SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
_X_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter period ended February 28, 1997
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OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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.
- -------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Missouri 43-1250566
-------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7701 Forsyth Boulevard, St. Louis, Missouri 63105
- ------------------------------------------- --------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 863-7700
----------------------------
- --------------------------------------------------------------------------------
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__.
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12,13, or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes____ No____
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding
of each of the issuer's classes of common stock, as of the latest practicable
date._____
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<PAGE>
PART I
ITEM 1 - FINANCIAL STATEMENTS:
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
February 28, November 30,
1997 1996
(Unaudited)
----------- -----------
ASSETS:
Cash $ 285,841 $ 211,840
Accounts receivable 190,885 199,357
Prepaid expenses and deposits 11,321 56,676
Investment property, at cost:
Land 1,013,858 1,013,858
Buildings and improvements 13,400,566 13,319,139
------------ ------------
14,414,424 14,332,997
Less accumulated depreciation 7,247,094 7,134,673
------------ ------------
7,167,330 7,198,324
Investment property held for sale 3,478,652 3,479,887
Deferred expenses - At amortized cost 65,442 65,549
------------ ------------
$ 11,199,471 $ 11,211,633
============ ============
LIABILITIES AND PARTNERS' DEFICIT
Liabilities:
Accounts payable and accrued expenses $ 127,830 $ 86,951
Mortgage notes payable 12,526,651 12,529,484
Refundable tenant deposits 85,096 89,395
------------ ------------
12,739,577 12,705,830
Partners' Deficit (1,540,106) (1,494,197)
------------ ------------
$ 11,199,471 $ 11,211,633
============ ============
SEE NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
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<PAGE>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS AND PARTNERS' DEFICIT
(UNAUDITED)
Three Months Ended
February 28, February 29,
1997 1996
---- ----
REVENUES:
Rental and other income $ 854,048 $ 849,950
Interest 188 295
----------- -----------
854,236 850,245
EXPENSES:
Interest 278,800 284,402
Depreciation and amortization 117,344 127,347
Real estate taxes 109,078 99,164
Property management fees paid to
Nooney Krombach Company 45,459 45,234
Reimbursement to Nooney Krombach
Company for partnership management
services and indirect expenses 10,000 10,000
Other operating expenses 339,464 294,369
----------- -----------
900,145 860,516
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NET LOSS $ (45,909) $ (10,271)
=========== ===========
NET LOSS PER LIMITED PARTNERSHIP UNIT $ (3.33) $ (0.75)
=========== ===========
PARTNERS' DEFICIT:
Beginning of Period $(1,494,197) $(1,475,464)
Net Loss (45,909) (10,271)
----------- -----------
End of Period $(1,540,106) $(1,485,735)
=========== ===========
SEE NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
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<TABLE>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Three Months Ended
February 28, February 29,
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (45,909) $ (10,271)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 117,344 127,347
Changes in assets and liabilities:
Decrease in accounts receivable 8,472 50,171
Decrease in prepaid expenses and deposits 45,355 28,016
Increase in accounts payable and accrued expenses 40,879 43,440
(Decrease) Increase in refundable tenant deposits (4,299) 4,138
Increase in deferred expenses (3,580) (26,840)
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Total Adjustments 204,171 226,272
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Net cash provided by operating activities 158,262 216,001
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CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to investment property (20,620) (14,037)
Additions using Capital Reserve Escrow (60,808)
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Net cash used in investing activities (81,428) (14,037)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on mortgage notes payable (2,833) (25,755)
--------- ---------
Net cash used in financing activities (2,833) (25,755)
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NET INCREASE IN CASH 74,001 176,209
CASH, Beginning of period 211,840 275,823
--------- ---------
CASH, End of period $ 285,841 $ 452,032
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS
INFORMATION - Cash paid during the period for interest $ 326,493 $ 284,402
========= =========
</TABLE>
SEE NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
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>
<PAGE>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
THREE MONTHS ENDED FEBRUARY 28, 1997 AND FEBRUARY 29, 1996
NOTE A:
Refer to the Registrant's financial statements for the year ended November 30,
1996, which are contained in the Registrant's Annual Report on Form 10-K, for a
description of the accounting policies which have been continued without change
except as noted below. Also, refer to the footnotes to those statements for
additional details of the Registrant's financial condition. The details in those
notes have not changed except as a result of normal transactions in the interim
or as noted below.
NOTE B:
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 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
responsibility of the partners. In the opinion of the general partners, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and changes in
financial position at February 28, 1997 and for all periods presented have been
made.
NOTE C:
The Registrant's properties are managed by Nooney Krombach Company, a
wholly-owned subsidiary of Nooney Company. Certain individual general partners
of the Registrant are officers and directors of Nooney Company. Nooney Four
Capital Corp., a general partner, is a 75% owned subsidiary of Nooney Company.
NOTE D:
The loss per limited partnership unit for the three months ended February 28,
1997 and February 29, 1996 was computed based on 13,529 units, the number of
units outstanding during the periods.
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<PAGE>
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
It should be noted that this 10-Q contains forward-looking information (as
defined in the Private Securities Litigation Reform Act of 1995) that involves
risk and uncertainty, including trends in the real estate investment market,
projected leasing and sales, and the future prospects for the Registrant. Actual
results could differ materially from those contemplated by such statements.
Liquidity and Capital Resources
Cash on hand as of February 28, 1997 is $285,841, an increase of $74,001 from
the year ended November 30, 1996 when the cash on had was $211,840. The increase
in cash balances can be attributable to an increase in the real estate tax
escrow accounting. As of November 30, 1996, these accounts were at their yearly
low point as real estate taxes has just been paid on the partnership properties.
The anticipated capital expenditures for the balance of 1997 are:
Leasing Capital Other Capital Total
--------------- ------------- -----
Cobblestone Court $ 63,436 $400,000 $463,436
Woodhollow Apartments 0 70,717 70,717
-------- -------- --------
$ 63,436 $470,717 $534,152
======== ======== ========
At Cobblestone Court, the Leasing Capital is for tenant improvements and lease
commissions if new tenants can be found for the vacant spaces. The Other Capital
is a roof replacement anticipated to cost approximately $400,000. The Registrant
has arranged for additional financing from the holder of the first and second
mortgages on the property to pay for this re-roofing. At Woodhollow Apartments,
the Other Capital consists of expenditures for new heating and air conditioning
units, signage and concrete work. This is the capital for items outside of the
scope of the capital renovation program which is paid for out of the capital
reserve escrow. Phase II of the capital renovation program at Woodhollow
Apartments consists of new siding, parking lot replacement and new tile and
hallway carpets will be getting under way in the near future. Approximately
$280,000 is anticipated to be spent from the capital reserve escrow on these
renovations during 1997.
As discussed in previous reports, the General Partners have put Cobblestone
Court on the market for sale. The General Partners elected to sell the property
at this time because Cobblestone Court needs to be reconfigured and repositioned
to stay competitive in today's retail environment, and the partnership is not in
financial position to supply the capital needed for such a project. The roof
replacement is necessary prior to selling the project as all potential
purchasers have canceled their purchase contract during their due diligence
because of the severe deterioration of the roof and the resulting tenant
complaints and lawsuits which have occurred against the Landlord. The lender
which has agreed to finance the roof replacement is also insisting that as soon
as the roof is completed, the property be strongly marketed. The General
Partners have hired a new local brokerage firm to both lease and sell the
property during 1997. The holder of the first and second mortgage debt on
Cobblestone Court and the second mortgage debt on Woodhollow Apartments has
extended these loans through October 31, 1997. The balance of the second
mortgages as of February 28, 1997, are as follows: the second mortgage on
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<PAGE>
Cobblestone Court Shopping Center - $1,438,039 and the second mortgage on
Woodhollow Apartments - $208,601. As previously indicated, the balances of both
of these loans will be increased to cover the cost of the re-roofing at
Cobblestone Court.
The long-term liquidity of the Registrant is dependent on its ability to fund
future capital expenditures and mortgage payments, maintain high occupancy and
negotiate with lenders the renewal and/or refinancing of the mortgage debt as it
matures. Until such time as real estate market conditions recover and a
profitable sale of the properties is feasible, the Registrant will continue to
manage the properties to achieve its investment objectives.
Results of Operations
The results of operations for the Registrant's properties for the quarters ended
February 28, 1997 and February 29, 1996 are detailed in the schedule below.
Expenses of the Registrant are excluded.
Woodhollow Apartments Cobblestone Court
--------------------- -----------------
1997
----
Revenues $ 580,966 $ 273,516
Expenses 590,487 305,435
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Net Loss $ (9,521) $ (31,919)
========= =========
1996
----
Revenues $ 578,058 $ 272,168
Expenses 556,897 280,272
--------- ---------
Net Income (Loss) $ 21,161 $ (8,104)
========= =========
At Woodhollow Apartments, the revenue increased slightly by $3,000 when
comparing first quarter 1997 to the first quarter of 1996, despite the decrease
in occupancy due to a gradual increase in rental rates. Expenses increased by
almost $34,000 due primarily to increases in professional services - other
($13,500), relating to a property appraisal and partnership liability insurance
fees, repairs and maintenance - painting ($5,000), and snow removal
($4,200).Depreciation expense also increased ($9,000).
Cobblestone Court's operating results show an increase in the operating loss of
$23,815. This increase is due primarily to an increase in operating expenses of
$50,000 due to increase in snow removal ($13,900), real estate taxes ($8,200),
professional services - other ($27,700), relating to partnership audit fees and
liability insurance, and partially offset by a decrease in amortization
($19,000). In the first quarter of 1996, the Registrant was amortizing loan fees
charged by the prior holder of the first mortgage for extensions of the loan
granted at that time. In 1997, the Registrant had no loan fees to amortize.
The occupancy levels as of February 28, 1997 and February 29, 1996 and February
28, 1995 are as follows:
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<PAGE>
Occupancy levels as of February 28, 1997,
February 29, 1996 and February 28, 1995
---------------------------------------
Property 1997 1996 1995
-------- ---- ---- ----
Woodhollow Apartments 91% 96% 96%
Cobblestone Court 84% 85% 99%
At Woodhollow Apartments the occupancy decreased 5% when comparing first quarter
of 1997 to first quarter of 1996. The Registrant anticipates that occupancy will
return to the 95% plus level during the second quarter and will remain high for
the balance of 1997.
During the first quarter of 1997, the occupancy at Cobblestone Court remained
level at 84%. Cobblestone court has three major tenants which occupy 26%, 7 1/2%
and 10% of the available space on leases which expire January 2001, April 2002
and month-to-month, respectively. The Registrant is working with the
month-to-month tenant on a longer term renewal.
1997 Comparisons
As of February 28, 1997, the Registrant's consolidated revenues for the quarter
ended are $854,236 compared to $850,245 for the same period ended February 29,
1996. Consolidated revenues were relatively stable when comparing one year to
the next and the increase of $4,000 is less than 10%. The consolidated expenses
for the quarter ended February 28, 1997 are $900,145 compared to $860,516 for
the same period ended February 29, 1996. The increase in consolidated expenses
relates primarily to Cobblestone Court, and as stated above, this property had
increases in operating expenses in the following categories: snow removal
($13,900), real estate taxes ($8,200) and professional services - other
($27,700). The increase in operating expenses was offset by a decrease in
amortization at Cobblestone Court ($19,000).
1996 Comparisons
As of February 29, 1996 the Registrant's consolidated revenues for the quarter
ended are $850,245 compared to $809,867 for the same period ended February 28,
1995. The increase in consolidated revenues is directly attributable to
Woodhollow Apartments. At Woodhollow Apartments revenues increased $52,612 when
comparing quarter ending results February 29, 1996 to February 28, 1995. The
increase is a result of an improving multi-family market in the west St. Louis
County area. Offsetting the increase in revenues at Woodhollow Apartments is a
decrease in revenues at Cobblestone Court of $11,252. The decrease at
Cobblestone Court relates to a decrease in rental income which can be attributed
to the decrease in occupancy.
Consolidated expenses for the quarter ended February 29, 1996 are $860,516
compared to $905,080 for the same period ended February 28, 1995. The decrease
in consolidated expenses relates primarily to the decrease in depreciation
expense. The decrease in depreciation expense relates to Cobblestone Court and
the fact that the property is being held for sale and under generally accepted
accounting principles a property held for sale may not be depreciated. Real
estate tax expense has also decreased from quarter end February 29, 1996 to
February 28, 1995. The decrease is due to a change in the law in the State of
Missouri.
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<PAGE>
Offsetting the decreases in depreciation expense and real estate tax expense
were increases in operating expenses. The following operating expenses increased
when comparing quarter end February 29, 1996 to February 28, 1995: snow removal
($11,634), furniture rental ($12,438), insurance ($4,620) and cleaning ($4,989).
Offsetting the aforementioned increases were decreases in the following
expenses: maintenance payroll (5,840) and professional services ($6,904).
Inflation
The effects of inflation did not have a material impact upon the Registrant's
operation in fiscal l996 and are not expected to materially affect the
Registrant's operation in l997.
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<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
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.
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
Dated: April 14, 1997 By: /s/ Gregory J. Nooney, Jr.
------------------------ -------------------------------------
Gregory J. Nooney, Jr.
General Partner
NOONEY CAPITAL CORPORATION
By: /s/ Gregory J. Nooney, Jr.
-------------------------------------
Gregory J. Nooney, Jr.
Chairman
By: /s/ Patricia A. Nooney
-------------------------------------
Patricia A. Nooney
Senior Vice President and Secretary
BEING A MAJORITY OF DIRECTORS
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<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> 3-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-START> DEC-01-1996
<PERIOD-END> FEB-28-1997
<CASH> 285,841
<SECURITIES> 0
<RECEIVABLES> 190,885
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 488,047
<PP&E> 14,414,424
<DEPRECIATION> 7,247,094
<TOTAL-ASSETS> 11,199,471
<CURRENT-LIABILITIES> 12,526,651
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (1,540,106)
<TOTAL-LIABILITY-AND-EQUITY> 11,199,471
<SALES> 854,048
<TOTAL-REVENUES> 854,236
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 621,345
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 278,800
<INCOME-PRETAX> (45,909)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (45,909)
<EPS-PRIMARY> (3.33)
<EPS-DILUTED> 0
</TABLE>
