SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year
ended December 31, 1994 Commission file no. 0-12433
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(Exact name of registrant as specified in its charter)
Illinois 36-3149589
(State of organization) (I.R.S. Employer Identification No.)
900 N. Michigan Ave., Chicago, Illinois 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312-915-1987
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
------------------- ------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
LIMITED PARTNERSHIP INTERESTS
(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
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
State the aggregate market value of the voting stock held by non-affiliates
of the registrant. Not applicable.
Documents incorporated by reference: None
TABLE OF CONTENTS
Page
----
PART I
Item 1. Business. . . . . . . . . . . . . . . . . . 1
Item 2. Properties. . . . . . . . . . . . . . . . . 6
Item 3. Legal Proceedings . . . . . . . . . . . . . 7
Item 4. Submission of Matters to a Vote of
Security Holders. . . . . . . . . . . . . . 7
PART II
Item 5. Market for the Partnership's Limited Partnership
Interests and Related Security Holder Matters7
Item 6. Selected Financial Data . . . . . . . . . . 8
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations14
Item 8. Financial Statements and Supplementary Data 21
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure. . . 54
PART III
Item 10. Directors and Executive Officers
of the Partnership. . . . . . . . . . . . . 54
Item 11. Executive Compensation. . . . . . . . . . . 57
Item 12. Security Ownership of Certain Beneficial Owners
and Management. . . . . . . . . . . . . . . 58
Item 13. Certain Relationships and Related Transactions59
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K . . . . . . . . . . 59
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . 61
i
PART I
ITEM 1. BUSINESS
All references to "Notes" are to Notes to Consolidated Financial
Statements contained in this report.
The registrant, Carlyle Real Estate Limited Partnership - XII (the
"Partnership"), is a limited partnership formed in late 1981 and currently
governed by the Revised Uniform Limited Partnership Act of the State of
Illinois to invest in improved income-producing commercial and residential
real property. The Partnership sold $160,000,000 in Limited Partnership
Interests (the "Interests"), to the public pursuant to a Registration
Statement on Form S-11 under the Securities Act of 1933 (Registration No.
2-76443). A total of 160,000 Interests have been sold to the public at
$1,000 per Interest. The offering closed on April 19, 1983. No Limited
Partner has made any additional capital contribution after such date. The
Limited Partners of the Partnership share in their portion of the benefits
of ownership of the Partnership's real property investments according to
the number of Interests held.
The Partnership is engaged solely in the business of the acquisition,
operation and sale and disposition of equity real estate investments. Such
equity investments are held by fee title, leasehold estates and/or through
joint venture partnership interests. The Partnership's real property
investments are located throughout the nation and it has no real estate
investments located outside of the United States. A presentation of
information about industry segments, geographic regions, raw materials or
seasonality is not applicable and would not be material to an understanding
of the Partnership's business taken as a whole. Pursuant to the
Partnership Agreement, the Partnership is required to terminate on or
before December 31, 2032. Accordingly, the Partnership intends to hold the
real properties it acquires for investment purposes until such time as sale
or other disposition appears to be advantageous. Unless otherwise
described, the Partnership expects to hold its properties for long-term
investment where, due to current market conditions, it is impossible to
forecast the expected holding period. At sale of a particular property,
the proceeds, if any, are generally distributed or reinvested in existing
properties rather than invested in acquiring additional properties.
The Partnership has made the real property investments set forth in
the following table:
<TABLE>
<CAPTION>
Sale or Disposal Date
or if Owned at
December 31, 1994,
Name, Type of Property Date of Original Invested
and Location (e) Size Purchase Capital Percentage (a) Type of Ownership (b)
---------------------- ---- -------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
1. Country Square Apartments
Carrollton, Texas. 434 units 9-30-82 2-2-93 fee ownership of land
and improvements
(through joint
venture partnership) (c)
2. Timberline
Apartments
Denver, Colorado . 200 units 11-1-82 7-25-90 fee ownership of land
and improvements
3. Summerfield/Oak-
ridge Apartments
Aurora, Colorado . 472 units 12-1-82 1-3-91 fee ownership of land
and improvements
(through joint
venture partnership)
4. Arbor Town
Apartments-I
Arlington, Texas . 200 units 12-29-82 11-26-84 fee ownership of land
and improvements (c)(g)
5. Arbor Town
Apartments-II
Arlington, Texas . 202 units 11-1-82 11-26-84 fee ownership of land
and improvements (c)(g)
6. Sierra Pines
Apartments
Houston, Texas . . 404 units 3-31-82 7-29-93 fee ownership of land
and improvements (c)
7. Presidio West
Apartments-II
Houston, Texas . . 400 units 9-16-82 1-1-86 fee ownership of land
and improvements
8. Meadows South-
west Apartments
Houston, Texas . . 384 units 4-1-82 12-28-90 fee ownership of land
and improvements
9. The Crossing
Apartments
Houston, Texas . . 366 units 8-1-82 7-29-93 fee ownership of land
and improvements (c)
Sale or Disposal Date
or if Owned at
December 31, 1994,
Name, Type of Property Date of Original Invested
and Location (e) Size Purchase Capital Percentage (a) Type of Ownership (b)
---------------------- ---- -------- ---------------------- ---------------------
10. Stonybrook
Apartments-I & II
Tucson, Arizona . 411 units 10-1-82 3% fee ownership of land
and improvements
(through joint venture
partnership)
11. First Interstate
Center
Seattle,
Washington. . . . 921,000 sq. ft. 3-10-82 22% fee ownership of
n.r.a. improvements and
and ground leasehold
interest (through joint
venture partnership)
(d)(h)
12. Carrara Place
Office Building
Englewood,
Colorado. . . . . 233,000 sq. ft.11-23-82 12-8-94 fee ownership of land
n.r.a. and improvements
(through joint venture
partnership)(d)(h)
13. San Mateo
Fashion Island
San Mateo,
California. . . . 832,000 sq. ft. 9-10-82 12-31-86 fee ownership of land
g.l.a. and improvements and
ground leasehold
interest in land
(c)
14. Permian Mall
Odessa, Texas . . 665,000 sq. ft.12-28-82 6% fee ownership of land
g.l.a. and improvements (f)
15. National City
Center Office
Building
Cleveland, Ohio . 786,400 sq. ft. 7-27-83 21% fee ownership of land
n.r.a. and improvements
(through joint
venture partnership)(f)
Sale or Disposal Date
or if Owned at
December 31, 1994,
Name, Type of Property Date of Original Invested
and Location (e) Size Purchase Capital Percentage (a) Type of Ownership (b)
---------------------- ---- -------- ---------------------- ---------------------
16. Yerba Buena
West Office
Building
San Francisco,
California. . . . 268,000 sq. ft. 8-30-85 6-24-92 fee ownership of land
n.r.a. and improvements
(through joint venture
partnership) (c)(d)
<FN>
---------------
(a) The computation of this percentage for properties held at December 31, 1994 does not include amounts
invested from sources other than the original net proceeds of the public offering as described above and in Item
7.
(b) Reference is made to Note 4 and to Item 8 - Schedule III filed with this annual report for the current
outstanding principal balances and a description of the long-term mortgage indebtedness secured by the
Partnership's real property investments.
(c) This property has been sold or disposed. Reference is made to Notes 4 and 7 for a description of the sale
or disposition of such real property investment.
(d) Reference is made to Note 3 for a description of the joint venture partnership through which the
Partnership has made this real property investment.
(e) Reference is made to Item 8 - Schedule III filed with this annual report for further information
concerning real estate taxes and depreciation.
(f) Reference is made to Item 6 - Selected Financial Data for additional operating and lease expiration data
concerning this investment property.
(g) The lender has concluded proceedings to realize upon its security and took title to the property.
Reference is made to Note 4(d).
(h) The Partnership sold its interest or a portion of its interest in this property. Reference is made to
Note 7 for a description of the sale of such Partnership interest.
</TABLE>
The Partnership's real property investments are subject to competition
from similar types of properties (including in certain areas properties
owned or advised by affiliates of the General Partners) in the respective
vicinities in which they are located. Such competition is generally for
the retention of existing tenants. Additionally, the Partnership is in
competition for new tenants in markets where significant vacancies are
present. Reference is made to Item 7 below for a discussion of competitive
conditions and future renovation and capital improvement plans of the
Partnership and certain of its significant investment properties.
Approximate occupancy levels for the properties are set forth in the table
set forth in Item 2 below to which reference is made. The Partnership
maintains the suitability and competitiveness of its properties in its
markets primarily on the basis of effective rents, tenant allowances and
services provided to tenants. In the opinion of the Corporate General
Partner of the Partnership, all of the investment properties held at
December 31, 1994 are adequately insured.
Reference is made to Note 8(a) for a schedule of minimum lease
payments to be received in each of the next five years, and in the
aggregate thereafter, under leases in effect at the Partnership's
properties as of December 31, 1994.
On December 1, 1994, Carlyle Seattle sold 49.95% of its interest and
entered into an option agreement concerning the remaining 50.05% interest
in First Interstate. Reference is made to Note 7 and the Partnership's
Report on Form 8-K (File No. 0-12433) for December 1, 1994, which
description is incorporated herein by reference.
On December 8, 1994, the Partnership sold its interest in Carrara
Place Limited. Reference is made to Note 7 and the Partnership's Report on
Form 8-K (File No. 0-12433) for December 8, 1994, which description is
incorporated by reference.
The Partnership has approximately 40 full-time personnel and 20
part-time individuals performing on-site duties at certain of the
Partnership's properties, none of whom are officers or directors of the
Corporate General Partner of the Partnership.
The terms of transactions between the Partnership, the General
Partners and their affiliates are set forth in Item 11 below to which
reference is hereby made for a description of such terms and transactions.
<TABLE>
ITEM 2. PROPERTIES
The Partnership owns directly or through joint venture partnerships the properties or interests in the
properties referred to under Item 1 above to which reference is hereby made for a description of said properties.
The following is a listing of principal businesses or occupations carried on in and approximate occupancy
levels by quarter during fiscal years 1994 and 1993 for the Partnership's investment properties owned during 1994:
<CAPTION>
1993 1994
--------------------------------------------------
At At At At At At At At
Principal Business 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
------------------ ---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Carrara Place
Office Building
Englewood, Colorado . . Attorneys/
Graphic Design 44% 43% 43% 43% 49% 80% 88% N/A
2. Stonybrook Apartments
- I & II
Tucson, Arizona . . . . Apartments 93% 86% 97% 96% 96% 83% 95% 96%
3. Permian Mall
Odessa, Texas . . . . . Retail 91% 90% 90% 90% 91% 91% 91% 92%
4. First Interstate Center
Seattle, Washington . . Financial Institu-
tion/Railroad 96% 96% 97% 97% 97% 99% 97% 97%
5. National City Center
Office Building
Cleveland, Ohio . . . . Banking 96% 94% 96% 96% 94% 94% 94% 94%
<FN>
--------------------
An "N/A" indicates that the Partnership's interest in the property was sold or disposed and was not owned by
the Partnership at the end of the period.
Reference is made to Item 6, Item 7 and Note 8 for further information regarding property occupancy,
competitive conditions and tenant leases at the Partnership's investment properties.
</TABLE>
ITEM 3. LEGAL PROCEEDINGS
The Partnership is not subject to any pending material legal
proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during
1993 and 1994.
PART II
ITEM 5. MARKET FOR THE PARTNERSHIP'S LIMITED PARTNERSHIP INTERESTS
AND RELATED SECURITY HOLDER MATTERS
As of December 31, 1994, there were 16,456 record holders of Interests
of the Partnership. There is no public market for Interests and it is not
anticipated that a public market for Interests will develop. Upon request,
the Corporate General Partner may provide information relating to a
prospective transfer of Interests to an investor desiring to transfer his
Interests. The price to be paid for the Interests, as well as any other
economic aspects of the transaction, will be subject to negotiation by the
investor.
Reference is made to Item 6 below for a discussion of cash distribu-
tions made to the Limited Partners.
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
DECEMBER 31, 1994, 1993, 1992, 1991 AND 1990
(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)
<CAPTION>
1994 1993 1992 1991 1990
------------- ------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Total income . . . . . . $ 43,570,909 49,186,211 52,853,676 54,125,067 57,407,063
============ =========== =========== =========== ===========
Operating loss . . . . . $ (4,513,232) (7,086,550) (9,725,577) (9,950,730) (10,350,259)
Partnership's share of
operations of uncon-
solidated venture . . . -- -- (723,696) (1,447,179) (2,670,211)
Venture partners'
share of ventures'
operations. . . . . . . 1,596,830 2,415,069 1,803,556 1,226,873 1,124,446
------------ ----------- ----------- ----------- -----------
Net operating loss . . . (2,916,402) (4,671,481) (8,645,717) (10,171,036) (11,896,024)
Gain (loss) on sale
or dispositions
of interest in
investment property,
net of venture
partners' share . . . . 30,614,901 4,091,683 3,817,800 1,637,840 (1,263,999)
Extraordinary items . . (675,062) -- -- -- 20,904,051
------------ ----------- ----------- ----------- -----------
Net earnings (loss). . . $ 27,023,437 (579,798) (4,827,917) (8,533,196) 7,744,028
============ =========== =========== =========== ===========
Net earnings (loss)
per limited part-
nership interest (b):
Net operating loss . . $ (17.50) (28.03) (51.87) (61.02) (71.37)
Gain (loss) on sale
or dispositions
of interest in
investment property
net of venture
partners' share . . . 189.42 25.32 23.62 10.13 (7.82)
Extraordinary items. . (4.18) -- -- -- 126.63
------------ ----------- ----------- ----------- -----------
Net earnings (loss)$ 167.74 (2.71) (28.25) (50.89) 47.44
============ =========== =========== =========== ===========
1994 1993 1992 1991 1990
------------- ------------- ----------- ------------ ------------
Total assets . . . . . . $125,013,528 209,636,156 233,815,505 252,650,342 279,101,191
============ =========== =========== =========== ===========
Long-term debt . . . . . $ 93,051,656 194,712,434 188,904,448 230,923,628 232,320,973
============ =========== =========== =========== ===========
Cash distributions
per Interest (c) . . . $ -- -- 1.50 9.75 11.00
============ =========== =========== =========== ===========
<FN>
-------------
(a) The above selected financial data should be read in conjunction with the consolidated financial
statements and the related notes appearing elsewhere in this annual report.
(b) The net earnings (loss) per Interest is based upon the number of Interests outstanding at the end of each
year (160,005).
c) Cash distributions to the Limited Partners since the inception of the Partnership have not resulted in
taxable income to such Limited Partners and have therefore represented a return of capital. Each Partner's
taxable income (or loss) from the Partnership in each year is equal to his allocable share of the taxable income
(loss) of the Partnership, without regard to the cash generated or distributed by the Partnership.
</TABLE>
<TABLE>
SIGNIFICANT PROPERTY - SELECTED RENTAL AND OPERATING DATA AS OF DECEMBER 31, 1994
<CAPTION>
Property
--------
National City
Center Office
Building a) The GLA occupancy rate and average base rent per square foot as of December 31
for each of the last five years were as follows:
Year Ending GLA Avg. Base Rent Per
December 31, Occupancy Rate Square Foot (1)
------------ -------------- ------------------
<S> <C> <C> <C>
1990 . . . . . 97% 11.22
1991 . . . . . 96% 11.41
1992 . . . . . 96% 11.47
1993 . . . . . 96% 11.86
1994 . . . . . 94% 12.44
<FN>
(1) Average base rent per square foot is based on GLA occupied as of December 31
of each year.
</TABLE>
<TABLE>
<CAPTION>
Base Rent Scheduled LeaseLease
b) Significant Tenants Square Feet Per Annum Expiration DateRenewal Option
------------------- ----------- --------- -----------------------------
<S> <C> <C> <C> <C> <C>
National City Bank 447,080 $4,700,0721/2006 7-10 year options
(Bank)
Ernst & Young 65,864 824,76811/1996 1-4 year options
(Public Accounting Firm)
Baker & Hostetler 151,392 1,859,92412/2001 15-5 year options
(Law Firm)
</TABLE>
<TABLE>
<CAPTION>
c) The following table sets forth certain information with respect to the
expiration of leases for the next ten years at the National City
Center Office Building:
Annualized Percent of
Number of Approx. Total Base Rent Total 1994
Year Ending Expiring GLA of Expiring of Expiring Base Rent
December 31, Leases Leases (1) Leases Expiring
------------ --------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C>
1995 -- -- -- --
1996 1 65,864 824,768 9%
1997 -- -- -- --
1998 2 16,905 246,991 3%
1999 -- -- -- --
2000 1 42,390 594,418 6%
2001 2 165,156 1,949,924 21%
2002 -- -- -- --
2003 -- -- -- --
2004 -- -- -- --
<FN>
(1) Excludes leases that expire in 1995 for which renewal leases or leases with
replacement tenants have been executed as of March 25, 1995.
</TABLE>
<TABLE>
<CAPTION>
Property
--------
CP Permian
Partners
Shopping Mall a) The GLA occupancy rate and average base rent per square foot as of December 31
for each of the last five years were as follows:
GLA Avg. Base Rent Per
December 31, Occupancy Rate Square Foot (1)
------------ -------------- ------------------
<S> <C> <C> <C>
1990 . . . . . 89% 6.24
1991 . . . . . 90% 5.63
1992 . . . . . 95% 5.35
1993 . . . . . 93% 5.52
1994 . . . . . 92% 5.49
<FN>
(1) Average base rent per square foot is based on GLA occupied as of December 31
of each year.
</TABLE>
<TABLE>
<CAPTION>
Base Rent Scheduled LeaseLease
b) Significant Tenants Square Feet Per Annum Expiration DateRenewal Option
------------------- ----------- --------- -----------------------------
<S> <C> <C> <C> <C> <C>
J.C. Penney 100,666 $286,294 2/2000 N/A
(Department Store)
Dillards
(Department Store) 100,780 333,194 2/2008 1-5 year option
Sears
(Department Store) 140,223 280,446 2/2030 N/A
</TABLE>
<TABLE>
<CAPTION>
c) The following table sets forth certain information with respect to the expiration of
leases for the next ten years at the CP Permian Partners Shopping Mall:
Annualized Percent of
Number of Approx. Total Base Rent Total 1994
Year Ending Expiring GLA of Expiring of Expiring Base Rent
December 31, Leases Leases (1) Leases Expiring
------------ --------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C>
1995 17 44,878 498,987 15%
1996 7 24,857 280,216 9%
1997 7 14,577 200,806 6%
1998 6 20,180 139,380 4%
1999 5 9,098 103,214 3%
2000 8 135,818 606,548 19%
2001 3 11,945 96,119 3%
2002 3 4,677 82,064 3%
2003 3 10,950 117,806 4%
2004 1 1,200 14,400 --
<FN>
(1) Excludes leases that expire in 1995 for which renewal leases or leases with
replacement tenants have been executed as of March 25, 1995.
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
On June 21, 1982, the Partnership commenced an offering of
$160,000,000 pursuant to a Registration Statement on Form S-11 under the
Securities Act of 1933. All Interests were subscribed and issued between
June 21, 1982 and April 19, 1983 from which the Partnership received gross
proceeds of $160,000,000.
After deducting selling expenses and other offering costs, the Part-
nership had approximately $141,004,000 with which to make investments in
income-producing commercial and residential real property, to pay legal
fees and other costs (including acquisition fees) related to such invest-
ments and to satisfy working capital requirements. Portions of the
proceeds were utilized to acquire the properties described in Item 1 above.
At December 31, 1994, the Partnership and its consolidated ventures
had cash and cash equivalents of approximately $30,504,000. Such funds and
short-term investments of approximately $1,945,000 are available for
capital improvements, future distributions to partners, and for working
capital requirements, including capital improvements and leasing costs
currently being incurred at the National City Center Office Building.
Certain of the Partnership's investment properties currently operate in
overbuilt markets which are characterized by lower occupancies and/or
reduced rent levels. The Partnership currently has adequate cash and cash
equivalents to maintain the operations of the Partnership. The Partnership
has taken steps to preserve its working capital by deciding to suspend
distributions from operations to the Limited and General Partners effective
as of the first quarter of 1992. The Partnership had also deferred cash
distributions and partnership management fees, payable to the Corporate
General Partner related to the third and fourth quarters of 1991. In
addition, the General Partners and their affiliates had deferred payment of
certain property management and leasing fees. In December 1994, the
Partnership paid the Corporate General Partner the previously deferred cash
distributions, partnership management fees and property management and
leasing fees in the amount of $19,666, $33,334 and $3,798,155,
respectively, as more fully described in Note 9. In February 1995, the
Partnership paid a sales distribution of $23,200,725 ($145 per Interest) to
the Limited Partners and $234,351 to the General Partners related to the
sale of the Partnership's interest in the First Interstate Center (Notes 7
and 10).
The Partnership and its consolidated ventures have currently budgeted
for 1995 approximately $1,216,000 for tenant improvements and other capital
expenditures. The Partnership's share of such items in 1995 is currently
budgeted to be approximately $1,130,000. Included in this amount is the
roof and parking lot at the Permian Mall which are currently in need of
repair. To fund the Permian Mall improvements, the Partnership intends to
initiate discussions with the mortgage lender regarding a modification to
the loan. There can be no assurance that a loan modification can be
obtained. Actual amounts expended in 1995 may vary depending on a number
of factors including actual leasing activity, results of operations,
liquidity considerations and other market conditions over the course of the
year. The source of capital for such items and for both short-term and
long-term future liquidity and distributions is expected to be through cash
generated by the Partnership's investment properties and through the sale
of such investments. Due to the Permian Mall improvements and
considerations on other properties as discussed below, only the National
City Center Office Building is considered to be a significant source of
future long-term operational cash generated. In addition, the Partnership
does not consider the remaining mortgage note receivable (related to San
Mateo Fashion Island) to be a source of future liquidity. Reference is
made to Note 7(b). In such regard, reference is made to the Partnership's
property specific discussions below and also to the Partnership's
disclosure of certain property lease expirations in Item 6. The
Partnership's and its Ventures' mortgage obligations are all non-recourse.
Therefore, the Partnership and its Ventures are not obligated to pay
mortgage indebtedness unless the related property produces sufficient net
cash flow from operations or sale.
STONYBROOK APARTMENTS
The mortgages on Stonybrook Apartments II matured October 1, 1994
(Stonybrook Apartments I is not subject to a mortgage loan) with an
outstanding balance of approximately $4,807,000 at September 30, 1994. The
Partnership refinanced the $4,152,600 first mortgage loan which has been
extended to October 1, 1999 at an interest rate of 9.175% per annum. The
loan requires monthly interest and principal payments of approximately
$35,000 with a balloon payment due at maturity. The Partnership remitted a
$40,000 principal payment to the lender, reducing the amount refinanced to
$4,112,600. Concurrently, the Partnership paid in full the second mortgage
note secured by the property in the amount of $654,800. Accrued and unpaid
interest in the amount of $325,485 was forgiven by the lender and is
included in extraordinary refinancing loss, net of gain in the accompanying
consolidated financial statements. Reference is made to Note 4. The
Partnership is currently marketing both phases of the property for sale.
CARRARA
In December 1994, the Partnership redeemed its interest in Carrara
Place Limited to the venture for $750,000 in cash at closing (Note 7). As
a result of the redemption, the Partnership recognized a gain of $5,404,577
in the accompanying consolidated financial statements. The market and
property conditions that preceded the redemption are discussed below.
The lease for Carrara Place Office Building's major tenant, which
represented 46% of the building's leasable area and provided for rental
payments that were significantly greater than current market rental rates,
expired in December 1992. The Denver, Colorado region had been adversely
affected by increased competition for tenants as a result of overbuilding
in the area. As a result of the current market rental rates, the cash flow
generated by the property would have been significantly less than the
payments required under the original mortgage note even if the space was
re-leased. Further, re-leasing the space required significant re-leasing
costs. Additionally, the lease for a tenant occupying approximately 17% of
the building's leasable area was scheduled to expire in June 1994. The
venture reached an agreement with the tenant to extend their lease for an
additional five years. The venture also reached an agreement with a new
tenant to occupy approximately 21% of the building's leasable area, with
the lease scheduled to expire in August 2004. The Carrara venture initiated
discussions with the mortgage lender regarding a modification to the
mortgage loan and in September 1993 reached an agreement to modify the loan
retroactive to January 1, 1993. Under the modification, the maturity date
was extended from June 30, 1994 until January 1, 1998. Interest continued
to accrue at 9.875% from January 1, 1993 until January 1, 1998. Effective
January 1, 1993, the net cash flow of the property, subject to certain
reserves, was paid to the lender and applied toward the payment of accrued
and unpaid interest, current interest and principal balance of the loan,
respectively. Any capital costs, including re-leasing costs, were to be
funded by the lender, subject to their approval, and such costs added to
the principal balance of the loan. Approximately $2,699,000 had been
funded by the lender as of the date of the redemption.
Concurrent with the modification, the Carrara venture was reorganized
such that the Partnership became the sole general partner of the venture,
with its venture partner becoming a limited partner of the venture. In
addition, the property manager (an affiliate of the unaffiliated venture
partner) was replaced effective September 1993. Based upon an analysis of
anticipated market conditions, the Partnership had decided not to commit
additional funds to the Carrara Place Office Building. There had to be a
significant improvement in market and property conditions in order for the
value of the property to be greater than the mortgage payoff amount at any
point in time, including accrued interest. Therefore, it was unlikely that
any significant proceeds would be received by the Partnership in the event
the property were sold or refinanced.
In conjunction with the modification, the Carrara venture had agreed
to transfer title to the lender if the venture failed to pay the loan in
full on the earlier of the extended maturity date or an acceleration of the
loan as a result of the occurrence of an event of default (as defined).
Such a decision would have resulted in a gain for financial reporting and
Federal income tax purposes with no corresponding distributable proceeds.
NATIONAL CITY CENTER
At the National City Center Office Building located in Cleveland,
Ohio, a major tenant (Baker & Hostetler) extended its lease term to 2001,
but reduced its space leased by approximately 18,000 square feet as of
January 1993. The extended lease requires tenant improvement costs of
approximately $92,000 per year through the expiration of the lease with an
additional amount to be paid in 1996 of approximately $730,000. These
tenant improvement costs will result in the property incurring a slight
deficit for 1994. In 1993, the Venture received a lease termination fee of
approximately $1,100,000 from another tenant (KPMG Peat Marwick LLP) for
vacating approximately 19,700 square feet (which was subsequently leased to
National City Bank).
In January 1994, the debt service payments under the existing mortgage
increased from 9-5/8% to 11-7/8% until the scheduled maturity of the loan
in December 1995. The Venture reached an agreement with the current
mortgage lender to refinance the existing mortgage effective April 28,
1994, with an interest rate of 8.5%. The loan will be amortized over 22
years with a balloon payment due on April 20, 2001. In addition, the
Venture paid a prepayment penalty of $580,586 based upon the outstanding
loan balance at the time of refinancing. The lender required an escrow
account of $612,000 to be established at the time of the refinancing for
future tenant improvements at the property. The escrowed funds are to be
released to the venture upon lender approval of such costs. The lender
also required an escrow of the tenant improvement costs related to the
Baker & Hostetler lease (as discussed above). The Venture is required to
escrow approximately $313,000 per year in 1994 through 1996 and
approximately $236,000 per year in 1997 and 1998. The $1,163,524
refundable loan commitment fee paid by the Partnership in 1993 was applied
to accrued interest and the prepayment penalty, with the balance of
$238,215 refunded to the Partnership in 1994. The Partnership's share of
extraordinary loss on extinguishment of debt ($1,000,547) consisting of the
prepayment penalty, the unamortized loan discount and unamortized loan fees
at the time of refinancing is recorded in the accompanying consolidated
financial statements. Real estate taxes payable in 1994 increased due to
the expiration of a 25% reduction of a real estate tax abatement that was
received when the property was purchased. The remaining 25% abatement
expires in 1998 for taxes payable in 1999.
CARLYLE SEATTLE
In May 1994, Carlyle Seattle executed an agreement which issued an
option to sell its interest in First Interstate to the unaffiliated venture
partner. The agreement provided for the purchase of 49.95% of Carlyle
Seattle's interest by October 17, 1994 (for which Carlyle Seattle received
a non-refundable deposit of $500,000 on June 30, 1994 and which was
subsequently extended until December 22, 1994 with the receipt of an
additional $500,000 on September 22, 1994) with an option for the
unaffiliated venture partner to purchase the remaining 50.05% Carlyle
Seattle interest between one year and two years after the initial sale
closing. On December 1, 1994 (initial sale transaction closing) Carlyle
Seattle received (from the unaffiliated joint venture partner) $20,276,000
in cash (less non-refundable deposits as described above) for 49.95% of its
interest as explained above. The unaffiliated venture partner paid
$5,000,000 in cash for the option of the unaffiliated venture partner to
purchase the remaining 50.05% of Carlyle Seattle's interest in First
Interstate. Additionally, the unaffiliated venture partner loaned Carlyle
Seattle $15,000,000 (bearing interest at a rate of 9% per annum with
accrued interest and unpaid principal due on January 1, 1997) which is
secured by Carlyle Seattle's remaining 50.05% interest. The exercise price
for the remaining 50.05% interest is $21,350,000 if the purchase option is
exercised one year from the initial closing, increasing up to $22,850,000
at the termination of the option period. The $5,000,000 option purchase
price and the balance of unpaid principal and accrued interest on the
$15,000,000 Carlyle Seattle loan can be applied toward the exercise price.
There can be no assurance that such option will be exercised. At December
31, 1994, Carlyle Seattle has recorded a note payable to the unaffiliated
venture partner in the amount of $15,000,000 plus accrued interest and a
deferred gain of $5,000,000 for the cash option payment. In connection
with the sale transaction, the First Interstate joint venture agreement was
amended to cause the joint venture to be converted to a limited partnership
in which Carlyle Seattle is the sole limited partner and the unaffiliated
venture partner is the sole general partner. The Partnership's share of
proceeds from this transaction was approximately $29,522,000 and its share
of gain on sale and restructuring was approximately $25,210,000 in 1994.
PERMIAN MALL
The property produced cash flow from operations in 1994, however,
significant funds will be required in the near future for major roof and
parking lot repairs. In 1995, 15% of the tenant leases are scheduled to
expire for which the Partnership is currently seeking renewal of existing
leases or replacement tenants. In anticipation of the necessary major
repairs and potential re-leasing costs the Partnership has initiated
discussions with the mortgage lender regarding a modification to the loan.
There can be no assurance that such modification will be obtained.
There are certain risks associated with the Partnership's investments
made through joint ventures including the possibility that the
Partnership's joint venture partners in an investment might become unable
or unwilling to fulfill their financial or other obligations, or that such
joint venture partners may have economic or business interests or goals
that are inconsistent with those of the Partnership.
Though the economy has recently shown signs of improvement and
financing is generally becoming more available for certain types of higher-
quality properties in healthy markets, real estate lenders are typically
requiring a lower loan-to-value ratio for mortgage financing than in the
past. This has made it difficult for owners to refinance real estate
assets at their current debt levels unless the value of the underlying
property has appreciated significantly. As a consequence, and due to the
weakness of some of the local real estate markets in which the
Partnership's properties operate, the Partnership is taking steps to
preserve its working capital. Therefore, the Partnership is carefully
scrutinizing the appropriateness of any discretionary expenditures,
particularly in relation to the amount of working capital it has available.
By conserving working capital, the Partnership will be in a better position
to meet future needs of its properties without having to rely on external
financing sources.
Due to the factors discussed above and the general lack of buyers of
real estate today, it is likely that the Partnership may hold some of its
investment properties longer than originally anticipated in order to
maximize the return to the Limited Partners. Also, in light of the current
severely depressed real estate markets, it currently appears that the
Partnership's goal of capital appreciation will not be achieved. Although
the Partnership expects to distribute from sale proceeds some portion of
the Limited Partners' original capital, without a dramatic improvement in
market conditions the Limited Partners will receive significantly less than
their original investment. In addition, in connection with sales or other
dispositions (including transfers to lenders) of properties (or interests
therein) owned by the Partnership or its joint venture, the Limited
Partners may be allocated substantial gain for Federal income tax purposes.
RESULTS OF OPERATIONS
The increase in cash and cash equivalents and short-term investments
in the aggregate as of December 31, 1994 as compared to December 31, 1993
is primarily due to (i) the Partnership's share of proceeds from the sale
of the First Interstate transaction (such proceeds were substantially
distributed in February 1995, Note 10) as discussed above and (ii) the
Partnership's suspension of cash distributions from operations effective
with the first quarter of 1992 as discussed above.
The decrease in loan commitment fee as of December 31, 1994 as
compared to December 31, 1993 is due to the application of the loan
commitment fee to accrued interest and prepayment penalty related to the
April, 1994 refinancing of the mortgage loan at the National City Center
Office Building (see Note 4(d)).
The increase in escrow deposits as of December 31, 1994 as compared to
December 31, 1993 is primarily due to the April, 1994 refinancing of the
National City Center Office Building mortgage loan (see Note 4(d)).
The decrease in investment properties net of accumulated depreciation
and deferred expenses as of December 31, 1994 as compared to December 31,
1993 is primarily due to the transactions related to Carrara Place Limited
and First Interstate in December, 1994 as discussed above. Such
transactions, the payoff of the Stonybrook I mortgage note and the
refinancing of the Stonybrook II mortgage note also resulted in the
decrease of the current portion and long term debt as of December 31, 1994
as compared to December 31, 1993.
The decreases in accrued rents receivable, accounts payable and other
liabilities as of December 31, 1994 as compared to December 31, 1993 is
primarily due to the First Interstate transaction.
The decrease in accrued interest at December 31, 1994 as compared to
December 31, 1993 is due primarily to the transaction related to Carrara
Place Limited (note 7).
The decrease in due to affiliates as of December 31, 1994 as compared
to December 31, 1993 is primarily due to the payment of deferred management
and leasing fees in December, 1994 (see Note 9).
The note payable and deferred gain at December 31, 1994 relate to the
sale and financing of Carlyle Seattle's remaining interest in First
Interstate (see Note 7(d)).
The decrease in rental income and mortgage and other interest and
property operating expenses for the year ended December 31, 1994 as
compared to the year ended December 31, 1993 is primarily due to the second
mortgage lender's realization upon its security represented by the Country
Square apartments in February, 1993, the sale of the Sierra Pines and
Crossing Apartments in July 1993 (see Note 7) and to the change to the
equity method of accounting for First Interstate effective December 1, 1994
(see Note 1). In addition, rental income decreased due to a $1,100,000
termination fee received in January 1993 at the National City Center Office
Building and due to decreased rental income at the First Interstate Center
resulting from decreased rental rates. The decrease in rental income,
mortgage and other interest, and property operating expenses for the year
ended December 31, 1993 compared to the year ended December 31, 1992 is
primarily due to the second mortgage lender's realization upon its security
represented by the Country Square apartments and the sale of the Sierra
Pines and Crossing Apartments in July 1993 and decreased occupancy at the
Carrara Place Office Building. The decrease in rental income is partially
offset by the lease termination fee received in 1993 at the National City
Center Office building, as discussed above.
The increase in interest income for the year ended December 31, 1994
compared to the year ended December 31, 1993 is primarily due to the
increases in the rate of interest earned on and an increased average
balance of U.S. Government obligations. The decrease in interest income
for the year ended December 31, 1993 compared to the year ended December
31, 1992 is primarily due to a decrease in the interest income recognized
on the mortgage note receivable for San Mateo Fashion Island.
The decrease in depreciation for the year ended December 31, 1994
compared to the year ended December 31, 1993 is primarily due to the second
mortgage lender's realization upon its security represented by the Country
Square apartments in February, 1993 and the sale of the Sierra Pines and
Crossing Apartments in July 1993 and to the change to the equity method of
accounting for First Interstate effective December 1, 1994 (see Note 7).
The increase in Partnership's share of operations of unconsolidated
venture for the year ended December 31, 1993 as compared to December 31,
1992 is due to the transfer of title to the property to the lender of the
Yerba Buena West Office Building in June 1992.
The provision for value impairment for the year ended December 31,
1992 is due to the Partnership recording a provision to reduce the net
carrying value of the Sierra Pines Apartments, based upon a proposed sales
price.
The decrease in venture partners' share of ventures' operations for
the year ended December 31, 1994 compared to the year ended December 31,
1993 and the corresponding decrease in venture partners' deficits in
ventures for the year ended December 31, 1994 compared to the year ended
December 31, 1993 is primarily due to the sale of the Partnership's
interest in Carrara Place Limited and the First Interstate transaction as
discussed above.
The gain on sale or dispositions, net of venture partners' share for
the year ended December 31, 1994 is due to the redemption of the
Partnership's interest in Carrara Place Limited and partial sale and
restructuring of First Interstate (see Note 7). The gain on the sale or
disposition of investment properties for the year ended December 31, 1993
is due to the second mortgage lender's realization upon its security
represented by the Country Square apartments in February 1993 and the gain
on sale of the Sierra Pines and Crossing Apartments in July 1993. The gain
on the sale or disposition of investment properties for the year ended
December 31, 1992 is due to the transfer of title to the property to the
lender of the Yerba Buena West Office Building in June 1992. In addition,
the lenders of Arbor Town Apartments - I and Arbor Town Apartments - II
realized upon their security and took title to the properties in December
1992.
The extraordinary loss for the year ended December 31, 1994 is
primarily due to the discount and deferred mortgage expense write-offs and
the prepayment penalty related to the National City Center mortgage
refinancing. These losses are netted against the forgiveness of accrued
interest associated with the Stonybrook Apartments II refinancing (see Note
4).
INFLATION
Due to the decrease in the level of inflation in recent years,
inflation generally has not had a material effect on rental income or
property operating expenses.
To the extent that inflation in future periods does have an adverse
impact on property operating expenses, the effect will generally be offset
by amounts recovered from tenants, as many of the long-term leases at the
Partnership's commercial properties have escalation clauses covering
increases in the cost of operating and maintaining the properties as well
as real estate taxes. Therefore, there should be little effect on
operating earnings if the properties remain substantially occupied. In
addition, substantially all of the leases at the Partnership's shopping
center investment contain provisions which entitle the Partnership to
participate in gross receipts of tenants above fixed minimum amounts.
Future inflation may also cause capital appreciation of the
Partnership's investment properties over a period of time to the extent
that rental rates and replacement costs of properties increase.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
INDEX
Independent Auditors' Report
Consolidated Balance Sheets, December 31, 1994 and 1993
Consolidated Statements of Operations, years ended December 31, 1994, 1993
and 1992
Consolidated Statements of Partners' Capital Accounts (Deficit),
years ended December 31, 1994, 1993 and 1992
Consolidated Statements of Cash Flows, years ended December 31, 1994,
1993 and 1992
Notes to Consolidated Financial Statements
SCHEDULE
--------
Consolidated Real Estate and Accumulated Depreciation III
SCHEDULES NOT FILED:
All schedules other than the one indicated in the index have been
omitted as the required information is inapplicable or the information is
presented in the consolidated financial statements or related notes.
INDEPENDENT AUDITORS' REPORT
The Partners
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII:
We have audited the consolidated financial statements of Carlyle Real
Estate Limited Partnership - XII (a limited partnership) and consolidated
ventures as listed in the accompanying index. In connection with our
audits of the consolidated financial statements, we also have audited the
financial statement schedule as listed in the accompanying index. These
consolidated financial statements and financial statement schedule are the
responsibility of the General Partners of the Partnership. Our
responsibility is to express an opinion on these consolidated financial
statements and financial statement schedule 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 General Partners of the
Partnership, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Carlyle Real Estate Limited Partnership - XII and consolidated ventures at
December 31, 1994 and 1993, and the results of their operations and their
cash flows for each of the years in the three-year period ended
December 31, 1994, in conformity with generally accepted accounting
principles. Also in our opinion, the related financial statement schedule,
when considered in relation to the basic consolidated financial statements
taken as a whole, presents fairly, in all material respects, the
information set forth therein.
KPMG PEAT MARWICK LLP
Chicago, Illinois
March 27, 1995
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1994 AND 1993
ASSETS
------
<CAPTION>
1994 1993
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . $ 30,504,207 2,789,530
Short-term investments (note 1). . . . . . . . . . . . . . . . . 1,944,746 6,865,532
Rents and other receivables. . . . . . . . . . . . . . . . . . . 1,255,652 1,085,701
Loan commitment fee (note 4(d)). . . . . . . . . . . . . . . . . -- 1,163,524
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . 102,740 154,073
Escrow deposits (note 4(d)). . . . . . . . . . . . . . . . . . . 2,403,305 605,734
------------ -----------
Total current assets. . . . . . . . . . . . . . . . . . . . 36,210,650 12,664,094
------------ -----------
Investment properties, at cost (notes 2, 3, and 4)-Schedule III:
Land and leasehold interest. . . . . . . . . . . . . . . . . . 17,171,695 18,021,695
Buildings and improvements . . . . . . . . . . . . . . . . . . 105,128,812 235,978,139
------------ -----------
122,300,507 253,999,834
Less accumulated depreciation. . . . . . . . . . . . . . . . . 39,346,202 82,546,206
------------ -----------
Total investment properties,
net of accumulated depreciation . . . . . . . . . . . . . 82,954,305 171,453,628
------------ -----------
Deferred expenses (note 1) . . . . . . . . . . . . . . . . . . . . 471,479 5,527,843
Accrued rents receivable (note 1). . . . . . . . . . . . . . . . . 125 5,114,243
Venture partners' deficit in ventures (note 3) . . . . . . . . . . 5,376,969 14,876,348
------------ -----------
$125,013,528 209,636,156
============ ===========
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
1994 1993
------------ -----------
Current liabilities:
Current portion of long-term debt (notes 3 and 4). . . . . . . . $ 1,683,440 6,489,518
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . 571,144 2,326,663
Amounts due to affiliates (note 9) . . . . . . . . . . . . . . . 695,870 3,596,654
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . 378,976 3,364,920
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . 2,337,868 2,764,835
------------ -----------
Total current liabilities . . . . . . . . . . . . . . . . . 5,667,298 18,542,590
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . 22,734 85,391
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . -- 2,062,011
Note payable (note 7(d)) . . . . . . . . . . . . . . . . . . . . . 15,000,000 --
Long-term debt, less current portion (note 4). . . . . . . . . . . 78,051,656 194,712,434
------------ -----------
Commitments and contingencies (notes 3, 4 and 8)
Total liabilities . . . . . . . . . . . . . . . . . . . . . 98,741,688 215,402,426
Venture partners' equity in ventures (note 3). . . . . . . . . . . 479,813 445,474
Deferred gain on sale of investment property (note 7(d)) . . . . . 5,000,000 --
Partners' capital accounts (deficit):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . (8,190,436) (8,373,178)
Cumulative cash distributions. . . . . . . . . . . . . . . . . (583,877) (564,211)
------------ -----------
(8,773,313) (8,936,389)
------------ -----------
Limited partners (160,005 interests):
Capital contributions, net of offering costs . . . . . . . . . 141,003,683 141,003,683
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . (91,390,527) (118,231,222)
Cumulative cash distributions. . . . . . . . . . . . . . . . . (20,047,816) (20,047,816)
------------ -----------
29,565,340 2,724,645
------------ -----------
Total partners' capital accounts (deficits) . . . . . . . . 20,792,027 (6,211,744)
------------ -----------
$125,013,528 209,636,156
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<CAPTION>
1994 1993 1992
------------ ------------ ------------
<S> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . $43,102,907 48,834,313 52,358,787
Interest income. . . . . . . . . . . . . . . . 442,110 351,898 494,889
Other income . . . . . . . . . . . . . . . . . 25,892 -- --
------------ ----------- -----------
43,570,909 49,186,211 52,853,676
------------ ----------- -----------
Expenses:
Mortgage and other interest. . . . . . . . . . 20,804,238 24,850,497 25,563,854
Depreciation . . . . . . . . . . . . . . . . . 7,779,552 9,144,746 9,598,560
Property operating expenses. . . . . . . . . . 17,844,877 20,304,224 22,790,284
Management fees to corporate general partner . 17,185 -- 16,667
Professional services. . . . . . . . . . . . . 358,196 378,862 326,219
Amortization of deferred expenses. . . . . . . 1,130,506 1,261,667 1,344,460
General and administrative . . . . . . . . . . 149,587 332,765 256,387
Provision for value impairment (note 1). . . . -- -- 2,682,822
------------ ----------- -----------
48,084,141 56,272,761 62,579,253
------------ ----------- -----------
Operating loss . . . . . . . . . . . . . (4,513,232) (7,086,550) (9,725,577)
Partnership's share of operations of
unconsolidated venture . . . . . . . . . . . . -- -- (723,696)
Venture partners' share of ventures'
operations (note 3). . . . . . . . . . . . . . 1,596,830 2,415,069 1,803,556
------------ ----------- -----------
Net operating loss . . . . . . . . . . . (2,916,402) (4,671,481) (8,645,717)
Gain on sale or dispositions, net of venture
partners' share (note 7) . . . . . . . . . . . 30,614,901 4,091,683 3,817,800
------------ ----------- -----------
Net earnings (loss) before
extraordinary items. . . . . . . . . . 27,698,499 (579,798) (4,827,917)
Extraordinary items (notes 4(d) and
4(e)). . . . . . . . . . . . . . . . . . . . . (675,062) -- --
------------ ----------- -----------
Net earnings (loss). . . . . . . . . . . $ 27,023,437 (579,798) (4,827,917)
============ =========== ===========
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
1994 1993 1992
------------ ------------ ------------
Net earnings (loss) per limited
partnership interest (note 1):
Net operating loss . . . . . . . . . $ (17.50) (28.03) (51.87)
Net gain on sale or dispositions
of interests in investment
properties . . . . . . . . . . . . 189.42 25.32 23.62
Net extraordinary items. . . . . . . (4.18) -- --
------------ ----------- -----------
Net earnings (loss). . . . . . . . . . . $ 167.74 (2.71) (28.25)
============ =========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICIT)
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<CAPTION>
GENERAL PARTNERS LIMITED PARTNERS (160,005 INTERESTS)
------------------------------------------------ -------------------------------------------------------
CONTRI-
BUTIONS
NET NET OF NET
CONTRI- EARNINGS CASH OFFERING EARNINGS CASH
BUTIONS (LOSS) DISTRIBUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ----------------------- ----------- ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance
(deficit)
Decem-
ber 31,
1991. . . 1,000 (7,919,585) (564,211) (8,482,796) 141,003,683 (113,277,100) (19,807,808) 7,918,775
Net loss
(note 5). -- (307,651) -- (307,651) -- (4,520,266) -- (4,520,266)
Cash dis-
tributions
($1.50 per
limited
partnership
interest) -- -- -- -- -- -- (240,008) (240,008)
------ ---------- -------- ---------- ----------- ------------ ----------- -----------
Balance
(deficit)
Decem-
ber 31,
1992. . . 1,000 (8,227,236) (564,211) (8,790,447) 141,003,683 (117,797,366) (20,047,816) 3,158,501
Net loss
(note 5). -- (145,942) -- (145,942) -- (433,856) -- (433,856)
------ ---------- -------- ---------- ----------- ------------ ----------- -----------
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICIT) - CONTINUED
GENERAL PARTNERS LIMITED PARTNERS (160,005 INTERESTS)
------------------------------------------------ -------------------------------------------------------
CONTRI-
BUTIONS
NET NET OF NET
CONTRI- EARNINGS CASH OFFERING EARNINGS CASH
BUTIONS (LOSS) DISTRIBUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ----------------------- ----------- ----------- ----------- ------------- -----------
Balance
(deficit)
Decem-
ber 31,
1993. . . 1,000 (8,373,178) (564,211) (8,936,389) 141,003,683 (118,231,222) (20,047,816) 2,724,645
Net earnings
(note 5). -- 182,742 -- 182,742 -- 26,840,695 -- 26,840,695
Cash dis-
tribution
(note 9). -- -- (19,666) (19,666) -- -- -- --
------ ---------- -------- ---------- ----------- ------------ ----------- ----------
Balance
(deficit)
Decem-
ber 31,
1994. . . $1,000 (8,190,436) (583,877) (8,773,313)141,003,683 (91,390,527) (20,047,816) 29,565,340
====== ========== ======== ========== =========== ============ =========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<CAPTION>
1994 1993 1992
------------ ------------ -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss). . . . . . . . . . . . . . $27,023,437 (579,798) (4,827,917)
Items not requiring (providing) cash:
Depreciation . . . . . . . . . . . . . . . . 7,779,552 9,144,746 9,598,560
Amortization of deferred expenses. . . . . . 1,130,506 1,261,667 1,344,460
Amortization of discount on long-term debt . 308,538 1,514,317 1,377,367
Long-term debt - deferred accrued interest . -- -- 406,000
Venture partners' share of ventures'
operations . . . . . . . . . . . . . . . . (1,596,830) (2,415,069) (1,803,556)
Provision for value impairment . . . . . . . -- -- 2,682,822
Gain on sale or dispositions of interests
in investments properties, net of
venture partners' share. . . . . . . . . . (30,614,901) (4,091,683) (3,817,800)
Extraordinary item . . . . . . . . . . . . . 675,062 -- --
Changes in:
Rents and other receivables. . . . . . . . . (606,584) (155,834) 432,758
Prepaid expenses . . . . . . . . . . . . . . 51,333 108,280 (4,359)
Escrow deposits. . . . . . . . . . . . . . . (1,601,546) 533,069 (523,436)
Accrued rents receivable . . . . . . . . . . (451,555) (371,958) (87,501)
Accounts payable . . . . . . . . . . . . . . (42,705) (1,218,280) 64,075
Amounts due to affiliates. . . . . . . . . . (2,900,784) (189,209) (34,969)
Accrued interest . . . . . . . . . . . . . . 1,403,937 2,322,534 (906)
Accrued real estate taxes. . . . . . . . . . (38,788) (240,052) 96,925
Tenant security deposits . . . . . . . . . . 17,587 (74,176) (11,730)
Other liabilities. . . . . . . . . . . . . . (281,527) (95,672) (208,996)
------------ ------------ -------------
Net cash provided by
operating activities . . . . . . . . 254,732 5,452,882 5,405,493
------------ ------------ -------------
Cash flows from investing activities:
Net sales and maturities (purchases) of
short-term investments . . . . . . . . . . . 4,920,786 (1,255,540) 788,712
Additions to investment properties . . . . . . (3,274,218) (3,097,755) (2,635,297)
Proceeds from sale or disposition of
investment properties, net of selling
expenses (notes 4(b) and 7(c)) . . . . . . . 14,862,094 1,892,932 --
Proceeds from sale of option, net of
venture partner share. . . . . . . . . . . . 3,665,000 -- --
Escrow deposits. . . . . . . . . . . . . . . . (898,971) -- --
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1994 1993 1992
------------ ------------ -----------
Partnership's contributions to
unconsolidated venture . . . . . . . . . . . -- -- (9,448)
Payment of deferred expenses . . . . . . . . . (266,986) (274,549) (264,608)
------------ ------------ -------------
Net cash provided by (used in)
investing activities . . . . . . . . 19,007,705 (2,734,912) (2,120,641)
------------ ------------ -------------
Cash flows from financing activities:
Proceeds from note payable, net of
venture partner share. . . . . . . . . . . . 10,995,000 -- --
Refunded portion of loan commitment fee. . . . 238,215 (1,163,524) --
Payment of deferred expenses . . . . . . . . . -- (51,087) --
Principal payments on long-term debt . . . . . (2,395,459) (1,746,375) (1,941,796)
Proceeds of long-term debt . . . . . . . . . . -- 388,020 --
Venture partners' contributions to venture . . 159,709 165,051 42,523
Distributions to venture partners. . . . . . . (525,559) (285,519) (283,848)
Distributions to limited partners. . . . . . . -- -- (240,008)
Distributions to general partners. . . . . . . (19,666) -- --
------------ ------------ -------------
Net cash provided by (used in)
financing activities . . . . . . . . 8,452,240 (2,693,434) (2,423,129)
------------ ------------ -------------
Net increase in cash and
cash equivalents . . . . . . . . . . 27,714,677 24,536 861,723
Cash and cash equivalents,
beginning of year. . . . . . . . . . 2,789,530 2,764,994 1,903,271
------------ ------------ -------------
Cash and cash equivalents,
end of year. . . . . . . . . . . . . $ 30,504,207 2,789,530 2,764,994
============ ============ =============
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . $ 19,091,763 21,055,562 23,781,393
============ ============ =============
Non-cash investing and financing activities:
Balance due on mortgage note payable cancelled $ -- 12,239,900 --
Balance due on accelerated wrap-around
mortgage note payable cancelled. . . . . . -- -- 9,210,122
Balance due on wrap-around mortgage
note payable canceled. . . . . . . . . . . -- -- (10,183,885)
Recognition of deferred gain on sale
of investment property . . . . . . . . . . -- -- 2,146,341
Reduction of land. . . . . . . . . . . . . . -- (2,170,000) --
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1994 1993 1992
------------ ------------ -----------
Reduction of buildings and improvements. . . -- (14,045,964) --
Reduction of accumulated depreciation. . . . -- 5,454,885 --
Reduction of accrued interest payable. . . . -- 41,916 383,999
Proceeds from disposition of
investment property. . . . . . . . . . . . -- -- --
Venture partners' share of gain. . . . . . . -- -- --
------------ ------------ -------------
Non-cash gain recognized on
disposition of investment property . . . $ -- 1,520,737 1,556,577
============ ============ =============
Disposals of fully depreciated assets. . . . $ 2,064,523 793,534 321,023
============ ============ =============
Loan proceeds utilized for additions to
investment property and payment of
deferred expenses. . . . . . . . . . . . . $ 2,698,601 -- --
============ ============ =============
Sale of investment properties (note 7):
Total sales proceeds,
net of selling expenses. . . . . . . . . . $ -- 13,872,932 --
Principal balance on loans payable. . . . . . -- (11,980,000) --
------------ ------------ -------------
Cash sales proceeds from sale of
investment properties, net of
selling expenses. . . . . . . . . . $ -- 1,892,932 --
============ ============ =============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1994, 1993 AND 1992
(1) BASIS OF ACCOUNTING
The accompanying consolidated financial statements include the
accounts of the Partnership and its ventures Carlyle Seattle Associates
("Carlyle Seattle") (note 7), Stonybrook Partners Limited Partnership
("Stonybrook"), Carrara Place Limited ("Carrara") (note 7), Carlyle
Carrollton Associates ("Carlyle Carrollton") (note 7), and Carlyle/National
City Associates ("Carlyle/National City"), Carlyle Seattle's venture,
Wright-Carlyle Seattle ("First Interstate") (note 7) and Carlyle
Carrollton's venture, Country Square, Ltd. ("Country Square") (note 7).
The effect of all transactions between the Partnership and the ventures has
been eliminated.
The equity method of accounting has been applied in the accompanying
consolidated financial statements with respect to the Partnership's
interest in Carlyle Yerba Buena Limited Partnership ("Yerba Buena"),
through the date of its disposition (note 3(c)) and First Interstate,
effective December 1, 1994, due to the sale of 49.95% of Carlyle Seattle's
interest (note 7). Accordingly, the accompanying consolidated financial
statements do not include the accounts of entities accounted for under the
equity method.
The Partnership records are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying consolidated financial statements have been prepared from such
records after making appropriate adjustments to present the Partnership's
accounts in accordance with generally accepted accounting principles
("GAAP") and to consolidate the accounts of the ventures as described
above. Such adjustments are not recorded on the records of the
Partnership. The net effect of these items is summarized as follows:
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
<CAPTION>
1994 1993
------------------------------ ------------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Total assets . . . . . . . . . . . $125,013,528 45,555,092 209,636,156 18,540,991
Partners' capital accounts
(deficits) (note 5):
General partners . . . . . . . (8,773,313) (5,596,056) (8,936,389) (10,287,004)
Limited partners . . . . . . . 29,565,340 24,217,044 2,724,645 (30,967,779)
Net earnings (loss) (note 5):
General partners . . . . . . . 182,742 4,710,614 (145,942) 1,102,701
Limited partners . . . . . . . 26,840,695 55,184,823 (433,856) 3,767,978
Net earnings (loss) per
limited partnership
interest . . . . . . . . . . . . 167.74 344.89 (2.71) 23.55
============ =========== =========== ===========
</TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The net earnings (loss) per limited partnership interest is based upon
the limited partnership interests outstanding at the end of each year
(160,005). Deficit capital accounts will result, through the duration of
the Partnership, in net gain for financial reporting and income tax
purposes.
Statement of Financial Accounting Standards No. 95 requires the
Partnership to present a statement which classifies receipts and payments
according to whether they stem from operating, investing or financing
activities. The required information has been segregated and accumulated
according to the classifications specified in the pronouncement.
Partnership distributions from unconsolidated ventures are considered cash
flow from operating activities only to the extent of the Partnership's
cumulative share of net earnings. In addition, the Partnership records
amounts held in U.S. Government obligations and certificates of deposit at
cost which approximates market. Therefore, for the purposes of these
statements, the Partnership's policy is to consider all such amounts held
with original maturities of three months or less ($30,086,428 and none held
at December 31, 1994 and 1993, respectively) as cash equivalents with any
remaining amounts reflected as short-term investments being held to
maturity.
Deferred expenses are comprised principally of deferred leasing
commissions and deferred lease assumption costs which are amortized over
the lives of the related leases and deferred mortgage costs which are
amortized over the term of the related notes.
Although certain leases of the Partnership provide for tenant
occupancy during periods for which no rent is due and/or increases in
minimum lease payments over the term of the lease, the Partnership accrues
rental income for the full period of occupancy on a straight-line basis.
Statement of Financial Accounting Standards No. 107, ("SFAS
107"),"Disclosures about Fair Value of Financial Instruments", requires
entities with total assets exceeding $150 million at December 31, 1992 to
disclose the SFAS 107 value of all financial assets and liabilities for
which it is practicable to estimate. Value is defined in the Statement as
the amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced or liquidation
sale. The Partnership believes the carrying amount of its financial
instruments classified as current assets and liabilities (excluding current
portion of long-term debt) approximates SFAS 107 value due to the
relatively short maturity of these instruments. There is no quoted market
value available for any of the Partnership's other instruments. The debt,
with a carrying balance of $79,735,096, has been calculated to have an SFAS
107 value of $69,365,789 by discounting the scheduled loan payments to
maturity. Due to restrictions on transferability and prepayment, and the
inability to obtain comparable financing due to previously modified debt
terms or other property specific competitive conditions, the Partnership
would be unable to refinance these properties to obtain such calculated
debt amounts reported. (See note 4.) The Partnership has no other
significant financial instruments.
During 1992, the Partnership entered into a contract (that was
subsequently terminated) to sell the Sierra Pines Apartments subject to
certain contingencies. Based upon the proposed sales price, the
Partnership would not have recovered the net carrying value of the
investment property. The Partnership, therefore, as a matter of prudent
accounting practice, made a provision for value impairment on such
investment property of $2,682,822. Such provision was recorded in
September 1992, to effectively reduce the net carrying value of the
investment property, based upon the proposed sale price. The Sierra Pines
Apartments was sold in July 1993 (note 7(c)).
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
No provision for State or Federal income taxes has been made as the
liability for such taxes is that of the Partners rather than the
Partnership. However, in certain instances, the Partnership has been
required under applicable law to remit directly to the taxing authorities
amounts representing withholding from distributions paid to partners.
(2) INVESTMENT PROPERTIES
The Partnership has acquired, either directly or through joint
ventures, ten apartment complexes, four office buildings, and two enclosed
shopping malls. During 1984, the Partnership sold its interest in the
Arbor Town Apartments-I and the Arbor Town Apartments-II complexes.
Subsequently, in 1992, the lenders on the Arbor Town Apartments-I and Arbor
Town Apartments-II complexes realized upon their security and obtained
title to the properties resulting in the Partnership no longer having a
security interest in the properties (note 4(d)). In 1986, the Partnership
conveyed its interest in the Presidio West Apartments-II and sold its
interest in the San Mateo shopping center. In 1990, the Partnership
disposed of its interest in the Timberline Apartments and sold its interest
in the Meadows Southwest Apartments. In 1991, the Partnership, through its
joint venture, disposed of its interest in the Summerfield/Oakridge
Apartments. In 1992, the Yerba Buena venture transferred title to the
property to the lender (note 3(c)). In 1993, the Partnership sold its
interest in the Sierra Pines Apartments and The Crossing Apartments, and
disposed of its interest in the Country Square Apartments (note 7). In
1994, the Partnership redeemed its interest in Carrara Place Limited (note
7). Also in 1994, Carlyle Seattle sold 49.95% of its interest in and
issued an option to sell its remaining 50.05% interest in the First
Interstate venture (note 7). The four properties owned at December 31,
1994 were completed and in operation.
Depreciation on the operating properties has been provided over
estimated useful lives of 5 to 30 years using the straight-line method.
All investment properties are pledged as security for long-term debt,
for which there is no recourse to the Partnership.
Maintenance and repair expenses are charged to operations as incurred.
Significant betterments and improvements are capitalized and depreciated
over their estimated useful lives.
Provisions for value impairment are recorded with respect to the
investment properties whenever the estimated future cash flows from a
property's operations and projected sale are less than the property's net
carrying value.
(3) VENTURE AGREEMENTS
(a) General
The Partnership, at December 31, 1994, is a party to three operating
joint venture agreements. Pursuant to such agreements, the Partnership
made aggregate capital contributions of $101,530,662 (including Carrara
Place Limited in which the Partnership redeemed its interest in 1994). In
general, the joint venture partners, who are either the sellers (or their
affiliates) of the property investments being acquired, or parties which
have contributed an interest in the property being developed, or were
subsequently admitted to the ventures, make no cash contributions to the
ventures, but their retention of an interest in the property, through the
joint venture, is taken into account in determining the purchase price of
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
the Partnership's interest, which is determined by arm's-length
negotiations. Under certain circumstances, either pursuant to the venture
agreements or due to the Partnership's obligations as a general partner,
the Partnership may be required to make additional cash contributions to
the ventures.
The Partnership has acquired, through the above ventures, one
apartment complex and two office buildings. In some instances, the
properties were acquired (as completed) for a fixed purchase price. In
other instances, properties were developed by the ventures and, in those
instances, the contributions of the Partnership were generally fixed. The
joint venture partners (who were primarily responsible for constructing the
properties) contributed any excess of cost over the aggregate amount
available from Partnership contributions and financing and, to the extent
such funds exceeded the aggregate costs, were to retain such excess. The
venture properties have been financed under various long-term debt
arrangements as described in note 4.
Two of the ventures' properties produced net cash receipts during
1994, one in 1993. In general, operating profits and losses are shared in
the same ratio as net cash receipts. If there are no net cash receipts,
substantially all profits or losses are allocated in accordance with the
partners' respective economic interests. The Partnership generally has
preferred positions (related to the Partnership's cash investment in the
ventures) with respect to distribution of sale or refinancing proceeds from
the ventures.
There are certain risks associated with the Partnership's investments
made through joint ventures including the possibility that the
Partnership's joint venture partners in an investment might become unable
or unwilling to fulfill their financial or other obligations, or that such
joint venture partners may have economic or business interests or goals
that are inconsistent with those of the Partnership.
(b) First Interstate Center
On December 1, 1994, Carlyle Seattle sold 49.95% of its interest in
First Interstate (note 7(d)).
During 1982, the Partnership acquired, through a joint venture ("First
Interstate") between an affiliated joint venture ("Carlyle Seattle")
described below and the developer, a fee ownership of improvements and a
leasehold interest in an office building in Seattle, Washington. Carlyle
Seattle is a joint venture between the Partnership and Carlyle Real Estate
Limited Partnership-X ("C-X"), an affiliated partnership sponsored by the
Corporate General Partner of the Partnership. Under the terms of the First
Interstate venture agreement, Carlyle Seattle made initial cash
contributions aggregating $30,000,000.
The terms of the Carlyle Seattle venture agreement provide that all
the capital contributions will be made in the proportion of 73.3% by the
Partnership and 26.7% by C-X. The initial required contribution by the
Partnership to the Carlyle Seattle venture was $22,000,000. The Carlyle
Seattle venture agreement further provides that all of the venture's share
of First Interstate's annual cash flow, sale or refinancing proceeds,
operating profits and losses, and tax items will be allocated 73.3% to the
Partnership and 26.7% to C-X.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Prior to the sale transaction, Carlyle Seattle was generally entitled
to receive a preferred distribution (on a cumulative basis) of annual cash
flow equal to 8% of its capital contributions to First Interstate.
venture. Cash flow in excess of this preferred distribution was
distributable to the First Interstate joint venture partner up to the next
$400,000 and any remaining annual cash flow was distributable 50% to
Carlyle Seattle and 50% to the First Interstate joint venture partner.
Operating deficits, if any, were shared 50% by Carlyle Seattle and 50% by
the First Interstate joint venture partner. Operating profits or losses of
the First Interstate joint venture generally were allocated in the same
ratio as the allocation of annual cash flow, however, the joint venture
partner was to be allocated not less than 25% of such profits and losses.
In connection with the transaction, the First Interstate Venture
Agreement has been amended to convert Carlyle Seattle's remaining general
partnership interest to a limited partnership interest. Additionally, the
amendment states that no profits, income or gain shall be allocable to
Carlyle Seattle except to the extent that Carlyle Seattle receives
distributions from First Interstate and operating losses shall be allocated
to the extent of Carlyle Seattle's positive capital account balance and
thereafter at 25.025%. The amended Venture Agreement provides that any
distributions to Carlyle Seattle are subordinate to the joint venture
partner's preferred return (as defined). It is not anticipated that any
distributions will be made to Carlyle Seattle from operations subsequent to
the initial sale transaction. Immediately after the execution of the
amendment to the Venture Agreement, the unaffiliated venture partner
conveyed its general partnership interest to its affiliate and First
Interstate was recapitalized. The recapitalization involved the
refinancing and replacement of the first mortgage loan. The replacement
debt is payable in monthly installments of interest only at a rate of 7.88%
per annum, and matures on December 1, 2001 when all unpaid principal and
accrued interest becomes due. Additionally, effective December 1, 1994,
the equity method of accounting has been applied with respect to Carlyle
Seattle's interest in First Interstate as Carlyle Seattle's interest has
decreased to less than 50% and converted to a limited partnership interest.
The office building is managed by an affiliate of the First Interstate
joint venture partner for a fee computed at 2% of base and percentage
rents.
(c) Yerba Buena West Office Building
In June 1992, Carlyle Yerba Buena Limited Partnership ("Yerba Buena")
transferred title to the property to the lender in return for an
opportunity to share in future sale or refinancing proceeds above certain
levels. In order for the joint venture to share in future sale or
refinancing proceeds, however, there must be a significant improvement in
current market and property operating conditions resulting in a significant
increase in value of the property. In addition, through June 1998, the
joint venture has right of first opportunity to purchase the property if
the lender chooses to sell. An affiliate of the Partnership's Corporate
General Partner had been managing and leasing the property for the lender.
In December 1994, the affiliate was replaced as manager and leasing agent
for the property. As a result of the transfer of title to the lender as
discussed above, the Partnership no longer has an ownership interest in the
property and recognized a gain of $2,261,223 and $1,350,845 in 1992 for
financial reporting and Federal income tax purposes, respectively, with no
corresponding distributable proceeds.
(d) Carrara
In December 1994, the Partnership redeemed its interest in Carrara
Place Limited to the venture (note 7(e)).
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The Carrara joint venture agreement provided that operating profits
and losses of the venture were to be allocated 50% to the venture and 50%
to the venture partner. Commencing July 1, 1994, operating profits or
losses were allocated 100% to the Partnership. Gain arising from the sale
or other disposition of the property would be allocated to the venture
partner or partners then having a deficit balance in its or their
respective capital accounts in accordance with the terms of the venture
agreement. Any additional gain would be allocated in accordance with the
distribution of sales proceeds. The lease for Carrara Place Office
Building's major tenant, which represented 46% of the building's leasable
area and provided for rental payments that were significantly greater than
current market rental rates, expired in December 1992 and the tenant
vacated. The Carrara venture initiated discussions with the mortgage
lender regarding a modification to the mortgage loan.
Concurrent with the modification (note 4(b)), the Carrara venture
reorganized such that the Partnership became the sole general partner of
the venture, with its venture partner becoming a limited partner of the
venture. In addition, the property manager (an affiliate of the
unaffiliated venture partner) was replaced effective September 1993. Based
upon an analysis of current and anticipated market conditions, the
Partnership had decided not to commit additional funds to the Carrara Place
Office Building. There had to be a significant improvement in market and
property conditions in order for the value of the property to be greater
than the mortgage pay off amount at any point in time, including accrued
interest. Therefore, it was unlikely that any significant proceeds would
be received by the Partnership from a sale of the property or that the
mortgage loan could be refinanced when it became due.
In conjunction with the modification, the venture had agreed to
transfer title to the lender if the venture failed to pay the loan in full
on the earlier of the extended maturity date or an acceleration of the loan
as a result of the occurrence of an event of default (as defined).
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(4) LONG-TERM DEBT
(a) General
Long-term debt consists of the following at December 31, 1994 and 1993:
<CAPTION>
1994 1993
----------- -----------
<S> <C> <C>
9.175% (9.21% through September 30, 1994) mortgage obligation;
secured by the Stonybrook-II apartment complex in
Tucson, Arizona; principal and interest payable monthly
at specified pay rates; unpaid accrued interest and the
remaining principal balance due October 1, 1999
(refinanced in 1994, see note 4(e)). . . . . . . . . . . . . . . $ 4,102,600 4,152,600
8.5% second mortgage note; secured by the Stonybrook-II
apartment complex in Tucson, Arizona; interest payable
annually at the greater of the excess net operating
income over the specified pay rates of the above mortgage
obligation or $40,000; unpaid accrued interest and
remaining principal balance due October 6, 1994
(retired, see note 4(e)) . . . . . . . . . . . . . . . . . . . . -- 654,800
9.875% mortgage note; secured by the Carrara Place
office building in Englewood, Colorado; payable in
monthly installments of net cash flow until January 1,
1998 when the remaining balance and any unpaid
interest was payable (assumed by the venture
in connection with the redemption, see
notes 7(e) and 4(b)) . . . . . . . . . . . . . . . . . . . . . . -- 22,763,187
9-7/8% mortgage note; secured by the Permian Mall
shopping center in Odessa, Texas; payable in
monthly installments of principal and interest
of $238,891 until June 1, 2010; balance is net
of $4,599,213 and $4,883,701, respectively, of
unamortized discount based upon an imputed
interest rate of 14% . . . . . . . . . . . . . . . . . . . . . . 18,114,034 18,416,331
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
1994 1993
----------- -----------
11% mortgage note, secured by the First Interstate
Center office building in Seattle, Washington;
payable in monthly installments of principal and
interest of $922,425 until December 15, 1995
at which time the remaining principal balance
of $96,275,082 will be payable (see note 3(b) and
7(d)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 97,493,927
Mortgage note; secured by the National City Center
office building in Cleveland, Ohio; payable in
monthly installments of principal and interest
(at 9-5/8% per annum increasing to 11-7/8% per
annum on January 1, 1994) of $545,164 and $634,221,
respectively, until April 8, 1994 when the
outstanding principal balance of $55,958,054
was refinanced. The refinanced mortgage is payable
in monthly installments of principal and interest
(at 8.5% per annum) of $486,767 until April 10, 2001
when the remaining principal balance is due,
balance is net of $570,301 of unamortized
discount in 1993 based upon an imputed interest
of 12% through refinancing date (accounted
for on the equity method as of the sale
transaction, see note 4(d)). . . . . . . . . . . . . . . . . . . 57,518,462 57,721,107
----------- ------------
Total debt. . . . . . . . . . . . . . . . . . . . . . . 79,735,096 201,201,952
Less current portion of long-term debt
(note 4(b)) . . . . . . . . . . . . . . . . . . . . . 1,683,440 6,489,518
----------- ------------
Total long-term debt. . . . . . . . . . . . . . . . . . $78,051,656 194,712,434
=========== ============
</TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Included in the above total long-term debt is $2,055,549 at December
31, 1993 which represents mortgage interest accrued but not currently
payable pursuant to the terms of the notes (as modified).
Five year maturities of long-term debt (exclusive of amortization of
discount) are as follows:
1995 . . . . . . . . . . $1,683,440
1996 . . . . . . . . . . 1,843,475
1997 . . . . . . . . . . 2,018,223
1998 . . . . . . . . . . 2,204,089
1999 . . . . . . . . . . 6,285,213
==========
(b) Debt Modifications
The Partnership modified the $5,800,000 second mortgage note secured
by the Country Square apartment complex in Carrollton, Texas effective June
1, 1989. The pay rate was raised from 4% per annum to 5% per annum
(payable in monthly installments of interest only) through December 1,
1992. Interest accrued and was deferred at a rate of 11% per annum from
June 1, 1989 through December 31, 1990 and 12% per annum from January 1,
1991 through December 31, 1992; payable each April 30 to the extent of any
annual cash flow (as defined) or upon the earlier of subsequent sale of the
property or the January 1, 1993 maturity of the note. The lender notified
the Partnership that it would not modify the existing terms of the second
mortgage. The Partnership was unable to secure new or additional
modifications or extensions to the loan. On February 2, 1993, the second
mortgage lender concluded proceedings to realize upon its security and took
title to the property. As a result, the Partnership recognized a gain for
financial reporting purposes of $1,520,734 and a gain for Federal income
tax purposes of $5,633,431 in 1993 with no corresponding distributable
proceeds.
Effective January 1, 1993, the mortgage note secured by the Carrara
Place Office Building was modified. Under the modification, the maturity
date was extended from June 30, 1994 until January 1, 1998. Interest
continued to accrue at 9.875% from January 1, 1993 until maturity.
Effective January 1, 1993, the net cash flow of the property (after the
required minimum interest payments of $8,333 monthly or $100,000 annually),
subject to certain reserves including a $350,000 operating reserve to fund
deficits, was to be paid to the lender and applied toward the payment of
accrued and unpaid interest, current interest and principal balance of the
loan, respectively. Any capital costs, including re-leasing costs, were to
be funded by the lender, (subject to their approval) and added to the
principal balance of the loan.
In conjunction with the modification, the venture had agreed to
transfer title to the lender if the venture failed to pay the loan in full
on the earlier of the extended maturity date or an acceleration of the loan
as a result of the occurrence of an event of default (as defined) (note
7(e)).
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(c) Sierra Pines and Crossings Apartments
Effective December 27, 1990, the Partnership obtained replacement
loans from an institutional lender to retire in full satisfaction, at an
aggregated discount, the previously modified existing long-term mortgage
notes secured by the Sierra Pines Apartments and the Crossings Apartments.
The new lender required the establishment of escrow accounts, of
approximately $253,000 and $291,000, to be used toward the purchase of
capital items at the Sierra Pines Apartments and the Crossings Apartments,
respectively. As of the date of sale (see note 7(c)) approximately $62,000
and $6,000 were used for such purposes for the respective properties. The
new mortgage loans, which were cross-collateralized, required interest only
payments at 9.5% plus contingent interest (as defined) until January 1,
1999, when the remaining balance was payable. In 1993 and 1992, $176,334
and $145,029 were paid for 1992 and 1991 contingent interest, respectively
for the properties. $107,945 was paid in 1993 for 1993 contingent interest
for both properties through the date of sale. In the event that these
properties were sold before the maturity date of the loan, the lender was
to receive additional interest of 6% of the mortgage principal and, in
general, the higher of 65% of the sale proceeds (as defined) or ten times
the highest contingent interest (as defined) amount in any of the three
full fiscal years preceding the sale. In 1993, the Partnership sold its
interest in the Sierra Pines Apartments and The Crossing Apartments (see
note 7(c)).
(d) National City Center Office Building
In January 1994, the debt service payments under the existing mortgage
for the National City Center Office Building increased from 9-5/8% to 11-
7/8% until the scheduled maturity of the loan in December 1995.
Carlyle/National City reached an agreement with the current mortgage lender
to refinance the existing mortgage effective April 28, 1994, with an
interest rate of 8.5%. The loan will be amortized over 22 years with a
balloon payment due on April 10, 2001. Carlyle/National City paid a
refundable loan commitment fee of $1,163,524 in 1993 in conjunction with
the refinancing. The fee was applied to accrued interest and the
prepayment penalty of $580,586 based on the outstanding mortgage balance at
the time of refinancing, with the balance of $238,215 refunded to
Carlyle/National City in 1994. In addition, the lender required an escrow
account of $612,000 to be established at the inception of the refinancing
for future tenant improvements costs at the property. The escrowed funds
are to be released to the venture upon lender approval of such costs. The
lender also required an escrow of the tenant improvement costs related to
the Baker & Hostetler lease (as discussed above). The Venture is required
to escrow approximately $313,000 per year in 1994 through 1996 and
approximately $236,000 per year in 1997 and 1998. The Partnership's share
of extraordinary loss on extinguishment of debt ($1,000,547) consisting of
the prepayment penalty, the unamortized loan discount and unamortized loan
fees at the time of refinancing is recorded in the accompanying
consolidated financial statements.
(e) Stonybrook Apartments
The mortgages on Stonybrook Apartments II matured October 1, 1994
(Stonybrook Apartments I is not subject to a mortgage loan) with an
outstanding balance of approximately $4,807,000 at September 30, 1994. The
Partnership refinanced the $4,152,600 first mortgage loan and extended the
maturity date to October 1, 1999 at an interest rate of 9.175% per annum.
The loan requires monthly interest and principal payments of approximately
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
$35,000 with a balloon payment due at maturity. The Partnership remitted a
$40,000 principal payment to the lender, reducing the amount refinanced to
$4,112,600. Concurrently, the Partnership paid in full the second mortgage
note secured by the property in the amount of $654,800. Accrued and unpaid
interest in the amount of $325,485 was forgiven by the lender and is
reflected as an extraordinary item in the accompanying consolidated
financial statements.
(5) PARTNERSHIP AGREEMENT
Pursuant to the terms of the Partnership Agreement, net profits and
losses of the Partnership from operations are allocated 96% to the Limited
Partners and 4% to the General Partners. Profits from the sale or other
disposition of investment properties will be allocated first to the General
Partners in an amount equal to the greater of the amount distributable to
the General Partners as sale or refinancing proceeds from sale or other
disposition of investment properties (as described below) or 1% of the
profits from the sale or refinancing. Losses from the sale or other
disposition of investment properties will be allocated 1% to the General
Partners. The remaining sale or other disposition of investment properties
profits and losses will be allocated to the Limited Partners.
An amendment to the Partnership Agreement, effective January 1, 1991,
generally provides that notwithstanding any allocation contained in the
Agreement, if at any time profits are realized by the Partnership, any
current or anticipated event that would cause the deficit balance in
absolute amount in the Capital Account of the General Partners to be
greater than their share of the Partnership's indebtedness (as defined)
after such event, then the allocation of Profits to the General Partners
shall be increased to the extent necessary to cause the deficit balance in
the Capital Account of the General Partners to be no less than their
respective shares of the Partnership's indebtedness (as defined) after such
event. In general, the effect of this amendment is to allow the deferral
of the recognition of taxable gain to the Limited Partners.
The General Partners are not required to make any capital contribu-
tions except under certain limited circumstances upon dissolution and
termination of the Partnership. Distributions of "net cash receipts" of
the Partnership will be allocated 90% to the Limited Partners and 10% to
the General Partners (of which 6.25% constitutes a management fee to the
Corporate General Partner for services in managing the Partnership).
Distributions of "sale proceeds" and "financing proceeds" are to be
allocated 99% to the Limited Partners and 1% to the General Partners until
receipt by the Limited Partners of their initial contributed capital plus a
stipulated return thereon. Thereafter, distributions of "sale proceeds"
and "financing proceeds" are to be allocated to the General Partners until
the General Partners have received an amount equal to 3% of the gross sales
prices of any properties sold, then the balance 85% to the Limited Partners
and 15% to the General Partners.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(6) MANAGEMENT AGREEMENTS
The Partnership has entered into agreements with sellers or affiliates
of the sellers for the operation and management of several properties.
Such agreements provided that, during the term of these agreements, the
managers paid all expenses of the properties and retained the excess, if
any, of cash revenues from operations over costs and expenses, as defined,
as a management fee. Upon termination of the agreements, an affiliate of
the General Partners assumed management under agreements providing for
management fees calculated at a percentage of the gross income from the
properties. In December 1994, one of the affiliated property managers sold
substantially all of its assets to an unaffiliated third party. In
addition, certain of the management personnel of the property manager
became management personnel of the purchaser and its affiliates. The
successor to the affiliated property manager is acting as the property
manager of the National City Center Office Building and Stonybrook
Apartments.
(7) SALE OF INVESTMENT PROPERTIES
(a) Arbor Town Apartments-I and Arbor Town Apartments-II
During November 1984, the Partnership concurrently sold the land and
related improvements of the Arbor Town Apartments-I and Arbor Town
Apartments-II located in Arlington, Texas for $15,500,000, consisting of
$3,100,000 in cash and $12,400,000 of wrap-around notes receivable. The
purchase wrap-around notes were subject to existing mortgage notes.
The sale was accounted for by the installment method whereby the gain
on sale of $2,724,491 (net of discount on the notes receivable of $890,413)
was recognized as collections of principal were received. Beginning with
1987, the Partnership adopted the cost recovery method. No profit was
recognized by the Partnership in 1992 and 1991.
The Partnership did not receive the scheduled interest only payments
of approximately $2,000,000 on the wrap-around notes receivable from
January 1988 through May 1989 and, therefore, the Partnership did not make
the corresponding scheduled monthly payments on the underlying
indebtedness. The buyer voluntarily filed for protection under Chapter 11
of the United States Bankruptcy Code in May 1988. In April 1989, the
United States Bankruptcy Court approved a plan of reorganization, whereby
scheduled payments on the wrap-around notes receivable and related
underlying mortgage notes payable were allowed to be modified by the buyer.
Under the terms of the Bankruptcy Reorganization Plan, the Partnership's
wrap-around notes receivable and underlying non-recourse mortgage notes
payable remained outstanding. The buyer subsequently negotiated the
modification of the underlying non-recourse mortgage notes payable directly
with the lenders while the wrap-around notes receivable had been modified
to the extent the Partnership had agreed that the buyer make payments
directly to the lender. These modifications modified the terms of the
original underlying loan agreements resulting in permanent interest expense
reductions. For financial reporting purposes, these interest expense
reductions had been offset by adjustments to the wrap-around notes
receivable. No reserve for collectibility had been established previously
due to the existence of deferred gain exceeding the net equity in the wrap-
around notes receivable, with the underlying indebtedness being non-
recourse to the Partnership. The Partnership recognized interest income on
the wrap-around notes receivable only to the extent interest had been paid
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
by the buyer on the modified underlying indebtedness. In December 1992,
the lenders concluded proceedings to realize upon their security and
obtained title to the properties resulting in the Partnership no longer
having a security interest in the properties. Although the Partnership
received no cash proceeds from the transfer of its security interest; it
did, however, recognize a gain for financial reporting purposes and a loss
for Federal income tax purposes in 1992 of $1,556,577 and $275,509,
respectively.
(b) San Mateo Fashion Island
On December 31, 1986, the Partnership sold its right, title and
interest in the land, leasehold interest and related improvements of the
San Mateo Fashion Island shopping center for $44,202,559 and recognized
profit in full of $9,528,813. The sale price consisted of $950,000 in cash
at closing, the assumption of the existing mortgage note having an unpaid
principal balance of $39,302,559 (for financial reporting purposes the
principal balance was $28,895,264) and an additional promissory note in the
amount of $3,950,000 ($950,000 paid in March 1988) secured by a
subordinated deed of trust on the property. In addition to the sale price,
the Partnership received $7,600,000 from the venture partner during 1986
under the terms of the venture agreement.
During the first quarter of 1992, the Partnership was advised by the
buyer (in which the Corporate General Partner has an interest) that it had
initiated discussions directly with the first mortgage lender regarding a
modification to the first mortgage note. The buyer is currently making
reduced payments to the first mortgage lender and had discontinued making
payments to the Partnership as of March 1992. Due to uncertainty regarding
the value of the underlying collateral, the Partnership reserved for the
entire outstanding principal balance and accrued interest ($3,720,000) on
the note receivable as of December 31, 1994 and 1993 in the accompanying
consolidated financial statements. In addition, the entire outstanding
principal balance and accrued interest was written off for Federal income
tax purposes in 1992.
(c) Sierra Pines and Crossing Apartments
On July 29, 1993, the Partnership sold the land, buildings, related
improvements and personal property of the Sierra Pines and Crossing
Apartments located in Houston, Texas. The purchaser is not affiliated with
the Partnership or its General Partners and the sale price was determined
by arm's-length negotiations. The sale prices of the land, buildings,
related improvements and personal property for Sierra Pines and Crossing
Apartments were $4,880,000 and $9,535,000, respectively. A portion of the
cash proceeds was utilized to retire the first mortgage notes with
outstanding balances of $4,380,000 and $7,600,000, respectively, secured by
the properties. The Partnership paid additional interest of $1,230,923 in
the aggregate in connection with the retirement of the mortgage notes. The
Partnership received in connection with these sales, after additional
interest and normal costs of sale, a net amount of cash of approximately
$950,000 (including $288,000 in advisory fees) in the aggregate. As a
result of these sales, the Partnership recognized gains for financial
reporting purposes in 1993 of $44,030 and $2,526,916, respectively, and
recognized a gain for Federal income tax purposes in 1993 of $1,510,727 and
$6,164,118, respectively.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(d) First Interstate
In May 1994, Carlyle Seattle executed an agreement which issued an
option to sell its interest in First Interstate to the unaffiliated venture
partner. The agreement provided for the purchase of 49.95% of Carlyle
Seattle's interest by October 17, 1994 (for which Carlyle Seattle received
a non-refundable deposit of $500,000 on June 30, 1994 and which was
subsequently extended until December 22, 1994 with the receipt of an
additional $500,000 on September 22, 1994) with an option for the
unaffiliated venture partner to purchase the remaining 50.05% Carlyle
Seattle interest between one year and two years after the initial sale
closing. On December 1, 1994 (initial sale transaction closing), Carlyle
Seattle received (from the unaffiliated joint venture partner) $20,276,000
cash (less non-refundable deposits as described above) for 49.95% of its
interest as explained above. The unaffiliated venture partner paid,
$5,000,000 cash for the option of the unaffiliated venture partner to
purchase the remaining 50.05% of Carlyle Seattle's interest in the First
Interstate. Additionally, the unaffiliated venture partner loaned
$15,000,000 (bearing interest at a rate of 9% per annum with accrued
interest and unpaid principal due on January 1, 1997) and is secured by
Carlyle Seattle's remaining 50.05% interest. The exercise price for the
remaining 50.05% interest is $21,350,000 if the purchase option is
exercised one year from the initial closing, increasing up to $22,850,000
at the termination of the option period. The $5,000,000 option purchase
price paid at the initial closing and the balance of unpaid principal and
accrued interest on the $15,000,000 Carlyle Seattle loan can be applied
toward the exercise price. There can be no assurance that such option will
be exercised. At December 31, 1994, Carlyle Seattle has recorded a note
payable to the unaffiliated venture partner in the amount of $15,000,000
plus accrued interest and a deferred gain of $5,000,000 for the cash option
payment. See note 3(b) for a discussion of the restructuring of the First
Interstate joint venture. The Partnership's share of proceeds from this
transaction was approximately $29,522,000. Carlyle Seattle recognized a
gain of $34,583,869 (of which the Partnership's share is $25,210,324) for
financial reporting purposes in 1994 and a gain of $83,565,440 (of which
the Partnership's share is $61,224,798) for Federal income tax purposes in
1994.
(e) Carrara
In December 1994, the Partnership redeemed its interest in Carrara
Place Limited for $750,000 in cash at closing. As a result of the
redemption, the Partnership recognized a gain of $5,404,577 for financial
reporting purposes and $12,141,105 for Federal income tax purposes in 1994.
(8) LEASES
(a) As Property Lessor
At December 31, 1994 the Partnership and its consolidated ventures'
principal assets are one apartment complex, one enclosed shopping mall and
two office buildings. The Partnership has determined that all leases
relating to these properties are properly classified as operating leases;
therefore, rental income is reported when earned and the cost of each of
the properties, excluding cost of land, is depreciated over the estimated
useful life.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Leases with commercial tenants range in term from one to thirty years
and provide for fixed minimum rent and partial reimbursement of operating
costs. In addition, leases with shopping center tenants provide additional
rent based upon percentages of tenants' sales volumes. With respect to the
Partnership's shopping center investment, a substantial portion of the
ability of retail tenants to honor their leases is dependent upon the
retail economic sector. Apartment complex leases in effect at December 31,
1994 are generally for a term of one year or less and provide for annual
rents of approximately $1,956,000.
Cost and accumulated depreciation of the leased assets are summarized
as follows at December 31, 1994:
Shopping mall:
Cost. . . . . . . . . . . . $ 24,767,200
Accumulated depreciation. . (8,401,619)
------------
16,365,581
------------
Office buildings:
Cost. . . . . . . . . . . . 89,472,492
Accumulated depreciation. . (27,206,294)
------------
62,266,198
------------
Apartment complex:
Cost. . . . . . . . . . . . 8,060,815
Accumulated depreciation. . (3,738,289)
------------
4,322,526
------------
Total. . . . . . . . . . $ 82,954,305
============
Minimum lease payments, including amounts representing executory costs
(e.g., taxes, maintenance, insurance) and any related profit in excess of
specific reimbursements, to be received in the future under the above
commercial operating lease agreements, are as follows:
1995 . . . . . . . . . . . $ 13,645,829
1996 . . . . . . . . . . . 11,609,375
1997 . . . . . . . . . . . 10,791,221
1998 . . . . . . . . . . . 10,356,002
1999 . . . . . . . . . . . 10,193,636
Thereafter . . . . . . . . 54,675,218
------------
Total. . . . . . . . . $111,271,281
============
(b) As Property Lessee
First Interstate owned a net leasehold interest (which was scheduled
to expire in 2052) in the land underlying the Seattle, Washington office
building, subject to a 20-year extension. The lease provided for an annual
rent of $670,000 and has been determined to be an operating lease (note
7(d)).
Concurrent with the sale transaction, an affiliate of the new general
partner in First Interstate purchased the land underlying the office
building and terminated the related ground lease.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(9) TRANSACTIONS WITH AFFILIATES
Fees, commissions and other expenses required to be paid by the
Partnership to the General Partners and their affiliates as of December 31,
1994 and for the years ended December 31, 1994, 1993 and 1992 are as
follows:
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
<CAPTION>
UNPAID AT
DECEMBER 31,
1994 1993 1992 1994
---------- -------- -------- --------------
<S> <C> <C> <C> <C>
Insurance commissions. . . . . . . . $ 39,097 50,000 50,000 --
Property management and
leasing fees . . . . . . . . . . . 1,251,080 1,055,773 1,094,265 660,703
Management fees to
Corporate General Partner. . . . . 17,185 -- 16,667 33,334
Reimbursement (at cost) for
administrative and
accounting services. . . . . . . . 147,626 29,180 102,783 --
Reimbursement (at cost) for
legal services . . . . . . . . . . 11,473 11,247 14,516 --
Reimbursement (at cost) for
out-of-pocket expenses . . . . . . 3,017 18,634 16,639 1,833
Reimbursement (at cost) for
out-of-pocket salary and
salary related expenses
relating to on-site and
other costs for the
Partnership and its
investment properties. . . . . . . 82,020 201,153 227,735 --
---------- --------- --------- -------
$1,551,498 1,365,987 1,522,605 695,870
========== ========= ========= =======
</TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
The General Partners and their affiliates had deferred through June
30, 1988 payment of certain property management and leasing fees. In
addition, the Partnership deferred the General Partners' cash distribution
and management fee of $19,666 and $33,334, respectively, for the third and
fourth quarters of 1991. In December 1994 the Partnership paid deferred
property management and leasing fees, cash distributions and management
fees of $3,798,155, $19,666 and $33,334, respectively.
(10) SUBSEQUENT EVENT - Distributions
In February 1995, the Partnership paid a sales distribution of
$23,200,725 ($145 per Interest) to the Limited Partners and $234,351 to the
General Partners.
<TABLE>
SCHEDULE III
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1994
<CAPTION>
COSTS
CAPITALIZED
INITIAL COST TO SUBSEQUENT TO GROSS AMOUNT AT WHICH CARRIED
PARTNERSHIP (A) TO ACQUISITION AT CLOSE OF PERIOD (B)
------------------------------------------------------------------------------
LAND AND BUILDINGS LAND AND BUILDINGS
LEASEHOLD AND BUILDINGS AND LEASEHOLD AND
ENCUMBRANCE INTERESTS IMPROVEMENTS IMPROVEMENTS INTERESTS IMPROVEMENTS TOTAL (C)
------------ ----------- ------------ ------------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
APARTMENT
BUILDING:
Tucson,
Arizona . . $ 4,102,600 1,331,500 7,885,152 (941,032) 1,116,695 6,944,120 8,060,815
OFFICE
BUILDINGS:
Cleveland,
Ohio. . . . 57,518,462 13,500,000 69,078,344 6,894,148 13,500,000 75,972,492 89,472,492
SHOPPING MALL:
Odessa, Texas 18,114,034 2,555,000 20,145,739 2,066,461 2,555,000 22,212,200 24,767,200
----------- ---------- ---------- ---------- ---------- ----------- -----------
Total. . . $79,735,096 17,386,500 97,109,235 8,019,577 17,171,695 105,128,812 122,300,507
=========== ========== ========== ========== ========== =========== ===========
</TABLE>
<TABLE>
SCHEDULE III - CONTINUED
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1994
<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
STATEMENT OF 1994
ACCUMULATED DATE OF DATE OPERATIONS REAL ESTATE
DEPRECIATION(D) CONSTRUCTION ACQUIRED IS COMPUTED TAXES
---------------- ------------ ---------- --------------- -----------
<S> <C> <C> <C> <C> <C>
APARTMENT BUILDINGS:
Tucson, Arizona . . . $ 3,738,289 1983 10/1/82 5-30 years 133,145
OFFICE BUILDINGS:
Cleveland, Ohio . . . 27,206,294 1980 7/27/83 5-30 years 785,327
SHOPPING MALL:
Odessa, Texas . . . . 8,401,619 1979 12/28/82 5-30 years 742,084
----------- ---------
Total. . . . . . . $39,346,202 1,660,556
=========== =========
SCHEDULE III - CONTINUED
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1994
<FN>
-----------------
(A) The cost to the Partnership represents the original purchase price of the properties, including amounts
incurred subsequent to acquisition which were contemplated at the time the property was acquired.
(B) The aggregate cost of real estate owned at December 31, 1994 for Federal income tax purposes is
$163,404,942.
(C) Reconciliation of real estate owned:
</TABLE>
<TABLE>
<CAPTION>
1994 1993 1992
------------ ------------ -----------
<S> <C> <C> <C>
Balance at beginning of period . . . . . . . $253,999,834 287,739,781 288,108,329
Additions during period. . . . . . . . . . . 3,274,218 3,097,755 2,635,297
Provision for value impairment . . . . . . . -- -- (2,682,822)
Reductions during period . . . . . . . . . . (134,973,545) (36,837,702) (321,023)
------------ ----------- -----------
Balance at end of period . . . . . . . . . . $122,300,507 253,999,834 287,739,781
============ =========== ===========
(D) Reconciliation of accumulated depreciation:
Balance at beginning of period . . . . . . . $ 82,546,206 88,213,016 78,935,479
Depreciation expense . . . . . . . . . . . . 7,779,552 9,144,746 9,598,560
Reduction in accumulated depreciation. . . . (50,979,556) (14,811,556) (321,023)
------------ ----------- -----------
Balance at end of period . . . . . . . . . . $ 39,346,202 82,546,206 88,213,016
============ =========== ===========
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
There were no changes of or disagreements with accountants during
fiscal year 1994 and 1993.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
The Corporate General Partner of the Partnership is JMB Realty
Corporation ("JMB"), a Delaware corporation. JMB, as the Corporate General
Partner, has responsibility for all aspects of the Partnership's
operations, subject to the requirement that sales of real property must be
approved by the Associate General Partner of the Partnership, Realty
Associates-XII, L.P., an Illinois limited partnership with JMB as the sole
general partner. The Associate General Partner shall be directed by a
majority in interest of its limited partners (who are generally officers,
directors and affiliates of JMB or its affiliates) as to whether to provide
its approval of any sale of real property (or any interest therein) of the
Partnership. The Partnership is subject to certain conflicts of interest
arising out of its relationships with the General Partners and their
affiliates as well as the fact that the General Partners and their
affiliates are engaged in a range of real estate activities. Certain
services have been and may in the future be provided to the Partnership or
its investment properties by affiliates of the General Partners, including
property management services and insurance brokerage services. In general,
such services are to be provided on terms no less favorable to the
Partnership than could be obtained from independent third parties and are
otherwise subject to conditions and restrictions contained in the
Partnership Agreement. The Partnership Agreement permits the General
Partners and their affiliates to provide services to, and otherwise deal
and do business with, persons who may be engaged in transactions with the
Partnership, and permits the Partnership to borrow from, purchase goods and
services from, and otherwise to do business with, persons doing business
with the General Partners or their affiliates. The General Partners and
their affiliates may be in competition with the Partnership under certain
circumstances, including, in certain geographical markets, for tenants for
properties and/or for the sale of properties. Because the timing and
amount of cash distributions and profits and losses of the Partnership may
be affected by various determinations by the General Partners under the
Partnership Agreement, including whether and when to sell or refinance a
property, the establishment and maintenance of reasonable reserves, the
timing of expenditures and the allocation of certain tax items under the
Partnership Agreement, the General Partners may have a conflict of interest
with respect to such determinations.
The names, positions held and length of service therein of each
director and executive officer and certain officers of the Corporate
General Partner are as follows:
SERVED IN
NAME OFFICE OFFICE SINCE
---- ------ ------------
Judd D. Malkin Chairman 5/03/71
Director 5/03/71
Neil G. Bluhm President 5/03/71
Director 5/03/71
Burton E. Glazov Director 7/01/71
Stuart C. Nathan Executive Vice President 5/08/79
Director 3/14/73
A. Lee Sacks Director 5/09/88
John G. Schreiber Director 3/14/73
SERVED IN
NAME OFFICE OFFICE SINCE
---- ------ ------------
H. Rigel Barber Chief Executive Officer and 8/01/93
Executive Vice President 1/02/87
Glenn E. Emig Executive Vice President 1/01/93
Chief Operating Officer 1/01/95
Jeffrey R. Rosenthal Managing Director-Corporate 4/22/91
Chief Financial Officer 8/01/93
Douglas H. Cameron Executive Vice President 1/01/95
Gary Nickele Executive Vice President 1/01/92
General Counsel 2/27/84
Ira J. Schulman Executive Vice President 6/01/88
Gailen J. Hull Senior Vice President 6/01/88
Howard Kogen Senior Vice President 1/02/86
Treasurer 1/01/91
There is no family relationship among any of the foregoing directors
or officers. The foregoing directors have been elected to serve one-year
terms until the annual meeting of the Corporate General Partner to be held
on June 7, 1995. All of the foregoing officers have been elected to serve
one-year terms until the first meeting of the Board of Directors held after
the annual meeting of the Corporate General Partner to be held on June 7,
1995. There are no arrangements or understandings between or among any of
said directors or officers and any other person pursuant to which any
director or officer was elected as such.
JMB is the corporate general partner of Carlyle Real Estate Limited
Partnership-VII ("Carlyle-VII"), Carlyle Real Estate Limited Partnership-IX
("Carlyle-IX"), Carlyle Real Estate Limited Partnership-X ("Carlyle-X"),
Carlyle Real Estate Limited Partnership-XI ("Carlyle-XI"), Carlyle Real
Estate Limited Partnership-XIII ("Carlyle-XIII"), Carlyle Real Estate
Limited Partnership-XIV ("Carlyle-XIV"), Carlyle Real Estate Limited
Partnership-XV ("Carlyle-XV"), Carlyle Real Estate Limited Partnership-XVI
("Carlyle-XVI"), Carlyle Real Estate Limited Partnership-XVII ("Carlyle-
XVII"), JMB Mortgage Partners, Ltd. ("Mortgage Partners"), JMB Mortgage
Partners, Ltd.-II ("Mortgage Partners-II"), JMB Mortgage Partners, Ltd.-III
("Mortgage Partners-III"), JMB Mortgage Partners, Ltd.-IV ("Mortgage
Partners-IV"), Carlyle Income Plus, Ltd. ("Carlyle Income Plus") and
Carlyle Income Plus, Ltd.-II ("Carlyle Income Plus-II") and the managing
general partner of JMB Income Properties, Ltd.-IV ("JMB Income-IV"), JMB
Income Properties, Ltd.-V ("JMB Income-V"), JMB Income Properties, Ltd.-VI
("JMB Income-VI"), JMB Income Properties, Ltd.-VII ("JMB Income-VII"), JMB
Income Properties, Ltd.-VIII ("JMB Income-VIII"), JMB Income Properties,
Ltd.-IX ("JMB Income-IX"), JMB Income Properties, Ltd.-X ("JMB Income-X"),
JMB Income Properties, Ltd.-XI ("JMB Income-XI"), JMB Income Properties,
Ltd.-XII ("JMB Income-XII") and JMB Income Properties, Ltd.-XIII ("JMB
Income-XIII"). Most of the foregoing directors and officers are also
officers and/or directors of various affiliated companies of JMB including
Arvida/JMB Managers, Inc. (the general partner of Arvida/JMB Partners, L.P.
("Arvida")), Arvida/JMB Managers-II, Inc. (the general partner of
Arvida/JMB Partners, L.P.-II ("Arvida-II")) and Income Growth Managers,
Inc. (the corporate general partner of IDS/JMB Balanced Income Growth, Ltd.
("IDS/BIG")). Most of such directors and officers are also partners of
certain partnerships which are associate general partners in the following
real estate limited partnerships: Carlyle-VII, Carlyle-IX, Carlyle-X,
Carlyle-XI, Carlyle-XIII, Carlyle-XIV, Carlyle-XV, Carlyle-XVI, Carlyle-
XVII, JMB Income-VI, JMB Income-VII, JMB Income-VIII, JMB Income-IX, JMB
Income-X, JMB Income-XI, JMB Income-XII, JMB Income-XIII, Mortgage
Partners, Mortgage Partners-II, Mortgage Partners-III, Mortgage
Partners-IV, Carlyle Income Plus, Carlyle Income Plus-II and IDS/BIG.
The business experience during the past five years of each such
director and officer of the Corporate General Partner of the Partnership in
addition to that described above is as follows:
Judd D. Malkin (age 57) is an individual general partner of JMB
Income-IV and JMB Income-V. Mr. Malkin has been associated with JMB since
October, 1969. Mr. Malkin is a director of Urban Shopping Centers, Inc.,
an affiliate of JMB that is a real estate investment trust in the business
of owning, managing and developing shopping centers, and is a director of
Catellus Development Corporation, a major diversified real estate
development company. He is a Certified Public Accountant.
Neil G. Bluhm (age 57) is an individual general partner of JMB
Income-IV and JMB Income-V. Mr. Bluhm has been associated with JMB since
August, 1970. Mr. Bluhm is a director of Urban Shopping Centers, Inc., an
affiliate of JMB that is a real estate investment trust in the business of
owning, managing and developing shopping centers. He is a member of the
Bar of the State of Illinois and a Certified Public Accountant.
Burton E. Glazov (age 56) has been associated with JMB since June,
1971 and served as an Executive Vice President of JMB until December 1990.
He is a member of the Bar of the State of Illinois and a Certified Public
Accountant.
Stuart C. Nathan (age 53) has been associated with JMB since July,
1972. Mr. Nathan is also a director of Sportmart Inc., a retailer of
sporting goods. He is a member of the Bar of the State of Illinois.
A. Lee Sacks (age 61) (President and Director of JMB Insurance Agency,
Inc.) has been associated with JMB since December, 1972.
John G. Schreiber (age 48) has been associated with JMB since
December, 1970 and served as an Executive Vice President of JMB until
December 1990. Mr. Schreiber is President of Schreiber Investments, Inc.,
a company which is engaged in the real estate investing business. He is
also a senior advisor and partner of Blackstone Real Estate Partners, an
affiliate of the Blackstone Group, L.P. Since 1994, Mr. Schreiber has also
served as a Trustee of Amli Residential Property Trust, a publicly-traded
real estate investment trust that invests in multi-family properties. He
holds a Masters degree in Business Administration from Harvard University
Graduate School of Business.
H. Rigel Barber (age 45) has been associated with JMB since March,
1982. He holds a J.D. degree from the Northwestern Law School and is a
member of the Bar of the State of Illinois.
Glenn E. Emig (age 47) has been associated with JMB since December,
1979. Prior to becoming Executive Vice President of JMB in 1993. Mr. Emig
was Executive Vice President and Treasurer of JMB Institutional Realty
Corporation. He holds a Masters degree in Business Administration from the
Harvard University Graduate School of Business and is a Certified Public
Accountant.
Jeffrey R. Rosenthal (age 43) has been associated with JMB since
December, 1987. He is a Certified Public Accountant.
Douglas H. Cameron (age 45) is Executive Vice President of JMB. Mr.
Cameron has been associated with JMB since April, 1977. Prior to joining
JMB, Mr. Cameron was Managing Director of Capital Markets-Property Sales
from June, 1990. He holds a Masters degree in Business Administration from
the University of Southern California.
Gary Nickele (age 42) has been associated with JMB since February,
1984. He holds a J.D. degree from the University of Michigan Law School
and is a member of the Bar of the State of Illinois.
Ira J. Schulman (age 43) has been associated with JMB since February,
1983. He holds a Masters degree in Business Administration from the
University of Pittsburgh.
Gailen J. Hull (age 46) has been associated with JMB since March,
1982. He holds a Masters degree in Business Administration from Northern
Illinois University and is a Certified Public Accountant.
Howard Kogen (age 59) has been associated with JMB since March, 1973.
He is a Certified Public Accountant.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no officers or directors. The Partnership is
required to pay a management fee to the Corporate General Partner and the
General Partners are entitled to receive a share of cash distributions,
when and as cash distributions are made to the Limited Partners, and a
share of profits or losses as described in Notes 5 and 9. The Partnership
deferred the General Partner's cash distribution and deferred management
fees related to the third and fourth quarters of 1991. In December 1994,
the Partnership paid the General Partner the previously deferred cash
distribution and management fees. The General Partners received a share of
the Partnership's long-term capital gain for tax purposes aggregating
$5,250,527 in 1994. In addition, the General Partners received a share of
the Partnership's operating losses aggregating $539,886. Such losses may
benefit the General Partners to the extent that such losses may be offset
against taxable income from the Partnership or other sources.
The Partnership is permitted to engage in various transactions
involving affiliates of the Corporate General Partner of the Partnership.
The relationship of the Corporate General Partner (and its directors and
officers) to its affiliates is set forth above in Item 10.
JMB Properties Company, an affiliate of the Corporate General Partner,
provided property management services to the Partnership for all or part of
1994 for the Stonybrook Apartments - I & II in Tucson, Arizona, the Permian
Mall in Odessa, Texas and National City Center Office Building in
Cleveland, Ohio at fees calculated at a percentage of gross income from the
properties. In 1994, such affiliate earned property management fees
amounting to $1,251,080 for such services, all of which were paid as of
December 31, 1994. As set forth in the Prospectus of the Partnership, the
Corporate General Partner must negotiate such agreements on terms no less
favorable to the Partnership than those customarily charged for similar
services in the relevant geographical area (but in no event at rates
greater than specified in the Prospectus), and such agreements must be
terminable by either party thereto, without penalty, upon 60 days' notice.
JMB Insurance Agency, Inc., an affiliate of the Corporate General
Partner, earned insurance brokerage commissions in 1994 aggregating
approximately $39,097, all of which were paid in 1994 in connection with
the providing of insurance coverage for certain of the real property
investments of the Partnership. Such commissions are at rates set by
insurance companies for the classes of coverage provided.
The General Partners of the Partnership or their affiliates may be
reimbursed for their direct expenses or out-of-pocket expenses relating to
the administration of the Partnership and the operation of the
Partnership's real property investments. In 1994, the Corporate General
Partner of the Partnership was due reimbursement for such out-of-pocket
expenses in the amount of $85,037, of which $1,833 was unpaid as of
December 31, 1994.
Additionally, the General Partners may be reimbursed for salaries and
direct expenses of officers and employees of the Corporate General Partner
and its affiliates while directly engaged in the administration of the
Partnership and in the operation of the Partnership's real property
investments. In 1994, such costs were $159,099. The General Partners
earned no disbursement agent fees in 1993.
<TABLE>
<CAPTION>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) No person or group is known by the Partnership to own beneficially more than 5% of the outstanding
Interests of the Partnership.
(b) The Corporate General Partner and its officers and directors own the following Interests of the
Partnership:
NAME OF AMOUNT AND NATURE
BENEFICIAL OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
-------------- ---------- ----------------- --------
<S> <C> <C> <C>
Limited Partnership Interests JMB Realty Corporation 100 Interests Less than 1%
directly
Limited Partnership Interests Corporate General Partner 100 Interests Less than 1%
and its officers and directly
directors as a group
---------------
<FN>
No officer or director of the Corporate General Partner of the Partnership possesses a right to acquire
beneficial ownership of Interests of the Partnership.
(c) There exists no arrangement, known to the Partnership, the operation of which may at a subsequent date
result in a change in control of the Partnership.
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires the General
Partners, the executive officers and directors of the Corporate General Partner and persons who own more than ten
percent of the Interests to file an initial report of ownership or changes in ownership of Interests on Form 3, 4
or 5 with the Securities and Exchange Commission (the "SEC"). Such persons are also required by SEC rules to
furnish the Partnership with copies of all Section 16(a) forms they file. Timely filing of an initial report of
ownership on Form 3 or Form 5 was not made on behalf of Glenn Emig.
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no significant transactions or business relationships with
the Corporate General Partner, affiliates or their management other than
those described in Items 10 and 11 above (see Note 3(c) to the accompanying
Notes to Consolidated Financial Statements).
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
(1) Financial Statements (See Index to Financial Statements
filed with this annual report).
(2) Exhibits.
3-A. The Prospectus of the Partnership dated June 21,
1982, as supplemented on August 24, 1982, October 21, 1982, November 1,
1982, December 22, 1982 and February 18, 1983, as filed with the Commission
pursuant to Rules 424(b) and 424(c), is hereby incorporated herein by
reference. Copies of pages 6-14, 137-139, A-6 to A-11 and A-13 to A-19 are
incorporated by reference to the Partnership's Registration Statement on
Form S-11 (File No. 2-76443) dated June 21, 1982.
3-B. Amended and Restated Agreement of Limited
Partnership set forth as Exhibit A to the Prospectus, is incorporated by
reference to the Partnership's Registration Statement on Form S-11 (File
No. 2-76443) dated June 21, 1982.
4-A. Mortgage loan agreement between Wright-Carlyle
Seattle and The Prudential Insurance Company dated October 16, 1985,
relating to the First Interstate Center is hereby incorporated by reference
to the Partnership's report for December 31, 1992 on Form 10-K (File No. 0-
12433) dated March 19, 1993.
4-B. Mortgage loan agreement between Carlyle/National
City Associates and New York Life Insurance Company dated November 15,
1983, relating to the National City Center Office Building is hereby
incorporated by reference to the Partnership's report for December 31, 1992
on Form 10-K (File No. 0-12433) dated March 19, 1993.
10-A.Acquisition documents including the venture
agreement relating to the purchase by the Partnership of an interest in the
First Interstate Center in Seattle, Washington are hereby incorporated by
reference to the Partnership's prospectus on Form S-11 (File No. 2-76443),
dated June 21, 1982.
10-B.Acquisition documents including the venture
agreement relating to the purchase by the Partnership of an interest in the
National City Center Office Building in Cleveland, Ohio are hereby
incorporated by reference to the Partnership's Report on Form 8-K, dated
August 8, 1983.
10-C.Bargain and Sale Deed relating to the
Partnership's disposition of the Timberline Apartments in Denver, Colorado,
dated July 25, 1990 is hereby incorporated by reference to the
Partnership's report for December 31, 1992 on Form 10-K (File No. 0-12433)
dated March 19, 1993.
10-D.Sale documents and exhibits thereto relating to
the Partnership's sale of the Meadows Southwest Apartments in Houston,
Texas are hereby incorporated herein by reference to the Partnership's
Report on Form 8-K (File No. 0-12433), dated January 11, 1991 by reference.
10-E.Non-Merger Quit Claim Deeds relating to the
Partnership's disposition of the Summerfield/ Oakridge Apartments in
Aurora, Colorado, dated January 7, 1991 are hereby incorporated by
reference to the Partnership's report for December 31, 1992 on Form 10-K
(File No. 0-12433) dated March 19, 1993.
21. List of Subsidiaries.
24. Powers of Attorney.
27. Financial Data Schedule.
99.1.The Partnership's Report on Form 8-K (File No. 0-
12433) describing the sale transaction of First
Interstate Center dated December 14, 1994 is filed herewith.
99.2.The Partnership's Report on Form 8-K (File No. 0-
12433) describing the sale of the Partnership's
interest in Carrara Place Limited dated December 22, 1994 is filed
herewith.
___________
Although certain additional long-term debt instruments
of the Registrant have been excluded from Exhibit 4 above, pursuant to Rule
601(b)(4)(iii), the Registrant commits to provide copies of such agreements
to the SEC upon request.
(b) The following reports on Form 8-K were filed since the beginning of
the last quarter of the period covered by this report.
(i) The Partnership's report on Form 8-K dated December 14, 1994
for December 1, 1994 (describing the sale transaction of First Interstate)
was filed.
(ii) The Partnership's report on Form 8-K dated December 22, 1994
for December 8, 1994 (describing the sale of the Partnership's interest in
Carrara Place Limited) was filed.
No annual report for the year 1994 or proxy material has been sent to
the Partners of the Partnership. An annual report will be sent to the
Partners subsequent to this filing.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Act of 1934, the Partnership has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
By: JMB Realty Corporation
Corporate General Partner
GAILEN J. HULL
By: Gailen J. Hull
Senior Vice President
Date: March 27, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: JMB Realty Corporation
Corporate General Partner
JUDD D. MALKIN*
By: Judd D. Malkin, Chairman and Director
Date: March 27, 1995
NEIL G. BLUHM*
By: Neil G. Bluhm, President and Director
Date: March 27, 1995
H. RIGEL BARBER*
By: H. Rigel Barber, Chief Executive Officer
Date: March 27, 1995
GLENN E. EMIG*
By: Glenn E. Emig, Chief Operating Officer
Date: March 27, 1995
JEFFREY R. ROSENTHAL*
By: Jeffrey R. Rosenthal, Chief Financial Officer
Principal Financial Officer
Date: March 27, 1995
GAILEN J. HULL
By: Gailen J. Hull, Senior Vice President
Principal Accounting Officer
Date: March 27, 1995
A. LEE SACKS*
By: A. Lee Sacks, Director
Date: March 27, 1995
STUART C. NATHAN*
By: Stuart C. Nathan, Executive Vice President
and Director
Date: March 27, 1995
*By: GAILEN J. HULL, Pursuant to a Power of Attorney
GAILEN J. HULL
By: Gailen J. Hull, Attorney-in-Fact
Date: March 27, 1995
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
EXHIBIT INDEX
DOCUMENT
INCORPORATED
BY REFERENCE PAGE
------------ ----
3-A. Pages 6-14, 137-139, A-6 to A-11 and
A-13 to A-19 of the Prospectus of the
Partnership dated June 21, 1982, as
supplemented on August 24, 1982,
October 21, 1982, November 1, 1982,
December 22,1982 and February 28, 1983Yes
3-B. Amended and Restated Agreement of
Limited Partnership set forth as
Exhibit A to the Prospectus Yes
4-A. Mortgage loan agreement related
to the First Interstate Center Yes
4-B. Mortgage loan agreement related
to the National City Center Office
Building Yes
10-A. Acquisition documents related to
First Interstate Center Yes
10-B. Acquisition documents related to
National City Center Office Building Yes
10-C. Bargain and Sale Deed related to
Timberline Apartments Yes
10-D. Sale documents related to
the Meadows Southwest Apartments Yes
10-E. Non-Merger Quit Claim Deeds related to
the Summerfield/Oakridge Apartments Yes
21. List of Subsidiaries No
24. Powers of Attorney No
27. Financial Data Schedule No
99.1. Form 8-K for First Interstate Center No
99.2. Form 8-K for Carrara Place
Office Building No
EXHIBIT 21
LIST OF SUBSIDIARIES
The Partnership is a partner of Carlyle Seattle Associates, a venture
which is a partner in Wright-Carlyle Seattle a general partnership which
holds title to the First Interstate Center in Seattle, Washington. The
developer of the property is a partner in the joint venture. The developer
of the property is a partner in the joint venture. The Partnership is a
partner of CP Permian Partners, a general partnership which holds title to
the Permian Mall in Odessa, Texas. The Corporate General Partner is a
partner in the joint venture. The Partnership is a partner of
Carlyle/National City Associates, a general partnership which holds title
to the National City Center Office Building in Cleveland, Ohio. Another
partnership sponsored by the Corporate General Partner is a partner in the
joint venture.
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and
directors of JMB Realty Corporation, the corporate general partner of
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII, do hereby nominate,
constitute and appoint GARY NICKELE, GAILEN J. HULL, DENNIS M. QUINN or any
of them, attorneys and agents of the undersigned with full power of
authority to sign in the name and on behalf of the undersigned officer or
directors a Report on Form 10-K of said partnership for the fiscal year
ended December 31, 1994, and any and all amendments thereto, hereby
ratifying and confirming all that said attorneys and agents and any of them
may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 31st day of January, 1995.
JUDD D. MALKIN
-----------------------
Judd D. Malkin Chairman and Director
NEIL G. BLUHM
-----------------------
Neil G. Bluhm President and Director
H. RIGEL BARBER
-----------------------
H. Rigel Barber Chief Executive Officer
JEFFREY R. ROSENTHAL
-----------------------
Jeffrey R. Rosenthal Chief Financial Officer
The undersigned hereby acknowledge and accept such power of authority
to sign, in the name and on behalf of the above named officer and
directors, a Report on Form 10-K of said partnership for the fiscal year
ended December 31, 1994, and any and all amendments thereto, the 31st day
of January, 1995.
GARY NICKELE
-----------------------
Gary Nickele
GAILEN J. HULL
-----------------------
Gailen J. Hull
DENNIS M. QUINN
-----------------------
Dennis M. Quinn
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and
directors of JMB Realty Corporation, the corporate general partner of
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII, do hereby nominate,
constitute and appoint GARY NICKELE, GAILEN J. HULL, DENNIS M. QUINN or any
of them, attorneys and agents of the undersigned with full power of
authority to sign in the name and on behalf of the undersigned officer or
directors a Report on Form 10-K of said partnership for the fiscal year
ended December 31, 1994, and any and all amendments thereto, hereby
ratifying and confirming all that said attorneys and agents and any of them
may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 31st day of January, 1995.
STUART C. NATHAN
-----------------------
Stuart C. Nathan Executive Vice President,
Director of General Partner
A. LEE SACKS
-----------------------
A. Lee Sacks Director of General Partner
The undersigned hereby acknowledge and accept such power of authority
to sign, in the name and on behalf of the above named officer and
directors, a Report on Form 10-K of said partnership for the fiscal year
ended December 31, 1994, and any and all amendments thereto, the 31st day
of January, 1995.
GARY NICKELE
-----------------------
Gary Nickele
GAILEN J. HULL
-----------------------
Gailen J. Hull
DENNIS M. QUINN
-----------------------
Dennis M. Quinn
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer of JMB
Realty Corporation, the corporate general partner of CARLYLE REAL ESTATE
LIMITED PARTNERSHIP - XII, does hereby nominate, constitute and appoint
GARY NICKELE, GAILEN J. HULL, DENNIS M. QUINN or any of them, attorneys and
agents of the undersigned with full power of authority to sign in the name
and on behalf of the undersigned officer, a Report on Form 10-K of said
partnership for the fiscal year ended December 31, 1994, and any and all
amendments thereto, hereby ratifying and confirming all that said attorneys
and agents and any of them may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 20th day of February, 1995.
GLENN E. EMIG
-----------------------
Glenn E. Emig Chief Operating Officer
The undersigned hereby acknowledge and accept such power of authority
to sign, in the name and on behalf of the above named officer, a Report on
Form 10-K of said partnership for the fiscal year ended December 31, 1994,
and any and all amendments thereto, the 20th day of February, 1995.
GARY NICKELE
-----------------------
Gary Nickele
GAILEN J. HULL
-----------------------
Gailen J. Hull
DENNIS M. QUINN
-----------------------
Dennis M. Quinn
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE REGISTRANT'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1994
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS INCLUDED IN SUCH REPORT.
</LEGEND>
<CIK> 0000700949
<NAME> CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 30,504,207
<SECURITIES> 1,944,746
<RECEIVABLES> 3,761,697
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 36,210,650
<PP&E> 122,300,507
<DEPRECIATION> 39,346,202
<TOTAL-ASSETS> 125,013,528
<CURRENT-LIABILITIES> 5,667,298
<BONDS> 93,051,656
<COMMON> 0
0
0
<OTHER-SE> 20,792,027
<TOTAL-LIABILITY-AND-EQUITY> 125,013,528
<SALES> 43,102,907
<TOTAL-REVENUES> 43,570,909
<CGS> 0
<TOTAL-COSTS> 26,754,935
<OTHER-EXPENSES> 524,968
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,804,238
<INCOME-PRETAX> (4,513,232)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,916,402)
<DISCONTINUED> 30,614,901
<EXTRAORDINARY> (675,062)
<CHANGES> 0
<NET-INCOME> 27,023,437
<EPS-PRIMARY> 167.74
<EPS-DILUTED> 0
</TABLE>
December 22, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: Carlyle Real Estate Limited Partnership - XII
Commission File No. 0-12433
Form 8K
Gentlemen:
Transmitted, for the above-captioned registrant, is the electronically filed
executed copy of registrant's current report on Form 8K dated December 22,
1994.
Thank you.
Very truly yours,
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
By: JMB Realty Corporation
Corporate General Partner
By: GAILEN J. HULL
________________________________
Gailen J. Hull
Senior Vice President
GJH:jo
Enclosures
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 8, 1994
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Illinois 0-12433 36-3149589
------------------- -------------- --------------------
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
organization)
900 N. Michigan Avenue, Chicago, Illinois 60611-1575
-----------------------------------------------------
(Address of principal executive office)
Registrant's telephone number, including area code: (312) 915-1987
-------------------------------------------------------------------
CARRARA PLACE OFFICE BUILDING
ENGLEWOOD, COLORADO
------------------------------
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On December 8, 1994, Carlyle
Real Estate Limited Partnership - XII (the "Partnership") sold its interest in
Carrara Place Limited, a Colorado limited partnership, which owns the land,
building and related improvements of the Carrara Place Office Building (the
"Property"), located in Englewood, Colorado. The purchasers, Carrara Place
Investment Partners, Ltd. and F.A. Nemecek, are the Partnership's unaffiliated
venture partners in the Carrara Place Limited Partnership and the sale price
was determined by arm's-length negotiations. The Property is an approximately
231,000 square foot office building and, as the date of this report was
approximately 80% occupied.
The sale price of the Partnership's interest was $750,000 all of which
was received in cash at closing. Additionally, the Partnership's share of
long-term debt, in the amount of approximately $14,600,000 was assumed by the
purchasers. The Partnership estimates that it will recognize a gain of
approximately $5,500,000 for financial reporting purposes and approximately
$13,100,000 for Federal income tax purposes from this transaction.
The Partnership Agreement provides that sale proceeds are to be allocated
99% to the Limited Partners and 1% to the General Partners until receipt by
the Limited Partners of their initial contributed capital plus a stipulated
return thereon. Thereafter, distributions of sale proceeds are to be
allocated to the General Partners until the General Partners have received an
amount equal to 3% of the gross sales prices of any properties sold, then the
balance 85% to the Limited Partners and 15% to the General Partners. The
Limited Partners have not yet received cash distributions of sale or
refinancing proceeds in an amount equal to their initial capital investment in
the Partnership. Therefore, 1% of the initial proceeds of this sale are
distributable to the General Partners.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements. Not applicable.
(b) Pro Forma Financial Information - Narrative.
As a result of the sale of the Partnership's interest in Carrara Place
Limited, beyond December 8, 1994, there will be no further rental income,
mortgage and other interest, depreciation, property operating expenses,
amortization of deferred expenses or venture partners' share of venture
operations recorded for the Carrara Place Office Building in the consolidated
financial statements of the Partnership, which for the Partnership's most
recent fiscal year (the year ended December 31, 1993) were approximately,
$1,873,000, $2,235,000, $809,000, $1,134,000, $120,000 and $1,312,000,
respectively. Rental income, mortgage and other interest, depreciation,
property operating expenses, amortization of deferred expenses and venture
partners' share of venture operations for Carrara were approximately $479,000,
$594,000, $210,000, $377,000, $60,000, and none, respectively, for the three
months ended September 30, 1994, and $1,149,000, $1,721,000, $615,000,
$957,000, $104,000 and $743,000, respectively, for the nine months ended
September 30, 1994. Also, as a result of the sale of the Partnership's
interest in Carrara Place Limited, there are no further assets and liabilities
related to Carrara Place Limited, which at September 30, 1994 consisted of
cash and other current assets of approximately $524,000; land and buildings
and improvements (net of accumulated depreciation) of approximately
$17,850,000; deferred expenses of approximately $673,000; venture partner's
deficit in venture of approximately $5,634,000; current liabilities of
$3,860,000; other liabilities of approximately $60,000 and long-term debt,
less current portion of approximately $25,012,000.
(c) Exhibits
10. Partnership Interest Redemption Agreement among Carlyle
Real Estate Limited Partnership - XII, Carrara Place Investment Partners,
Ltd., F.A. Nemecek and Carrara Place Limited dated November 23, 1994.
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.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
By: JMB Realty Corporation
Corporate General Partner
By: GAILEN J. HULL
-----------------------------------
Gailen J. Hull
Senior Vice President
Dated: December 22, 1994
December 14, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re:Carlyle Real Estate Limited Partnership - XII
Commission File No. 0-12433
Form 8K
Gentlemen:
Transmitted, for the above-captioned registrant, is the
electronically filed executed copy of registrant's current report
on Form 8K dated December 14, 1994.
Thank you.
Very truly yours,
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
By:JMB Realty Corporation
Corporate General Partner
By: ________________________________
C. Scott Nelson, Vice President
Accounting Officer
CSN:jo
Enclosures
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 1, 1994
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Illinois 0-12433 36-3149589
------------------- -------------- --------------------
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
organization)
900 N. Michigan Avenue, Chicago, Illinois 60611-1575
-----------------------------------------------------
(Address of principal executive office)
Registrant's telephone number, including area code: (312) 915-1987
-------------------------------------------------------------------
FIRST INTERSTATE CENTER
SEATTLE, WASHINGTON
-------------------------
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On December 1,
1994 Carlyle Seattle, a joint venture between Carlyle Real Estate
Limited Partnership - XII (the "Partnership") and an affiliated
partnership (Carlyle Real Estate Limited Partnership-X ("Carlyle-
X")) sponsored by the Corporate General Partner of the
Partnership, sold 49.95% of its interest and entered into an
option agreement concerning the remaining 50.05% interest in the
First Interstate joint venture to its unaffiliated venture
partner, 999 Third Avenue, Ltd., (the "Buyer").
In May 1994, Carlyle Seattle executed an agreement with the
purchaser to sell 49.95% of its interest in First Interstate by
December 1994, with an option for the unaffiliated venture partner
to purchase the remaining 50.05% interest between one and two
years after the initial sale closing subject to certain
conditions. Carlyle Seattle received at closing $20,000,000 cash
(less non-refundable deposits received prior to the closing of
$1,000,000) for 49.95% of its interest in First Interstate,
$5,000,000 cash for the option of the Buyer to purchase the
remaining 50.05% of Carlyle Seattle's interest in the First
Interstate joint venture and an additional $15,000,000 cash in the
form of a loan to Carlyle Seattle. The $15,000,000 loan to
Carlyle Seattle (bearing interest at a rate of 9% per annum with
accrued interest and unpaid principal due on January 1, 1997) is
secured by Carlyle Seattle's remaining 50.05% interest. The
exercise price for the remaining 50.05% interest is $21,350,000 if
the purchase option is exercised one year from the initial closing
up to $22,850,000 at the termination of the option period. The
exercise price would be satisfied by applying the $5,000,000
option purchase price paid at the initial closing and applying the
balance of unpaid principal and accrued interest on the
$15,000,000 Carlyle Seattle loan. In connection with the sale,
the First Interstate Partnership agreement has been amended
stating that no profits, income or gain shall be allocable to
Carlyle Seattle except to the extent that Carlyle Seattle receives
any distributions and operating losses shall be allocated to the
extent of Carlyle Seattle's positive capital account balance and
thereafter at 25.025%. Occupancy at the First Interstate Center
was approximately 97% at the date of sale.
The terms of the Carlyle Seattle venture agreement generally
provide that sale proceeds will be allocated 73.3% to the
Partnership and 26.7% to Carlyle-X.
The Partnership Agreement provides that sale proceeds are to
be allocated 99% to the Limited Partners and 1% to the General
Partners until receipt by the Limited Partners of their initial
contributed capital plus a stipulated return thereon. Thereafter,
distributions of sale proceeds are to be allocated to the General
Partners until the General Partners have received an amount equal
to 3% of the gross sales prices of any properties sold, then the
balance 85% to the Limited Partners and 15% to the General
Partners. The Limited Partners have not yet received cash
distributions of sale or refinancing proceeds in an amount equal
to their initial capital investment in the Partnership.
Therefore, 1% of the initial proceeds of this sale are
distributable to the General Partners.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements. Not applicable.
(b) Pro Forma Financial Information - Narrative.
As a result of the sale of Carlyle Seattle's interest in the
First Interstate venture, beyond December 1, 1994, there will be
no further rental income, interest income, mortgage and other
interest, depreciation, property operating expenses, amortization
of deferred expenses or venture partners' share of venture
operations recorded for the First Interstate Center in the
consolidated financial statements of the Partnership, which for
the Partnership's most recent fiscal year (the year ended December
31, 1993) were approximately, $20,747,000, $49,000, $10,754,000,
$4,586,000, $6,623,000, $1,065,000 and $967,000, respectively.
Rental income, interest income, mortgage and other interest,
depreciation, property operating expenses, amortization of
deferred expenses and venture partners' share of venture
operations for the First Interstate Center were approximately
$4,831,000, $17,000, $2,675,000, $1,146,000, $1,852,000, $266,000
and $482,000, respectively, for the three months ended September
30, 1994, and $14,828,000, $43,000, $8,034,000, $3,349,000,
$5,065,000, $799,000 and $1,082,000, respectively, for the nine
months ended September 30, 1994. Also, as a result of the sale of
the Partnership's interest in Carlyle Seattle, there are no
further assets and liabilities related to Carlyle Seattle and its
venture, First Interstate, which at September 30, 1994 consisted
of cash and other current assets of approximately $2,326,000; land
and buildings and improvements (net of accumulated depreciation)
of approximately $67,118,000; deferred expenses of approximately
$4,166,000; accrued rents receivable of approximately $5,139,000;
current liabilities of $1,186,000; other liabilities of
approximately $1,956,000 and long-term debt, less current portion
of approximately $96,832,000.
An additional result of the sale is that Carlyle Seattle will
reflect a $15,000,000 note payable and any accrued interest (as
defined above) to the Buyer of Carlyle Seattle's 49.95%
Partnership interest. The note is secured by Carlyle Seattle's
remaining 50.05% interest in the First Interstate venture. The
Partnership expects to recognize a gain in 1994 for financial
reporting and federal income tax purposes.
(c) Exhibits
10. Letter Regarding Sale/Option and Partnership
Amendment, dated May 15, 1994, between Carlyle Seattle Associates
and 999 Third Avenue, Ltd. relating to the First Interstate Center
in Seattle, Washington is hereby incorporated herein by reference
to the Partnership's report for June 30, 1994 on Form 10-Q (File
No. 0-12344) dated August 12, 1994.
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.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
By: JMB Realty Corporation
Corporate General Partner
By: C. SCOTT NELSON
-----------------------------------
C. Scott Nelson, Vice President
Accounting Officer
Dated: December 14, 1994
