FORM 10-KSB--ANNUAL OR TRANSITIONAL REPORT UNDER
SECTION 13 OR 15(d)
(As last amended by 34-31905, eff. 4/26/93)
FORM 10-KSB
[X] Annual Report Under Section 13 or 15(d) of the Securities Exchange Act of
1934 [Fee Required]
For the fiscal year ended December 31, 1995
or
[ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange Act
of 1934 [No Fee Required]
For the transition period.........to.........
Commission file number 2-76434
DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES
(Name of small business issuer in its charter)
New York 13-3153572
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
230 Park Avenue, Suite 2400
New York, New York 10169
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (212) 697-2330
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Units of Limited Partnership Interest
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 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
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will 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-KSB or any
amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year. $349,453
State the aggregate market value of the voting partnership interests held by
non-affiliates computed by reference to the price at which the partnership
interests were sold, or the average bid and asked prices of such partnership
interests, as of December 31, 1995 - Not Applicable.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of the Prospectus of Registrant dated November 2, 1982 (included in
Registration Statement, No. 2-76434 of Registrant) are incorporated by
reference into Parts I and III.
PART I
Item 1. Description of Business
Drexel Burnham Lambert Real Estate Associates (the "Partnership" or
"Registrant") is a limited partnership which was formed on December 14, 1982,
pursuant to the Partnership Law of the State of New York. The Partnership is
engaged in the business of acquiring, operating and holding real properties for
investment. The Partnership acquired four properties during 1983 and continues
to operate one of them (Wendover Business Park-Phase I). Effective June 30,
1993, Landmark Associates, a joint venture in which the Partnership owned a 60%
interest, was dissolved. For a further discussion on the dissolution of
Landmark and the settlement of the remaining debt, refer to "Item 7, Note 1".
Commencing in January 1983 pursuant to the Prospectus, the Partnership
offered $11,500,000 in Limited Partnership Interests (the "Interests"). A total
of 11,500 Interests were sold to the public at $1,000 per Interest. The offering
closed on February 10, 1983. No Limited Partner has made any additional capital
contribution after that date. The Limited Partners of the Partnership share in
the benefits of ownership of the Partnership's real property investments
according to the number of Interests held.
The Interests were registered under the Securities Act of 1933 via
Registration Statement No. 2-76434 (the "Registration Statement"). Reference is
made to the Prospectus of the Registrant dated November 2, 1982 (the
"Prospectus") contained in said Registration Statement, which is incorporated
herein by reference thereto.
A further description of the Partnership's business is included in
Management's Discussion and Analysis or Plan of Operations included in "Item 6"
of this Form 10-KSB.
The Partnership's remaining investment in real property is subject to
competition from similar properties in the vicinity in which it is located and
the Partnership is not a significant factor in its industry.
The terms of agreements between the Partnership and affiliates of the General
Partner of the Partnership are set forth in "Item 12" below to which reference
is hereby made for a description of such terms.
On February 3, 1993, all of the outstanding stock of the General Partner was
sold to the Wynnewood Company, Inc. ("Wynnewood"), a corporation which is owned
by the principal operating officer of the General Partner.
The Partnership had no employees as of December 31, 1995. Management and
administrative services are performed by Wynnewood, the General Partner and by
IFGP Corporation ("Insignia") and affiliates. Pursuant to a management
agreement between them, affiliates of Insignia provide property management
services, partnership administration, and registrar and transfer services to the
Partnership.
Item 2. Description of Properties
On June 29, 1983, the Partnership acquired, and currently owns and
operates, Wendover Business Park-Phase I ("Wendover") (68,000 square feet)
located in Greensboro, North Carolina. The Business Park was acquired for
$2,820,000 of which $1,410,000 was paid in cash and $1,410,000 was paid in the
form of a $1,110,000 senior purchase money note and a $300,000 junior purchase
money note. In July of 1993, the junior note was paid in full. A new mortgage
in the amount of $1,350,000 was executed in January of 1994. The proceeds from
the new mortgage were used to pay off the original senior note. The principal
balance of the current mortgage at December 31, 1995, is $1,295,886. The
mortgage matures February 1, 2001, and is being amortized over twenty years with
an interest rate of 8%. The balloon payment due at maturity is $1,097,022.
Further details of the mortgage are disclosed in "Item 7, Note 3".
Depreciation of buildings and improvements is computed on straight-line
and accelerated methods basis over estimated service lives ranging from three to
thirty years. Wendover Business Park I had a gross carrying value of $2,929,482
at December 31, 1995, with accumulated depreciation of $1,228,975 for a net book
value of $1,700,507. The federal tax basis at December 31, 1995, of Wendover
Business Park I is $680,670.
Average annual rental rates per square foot and average annual occupancy
for 1995 and 1994 for Wendover were:
Average Annual Average Annual
Rental Rate Occupancy
1995 $5.23/sq.ft. 92%
1994 5.13/sq.ft. 99%
As noted under "Item 1. Description of Business", the real estate industry
is highly competitive and Wendover is subject to competition from other
commercial buildings in the area. Management believes the property is
adequately insured.
The following is a schedule of the lease expirations for the years 1996 -
2005:
Number of % of Gross
Expirations Square Feet Annual Rent Annual Rent
1996 3 12,238 $ 71,440 21.4%
1997 0 0 0 0
1998 1 3,480 16,800 5.0%
1999 3 20,957 96,417 28.9%
2000 1 4,260 32,075 9.6%
2001 0 0 0 0
2002 1 2,610 14,548 4.4%
2003-2005 0 0 0 0
In addition, one tenant, who rents their space on a month-by-month basis,
contributed $75,351 to annual rental income for 1995. This tenant occupies
17,477 sq. ft. and lease payments are approximately 22.6% of gross annual rent
for 1995.
The following schedule reflects information on tenants occupying 10% or
more of the leasable square feet at Wendover:
<TABLE>
<CAPTION>
Square Footage Annual Rent
Nature of Business Leased Per Square Foot Lease Expiration
<S> <C> <C> <C>
Communication equipment 17,477 $4.31 Month to month lease
Textile equipment sales 6,960 4.24 06/30/99
Custom color printing 6,960 6.58 12/31/96
Wholesale auto supplies 7,037 4.82 01/31/99
Electrical contractor 6,960 4.74 05/31/99
</TABLE>
Real estate taxes in 1995 for Wendover were $37,666. In 1994, real estate
taxes were $38,593.
Item 3. Legal Proceedings
The Partnership is not a party to, nor are any of its properties subject
to, any material pending 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.
PART II
Item 5. Market for the Partnership Equity and Related Partner Matters
As of December 31, 1995, the Partnership included approximately 1,006
limited partners, holding a total of 11,455 Interests. During 1994, the number
of Partnership Interests decreased by 45 Interests due to limited partners
abandoning their Interests. In abandoning his or her Partnership Interests, a
limited partner relinquishes all rights, title and interest in the Partnership
as of the date of abandonment. No public trading market has developed for
Interests and it is not anticipated that such a market will develop in the
future.
Cash distributions were made quarterly from July 1983, until October 1987,
after which they were suspended. In December 1995, the General Partner approved
a cash distribution to the Limited Partners in the amount of $114,550 ($10 per
Interest) to be paid in February 1996. A similar distribution was declared in
December 1994 and paid to Limited Partners in February 1995. As of December 31,
1995, the remaining unpaid preferred return arrearage totalled $7,188,362 or
approximately $628 per Interest. Reference is made to "Item 6" for a
description of liquidity and capital resources.
Item 6. Management's Discussion and Analysis or Plan of Operations
Results of Operations
The Partnership realized a net loss of $16,350 for the year ended December
31, 1995 compared to net income of $1,694,719 for the year ended December 31,
1994. The decrease in net income is due primarily to the non-recurring gain on
extinguishment of debt in the first quarter of 1994 (see "Notes 1 and 3" of the
Financial Statements which are included in "Item 7" below). Total revenues for
the years ended December 31, 1995 and 1994 remained stable. Total expenses also
remained stable for the years ended December 31, 1995 and 1994. The slight
increase in rental operations expense in 1995 was due primarily to an exterior
painting project. With the exception of the non-recurring gain on
extinguishment of debt in 1994 as mention above, the Partnership's results of
operations were comparable to those for the corresponding period of the prior
year.
Liquidity and Capital Resources
On December 31, 1995, the Partnership had cash and cash equivalents of
$302,236. The present cash reserves of the Partnership are believed to be
sufficient to meet the foreseeable needs of the Partnership.
As of December 31, 1995, the Partnership's remaining property was
approximately 90% leased. The property's largest tenant, occupying 17,477
sq.ft., approximately 26% of the leasable space, has been a tenant for a number
of years on a month-to-month lease. In February 1996, this tenant notified
management that it wished to reduce the space it occupies to approximately 3,500
sq. ft. effective May 1, 1996. At the same time, management began negotiating
with another national tenant to lease a large portion of the space being vacated
for a five-year term at a higher rental per sq. ft. than the present tenant.
Tenant improvements and leasing commissions will offset part of this higher
rental if the new lease is consummated. If this proposed lease is not
consummated, the property will experience a decline in operating cash flow until
the space is released. During 1996, several other tenants, occupying
approximately 9,000 sq. ft. of space, are expected to renew their leases which
expire during the year.
The Partnership has approved capital expenditures to be expended in the
second quarter of 1996 in the approximate amount of $15,000 for repairs to the
foundation of one of the buildings. In February 1996, the Partnership paid a
distribution of $10 per partnership interest, totalling approximately $115,000,
from existing cash reserves. Remaining cash balances are believed to be
sufficient to meet planned capital expenditures, tenant improvements and leasing
commissions.
Inflation
Inflation in the future may increase rental revenues as well as operating
expenses, all subject to general market trends. Certain Wendover leases provide
for rent increases based upon the Consumer Price Index.
Item 7. Financial Statements
INDEX TO FINANCIAL STATEMENTS
Independent Auditor's Report
Balance Sheet at December 31, 1995
Statements of Operations for the Years Ended
December 31, 1995 and 1994
Statements of Partners Equity (Deficit) for the Years Ended
December 31, 1995 and 1994
Statements of Cash Flows for the Years Ended
December 31, 1995 and 1994
Notes to Financial Statements
Independent Auditor's Report
To the Partners
Drexel Burnham Lambert Real Estate Associates
We have audited the accompanying balance sheet of Drexel Burnham Lambert Real
Estate Associates (a limited partnership) as of December 31, 1995, and the
related statements of operations, partners' equity (deficit) and cash flows for
each of the two years in the period ended December 31, 1995. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements 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
management, 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 financial statements referred to above present fairly, in
all material respects, the financial position of Drexel Burnham Lambert Real
Estate Associates (a limited partnership) at December 31, 1995, and the results
of its operations and its cash flows for each of the two years in the period
ended December 31, 1995, in conformity with generally accepted accounting
principles.
/s/Pannell Kerr Forster PC
January 31, 1996
DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES
(A Limited Partnership)
Balance Sheet
<TABLE>
<CAPTION>
December 31, 1995
Assets
<S> <C> <C>
Cash and cash equivalents $ 302,236
Accounts receivable 15,688
Real and personal property - at cost (notes 1, 2, and 3)
Land $ 227,104
Building and improvements 2,702,378
2,929,482
Accumulated depreciation and amortization (1,228,975) 1,700,507
Restricted cash - tenant security deposits 11,674
Deferred costs (note 2) 70,102
Deferred rent receivable (note 2) 6,916
Deposits with mortgagee (note 3) 101,601
$ 2,208,724
Liabilities and Partners' Equity (Deficit)
Liabilities
Accounts payable $ 5,358
Accrued liabilities
Interest $ 8,639
Professional fees 23,500 32,139
Distributions payable (note 4) 114,550
Deposits payable 11,674
Mortgage payable (note 3) 1,295,886
Total liabilities 1,459,607
Partners' equity (deficit) (note 4)
General partner (46,707)
Limited partners 795,824
Total partners' equity 749,117
$ 2,208,724
<FN>
See notes to financial statements
</TABLE>
DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES
(A Limited Partnership)
Statements of Operations
<TABLE>
<CAPTION>
Year Ended
December 31
1995 1994
<S> <C> <C>
Revenue
Rental operations $ 333,293 $ 337,812
Interest income 16,160 8,999
Total revenue 349,453 346,811
Expenses
Rental operations 96,014 87,917
General and administrative 51,803 49,460
Management fees to related parties (note 5) 6,295 6,385
Mortgage interest expense (note 3) 104,805 108,454
Depreciation and amortization (note 2) 106,886 106,139
Total expenses 365,803 358,355
(Loss) before extraordinary item (16,350) (11,544)
Extraordinary item - gain on extinguishment of debt
(notes 1 and 3) -- 1,706,263
Net (loss) income (note 6) $ (16,350) $ 1,694,719
Net (loss) income per limited partner interest (note 4)
Before extraordinary item $ (1.41) $ (1.00)
Extraordinary item -- 147.46
Net (loss) income per limited partner interest $ (1.41) $ 146.46
Distributions per interest (note 4) $ 10.00 $ 10.00
<FN>
See notes to financial statements
</TABLE>
DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES
(A Limited Partnership)
Statements of Partners' Equity (Deficit)
For Years Ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
General Limited
Total Partner Partners
<S> <C> <C> <C>
Original capital contribution (note 4) $11,501,000 $ 1,000 $11,500,000
Less offering costs 1,363,018 -- 1,363,018
10,137,982 1,000 10,136,982
Cumulative net (loss) through December 31, 1993 (6,361,841) (63,619) (6,298,222)
Cumulative distributions to limited partners
through December 31, 1993 (4,476,293) (871) (4,475,422)
Balance - December 31, 1993 (700,152) (63,490) (636,662)
Net income for year ended December 31, 1994 1,694,719 16,947 1,677,772
Distribution to partners (note 4) (114,550) -- (114,550)
Balance - December 31, 1994 880,017 (46,543) 926,560
Net (loss) for year ended December 31, 1995 (16,350) (164) (16,186)
Distribution to partners (note 4) (114,550) -- (114,550)
Balance - December 31, 1995 $ 749,117 $ (46,707) $ 795,824
<FN>
See notes to financial statements
</TABLE>
DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES
(A Limited Partnership)
Statements of Cash Flows
<TABLE>
<CAPTION>
Year Ended
December 31
1995 1994
<S> <C> <C>
Cash flows from operating activities
Net (loss) income $ (16,350) $ 1,694,719
Adjustments to reconcile net (loss) income to net cash
provided (used) by operating activities
Accrued interest expense added to principal -- 16,736
Depreciation 90,212 90,839
Amortization 16,674 15,300
Extraordinary item - gain on extinguishment of debt -- (1,706,263)
Changes in certain other accounts
Tenant security deposits 382 2,530
Accounts and other receivables (18,291) 19,923
Deferred costs (9,318) (74,477)
Deposits with mortgagee 4,398 (65,499)
Accounts payable 3,274 1,940
Accrued liabilities (704) (8,782)
Deposits payable (22,758) 4,374
Net cash provided (used) by operating activities 47,519 (8,660)
Cash flows from financing activities
Proceeds from mortgage refinancing -- 1,350,000
Repayment of mortgage payable (30,495) (1,177,920)
Payment to settle joint venture liabilities -- (450,000)
Distribution paid to partners (114,550) --
Net cash (used) by financing activities (145,045) (277,920)
(Decrease) in cash and cash equivalents (97,526) (286,580)
Cash and cash equivalents - beginning of year 399,762 686,342
Cash and cash equivalents - end of year $ 302,236 $ 399,762
Supplemental disclosure of cash flow information
Cash paid during the year for interest $ 105,008 $ 95,000
<FN>
See notes to financial statements
</TABLE>
Note 1 - Organization
Drexel Burnham Lambert Real Estate Associates ("Partnership") was organized as a
limited partnership under the laws of the State of New York pursuant to a
Certificate of Limited Partnership dated December 14, 1982. The general partner
of the Partnership is DBL Properties Corporation (General Partner). In February
1993, all of the outstanding stock of the General Partner was sold to The
Wynnewood Company, Inc. ("Wynnewood"), a corporation which is owned by the
principal operating officer of the General Partner.
The Partnership held a 60% interest in Landmark Associates ("Landmark"), a joint
venture which owned and operated the Landmark Resort Hotel, located in Myrtle
Beach, South Carolina. On October 5, 1992, the foreclosure action initiated by
the Landmark mortgagee was effectively concluded, at which time Landmark ceased
operating the hotel. Landmark was dissolved in June 1993, and the Partnership
assumed its portion of the remaining liabilities. At the time of dissolution,
Landmark had liabilities due to affiliates amounting to $3,401,175. The
Partnership, a 60% general partner of Landmark, assumed its pro rata share of
the obligation in the amount of $2,040,705. In January 1994, the Partnership
paid $450,000 to the DBL Liquidating Trust, the successor to the Drexel Burnham
Lambert Group, Inc. in full settlement of these liabilities. Accordingly, the
Partnership recorded $1,590,705 as part of an extraordinary item "gain on
extinguishment of debt" for the year ended December 31, 1994.
The Partnership continues to own and operate the Wendover Business Park - Phase
I ("Wendover"), an office/warehouse complex, containing 67,982 square feet of
office/warehouse space on 3.776 acres in Greensboro, North Carolina.
Note 2 - Significant Accounting Policies
Basis of accounting
The financial statements include the accounts of the Partnership and its sole
operating division, Wendover Business Park - Phase I ("Wendover").
Estimates
The financial statements of the Partnership are prepared in conformity with
generally accepted accounting principles, which requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent 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.
Note 2 - Significant Accounting Policies (continued)
Long-lived assets
Effective January 1, 1995, 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." Accordingly, the Partnership
evaluates its long-lived assets, which consists primarily of its investment in
real property, for impairment based on the recoverability of their carrying
amounts. When it is probable that undiscounted cash flows will not be
sufficient to recover the carrying amounts, the assets will be written down to
their fair value. No such write-downs were required in 1995.
Disclosure about fair value of financial instruments
In 1995, the Partnership implemented Statement of Financial Accounting Standards
No. 107, "Disclosure about Fair Value of Financial Instruments," which requires
disclosure of the fair value of financial instruments for which it is
practicable to estimate that value. The carrying amount of the Partnership's
cash and cash equivalents approximates fair value due to their short-term
nature. At December 31, 1995, the Wendover mortgage payable approximates fair
value.
Depreciation
Depreciation of the Wendover building and improvements are computed on straight-
line and accelerated methods over estimated service lives ranging from three to
thirty years.
Deferred costs
Deferred leasing costs are shown net of accumulated amortization of $10,475 and
are being amortized on a straight-line basis over the respective lease terms.
Deferred mortgage costs are shown net of accumulated amortization of $17,125 and
are being amortized on a straight-line basis over the term of the mortgage.
Revenue recognition
The straight-line basis is used to recognize minimum rental income under leases
which provide for varying rents over their terms.
Income taxes
No provision has been made for income taxes since such taxes, if any, are
payable by the partners individually.
Note 2 - Significant Accounting Policies (continued)
Cash and cash equivalents
For purposes of financial reporting, cash and cash equivalents includes cash on
hand and in banks, including money market funds and certificates of deposit with
original maturities of three months or less.
Supplemental disclosure of noncash financing activities
In December 1995, the Partnership approved a cash distribution to Limited
Partners in the amount of $114,550 ($10 per share) to be paid in February 1996.
A similar distribution was declared in December 1994 and paid in February 1995.
Concentration of credit risk
Substantially all of the Partnership's cash deposits are with one bank and
consist of demand deposits, certificates of deposit and money market accounts.
The Partnership has not experienced any losses on its cash deposits.
Note 3 - Mortgage Payable
On January 13, 1994, the Wendover property was refinanced for $1,350,000 and the
existing mortgage was satisfied for $115,558 less than the recorded amount.
This amount has been reflected as part of the extraordinary item in the
accompanying 1994 statement of operations. The new mortgage matures on February
1, 2001, and requires monthly payments of $11,292 to be applied first to
interest at the rate of 8% per annum and the balance to reduction of principal.
Under the terms of the new mortgage, Wendover is required to maintain an escrow
account for tenant improvements and leasing commissions. In addition, monthly
escrow deposits are required for payments of real estate taxes and insurance.
At December 31, 1995, the escrow account for tenant improvements and leasing
commissions amounted to $95,186 (all of which was reimbursed in 1996), while the
escrow account for real estate taxes and insurance amounted to $6,415.
The following is a schedule by years of future amortization payments required by
the mortgage:
Year Ending
December 31
1996 $ 33,026
1997 35,767
1998 38,736
1999 41,951
2000 45,433
2001 (maturity) 1,100,973
Total $ 1,295,886
Note 4 - Partners' Equity
Pursuant to a public offering, 11,500 limited partnership units were sold at
$1,000 per interest. During 1994, partners holding 45 units abandoned their
Partnership interest, accordingly, the calculations of net income (loss) per
limited partner interest in 1995 and 1994 are based on 11,455 interests
outstanding.
For income tax purposes, the limited partners share 99% and the General Partner
1% (subordinated as defined in the partnership agreement) in all profits or
losses from operations until the limited partners have received an 8% cumulative
preferred return on their invested capital. Thereafter, the limited partners
share 90% and the General Partner shares 10% in the profits or losses from
operations.
Cash distributions from sales or refinancings, if any, shall be made to the
partners to the extent available and, as more fully described in the partnership
agreement, as follows: first, to each partner in an amount equivalent to the
positive amount of such partner's capital account on the date of distribution
after adjustment; second, to the limited partners, until the limited partners
have received an amount equal to their original invested capital; third, 99% to
the limited partners equal to any unpaid preferred return arrearage; and fourth,
any excess 85% to the limited partners and 15% to the general partner.
Distributions in liquidation to the partners shall be made in accordance with
the terms of the preceding two paragraphs, as appropriate.
In December 1995, the Partnership approved a cash distribution to Limited
Partners in the amount of $114,550 ($10 per interest) to be paid in February
1996. A similar distribution was declared in December 1994, and paid to Limited
Partners in February 1995. No distributions were made or accrued to the General
Partner, since the Limited Partners must receive their original invested capital
plus any preferred return arrearage before payment to the General Partner. As
of December 31, 1995, the unpaid preferred return arrearage totaled $7,188,362.
Note 5 - Commitments
Leases
The Partnership leases office and warehouse space in the Wendover property to
tenants under lease agreements which expire on various dates through 2002. The
following is a schedule by year of the minimum future rentals, excluding
escalations, required under these leases as of December 31, 1995:
Year Ended
December 31
1996 $ 230,260
1997 171,917
1998 162,962
1999 91,916
2000 50,522
Thereafter 38,824
Total $ 746,401
Three tenants of Wendover individually account for in excess of 10% of the gross
revenue of the property. One of those tenants is currently on a month-to-month
basis, while leases for the other two tenants expire in December 1996 and
January 1999.
Management agreements
The Partnership has entered into an agreement with IFGP Corporation ("Insignia")
which provides for Insignia or its affiliates to perform certain management and
administrative duties for the Partnership. Fees paid to Insignia affiliates
during each of 1995 and 1994, amounted to $19,871.
The Partnership has also engaged Insignia affiliates to manage the Wendover
property under an agreement which provides for fees equal to 5% of monthly gross
revenue. Insignia has assigned a portion of its fees to Wynnewood. Management
fees earned by Wynnewood during 1995 and 1994 amounted to $6,295 and $6,385,
respectively.
Note 6 - Reconciliation of financial and tax net income (loss)
The following is a reconciliation of the Partnership's net income (loss) for
financial and tax reporting purposes:
Years Ended
December 31
1995 1994
Financial net income (loss) $ (16,349) $1,694,719
(Deficiency) of book over tax depreciation (76,676) (76,050)
Deferred rent income (22,376) (7,552)
Other (4,472) 6,846
Tax net income (loss) $(119,873) 1,617,963
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
There have been no changes in or disagreements with the accountants on any
matter of accounting principles, practices or financial statement disclosure.
PART III
Item 9. Directors and Executive Officers, Promoters and Control Persons,
Compliance with Section 16(a) of the Exchange Act
Effective February 3, 1993, the General Partner of the Partnership, DBL
Properties Corporation, a New York Corporation, became a wholly-owned
subsidiary of The Wynnewood Company, Inc. which is wholly-owned by William D.
Clements. Prior to that date, DBLR had been the sole stockholder of the General
Partner. The General Partner has responsibility for all aspects of the
Partnership's operations.
The directors and executive officers of the General Partner are as follows:
Name Position
William D. Clements President, Treasurer, Assistant Secretary
and Director
Robert A. Gauthier Vice President, Secretary and Director
WILLIAM D. CLEMENTS, age 56. Mr. Clements has been President since
February 1993 and was Vice President from 1990 until then. He was Chairman of
the Board from 1989 to 1990, and was a Vice President in the Corporate Finance
Department of Drexel Burnham Lambert Incorporated from 1985-1990. Prior to that
he was a Senior Vice President of DBLR from 1983 and a Vice President from 1978.
He received his BA degree from Siena College and his MBA from the Wharton
Graduate School of the University of Pennsylvania.
ROBERT A. GAUTHIER, age 42. Mr. Gauthier has been Vice President and
Secretary of the General Partner since February 1993. He is also Vice President
of Operations, Rocky Mountain Division of Capstar Hotels, a hotel management
firm, since 1992. Prior to then, he was the manager of two hotels owned by DBL
Airport Valley Limited Partnership from 1987 to 1992. He has spent his entire
career in the hotel industry after receiving a BA from California Polytechnical
State University.
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
any person who owns more than ten percent of the outstanding limited partnership
interests and each of the officers and directors of the general partner, DBL
Properties Corporation, to file with the Securities and Exchange Commission and
the Partnership initial reports of ownership of limited partnership interests in
the Partnership within certain prescribed time periods (regardless of whether
the officers or directors of DBL Properties Corporation own any limited
partnership interests) and to file further reports within prescribed time
periods to report any change in such ownership. To the Partnership's knowledge,
all Section 16(a) filing requirements applicable to officers and directors of
DBL Properties Corporation or to greater than ten percent owners of limited
partnership interests were complied with.
Item 10. Executive Compensation
Officers and directors of the General Partner do not and will not receive
any direct compensation for services rendered by them in such capacities.
Although the Partnership is required to pay fees to the General Partner and/or
its affiliates upon property acquisition, for property management, and for real
estate commissions, and the General Partner is also entitled to receive cash
distributions from the operation and liquidation of the Partnership, no such
fees, payments or distributions were made to the General Partner in 1995.
Certain payments, including payments for management fees, were paid to
affiliates of the General Partner in 1995, as described under "Item 12" hereto.
As of January 1, 1992, the Partnership engaged IFGP Corporation and certain
affiliates to provide management and administration services to the Partnership.
For a complete description of Management Compensation, see the discussion under
the caption, "Management Compensation" in the Prospectus, which discussion is
hereby incorporated by reference. The General Partner of the Partnership may be
reimbursed for its direct expenses relating to the offering, the administration
and the operations of the Partnership's real property investments. For a
further discussion of expenses incurred with related parties and with
management, see "Note 5" to the Financial Statements which is included in "Item
7" above, to which reference is hereby made.
Item 11. Security Ownership of Certain Beneficial Owners and Management
At December 31, 1995, no person or group is known to own more than 5% of
the outstanding Interests of the Partnership.
No officer or director of the General Partner of the Partnership owns any
limited partnership Interests, nor do they possess a right to acquire beneficial
ownership of Interests.
The General Partner of the Partnership, DBL Properties Corporation, became
a wholly-owned subsidiary of The Wynnewood Company, Inc. in February 1993, which
is in turn a corporation wholly-owned by Mr. William D. Clements.
Item 12. Certain Relationships and Related Transactions
Reference is hereby made to "Note 5" to the Financial Statements which is
included in "Item 7", and "Items 9, 10 and 11" above for a description of
certain relationships and related transactions.
Item 13. Exhibits and Reports on Form 8-K:
(a) Exhibits: See Exhibit Index contained herein.
(b) Reports on Form 8-K filed during the fourth quarter of 1995: None
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES
By: DBL Properties Corporation
General Partner
By: /s/William D. Clements
William D. Clements
President
Date: March 18, 1996
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the Registrant and in the capacities and on
the dates indicated.
/s/Robert A. Gauthier Director March 18, 1996
Robert A. Gauthier
/s/William D. Clements President and March 18, 1996
William D. Clements Director
EXHIBITS INDEX
Exhibit
3.1 Prospectus of the Partnership filed pursuant to rule 424(b), dated
November 2, 1982 is hereby incorporated herein by reference.
3.2 Form of Agreement of Limited Partnership of the Partnership -
reference is made to Exhibit A to the Prospectus.
3.3 Certificate of Limited Partnership of the Partnership, which appears
as Exhibit 3.2 to the Registration Statement is hereby incorporated
herein by reference.
10.1 Agreements relating to purchase by the Partnership of Peppertree
Village Apartments in Lakeland, Florida which appears as Exhibit 2.2
to the Registration Statement is hereby incorporated herein by
reference.
10.2 Agreement relating to purchase by the Partnership of an interest in
the Landmark Resort Hotel in Myrtle Beach, South Carolina which
appears as Exhibit 2.1 to the Registration Statement is hereby
incorporated herein by reference.
10.3 Agreement relating to purchase by the Partnership of the Wendover
Business Park Phase I in Greensboro, North Carolina, for which a
Report on Form 8-K was filed with the Commission on July 14, 1983
and was amended on November 18, 1983, which report is hereby
incorporated herein by reference.
10.4 Agreement relating to purchase by the Partnership for an interest in
Airport Office Park in Phoenix, Arizona, for which a Report on Form
8-K was filed with the Commission on August 18, 1983, and was
amended on November 18, 1983, which report is hereby incorporated
herein by reference.
10.5 Loan agreement relating to the refinancing of the Landmark Resort
Hotel in Myrtle Beach, South Carolina, for which a Report on Form 8-
K was filed with the commission on March 3, 1987, is listed below as
Exhibit 28.4, and is hereby incorporated herein by reference.
10.6 Contracts related to refinancing of the debt of Wendover Business
Park Phase I were filed as Exhibit 10.6 to the Report on Form 10-KSB
for the fiscal year ended December 31, 1993, and are hereby
incorporated herein by reference:
(a) Mortgage note dated January 13, 1994 between Drexel
Burnham Lambert Real Estate Associates, a New York limited
partnership, and United Family Life Insurance Company, a
Georgia corporation.
(b) Deed of Trust and Security Agreement dated January 13,
1994 between Drexel Burnham Lambert Real Estate
Associates, a New York limited partnership, and Stewart
Title Guaranty Company for the benefit of United Family
Life Insurance Company, a Georgia corporation.
(c) Assignment of Leases, Rents, Contracts, and Agreements
dated January 13, 1994 from Drexel Burnham Lambert Real
Estate Associates, a New York limited partnership, to
United Family Life Insurance Company, a Georgia
corporation.
(d) Hazardous Material Indemnification Agreement dated January
13, 1994 between Drexel Burnham Lambert Real Estate
Associates, a New York limited partnership, and United
Family Life Insurance Company, a Georgia corporation.
(e) Escrow Agreement dated January 13, 1994 by and between
United Family Life Insurance Company, a Georgia
corporation, Drexel Burnham Lambert Real Estate
Associates, a New York limited partnership, and Dickinson,
Logan, Todd and Barber, Inc. (the "Escrow Agent").
10.7 Exchange Agreement effective January 13, 1994 between Drexel Burnham
Lambert Real Estate Associates, a New York limited partnership, and
the DBL Liquidating Trust, a trust established under the laws of New
York was filed as Exhibit 10.7 to Report 10-KSB for fiscal year
ended December 31, 1993, and is hereby incorporated herein by
reference.
27 Financial Data Schedule
99.1 Special Report/Acquisition Bulletin dated July 1, 1983 is hereby
incorporated herein by reference.
99.2 Report on Form 8-K filed July 14, 1983 and amended November 18, 1983
regarding the purchase of Wendover Business Park Phase I in
Greensboro, North Carolina is hereby incorporated herein by
reference.
99.3 Report on Form 8-K filed August 18, 1983 and amended November 18,
1983, regarding the acquisition of a 50% interest in Airport Office
Park located in Phoenix, Arizona is hereby incorporated herein by
reference.
99.4 Report on Form 8-K filed March 3, 1987 regarding the refinancing and
renovation of the Landmark Resort Hotel is hereby incorporated
herein by reference.
99.5 Report on Form 8-K filed March 10,1987 regarding refinancing of the
Airport Office Park is hereby incorporated herein by reference.
99.6 Report on Form 8-K filed May 5, 1988 regarding the suspension of
cash distributions to Limited Partners is hereby incorporated herein
by reference.
99.7 Report on Form 8-K filed October 11,1989 regarding the change in
control of the parent company of the General Partner is hereby
incorporated herein by reference.
99.8 Report on Form 8-K filed March 20, 1990 regarding the foreclosure
sale of Airport Office Park is hereby incorporated herein by
reference.
99.9 Landmark Associates Loan Modification Agreement dated May 1, 1990
and Letter Agreement dated March 5, 1991.
99.10 Report on Form 8-K filed February 3, 1993 regarding the sale of
outstanding stock of the General Partner is hereby incorporated
herein by reference.
99.11 Report on Form 8-K filed January 13, 1993 regarding the foreclosure
sale of Landmark Resort Hotel is hereby incorporated herein by
reference.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Drexel
Burnham Lambert Real Estate Associates 1995 Year-End 1995 10-KSB and is
qualified in its entirety by reference to such 10-KSB.
</LEGEND>
<CIK> 0000700951
<NAME> DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 302,236
<SECURITIES> 0
<RECEIVABLES> 15,688
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 2,929,482
<DEPRECIATION> 1,228,975
<TOTAL-ASSETS> 2,208,724
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 1,295,886
0
0
<COMMON> 0
<OTHER-SE> 749,117
<TOTAL-LIABILITY-AND-EQUITY> 2,208,724
<SALES> 0
<TOTAL-REVENUES> 349,453
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 365,803
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 104,805
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (16,350)
<EPS-PRIMARY> (1.42)
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
</FN>
</TABLE>
