
Apartments 402 Units $2,126,000 $5,288/unit 93% None
</TABLE>
<PAGE> 5
ITEM 3: LEGAL PROCEEDINGS
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The Registrant is not a party to any material pending legal proceedings.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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There were no matters submitted to a vote of security holders during the fourth
quarter of fiscal 1995.
PART II
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ITEM 5: MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
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As of February 1, 1996, there were 1,438 record holders of Interests in the
Registrant. There is no public market for the Interests, and it is not
anticipated that a public market will develop.
There were no cash distributions paid to the Limited Partners during fiscal
1994 or fiscal 1995.
ITEM 6: SELECTED FINANCIAL DATA
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<TABLE>
<CAPTION>
Year Ended November 30,
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1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- -----------
(Not covered by independent auditors' report)
<S> <C> <C> <C> <C> <C>
Rental and other income $ 3,372,342 $ 3,266,262 $ 3,330,071 $ 3,373,636 $ 3,461,104
Net loss (151,835) (405,172) (324,856) (771,085) (2,011,861)
Data per limited partnership unit:
Net loss (11.03) (29.43) (23.60) (56.01) (146.13)
Weighted average limited partnership units
outstanding 13,529 13,529 13,529 13,529 13,529
At year-end:
Total assets 11,322,989 11,789,994 12,303,761 14,790,938 15,543,925
Investment property - net 10,705,962 11,170,661 11,750,886 14,054,978 14,824,961
Mortgage notes payable 12,628,720 12,721,302 12,850,500 14,846,620 14,995,909
Partners' equity (deficiency in assets) (1,475,464) (1,323,629) (918,457) (593,601) 177,484
<FN>
See Item 7: Management's Discussion and Analysis for discussion of comparability of items.
</TABLE>
<PAGE> 6
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
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Liquidity and Capital Resources
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Cash reserves as of November 30, 1995 are $275,823, a decrease of $87,826 from
year ended November 30, 1994. The decrease in cash from year ended November
30, 1995 is attributable to the payment of 1994 and 1995 real estate taxes for
Woodhollow Apartments. The 1995 real estate taxes were paid in October instead
of December to take advantage of a real estate tax law change in the state of
Missouri which lowered the real estate taxes by approximately 38% when compared
to the 1994 real estate tax invoice. Though cash reserves have decreased from
November 30, 1994, the Registrant expects the cash flow provided by operations
and the Woodhollow capital reserve escrow to be adequate to fund the
anticipated capital expenditures in fiscal year 1996. The anticipated capital
expenditures by property are as follows:
<TABLE>
<CAPTION>
Leasing Operating Other
Capital Capital Capital Total
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Woodhollow Apartments 0 $ 59,452 $223,428 $282,880
Cobblestone Court $ 98,146 0 0 98,146
---------- ---------- ---------- ----------
$ 98,146 $ 59,452 $223,428 $381,026
</TABLE>
Throughout 1996 the Registrant approximates capital expenditures of $381,026.
At Woodhollow Apartments, operating capital is necessary in 1996 for carpet and
vinyl replacement, hot water heaters and other appliances. In 1996 the
Registrant anticipates spending $150,000 from the capital reserve escrow on new
siding and parking lot upgrades. The remainder of the other capital
expenditures will be for the cost of replacing air conditioning units, signage
and the installation of a wheelchair ramp for accessing the clubhouse.
Forecasted capital expenditures for Cobblestone Court relate to capital
necessary to build out tenant space and fund brokerage lease commissions.
During 1994, the Registrant successfully negotiated with the first mortgage
lender on Woodhollow Apartments an extension of the maturity of its note which
matured August 1, 1994. Under the modification, the note, with a principal
balance of $8,276,961, was extended for an additional seven years reducing the
interest rate from 10-3/8% to 9-1/8%. During the first three years, the
payments are interest only, thereafter the Registrant will pay principal based
on a 15-year amortization schedule. In connection with the refinancing, the
Registrant was required to establish a capital reserve escrow account to fund
certain deferred capital improvements including new siding, parking lot
upgrades and common area renovations estimated to cost approximately $900,000.
The refinancing of the first mortgage of Woodhollow reduced its annual debt
service by approximately $170,000.
The holder of the first deed of trust on Cobblestone Court informed the
Registrant that they would not renew the loan at maturity due to their
underwriting standards relating to loan size. The lender extended the loan
<PAGE> 7
several times through June 30, 1996, to allow the Registrant time to place the
loan with another mortgage lender. In November the Registrant determined that
refinancing the property could not be achieved and placed the property on the
market for sale.
Subsequent to the end of the fourth quarter, the Registrant executed extensions
on the second deed of trust secured by Cobblestone Court and Woodhollow
Apartments through June 30, 1996. The terms and conditions of the extensions
have not changed from those of previous extensions.
During 1995, the State of Missouri passed a law that affected the
classification of apartment and nursing home properties. These properties
had their property classification changed from commercial to residential thus
reducing their assessment rate from 32% to 19%. Woodhollow Apartments
qualified under the new law, resulting in a real estate tax reduction of
approximately 38%. The savings recognized will be placed into the property's
capital reserve escrow.
The future liquidity of the Registrant is dependent on its ability to fund
future capital expenditures and mortgage payments from operations and cash
reserves, maintain occupancy and negotiate with lenders the refinancing of
mortgage debt as it matures, and the sale of Cobblestone Court at a price
sufficient to cover required obligations. Until such time as the real estate
market recovers, the Registrant will continue to manage the properties to
achieve its investment objectives.
<PAGE> 8
Results of Operations
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The results of operations for the Registrant's properties for the year ended
November 30, 1995, 1994 and 1993 are detailed in the schedule below. The
information contained in the schedule are the results of operations for each
property. Expenses of the Registrant are excluded.
<TABLE>
<CAPTION>
Woodhollow Cobblestone Quad I
Apartments Court S.C. Warehouse
------------ ------------ ------------
<S> <C> <C> <C>
1995
- ----
Revenues $2,142,229 $1,230,146 0
Expenses 2,288,324 1,179,866 0
------------ ------------ ------------
Net Income $ (146,095) $ 50,280 0
============ ============ ============
1994
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Revenues $2,059,244 $1,164,660 0
Expenses 2,422,264 1,164,660 0
------------ ------------ ------------
Net Income $ (363,020) $ 44,640 0
============ ============ ============
1993
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Revenues $1,944,202 $1,168,903 $ 228,638
Expenses 2,484,760 1,123,580 247,527
Gain on Sale 0 0 286,980
------------ ------------ ------------
Net Income $ (540,558) $ 45,323 $ 268,091
============ ============ ============
</TABLE>
The three year operating results of Woodhollow Apartments have significantly
improved, with revenues increasing and expenses decreasing during the three
years presented. The increased revenues over the past three years can be
attributable to an overall improvement of the apartment market in the metro
west St. Louis area. The improved market has allowed average rental rates to
increase and occupancy to remain at relatively high levels. The decrease in
expenses can be attributable to decreasing depreciation and amortization
resulting from certain capital expenditures becoming fully amortized throughout
the three years, decreasing interest expense due to the refinancing completed
in 1994 and real estate taxes which decreased from 1994 to 1995. Offsetting
the decreases in the aforementioned expense categories were increases in
operating expenses.
<PAGE> 9
At Cobblestone Court the operating results were mixed with net income
decreasing from 1993 to 1994 and then increasing from 1994 to 1995. Revenues
for the three years increased from $1,168,903 in 1993, to $1,209,300 in 1994
and to $1,230,146 in 1995. The increase in revenues from 1993 to 1994 and from
1994 to 1995 can be attributable to the strengthening market and the
Registrant's ability to negotiate rent increases on new leases and renewals.
Another factor contributing to increased revenues from 1993 to 1994 was the
increase in real estate tax reimbursement. As the property's real estate tax
expense increased from 1993 to 1994, the property had the ability to pass
through those increases to the tenants. Expenses increased during the three
year period from 1993 to 1995. The increase from 1993 to 1994 relates to an
increase in real estate tax expense. The increase from 1994 to 1995 can be
attributable to increases in interest expense and parking lot expenditures,
offset by decreases in amortization and office expenses.
Quad I Warehouses were disposed of on August 10, 1993.
The occupancy levels at the Registrant's properties as of November 30, 1995,
1994 and 1993 are detailed in the schedule below.
<TABLE>
<CAPTION>
Occupancy rates at November 30
-------------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Woodhollow Apartments 93% 93% 95%
Cobblestone Court 92% 99% 96%
</TABLE>
At Woodhollow Apartments the occupancy remained relatively constant for the
three years presented. The Registrant attributes the consistently high
occupancy to increasing demand for apartments in the metro west St. Louis area
without an increasing supply. The Registrant expects this trend to continue.
During the fourth quarter the occupancy at Cobblestone Court remained at 92%.
Cobblestone Court did not have any leasing activity during the fourth quarter.
For the year, occupancy decreased 7% from year ended December 31, 1994, through
leasing of 1,574 square feet to new tenants, renewal leases of 13,167 square
feet, and two tenants vacating totaling 8,813 square feet. As previously
disclosed, a major tenant who occupies approximately 26% of the available
space exercised their option for an additional five years commencing December
1, 1995. The new term will expire January 2001. Two other major tenants that
individually occupy approximately 10% of the available space have leases that
expire in May 1996 and April 2000.
1995 Comparisons
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As of November 30, 1995, the Registrant's consolidated revenues are $3,375,929
compared to $3,270,135 for the year ended November 30, 1994. The increase in
revenues are $105,794 or 3.24%. The increase in revenues is attributable to
both Cobblestone Court and Woodhollow Apartments where increases were $20,846
and $82,985, respectively. Cobblestone Court's revenues increased due to a
<PAGE> 10
strengthening market and the Registrant's ability to negotiate increases in
rental rates on lease renewals. Additionally, percentage rent income increased
due to better than expected performance from various tenants' business
operations. Woodhollow Apartments had the largest revenue increase of the two
properties and this also can be attributed to a strengthening market and the
Registrant's ability to negotiate rental rate increases. Along with increased
rental revenues, the property had an increase in furniture rental income due to
a corporate user renting several apartments and furniture for their employees.
The Registrant's consolidated expenses for the year ended November 30, 1995 and
1994 are $3,527,764 and $3,675,307, respectively. The decrease of $147,543 or
4.01% is attributable to decreases in interest, depreciation and amortization,
and real estate taxes, offset by an increase in repairs and maintenance
expenses. The decrease in interest expense relates to the refinancing of
Woodhollow Apartments first deed of trust in August 1994 which reduced the
interest rate from 10.375% to 9.125%. Offsetting the $66,072 decrease was an
increase in interest expense relating to Cobblestone Court and its floating
rate debt. Depreciation and amortization expenses decreased by $115,328 with
Woodhollow Apartments comprising $104,844 of the total. The decrease in
depreciation and amortization relate to certain capital expenditures at
Woodhollow Apartments becoming fully depreciated and/or amortized. The
decrease in real estate taxes also relates to Woodhollow Apartments. As
previously discussed, the State of Missouri passed a law that affected the
classification of apartment and nursing home properties. Woodhollow
Apartments was affected and their assessment rate decreased from 32% to 19%
resulting in a real estate tax reduction of approximately 38%. Repairs and
maintenance expense increased by $63,414 when comparing November 30, 1995 to
year ended November 30, 1994. The components of the increase are landscaping,
plumbing, and apartment turnover expenses at Woodhollow Apartments along with
parking lot maintenance and landscaping at Cobblestone Court.
With the increase in consolidated revenues and the decrease in consolidated
expenses, the Registrant's net loss decreased from ($405,172) to ($151,835) for
the years ended November 30, 1994 and 1995, respectively. Net loss per limited
partnership unit improved to ($11.03). Cash flow provided by operating
activities for the year ended November 30, 1995 is $158,363. Operating cash
flow along with prior year reserve capital enabled the Registrant to fund
capital expenditures of $153,607 and reduced the note payable by $92,582.
1994 Comparisons
- ----------------
Revenues for the years ended November 30, 1994 and 1993 are $3,270,135 and
$3,620,743, respectively. The decrease in consolidated revenues relates to a
$286,980 gain on the sale of one of the Registrant's properties recorded in
1993. Without consideration to the gain, revenues decreased $63,628. The
decrease is attributable to the sold property, Quad I Warehouses, because in
1993 revenues totaling $228,638 were recorded while in 1994 the property had
already been sold and no revenues recorded. The decrease in revenues relating
to the sold property were offset by increases in revenues at Woodhollow
Apartments ($99,311) and Cobblestone Court ($40,397). At Woodhollow Apartments
the revenue increases were caused by increasing rental rates and a reduction in
rent concessions. Cobblestone Court's increase in revenues relates to higher
occupancy and increased tax participation revenues.
The Registrant's consolidated expenses for the years ended November 30, 1994
and 1993 are $3,675,307 and $3,945,599, respectively. A significant part of
<PAGE> 11
the operating expense decrease relates to Quad I Warehouses. The property
operated in 1993 generating expenses of $250,638 while in 1994 no expenses from
this property had been recorded due to its sale in August 1993. Without
considering the impact of Quad I Warehouses, consolidated expenses would have
decreased only $19,654 or less than 1%.
Net loss for the year ended November 30, 1994 was $405,172 or $29.43 per
limited partnership unit. When compared to year ended November 30, 1993, the
net loss increased by $80,316. Even though the property's operating results
were weak, cash flow provided by operating activities was $280,203 enabling the
Registrant to fund capital expenditures of $137,114 and reduce the outstanding
debt by $129,128.
Inflation
- ---------
The effects of inflation did not have a material impact upon the Registrant's
operation in fiscal 1995 and are not expected to materially affect the
Registrant's operation in 1996.
Interest Rates
- --------------
Interest rates on floating rate debt increased in 1995 which negatively
affected the operations of the Registrant in 1995. Future increases in the
prime interest rate can adversely affect the operations of the Registrant
during 1996 and in the future.
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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Financial Statements of the Registrant are filed herewith as Exhibit 99.3 and
are incorporated herein by reference (see Item 14(a)(1)). The supplementary
financial information specified by Item 302 of Regulation S-K is provided in
Item 7.
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
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None
PART III
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ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- ---------------------------------------------------------------
The General Partners of the Registrant responsible for all aspects of the
Registrant's operations are Gregory J. Nooney, Jr., age 65, and Nooney Capital
Corp., a Missouri corporation. Gregory J. Nooney, Jr. is a senior officer of
Nooney Company, the sponsor of the Registrant.
<PAGE> 12
The background and experience of the General Partners are as follows:
Gregory J. Nooney, Jr. joined Nooney Company in 1954 and is currently Chairman
of the Board and Chief Executive Officer.
John J. Nooney is a Special General Partner of the Partnership and as such,
does not exercise control of the affairs of the Partnership.
John J. Nooney joined Nooney Company in 1958 and was President and Treasurer
until he resigned in 1992. Mr. Nooney is currently Chairman of the Board of
Dalton Investments, a real estate asset management firm.
Nooney Capital Corp. was formed in February 1982 for the purpose of being a
general and/or limited partner in the Registrant and other limited
partnerships. Gregory J. Nooney, Jr. is a director of Nooney Capital Corp.
Gregory J. Nooney, Jr. and John J. Nooney are brothers. Gregory J. Nooney, Jr.
and Faith L. Nooney (wife of John J. Nooney) are stockholders of Nooney
Company, with Gregory J. Nooney, Jr. controlling all voting stock of Nooney
Company.
The General Partners will continue to serve as General Partners until their
withdrawal or their removal from office by the Limited Partners.
Certain of the General Partners act as general partners of limited partnerships
and hold directorships of companies with a class of securities registered
pursuant to Section 12(g) of the Securities Exchange Act of 1934 or subject to
the requirements of Section 15(d) of the Act. A list of such directorships,
and the limited partnerships for which the General Partners serve as general
partners, is filed herewith as Exhibit 99.1 and incorporated herein by
reference.
During 1993 Lindbergh Boulevard Partners, L.P. filed a voluntary petition under
Chapter 11 of the United States Bankruptcy Code. Gregory J. Nooney, Jr. is the
general partner of Nooney Ltd. II, L.P, which in turn is the general partner of
Nooney Development Partners, L.P., which in turn is the general partner of
Nooney-Hazelwood Associates, L.P., which is the general partner of Lindbergh
Boulevard Partners, L.P. Lindbergh Boulevard Partners, L.P. emerged from
bankruptcy on May 17, 1994, when its Plan of Reorganization was confirmed.
ITEM 11: EXECUTIVE COMPENSATION
- -----------------------------------
The General Partners are entitled to a share of distributions and a share of
profits and losses as more fully described under the headings "Compensation to
General Partners and Affiliates" on pages 9-11 and "Profits and Losses for Tax
Purposes; Distributions; and Expenses of General Partners" on pages A-16 to
A-19 of the Prospectus of the Registrant dated April 8, 1982, as supplemented
and filed pursuant to Rule 424(c) of the Securities Act of 1933 (the
"Prospectus"), which are incorporated herein by reference.
During fiscal 1995 there were no cash distributions paid to the General
Partners by the Registrant.
See Item 13 below for a discussion of transactions between the Registrant and
certain affiliates of the General Partners.
<PAGE> 13
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- ---------------------------------------------------------------------------
(a) Security Ownership of Certain Beneficial Owners.
No person is known to the Registrant to be the beneficial owner of more than 5%
of the outstanding Interests of the Registrant.
(b) Security Ownership of Management.
None of the General Partners is known to the Registrant to be the beneficial
owner, either directly or indirectly, of any Interests in the Registrant.
(c) Changes in Control.
There are no arrangements known to the Registrant, the operation of which may
at a subsequent date result in a change in control of the Registrant.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -----------------------------------------------------------
(a) Transactions with Management and Others.
Certain affiliates of the General Partners are entitled to certain fees and
other payments from the Registrant in connection with certain transactions of
the Registrant as more fully described under the headings "Compensation to
General Partners and Affiliates" on pages 9-11 and "Management" on pages 26-28
of the Prospectus, which are incorporated herein by reference.
Nooney Krombach Company, the manager of Registrant's properties, is a wholly-
owned subsidiary of Nooney Company. Nooney Krombach Company is entitled to
receive monthly compensation from the Registrant for property management and
leasing services, plus reimbursement of expenses. During fiscal 1995 the
Registrant paid property management and leasing fees of $181,734 to Nooney
Krombach Company.
During fiscal 1995 the Registrant paid Nooney Krombach Company $40,000 as
reimbursement for indirect expenses incurred in connection with management of
the Registrant.
See Item 11 above for a discussion of cash distributions paid to the General
Partners during fiscal 1995.
(b) Certain Business Relationships.
The relationship of certain of the General Partners to certain of their
affiliates is set forth in Item 13(a) above. Also see Item 13(a) above for a
discussion of amounts paid by the Registrant to the General Partners or their
affiliates during fiscal 1995.
(c) Indebtedness of Management.
Not Applicable.
(d) Transactions with promoters.
Not Applicable.
<PAGE> 14
PART IV
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ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- --------------------------------------------------------------------------
(a) The following documents are filed as a part of this report:
(1) Financial Statements (filed herewith as Exhibit 99.3):
Independent auditors' report
Balance sheets
Statements of operations
Statements of partners' equity (deficiency in assets)
Statements of cash flows
Notes to financial statements
(2) Financial Statement Schedules (filed herewith as Exhibit 99.3):
Schedule - Reconciliation of partners' equity (deficit)
Schedule III - Real estate and accumulated depreciation
All other schedules are omitted because they are
inapplicable or not required under the instructions.
(3) Exhibits:
See Exhibit Index on Page 16.
(b) Reports on Form 8-K
During the last quarter of the period covered by this report, the
Registrant filed no reports on Form 8-K.
(c) Exhibits:
See Exhibit Index on Page 16.
(d) Not Applicable
<PAGE> 15
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) under 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.
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
Date: February 21, 1996 /s/ Gregory J. Nooney, Jr.
-----------------------------------------
Gregory J. Nooney, Jr.
General Partner
Nooney Capital Corp.
General Partner
Date: February 21, 1996 By: /s/ Gregory J. Nooney, Jr.
-------------------------------------
Gregory J. Nooney, Jr.
Chairman of the Board and
Chief Executive Officer
By: /s/ Patricia A. Nooney
-------------------------------------
Patricia A. Nooney
Senior Vice President and
Secretary
<PAGE> 16
EXHIBIT INDEX
Exhibit Number Description
- -------------- ---------------------------------------------------------------
3.1 Amended and Restated Agreement and Certificate of Limited
Partnership dated April 7, 1982, is incorporated by
reference to the Prospectus contained in the Registration
Statement on Form S-11 under the Securities Act of 1933
(File No. 2-76046).
10 Management Contract between Nooney Real Property Investors-
Four, L.P. and Nooney Company is incorporated by reference to
Exhibit 10 to the Registration Statement on Form S-11 under
the Securities Act of 1933 (File No. 2-76046). The Management
Contract was assigned by Nooney Company to Nooney Management
Company (now Nooney Krombach Company), a wholly-owned
subsidiary of Nooney Company, on April 1, 1985, and is
identical in all material respects.
27 Financial Data Schedule (provided for the information of the
U.S. Securities and Exchange Commission only)
99.1 List of Directorships filed in response to Item 10.
99.2 Pages 9-11, 26-28 and A-16 - A-19 to the Prospectus of the
Registrant dated April 8, 1982, as supplemented and filed
pursuant to Rule 424(c) of the Securities Act of 1933 are
incorporated by reference.
99.3 Financial Statements and Schedules.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR NOONEY REAL PROPERTY INVESTORS-FOUR, L.P. AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000700720
<NAME> NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-START> DEC-01-1994
<PERIOD-END> NOV-30-1995
<CASH> 275,823
<SECURITIES> 0
<RECEIVABLES> 186,369
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 531,331
<PP&E> 13,918,234
<DEPRECIATION> 6,702,698
<TOTAL-ASSETS> 11,322,989
<CURRENT-LIABILITIES> 74,635
<BONDS> 12,628,720
0
0
<COMMON> 0
<OTHER-SE> (1,475,464)
<TOTAL-LIABILITY-AND-EQUITY> 11,322,989
<SALES> 3,372,342
<TOTAL-REVENUES> 3,375,929
<CGS> 3,527,764
<TOTAL-COSTS> 3,527,764
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,154,055
<INCOME-PRETAX> (151,835)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (151,835)
<EPS-PRIMARY> (11.03)
<EPS-DILUTED> 0
</TABLE>
<PAGE> 1
EXHIBIT 99.1
Below each General Partner's name is a list of the limited partnerships, other
than the Registrant, for which the General Partner serves as a general partner
and the companies for which the General Partner serves as a director. The list
includes only those limited partnerships and companies which have a class of
securities registered pursuant to Section 12(g) of the Securities Exchange Act
of 1934 or are subject to the requirements of Section 15(d) of the Act.
Gregory J. Nooney, Jr.
- ----------------------
Limited Partnerships:
Nooney Real Property Investors-Two, L.P. Nooney Income Fund Ltd., L.P.
Nooney Income Fund Ltd.II, L.P.
Directorships:
Nooney Realty Trust, Inc.
John J. Nooney
- --------------
Limited Partnerships:
Nooney Real Property Investors-Two, L.P. Nooney Income Fund Ltd., L.P.
Nooney Income Fund Ltd.II, L.P.
<PAGE> 1
EXHIBIT 99.3
INDEPENDENT AUDITORS' REPORT
To the Partners of
Nooney Real Property Investors-Four, L.P.:
We have audited the accompanying balance sheets of Nooney Real Property
Investors-Four, L.P. (a limited partnership) as of November 30, 1995 and 1994,
and the related statements of operations, partners' equity (deficiency in
assets) and cash flows for each of the three years in the period ended
November 30, 1995. Our audits also included the financial statement schedules
listed in the index at Item 14(a)2. These financial statements and financial
statement schedules are the responsibility of the Partnership's general
partners. Our responsibility is to express an opinion on these financial
statements and financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by the Partnership's general partners, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Nooney Real Property Investors-Four, L.P.
as of November 30, 1995 and 1994, and the results of its operations and its
cash flows for each of the three years in the period ended November 30, 1995 in
conformity with generally accepted accounting principles. Also, in our
opinion, such financial statement schedules, when considered in relation to the
basic financial statements taken as a whole, present fairly in all material
respects the information set forth therein.
The accompanying financial statements and financial statement schedules have
been prepared assuming that Nooney Real Property Investors-Four, L.P. will
continue as a going concern. As discussed in Note 1, conditions exist which
raise substantial doubt about the Partnership's ability to continue as a going
concern unless it is able to negotiate with mortgage lenders to refinance the
debt maturing in 1996 or sell Cobblestone Court at an adequate price to cover
required obligations. Management's plans in regard to these matters are also
described in Note 1. The financial statements and financial statement
schedules do not include any adjustments that might result from the outcome of
this uncertainty.
/S/ DELOITTE & TOUCHE LLP
January 12, 1995
<PAGE> 2
<TABLE>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
NOVEMBER 30, 1995 AND 1994
- -------------------------------------------------------------------------------
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
ASSETS
CASH - Includes restricted cash of $152,236 at
November 30, 1995 and $-0- at November 30, 1994 $ 275,823 $ 363,649
ACCOUNTS RECEIVABLE 186,369 122,744
PREPAID EXPENSES AND DEPOSITS 69,139 35,649
INVESTMENT PROPERTY (Notes 1 and 3):
Land 1,013,858 2,219,236
Buildings and improvements 12,904,376 17,817,235
------------ ------------
13,918,234 20,036,471
Less accumulated depreciation (6,702,698) (8,865,810)
------------ ------------
7,215,536 11,170,661
Investment property held for sale (Note 1) 3,490,426
------------ ------------
Total investment property 10,705,962 11,170,661
DEFERRED EXPENSES - At amortized cost (Note 2) 85,696 97,291
------------ ------------
TOTAL $11,322,989 $11,789,994
============ ============
LIABILITIES AND PARTNERS' EQUITY (DEFICIENCY IN ASSETS)
LIABILITIES:
Accounts payable and accrued expenses $ 74,635 $ 299,200
Refundable tenant deposits 95,098 93,121
Mortgage notes payable (Notes 1 and 3) 12,628,720 12,721,302
------------ ------------
Total liabilities 12,798,453 13,113,623
PARTNERS' EQUITY (DEFICIENCY IN ASSETS) (1,475,464) (1,323,629)
------------ ------------
TOTAL $11,322,989 $11,789,994
============ ============
<FN>
See notes to financial statements.
</TABLE>
<PAGE> 3
<TABLE>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
YEARS ENDED NOVEMBER 30, 1995, 1994 AND 1993
- ---------------------------------------------------------------------------------------------
<CAPTION>
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
REVENUES:
Rental and other income (Notes 2 and 4) $3,372,342 $3,266,262 $3,330,071
Interest 3,587 3,873 3,692
Gain on sale of investment property 286,980
------------ ------------ ------------
Total revenues 3,375,929 3,270,135 3,620,743
EXPENSES:
Interest 1,154,055 1,200,009 1,359,378
Depreciation and amortization (Note 2) 649,135 764,463 854,470
Real estate taxes 442,140 508,620 519,511
Repairs and maintenance 237,994 174,580 212,834
Property management fees - related party (Note 2) 181,734 176,283 181,608
Payroll 262,816 252,824 256,310
Other operating expenses (includes $40,000 in each
year to related party) (Note 2) 599,890 598,528 561,488
------------ ------------ ------------
Total expenses 3,527,764 3,675,307 3,945,599
------------ ------------ ------------
NET LOSS $ (151,835) $ (405,172) $ (324,856)
============ ============ ============
NET LOSS ALLOCATION:
General partners $ (2,630) $ (7,020) $ (5,629)
Limited partners (149,205) (398,152) (319,227)
LIMITED PARTNERSHIP DATA (Note 2):
Net loss per unit $ (11.03) $ (29.43) $ (23.60)
============ ============ ============
Weighted average limited partnership units
outstanding 13,529 13,529 13,529
============ ============ ============
<FN>
See notes to financial statements.
</TABLE>
<PAGE> 4
<TABLE>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY IN ASSETS)
YEARS ENDED NOVEMBER 30, 1995, 1994 AND 1993
- ---------------------------------------------------------------------------------------------
<CAPTION>
Limited General
Partners Partners Total
------------ ------------ ------------
<S> <C> <C> <C>
BALANCE (DEFICIENCY IN ASSETS),
DECEMBER 1, 1992 $ (316,719) $ (276,882) $ (593,601)
Net loss (319,227) (5,629) (324,856)
------------ ------------ ------------
BALANCE (DEFICIENCY IN ASSETS),
NOVEMBER 30, 1993 (635,946) (282,511) (918,457)
Net loss (398,152) (7,020) (405,172)
------------ ------------ ------------
BALANCE (DEFICIENCY IN ASSETS),
NOVEMBER 30, 1994 (1,034,098) (289,531) (1,323,629)
Net loss (149,205) (2,630) (151,835)
------------ ------------ ------------
BALANCE (DEFICIENCY IN ASSETS),
NOVEMBER 30, 1995 $(1,183,303) $ (292,161) $(1,475,464)
============ ============ ============
<FN>
See notes to financial statements.
</TABLE>
<PAGE> 5
<TABLE>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
YEARS ENDED NOVEMBER 30, 1995, 1994 AND 1993
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (151,835) $ (405,172) $ (324,856)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Gain on sale of investment property (286,980)
Depreciation 618,306 717,339 790,290
Amortization of deferred expenses 30,829 47,124 64,180
Changes in accounts affecting operations:
Accounts receivable (63,625) (13,749) 23,666
Due from Nooney Krombach Company 10,298 (10,298)
Prepaid expenses and deposits (33,490) (3,265) (1,115)
Deferred expenses (19,234) (92,975) (2,736)
Accounts payable and accrued expenses (224,565) 11,671 (131,614)
Refundable tenant deposits 1,977 8,932 (11,953)
------------ ------------ ------------
Net cash provided by operating activities 158,363 280,203 108,584
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of investment property -- 1,918,965
Additions to investment property (153,607) (137,114) (103,475)
------------ ------------ ------------
Net cash (used in) provided by investing activities (153,607) (137,114) 1,815,490
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES -
Payments on mortgage notes payable (92,582) (129,198) (1,996,120)
------------ ------------ ------------
NET INCREASE (DECREASE) IN CASH (87,826) 13,891 (72,046)
CASH, BEGINNING OF YEAR 363,649 349,758 421,804
------------ ------------ ------------
CASH, END OF YEAR $ 275,823 $ 363,649 $ 349,758
============ ============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION - Cash paid during the year for interest $ 1,166,752 $ 1,197,055 $ 1,465,118
============ ============ ============
<FN>
See notes to financial statements.
</TABLE>
<PAGE> 6
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED NOVEMBER 30, 1995, 1994 AND 1993
- -------------------------------------------------------------------------------
1. BUSINESS
Nooney Real Property Investors-Four, L.P. (the "Partnership") is a limited
partnership organized under the laws of the State of Missouri on
February 9, 1982. The Partnership was organized to invest primarily in
income-producing real properties such as shopping centers, office buildings
and other commercial properties, apartment buildings, warehouses and light
industrial properties. The Partnership's portfolio is comprised of an
apartment building located in West St. Louis County, Missouri which
generated 63.5% of rental and other income for the year ended November 30,
1995; and a retail shopping center located in Burnsville, Minnesota, a
suburb of Minneapolis, which generated the remaining 36.5% of rental and
other income for the year ended November 30, 1995.
The accompanying financial statements for the Partnership have been
presented on the basis that the Partnership will continue as a going
concern, allowing for the realization of assets and the satisfaction of
liabilities in the normal course of business. The uncertainty referred to
in the following paragraph raises substantial doubt as to the Partnership's
ability to continue as a going concern. The financial statements do not
include any adjustments that might result from the outcome of such
uncertainty.
First mortgage debt on Cobblestone Court Shopping Center of $2,692,277
matures June 1996 (Note 3). Second mortgages on both properties of
$1,438,039 and $221,443 are also due June 1996. The Partnership's
management is presently attempting to sell Cobblestone Court Shopping
Center, but is unable to predict when such a sale will occur or if such a
sale will be finalized. If the Partnership is successful in selling the
property, it expects to be in a position to fully payoff the first and
second mortgage on the property. If the Partnership is unsuccessful in
selling the property, it intends to negotiate with the first and second
mortgage lenders to renew and restructure the debt or pursue refinancing
with another lender. Until a sale occurs, or the first mortgage lender
decides to foreclose, the Partnership will continue to operate the
properties.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements include only those assets, liabilities and results
of operations of the partners which relate to the business of Nooney Real
Property Investors-Four, L.P. The statements do not include any assets,
liabilities, revenues or expenses attributable to the partners' individual
activities. No provision has been made for federal and state income taxes
since these taxes are the personal responsibility of the partners.
The corporate general partner is a 75%-owned subsidiary of Nooney Company.
One of the individual general partners is an officer, director and
shareholder of Nooney Company. The other individual general partners'
spouse is a shareholder of Nooney Company. Nooney Krombach Company, a
wholly-owned subsidiary of Nooney Company, manages the Partnership's real
<PAGE> 7
estate for a management fee. Property management fees paid to Nooney
Krombach Company were $181,734, $176,283 and $181,608 for the years ended
November 30, 1995, 1994 and 1993, respectively. Additionally, the
Partnership pays Nooney Krombach Company $40,000 annually as reimbursement
for management services and indirect expenses in connection with the
management of the Partnership.
Investment property is recorded at the lower of cost or net realizable
value. Investment property that is currently held for sale is recorded at
the lower of its net book value or net realizable value.
Apartment buildings are depreciated over their estimated useful lives using
the 125% declining balance method. All other buildings are depreciated
over their estimated useful lives using the straight-line method.
Lease agreements are accounted for as operating leases and rentals from
such leases are reported as revenues ratably over the terms of the leases.
Certain agreements provide for rent concessions. At November 30, 1995,
accounts receivable include approximately $4,000 ($4,000 in 1994) of
accrued rent which is not yet due under the terms of the various lease
agreements.
Included in rental and other income are amounts received from tenants under
provisions of lease agreements which require the tenants to pay additional
rent equal to specified portions of certain expenses such as real estate
taxes, insurance, utilities and common area maintenance. The income is
recorded in the same period that the related expense is incurred.
Pursuant to the terms of the Partnership Agreement, losses from operations
and cash distributions are allocated l% to the individual general partners
and the remainder pro rata to all general and limited partners based upon
the relationship of original capital contributions.
Limited partnership per unit computations are based on the weighted average
number of limited partnership units outstanding during the year.
Deferred expenses consist of lease fees and financing costs and are
amortized over the terms of their respective leases or notes.
Certain reclassifications have been made to 1994 and 1993 amounts to
conform with 1995 balances.
<PAGE> 8
3. MORTGAGE NOTES PAYABLE
Mortgage notes payable as of November 30, 1995 and 1994 and the related
collateral book values consist of the following:
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Cobblestone Court Shopping Center
---------------------------------
(Book value of $3,500,000 at November 30, 1995)
8.5%, due in monthly installments of $26,921, including interest, to
December 31, 1995 (refinanced on January 1, 1996 to mature on June 29,
1996) when remaining principal balance of $2,636,188 is due $ 2,692,277 $ 2,774,851
Note payable to bank, interest only due monthly at bank's prime rate
(8.75% at November 30, 1995) plus 1% to December 31, 1995 (refinanced on
January 1, 1996 to mature on June 29, 1996) when entire principal
balance is due 1,438,039 1,438,039
Woodhollow Apartments
---------------------
(Book value of $7,292,000 at November 30, 1995)
9.125%, due in monthly interest payments of $62,939 only until August 1997
when monthly payments increase to $70,170, consisting of both principal
and interest, until August 2001 when remaining principal balance of
$7,859,989 is due 8,276,961 8,276,961
Note payable to bank related to above properties, monthly principal
payments of $834 plus interest at 1% over the bank's prime rate (8.75%
at November 30, 1995) commencing November 1, 1994 to December 31, 1995
(refinanced on January 1, 1996 to mature on June 29, 1996) when entire
principal balance is due 221,443 231,451
------------ ------------
Total debt of above properties (total book value of $10,792,000 at
November 30, 1995) $12,628,720 $12,721,302
============ ============
</TABLE>
In July 1994, the 9.125% mortgage note payable was refinanced with the same
lender. In connection with the refinancing, the partnership was required
to establish a capital reserve escrow account to fund certain deferred
maintenance including new siding, parking lot repairs and entry way
renovations outlined in the escrow agreement. Under the terms of the
agreement, the partnership is required to deposit on a monthly basis all
net operating income as defined in the escrow agreement. Withdrawals may
be made on a monthly basis only to fund the aforementioned repairs. Upon
completion of the repairs, any funds remaining in the escrow account will
be returned to the partnership. As of November 30, 1995, no additional
deposits were required to be made to the escrow account based upon the net
operating income calculation.
<PAGE> 9
The mortgage notes are collateralized by deeds of trust and assignments of
rents on all investment properties. Principal payments required during the
next five years are as follows:
<TABLE>
<C> <C>
1996 $ 4,352,000
1997 29,000
1998 93,000
1999 102,000
2000 110,000
</TABLE>
In accordance with Statement of Financial Accounting Standards No. 107,
Disclosures About Fair Value of Financial Instruments, the estimated fair
value of mortgage notes payable with maturities greater than one year is
determined based on rates currently available to the Partnership for
mortgage notes with similar terms and remaining maturities. The estimated
fair value of mortgage notes payable with maturities of less than one year
are valued at their carrying amounts included in the balance sheet, which
are reasonable estimates of fair value due to the relatively short period
to maturity of the instruments. The carrying amount and estimated fair
value of the Partnership's debt at November 30, 1995 are summarized as
follows:
<TABLE>
<CAPTION>
Carrying Estimated
Amount Fair Value
------------ ------------
<S> <C> <C>
Mortgage notes payable $12,628,720 $13,029,593
</TABLE>
Fair value estimates are made at a specific point in time, are subjective
in nature and involve uncertainties and matters of significant judgment.
Settlement of the Partnership's debt obligations at fair value may not be
possible and may not be a prudent management decision. The potential loss
on extinguishment at November 30, 1995 does not take into consideration
expenses that would be incurred to settle the debt obligations at fair
value.
<PAGE> 10
4. RENTAL REVENUES UNDER OPERATING LEASES
Minimum future rental revenues under noncancelable operating leases on
properties other than apartment buildings in effect as of November 30, 1995
are as follows:
<TABLE>
<C> <C>
1996 $ 429,000
1997 301,000
1998 151,000
1999 90,000
2000 90,000
----------
Total $1,061,000
==========
</TABLE>
In addition, certain lease agreements require tenant participation in
certain operating expenses and additional contingent rentals based upon
percentages of tenant sales in excess of minimum amounts. Tenant
participation in expenses included in revenues approximated $454,000,
$452,000 and $446,000 for the years ended November 30, 1995, 1994 and 1993,
respectively. Contingent rentals were not significant for the years ended
November 30, 1995, 1994 and 1993.
5. FEDERAL INCOME TAX STATUS
The general partners believe, based upon opinion of legal counsel, that
Nooney Real Property Investors-Four, L.P. is considered a partnership for
income tax purposes.
Selling commissions and offering expenses incurred in connection with the
sale of limited partnership units are not deductible for income tax
purposes and therefore increase the partners' bases. Investment properties
are depreciated for income tax purposes using rates which differ from rates
used for computing depreciation for financial statement reporting. Rents
received in advance are includable in taxable income in the year received.
Rent concessions, recognized ratably over lease terms for financial
statement purposes, are includable in taxable income in the year rents are
received. Insurance premiums are deductible for tax purposes in the year
paid. Losses in connection with the writedown of investment property are
not recognized for income tax purposes until the property is disposed.
<PAGE> 11
The comparison of financial statement and income tax reporting is as
follows:
<TABLE>
<CAPTION>
Financial Income
Statement Tax
------------ ------------
<S> <C> <C>
1995:
Net loss $ (151,835) $ (603,701)
Partners' deficiency in assets (1,475,464) (5,564,655)
1994:
Net loss $ (405,172) $ (737,206)
Partners' deficiency in assets (1,323,629) (4,960,954)
1993:
Net loss $ (324,856) $ (192,753)
Partners' deficiency in assets (918,457) (4,223,748)
</TABLE>
6. DISPOSAL OF INVESTMENT PROPERTY
On August 10, 1993, the Partnership sold Quad I to an unrelated party for
$2,050,000. The property had a net book value of $1,631,985 and first
mortgage debt outstanding of $1,448,925. The Partnership incurred other
selling costs of $131,035. Proceeds of the sale in the amount of $335,000
were used to reduce second mortgage debt on Woodhollow Apartments. In
connection with this transaction, second mortgage debt of $200,000
previously on Quad I remained unpaid. The unpaid balance was consolidated
with Cobblestone Court Shopping Center second mortgage debt held by the
same lender (Note 3).
* * * * * *
<PAGE> 12
<TABLE>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
SCHEDULE - RECONCILIATION OF PARTNERS' EQUITY (DEFICIENCY IN ASSETS)
YEARS ENDED NOVEMBER 30, 1995, 1994 AND 1993
- ------------------------------------------------------------------------------------------------------------
The reconciliation of partners' equity (deficiency in assets) between financial statements and income tax
reporting is as follows:
<CAPTION>
1995
----------------------------------------
Limited General
Partners Partners Total
------------ ------------ ------------
<S> <C> <C> <C>
Balance (deficiency) per statement of partners' equity $(1,183,303) $ (292,161) $(1,475,464)
Add:
Selling commissions and other offering costs not deductible for
income tax purposes 1,732,907 1,732,907
Prepaid rents included in income for income tax purposes 11,068 195 11,263
Writedown of investment property not recognized for income
tax purposes 1,045,565 18,435 1,064,000
------------ ------------ ------------
1,606,237 (273,531) 1,332,706
Less:
Excess depreciation deducted for income tax purposes 6,678,466 188,532 6,866,998
Rent concessions not recognized for income tax purposes 3,523 62 3,585
Insurance premiums deducted for income tax purposes 26,314 464 26,778
------------ ------------ ------------
Balance (deficiency) per tax return $ 5,102,066 $ 462,589 $ 5,564,655
============ ============ ============
(Continued)
</TABLE>
<PAGE> 13
<TABLE>
<CAPTION>
1994
----------------------------------------
Limited General
Partners Partners Total
------------ ------------ ------------
<S> <C> <C> <C>
Balance (deficiency) per statement of partners' equity $ (1,034,098) $ (289,531) $ (1,323,629)
Add:
Selling commissions and other offering costs not deductible
for income tax purposes 1,732,907 1,732,907
Prepaid rents included in income for income tax purposes 23,418 413 23,831
Writedown of investment property not recognized for income
tax purposes 1,045,565 18,435 1,064,000
------------ ------------ ------------
1,767,792 (270,683) 1,497,109
Less:
Excess depreciation deducted for income tax purposes 6,259,236 181,139 6,440,375
Rent concessions not recognized for income tax purposes 4,186 74 4,260
Insurance premiums deducted for income tax purposes 13,195 233 13,428
------------ ------------ ------------
Balance (deficiency) per tax return $(4,508,825) $ (452,129) $(4,960,954)
============ ============ ============
<CAPTION>
1993
----------------------------------------
Limited General
Partners Partners Total
------------ ------------ ------------
<S> <C> <C> <C>
Balance (deficiency) per statement of partners' equity $ (635,946) $ (282,511) $ (918,457)
Add:
Selling commissions and other offering costs not deductible for
income tax purposes 1,732,907 1,732,907
Prepaid rents included in income for income tax purposes 34,932 616 35,548
Writedown of investment property not recognized for income tax
purposes 1,045,565 18,435 1,064,000
------------ ------------ ------------
2,177,458 (263,460) 1,913,998
Less:
Excess depreciation deducted for income tax purposes 5,943,268 175,569 6,118,837
Rent concessions not recognized for income tax purposes 6,947 122 7,069
Insurance premiums deducted for income tax purposes 11,635 205 11,840
------------ ------------ ------------
Balance (deficiency) per tax return $(3,784,392) $ (439,356) $(4,223,748)
============ ============ ============
</TABLE>
<PAGE> 14
<TABLE>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
NOVEMBER 30, 1995
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
Column A Column B Column C
- ---------------------------------------------------- ------------ ----------------------------------------
Initial Cost to Partnership
----------------------------------------
Buildings
and
Description Encumbrances Land Improvements Total
- ---------------------------------------------------- ------------ ------------ ------------ ------------
<C> <C> <C> <C> <C>
Cobblestone Court Shopping Center,
Burnsville, Minnesota $ 4,130,316 $ 1,205,378 $ 4,676,940 $ 5,882,318
Woodhollow Apartments, St. Louis, Missouri 8,276,961 1,013,858 11,651,289 12,665,147
Both properties 221,443
------------ ------------ ------------ ------------
Total $12,628,720 $ 2,219,236 $16,328,229 $18,547,465
============ ============ ============ ============
<CAPTION>
Column A Column D Column E
- ---------------------------------------------------- ------------ ----------------------------------------
Gross Amount at Which
Costs Carried at Close of Period
Capitalized ----------------------------------------
Subsequent Buildings
to and
Description Acquisition Land Improvements Total
- ------------------------------------------------- --------------- ------------ ------------ ------------
<C> <C> <C>
Cobblestone Court Shopping Center,
Burnsville, Minnesota $ 350,338<F1> $ 1,205,378 $ 5,027,278 $ 6,232,656
Woodhollow Apartments, St. Louis, Missouri 1,253,087<F1> 1,013,858 12,904,376 13,918,234
Both properties
--------------- ------------ ------------ ------------
Total $ 1,603,425 $ 2,219,236 $17,931,654 $20,150,890
=============== ============ ============ ============
<FN>
<F1> Amount is net of the following building writedowns to reflect the minimum recoverable value to the
Partnership:
Cobblestone Court $ 489,000
Woodhollow Apartments $ 575,000
(Continued)
</TABLE>
<PAGE> 15
<TABLE>
<CAPTION>
Column A Column F Column G Column H Column I
- ------------------------------------------------- --------------- ------------ ------------ ------------
Life on
which
Depreciation
in Latest
Income
Accumulated Date of Date Statement
Description Depreciation Construction Acquired is Computed
- ------------------------------------------------- --------------- ------------ ------------ ------------
<C> <C> <C> <C> <C>
Cobblestone Court Shopping Center,
Burnsville, Minnesota $ 2,742,230 1980 2/16/82 30 years
Woodhollow Apartments, St. Louis, Missouri 6,702,698 1971-1972 7/28/82 30 years
---------------
Total $ 9,444,928
===============
(Continued)
</TABLE>
<PAGE> 16
<TABLE>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
YEARS ENDED NOVEMBER 30, 1995, 1994 AND 1993
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
(A) Reconciliation of amounts in Column E:
Balance at beginning of period $20,036,471 $19,902,357 $22,008,963
Add - Cost of improvements 153,607 137,114 103,475
Less:
Cost of disposals (39,188) (3,000) (2,210,081)
------------ ------------ ------------
Balance at end of period $20,150,890 $20,036,471 $19,902,357
============ ============ ============
(B) Reconciliation of amounts in Column F:
Balance at beginning of period $ 8,865,810 $ 8,151,471 $ 7,953,985
Add - Provision during the period 618,306 717,339 790,290
Less - Depreciation on disposals (39,188) (3,000) (592,804)
------------ ------------ ------------
Balance at end of period $ 9,444,928 $ 8,865,810 $ 8,151,471
============ ============ ============
(C) The aggregate cost of real estate owned for
federal income tax purposes $21,214,890 $21,100,471 $20,966,357
============ ============ ============
(Concluded)
</TABLE>
