FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
(As last amended by 34-32231, eff. 6/3/93.)
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period.........to.........
Commission file number 2-76434
DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES
(Exact name of small business issuer as specified in its charter)
New York 13-3153572
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
850 Third Avenue, Nineteenth Floor
New York, New York 10022
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (212) 822-2246
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES
(A Limited Partnership)
BALANCE SHEET
(Unaudited)
June 30, 1996
Assets
Cash and cash equivalents:
Unrestricted $ 253,882
Restricted-tenant security deposits 11,674
Accounts receivable 5,438
Deposits with mortgagee 21,842
Deferred charges 70,143
Deferred rent receivable 9,829
Investment property:
Land $ 227,104
Building and improvements 2,734,294
2,961,398
Less accumulated depreciation (1,274,791) 1,636,607
$ 2,059,415
Liabilities and Partners' Equity (Deficit)
Liabilities
Accounts payable $ 2,138
Accrued liabilities:
Interest $ 8,639
Real estate taxes 18,833
Professional fees 12,175
Other 1,108 40,755
Deposits payable 11,674
Mortgage payable 1,279,702
Total liabilities 1,334,269
Partners' equity (deficit)
General partner (46,947)
Limited partners 772,093 725,146
$ 2,059,415
See Notes to Financial Statements
b) DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES
(A Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues:
Rental operations $ 75,058 $ 88,249 $158,185 $179,897
Interest income 2,741 5,088 6,066 8,520
Total revenues 77,799 93,337 164,251 188,417
Expenses:
Rental operations 26,216 22,399 50,013 40,550
General and administrative 17,588 16,356 29,589 28,878
Management fees to related
party (Note 3) 1,555 1,751 3,091 3,451
Mortgage interest 25,704 26,279 51,568 52,708
Depreciation and amortization 27,000 26,736 53,961 53,544
Total expenses 98,063 93,521 188,222 179,131
Net (loss) income $(20,264) $ (184) $(23,971) $ 9,286
Net (loss) income per limited
partner interest (based on
11,455 units issued and
outstanding) $ (1.75) $ (.02) $ (2.07) $ .80
<FN>
See Notes to Financial Statements
</TABLE>
c) DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES
(A Limited Partnership)
STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
(Unaudited)
General Limited
Partner Partners Total
Partners' equity (deficit)
at December 31, 1995 $(46,707) $795,824 $749,117
Net loss for the six months
ended June 30, 1996 (240) (23,731) (23,971)
Partners' equity (deficit)
at June 30, 1996 $(46,947) $772,093 $725,146
See Notes to Financial Statements
d) DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $ (23,971) $ 9,286
Adjustments to reconcile net (loss) income to
net cash provided by operating
activities:
Depreciation and amortization 53,961 53,544
Change in accounts:
Accounts and deferred rent receivable 7,337 (12,381)
Deferred charges (8,186) (3,255)
Deposits with mortgagee 79,759 (9,664)
Accounts payable (3,220) (1,986)
Accrued liabilities 8,616 (10,543)
Net cash provided by operating
activities 114,296 25,001
Cash flows from investing activities:
Additions to real and personal property (31,916) --
Net cash used in investing activities (31,916) --
Cash flows from financing activities:
Principal payments on mortgage (16,184) (14,944)
Partners' distributions paid (114,550) (114,550)
Net cash used by financing activities (130,734) (129,494)
Net decrease in cash and cash equivalents (48,354) (104,493)
Cash and cash equivalents at beginning of period 302,236 399,762
Cash and cash equivalents at end of period $ 253,882 $ 295,269
Supplemental disclosure of cash flow information:
Cash paid for interest $ 51,568 $ 52,808
<FN>
See Notes to Financial Statements
</TABLE>
e) DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of the General Partner, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three and six month periods ended June 30,
1996, are not necessarily indicative of the results that may be expected for the
fiscal year ending December 31, 1996. For further information, refer to the
financial statements and footnotes thereto included in the Partnership's annual
report on Form 10-KSB for the fiscal year ended December 31, 1995.
Note 2 - General
The financial statements of Drexel Burnham Lambert Real Estate Associates
include the operations of Wendover Business Park Phase I ("Wendover") which is
the only property the Partnership owns and operates.
Certain reclassifications have been made to the 1995 balances to conform to the
1996 presentation.
Note 3 - Related Party Transactions
For the six months ended June 30, 1996 and 1995, the Partnership paid management
fees of $3,091 and $3,451, respectively, to The Wynnewood Company, the parent of
the Partnership's General Partner.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
For the six months ending June 30, 1996, the Partnership realized a net loss of
$23,971, compared to net income of $9,286 for the six months ended June 30,
1995. The Partnership realized a net loss of $20,264 for the three months ended
June 30, 1996, compared to a net loss of $184 for the three months ended June
30, 1995. The decrease in net income was caused primarily by decreases in
rental revenues for both the three and six months ended June 30, 1996, compared
to the three and six months ended June 30, 1995. The decrease in rental revenues
for both the three and six months ended June 30, 1996, was primarily due to the
property's largest tenant moving from a space of 17,477 sq. ft. to a smaller
space of approximately 3,500 sq. ft. Management has negotiated and executed a
new lease with another national tenant to lease a large part of the vacated
space. Total expenses were comparable for both the three and six months ended
June 30, 1996 and 1995.
On January 13, 1994, the Wendover property was refinanced for $1,350,000. Under
the terms of the new mortgage, Wendover was required to maintain an escrow
account for tenant improvements and leasing commissions for two years. In
January 1996, approximately $95,000 was reimbursed to the property from the
mortgage company as the terms of the agreement expired.
Liquidity and Capital Resources
On June 30, 1996, the Partnership held unrestricted cash (including shares of
money market funds and a certificate of deposit) of $253,882. The present cash
reserves of the Partnership are believed to be sufficient to meet the
foreseeable needs of the Partnership.
As of June 30, 1996, the Partnership's remaining property was approximately 85%
leased. Management has executed a new lease with another national tenant to
lease approximately 13,900 sq. ft. of the vacant space for a five-year term.
Tenant improvements and leasing commissions in connection with this lease will
be substantial and will be funded from a combination of existing cash reserves
and rental concessions to the new tenant for the first six to seven months of
the lease. Assuming no other leasing activity, it is expected the property will
experience a small monthly cash flow deficit until these rental concessions
expire. During 1996, one other tenant, occupying approximately 7,000 sq. ft. of
space, is expected to renew its lease which will expire before the end of the
current year.
The Partnership expended approximately $20,000 for repairs to the foundation of
one of the buildings during the second quarter of 1996. Remaining cash balances
are believed to be sufficient to meet planned capital expenditures, tenant
improvements and leasing commissions as outlined above.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to
this report.
b) Reports on Form 8-K:
None filed during the quarter ended June 30, 1996.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES
(Registrant)
By: DBL Properties Corporation
(General Partner)
By: /s/William D. Clements
William D. Clements
President
Date: August 8, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Drexel
Burnham Lambert Real Estate Associates 1996 Second Quarter 10-QSB and is
qualified in its entirety by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000700951
<NAME> DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 253,882
<SECURITIES> 0
<RECEIVABLES> 5,438
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 2,961,398
<DEPRECIATION> (1,274,791)
<TOTAL-ASSETS> 2,059,415
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 1,279,702
0
0
<COMMON> 0
<OTHER-SE> 725,146
<TOTAL-LIABILITY-AND-EQUITY> 2,059,415
<SALES> 0
<TOTAL-REVENUES> 164,251
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 188,222
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 51,568
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (23,971)
<EPS-PRIMARY> (2.07)
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
</FN>
</TABLE>
