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, 1995 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, Illinois60611
(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 X
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 Matters . . . . 7
Item 6. Selected Financial Data . . . . . . . . 8
Item 7. Management's Discussion and
Analysis of Financial Condition
and Results of Operations . . . . . . . 14
Item 8. Financial Statements and
Supplementary Data. . . . . . . . . . . 20
Item 9. Changes in and Disagreements
with Accountants on Accounting
and Financial Disclosure. . . . . . . . 49
PART III
Item 10. Directors and Executive Officers
of the Partnership. . . . . . . . . . . 49
Item 11. Executive Compensation. . . . . . . . . 52
Item 12. Security Ownership of Certain
Beneficial Owners and Management. . . . 53
Item 13. Certain Relationships and
Related Transactions. . . . . . . . . . 54
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K . . . . . . . . 54
SIGNATURES . . . . . . . . . . . . . . . . . . . . 57
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 no later
than December 31, 2032. At sale of a particular property, the net
proceeds, if any, are generally distributed or reinvested in existing
properties rather than invested in acquiring additional properties. As
discussed further in Item 7, the marketplaces in which the portfolio
operates and real estate markets in general are in a recovery mode. The
Partnership currently expects to conduct an orderly liquidation of its
remaining investment portfolio as quickly as possible and to wind up its
affairs not later than December 31, 1999, barring any unforeseen economic
developments. (Reference is also made to Note 1.)
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, 1995,
Name, Type of Property Date of Original Invested
and Location (e) Size PurchaseCapital 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)
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
5. Arbor Town
Apartments-II
Arlington, Texas 202 units 11-1-82 11-26-84 fee ownership of land
and improvements
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, 1995,
Name, Type of Property Date of Original Invested
and Location (e) Size PurchaseCapital 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) (d)
11. First Interstate
Center
Seattle,
Washington. . . 921,000 3-10-82 12/15/95 fee ownership of
sq.ft. improvements and
n.r.a. and ground leasehold
interest (through joint
venture partnership)
(c)(d)
12. Carrara Place
Office Building
Englewood,
Colorado. . . . 233,000 11-23-82 12-8-94 fee ownership of land
sq.ft. and improvements
n.r.a. (through joint venture
partnership)(c)(d)
13. San Mateo
Fashion Island
San Mateo,
California. . . 832,000 9-10-82 12-31-86 fee ownership of land
sq.ft. and improvements and
g.l.a. ground leasehold
interest in land
(c)
14. Permian Mall
Odessa, Texas . 665,000 12-28-82 6% fee ownership of land
sq.ft. and improvements (f)
g.l.a.
15. National City
Center Office
Building
Cleveland, Ohio 786,400 7-27-83 21% fee ownership of land
sq.ft. and improvements
n.r.a. (through joint
venture partnership)(f)
Sale or Disposal Date
or if Owned at
December 31, 1995,
Name, Type of Property Date of Original Invested
and Location (e) Size PurchaseCapital Percentage (a) Type of Ownership (b)
- ---------------------- ---- ------------------------------ ---------------------
16. Yerba Buena
West Office
Building
San Francisco,
California. . . 268,000 8-30-85 6-24-92 fee ownership of land
sq.ft. and improvements
n.r.a. (through joint venture
partnership)
<FN>
- ---------------
(a) The computation of this percentage for properties held at December 31, 1995 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.
</TABLE>
The Partnership's real property investments are subject to competition
from similar types of properties (including in certain areas properties
owned 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, 1995 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, 1995.
On December 1, 1994, Carlyle Seattle sold 49.95% of its interest and
entered into an option agreement concerning the remaining 50.05% of its
interest in First Interstate. The remaining interest was sold on December
15, 1995. Reference is made to Note 7 and the Partnership's Reports on
Form 8-K (File No. 0-12433) for December 1, 1994 and December 15, 1995,
which descriptions are hereby incorporated herein by reference.
The Partnership has no employees other than personnel 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 1995 and 1994 for the Partnership's investment properties owned during 1995:
<CAPTION>
1994 1995
--------------------------------------------------
At At At At At At At At
Principal Business3/31 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. Stonybrook Apartments
- I & II
Tucson, Arizona . . Apartments 96% 83% 95% 96% 94% 77% 79% 86%
2. Permian Mall
Odessa, Texas . . . Retail 91% 91% 91% 92% 91% 92% 93% 92%
3. First Interstate Center
Seattle, Washington Financial Institu-
tion/Railroad 97% 99% 97% 97% 97% 94% 90% N/A
4. National City Center
Office Building
Cleveland, Ohio . . Banking 94% 94% 94% 94% 97% 98% 98% 97%
<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 quarter.
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
1994 and 1995.
PART II
ITEM 5. MARKET FOR THE PARTNERSHIP'S LIMITED PARTNERSHIP INTERESTS
AND RELATED SECURITY HOLDER MATTERS
As of December 31, 1995, there were 16,956 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. There are certain conditions and restrictions on the transfer of
Interests, including, among other things, the requirements that the
substitution of a transferee of Interests as a Limited Partner of the
Partnership be subject to the written consent of the Corporate General
Partner. The rights of a transferee of Interests who does not become a
substituted Limited Partner will be limited to the rights to receive his
share of profits or losses and cash distributions from the Partnership, and
such transferee will not be entitled to vote such Interests. No transfer
will be effective until the first day of the next succeeding calendar
quarter after the requisite transfer form satisfactory to the Corporate
General Partner has been received by the Corporate General Partner. The
transferee consequently will not be entitled to receive any cash
distributions or any allocable share of profits or losses for tax purposes
until such succeeding calendar quarter. Profits or losses from operations
of the Partnership for a calendar year in which a transfer occurs will be
allocated between the transferor and the transferee based upon the number
of quarterly periods in which each was recognized as the holder of
Interests, without regard to the results of Partnership's operations during
particular quarterly periods and without regard to whether cash
distributions were made to the transferor or transferee. Profits or losses
arising from the sale or other disposition of Partnership properties will
be allocated to the recognized holder of the Interests as of the last day
of the quarter in which the Partnership recognized such profits or losses.
Cash distributions to a holder of Interests arising from the sale or other
disposition of Partnership properties will be distributed to the recognized
holder of the Interests as of the last day of the quarterly period with
respect to which distribution is made.
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, 1995, 1994, 1993, 1992 AND 1991
(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)
<CAPTION>
1995 1994 1993 1992 1991
-------------------------- ----------- ------------------------
<S> <C> <C> <C> <C> <C>
Total income . . . . .$ 23,238,472 43,570,909 49,186,211 52,853,676 54,125,067
============ =========== =========== =========== ===========
Operating earnings
(loss) . . . . . . .$ (985,559) (4,513,232) (7,086,550) (9,725,577) (9,950,730)
Partnership's share of
operations of uncon-
solidated venture . . -- -- -- (723,696) (1,447,179)
Venture partners'
share of ventures'
operations. . . . . . 277,861 1,596,830 2,415,069 1,803,556 1,226,873
------------ ----------- ----------- ----------- -----------
Net operating
earnings (loss) . . . (707,698) (2,916,402) (4,671,481) (8,645,717)(10,171,036)
Gain (loss) on sale
or dispositions
of interest in
investment property,
net of venture
partners' share . . . 15,690,781 30,614,901 4,091,683 3,817,800 1,637,840
Extraordinary items . -- (675,062) -- -- --
------------ ----------- ----------- ----------- -----------
Net earnings (loss). .$ 14,983,083 27,023,437 (579,798) (4,827,917) (8,533,196)
============ =========== =========== =========== ===========
Net earnings (loss)
per limited part-
nership interest (b):
Net operating
earnings (loss). . .$ (4.25) (17.50) (28.03) (51.87) (61.02)
Gain (loss) on sale
or dispositions
of interest in
investment property
net of venture
partners' share . . 97.08 189.42 25.32 23.62 10.13
Extraordinary items. -- (4.18) -- -- --
------------ ----------- ----------- ----------- -----------
Net earnings (loss)$ 92.83 167.74 (2.71) (28.25) (50.89)
============ =========== =========== =========== ===========
1995 1994 1993 1992 1991
-------------------------- ----------- ------------------------
Total assets . . . . .$ 95,288,548 125,013,528 209,636,156 233,815,505 252,650,342
============ =========== =========== =========== ===========
Long-term debt . . . .$ 59,465,831 93,051,656 194,712,434 188,904,448 230,923,628
============ =========== =========== =========== ===========
Cash distributions
per Interest (c) . .$ 145.00 -- -- 1.50 9.75
============ =========== =========== =========== ===========
<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 from the Partnership are generally not equal to Partnership income (loss) for
financial reporting or Federal income tax purposes. Each Partner's taxable income (loss) from the Partnership in
each year is equal to his allocable share of the taxable income (loss) of the Partnership. Accordingly, 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.
</TABLE>
<TABLE>
SIGNIFICANT PROPERTY - SELECTED RENTAL AND OPERATING DATA AS OF DECEMBER 31, 1995
<CAPTION>
Property
- --------
National City
Center Office
Building a) The net rentable area ("NRA") 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 NRA Avg. Base Rent Per
December 31, Occupancy Rate Square Foot (1)
------------ -------------- ------------------
<S> <C> <C> <C> <C>
1991. . . . . 96% 11.41
1992. . . . . 96% 11.47
1993. . . . . 96% 11.86
1994. . . . . 94% 12.44
1995. . . . . 97% 11.85
<FN>
(1) Average base rent per square foot is based on NRA occupied as of December 31
of each year.
</TABLE>
<TABLE>
<CAPTION>
Base RentScheduled LeaseLease
b) Significant Tenants Square FeetPer AnnumExpiration DateRenewal Option
------------------- -------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
National City Bank 447,080 $4,937,4661/2006 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 1995
Year Ending Expiring NRA of Expiringof Expiring Base Rent
December 31, Leases Leases (1) Leases Expiring
------------ --------- -------------------------- ----------
<S> <C> <C> <C> <C> <C> <C>
1996 1 65,864 824,768 9%
1997 -- -- -- --
1998 2 16,905 246,990 3%
1999 -- -- -- --
2000 1 42,390 599,154 7%
2001 2 165,156 2,228,949 25%
2002 -- -- -- --
2003 -- -- -- --
2004 -- -- -- --
2005 -- -- -- --
<FN>
(1) Excludes leases that expire in 1996 for which renewal leases or leases with
replacement tenants have been executed as of March 25, 1996.
</TABLE>
<TABLE>
<CAPTION>
Property
- --------
Permian Mall a) The gross leasable area ("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> <C>
1991. . . . . 90% 5.63
1992. . . . . 95% 5.35
1993. . . . . 93% 5.52
1994. . . . . 92% 5.49
1995. . . . . 92% 5.33
<FN>
(1) Average base rent per square foot is based on GLA occupied as of December 31
of each year.
</TABLE>
<TABLE>
<CAPTION>
Base RentScheduled LeaseLease
b) Significant Tenants Square FeetPer AnnumExpiration DateRenewal Option
------------------- -------------------------------------------------
<S> <C> <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 Permian Mall:
Annualized Percent of
Number of Approx. Total Base Rent Total 1995
Year Ending Expiring GLA of Expiringof Expiring Base Rent
December 31, Leases Leases (1) Leases Expiring
------------ --------- -------------------------- ----------
<S> <C> <C> <C> <C> <C> <C>
1996 14 35,919 304,440 10%
1997 13 28,725 319,188 10%
1998 7 20,571 159,708 5%
1999 7 10,521 178,548 6%
2000 9 137,379 629,004 20%
2001 3 11,945 101,904 3%
2002 4 5,927 136,080 4%
2003 3 10,950 117,804 4%
2004 2 8,700 19,200 1%
2005 5 15,730 307,188 10%
<FN>
(1) Excludes leases that expire in 1996 for which renewal leases or leases with
replacement tenants have been executed as of March 25, 1996.
</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, 1995, the Partnership and its consolidated ventures
had cash and cash equivalents of approximately $10,946,000. Such funds 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. However, the Partnership has not made all
required payments to the mortgage lender on the Permian Mall effective
December, 1995 as discussed below. In addition, 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 sale of the Partnership's
interest in the First Interstate Center (Note 7).
The Partnership and its consolidated ventures have currently budgeted
for 1996 approximately $907,700 for tenant improvements and other capital
expenditures. The Partnership's share of such items in 1996 is currently
budgeted to be approximately $794,500. Actual amounts expended in 1996 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
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. 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 separate non-
recourse loans secured individually by the investment properties and are
not obligations of the entire investment portfolio, and the Partnership and
its ventures are not personally liable for the payment of the mortgage
indebtedness.
STONYBROOK APARTMENTS
Occupancy at the Stonybrook Apartments was 86% at December 31, 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 to traditional levels 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.
To explore the Partnership's options regarding this property, the
Partnership began marketing the property for sale. In February 1996, the
Partnership entered into a non-binding letter of intent to sell the
Stonybrook Apartments. The prospective purchaser (an independent third
party) is currently conducting its due diligence review with respect to the
property and proposed transaction and is expected to complete such review
by mid April 1996. A sale of the property for the proposed terms would
result in a gain to the Partnership for financial reporting and Federal
income tax purposes in 1996. The letter of intent executed by the
Partnership and the prospective purchaser is non-binding with respect to
the sale of the Partnership's interest in the property and consummation of
the proposed transaction is subject to the satisfaction of various
conditions. Therefore, there can be no assurance that any such sale will
be consummated on any terms.
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 66,000 square feet (12.5% of the building) whose
lease is scheduled to expire in late 1996 has informed the Partnership that
it intends to vacate a portion (approximately 41,000 square feet) upon
expiration of its existing lease. 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 any of the 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 extension of the Baker & Hostetler lease (as discussed above). The
venture is required to escrow approximately $313,000 per year in 1994
through 1996 (approximately $1,284,000 at December 31, 1995) and
approximately $229,000 per year in 1997 and 1998. As of December 31, 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 final 25% of the abatement expires in 1998 for
taxes payable in 1999.
CARLYLE SEATTLE
In May 1994, Carlyle Seattle Associates ("Carlyle Seattle") a
partnership in which the Partnership owns an interest executed an agreement
which granted an option to sell its interest in the Wright-Carlyle Seattle
("First Interstate") venture 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% of Carlyle Seattle's interest between one
year and two years after the sale closing date. 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 was secured by
the remaining 50.05% of Carlyle Seattle's interest in First Interstate.
The exercise price for the remaining 50.05% interest was to be $21,350,000
if the purchase option was exercised on or before December 22, 1995 and
increasing 7% per annum thereafter until 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
could be applied toward the exercise price. 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 was the sole limited partner and the unaffiliated venture
partner was the sole general partner. 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 was
$25,210,324) for financial reporting purposes in 1994 and a gain of
$83,565,440 (of which the Partnership's share was $61,224,798) for Federal
income tax purposes in 1994.
On December 15, 1995, the unaffiliated venture exercised its option to
purchase the Partnership's remaining 50.05% interest in Carlyle Seattle for
$21,350,000. The exercise price was satisfied by applying the $5,000,000
option purchase price paid at the initial closing and applying the balance
of unpaid principal ($15,000,000) and accrued interest ($1,406,250) on the
Carlyle Seattle loan. Therefore, there are no additional cash proceeds
from the sale of Carlyle Seattle's remaining 50.05% interest. As a result
of this transaction, Carlyle Seattle realized a gain on sale of
approximately $21,406,000 for financial reporting purposes of which the
Partnership's share is approximately $15,691,000.
PERMIAN MALL
Although the property produced cash flow in 1994, the property
operated at a deficit in 1995. This deficit was primarily due to declining
retail sales resulting in lower effective rents. Additionally, significant
funds which the Partnership estimates to be at a minimum of $1,000,000
would have been required in the near future for major roof and parking lot
repairs. In anticipation of the necessary major repairs and potential
leasing costs, the Partnership had initiated discussions with the mortgage
lender regarding a modification of the loan. The Partnership was unable to
secure such modification. Due to these facts, the Partnership was unable
to pay the 1995 real estate taxes assessed on the property in the amount of
$770,000 due in January, 1996 nor has it remitted all of the scheduled debt
service payments since December 1995. Consequently, the Partnership
received a notice of default from the lender in February 1996. It is
expected that the lender will realize upon its security and take possession
of the property in 1996. This transaction would result in the Partnership
no longer having an ownership interest in the property, and will result in
a net gain for financial reporting purposes and Federal income tax purposes
to the Partnership with no corresponding distributable proceeds in 1996.
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.
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. The Partnership has also sought or may seek additional loan
modifications where appropriate. By conserving working capital, the
Partnership will be in a better position to meet the future needs of its
properties since the availability of satisfactory outside sources of
capital may be limited given the portfolio's current debt levels. 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. However, after reviewing the remaining properties
and the marketplaces in which they operate, the General Partners of the
Partnership expect to be able to conduct an orderly liquidation of its
remaining investment portfolio as quickly as practicable. Therefore, 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 near term),
barring unforeseen economic developments. Without a dramatic improvement
in market conditions, the Limited Partnership will receive substantially
less than half of their original investment.
RESULTS OF OPERATIONS
The decrease in cash and cash equivalents as of December 31, 1995 as
compared to December 31, 1994 is primarily due to the distribution of
$23,200,725 to partners of sales proceeds in February 1995.
The decrease in short-term investments as of December 31, 1995 as
compared to December 31, 1994 is due to all of the Partnership's
investments in U.S. Government obligations being classified as cash
equivalents at December 31, 1995 rather than short-term investments.
The aggregate decrease in escrow deposits (short-term and long-term)
as of December 31, 1995 as compared to December 31, 1994 is primarily due
to the refund of excess real estate tax deposits (approximately $547,000)
received in 1995 at the National City Center, this amount is partially
offset by additional payments into the escrow accounts for future leasing
costs required by terms of the loan secured by the National City Center
Building (see Note 4(b)).
The increase in current portion of long-term debt and the
corresponding decrease in long-term debt as of December 31, 1995 as
compared to December 31, 1994 is primarily due to the classification of the
mortgage (with a principal balance of approximately $17,755,000) secured by
the Permian Mall for which the Partnership has received a notice of
default, as current as of December 31, 1995 (see Note 4).
The decrease in accrued interest, note payable and deferred gain on
sale of investment property as of December 31, 1995 as compared to 1994 is
due to the sale of the Partnership's remaining interest in Carlyle Seattle
in December 1995 (see Note 7).
The decrease in rental income, mortgage and other interest,
depreciation, property operating expenses, professional services, and
amortization of deferred expenses for the year ended December 31, 1995 as
compared to the year ended December 31, 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 decrease in rental income and
mortgage and other interest, depreciation 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 increase in interest income for the year ended December 31, 1995
as compared to the year ended December 31, 1994 is primarily due to the
temporary investment of First Interstate Center sales proceeds prior to the
sale distribution 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 increase in general and administrative expenses for the year ended
December 31, 1995 as compared to the year ended December 31, 1994 is
attributable primarily to an increase in and the recognition of certain
additional prior year reimbursable costs to affiliates of the General
Partners in 1995 and also due to credits received in 1994 for prior year
reimbursable costs.
The decrease in venture partners' share of venture operations and the
corresponding decrease in venture partners deficits in ventures for the
year ended December 31, 1995 as compared to the year ended December 1994 is
due to the sale of the Carlyle Seattle's remaining interest in First
Interstate. 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 (see Note 7).
The gain on sale or disposition, net of venture partner's share for
the year ended December 31, 1995 is due to the sale of Carlyle Seattle's
remaining interest in First Interstate. The gain on sale or disposition,
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 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.
Inflation is not expected to significantly impact future operations
due to the expected liquidation of the Partnership by 1999. However, to
the extent that inflation in future periods would have an adverse impact on
property operating expenses, the effect would 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.
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, 1995 and 1994
Consolidated Statements of Operations, years ended December 31,
1995, 1994 and 1993
Consolidated Statements of Partners' Capital Accounts (Deficit),
years ended December 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows, years ended December 31,
1995, 1994 and 1993
Notes to Consolidated Financial Statements
SCHEDULE
--------
Consolidated Real Estate and Accumulated DepreciationIII
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, 1995 and 1994, and the results of their operations and their
cash flows for each of the years in the three-year period ended
December 31, 1995, 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 25, 1996
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
ASSETS
------
<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . $ 10,946,150 30,504,207
Short-term investments (note 1). . . . . . . . . . . . . . -- 1,944,746
Rents and other receivables. . . . . . . . . . . . . . . . 560,228 570,935
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . 116,454 102,740
Escrow deposits (note 4(b)). . . . . . . . . . . . . . . . 1,645,121 1,504,334
------------ -----------
Total current assets. . . . . . . . . . . . . . . . . 13,267,953 34,626,962
------------ -----------
Investment properties, at cost (notes 2, 3, and 4)-Schedule III:
Land and leasehold interest. . . . . . . . . . . . . . . 17,171,695 17,171,695
Buildings and improvements . . . . . . . . . . . . . . . 105,732,483 105,128,812
------------ -----------
122,904,178 122,300,507
Less accumulated depreciation. . . . . . . . . . . . . . 42,824,687 39,346,202
------------ -----------
Total investment properties,
net of accumulated depreciation . . . . . . . . . . 80,079,491 82,954,305
------------ -----------
Deferred expenses (note 1) . . . . . . . . . . . . . . . . . 407,246 471,479
Accrued rents receivable (note 1). . . . . . . . . . . . . . 914,627 684,842
Venture partners' deficit in ventures. . . . . . . . . . . . 6,931 5,376,969
Escrow deposits (note 4(b)). . . . . . . . . . . . . . . . . 612,300 898,971
------------ -----------
$ 95,288,548 125,013,528
============ ===========
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
1995 1994
------------ -----------
Current liabilities:
Current portion of long-term debt (notes 3 and 4). . . . . $ 18,878,959 1,683,440
Accounts payable . . . . . . . . . . . . . . . . . . . . . 1,164,924 733,505
Accrued interest . . . . . . . . . . . . . . . . . . . . . 271,246 378,976
Accrued real estate taxes. . . . . . . . . . . . . . . . . 2,381,207 2,337,868
Other current liabilities. . . . . . . . . . . . . . . . . 217,434 533,509
------------ -----------
Total current liabilities . . . . . . . . . . . . . . 22,913,770 5,667,298
Tenant security deposits . . . . . . . . . . . . . . . . . . 21,530 22,734
Note payable (note 7(b)) . . . . . . . . . . . . . . . . . . -- 15,000,000
Long-term debt, less current portion (note 4). . . . . . . . 59,465,831 78,051,656
------------ -----------
Commitments and contingencies (notes 3, 4 and 8)
Total liabilities . . . . . . . . . . . . . . . . . . 82,401,131 98,741,688
Venture partners' equity in ventures (note 3). . . . . . . . 547,383 479,813
Deferred gain on sale of investment property (note 7(b)) . . -- 5,000,000
Partners' capital accounts (deficit):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net losses. . . . . . . . . . . . . . . . . . (8,061,836) (8,190,436)
Cumulative cash distributions. . . . . . . . . . . . . . (818,228) (583,877)
------------ -----------
(8,879,064) (8,773,313)
------------ -----------
Limited partners (160,005 interests):
Capital contributions, net of offering costs . . . . . . 141,003,683 141,003,683
Cumulative net losses. . . . . . . . . . . . . . . . . . (76,536,044) (91,390,527)
Cumulative cash distributions. . . . . . . . . . . . . . (43,248,541) (20,047,816)
------------ -----------
21,219,098 29,565,340
------------ -----------
Total partners' capital accounts (deficits) . . . . . 12,340,034 20,792,027
------------ -----------
$ 95,288,548 125,013,528
============ ===========
<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
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<CAPTION>
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . $22,300,351 43,102,907 48,834,313
Interest income. . . . . . . . . . . . . . 938,121 442,110 351,898
Other income . . . . . . . . . . . . . . . -- 25,892 --
------------ ----------- -----------
23,238,472 43,570,909 49,186,211
------------ ----------- -----------
Expenses:
Mortgage and other interest. . . . . . . . 9,024,210 20,804,238 24,850,497
Depreciation . . . . . . . . . . . . . . . 3,478,485 7,779,552 9,144,746
Property operating expenses. . . . . . . . 11,000,332 17,844,877 20,304,224
Management fees to corporate general partner -- 17,185 --
Professional services. . . . . . . . . . . 271,107 358,196 378,862
Amortization of deferred expenses. . . . . 64,233 1,130,506 1,261,667
General and administrative . . . . . . . . 385,664 149,587 332,765
------------ ----------- -----------
24,224,031 48,084,141 56,272,761
------------ ----------- -----------
Operating earnings (loss). . . . . . (985,559) (4,513,232) (7,086,550)
Venture partners' share of ventures'
operations (note 3). . . . . . . . . . . . 277,861 1,596,830 2,415,069
------------ ----------- -----------
Net operating earnings (loss). . . . (707,698) (2,916,402) (4,671,481)
Gain on sale or disposition, net of venture
partners' share (note 7) . . . . . . . . . 15,690,781 30,614,901 4,091,683
------------ ----------- -----------
Net earnings (loss) before
extraordinary items. . . . . . . . 14,983,083 27,698,499 (579,798)
Extraordinary items (notes 4(b) and
4(c)). . . . . . . . . . . . . . . . . . . -- (675,062) --
------------ ----------- -----------
Net earnings (loss). . . . . . . . . $ 14,983,083 27,023,437 (579,798)
============ =========== ===========
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
1995 1994 1993
------------ ------------ ------------
Net earnings (loss) per limited
partnership interest (note 1):
Net operating earnings (loss). . $ (4.25) (17.50) (28.03)
Net gain on sale or disposition
of interests in investment
properties, net of venture
partner's share. . . . . . . . 97.08 189.42 25.32
Net extraordinary items. . . . . -- (4.18) --
------------ ----------- -----------
Net earnings (loss). . . . . . . . . $ 92.83 167.74 (2.71)
============ =========== ===========
<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, 1995, 1994 AND 1993
<CAPTION>
GENERAL PARTNERS LIMITED PARTNERS (160,005 INTERESTS)
------------------------------------------------ -------------------------------------------------------
CONTRI-
BUTIONS
NET CASH NET OF NET
CONTRI- EARNINGS DISTRI- OFFERING EARNINGS CASH
BUTIONS (LOSS) BUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ---------- ---------- ----------- ----------- ----------- ------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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)
------ ---------- -------- ---------- ----------------------- ----------------------
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 -- -- (19,666) (19,666) -- -- -- --
------ ---------- -------- ---------- ----------------------- ----------- ----------
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 CASH NET OF NET
CONTRI- EARNINGS DISTRI- OFFERING EARNINGS CASH
BUTIONS (LOSS) BUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ---------- ---------- ----------- ----------- ----------- ------------------------
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
Net earnings
(note 5). -- 128,600 -- 128,600 -- 14,854,483 -- 14,854,483
Cash dis-
tribution
($145 per
Limited
Partner
interest)
(note 9). -- -- (234,351) (234,351) -- -- (23,200,725)(23,200,725)
------ ---------- -------- ---------- ----------- ----------- ----------- ----------
Balance
(deficit)
Decem-
ber 31,
1995. . .$1,000(8,061,836) (818,228) (8,879,064)141,003,683 (76,536,044) (43,248,541)21,219,098
====== ========== ======== ========== =========== =========== =========== ==========
<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, 1995, 1994 AND 1993
<CAPTION>
1995 1994 1993
------------ ------------ -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss). . . . . . . . . . . . $ 14,983,083 27,023,437 (579,798)
Items not requiring (providing) cash:
Depreciation . . . . . . . . . . . . . . 3,478,485 7,779,552 9,144,746
Amortization of deferred expenses. . . . 64,233 1,130,506 1,261,667
Amortization of discount on long-term debt 299,737 308,538 1,514,317
Venture partners' share of ventures'
operations . . . . . . . . . . . . . . (277,861) (1,596,830) (2,415,069)
Gain on sale or disposition of interests
in investments properties, net of
venture partners' share. . . . . . . . (15,690,781) (30,614,901) (4,091,683)
Extraordinary item . . . . . . . . . . . -- 675,062 --
Changes in:
Rents and other receivables. . . . . . . 10,707 (606,584) (155,834)
Prepaid expenses . . . . . . . . . . . . (13,714) 51,333 108,280
Escrow deposits. . . . . . . . . . . . . 531,334 (1,601,546) 533,069
Accrued rents receivable . . . . . . . . (229,785) (451,555) (371,958)
Accounts payable . . . . . . . . . . . . 431,419 (2,943,489) (1,407,489)
Accrued interest . . . . . . . . . . . . 1,298,520 1,403,937 2,322,534
Accrued real estate taxes. . . . . . . . 43,339 (38,788) (240,052)
Other current liabilities. . . . . . . . (316,075) (281,527) (95,672)
Tenant security deposits . . . . . . . . (1,204) 17,587 (74,176)
------------ ------------ -------------
Net cash provided by
operating activities . . . . . . 4,611,437 254,732 5,452,882
------------ ------------ -------------
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1995 1994 1993
------------ ------------ -----------
Cash flows from investing activities:
Net sales and maturities (purchases) of
short-term investments . . . . . . . . . 1,944,746 4,920,786 (1,255,540)
Additions to investment properties . . . . (603,671) (3,274,218) (3,097,755)
Proceeds from sale or disposition of
investment properties, net of selling
expenses (notes 4(b) and 7(b)) . . . . . -- 14,862,094 1,892,932
Proceeds from sale of option, net of
venture partner share. . . . . . . . . . -- 3,665,000 --
Escrow deposits. . . . . . . . . . . . . . (385,450) (898,971) --
Payment of deferred expenses . . . . . . . -- (266,986) (274,549)
------------ ------------ -------------
Net cash provided by (used in)
investing activities . . . . . . 955,625 19,007,705 (2,734,912)
------------ ------------ -------------
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 . . . (1,690,043) (2,395,459) (1,746,375)
Proceeds of long-term debt . . . . . . . . -- -- 388,020
Venture partners' contributions to venture -- 159,709 165,051
Distributions to venture partners. . . . . -- (525,559) (285,519)
Distributions to limited partners. . . . . (23,200,725) -- --
Distributions to general partners. . . . . (234,351) (19,666) --
------------ ------------ -------------
Net cash provided by (used in)
financing activities . . . . . . (25,125,119) 8,452,240 (2,693,434)
------------ ------------ -------------
Net increase (decrease) in cash and
cash equivalents . . . . . . . . (19,558,057) 27,714,677 24,536
Cash and cash equivalents,
beginning of year. . . . . . . . 30,504,207 2,789,530 2,764,994
------------ ------------ -------------
Cash and cash equivalents,
end of year. . . . . . . . . . . $ 10,946,150 30,504,207 2,789,530
============ ============ =============
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1995 1994 1993
------------ ------------ -----------
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. $ 7,425,953 19,091,763 21,055,562
============ ============ =============
Non-cash investing and financing activities:
Balance due on mortgage note payable cancelled$ -- -- 12,239,900
Balance due on note payable canceled . . 15,000,000 -- --
Recognition of deferred gain on sale
of interest in investment property . . 5,000,000 -- --
Reduction of land. . . . . . . . . . . . -- -- (2,170,000)
Reduction of buildings and improvements. -- -- (14,045,964)
Reduction of accumulated depreciation. . -- -- 5,454,885
Reduction of accrued interest payable. . 1,406,250 -- 41,916
Venture partners' share of gain. . . . . (5,715,469) -- --
------------ ------------ -------------
Non-cash gain recognized on
disposition of investment property . $ 15,690,781 -- 1,520,737
============ ============ =============
Disposals of fully depreciated assets. . $ -- 2,064,523 793,534
============ ============ =============
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, 1995, 1994 AND 1993
(1) OPERATIONS AND BASIS OF ACCOUNTING
The Partnership holds (either directly or through joint ventures) an
equity investment portfolio of United States real estate. Business
activities consist of rentals to a wide variety of commercial and retail
companies, and the ultimate sale or disposition of such real estate. The
Partnership currently expects to conduct an orderly liquidation of its
remaining investment portfolio and wind up its affairs not later than
December 31, 1999.
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") (sold in 1994; see note
7), Carlyle/National City Associates ("Carlyle/National City") and through
November 30, 1994, Carlyle Seattle's venture, Wright-Carlyle Seattle
("First Interstate") (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 First Interstate, effective December 1, 1994,
due to the sale of 49.95% of Carlyle Seattle's interest until the remaining
interest was sold on December 15, 1995 (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 GAAP and consolidation adjustments are not recorded on the
records of the Partnership. The net effect of these items for the years
ended December 31, 1995 and 1994 is summarized as follows:
<TABLE>
<CAPTION>
1995 1994
------------------------------ ------------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
(UNAUDITED)
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Total assets . . . . . . . . . $ 95,288,548 22,555,614 125,013,528 45,555,092
Partners' capital accounts
(deficits) (note 5):
General partners . . . . . (8,879,064) (5,577,644) (8,773,313) (5,596,056)
Limited partners . . . . . 21,219,098 (2,927,821) 29,565,340 24,217,044
Net earnings (loss) (note 5):
General partners . . . . . 128,600 252,763 182,742 4,710,614
Limited partners . . . . . 14,854,483 (3,944,140) 26,840,695 55,184,823
Net earnings (loss) per
limited partnership
interest . . . . . . . . . . 92.83 (24.65) 167.74 344.89
============ =========== =========== ===========
</TABLE>
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.
The preparation of financial statements in accordance with GAAP
requires the Partnership to make estimates and assumptions that affect the
reported or disclosed amount of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Certain reclassifications have been made to the 1994 and 1993
Consolidated Financial Statements to conform with the 1995 presentation.
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 ($10,773,569 and
$30,086,428 held at December 31, 1995 and 1994, 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 all
entities 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. Given the default of the debt secured by the Permian Mall, it
is not practical to estimate a value for SFAS 107. The remaining debt,
with a carrying balance of $60,589,705, has been calculated to have an SFAS
107 value of $61,333,811 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.
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 may be
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. 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.
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. 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). In 1995, Carlyle
Seattle sold its remaining interest in the First Interstate venture (note
7). The three properties owned at December 31, 1995 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.
Maintenance and repair expenses are charged to operations as incurred.
Significant betterments and improvements are capitalized and depreciated
over their estimated useful lives.
Under the Partnership's impairment policy, provisions for value
impairment are recorded with respect to investment properties pursuant to
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". Therefore, the Partnership does not anticipate
any effect on its consolidated financial statements upon full adoption of
SFAS 121 as required in the first quarter of 1996.
All investment properties are pledged as security for long-term debt,
for which there is no recourse to the Partnership as described in note 4.
(3) VENTURE AGREEMENTS
(a) General
The Partnership, at December 31, 1995, is a party to certain operating
joint venture agreements. 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 venture properties have been financed under various long-term debt
arrangements as described in note 4.
One of the ventures' properties produced net cash receipts during
1995, two in 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 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. On December 15, 1995, Carlyle Seattle sold the remaining
50.05% of its interest in First Interstate (note 7(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 provided that all
the capital contributions were to be made in the proportion of 73.3% by the
Partnership and 26.7% by C-X. The Carlyle Seattle venture agreement
further provided 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 would be allocated 73.3% to the Partnership and 26.7%
to C-X.
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 was amended to convert Carlyle Seattle's remaining general
partnership interest to a limited partnership interest. Additionally, the
amendment stated 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 provided that any
distributions to Carlyle Seattle be subordinate to the joint venture
partner's preferred return (as defined). No distributions were made to
Carlyle Seattle from operations subsequent to the initial sale transaction.
Additionally, effective December 1, 1994, until the remaining interest was
sold on December 15, 1995, the equity method of accounting has been applied
with respect to Carlyle Seattle's interest in First Interstate as Carlyle
Seattle's interest had decreased to less than 50% and converted to a
limited partnership interest.
The office building was 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 venture redeemed the Partnership's interest in
Carrara Place Limited to the venture (note 7(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.
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).
(d) Stonybrook Apartments
To explore the Partnership's options regarding this property, the
Partnership began marketing the property for sale. In February 1996, the
Partnership entered into a non-binding letter of intent to sell the
Stonybrook Apartments. The prospective purchaser (an independent third
party) is currently conducting its due diligence review with respect to the
property and proposed transaction and is expected to complete such review
by mid April 1996. A sale of the property for the proposed terms would
result in a gain to the Partnership for financial reporting and Federal
income tax purposes in 1996. The letter of intent executed by the
Partnership and the prospective purchaser is non-binding with respect to
the sale of the Partnership's interest in the property and consummation of
the proposed transaction is subject to the satisfaction of various
conditions. Therefore, there can be no assurance that any such sale will
be consummated on any terms.
<TABLE>
(4) LONG-TERM DEBT
(a) General
Long-term debt consists of the following at December 31, 1995 and 1994:
<CAPTION>
1995 1994
----------- -----------
<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(c)). . . . . . . . . . . . $ 4,061,350 4,102,600
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 $4,299,737 and $4,599,213, respectively, of
unamortized discount based upon an imputed
interest rate of 14% (in default as of
February 1996, see note 4(d)). . . . . . . . . . . . . . . 17,755,085 18,114,034
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,
see note 4(b)) . . . . . . . . . . . . . . . . . . . . . . 56,528,355 57,518,462
----------- ------------
Total debt. . . . . . . . . . . . . . . . . . . . 78,344,790 79,735,096
Less current portion of long-term debt
(note 4(d)) . . . . . . . . . . . . . . . . . . 18,878,959 1,683,440
----------- ------------
Total long-term debt. . . . . . . . . . . . . . . $59,465,831 78,051,656
=========== ============
</TABLE>
Five year maturities of long-term debt (exclusive of amortization of
discount) are as follows:
1996. . . . . . . . . $18,878,959
1997. . . . . . . . . 1,222,876
1998. . . . . . . . . 1,314,048
1999. . . . . . . . . 5,316,983
2000. . . . . . . . . 1,512,192
===========
(b) National City Center Office Building
Carlyle/National City reached an agreement with the current mortgage
lender to refinance the existing mortgage effective April 28, 1994. 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
improvement 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 extension
of 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) consisting of the
prepayment penalty, the unamortized loan discount and unamortized loan fees
at the time of refinancing was recorded in 1994.
(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. 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
Although the property produced cash flow in 1994, the property
operated at a deficit in 1995. This deficit was primarily due to declining
retail sales resulting in lower effective rents. Additionally, significant
funds which the Partnership estimates to be at a minimum of $1,000,000
would have been required in the near future for major roof and parking lot
repairs. In anticipation of the necessary major repairs and potential
leasing costs, the Partnership had initiated discussions with the mortgage
lender regarding a modification of the loan. The Partnership was unable to
secure such modification. Due to these facts, the Partnership was unable
to pay the 1995 real estate taxes assessed on the property in the amount of
$770,000 due in January, 1996 nor has it remitted all of the scheduled debt
service payments since December 1995. Consequently, the Partnership
received a notice of default from the lender in February 1996. It is
expected that the lender will realize upon its security and take possession
of the property in 1996. This transaction would result in the Partnership
no longer having an ownership interest in the property, and will result in
a net gain for financial reporting purposes and Federal income tax purposes
to the Partnership with no corresponding distributable proceeds in 1996.
(e) 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(c)).
(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.
The Partnership Agreement, additionally, 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 provision 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. The Limited Partners shall receive 100%
of such net sale proceeds until the Limited Partners (i) have received cash
distributions of sale or refinancing proceeds in an amount equal to the
Limited Partners' aggregate initial capital investment in the Partnership.
The Limited Partners have not received cash distributions to satisfy these
requirements.
(6) MANAGEMENT AGREEMENTS
Certain of the Partnership's properties are managed by affiliates of
the General Partners or their assignees for fees computed as a percentage
of certain rents received by 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 after the sale on the same terms that existed prior
to the sale.
(7) 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.
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 Associates ("Carlyle Seattle") a
partnership in which the Partnership owns an interest executed an agreement
which granted an option to sell its interest in the Wright-Carlyle Seattle
("First Interstate") venture 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% of Carlyle Seattle's interest between one
year and two years after the sale closing date. 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 was secured by
the remaining 50.05% of Carlyle Seattle's interest in First Interstate.
The exercise price for the remaining 50.05% interest was to be $21,350,000
if the purchase option was exercised on or before December 22, 1995 and
increasing 7% per annum thereafter until 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
could be applied toward the exercise price. 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 was the sole limited partner and the unaffiliated venture
partner was the sole general partner. 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 was
$25,210,324) for financial reporting purposes in 1994 and a gain of
$83,565,440 (of which the Partnership's share was $61,224,798) for Federal
income tax purposes in 1994.
On December 15, 1995, the unaffiliated venture exercised its option to
purchase the Partnership's remaining 50.05% interest in Carlyle Seattle for
$21,350,000. The exercise price was satisfied by applying the $5,000,000
option purchase price paid at the initial closing and applying the balance
of unpaid principal ($15,000,000) and accrued interest ($1,406,250) on the
Carlyle Seattle loan. Therefore, there are no additional cash proceeds
from the sale of Carlyle Seattle's remaining 50.05% interest. As a result
of this transaction, Carlyle Seattle realized a gain on sale of
approximately $21,406,000 for financial reporting purposes of which the
Partnership's share is approximately $15,691,000.
(c) Carrara
In December 1994, the venture redeemed the Partnership's 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.
(d) 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.
(8) LEASES
(a) As Property Lessor
At December 31, 1995, the Partnership and its consolidated ventures'
principal assets are one apartment complex, one enclosed shopping mall and
one office building. 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.
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,
1995 are generally for a term of one year or less and provide for annual
rents of approximately $1,840,482.
Cost and accumulated depreciation of the leased assets are summarized
as follows at December 31, 1995:
Shopping mall:
Cost . . . . . . . . . . $ 24,845,917
Accumulated depreciation (9,145,348)
------------
15,700,569
------------
Office buildings:
Cost . . . . . . . . . . 89,955,966
Accumulated depreciation (29,742,071)
------------
60,213,895
------------
Apartment complex:
Cost . . . . . . . . . . 8,102,295
Accumulated depreciation (3,937,268)
------------
4,165,027
------------
Total . . . . . . . . $ 80,079,491
============
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:
1996. . . . . . . . . . $ 13,859,963
1997. . . . . . . . . . 11,094,148
1998. . . . . . . . . . 10,801,014
1999. . . . . . . . . . 10,445,655
2000. . . . . . . . . . 9,967,097
Thereafter. . . . . . . 46,572,634
------------
Total . . . . . . . $102,740,511
============
(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 had been determined to be an operating lease (note
7(b)).
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.
(9) TRANSACTIONS WITH AFFILIATES
The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Corporate General Partner
and its affiliates including the reimbursement for salaries and salary-
related expenses of its employees, certain of its officers, and other
direct expenses relating to the administration of the Partnership and the
operation of the Partnership's investments. Fees, commissions and other
expenses required to be paid by the Partnership to the General Partners and
their affiliates as of December 31, 1995, 1994 and 1993 are as follows:
<TABLE>
<CAPTION>
UNPAID AT
DECEMBER 31,
1995 1994 1993 1995
-------- -------- -------- --------------
<S> <C> <C> <C> <C>
Property management and
leasing fees . . . . . . . . . . $378,886 1,268,265 1,055,773 175,490
Insurance commissions. . . . . . . 36,870 39,097 50,000 --
Reimbursement (at cost) for
accounting services. . . . . . . 106,919 126,072 88,062 --
Reimbursement (at cost) for
portfolio management
services . . . . . . . . . . . . 39,302 21,554 -- --
Reimbursement (at cost) for
legal services . . . . . . . . . 6,265 11,473 11,247 --
Reimbursement (at cost) for
administrative charges and
other out-of-pocket expenses . . 125,278 85,037 160,905 47,944
-------- --------- -------- --------
$693,520 1,551,498 1,365,987 223,434
======== ========= ======== ========
<FN>
The above table reflects that during 1995, the Partnership recognized and paid certain 1994 administrative
charges of approximately $52,772 that had not previously been reimbursed.
</TABLE>
The General Partners and their affiliates had deferred through June
30, 1988 payment of certain property management and leasing fees. In 1995,
the Partnership paid deferred property management and leasing fees of
$44,450.
Effective October 1, 1995, the Corporate General Partner of the
Partnership engaged independent third parties to perform certain
administrative services for the Partnership which were previously performed
by, and partially reimbursed to, affiliates of the General Partners. Use
of such third parties is not expected to have a material effect on the
operations of the Partnership.
Effective January 1, 1994, certain officers and directors of the
Corporate 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 in 1995 were $36,300.
<TABLE>
SCHEDULE III
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
<CAPTION>
COST
CAPITALIZED GROSS AMOUNT AT
INITIAL COST TO SUBSEQUENT TO WHICH CARRIED
PARTNERSHIP (A) ACQUISITION AT CLOSE OF PERIOD (B)(C)
-------------------------- --------------------------------------------------
LAND AND BUILDINGS LAND AND BUILDINGS LAND AND BUILDINGS
LEASEHOLD AND LEASEHOLD AND LEASEHOLD AND
ENCUMBRANCE INTERESTS IMPROVEMENTS INTERESTS IMPROVEMENTS INTERESTS IMPROVEMENTS
------------ --------------------------------- ----------------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
APARTMENT
BUILDING:
Tucson,
Arizona .$ 4,061,350 1,331,500 7,885,152 (214,805) (899,552) 1,116,695 6,985,600
OFFICE
BUILDINGS:
Cleveland,
Ohio. . . 56,528,355 13,500,000 69,078,344 -- 7,377,622 13,500,000 76,455,966
SHOPPING MALL:
Odessa, Texas17,755,085 2,555,000 20,145,739 -- 2,145,178 2,555,000 22,290,917
----------- ---------- ---------- -------- ---------- ---------- -----------
Total. .$78,344,790 17,386,500 97,109,235 (214,805) 8,623,248 17,171,695 105,732,483
=========== ========== ========== ======== ========== ========== ===========
</TABLE>
<TABLE>
SCHEDULE III - CONTINUED
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
STATEMENT OF 1995
ACCUMULATED DATE OF DATE OPERATIONS REAL ESTATE
TOTAL DEPRECIATION(D) CONSTRUCTION ACQUIRED IS COMPUTED TAXES
----------- --------------- ---------------------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C>
APARTMENT
BUILDINGS:
Tucson,
Arizona . .$ 8,102,295 3,937,268 1983 10/1/82 5-30 years 151,136
OFFICE
BUILDINGS:
Cleveland,
Ohio. . . . 89,955,966 29,742,071 1980 7/27/83 5-30 years 1,553,532
SHOPPING
MALL:
Odessa,
Texas . . . 24,845,917 9,145,348 1979 12/28/82 5-30 years 760,188
------------ ----------- ---------
Total. .$122,904,178 42,824,687 2,464,856
============ =========== =========
SCHEDULE III - CONTINUED
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
<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, 1995 for Federal income tax purposes is
$136,789,584.
(C) Reconciliation of real estate owned:
</TABLE>
<TABLE>
<CAPTION>
1995 1994 1993
------------ ------------ -----------
<S> <C> <C> <C>
Balance at beginning of period. . . . . . $122,300,507 253,999,834 287,739,781
Additions during period . . . . . . . . . 603,671 3,274,218 3,097,755
Reductions during period. . . . . . . . . -- (134,973,545) (36,837,702)
------------ ----------- -----------
Balance at end of period. . . . . . . . . $122,904,178 122,300,507 253,999,834
============ =========== ===========
(D) Reconciliation of accumulated depreciation:
Balance at beginning of period. . . . . . $ 39,346,202 82,546,206 88,213,016
Depreciation expense. . . . . . . . . . . 3,478,485 7,779,552 9,144,746
Reduction in accumulated depreciation . . -- (50,979,556) (14,811,556)
------------ ----------- -----------
Balance at end of period. . . . . . . . . $ 42,824,687 39,346,202 82,546,206
============ =========== ===========
</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 1995 and 1994.
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 substantially all of the
outstanding stock of which is owned directly or indirectly, by certain of
its officers and directors and members of their families. 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, ABPP Associates, L.P. Effective December 31, 1995, ABPP
Associates, L.P. acquired all of the partnership interests in Realty
Associates - XII, L.P., the Associate General Partner, and elected to
continue the business of Realty Associates - XII, L.P. ABPP Associates,
L.P., an Illinois limited partnership with JMB as its sole general partner,
continues as the Associate 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 the executive and certain other 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
Chief Financial Officer 2/22/96
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
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
Gary Nickele Executive Vice President 1/01/92
General Counsel 2/27/84
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 a one-year
term until the annual meeting of the Corporate General Partner to be held
on June 5, 1996. 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 5,
1996. 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.-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"). JMB is also the sole general partner of the
associate general partner of most of the foregoing partnerships. 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-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 58) 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. He is a Certified
Public Accountant.
Neil G. Bluhm (age 58) 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 57) 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 54) 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 62) (President and Director of JMB Insurance Agency,
Inc.) has been associated with JMB since December, 1972.
John G. Schreiber (age 49) 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. Mr.
Schrieber is also a director of Urban Shopping Center, 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 a number of
investment companies or managed by T. Rowe Price Associates and its
affiliates. He holds a Masters degree in Business Administration from
Harvard University Graduate School of Business.
H. Rigel Barber (age 46) 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 48) 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.
Gary Nickele (age 43) 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.
Gailen J. Hull (age 47) 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 60) 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
distributions and management fees. The General Partners received a share
of the Partnership's income aggregating $252,763.
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.
Urban Retail Properties, Co., an affiliate of the Corporate General
Partner, provided property management services to the Partnership for all
or part of 1995 for the Permian Mall in Odessa, Texas at fees calculated at
a percentage of gross income from the properties. In 1995, such affiliate
earned property management fees amounting to $378,886 for such services.
As of December 31, 1995, property management and leasing fees due to such
affiliates in the amount of $175,490 remain unpaid. 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 1995 aggregating
approximately $36,870, all of which were paid in 1995 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.
Effective January 1, 1994, certain officers and directors of the
Corporate 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 in 1995 were $36,300.
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 1995, the Corporate General
Partner of the Partnership was due reimbursement for such out-of-pocket
expenses in the amount of $125,278, of which $47,944 was unpaid as of
December 31, 1995.
Additionally, the General Partners may be reimbursed for salaries and
salary related 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 1995, such costs were $152,486, all of which have been
paid.
<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, its officers and directors and the Associate General Partner 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%
its officers and directly
directors and the
Associate General
Partner 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.
</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.
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.
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, 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.
10-D.Partnership Interest Redemption Agreement among
Carlyle Real Estate Limited Partnership-XII, Carrara Place Investment
Partners, Ltd., F.A. Nemeck and Carrara Place Limited is hereby
incorporated herein by reference to the Partnership's report for December
8, 1994 on Form 8-K (File No. 0-12433) dated November 23, 1994.
10-E.Letter Agreement Regarding Option Closing 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 January 26, 1996 on Form 8-K
(File No. 0-12433) dated December 15, 1995.
10-F.Assignment and Assumption of Partnership Interest
between Carlyle Seattle Associates and Wright Runstad Properties, L.P. is
hereby incorporated herein by reference to the Partnership's report for
January 26, 1996 on Form 8-K (File No. 0-12433) dated December 15, 1995.
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 for December 1, 1994 is filed
herewith.
99.2.The Partnership's Report on Form 8-K (File No. 0-
12433) describing the sale transaction of First
Interstate Center dated January 26, 1996 for December 15, 1995 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 (File No. 0-12433) for
December 15, 1995 (describing the sale transaction of First Interstate
Center in Seattle, Washington) was filed. This report was dated January
26, 1996.
No annual report for the year 1995 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 25, 1996
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
Chief Financial Officer
Date: March 25, 1996
NEIL G. BLUHM*
By: Neil G. Bluhm, President and Director
Date: March 25, 1996
H. RIGEL BARBER*
By: H. Rigel Barber, Chief Executive Officer
Date: March 25, 1996
GLENN E. EMIG*
By: Glenn E. Emig, Chief Operating Officer
Date: March 25, 1996
GAILEN J. HULL
By: Gailen J. Hull, Senior Vice President
Principal Accounting Officer
Date: March 25, 1996
A. LEE SACKS*
By: A. Lee Sacks, Director
Date: March 25, 1996
STUART C. NATHAN*
By: Stuart C. Nathan, Executive Vice President
and Director
Date: March 25, 1996
*By: GAILEN J. HULL, Pursuant to a Power of Attorney
GAILEN J. HULL
By: Gailen J. Hull, Attorney-in-Fact
Date: March 25, 1996
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
4-C. Amended and restated promissory
note related to National City
Center Office Building Yes
4-D. Bondowner, Borrower, Remarketing
Agent, Bondowner election to
retain Bonds and notice of
remarketing rate relating to
Stonybrook Apartments II Yes
10-A. Acquisition documents related to
First Interstate Center Yes
10-B. Acquisition documents related to
National City Center Office BuildingYes
10-C. Letter regarding sale/option and
Partnership Amendment related to
First Interstate Center Yes
10-D. Partnership interest redemption
Agreement related to Carrara
Place Yes
10-E. Letter agreement regarding option
closing related to the First
Interstate Center Yes
10-F. Assignment and assumption of
Partnership interest related to
Carlyle Seattle Associates Yes
21. List of Subsidiaries No
24. Powers of Attorney No
27. Financial Data Schedule No
99.1. Form 8-K for First Interstate CenterYes
for December 1, 1994
99.2. Form 8-K for First Interstate Center
as of December 15, 1995 Yes
EXHIBIT 21
LIST OF SUBSIDIARIES
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 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 officers a Report on Form 10-K of said
partnership for the fiscal year ended December 31, 1995, 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 5th day of February, 1996.
H. RIGEL BARBER
- -----------------------
H. Rigel Barber Chief Executive Officer
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 officers, a Report on
Form 10-K of said partnership for the fiscal year ended December 31, 1995,
and any and all amendments thereto, the 5th day of February, 1996.
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 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 officers a Report on Form 10-K of said
partnership for the fiscal year ended December 31, 1995, 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 5th day of February, 1996.
NEIL G. BLUHM
- ----------------------- President and Director
Neil G. Bluhm
JUDD D. MALKIN
- ----------------------- Chairman and Chief Financial Officer
Judd D. Malkin
A. LEE SACKS
- ----------------------- Director of General Partner
A. Lee Sacks
STUART C. NATHAN
- ----------------------- Executive Vice President
Stuart C. Nathan Director of General Partner
A. Lee Sacks
The undersigned hereby acknowledge and accept such power of authority
to sign, in the name and on behalf of the above named officers, a Report on
Form 10-K of said partnership for the fiscal year ended December 31, 1995,
and any and all amendments thereto, the 5th day of February, 1996.
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, 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> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 10,946,150
<SECURITIES> 0
<RECEIVABLES> 2,321,803
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 13,267,953
<PP&E> 122,904,178
<DEPRECIATION> 42,824,687
<TOTAL-ASSETS> 95,288,548
<CURRENT-LIABILITIES> 22,913,770
<BONDS> 59,465,831
<COMMON> 0
0
0
<OTHER-SE> 12,340,034
<TOTAL-LIABILITY-AND-EQUITY> 95,288,548
<SALES> 22,300,351
<TOTAL-REVENUES> 23,238,472
<CGS> 0
<TOTAL-COSTS> 14,543,050
<OTHER-EXPENSES> 656,771
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,024,210
<INCOME-PRETAX> (985,559)
<INCOME-TAX> 0
<INCOME-CONTINUING> (707,698)
<DISCONTINUED> 15,690,781
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,983,083
<EPS-PRIMARY> 92.83
<EPS-DILUTED> 92.83
</TABLE>
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
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 15, 1995
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
- -------------------------------------------------------------------
<PAGE>
FIRST INTERSTATE CENTER
SEATTLE, WASHINGTON
-------------------------
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. In December 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
by which it granted an option to purchase its remaining 50.05% interest in the
First Interstate joint venture to its unaffiliated venture partner, 999 Third
Avenue, Ltd., (the "Buyer"). Effective December 15, 1995, the Buyer exercised
its option and purchased Carlyle Seattle's remaining 50.05% interest in First
Interstate.
The terms of the option were that the Buyer could purchase the remaining
50.05% interest between one and two years after the initial sale closing
subject to certain conditions. At the initial closing, Carlyle Seattle
received $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 to purchase the remaining 50.05% (which could
be applied as a credit to the purchase thereof) 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 to be due on January 1, 1997) was secured by
Carlyle Seattle's remaining 50.05% interest. As provided by the initial sale
agreement, the exercise price for the remaining 50.05% interest was
$21,350,000. The exercise price was satisfied by applying the $5,000,000
option purchase price paid at the initial closing and applying the balance of
unpaid principal ($15,000,000) and accrued interest ($1,400,000) on the
Carlyle Seattle loan. Therefore, there are no additional cash proceeds from
the sale of Carlyle Seattle's remaining 50.05% interest. Occupancy at the
First Interstate Center was approximately 90% at the date of sale.
<PAGE>
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, the Carlyle Seattle venture liquidated and beyond December
15, 1995, there will be no further mortgage and other interest or venture
partners' share of venture operations recorded for Carlyle Seattle in the
consolidated financial statements of the Partnership, which for the
Partnership's most recent fiscal year (the year ended December 31, 1994) were
approximately, $112,000 and $30,000, respectively. Mortgage and other
interest and venture partners' share of venture operations for Carlyle Seattle
were approximately $337,500 and $90,000, respectively, for the three months
ended September 30, 1995, and approximately $1,012,500 and $270,000,
respectively, for the nine months ended September 30, 1995. Also, as a result
of the sale of Carlyle Seattle's interest in First Interstate, there are no
further assets and liabilities related to Carlyle Seattle, which at December
31, 1994 and September 30, 1995 consisted of a note payable of $15,000,000,
accrued interest payable of $112,500 at December 31, 1994 and $1,125,000 at
September 30, 1995, a deferred gain of $5,000,000 at December 31, 1994 and
September 30, 1995, and venture partners' deficit in ventures of approximately
$5,370,000 at December 31, 1994 and $5,640,000 at September 30, 1995.
The Partnership expects to recognize a gain of approximately $21,400,000
in 1995 for financial reporting purposes. The gain for Federal income tax
purposes was fully recognized in 1994.
(c) Exhibits
10.1. Letter Agreement Regarding Option Closing dated
December 15, 1995, between Carlyle Seattle Associates and 999 Third Avenue,
Ltd. relating to the First Interstate Center in Seattle, Washington.
10.2. Assignment and Assumption of Partnership Interest,
dated December 15, 1995, between Carlyle Seattle Associates and Wright Runstad
Properties, L.P.
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: January 26, 1996
