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, 1996 Commission file no. 0-12433
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(Exact name of registrant as specified in its charter)
Illinois 36-3149589
(State of organization) (I.R.S. Employer Identification No.)
900 N. Michigan Ave., Chicago, Illinois 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312-915-1987
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ------------------- ------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
LIMITED PARTNERSHIP INTERESTS
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K 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. . . . . . . . . . 12
Item 8. Financial Statements and
Supplementary Data . . . . . . . . . . . . . 16
Item 9. Changes in and Disagreements
with Accountants on Accounting
and Financial Disclosure . . . . . . . . . . 42
PART III
Item 10. Directors and Executive Officers
of the Partnership . . . . . . . . . . . . . 42
Item 11. Executive Compensation . . . . . . . . . . . 45
Item 12. Security Ownership of Certain
Beneficial Owners and Management . . . . . . 46
Item 13. Certain Relationships and
Related Transactions . . . . . . . . . . . . 47
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K. . . . . . . . . . . 47
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . 50
i
PART I
ITEM 1. BUSINESS
Unless otherwise indicated, all references to "Notes" are to Notes to
Consolidated Financial Statements contained in this report. Capitalized
terms used herein, but not defined, have the same meanings as used in the
Notes.
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 have been held by fee title, leasehold estates and/or
through joint venture partnership interests. The Partnership's remaining
real property investment is located in the state of Ohio 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 Partnership currently expects to conduct
an orderly liquidation of its remaining investment property as quickly as
possible and wind up its affairs not later than December 31, 1999, barring
any unforeseen economic developments.
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, 1996,
Name, Type of Property Date of Original Invested
and Location (e) Size Purchase Capital Percentage (a) Type of Ownership (b)
- ---------------------- ---- -------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
1. Country Square
Apartments
Carrollton, Texas . 434 units 9-30-82 2-2-93 fee ownership of land
and improvements
(through joint
venture partnership)
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
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
Sale or Disposal Date
or if Owned at
December 31, 1996,
Name, Type of Property Date of Original Invested
and Location (e) Size Purchase Capital Percentage (a) Type of Ownership (b)
- ---------------------- ---- -------- ---------------------- ---------------------
10. Stonybrook
Apartments-I & II
Tucson, Arizona. . 411 units 10-1-82 5-23-96 fee ownership of land
and improvements
(through joint venture
partnership) (c)(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 4-2-96 fee ownership of land
sq.ft. and improvements (c)
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)(d)(f)
Sale or Disposal Date
or if Owned at
December 31, 1996,
Name, Type of Property Date of Original Invested
and Location (e) Size Purchase Capital Percentage (a) Type of Ownership (b)
- ---------------------- ---- -------- ---------------------- ---------------------
16. Yerba Buena
West Office
Building
San Francisco,
California . . . . 268,000 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 the property held at December 31, 1996 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 the Notes and to Item 8 - Schedule III filed with this annual report for the current
outstanding principal balance and a description of the long-term mortgage indebtedness secured by the
Partnership's real property investment.
(c) This property has been sold or disposed. Reference is made to the Notes for a description of the sale or
disposition of such real property investment.
(d) Reference is made to the Notes 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 remaining real property investment is subject to
competition from similar types of properties (including in properties owned
by affiliates of the General Partners) in the vicinity in which it is
located. Such competition is generally for the retention of existing
tenants. Additionally, the Partnership is in competition for new tenants.
Reference is made to Item 7 below for a discussion of competitive
conditions and future renovation and capital improvement plans of the
Partnership and its investment property. Approximate occupancy levels 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
property in its market 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, the investment property held
at December 31, 1996 is adequately insured.
Reference is made to the Notes 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 property
as of December 31, 1996.
On April 2, 1996, the lender realized upon its mortgage security
interest in the Permian Mall, and took title to the property. Reference is
made to the Notes for a further description of such transaction.
On May 23, 1996, the Partnership sold the Stonybrook Apartments I &
II. Reference is made to the Notes for a further description of such
transaction.
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 or owned directly or through joint venture partnerships the properties or interest 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 1996 and 1995 for the Partnership's investment properties owned during 1996:
<CAPTION>
1995 1996
------------------------- -------------------------
At At At At At At At At
Principal Business 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
------------------ ---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Stonybrook Apartments
- I & II
Tucson, Arizona. . . . . Apartments 94% 77% 79% 86% 91% N/A N/A N/A
2. Permian Mall
Odessa, Texas. . . . . . Retail 91% 92% 93% 92% 88% N/A N/A N/A
3. National City Center
Office Building
Cleveland, Ohio. . . . . Banking 97% 98% 98% 97% 97% 97% 95% 95%
<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 to the Notes for further information regarding property occupancy,
competitive conditions and tenant leases at the Partnership's remaining investment property.
</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
1995 and 1996.
PART II
ITEM 5. MARKET FOR THE PARTNERSHIP'S LIMITED PARTNERSHIP INTERESTS
AND RELATED SECURITY HOLDER MATTERS
As of December 31, 1996, there were 16,612 record holders of the
159,990 Interests outstanding 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, which may be granted or withheld in its
sole and absolute discretion. 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 or have other rights of a limited partner. 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, 1996, 1995, 1994, 1993 AND 1992
(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)
<CAPTION>
1996 1995 1994 1993 1992
------------- ------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Total income. . . . . . . $ 17,687,780 23,238,472 43,570,909 49,186,211 52,853,676
============ =========== =========== =========== ===========
Operating earnings
(loss). . . . . . . . . $ 486,713 (985,559) (4,513,232) (7,086,550) (9,725,577)
Partnership's share of
operations of uncon-
solidated venture. . . . -- -- -- -- (723,696)
Venture partners'
share of ventures'
operations . . . . . . . (80,894) 277,861 1,596,830 2,415,069 1,803,556
------------ ----------- ----------- ----------- -----------
Net operating
earnings (loss) . . . . 405,819 (707,698) (2,916,402) (4,671,481) (8,645,717)
Gain (loss) on sale
or disposition
of investment properties,
or interest in investment
properties, net of
venture partners' share. 7,080,695 15,690,781 30,614,901 4,091,683 3,817,800
Extraordinary items . . . -- -- (675,062) -- --
------------ ----------- ----------- ----------- -----------
Net earnings (loss) . . . $ 7,486,514 14,983,083 27,023,437 (579,798) (4,827,917)
============ =========== =========== =========== ===========
Net earnings (loss)
per limited part-
nership interest (b):
Net operating
earnings (loss) . . . . $ 2.44 (4.25) (17.50) (28.03) (51.87)
Gain (loss) on sale
or disposition of
investment properties,
or interest in invest-
ment properties, net
of venture partners'
share. . . . . . . . . 43.81 97.08 189.42 25.32 23.62
Extraordinary items . . -- -- (4.18) -- --
------------ ----------- ----------- ----------- -----------
Net earnings (loss) $ 46.25 92.83 167.74 (2.71) (28.25)
============ =========== =========== =========== ===========
1996 1995 1994 1993 1992
------------- ------------- ----------- ------------ ------------
Total assets. . . . . . . $ 69,599,208 95,288,548 125,013,528 209,636,156 233,815,505
============ =========== =========== =========== ===========
Long-term debt. . . . . . $ 54,277,855 59,465,831 93,051,656 194,712,434 188,904,448
============ =========== =========== =========== ===========
Cash distributions
per Interest (c). . . . $ 60.00 145.00 -- -- 1.50
============ =========== =========== =========== ===========
<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.
(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, 1996
<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>
1992 . . . . . 96% 11.47
1993 . . . . . 96% 11.86
1994 . . . . . 94% 12.44
1995 . . . . . 97% 11.85
1996 . . . . . 95% 13.09
<FN>
(1) Average base rent per square foot is based on NRA occupied as of December 31
of each year.
</TABLE>
<TABLE>
<CAPTION>
Base Rent Scheduled Lease Lease
b) Significant Tenants Square Feet Per Annum Expiration Date Renewal Option
------------------- ----------- --------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
National City Bank 447,080 $5,683,169 1/2006 7-10 year options
(Bank)
Ernst & Young 45,454 549,845 02/1997 none
(Public Accounting Firm) 20,410 319,621 11/2000 none
Baker & Hostetler 151,392 2,138,949 12/2001 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 1996
Year Ending Expiring NRA of Expiring of Expiring Base Rent
December 31, Leases Leases (1) Leases Expiring
------------ --------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
1997 1 45,454 549,845 6%
1998 2 16,905 249,391 3%
1999 -- -- -- --
2000 2 62,800 918,775 9%
2001 3 153,799 2,193,944 22%
2002 -- -- -- --
2003 -- -- -- --
2004 -- -- -- --
2005 -- -- -- --
2006 1 447,080 5,683,169 58%
<FN>
(1) Excludes leases that expire in 1997 for which renewal leases or leases with
replacement tenants have been executed as of February 3, 1997.
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
As a result of the public offering of Interests as described in Item
1, the Partnership had approximately $141,004,000 (after deducting selling
expenses and other offering costs) 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.
During 1996 some of the Limited Partners in the Partnership received
from unaffiliated third parties unsolicited tender offers to purchase up to
4.9% of the Interests in the Partnership at between $50 and $75 per
Interest. The Partnership recommended against acceptance of these offers
on the basis that, among other things, the offer price was inadequate.
Such offers expired. As of the date of this report, the Partnership is
aware that 4,670.41 Interests have been purchased by such unaffiliated
third parties either pursuant to such tender offers or through negotiated
purchases. It is possible that other offers for Interests may be made by
unaffiliated third parties in the future, although there is no assurance
that any other third party will commence an offer for Interests, the terms
of any such offer or whether any such offer, if made, will be consummated,
amended or withdrawn. The board of directors of JMB Realty Corporation
("JMB") the Corporate General Partner of the Partnership, has established a
special committee (the "Special Committee") consisting of certain directors
of JMB to deal with all matters relating to tender offers for Interests in
the Partnership, including any and all responses to such tender offers.
The Special Committee has retained independent counsel to advise it in
connection with any potential tender offers for Interests and has retained
Lehman Brothers Inc. as financial advisor to assist the Special Committee
in evaluating and responding to any additional potential tender offers for
Interests.
At December 31, 1996, the Partnership and its consolidated venture had
cash and cash equivalents of approximately $6,668,000. Such funds are
available for capital improvements, future distributions to partners, and
for working capital requirements, including capital improvements, to the
extent funded from previously established escrows as described in the
Notes, and leasing costs currently being incurred at the National City
Center Office Building.
In May 1996, the Partnership paid a distribution of previously
undistributed sales proceeds of $4,800,150 ($30 per interest) to the
Limited Partners and $48,486 to the General Partners and an operating
distribution of $800,250 ($5 per interest) to the Limited Partners and
$33,335 to the General Partners. In August 1996, the Partnership
distributed approximately $4,000,000 ($25 per interest) to the Limited
Partners of proceeds related to the sale of the Stonybrook Apartments.
The Partnership and its consolidated venture have currently budgeted
for 1997 approximately $1,921,000 for tenant improvements and other capital
expenditures. The Partnership's share of such items in 1997 is currently
budgeted to be approximately $1,657,000. Actual amounts expended in 1997
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
remaining investment property and through the sale of such investment.
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 remaining venture's
mortgage obligation is a separate non-recourse loan secured individually by
the investment property and is not an obligation of the entire investment
portfolio, and the Partnership and its venture are not personally liable
for the payment of the mortgage indebtedness.
STONYBROOK APARTMENTS
On May 23, 1996, the Partnership, through the Stonybrook Partners
Limited Partnership joint venture, sold the Stonybrook Apartments I & II.
Reference is made to the Notes for a further description of such sale.
NATIONAL CITY CENTER
At the National City Center Office Building located in Cleveland,
Ohio, a tenant who occupies approximately 66,000 square feet (12.5% of the
building) whose lease expired in late 1996 informed the Partnership that it
intended to vacate a portion (approximately 45,000 square feet) upon
expiration of its existing lease. In the fourth quarter of 1996, the
venture and the tenant reached an agreement in which the tenant delayed
downsizing its space until February 1997 and extended the term of the
remaining space (approximately 21,000 square feet) until late 2000 at a
slightly higher rate.
In addition, the venture was notified in August 1995 of the intention
of a tenant (who occupied approximately 12,500 square feet and was
operating a restaurant on the building's plaza level) to terminate its
lease effective August 31, 1996. Upon termination, the tenant was required
to pay the venture a lease termination fee of $45,000. In January 1997,
the venture collected the termination fee from the tenant. The venture is
currently exploring its options and is negotiating with several replacement
restaurant tenants. However, there can be no assurance a replacement
tenant will be obtained.
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 $1,597,000 at December 31, 1996) and
approximately $229,000 per year in 1997 and 1998. As of December 31, 1996,
approximately $92,000 has been received from the tenant improvement escrow.
Additionally, in January 1997 approximately $820,000 was received 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.
PERMIAN MALL
On April 2, 1996, the lender realized upon its security in the Permian
Mall. Reference is made to the Notes for a further description of such
disposition.
GENERAL
The Partnership has held its remaining investment property longer than
originally anticipated in an effort to maximize the return to the Limited
Partners. However, after reviewing the remaining investment property and
the marketplace in which it operates, the General Partners of the
Partnership expect to be able to conduct an orderly liquidation of its
remaining investment property as quickly as practicable. In such regard,
the Partnership has classified the National City Center investment property
as held for sale or disposition as of December 31, 1996 and the property
will no longer be subject to continuing depreciation. Therefore, the
affairs of the Partnership are expected to be wound up no later than 1999
(sooner if the property is sold or disposed of in the near term), barring
unforeseen economic developments. The Limited Partners are expected to
receive substantially less than half of their original investment.
RESULTS OF OPERATIONS
Significant variances between periods reflected in the accompanying
consolidated financial statements are the result of the sale of the
Stonybrook Apartments in May 1996, the lender realizing upon its security
in the Permian Mall in April 1996, the sale of Carlyle Seattle's interest
in First Interstate in December 1995 and December 1994 and the redemption
of the Partnership's interest in Carrara Place Limited in December 1994.
The decrease in cash and cash equivalents at December 31, 1996 as
compared to December 31, 1995 is primarily due to the distributions of
sales proceeds and cash flow from operations to the limited and general
partners in 1996.
The increase in escrow deposits-current at December 31, 1996 as
compared to December 31, 1995 is primarily due to payments into the escrow
accounts for future leasing costs required by terms of the loan secured by
the National City Center Building.
The decrease in accounts payable at December 31, 1996 as compared to
December 31, 1995 is primarily due to the January 1996 repayment of a
$604,570 bank overdraft in the Partnership's bank account at December 31,
1995.
The increase in other current liabilities at December 31, 1996 as
compared to December 31, 1995 is primarily due to the timing of payments
for rents at the National City Center Building.
The decrease in interest income for the year ended December 31, 1996
as compared to the year ended December 31, 1995 and the increase in the
year ended December 31, 1995 as compared to December 31, 1994 is primarily
due to the temporary investment of the First Interstate sale proceeds prior
to their distribution in February 1995. Additionally, the decrease in
interest income for the year ended December 31, 1996 as compared to the
year ended December 31, 1995 is due to the distribution of previously
undistributed sales proceeds and cash flow from operations in 1996 as
discussed above.
The decrease in depreciation for the year ended December 31, 1996 as
compared to the year ended December 31, 1995 is primarily due to the
classification of the Permian Mall and Stonybrook Apartments as assets held
for sale as of January 1, 1996, and therefore not subject to continued
depreciation.
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 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.
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 property have escalation clauses covering
increases in the cost of operating and maintaining the property as well as
real estate taxes. Therefore, there should be little effect from inflation
on operating earnings if the property remains substantially occupied.
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, 1996 and 1995
Consolidated Statements of Operations, years ended December 31,
1996, 1995 and 1994
Consolidated Statements of Partners' Capital Accounts (Deficit),
years ended December 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows, years ended December 31,
1996, 1995 and 1994
Notes to Consolidated Financial Statements
SCHEDULE
--------
Consolidated Real Estate and Accumulated Depreciation III
SCHEDULES NOT FILED:
All schedules other than the one indicated in the index have been
omitted as the required information is inapplicable or the information is
presented in the consolidated financial statements or related notes.
INDEPENDENT AUDITORS' REPORT
The Partners
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII:
We have audited the consolidated financial statements of Carlyle Real
Estate Limited Partnership - XII (a limited partnership) and consolidated
ventures as listed in the accompanying index. In connection with our
audits of the consolidated financial statements, we also have audited the
financial statement schedule as listed in the accompanying index. These
consolidated financial statements and financial statement schedule are the
responsibility of the General Partners of the Partnership. Our
responsibility is to express an opinion on these consolidated financial
statements and financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by the General Partners of the
Partnership, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Carlyle Real Estate Limited Partnership - XII and consolidated ventures at
December 31, 1996 and 1995, and the results of their operations and their
cash flows for each of the years in the three-year period ended
December 31, 1996, 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.
As discussed in the Notes to the consolidated financial statements, in
1996, the Partnership and its consolidated ventures changed their method of
accounting for long-lived assets and long-lived assets to be disposed of to
conform with Statement of Financial Accounting Standards No. 121.
KPMG PEAT MARWICK LLP
Chicago, Illinois
March 21, 1997
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
ASSETS
------
<CAPTION>
1996 1995
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 6,667,839 10,946,150
Rents and other receivables . . . . . . . . . . . . . . . . . . . . 68,860 560,228
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 59,345 116,454
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . 1,964,692 1,645,121
------------ -----------
Total current assets . . . . . . . . . . . . . . . . . . . . . 8,760,736 13,267,953
------------ -----------
Investment properties, at cost - Schedule III:
Land and leasehold interest . . . . . . . . . . . . . . . . . . . -- 17,171,695
Buildings and improvements. . . . . . . . . . . . . . . . . . . . -- 105,732,483
------------ -----------
-- 122,904,178
Less accumulated depreciation . . . . . . . . . . . . . . . . . . -- 42,824,687
------------ -----------
Total properties held for investment,
net of accumulated depreciation. . . . . . . . . . . . . . . -- 80,079,491
Properties held for sale or disposition . . . . . . . . . . . . . 59,086,511 --
------------ -----------
Total investment properties. . . . . . . . . . . . . . . . . . 59,086,511 80,079,491
------------ -----------
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 319,838 407,246
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . 819,823 914,627
Venture partners' deficits in ventures. . . . . . . . . . . . . . . . -- 6,931
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . 612,300 612,300
------------ -----------
$ 69,599,208 95,288,548
============ ===========
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
1996 1995
------------ -----------
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . $ 1,172,876 18,878,959
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . 552,586 1,164,924
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . 266,075 271,246
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . 1,864,657 2,381,207
Other current liabilities . . . . . . . . . . . . . . . . . . . . . 691,250 217,434
------------ -----------
Total current liabilities. . . . . . . . . . . . . . . . . . . 4,547,444 22,913,770
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . 305 21,530
Long-term debt, less current portion. . . . . . . . . . . . . . . . . 54,277,855 59,465,831
------------ -----------
Commitments and contingencies
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . 58,825,604 82,401,131
Venture partners' equity in ventures . . . . . . . . . . . . . . . . 628,277 547,383
Partners' capital accounts (deficit):
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net losses . . . . . . . . . . . . . . . . . . . . . . (7,974,796) (8,061,836)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . (900,049) (818,228)
------------ -----------
(8,873,845) (8,879,064)
------------ -----------
Limited partners:
Capital contributions, net of offering costs. . . . . . . . . . . 141,003,683 141,003,683
Cumulative net losses . . . . . . . . . . . . . . . . . . . . . . (69,136,570) (76,536,044)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . (52,847,941) (43,248,541)
------------ -----------
19,019,172 21,219,098
------------ -----------
Total partners' capital accounts (deficits). . . . . . . . . . 10,145,327 12,340,034
------------ -----------
$ 69,599,208 95,288,548
============ ===========
<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, 1996, 1995 AND 1994
<CAPTION>
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . . . . $17,181,310 22,300,351 43,102,907
Interest income . . . . . . . . . . . . . . . . . 506,470 938,121 442,110
Other income. . . . . . . . . . . . . . . . . . . -- -- 25,892
------------ ----------- -----------
17,687,780 23,238,472 43,570,909
------------ ----------- -----------
Expenses:
Mortgage and other interest . . . . . . . . . . . 6,025,827 9,024,210 20,804,238
Depreciation. . . . . . . . . . . . . . . . . . . 2,573,900 3,478,485 7,779,552
Property operating expenses . . . . . . . . . . . 7,873,109 11,000,332 17,844,877
Management fees to corporate general partner. . . 55,557 -- 17,185
Professional services . . . . . . . . . . . . . . 243,600 271,107 358,196
Amortization of deferred expenses . . . . . . . . 62,600 64,233 1,130,506
General and administrative. . . . . . . . . . . . 366,474 385,664 149,587
------------ ----------- -----------
17,201,067 24,224,031 48,084,141
------------ ----------- -----------
Operating earnings (loss) . . . . . . . . . 486,713 (985,559) (4,513,232)
Venture partners' share of ventures'
operations. . . . . . . . . . . . . . . . . . . . (80,894) 277,861 1,596,830
------------ ----------- -----------
Net operating earnings (loss) . . . . . . . 405,819 (707,698) (2,916,402)
Gain on sale or disposition, net of venture
partners' share . . . . . . . . . . . . . . . . . 7,080,695 15,690,781 30,614,901
------------ ----------- -----------
Net earnings (loss) before
extraordinary items . . . . . . . . . . . 7,486,514 14,983,083 27,698,499
Extraordinary items . . . . . . . . . . . . . . . . -- -- (675,062)
------------ ----------- -----------
Net earnings (loss) . . . . . . . . . . . . $ 7,486,514 14,983,083 27,023,437
============ =========== ===========
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
1996 1995 1994
------------ ------------ ------------
Net earnings (loss) per limited
partnership interest:
Net operating earnings (loss) . . . . . $ 2.44 (4.25) (17.50)
Net gain on sale or disposition
of interests in investment
properties, net of venture
partner's share . . . . . . . . . . . 43.81 97.08 189.42
Net extraordinary items . . . . . . . . -- -- (4.18)
------------ ----------- -----------
Net earnings (loss) . . . . . . . . . . . . $ 46.25 92.83 167.74
============ =========== ===========
<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, 1996, 1995 AND 1994
<CAPTION>
GENERAL PARTNERS LIMITED PARTNERS
------------------------------------------------ -------------------------------------------------------
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,
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
(loss) . . -- 182,742 -- 182,742 -- 26,840,695 -- 26,840,695
Cash dis-
tribution. -- -- (19,666) (19,666) -- -- -- --
------ ---------- -------- ---------- ----------- ------------ ----------- ----------
Balance
(deficit)
Decem-
ber 31,
1994 . . . 1,000 (8,190,436) (583,877) (8,773,313) 141,003,683 (91,390,527) (20,047,816) 29,565,340
Net earnings
(loss) . . -- 128,600 -- 128,600 -- 14,854,483 -- 14,854,483
Cash dis-
tribution
($145 per
Limited
Partner
interest). -- -- (234,351) (234,351) -- -- (23,200,725) (23,200,725)
------ ---------- -------- ---------- ----------- ----------- ----------- ----------
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICIT) - CONTINUED
GENERAL PARTNERS LIMITED PARTNERS
------------------------------------------------ -------------------------------------------------------
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,
1995 . . . 1,000 (8,061,836) (818,228) (8,879,064) 141,003,683 (76,536,044) (43,248,541) 21,219,098
Net earnings
(loss) . . -- 87,040 -- 87,040 -- 7,399,474 -- 7,399,474
Cash dis-
tribution
($60 per
Limited
Partner
interest). -- -- (81,821) (81,821) -- -- (9,599,400) (9,599,400)
------ ---------- -------- ---------- ----------- ----------- ----------- ----------
Balance
(deficit)
Decem-
ber 31,
1996 . . .$1,000 (7,974,796) (900,049) (8,873,845) 141,003,683 (69,136,570) (52,847,941) 19,019,172
====== ========== ======== ========== =========== =========== =========== ==========
<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, 1996, 1995 AND 1994
<CAPTION>
1996 1995 1994
------------ ------------ -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . $ 7,486,514 14,983,083 27,023,437
Items not requiring (providing) cash:
Depreciation. . . . . . . . . . . . . . . . . . 2,573,900 3,478,485 7,779,552
Amortization of deferred expenses . . . . . . . 62,600 64,233 1,130,506
Amortization of discount on long-term debt. . . 79,333 299,737 308,538
Venture partners' share of ventures'
operations and gain on sale or
disposition of investment properties. . . . . 87,825 5,437,608 7,776,715
Total gain on sale or disposition of
investment properties or interests
in investment properties. . . . . . . . . . . (7,087,626) (21,406,250) (39,988,446)
Extraordinary items . . . . . . . . . . . . . . -- -- 675,062
Changes in:
Rents and other receivables . . . . . . . . . . (5,710) 10,707 (606,584)
Prepaid expenses. . . . . . . . . . . . . . . . 39,166 (13,714) 51,333
Escrow deposits . . . . . . . . . . . . . . . . (72,572) 531,334 (1,601,546)
Accrued rents receivable. . . . . . . . . . . . 51,122 (229,785) (451,555)
Accounts payable. . . . . . . . . . . . . . . . (7,635) (173,151) (2,943,489)
Accrued interest. . . . . . . . . . . . . . . . (5,171) 1,298,520 1,403,937
Accrued real estate taxes . . . . . . . . . . . 438,312 43,339 (38,788)
Other current liabilities . . . . . . . . . . . 617,652 (316,075) (281,527)
Tenant security deposits. . . . . . . . . . . . (12,201) (1,204) 17,587
------------ ------------ -------------
Net cash provided by (used in)
operating activities. . . . . . . . . . 4,245,509 4,006,867 254,732
------------ ------------ -------------
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1996 1995 1994
------------ ------------ -----------
Cash flows from investing activities:
Net sales and maturities (purchases) of
short-term investments. . . . . . . . . . . . . -- 1,944,746 4,920,786
Additions to investment properties. . . . . . . . (1,479,343) (603,671) (3,274,218)
Proceeds from sale of investment properties,
net of selling expenses . . . . . . . . . . . . 4,571,594 -- 14,862,094
Proceeds from sale of option, net of
venture partner share . . . . . . . . . . . . . -- -- 3,665,000
Escrow deposits . . . . . . . . . . . . . . . . . (246,999) (385,450) (898,971)
Payment of deferred expenses. . . . . . . . . . . (5,657) -- (266,986)
------------ ------------ -------------
Net cash provided by (used in)
investing activities. . . . . . . . . . 2,839,595 955,625 19,007,705
------------ ------------ -------------
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
Bank overdrafts . . . . . . . . . . . . . . . . . (604,570) 604,570 --
Principal payments on long-term debt. . . . . . . (1,077,624) (1,690,043) (2,395,459)
Venture partners' contributions to venture. . . . -- -- 159,709
Distributions to venture partners . . . . . . . . -- -- (525,559)
Distributions to limited partners . . . . . . . . (9,599,400) (23,200,725) --
Distributions to general partners . . . . . . . . (81,821) (234,351) (19,666)
------------ ------------ -------------
Net cash provided by (used in)
financing activities. . . . . . . . . . (11,363,415) (24,520,549) 8,452,240
------------ ------------ -------------
Net increase (decrease) in cash and
cash equivalents. . . . . . . . . . . . (4,278,311) (19,558,057) 27,714,677
Cash and cash equivalents,
beginning of year . . . . . . . . . . . 10,946,150 30,504,207 2,789,530
------------ ------------ -------------
Cash and cash equivalents,
end of year . . . . . . . . . . . . . . $ 6,667,839 10,946,150 30,504,207
============ ============ =============
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1996 1995 1994
------------ ------------ -----------
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . $ 5,951,665 7,425,953 19,091,763
============ ============ =============
Non-cash investing and financing activities:
Disposition of investment properties:
Balance due on mortgage note payable canceled . $ 22,054,561 -- --
Balance due on note payable canceled. . . . . . -- 15,000,000 --
Discount on long-term debt canceled . . . . . . (4,220,143) -- --
Recognition of deferred gain on sale
of interest in investment property. . . . . . -- 5,000,000 --
Reduction of investment property. . . . . . . . (15,700,569) -- --
Reduction of current assets and liabilities . . 515,905 -- --
Reduction of accrued interest payable . . . . . -- 1,406,250 --
------------ ------------ -------------
Non-cash gain recognized on
disposition of investment property. . . . . $ 2,649,754 21,406,250 --
============ ============ =============
Disposals of fully depreciated assets . . . . . $ -- -- 2,064,523
============ ============ =============
Loan proceeds utilized for additions to
investment property and payment of
deferred expenses . . . . . . . . . . . . . . $ -- -- 2,698,601
============ ============ =============
Sale of investment properties:
Total sales proceeds,
net of selling expenses . . . . . . . . . . $ 8,632,944 -- --
Principal balance on loans payable. . . . . . (4,061,350) -- --
------------ ------------ -------------
Cash sales proceeds from sale of
investment properties, net of
selling expenses . . . . . . . . . . . $ 4,571,594 -- --
============ ============ =============
<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, 1996, 1995 AND 1994
OPERATIONS AND BASIS OF ACCOUNTING
GENERAL
The Partnership holds (through a joint venture) an equity investment
in an office building located in Ohio. Business activities consist of
rentals to a 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 property and
wind up its affairs not later than December 31, 1999 (sooner if the
property is sold or disposed of in the near term).
The accompanying consolidated financial statements include the
accounts of the Partnership and its majority-owned ventures, Carlyle
Seattle Associates ("Carlyle Seattle") (prior to sale of its interest),
Stonybrook Partners Limited Partnership ("Stonybrook") (prior to its sale
in May 1996), Carrara Place Limited ("Carrara") (prior to its sale in
December 1994), Carlyle/National City Associates ("Carlyle/National City")
and through November 30, 1994, Carlyle Seattle's venture, Wright-Carlyle
Seattle ("First Interstate"). The effect of all transactions between the
Partnership and the consolidated 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. 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, 1996 and 1995 is summarized as follows:
<TABLE>
<CAPTION>
1996 1995
------------------------------ ------------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
(UNAUDITED) (UNAUDITED)
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Total assets. . . . . . . . . . . . $ 69,599,208 22,631,510 95,288,548 22,555,614
Partners' capital accounts
(deficits):
General partners. . . . . . . . (8,873,845) (3,752,860) (8,879,064) (5,577,644)
Limited partners. . . . . . . . 19,019,172 6,716,371 21,219,098 (2,927,821)
Net earnings (loss):
General partners. . . . . . . . 87,040 1,906,605 128,600 252,763
Limited partners. . . . . . . . 7,399,474 19,243,593 14,854,483 (3,944,140)
Net earnings (loss) per
limited partnership
interest. . . . . . . . . . . . . 46.25 120.28 92.83 (24.65)
============ =========== =========== ===========
</TABLE>
The net earnings (loss) per limited partnership interest is based upon
the limited partnership interests outstanding at the end of each year.
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 1995 and 1994
Consolidated Financial Statements to conform with the 1996 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 ($5,760,588 and
$10,773,569 held at December 31, 1996 and 1995, respectively) as cash
equivalents, which includes investments in an institutional mutual fund
which holds U.S. Government obligations, 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.
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.
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 but
retained a security interest therein. Subsequently, in 1992, the first
mortgage 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 such 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 joint
venture which owned the Yerba Buena West Office Building 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. 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. In 1995,
Carlyle Seattle sold its remaining interest in the First Interstate
venture, as discussed below. In 1996, the Partnership, through a joint
venture, sold the Stonybrook Apartments. Also, in 1996, the lenders
realized upon their security and obtained title to the Permian Mall. The
one property owned at December 31, 1996 is 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.
The Partnership adopted Statement of Financial Accounting Standards
No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed of" ("SFAS 121") as required in the first
quarter of 1996. SFAS 121 requires that the Partnership record an
impairment loss on its properties to be held for investment whenever their
carrying value cannot be fully recovered through estimated undiscounted
future cash flows from their operations and sale. The amount of the
impairment loss to be recognized would be the difference between the
property's carrying value and the property's estimated fair value. The
Partnership's policy is to consider a property to be held for sale or
disposition when the Partnership has committed to a plan to sell of such
property and active marketing activity has commenced or is expected to
commence in the near term. In accordance with SFAS 121, any properties
identified as "held for sale or disposition" are no longer depreciated.
Adjustments for impairment loss for such properties (subsequent to the date
of adoption of SFAS 121) are made in each period as necessary to report
these properties at the lower of carrying value or fair value less costs to
sell. The adoption of SFAS 121 did not have any effect on the
Partnership's financial position, results of operations or liquidity.
The results of operations for consolidated properties classified as
held for sale or disposition as of December 31, 1996 or sold or disposed of
during the past three years were $728,582, ($801,138) and ($2,765,784),
respectively, for the three years ended December 31, 1996, 1995 and 1994.
The remaining investment property is pledged as security for long-term
debt, for which there is no recourse to the Partnership.
VENTURE AGREEMENTS - GENERAL
The Partnership, at December 31, 1996, is a party to one operating
joint venture agreement with an affiliated venture partner. Under certain
circumstances, either pursuant to the venture agreement or due to the
Partnership's obligations as a general partner, the Partnership may be
required to make additional cash contributions to the venture.
The venture property has been financed under a long-term debt
arrangement as described below.
One of the ventures' properties produced net cash receipts during
1996, and one in 1995. 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.
INVESTMENT PROPERTIES
National City Center Office Building
In July 1983, the Partnership acquired, through Carlyle/National City
(a joint venture with Carlyle-XI), an interest in an office building in
Cleveland, Ohio.
The Partnership made an initial contribution of $35,081,513 to
Carlyle/National City. The terms of the Carlyle/National City venture
agreement provide that the capital contributions, annual cash flow, net
proceeds from sale or refinancing and profit or loss will be allocated or
distributed 86.2745% to the Partnership. The Partnership's net cash
investment in the property was $22,140,338 after distributions resulting
from the increase in the first mortgage loan.
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 $612,300 to be
established at the inception of the refinancing for certain specific 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 the Baker & Hostetler lease. The Venture was required to
escrow approximately $313,000 per year in 1994 through 1996 and to escrow
approximately $229,000 per year in 1997 and 1998. As of December 31, 1996,
approximately $92,000 has been received from the tenant improvement escrow.
Additionally, in January 1997 approximately $820,000 was received from the
tenant improvement escrow. 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. As the Partnership has committed
to a plan to sell the property, the property has been classified as held
for sale or disposition as of December 31, 1996 and therefore will no
longer be subject to continued depreciation.
Permian Mall
In anticipation of necessary major repairs and potential leasing
costs, the Partnership initiated discussions with the mortgage lender
regarding a modification of the loan securing the property. The
Partnership was unable to secure any 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
did it remit all of the scheduled debt service payments since December
1995. Consequently, the Partnership received a notice of default from the
lender in February 1996, and as a result, the lender then realized upon its
security on April 2, 1996. As the Partnership had committed to a plan to
sell or dispose of the property, the property was classified as held for
sale or disposition as of January 1, 1996 and therefore was not subject to
continued depreciation. As a result of the disposition of the property,
the Partnership recognized a gain of $2,643,751, net of venture partner's
share, for financial reporting purposes and realized a gain of $14,801,353
for Federal income tax purposes in 1996 with no corresponding distributable
proceeds.
Stonybrook Apartments
On May 23, 1996, the Partnership, through the Stonybrook Partners
Limited Partnership joint venture, sold the land and related improvements
known as the Stonybrook Apartments I & II. As the Partnership had
committed to a plan to sell or dispose of the property, the property was
classified as held for sale or disposition as of January 1, 1996 and
therefore was not subject to continued depreciation. The purchaser was not
affiliated with the Partnership or its General Partners and the sale price
was determined by arm's-length negotiations. The sale price of the land
and improvements was $8,632,944 (after deducting selling costs). A portion
of the sales proceeds was utilized to retire the mortgage debt with an
outstanding balance of $4,061,350. As a result of the sale, the
Partnership recognized a gain of $4,436,943, net of venture partner's
share, for financial reporting purposes and recognized a gain of $7,716,980
for Federal income tax purposes in 1996.
Stonybrook Apartments I was not subject to a mortgage loan. The
mortgages on Stonybrook Apartments II matured October 1, 1994 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 required 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 in 1994,
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.
First Interstate Center
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 was 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 described below, 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 May 1994, Carlyle Seattle 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. 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 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 were 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 in 1995 of which
the Partnership's share is approximately $15,691,000.
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.
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.
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.
LONG-TERM DEBT - GENERAL
Long-term debt consists of the following at December 31, 1996 and
1995:
1996 1995
----------- ----------
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) retired in May 1996
at sale. . . . . . . . . . . . . . . . . $ -- 4,061,350
1996 1995
----------- ----------
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 of unamortized discount
based upon an imputed interest rate
of 14%; lender realized upon its
security interest in the property
in April 1996. . . . . . . . . . . . . . -- 17,755,085
Mortgage note; secured by the
National City Center office building
in Cleveland, Ohio; 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 . 55,450,731 56,528,355
----------- -----------
Total debt . . . . . . . . . . 55,450,731 78,344,790
Less current portion
of long-term debt. . . . . . 1,172,876 18,878,959
----------- -----------
Total long-term debt . . . . . $54,277,855 59,465,831
=========== ===========
Five year maturities of long-term debt are as follows:
1997 . . . . . . . . . . $ 1,172,876
1998 . . . . . . . . . . 1,276,547
1999 . . . . . . . . . . 1,389,383
2000 . . . . . . . . . . 1,512,192
2001 . . . . . . . . . . 50,099,733
===========
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.
If upon the completion of the liquidation of the Partnership and the
distribution of all Partnership funds, the Limited Partners have not
received cash disbursements to satisfy these requirements, the General
Partners will be required to return all or a portion of the 1% distribution
of net sale or refinancing proceeds described above. As of December 31,
1996 the General Partners have received net sale or refinancing proceeds
aggregating approximately $260,000. The Limited Partners have not received
and are not expected to receive cash distributions to satisfy these
requirements.
MANAGEMENT AGREEMENTS
Certain of the Partnership's properties are/were 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 and assigned its interest in its management contracts 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 (prior to its sale in May 1996) after the assignment
of the management contracts on the same terms that existed prior to the
assignment.
LEASES - AS PROPERTY LESSOR
At December 31, 1996, the Partnership and its consolidated venture
principal asset is one office building. The Partnership has determined
that all leases relating to this property are properly classified as
operating leases; therefore, rental income is reported when earned and the
cost of each of the property, 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.
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:
1997 . . . . . . . . . . . $ 9,463,832
1998 . . . . . . . . . . . 9,331,093
1999 . . . . . . . . . . . 9,145,850
2000 . . . . . . . . . . . 9,069,285
2001 . . . . . . . . . . . 8,225,657
Thereafter . . . . . . . . 26,070,740
------------
Total. . . . . . . . . $ 71,306,457
============
LEASES - 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.
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.
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, 1996, 1995 and 1994 are as follows:
UNPAID AT
DECEMBER 31,
1996 1995 1994 1996
-------- ------- --------- ------------
Property management
and leasing fees . . . $109,308 378,886 1,268,265 171,556
Management fees to
corporate general
partner. . . . . . . . 55,557 -- 17,185 --
Insurance commissions . 18,966 36,870 39,097 --
Reimbursement (at cost)
for accounting
services . . . . . . . 8,906 106,919 126,072 925
Reimbursement (at cost)
for portfolio management
services . . . . . . . 33,775 39,302 21,554 7,784
Reimbursement (at cost)
for legal services . . 8,740 6,265 11,473 1,946
Reimbursement (at cost)
for administrative
charges and other out-of-
pocket expenses. . . . 629 125,278 67,852 149
-------- ------- --------- --------
$235,881 693,520 1,551,498 182,360
======== ======= ========= ========
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 their share of all previously deferred property
management and leasing fees. The balance of unpaid property management and
leasing fees in the consolidated financial statements at December 31, 1996
reflects the amount due to the General Partners and their affiliates from
the Partnership's affiliated venture partner in the Carlyle/National City
venture.
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 1996 were $35,304.
<TABLE>
SCHEDULE III
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
<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>
OFFICE
BUILDINGS:
Cleveland,
Ohio . . . $55,450,731 13,500,000 69,078,344 -- 8,824,138 13,500,000 77,902,482
----------- ---------- ---------- -------- ---------- ---------- -----------
Total . . $55,450,731 13,500,000 69,078,344 -- 8,824,138 13,500,000 77,902,482
=========== ========== ========== ======== ========== ========== ===========
</TABLE>
<TABLE>
SCHEDULE III - CONTINUED
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
STATEMENT OF 1996
ACCUMULATED DATE OF DATE OPERATIONS REAL ESTATE
TOTAL DEPRECIATION(D) CONSTRUCTION ACQUIRED IS COMPUTED TAXES
----------- --------------- ------------ ---------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C>
OFFICE
BUILDINGS:
Cleveland,
Ohio . . . . . 91,402,482 32,315,971 1980 7/27/83 5-30 years 1,890,482
------------ ----------- ---------
Total . . .$ 91,402,482 32,315,971 1,890,482
============ =========== =========
SCHEDULE III - CONTINUED
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
<FN>
- -----------------
(A) The cost to the Partnership represents the original purchase price of the property, 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, 1996 for Federal income tax purposes is
$99,001,097.
(C) Reconciliation of real estate owned:
</TABLE>
<TABLE>
<CAPTION>
1996 1995 1994
------------ ------------ -----------
<S> <C> <C> <C>
Balance at beginning of period . . . . . . . . . $122,904,178 122,300,507 253,999,834
Additions during period. . . . . . . . . . . . . 1,479,343 603,671 3,274,218
Reductions during period . . . . . . . . . . . . (32,981,039) -- (134,973,545)
------------ ----------- -----------
Balance at end of period . . . . . . . . . . . . $ 91,402,482 122,904,178 122,300,507
============ =========== ===========
(D) Reconciliation of accumulated depreciation:
Balance at beginning of period . . . . . . . . . $ 42,824,687 39,346,202 82,546,206
Depreciation expense . . . . . . . . . . . . . . 2,573,900 3,478,485 7,779,552
Reduction in accumulated depreciation. . . . . . (13,082,616) -- (50,979,556)
------------ ----------- -----------
Balance at end of period . . . . . . . . . . . . $ 32,315,971 42,824,687 39,346,202
============ =========== ===========
</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 1996 and 1995.
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, directors and members of their families and affiliates. 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. ABPP Associates, L.P., an Illinois
limited partnership with JMB as its sole 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 7, 1997. All of the foregoing officers have been elected to serve
one-year terms until the first meeting of the Board of Directors held after
the annual meeting of the Corporate General Partner to be held on June 7,
1997. 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-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.-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.-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-XI, Carlyle-XIII,
Carlyle-XIV, Carlyle-XV, Carlyle-XVI, Carlyle-XVII, JMB Income-VI, JMB
Income-VII, JMB Income-X, JMB Income-XI, JMB Income-XII, JMB Income-XIII,
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 59) 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.
("USC, 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 59) 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 USC, Inc. He is a member of the
Bar of the State of Illinois and a Certified Public Accountant.
Burton E. Glazov (age 58) 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 55) 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 63) (President and Director of JMB Insurance Agency,
Inc.) has been associated with JMB since December, 1972.
John G. Schreiber (age 50) 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 USC, Inc., as well as a director for 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 47) 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 49) 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 44) 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 48) 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 61) 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 the Notes. The General Partners
received a share of the Partnership's income aggregating $1,906,605 for
Federal income tax purposes in 1996.
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 part
of 1996 for the Permian Mall in Odessa, Texas at fees calculated at a
percentage of gross income from the properties. In 1996, such affiliate
earned property management fees amounting to $109,308 for such services.
JMB Insurance Agency, Inc., an affiliate of the Corporate General
Partner, earned insurance brokerage commissions in 1996 aggregating
approximately $18,966, all of which were paid in 1996 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 1996 were $35,304.
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 1996, the Corporate General
Partner of the Partnership was due reimbursement for such out-of-pocket
expenses in the amount of $629, of which $149 was unpaid as of December 31,
1996.
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 1996, such costs were $51,421, of which $10,655 was unpaid
at December 31, 1996.
<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.
Reference is made to Item 10 for information concerning ownership of the Corporate General Partner.
(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.
3-C. Acknowledgement of rights and duties of the
General Partners of the Partnership between ABPP Associates, L.P. (a
successor Associated General Partner of the Partnership) and JMB Realty
Corporation as of December 31, 1995 is hereby incorporated herein by
reference to the Partnership's report for June 30, 1996 on Form 10-Q (File
No. 0-12433) dated August 9, 1996.
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.
10-G. Sale documents and exhibits thereto relating to
the Partnership's sale of the Stonybrook Apartments in Tucson, Arizona is
hereby incorporated herein by reference to the Partnership's report for
June 30, 1996 on Form 10-Q (File No. 0-12433) dated August 9, 1996.
10-H. Substitute Trustee's deed and bill of sale
related to the Partnership's disposition of the Permian Mall in Odessa,
Texas is hereby incorporated herein by reference to the Partnership's
report for June 30, 1996 on Form 10-Q (File No. 0-12433) dated August 9,
1996.
21. List of Subsidiaries.
24. Powers of Attorney.
27. Financial Data Schedule.
___________
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) No reports on Form 8-K have been filed since the beginning of
the last quarter of the period covered by this report.
No annual report for the year 1996 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 21, 1997
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 21, 1997
NEIL G. BLUHM*
By: Neil G. Bluhm, President and Director
Date: March 21, 1997
H. RIGEL BARBER*
By: H. Rigel Barber, Chief Executive Officer
Date: March 21, 1997
GLENN E. EMIG*
By: Glenn E. Emig, Chief Operating Officer
Date: March 21, 1997
GAILEN J. HULL
By: Gailen J. Hull, Senior Vice President
Principal Accounting Officer
Date: March 21, 1997
A. LEE SACKS*
By: A. Lee Sacks, Director
Date: March 21, 1997
STUART C. NATHAN*
By: Stuart C. Nathan, Executive Vice President
and Director
Date: March 21, 1997
*By: GAILEN J. HULL, Pursuant to a Power of Attorney
GAILEN J. HULL
By: Gailen J. Hull, Attorney-in-Fact
Date: March 21, 1997
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, 1983 Yes
3-B. Amended and Restated Agreement of
Limited Partnership set forth as
Exhibit A to the Prospectus Yes
3-C. Acknowledgment of rights and duties
of the General Partners of the
Partnership between ABPP Associates,
L.P. (a successor Associated General
Partner of the Partnership) and
JMB Realty Corporation 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 Building Yes
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
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
EXHIBIT INDEX - CONTINUED
DOCUMENT
INCORPORATED
BY REFERENCE PAGE
------------ ----
10-G. Sale documents and exhibits
thereto relating to the Partner-
ship's sale of the Stonybrook
Apartments Yes
10-H. Substitute Trustee's deed and
bill of sale related to the
Partnership's disposition of
the Permian Mall Yes
21. List of Subsidiaries No
24. Powers of Attorney No
27. Financial Data Schedule No
EXHIBIT 21
LIST OF SUBSIDIARIES
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, 1996, 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 22nd day of January, 1997.
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, 1996,
and any and all amendments thereto, the 22nd day of January, 1997.
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, 1996, 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 22nd day of January, 1997.
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
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, 1996,
and any and all amendments thereto, the 22nd day of January, 1997.
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, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 6,667,839
<SECURITIES> 0
<RECEIVABLES> 2,092,897
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8,760,736
<PP&E> 59,086,511
<DEPRECIATION> 0
<TOTAL-ASSETS> 69,599,208
<CURRENT-LIABILITIES> 4,547,444
<BONDS> 54,277,855
<COMMON> 0
0
0
<OTHER-SE> 10,145,327
<TOTAL-LIABILITY-AND-EQUITY> 69,599,208
<SALES> 17,181,310
<TOTAL-REVENUES> 17,687,780
<CGS> 0
<TOTAL-COSTS> 10,509,609
<OTHER-EXPENSES> 665,631
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,025,827
<INCOME-PRETAX> 486,713
<INCOME-TAX> 0
<INCOME-CONTINUING> 405,819
<DISCONTINUED> 7,080,695
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,486,514
<EPS-PRIMARY> 46.25
<EPS-DILUTED> 46.25
</TABLE>
