FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY OR TRANSITIONAL REPORT
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 March 31, 1997
or
[ ] 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)
March 31, 1997
Assets
Cash and cash equivalents:
Unrestricted $ 141,446
Restricted--tenant security deposits 11,879
Accounts receivable 3,453
Deposits with mortgagee 13,664
Deferred charges 84,277
Deferred rental income 10,008
Real and personal property:
Land $ 227,104
Buildings and improvements 2,891,614
3,118,718
Less accumulated depreciation (1,358,450) 1,760,268
$ 2,024,995
Liabilities and Partners' Equity (Deficit)
Liabilities
Accrued liabilities:
Interest $ 8,639
Real estate taxes 8,823
Professional fees 18,088 $ 35,550
Deposits payable 9,101
Mortgage payable 1,254,241
Total liabilities 1,298,892
Partners' equity (deficit)
General partner (46,936)
Limited partners (11,500 units issued
and 11,455 units outstanding) 773,039 726,103
$ 2,024,995
See Notes to Financial Statements
b) DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES
(A Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
1997 1996
Revenues:
Rental operations $ 85,432 $ 83,127
Interest income 1,801 3,325
Total revenue 87,233 86,452
Expenses:
Rental operations 25,524 25,333
General and administrative 11,262 12,001
Mortgage interest 25,257 25,864
Depreciation and amortization 37,508 26,961
Total expenses 99,551 90,159
Net loss $ (12,318) $ (3,707)
Net loss per limited partner interest $ (1.06) $ (.32)
Average limited partner units outstanding 11,455 11,455
See Notes to Financial Statements
c) DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES
(A Limited Partnership)
STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
(Unaudited)
For the Three Months Ended March 31, 1997
General Limited
Partner Partners Total
Partners' equity (deficit) at
December 31, 1996 $ (46,813) $ 785,234 $ 738,421
Net loss for the three months
ended March 31, 1997 (123) (12,195) (12,318)
Partners' equity (deficit) at
March 31, 1997 $ (46,936) $ 773,039 $ 726,103
See Notes to Financial Statements
d) DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (12,318) $ (3,707)
Adjustments to reconcile net loss to net
cash (used in)provided by operating activities:
Depreciation and amortization 37,508 26,961
Deferred rent (23,008) --
Change in accounts:
Tenant security deposits (205) 1,754
Accounts receivable 4,263 1,315
Deferred charges (9,692) (5,152)
Deposits with mortgagee (3,139) 90,907
Accounts payable (53,502) (1,814)
Accrued liabilities 3,411 (3,264)
Deposits payable (2,573) --
Net cash (used in) provided by
operating activities (59,255) 107,000
Cash flows from investing activities:
Additions to real and personal property (46,200) (10,506)
Net cash used in investing activities (46,200) (10,506)
Cash flows from financing activities:
Repayment of mortgage payable (8,619) (8,011)
Distributions to partners -- (114,550)
Net cash used in financing activities (8,619) (122,561)
Net decrease in cash and cash equivalents (114,074) (26,067)
Cash and cash equivalents at beginning of period 255,520 302,236
Cash and cash equivalents at end of period $ 141,446 $ 276,169
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 25,257 $ 25,864
<FN>
See Notes to Financial Statements
</TABLE>
e) DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES
(A Limited Partnership)
Notes to Financial Statements
(Unaudited)
March 31, 1997
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 month period ended March 31, 1997,
are not necessarily indicative of the results that may be expected for the
fiscal year ending December 31, 1997. 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, 1996.
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 1996 balances to conform to the
1997 presentation.
NOTE 3 - RELATED PARTY TRANSACTIONS
For the three months ended March 31, 1997 and 1996, the Partnership paid
management fees of $1,583 and $1,536, 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 three month period ending March 31, 1997, the Partnership realized a net
loss of $12,318 compared to a net loss of $3,707 for the corresponding period of
1996. The increase in net loss is primarily attributable to an increase in
depreciation expense. Depreciation expense increased as a result of the
acquisition of approximately $151,000 of property improvements and replacements
during the fourth quarter 1996 and first quarter 1997.
Liquidity and Capital Resources
At March 31, 1997, the Partnership held cash of $141,446. The present cash
reserves of the Partnership are believed to be sufficient to meet the
foreseeable needs of the Partnership.
As of March 31, 1997, the Partnership's remaining property was approximately 85%
leased. Tenant rent concessions related to a new tenant occupying approximately
14,000 sq. ft. expired in March, 1997. The tenant is now obligated to make
monthly rental payments. Tenant improvements and leasing commissions in
connection with this lease were substantial and were 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. The lease of another tenant occupying 3,150
sq. ft. expires at the end of April, 1997. The tenant has indicated their
intention to renew its lease. Also a tenant occupying 6,960 sq. ft. has vacated
its space prior to the end of the lease. This tenant continues to pay monthly
rent. However, it is anticipated that the space will be leased to a new tenant.
Management has received bids for a capital improvement program to be performed
over the next twelve to eighteen months involving principally roof and parking
lot repairs. Total costs are estimated to be approximately $66,000 of which
$36,000 has been authorized for the current fiscal year. Remaining cash
balances, along with projected cash flows, are believed to be sufficient to meet
estimated capital expenditures and any tenant improvements and leasing
commissions in connection with new leasing.
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 March 31, 1997.
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: May 6, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Drexel
Burnham Lambert Real Estate Associates 1997 First 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 141,446
<SECURITIES> 0
<RECEIVABLES> 3,453
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 3,118,718
<DEPRECIATION> 1,358,450
<TOTAL-ASSETS> 2,024,995
<CURRENT-LIABILITIES> 0
<BONDS> 1,254,241
0
0
<COMMON> 0
<OTHER-SE> 726,103
<TOTAL-LIABILITY-AND-EQUITY> 2,024,995
<SALES> 0
<TOTAL-REVENUES> 87,233
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 99,551
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 25,257
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,318)
<EPS-PRIMARY> (1.06)
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
</FN>
</TABLE>
