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 September 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)
September 30, 1996
Assets
Cash and cash equivalents:
Unrestricted $ 257,180
Restricted-tenant security deposits 11,674
Accounts receivable 4,443
Deposits with mortgagee 32,990
Deferred charges 87,886
Investment property:
Land $ 227,104
Building and improvements 2,871,079
3,098,183
Less accumulated depreciation (1,298,728) 1,799,455
$2,193,628
Liabilities and Partners' Equity (Deficit)
Liabilities
Accounts payable $ 65,463
Accrued liabilities:
Interest $ 8,639
Real estate taxes 29,662
Professional fees 18,262
Other 2,232 58,795
Deferred rental income 48,617
Deposits payable 11,674
Mortgage payable 1,271,365
Total liabilities 1,455,914
Partners' equity (deficit)
General partner (46,821)
Limited partners 784,535 737,714
$2,193,628
See Notes to Financial Statements
b) DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES
(A Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
Revenues:
Rental operations $ 101,045 $ 73,188 $ 259,230 $ 253,085
Interest income 2,766 3,741 8,832 12,261
Total revenues 103,811 76,929 268,062 265,346
Expenses:
Rental operations 25,018 17,784 75,031 58,334
General and administrative 10,869 11,985 40,458 40,863
Management fees to related
party (Note 3) 1,579 1,474 4,670 4,925
Mortgage interest 25,539 26,127 77,107 78,835
Depreciation and amortization 28,238 26,736 82,199 80,280
Total expenses 91,243 84,106 279,465 263,237
Net income (loss) $ 12,568 $ (7,177) $ (11,403) $ 2,109
Net income (loss) per limited
partner interest (based on
11,455 units issued and
outstanding) $ 1.09 $ (.62) $ (.99) $ .18
See Notes to Financial Statements
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 nine months
ended September 30, 1996 (114) (11,289) (11,403)
Partners' equity (deficit)
at September 30, 1996 $(46,821) $784,535 $737,714
See Notes to Financial Statements
d) DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
1996 1995
Cash flows from operating activities:
Net income (loss) $ (11,403) $ 2,109
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 82,199 80,280
Change in accounts:
Restricted cash -- (590)
Accounts receivable 18,160 (7,055)
Deferred charges (30,229) (1,254)
Deposits with mortgagee 68,611 (21,402)
Accounts payable (4,995) (2,084)
Accrued liabilities 26,656 1,079
Deferred rental income (16,483) --
Net cash provided by operating
activities 132,516 51,083
Cash flows from investing activities:
Additions to real and personal property (38,501) --
Net cash used in investing activities (38,501) --
Cash flows from financing activities:
Principal payments on mortgage (24,521) (22,642)
Partners' distributions paid (114,550) (114,550)
Net cash used in financing activities (139,071) (137,192)
Net decrease in cash and cash equivalents (45,056) (86,109)
Cash and cash equivalents at beginning of period 302,236 399,762
Cash and cash equivalents at end of period $ 257,180 $ 313,653
Supplemental disclosure of cash flow information:
Cash paid for interest $ 77,107 $ 78,987
Non-cash investing activities:
Tenant improvements included in accounts
payable and deferred rental income $ 130,200 $ --
See Notes to Financial Statements
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 nine month periods ended
September 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 nine months ended September 30, 1996 and 1995, the Partnership paid
management fees of $4,670 and $4,925, respectively, to The Wynnewood Company, an
affiliate of the Partnership's General Partner.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
For the nine month period ending September 30, 1996, the Partnership realized a
net loss of $11,403 compared to net income of $2,109 for the corresponding
period of 1995. The Partnership realized net income of $12,568 for the three
month period ended September 30, 1996, compared to a net loss of $7,177 for the
corresponding period of 1995. The decrease in net income for the nine month
period ended September 30, 1996, was due to an increase in rental operations
expense. Rental operations expense increased primarily due to an increase in
maintenance expense resulting from the seal-coating of the parking area and
minor roof repairs at Wendover. Net income for the three month period ended
September 30, 1996, increased due to an increase in rental revenue. Rental
revenue increased for the three month period ended September 30, 1996, due to
the collection of approximately $34,000 in lease termination fees resulting from
the early lease termination of a tenant.
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 September 30, 1996, the Partnership held cash of $257,180. The present cash
reserves of the Partnership are believed to be sufficient to meet the
foreseeable needs of the Partnership.
As of September 30, 1996, the Partnership's remaining property was approximately
85% leased. A new tenant has completed its improvements and is now occupying
approximately 14,000 sq. ft. of space. Tenant improvements and leasing
commissions in connection with this lease were substantial and are being funded
from a combination of existing cash reserves and rental concessions to the new
tenant for the first six-to-seven months of its lease. Until these rental
concessions expire, assuming no other leasing activity, it is expected the
property will experience a small monthly cash flow deficit. One other tenant,
occupying approximately 7,000 sq. ft. of space, with a lease expiring December
31, 1996, is anticipated to renew its lease. A new leasing company has been
engaged in an effort to lease remaining vacancies.
The Partnership expended approximately $20,000 for improvements 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) 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 September 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: November 6, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Drexel
Burnham Lambert Real Estate Associates 1996 Third 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 257,180
<SECURITIES> 0
<RECEIVABLES> 4,443
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 3,098,183
<DEPRECIATION> (1,298,728)
<TOTAL-ASSETS> 2,193,628
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 1,271,365
0
0
<COMMON> 0
<OTHER-SE> 737,714
<TOTAL-LIABILITY-AND-EQUITY> 2,193,628
<SALES> 0
<TOTAL-REVENUES> 268,062
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 279,465
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 77,107
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (11,403)
<EPS-PRIMARY> (.99)
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
</FN>
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