SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended September 30, 1995 Commission file number 0-12433
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(Exact name of registrant as specified in its charter)
Illinois 36-3149589
(State of organization) (IRS Employer Identification No.)
900 N. Michigan Ave., Chicago, IL 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312/915-1987
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
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements. . . . . . . . . . . . . . . . . . . 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . 17
PART II OTHER INFORMATION
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . 21
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . 22
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1995 AND DECEMBER 31, 1994
(UNAUDITED)
ASSETS
------
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . . . . . . . . . $ 5,168,110 30,504,207
Short-term investments (note 1). . . . . . . . . . . . . . . . . . . . . . . . . 4,912,917 1,944,746
Rents and other receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,274,531 1,255,777
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199,093 102,740
Escrow deposits (note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,585,758 2,403,305
------------ ------------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . 14,140,409 36,210,775
------------ ------------
Investment properties, at cost:
Land and leasehold interest. . . . . . . . . . . . . . . . . . . . . . . . . . 17,171,695 17,171,695
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . 105,587,473 105,128,812
------------ ------------
122,759,168 122,300,507
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . . . (41,952,058) (39,346,202)
------------ ------------
Total investment properties, net of
accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . 80,807,110 82,954,305
------------ ------------
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423,304 471,479
Venture partners' deficits in ventures . . . . . . . . . . . . . . . . . . . . . . 5,647,307 5,376,969
------------ ------------
$101,018,130 125,013,528
============ ============
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- -----------
Current liabilities:
Bank overdraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 29,131 --
Current portion of long-term debt (note 3) . . . . . . . . . . . . . . . . . . . 1,803,389 1,683,440
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394,025 509,302
Amounts due to affiliates (note 5) . . . . . . . . . . . . . . . . . . . . . . . 183,845 224,203
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,393,146 378,976
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,796,376 2,337,868
Other current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 126,096 533,509
------------ ------------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 6,726,008 5,667,298
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,465 22,734
Note payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000,000 15,000,000
Long-term debt, less current portion . . . . . . . . . . . . . . . . . . . . . . . 76,901,160 78,051,656
------------ ------------
Commitments and contingencies (notes 1, 2, 3 and 4)
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98,641,633 98,741,688
Venture partners' equity in ventures . . . . . . . . . . . . . . . . . . . . . . . 498,504 479,813
Deferred gain on sale of investment property . . . . . . . . . . . . . . . . . . . 5,000,000 5,000,000
Partners' capital accounts (deficits):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,209,594) (8,190,436)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . . . . . (818,228) (583,877)
------------ ------------
(9,026,822) (8,773,313)
------------ ------------
Limited partners (160,005 interests):
Capital contributions, net of offering costs . . . . . . . . . . . . . . . . . 141,003,683 141,003,683
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (91,850,327) (91,390,527)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . . . . . (43,248,541) (20,047,816)
------------ ------------
5,904,815 29,565,340
------------ ------------
Total partners' capital accounts (deficits). . . . . . . . . . . . . . . . (3,122,007) 20,792,027
------------ ------------
$101,018,130 125,013,528
============ ============
<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
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------- --------------------------
1995 1994 1995 1994
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . $ 5,498,129 10,810,127 16,896,366 32,809,995
Interest income. . . . . . . . . . . . . . . . . . . . 155,266 117,508 722,559 245,360
----------- ---------- ----------- ----------
5,653,395 10,927,635 17,618,925 33,055,355
----------- ---------- ----------- ----------
Expenses:
Mortgage and other interest. . . . . . . . . . . . . . 2,263,535 5,203,433 6,820,568 16,512,287
Depreciation . . . . . . . . . . . . . . . . . . . . . 885,670 2,229,812 2,605,856 6,614,978
Property operating expenses. . . . . . . . . . . . . . 2,600,562 4,540,884 8,355,711 14,105,049
Professional services. . . . . . . . . . . . . . . . . -- 9,008 187,395 246,658
Amortization of deferred expenses. . . . . . . . . . . 16,058 385,423 48,175 990,692
General and administrative . . . . . . . . . . . . . . 109,081 83,005 331,825 137,032
----------- ---------- ----------- ----------
5,874,906 12,451,565 18,349,530 38,606,696
----------- ---------- ----------- ----------
Operating loss. . . . . . . . . . . . . . . . . . (221,511) (1,523,930) (730,605) (5,551,341)
Venture partners' share of
ventures' operations . . . . . . . . . . . . . . . . . 76,589 449,557 251,647 1,955,550
----------- ---------- ----------- ----------
Net operating loss before extraordinary
item. . . . . . . . . . . . . . . . . . . . . . (144,922) (1,074,373) (478,958) (3,595,791)
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------- --------------------------
1995 1994 1995 1994
----------- ---------- ----------- ----------
Extraordinary item, net of
venture partner's share
of $159,178 . . . . . . . . . . . . . . . . . . -- -- -- (1,000,547)
----------- ---------- ----------- ----------
Net loss. . . . . . . . . . . . . . . . . . . $ (144,922) (1,074,373) (478,958) (4,596,338)
=========== ========== =========== ==========
Net loss per limited
partnership interest:
Net operating loss. . . . . . . . . . . . . . $ (.87) (6.45) (2.87) (21.58)
Extraordinary item, net . . . . . . . . . . . -- -- -- (6.19)
----------- ---------- ----------- ----------
$ (.87) (6.45) (2.87) (27.77)
=========== ========== =========== ==========
Cash distributions per
limited partnership
interest. . . . . . . . . . . . . . . . . . . . $ -- -- 145.00 --
=========== ========== =========== ==========
<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
NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (478,958) (4,596,338)
Items not requiring (providing) cash:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,605,856 6,614,978
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . 48,175 990,692
Extraordinary items, net of venture partner's
share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 1,000,547
Amortization of discount on long-term debt . . . . . . . . . . . . . . . . . . . . 223,397 235,970
Venture partners' share of ventures' operations. . . . . . . . . . . . . . . . . . (251,647) (1,955,550)
Changes in:
Rents and other receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . (18,754) 371,350
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (96,353) (28,546)
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,096 (2,481,807)
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (24,984)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (115,277) 66,834
Amounts due to affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (40,358) (39,147)
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,014,170 1,916,363
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458,508 223,756
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,269) 63,524
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (407,413) (173,261)
------------ -----------
Net cash provided by operating activities. . . . . . . . . . . . . . . . . . . 2,985,173 2,184,381
------------ -----------
Cash flows from investing activities:
Net sales and maturities (purchases) of
short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,968,171) 1,233,240
Additions to investment properties . . . . . . . . . . . . . . . . . . . . . . . . . (458,661) (1,992,266)
Payment of deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (225,146)
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (234,549) --
------------ -----------
Net cash used in investing activities. . . . . . . . . . . . . . . . . . . . (3,661,381) (984,172)
------------ -----------
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
1995 1994
------------ -----------
Cash flows from financing activities:
Refunded portion of loan commitment fee. . . . . . . . . . . . . . . . . . . . . . . -- 238,215
Bank overdraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,131 --
Principal payments on long-term debt . . . . . . . . . . . . . . . . . . . . . . . . (1,253,944) (1,244,713)
Venture partners' contributions to venture . . . . . . . . . . . . . . . . . . . . . -- 159,709
Distributions to venture partners. . . . . . . . . . . . . . . . . . . . . . . . . . -- (133,500)
Distributions to limited partners. . . . . . . . . . . . . . . . . . . . . . . . . . (23,200,725) --
Distributions to general partners. . . . . . . . . . . . . . . . . . . . . . . . . . (234,351) --
------------ -----------
Net cash provided by (used in) financing activities. . . . . . . . . . . . . . (24,659,889) (980,289)
------------ -----------
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . (25,336,097) 219,920
Cash and cash equivalents, beginning of year . . . . . . . . . . . . . . . . . 30,504,207 2,789,530
------------ -----------
Cash and cash equivalents, end of period . . . . . . . . . . . . . . . . . . . $ 5,168,110 3,009,450
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . . . . . . . . . . . $ 5,583,001 14,704,677
============ ===========
Non-cash investing and financing activities:
Loan proceeds utilized for additions to invest-
ment property and payment of deferred expenses . . . . . . . . . . . . . . . . . $ -- 2,248,715
============ ===========
<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
SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the year ended December 31, 1994 which are
included in the Partnership's 1994 Annual Report, as certain footnote
disclosures which would substantially duplicate those contained in such
audited financial statements have been omitted from this report.
(1) BASIS OF ACCOUNTING
The accompanying consolidated financial statements include the
accounts of the Partnership and its ventures - Carlyle Seattle Associates
("Carlyle Seattle"), Carlyle Seattle's venture, Wright-Carlyle Seattle
("First Interstate") (note 4(b)), Carrara Place Limited ("Carrara") (note
4(c)) and Carlyle/National City Associates ("Carlyle/National City"). 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 First Interstate, effective December 1, 1994, due to the sale
of 49.95% of Carlyle Seattle's interest (note 4(b)). 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 for
the nine months ended September 30:
1995 1994
----------------------- -----------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
---------- --------- ---------- ---------
Net loss . . . . . . . $478,958 3,230,733 4,596,338 9,031,198
Net loss
per limited
partnership
interest. . . . . . . $ 2.87 19.38 27.77 54.19
======== ========= ========= =========
The net loss per limited partnership interest ("Interest") is based
upon the limited partnership interests outstanding at the end of each
period (160,005). Deficit capital balances will result, throughout the
duration of the Partnership, in net gain for financial reporting and income
tax purposes.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
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 ($5,168,110 and
$30,086,428 held at September 30, 1995 and December 31, 1994, respectively)
as cash equivalents with any remaining amounts (generally with original
maturities of one year or less) reflected as short-term investments being
held to maturity.
Certain reclassifications have been made to the 1994 consolidated
financial statements to conform with the 1995 presentation.
During March 1995, Statement of Financial Accounting Standards No. 121
("SFAS 121") "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of" was issued. SFAS 121, when effective,
will require that the Partnership record an impairment loss on its long-
lived assets to be held and used (primarily its consolidated investments in
land, buildings and improvements) whenever their carrying value cannot be
fully recovered through estimated undiscounted future cash flows from
operations and sale. The amount of the impairment loss to be recognized
would be the difference between the long-lived asset's carrying value and
the asset's estimated fair value. Any long-lived assets identified "to be
disposed of" would no longer be depreciated but adjustments for impairment
loss would be made in each period as necessary to report these assets at
the lower of historical cost and fair value less costs to sell. In certain
situations, such estimated fair value could be less that the existing non-
recourse debt which is secured by the property.
The amount of any impairment loss recognized by the Partnership under
its current accounting policy has been limited to the excess, if any, of
the property's carrying value over the outstanding balance of the
property's non-recourse indebtedness. An impairment loss under SFAS 121
would be determined without regard to the nature or the balance of such
non-recourse indebtedness. Upon the disposition of a property for which an
impairment loss has been recognized under SFAS 121, the Partnership would
recognize, at a minimum, a net gain for financial reporting purposes to the
extent of any excess of the then outstanding balance of the property's non-
recourse indebtedness over the then carrying value of the property,
including the effect of any reduction for impairment loss under SFAS 121.
The Partnership expects to adopt SFAS 121 no later than the first
quarter of 1996. Although the Partnership has not finalized its assessment
the full impact of adopting SFAS 121, it is not anticipated that any
significant additional provisions for value impairment would be required
for the properties owned by the Partnership and its consolidated ventures,
or by the Partnership's unconsolidated ventures in the first period of
implementation of SFAS 121. In addition, upon the disposition of an
impaired property, the Partnership would generally recognize more net gain
for financial reporting purposes under SFAS 121 than it would have under
the Partnership's current impairment policy, without regard to the amount,
if any, of cash proceeds received by the Partnership in connection with the
disposition. Although implementation of this new accounting statement
could significantly impact the Partnership's reported earnings, there would
be no impact on cash flows. Further, any such impairment loss would not be
recognized for Federal income tax purposes.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(2) VENTURE AGREEMENTS
(a) General
The Partnership currently is a party to three operating joint venture
agreements. In general, the joint venture partners, who are either the
sellers (or their affiliates) of the property investments being acquired,
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 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.
One of the ventures' properties produced net cash receipts during the
nine months ended September 30, 1995 and 1994. 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 venture partners in an investment might become unable or
unwilling to fulfill their financial or other obligations, or that such
venture partners may have economic or business interests or goals that are
inconsistent with those of the Partnership.
(b) Carlyle Seattle
On December 1, 1994, Carlyle Seattle sold 49.95% of its interest in
First Interstate (note 4(b)).
During 1982, the Partnership acquired, through a joint venture ("First
Interstate") between Carlyle Seattle and the developer, 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
($22,000,000 by the Partnership).
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 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 cumulative $2,400,000 per annum preferred distribution of cash
flow. Any excess cash flow was first distributable to the First Interstate
joint venture partner up to the next $400,000 then 50% to Carlyle Seattle
and 50% to 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. 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) Carrara
In December 1994, the Partnership's interest in Carrara Place Limited
was redeemed by the venture (note 4(c)).
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.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Concurrent with the modification, 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).
(3) LONG-TERM DEBT
(a) General
All investment properties are pledged as security for long-term debt
which matures at various dates commencing October, 1999. Upon loan
maturity, should the Partnership not seek or be unable to secure new or
additional modifications or extensions to the loans, based upon current and
anticipated future market conditions, the Partnership may not commit any
significant additional amounts to these properties. Such decisions would
be made on a property-by-property basis.
(b) 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. 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) consisted of the
prepayment penalty, the unamortized loan discount and unamortized loan fees
at the time of refinancing was recorded in 1994.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(c) 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. 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 $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 1994.
(d) 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, 1996 and 1997, 15%, 9% and 6%, respectively,
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. If the Partnership is unable to secure such
modification based upon current and expected future market conditions, the
Partnership would likely decide not to commit any significant additional
amounts to the property. This would result in the Partnership no longer
having an ownership interest in such property and result in gain for
financial reporting and Federal income tax purposes to the Partnership with
no corresponding distributable proceeds.
(4) SALE OF INVESTMENT PROPERTIES
(a) 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. Among other things, the sale price included
a promissory note given by the buyer to the Partnership, in the amount of
$3,950,000 ($950,000 paid in March 1988) which is secured by a subordinated
deed of trust on the property.
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 was 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. In addition, the entire outstanding
principal balance and accrued interest was written off for Federal income
tax purposes in 1992.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
In December 1994, the buyer sold its interest in the shopping center
to an unaffiliated third party for $24,300,000. In connection with the
sale, the buyer, with the consent of the first mortgage lender, paid off
the first mortgage loan, which had an outstanding principal balance at sale
of approximately $39,000,000, at the discounted amount of $21,000,000.
Pursuant to an agreement entered into in 1993 with the first mortgage
lender, the approximately $3,300,000 that the buyer received at closing
represented closing costs and reimbursement of amounts paid for deficit
operations and certain lease termination payments. In addition, the buyer
paid the Partnership $10,000 in consideration of the full satisfaction of
the buyer's promissory note to the Partnership and the release of the
subordinated deed of trust on the shopping center securing the promissory
note.
(b) First Interstate
In May 1994, Carlyle Seattle executed an agreement by which it granted
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
purchase 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 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 in First Interstate.
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.
(c) Carrara
In December 1994, the Partnership's interest in Carrara Place Limited
was redeemed by the venture 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.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
(5) TRANSACTIONS WITH AFFILIATES
Fees, commissions and other expenses required to be paid by the
Partnership to the General Partners and their affiliates as of September
30, 1995 and for the nine months ended September 30, 1995 and 1994 are as
follows:
<TABLE>
<CAPTION>
Unpaid at
September 30,
1995 1994 1995
-------- ------ -------------
<S> <C> <C> <C>
Property management
and leasing fees. . . . . . . . . $285,727 664,071 181,842
Insurance commissions. . . . . . . 36,598 36,867 --
Reimbursement
(at cost) for
out-of-pocket
expenses. . . . . . . . . . . . . 37,890 26,198 2,003
-------- ------- -------
$323,617 727,136 183,846
======== ======= =======
</TABLE>
The Corporate General Partner and its affiliates are entitled to
reimbursement for salaries and direct expenses of officers and employees of
the Corporate General Partner and its affiliates relating to the
administration of the Partnership and operation of Partnership properties.
For the nine months ended September 30, 1995, such costs aggregated
$109,745, all of which were paid by September 30, 1995.
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.
Effective January 1, 1994, certain officers and directors of the
Managing General Partner acquired interests in a company which, among other
things, has provided and continues to provide certain property management
services to certain of the properties owned by the Partnership. Such
acquisition had no effect on the fees payable by the Partnership under any
existing agreements with such company. The fees earned by such company
from the Partnership for the nine months ended September 30, 1995 were
$285,727.
The Corporate General Partner of the Partnership has determined to use
independent third parties to perform certain administrative services
beginning in the fourth quarter of 1995. Use of such third parties is not
expected to have a material effect on the operations of the Partnership.
(6) ADJUSTMENTS
In the opinion of the Corporate General Partner, all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation have been made to the accompanying figures as of September 30,
1995 and for the three and nine months ended September 30, 1995 and 1994.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
All references to "Notes" are Notes to Consolidated Financial
Statements contained in this report.
At September 30, 1995, the Partnership and its consolidated ventures
had cash and cash equivalents of approximately $5,168,000. Such remaining
funds and short-term investments of approximately $4,913,000 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. 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 partial sale
of the Partnership's interest in the First Interstate Center (Note 4).
To fund the Permian Mall improvements, the Partnership has initiated
discussions with the mortgage lender regarding a modification to the loan
(discussed below). There can be no assurance that a loan modification can
be obtained.
The Partnership and its consolidated ventures have currently budgeted
for 1995 approximately $902,000 for tenant improvements and other capital
expenditures. The Partnership's share of such items in 1995 is currently
budgeted to be approximately $798,000. Additionally, the roof and parking
lot at the Permian Mall are currently in need of repair and the Partnership
had originally budgeted an additional $415,000 for such improvements in
1995. Actual amounts expended in 1995 may vary depending on a number of
factors including the result of the loan modification negotiations, 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. However,
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 liquidity. 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. The Partnership is currently marketing
both phases of the property for sale.
Occupancy at the Stonybrook Apartments was 79% at September 30, 1995.
As expected, a general reduction in occupancies occurs in Tucson during the
summer months and then historically recovers. This year, the fall recovery
in occupancy has not occurred primarily due to the increase in home
purchases in the Tucson area coupled with a slight decline in the
University of Arizona student enrollment.
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. A tenant
who occupies approximately 61,000 square feet (12.5% of the building) whose
lease is scheduled to expire in late 1996. The venture is currently
exploring its options with this tenant. However, there can be no assurance
that the venture will be able to obtain a renewal for this space.
In January 1994, the debt service payments under the existing mortgage
increased from 9-5/8% to 11-7/8% until the previously 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 now 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
(approximately $1,200,000 at September 30, 1995) and approximately $236,000
per year in 1997 and 1998. As of September 30, 1995, no amounts had been
removed from the tenant improvement escrow. 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 by which it granted
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
purchase 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 September
30, 1995, 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, 1996 and 1997, 15%, 9% and 6%, respectively,
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. If the Partnership is unable to secure such
modification based upon current and expected future market conditions, the
Partnership would likely decide not to commit any significant additional
amounts to the property. This would result in the Partnership no longer
having an ownership interest in such property and result in gain for
financial reporting and Federal income tax purposes to the Partnership with
no corresponding distributable proceeds.
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.
While the real estate markets are recuperating, highly competitive
market conditions continue to exist in most locations. The Partnership's
philosophy and approach has been to aggressively and creatively manage the
Partnership's real estate assets to attract and retain tenants. Net
effective rents to the landlord from renewal tenants are generally more
favorable than lease terms which can be negotiated with new tenants.
However, the Partnership's capital resources must also be preserved and
allocated in such a manner as to maximize the total value of the portfolio.
As a result of the real estate market conditions discussed above, the
Partnership continues to conserve its working capital. All expenditures
are carefully analyzed and certain capital projects are deferred when
appropriate. By conserving working capital, the Partnership will be in a
better position to meet the future needs of its properties since outside
sources of capital may be limited. Due to these factors, the Partnership
has held its remaining investment properties longer than originally
anticipated in an effort to maximize the return to the Limited Partners.
After reviewing the remaining properties and their competitive marketplace,
the General Partners of the Partnership expect to be able to liquidate the
remaining assets as quickly as practicable. The affairs of the Partnership
are expected to be wound up no later than 1999 (sooner if the properties
are sold or disposed of in the nearer term) barring unforeseen economic
developments.
RESULTS OF OPERATIONS
The aggregate decrease in cash and cash equivalents and short-term
investments as of September 30, 1995 as compared to December 31, 1994 is
primarily due to the distribution of $23,200,725 to partners of previous
sales proceeds in February 1995. Additionally, the decrease in cash and
cash equivalents and the increase in short-term investments at September
30, 1995 as compared to December 31, 1994 is primarily due to the majority
of the Partnership's investments in U.S. Government obligations classified
as short-term investments at September 30, 1995 rather than as cash
equivalents. Reference is made to Note 1.
The increase in prepaid expenses as of September 30, 1995 as compared
to December 31, 1994 is primarily due to the timing of the payment of
insurance premiums at certain of the Partnership's investment properties.
The decrease in accounts payable at September 30, 1995 as compared to
December 31, 1994 is primarily the result of the timing of credits given
for rental escalations due from tenants at the Permian Mall.
The increase in accrued interest as of September 30, 1995 as compared
to December 31, 1994 is primarily due to the sale and related financing of
Carlyle Seattle's remaining interest in First Interstate (Note 4(b)).
The increase in accrued real estate taxes as of September 30, 1995 as
compared to December 31, 1994 is due to the timing of payments for real
estate taxes at certain of the Partnership's investment properties.
The decrease in other current liabilities as of September 30, 1995 as
compared to December 31, 1994 is primarily due to a decrease in unearned
rents at National City Center.
The decrease in rental income, mortgage and other interest,
depreciation, property operating expenses, professional services, and
amortization of deferred expenses for the three and nine months ended
September 30, 1995 as compared to the three and nine months ended September
30, 1994 is primarily due to the redemption of the Partnership's interest
in Carrara Place Limited and the partial sale and restructuring of Carlyle
Seattle's interest in First Interstate, both in December 1994.
The increase in interest income for the three and nine months ended
September 30, 1995 as compared to the three and nine months ended September
30, 1994 is primarily due to the temporary investment of First Interstate
Center sales proceeds prior to the sale distribution as discussed above.
The increases in general and administrative expenses for the three and
nine months ended September 30, 1995 as compared to the three and nine
months ended September 30, 1994 are attributable primarily to an increase
in and the recognition of certain additional prior year reimbursable costs
to affiliates of the General Partners in 1995. Reference is made to Note
5.
The decrease in venture partners' share of venture operations for the
three and nine months ended September 30, 1995 as compared to the three and
nine months ended September 30, 1994 is primarily due to the redemption of
the Partnership's interest in Carrara Place Limited and the partial sale
and restructuring of Carlyle Seattle's interest in First Interstate, both
in December 1994 as discussed above.
The decrease in extraordinary item for the three and nine months ended
September 30, 1995 as compared to the three and nine months ended September
30, 1994 is due to the April 1994 refinancing of the National City Center
mortgage payable (Note 3(b)).
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
OCCUPANCY
The following is a listing of approximate occupancy levels by quarter for the Partnership's investment
properties.
<CAPTION>
1994 1995
------------------------------------- ------------------------------
At At At At At At At At
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>
1. Carrara Place
Office Building
Englewood, Colorado . . . . . 49% 80% 88% N/A N/A N/A N/A
2. Stonybrook Apartments
I & II
Tucson, Arizona. . . . . . . 96% 83% 95% 96% 94% 77% 79%
3. Permian Mall
Odessa, Texas . . . . . . . . 91% 91% 91% 92% 91% 92% 93%
4. First Interstate Center
Seattle, Washington . . . . . 97% 99% 97% 97% 97% 94% 90%
5. National City Center
Office Building
Cleveland, Ohio . . . . . . . 94% 94% 94% 94% 97% 98% 98%
<FN>
- ------------
An "N/A" indicates that the property was not owned by the Partnership at the end of the quarter.
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
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 herein 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
herein by reference to the Partnership's report for December 31, 1992 on
Form 10-K (File No. 0-12433) dated March 19, 1993.
4-C. Amended and Restated Promissory Note, dated April 30, 1994,
between Carlyle/National City Associates and New York Life Insurance
Company relating to the National City Center Office Building is hereby
incorporated herein by reference to the Partnership's report for March 31,
1994 on Form 10-Q (File No. 0-12433) dated May 11, 1994.
4-D. Bondowner, Borrower, Remarketing Agent, Issuer and Trustee
Waiver, Appointment of and Acceptance by Successor Remarketing Agent,
Bondowner Election to Retain Bonds and Notice of Remarketing Rate, dated
October 1, 1994 relating to the refinancing of the first mortgage note
relating to the Stonybrook Apartments II is hereby incorporated by
reference to the Partnership's report on Form 10-K (File No. 0-12433) dated
March 27, 1995.
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 (File No. 2-76443), dated
August 8, 1983.
10-C. 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. 0-12433) dated August 12, 1994.
27. Financial Data Schedule
(b) No reports on Form 8-K were filed since the beginning of the last
quarter of the period covered by this report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company 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
Date: November 9, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.
GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date: November 9, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 5,168,110
<SECURITIES> 4,912,917
<RECEIVABLES> 4,059,382
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 14,140,409
<PP&E> 122,759,168
<DEPRECIATION> 41,952,058
<TOTAL-ASSETS> 101,018,130
<CURRENT-LIABILITIES> 6,726,008
<BONDS> 76,901,160
<COMMON> 0
0
0
<OTHER-SE> (3,122,007)
<TOTAL-LIABILITY-AND-EQUITY> 101,018,130
<SALES> 16,896,366
<TOTAL-REVENUES> 17,618,925
<CGS> 0
<TOTAL-COSTS> 11,009,742
<OTHER-EXPENSES> 519,220
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,820,568
<INCOME-PRETAX> (730,605)
<INCOME-TAX> 0
<INCOME-CONTINUING> (478,958)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (478,958)
<EPS-PRIMARY> (2.87)
<EPS-DILUTED> (2.87)
</TABLE>
