SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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 May 31, 1998
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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________________________
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.)
500 North Broadway, Suite 1200, St. Louis, MO 63102-2124
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 206-4600
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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
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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
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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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PART I
ITEM 1 - FINANCIAL STATEMENTS:
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NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
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(A LIMITED PARTNERSHIP)
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BALANCE SHEETS
--------------
May 31, November 30,
1998 1997
(Unaudited)
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ASSETS:
Cash $ 265,548 $ 327,910
Accounts receivable 98,926 111,353
Prepaid expenses and deposits 94,300 27,772
Investment property, at cost:
Land 1,013,858 1,013,858
Buildings and improvements 13,900,827 13,841,059
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14,914,685 14,854,917
Less accumulated depreciation 7,842,687 7,598,733
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7,071,998 7,256,184
Investment property held for sale 3,853,516 3,854,057
Deferred expenses - At amortized cost 43,431 50,804
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$ 11,427,719 $ 11,628,080
============ ============
LIABILITIES AND PARTNERS' DEFICIT
Liabilities:
Accounts payable and accrued expenses $ 119,951 $ 108,665
Accrued real estate taxes 166,532 255,680
Mortgage notes payable 12,820,159 12,871,393
Refundable tenant deposits 80,259 80,287
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13,186,901 13,316,025
Partners' Deficit (1,759,182) (1,687,945)
------------ ------------
$ 11,427,719 $ 11,628,080
============ ============
SEE NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
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<TABLE>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
-----------------------------------------
(A LIMITED PARTNERSHIP)
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STATEMENTS OF OPERATIONS AND PARTNERS' DEFICIT
----------------------------------------------
(UNAUDITED)
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<CAPTION>
Three Months Ended Six Months Ended
May 31, May 31, May 31, May 31,
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
REVENUES:
Rental and other income $ 829,046 $ 842,305 $ 1,677,349 $ 1,696,354
Interest 736 250 1,170 438
----------- ----------- ----------- -----------
829,782 842,555 1,678,519 1,696,792
EXPENSES:
Interest 287,956 281,766 575,524 560,565
Depreciation and amortization 128,275 117,329 251,868 234,673
Real estate taxes 113,437 109,746 215,708 218,824
Property management fees paid to
Nooney Inc. 43,852 44,806 89,060 90,265
Reimbursement to Nooney Inc.
for partnership management
services and indirect expenses 10,000 10,000 20,000 20,000
Repairs & Maintenance expenses 50,076 42,817 93,709 87,957
Payroll expenses 87,421 67,878 141,876 124,130
Insurance expenses 24,207 25,999 50,278 52,786
Cleaning expenses 22,269 22,880 42,877 38,467
Utility expenses 37,233 37,288 72,008 72,808
Professional fee expenses 32,194 28,008 48,721 79,197
Other operating expenses 66,469 89,509 148,127 198,500
----------- ----------- ----------- -----------
903,389 878,026 1,749,756 1,778,172
----------- ----------- ----------- -----------
NET LOSS $ (73,607) (35,471) (71,237) $ (81,380)
=========== =========== =========== ===========
NET LOSS PER LIMITED
PARTNERSHIP UNIT $ (5.35) $ (2.58) $ (5.17) $ (5.91)
=========== =========== =========== ===========
PARTNERS' DEFICIT:
Beginning of Period $(1,685,575) $(1,540,106) $(1,687,945) $(1,494,197)
Net Loss (73,607) (35,471) (71,237) (81,380)
----------- ----------- ----------- -----------
End of Period $(1,759,182) $(1,575,577) $(1,759,182) $(1,575,577)
=========== =========== =========== ===========
<FN>
SEE NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
</FN>
</TABLE>
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<PAGE>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
-----------------------------------------
(A LIMITED PARTNERSHIP)
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STATEMENTS OF CASH FLOWS
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(UNAUDITED)
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Six Months Ended
May 31, May 31,
1998 1997
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (71,237) $ (81,380)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization 251,868 234,673
Changes in assets and liabilities:
Decrease (Increase) in accounts receivable 12,427 (20,026)
(Increase) Decrease in prepaid expenses
and deposits (66,528) 34,569
Increase in deferred expense 0 (3,580)
(Decrease) Increase in current liabilities (77,890) 186,733
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Total Adjustments 119,877 432,369
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Net cash provided by operating
activities 48,640 350,989
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CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to investment property (58,626) (158,855)
Property additions using Capital Reserve Escrow (1,142) (73,566)
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Net cash used in investing activities (59,768) (232,421)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on mortgage notes payable (51,234) (5,833)
Funding on mortgage notes payable 0 124,684
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Net cash from financing activities (51,234) 118,851
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NET (DECREASE) INCREASE IN CASH (62,362) 237,419
CASH, Beginning of period 327,910 211,840
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CASH, End of period $ 265,548 $ 449,259
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS
INFORMATION - Cash paid during the period for interest $ 608,259 $ 575,523
========= =========
SEE NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
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NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
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(A LIMITED PARTNERSHIP)
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NOTES TO UNAUDITED FINANCIAL STATEMENTS
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THREE AND SIX MONTHS ENDED MAY 31, 1998 AND 1997
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NOTE A:
Refer to the Registrant's financial statements for the year ended November 30,
1997, 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 May 31, 1998 and for all periods presented have been made.
The results for the three-month and six-month period ended May 31, 1998 are not
necessarily indicative of the results which may be expected for the entire year.
NOTE C:
The Registrant's properties are managed by Nooney, Inc., a wholly-owned
subsidiary of CGS Real Estate Company. Nooney Capital Corp., a general partner,
is a 75% owned subsidiary of S-P Properties, Inc. S-P Properties, Inc. is a
wholly-owned subsidiary of CGS Real Estate Company.
NOTE D:
The loss per limited partnership unit for the three and six months ended May 31,
1998 and May 31, 1997 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
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AND RESULTS OF OPERATIONS
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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 May 31, 1998 is $265,548, a decrease of $62,362 from year end
November 30, 1997. The decrease in cash balances can primarily be attributed to
timing of payments for insurance premiums for both Woodhollow Apartments and
Cobblestone Court Shopping Center. In 1998, these premiums were paid in one lump
sum during the second quarter, while in prior years a down payment was made in
the second quarter and monthly installments throughout the policy period were
made. Cash produced from operating activity for the six months ended May 31,
1998 was $48,640. Capital additions were made in the amount of $59,768 and
payments on mortgage notes in the amount of $51,234 for this six month period
were made. In May 1998, the first installment of the real estate taxes for
Cobblestone Court were not paid as there was not sufficient cash in the real
estate tax escrow. The Registrant anticipates that there will be sufficient cash
to fund the tax escrow and pay the delinquent tax installment and any accrued
penalties prior to the end of the third quarter 1998. The Registrant plans to
maintain adequate cash reserves for real estate taxes and fund remaining capital
expenditures from operations at Woodhollow Apartments. Capital expenditures by
property anticipated for the balance of the year are as follows:
Leasing Capital Other Capital Total
--------------- ------------- -----
Cobblestone Court $ 0 $ 0 $ 0
Woodhollow Apartments 0 111,842 111,842
-------- -------- --------
$ 0 $111,842 $111,842
======== ======== ========
At Cobblestone Court Shopping Center, no capital expenditures are anticipated.
At Woodhollow Apartments, the Other Capital consists of expenditures for new
heating and air conditioning units ($8,720), new signage ($16,621), and
painting/carpeting interior hallways ($86,501). These are capital items outside
of the scope of the capital renovation program which is paid for out of the
capital reserve escrow. In the second quarter 1998, one building was renovated
and will be paid for during third quarter using the capital reserve escrow for
Woodhollow Apartments. After this payment, no additional improvements are
anticipated from the capital reserve escrow for the remainder of 1998.
As discussed in previous reports, Cobblestone Court is listed with a local
Minneapolis broker to lease the property by locating one or two new anchors for
the east end of the shopping center. After new tenants are found, the goal is to
sell the property.
The holder of the first and second mortgage debt on Cobblestone Court and the
second mortgages that are cross-collateralized with both Cobblestone Court and
Woodhollow Apartments has extended these loans through October 31, 1998. The May
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31, 1998 balance of the second mortgage on Cobblestone Court is $1,689,571 and
the second mortgage on Woodhollow Apartments is $318,284. The interest rate on
the first mortgage for Cobblestone was 8.53125% ending May 31, 1998. The
interest rate for one portion of the cross collateralized second mortgages is
LIBOR plus 2.75% and as of May 31, 1998 was 8.56641%, while the other portion
was 9.5%. The interest rate on Cobblestone's second mortgage was 8.52344%.
Woodhollow Apartments has a first mortgage due August 1, 2001 with an interest
rate of 9.125%.
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 certain mortgage debt
as it matures.
Results of Property Operations
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The results of operations for the Registrant's properties for the three months
ended May 31, 1998 and 1997 are detailed in the schedule below. Revenues and
expenses of the Registrant are excluded.
Woodhollow Apartments Cobblestone Court
--------------------- -----------------
1998
----
Revenues $ 589,619 $ 239,525
Expenses 629,942 273,388
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Net Loss $ (40,323) $ (33,863)
========= =========
1997
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Revenues $ 576,669 $ 266,210
Expenses 597,459 280,507
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Net Loss $ (20,790) $ (14,297)
========= =========
At Woodhollow Apartments, revenues increased $12,950 when comparing the second
quarter of 1998 to the second quarter of 1997. The reason for this is primarily
due to increases in the amount of rental income due to higher rental rates. This
increase in revenue was partially offset by an added number of rent concessions
given for incentive purposes to both new and renewing tenants. Expenses
increased $32,483 due to increases in payroll ($20,303) primarily attributable
to additional maintenace hours, professional fees ($6,822), repairs and
maintenance expenses ($8,243) and depreciation ($10,946). These increases in
expense were partially offset by decreases in fire/crime prevention ($4,080),
landscaping renovation ($8,075), and interest expense ($1,726).
At Cobblestone Court Shopping Center, revenues decreased by $26,685 when
comparing the quarter ended May 31, 1998 to the quarter ended May 31, 1997. The
decrease in income is primarily attributable to the drop in the occupancy level,
therefore reducing all income billings. The decrease in income totaled $53,923
and was partially offset by a decrease in the bad debt provision of $27,915.
Expenses decreased minimally at $7,119 due to decreases in snow removal
($9,866), professional fees ($2,636), cleaning expenses ($2,516), trash removal
($2,232), and other operating expenses ($4,200). These decreases were partially
offset by increases in interest expense ($7,916) due to additional interest
incurred for monies borrowed in 1997 for roof replacement and real estate tax
expense ($6,462) due to late payment penalties.
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<PAGE>
The occupancy levels at the Registrant's properties during the second quarter
decreased at both Cobblestone Court and Woodhollow Apartments. The occupancy
levels at May 31, 1998, 1997 and 1996 are as follows:
Occupancy levels as of May 31,
Property 1998 1997 1996
-------- ---- ---- ----
Cobblestone Court Shopping Center 64% 74% 84%
Woodhollow Apartments 94% 93% 94%
At Cobblestone Court Shopping Center, leasing activity during the second quarter
consisted of one tenant occupying 2,821 square feet vacating their space. The
property has two major tenants which occupy 26% and 7 1/2% of the available
space on leases that expire January 2001 and April 2002.
At Woodhollow Apartments, the occupancy increased by 1% during the quarter. The
Registrant anticipates occupancy increasing to above 95% during the third
quarter of 1998 as demand for apartments in the West St. Louis County area
continues to be strong and the renovation program continues at the property.
1998 Comparisons
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For the three and six month ended May 31, 1998, the Registrant's consolidated
revenues were $829,782 and $1,678,519, respectively. Revenues decreased $12,773
and $18,273 for the three and six month periods ended May 31, 1998 as compared
to the same periods ended May 31, 1997. The decrease in revenues can be
attributable to the lower occupancy level at Cobblestone Court. Consolidated
expenses for the three months ended May 31, 1998 and three months ended May 31,
1997 were $903,389 and $878,026 respectively. The increase in consolidated
expenses for the three months ended 1998 was $25,363 when compared to May 31,
1997. Expenses that increased were interest expense ($6,190), depreciation
($10,946), payroll expenses ($19,543), due to reasons as mentioned in the
property comparisons, repairs and maintenance expenses ($7,259), and
professional fees ($4,186). These increases were partially offset by decreases
in snow removal ($9,866), renovation landscaping ($8,075), fire/crime prevention
($4,080), and insurance ($1,792). When comparing the six months ended May 31,
1998 and May 31, 1997, consolidated expenses were $1,749,756 and $1,778,172,
respectively, a decrease of $28,416. The decrease can be attributable to
decreases in snow removal ($31,216) and professional fees ($29,936) due to legal
costs incurred in the potential sale of Cobblestone. These decreases were
partially offset by increases in interest expense ($14,959) due to additional
borrowings secured by second mortgages in 1997 for Cobblestone and
depreciation/amortization ($17,195).
1997 Comparisons
- ----------------
For the three and six months ended May 31, 1997, the Registrant's consolidated
revenues were $842,555 and $1,696,792, respectively. Revenues decreased $22,278
and $23,098 for the three and six month periods ended May 31, 1997 as compared
to the same periods ended May 31, 1996. The decrease in revenues can be
attributable to the write-off to bad debt of rental revenues from the major
tenant who vacated at Cobblestone Court Shopping Center. Consolidated expenses
for the three months ended May 31, 1997 and three months ended May 31, 1996,
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<PAGE>
were $878,026 and $886,382, respectively. The decrease in consolidated expenses
for the three months ended 1997 was $8,356 when compared to May 31, 1996.
Expenses that decreased were interest ($3,005), depreciation and amortization
($5,856), repairs and maintenance expenses ($16,594), and other operating
expenses ($4,869), partially offset by increases in cleaning expenses ($7,970)
and professional fee expenses ($8,836). When comparing the six months ended May
31, 1997 and May 31, 1996, consolidated expenses were $1,778,172 and $1,751,710,
respectively, an increase of $26,462. This increase in expenses can be
attributed to an increase in real estate taxes ($9,042), cleaning expenses
($9,297), utility expenses ($7,729), professional fee expenses ($28,397) and
other operating expenses ($5,954), partially offset by decreases in interest
($8,608), depreciation and amortization ($15,859), and repairs and maintenance
expenses ($11,246).
Inflation
- ---------
The effects of inflation did not have a material impact upon the Registrant's
operation is fiscal 1997 and are not expected to materially affect the
Registrant's operations in 1998.
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<PAGE>
PART II. OTHER INFORMATION
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Item 6. Exhibits and Reports on Form 8-K
- ----------------------------------------
(a) Exhibits
See Exhibit Index
(b) Reports on Form 8-K
None
SIGNATURES
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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.
Dated: July 14, 1998 NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
----------------------
BY: NOONEY CAPITAL CORPORATION
General Partner
BY: /s/ Gregory J. Nooney, Jr.
--------------------------
Gregory J. Nooney, Jr.
Chairman
/s/ Patricia A. Nooney
----------------------
Patricia A. Nooney
Senior Vice President and Secretary
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<PAGE>
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).
27 Financial Data Schedule (provided for the information of
U.S. Securities and Exchange Commission only)
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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> 6-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> DEC-01-1997
<PERIOD-END> MAY-31-1998
<CASH> 265,548
<SECURITIES> 0
<RECEIVABLES> 98,926
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 458,774
<PP&E> 14,914,685
<DEPRECIATION> 7,842,687
<TOTAL-ASSETS> 11,427,719
<CURRENT-LIABILITIES> 286,483
<BONDS> 12,820,159
<COMMON> 0
0
0
<OTHER-SE> (1,759,182)
<TOTAL-LIABILITY-AND-EQUITY> 11,427,719
<SALES> 829,046
<TOTAL-REVENUES> 829,782
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 615,433
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 287,956
<INCOME-PRETAX> (73,607)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (73,607)
<EPS-PRIMARY> (5.35)
<EPS-DILUTED> 0
</TABLE>
