FORM 10-KSB--ANNUAL OR TRANSITIONAL REPORT UNDER
SECTION 13 OR 15(D)
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [No Fee Required]
For the fiscal year ended December 31, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [No Fee Required]
For the transition period from to
Commission file number 0-11766
ANGELES PARTNERS XI
(Name of small business issuer in its charter)
California 95-3788040
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (864) 239-1000
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Limited Partnership Units
(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 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. $8,028,000
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 a specified date within the past 60 days. No market exists for
the limited partnership interests of the Registrant, and therefore, no aggregate
market value can be determined.
DOCUMENTS INCORPORATED BY REFERENCE
None
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Angeles Partners XI (the "Partnership" or "Registrant") is a publicly-held
limited partnership organized under the California Uniform Limited Partnership
Act on February 14, 1983. The Partnership's managing general partner is Angeles
Realty Corporation II ("ARC II" or the "Managing General Partner"), a California
corporation and wholly-owned subsidiary of MAE GP Corporation ("MAE GP").
Effective February 25, 1998, MAE GP was merged into Insignia Properties Trust
("IPT"), which was an affiliate of Insignia Financial Group, Inc. ("Insignia").
Effective February 26, 1999, IPT was merged into Apartment Investment and
Management Company ("AIMCO"). Thus the Managing General Partner is now a wholly-
owned subsidiary of AIMCO. Until December 30, 1997, the Elliott Accommodation
Trust, the Elliott Family Partnership, Ltd. and ARC II/AREMCO Partners, Ltd.,
were the non-managing general partners. As of December 31, 1997, the Elliott
Family Partnership, Ltd. acquired the Elliott Accommodation Trust's general
partner interest in the Registrant. The Managing General Partner and the non-
managing general partners are herein collectively referred to as the "General
Partners". The Partnership Agreement provides that the Partnership is to
terminate on December 31, 2035, unless terminated prior to such date.
The Registrant is engaged in the business of operating and holding real
properties for investment. In 1983 and 1984, during its acquisition phase, the
Registrant acquired eight existing apartment properties, a retail/apartment
complex, a retail/office complex, and an office/warehouse complex. In 1991, the
Registrant invested in a joint venture along with two other related
partnerships. The Registrant's ownership in this joint venture is 41.1%. As of
December 31, 1998, the Registrant owns and operates one apartment property and
owns its interest in the joint venture ("Joint Venture") (See Item 2.
"Description of Properties"). On February 26, 1999, the Joint Venture sold its
only investment property, Princeton Meadows Golf Course, to an unaffiliated
third party (see "Subsequent Event" below and "Item 2, Description of
Properties").
Commencing February 14, 1983, the Registrant offered, pursuant to a Registration
Statement filed with the Securities and Exchange Commission, up to 40,000 units
of Limited Partnership Interest (the "Units"), at a purchase price of $1,000 per
Unit with a minimum purchase of 5 Units ($5,000). Upon termination of the
offering, the Registrant sold 40,000 units aggregating $40,000,000. The General
Partners contributed capital in the amount of $30,000 for a 1% interest in the
Partnership. Since its initial offering, the Registrant has not received, nor
are limited partners required to make, additional capital contributions.
A further description of the Partnership's business is included in "Management's
Discussion and Analysis or Plan of Operation" included in "Item 6" of this Form
10-KSB.
The Registrant has no employees. Management and administrative services are
provided by the Managing General Partner and by agents retained by the Managing
General Partner. An affiliate of the Managing General Partner, has been
providing property management services for the Registrant.
The business in which the Partnership is engaged is highly competitive. There
are other residential properties within the market area of the registrant's
property. The number and quality of competitive properties, including those
which may be managed by an affiliate of the Managing General Partner in such
market area, could have a material effect on the rental market for the
apartments at the Registrant's property and the rents that may be charged for
such apartments. While the Managing General Partner and its affiliates are a
significant factor in the United States in the apartment industry, competition
for the apartments is local. In addition, various limited partnerships have
been formed by the Managing General Partner and/or affiliates to engage in
business which may be competitive with the Registrant.
Both the income and expenses of operating the remaining property owned by the
Partnership are subject to factors outside of the Partnership's control, such as
an oversupply of similar properties resulting from overbuilding, increases in
unemployment or population shifts, reduced availability of permanent mortgage
financing, changes in zoning laws, or changes in patterns or needs of users. In
addition, there are risks inherent in owning and operating residential
properties because such properties are susceptible to the impact of economic and
other conditions outside of the control of the Partnership.
There have been, and it is possible there may be other, Federal, state and local
legislation and regulations enacted relating to the protection of the
environment. The Partnership is unable to predict the extent, if any, to which
such new legislation or regulations might occur and the degree to which such
existing or new legislation or regulations might adversely affect the properties
owned by the Partnership.
The Partnership monitors its property for evidence of pollutants, toxins and
other dangerous substances, including the presence of asbestos. In certain
cases environmental testing has been performed, which resulted in no material
adverse conditions or liabilities. In no case has the Partnership received
notice that it is a potentially responsible party with respect to an
environmental clean up site. However, the Joint Venture, in which the
partnership had an equity interest, was responsible for an environmental clean-
up. Upon the sale of the Princeton Meadows Golf Course, the Joint Venture
received documents from the purchaser releasing the joint Venture from any
further responsibility or liability with respect to the clean-up (see "Item 7.
Financial Statements - Note C").
Transfer of Control
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. and Insignia Properties Trust
merged into Apartment Investment and Management Company, a publicly traded real
estate investment trust, with AIMCO being the surviving corporation (the
"Insignia Merger"). As a result, AIMCO ultimately acquired a 100% ownership
interest in Insignia Properties Trust ("IPT"), the entity which controls the
Managing General Partner. The Managing General Partner does not believe that
this transaction will have a material effect on the affairs and operations of
the Partnership.
Subsequent Event
On February 26, 1999, the Joint Venture sold the Princeton Meadows Golf Course
to an unaffiliated third party for gross sale proceeds of $5,100,000. The Joint
Venture received net proceeds of $3,452,000 after payment of closing costs,
resulting in a gain on sale of approximately $2,932,000. The Partnership's 1999
pro-rata share of this gain is expected to be approximately $1,205,000.
Furthermore, as a result of the sale, unamortized loan costs in the amount of
$6,500 were written off. This resulted in an extraordinary loss on early
extinguishment of debt of approximately $6,500. The Partnership's 1999 pro-rata
share of this extraordinary loss is expected to be approximately $2,700.
ITEM 2. DESCRIPTION OF PROPERTY:
The following table sets forth the Partnership's investment in property:
Date of
Property Purchase Type of Ownership Use
Fox Run Apartments 5/27/83 Fee ownership subject Residential Rental
Plainsboro, New to first and second 776 units
Jersey mortgages (1)
(1) Property is held by a Limited Liability Company of which the Registrant is
the sole member.
The Partnership also has a 41.1% investment in the Princeton Meadows Golf Course
Joint Venture ("Joint Venture"). The Partnership entered into a General
Partnership Agreement with Angeles Income Properties, Ltd. II and Angeles
Partners XII, both of which are California partnerships and affiliates of the
Managing General Partner, to form the Joint Venture. The property owned by the
Joint Venture, as of December 31, 1998, is summarized as follows:
Date of
Property Purchase Type of Ownership Use
Princeton Meadows Golf Course 7/26/91 Fee ownership, subject Golf Course
to a first mortgage
Princeton Meadows Golf Course is accounted for by the Partnership on the equity
method of accounting in accordance with its ownership percentage and is included
in "Item 7. Financial Statements" on the balance sheet as an "Investment in
joint venture".
On February 26, 1999, the Joint Venture sold its only investment property,
Princeton Meadows Golf Course, to an unaffiliated third party (see "Item 1,
Subsequent Event").
SCHEDULE OF PROPERTY:
Set forth below for the Registrant's property is the gross carrying value,
accumulated depreciation, depreciable life, method of depreciation and Federal
tax basis.
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
(in thousands) (in thousands)
Fox Run Apartments $ 29,743 $ 18,662 5-20 yrs S/L $ 8,701
See "Note A" of the financial statements included in "Item 7. Financial
Statements" for a description of the Partnership's depreciation policy.
SCHEDULE OF PROPERTY INDEBTEDNESS:
The following table sets forth certain information relating to the loans
encumbering the Registrant's property.
Principal Principal
Balance At Balance
December 31, Interest Period Maturity Due At
Property 1998 Rate Amortized Date (3) Maturity
(in thousands) (in thousands)
Fox Run Apartments
1st mortgage $ 28,000 8.32% 27 years (1) 1/2002 $ 26,916
2nd mortgage 2,400 15.29% 15 years (1) 1/2002 2,192
3rd mortgage (2) 868 11.25% 30 years 1/2002 852
Total $ 31,268 $ 29,960
1) Interest only payments, until February 1999, at which time the monthly
payment will be increased to include principal and interest.
2) Payable to Angeles Mortgage Investment Trust ("AMIT"), an affiliate of the
Managing General Partner. This note is also collateralized by the
Partnership's general partner interest in the Joint Venture.
3) See "Item 7. Financial Statements _ Note D" for information with respect to
the Registrant's ability to prepay these loans, and other information with
respect to the loans.
RENTAL RATES AND OCCUPANCY:
Average annual rental rates and occupancy for 1998 and 1997 for the property:
Average Annual Average Annual
Rental Rates Occupancy
Property 1998 1997 1998 1997
Fox Run Apartments $9,537/unit $9,212/unit 97% 96%
As noted under "Item 1. Description of Business," the real estate industry is
highly competitive. The apartment complex of the Partnership is subject to
competition from other residential apartment complexes in the area. The
Managing General Partner believes that this property is adequately insured and
is in good physical condition, subject to normal depreciation and deterioration
as is typical for assets of this type and age. See "Capital Improvements" below
for information related to budgeted capital improvements at the property. The
apartment complex leases units for terms of one year or less. No residential
tenant leases 10% or more of the available rental space.
REAL ESTATE TAXES AND RATES:
Real estate taxes and rates in 1998 were:
1998 1998
Billing Rate
(in thousands)
Fox Run Apartments $ 781 2.6%
The Partnership has a fiscal year end that is different than the real estate tax
year; therefore, the Registrant's actual property tax expense for the year ended
December 31, 1998 is partially based on 1997 calendar year tax rates which are
slightly different from 1998 rates.
CAPITAL IMPROVEMENTS:
In 1998, the Partnership spent approximately $601,000 on capital improvements at
Fox Run Apartments, primarily consisting of reconstuction activity related to
the 1997 fire which completely destroyed the clubhouse and office. The
Partnership also replaced carpets, cabinets, countertops and appliances at the
property along with land improvements. These improvements were funded from cash
flow. Based on a report received from an independent third party consultant
analyzing necessary exterior improvements and estimates made by the Managing
General Partner on interior improvements, it is estimated that the property
requires approximately $2,192,000 of capital improvements over the near-term.
The Partnership has budgeted, but is not limited to, capital improvements of
approximately $2,021,000 for 1999 at this property, which includes roof repairs,
landscaping and irrigation improvements, and parking lot repairs. The capital
improvements planned for 1999 at the Partnership's property will be made only to
the extent of cash available from operations and Partnership reserves.
ITEM 3. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled ROSALIE NUANES, ET AL. V. INSIGNIA
FINANCIAL GROUP, INC., ET AL. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the Managing General Partner and several of their affiliated
partnerships and corporate entities. The complaint purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia
("Insignia Affiliates") of interests in certain general partner entities, past
tender offers by Insignia Affiliates to acquire limited partnership units, the
management of partnerships by Insignia Affiliates as well as a recently
announced agreement between Insignia and Apartment Investment and Management
Company. The complaint seeks monetary damages and equitable relief, including
judicial dissolution of the Partnership. On June 25, 1998, the Managing General
Partner filed a motion seeking dismissal of the action. In lieu of responding to
the motion, the plaintiffs have filed an amended complaint. The Managing
General Partner has filed demurrers to the amended complaint which were heard
during February 1999. No ruling on such demurrers has been received. The
Managing General Partner does not anticipate that costs associated with this
case, if any, to be material to the Partnership's overall operations.
On July 30, 1998, certain entities claiming to own limited partnership interests
in certain limited partnerships whose general partners were, at the time,
affiliates of Insignia filed a complaint entitled EVEREST PROPERTIES, LLC. V.
INSIGNIA FINANCIAL GROUP, INC., ET AL. in the Superior Court of the State of
California, county of Los Angeles. The action involves 44 real estate limited
partnerships (including the Partnership) in which the plaintiffs allegedly own
interests and which Insignia Affiliates allegedly manage or control (the
"Subject Partnerships"). This case was settled on March 3, 1999. The
Partnership is responsible for a portion of the settlement costs. The expense
will not have a material effect on the Partnership's net income.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the quarter ended December 31, 1998, the Unit holders of the Partnership
did not vote on any matter.
PART II
ITEM 5. MARKET FOR THE PARTNERSHIP'S COMMON EQUITY AND RELATED SECURITY HOLDER
MATTERS
The Partnership, a publicly-held limited partnership, offered and sold 40,000
Limited Partnership Units aggregating $40,000,000. The Partnership currently
has 39,627 Limited Partnership Units outstanding held by 2,949 Limited Partners
of record. In 1998, the number of Limited Partnership Units decreased by 10
units due to Limited Partners abandoning their units. In abandoning his or her
Limited Partnership Unit(s), a Limited Partner relinquishes all rights, title
and interest in the Partnership as of the date of abandonment. Affiliates of
the Managing General Partner owned 10,768 units or 27.174% of outstanding
partnership units at December 31, 1998. No public trading market has developed
for the Units, and it is not anticipated that such a market will develop in the
future.
There were no distributions made during 1997 or 1998. Future distributions will
be dependent on the levels of net cash generated from operations, refinancings,
the sale of the property and the availability of cash reserves. The
Partnership's distribution policy will be reviewed on a quarterly basis. There
can be no assurance, however, that the Partnership will generate sufficient
funds from operations after required capital expenditures to permit any
distributions to its partners in 1999 or subsequent periods.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The matters discussed in this Form 10-KSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the disclosure
contained in this Form 10-KSB and the other filings with the Securities and
Exchange Commission made by the Registrant from time to time. The discussion of
the Registrant's business and results of operations, including forward-looking
statements pertaining to such matters, does not take into account the effects of
any changes to the Registrant's business and results of operation. Accordingly,
actual results could differ materially from those projected in the forward-
looking statements as a result of a number of factors, including those
identified herein.
This item should be read in conjunction with the financial statements and other
items contained elsewhere in this report.
Results of Operations
The Partnership recognized net income of approximately $19,000 for the year
ended December 31, 1998, as compared to a net loss of approximately $673,000 for
the year ended December 31, 1997. (See "Note E" of the financial statements for
a Reconciliation of these amounts to the Registrant's Federal taxable income or
loss). The increase in net income is primarily due to an increase in revenues
which was partially offset by an increase in expenses and a loss in equity in
the Registrant's investment in Joint Venture for the year ended December 31,
1998. The increase in revenues is primarily due to an increase in rental income
and the recording in 1998 of a casualty gain as a result of insurance proceeds
received in 1998 from a 1997 fire at Fox Run and to a lesser extent an increase
in other income. The increase in rental income is the result of a combined
increase in occupancy and average rental rates at Fox Run. Other income
increased primarily due to an increase in lease cancellation fees, washer/dryer
collections, and interest income.
In October 1997, there was a fire at Fox Run Apartments that completely
destroyed the clubhouse and office. The undepreciated value of the clubhouse
and office was written off and netted with a portion of the proceeds which was
received in 1997, resulting in no gain or loss recognized in 1997. Total
insurance proceeds have been agreed upon with the insurance carrier and are
estimated to cover the cost of replacement of the assets. A casualty gain of
approximately $421,000 resulting from the recording of these insurance proceeds
was recognized during the twelve months ended December 31, 1998.
The increase in expense was primarily due to an increase in property tax expense
which was the result of an increase in property tax rates. All other expenses
remained relatively constant.
Included in general and administrative expenses at both December 31, 1998 and
1997 are reimbursements to the Managing General Partner allowed under the
Partnership Agreement associated with its management of the Partnership. Costs
associated with the quarterly and annual communications with investors and
regulatory agencies and the annual audit required by the Partnership Agreement
are also included.
The Partnership has a 41.1% investment in the Princeton Meadows Golf Course
Joint Venture. For 1998, the Partnership realized equity in loss of the Joint
Venture of approximately $5,000 versus equity in income of the Joint Venture of
approximately $38,000 in 1997 (see "Item 7. Financial Statements - Note C -
Investment in Joint Venture"). The decrease in net income for the Joint Venture
for the year ended December 31, 1998, versus the year ended December 31, 1997,
can be attributed to an increase in expenses partially offset by a slight
increase in income. In an effort to attract new customers, management has
completed major landscaping projects and renovations to its clubhouse in 1998 to
improve the overall appearance of the golf course. On February 26,1999, the
joint Venture sold Princeton Meadows Golf Course to an unaffiliated third party.
(See "Note J" of the Financial Statements including "Item 7").
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of its investment property to
assess the feasibility of increasing rent, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expense. As part of
this plan, the Managing General Partner attempts to protect the Partnership from
the burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
Managing General Partner will be able to sustain such a plan.
Liquidity and Capital Resources
At December 31, 1998, the Partnership had cash and cash equivalents of
approximately $1,207,000 as compared to approximately $746,000 at December 31,
1997. The increase in cash and cash equivalents is due to $836,000 of cash
provided by operating activities, which was partially offset by $371,000 of cash
used in investing activities and $4,000 of cash used in financing activities.
Cash used in investing activities consisted of capital improvements, partially
offset by net insurance proceeds received as a result of the 1997 fire at Fox
Run. Cash used in financing activities consisted of payments of principal made
on the mortgages encumbering Fox Run. The Registrant invests its working
capital reserves in a money market cash account.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the property to adequately maintain the physical assets
and other operating needs of the Partnership and to comply with Federal, state
and local legal and regulatory requirements. The Partnership has budgeted, but
is not limited to, approximately $2,192,000 in capital improvements for the
Partnership's property in 1999 which includes roof repairs, landscaping and
irrigation improvements and parking lot repairs. The capital expenditures will
be incurred only if cash is available from operations or from partnership
reserves. To the extent that such budgeted capital improvements are completed,
the Registrant's distributable cash flow, if any, may be adversely affected at
least in the short term.
The Registrant's current assets are thought to be sufficient for any near-term
needs (exclusive of capital improvements) of the Registrant. The mortgage
indebtedness of approximately $31,268,000 encumbering Fox Run is being amortized
over periods ranging from 15 to 30 years with balloon payments of $29,960,000
due January 2002. The Managing General Partner may attempt to refinance such
indebtedness and/or sell the property prior to such maturity date. If the
property cannot be refinanced or sold for a sufficient amount, the Partnership
will risk losing such property through foreclosure.
There were no cash distributions during either of the twelve months ended
December 31, 1998, or December 31, 1997. Future cash distributions will depend
on the levels of net cash generated from operations, refinancings, the sale of
the property and the availability of cash reserves. The Partnership's
distribution policy will be reviewed on a quarterly basis. There can be no
assurance, however, that the Partnership will generate sufficient funds from
operations, after required capital expenditures, to permit distributions to its
partners in 1999 or subsequent periods.
Year 2000 Compliance
General Description of the Year 2000 Issue and the Nature and Effects of the
Year 2000 on Information Technology (IT) and Non-IT Systems
The Year 2000 issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year. The Partnership
is dependent upon the Managing General Partner and its affiliates for management
and administrative services ("Managing Agent"). Any of the computer programs or
hardware that have date-sensitive software or embedded chips may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result
in a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices, or engage in similar normal business activities.
Over the past two years, the Managing Agent has determined that it will be
required to modify or replace significant portions of its software and certain
hardware so that those systems will properly utilize dates beyond December 31,
1999. The Managing Agent presently believes that with modifications or
replacements of existing software and certain hardware, the Year 2000 issue can
be mitigated. However, if such modifications and replacements are not made or
not completed in time, the Year 2000 issue could have a material impact on the
operations of the Partnership.
The Managing Agent's plan to resolve Year 2000 issues involves four Phases:
assessment, remediation, testing, and implementation. To date, the Managing
Agent has fully completed its assessment of all the information systems that
could be significantly affected by the Year 2000, and has begun the remediation,
testing and implementation phases on both hardware and software systems.
Assessments are continuing in regards to embedded systems. The status of each
is detailed below.
Status of Progress in Becoming Year 2000 Compliant, Including Timetable for
Completion of Each Remaining Phase
Computer Hardware:
During 1997 and 1998, the Managing Agent identified all of the computer systems
at risk and formulated a plan to repair or replace each of the affected systems.
In August 1998, the mainframe system used by the Managing Agent became fully
functional. In addition to the mainframe, PC-based network servers and routers
and desktop PCs were analyzed for compliance. The Managing Agent has begun to
replace each of the non-compliant network connections and desktop PCs and, as of
December 31, 1998, had completed approximately 75% of this effort.
The total cost to the Managing Agent to replace the PC-based network servers,
routers and desktop PCs is expected to be approximately $1.5 million of which
$1.3 million has been incurred to date. The remaining network connections and
desktop PCs are expected to be upgraded to Year 2000 compliant systems by March
31, 1999.
Computer software:
The Managing Agent utilizes a combination of off-the-shelf, commercially
available software programs as well as custom-written programs that are designed
to fit specific needs. Both of these types of programs were studied, and
implementation plans written and executed with the intent of repairing or
replacing any non-compliant software programs.
During 1998, the Managing Agent began converting the existing property
management and rent collection systems to its management properties Year 2000
compliant systems. The estimated additional costs to convert such systems at
all properties, is $200,000, and the implementation and the testing process is
expected to be completed by March 31, 1999.
The final software area is the office software and server operating systems.
The Managing Agent has upgraded all non-compliant office software systems on
each PC and has upgraded 80% of the server operating systems. The remaining
server operating systems are planned to be upgraded to be Year 2000 compliant by
March 31, 1999.
Operating Equipment:
The Managing Agent has operating equipment, primarily at the property sites,
which needed to be evaluated for Year 2000 compliance. In September 1997, the
Managing Agent began taking a census and inventory of embedded systems
(including those devices that use time to control systems and machines at
specific properties, for example elevators, heating, ventilating, and air
conditioning systems, security and alarm systems, etc.).
The Managing Agent has chosen to focus its attention mainly upon security
systems, elevators, heating, ventilating and air conditioning systems, telephone
systems and switches, and sprinkler systems. While this area is the most
difficult to fully research adequately, management has not yet found any major
non-compliance issues that put the Managing Agent at risk financially or
operationally. The Managing Agent intends to have a third-party conduct an
audit of these systems and report their findings by March 31, 1999.
Any of the above operating equipment that has been found to be non-compliant to
date has been replaced or repaired. To date, these have consisted only of
security systems and phone systems. As of December 31, 1998 the Managing Agent
has evaluated approximately 86% of the operating equipment for the Year 2000
compliance.
The total cost incurred for all properties managed by the Managing Agent as of
December 31, 1998 to replace or repair the operating equipment was approximately
$400,000. The Managing Agent estimates the cost to replace or repair any
remaining operating equipment is approximately $325,000, which is expected to be
completed by April 30, 1999.
The Managing Agent continues to have "awareness campaigns" throughout the
organization designed to raise awareness and report any possible compliance
issues regarding operating equipment within our enterprise.
Nature and Level of Importance of Third Parties and Their Exposure to the Year
2000
The Managing Agent continues to conduct surveys of its banking and other vendor
relationships to assess risks regarding their Year 2000 readiness. The Managing
Agent has banking relationships with three major financial institutions, all of
which have indicated their compliance efforts will be complete before May 1999.
The Managing Agent has updated data transmission standards with two of the three
financial institutions. The Managing Agent's contingency plan in this regard is
to move accounts from any institution that cannot be certified Year 2000
compliant by June 1, 1999.
The Partnership does not rely heavily on any single vendor for goods and
services, and does not have significant suppliers and subcontractors who share
information systems (external agent). To date the Partnership is not aware of
any external agent with a Year 2000 compliance issue that would materially
impact the Partnership's results of operations, liquidity, or capital resources.
However, the Partnership has no means of ensuring that external agents will be
Year 2000 compliant.
The Managing Agent does not believe that the inability of external agents to
complete their Year 2000 remediation process in a timely manner will have a
material impact on the financial position or results of operations of the
Partnership. However, the effect of non-compliance by external agents is not
readily determinable.
Costs to Address Year 2000
The total cost of the Year 2000 project to the Managing Agent is estimated at
$3.5 million and is being funded from operating cash flows. To date, the
Managing Agent has incurred approximately $2.8 million ($0.6 million expensed
and $2.2 million capitalized for new systems and equipment) related to all
phases of the Year 2000 project. Of the total remaining project costs,
approximately $0.5 million is attributable to the purchase of new software and
operating equipment, which will be capitalized. The remaining $0.2 million
relates to repair of hardware and software and will be expensed as incurred.
The Partnership's portion of these costs are not material.
Risks Associated with the Year 2000
The Managing Agent believes it has an effective program in place to resolve the
Year 2000 issue in a timely manner. As noted above, the Managing Agent has not
yet completed all necessary phases of the Year 2000 program. In the event that
the Managing Agent does not complete any additional phases, certain worst case
scenarios could occur. The worst case scenarios could include elevators,
security and heating, ventilating and air conditioning systems that read
incorrect dates and operate with incorrect schedules (e.g., elevators will
operate on Monday as if it were Sunday). Although such a change would be
annoying to residents, it is not business critical.
In addition, disruptions in the economy generally resulting from Year 2000
issues could also adversely affect the Partnership. The Partnership could be
subject to litigation for, among other things, computer system failures,
equipment shutdowns or failure to properly date business records. The amount of
potential liability and lost revenue cannot be reasonably estimated at this
time.
Contingency Plans Associated with the Year 2000
The Managing Agent has contingency plans for certain critical applications and
is working on such plans for others. These contingency plans involve, among
other actions, manual workarounds and selecting new relationships for such
activities as banking relationships and elevator operating systems.
ITEM 7. FINANCIAL STATEMENTS
ANGELES PARTNERS XI
LIST OF FINANCIAL STATEMENTS
Report of Ernst & Young, LLP, Independent Auditors
Consolidated Balance Sheet - December 31, 1998
Consolidated Statements of Operations - Years ended December 31, 1998 and 1997
Consolidated Statements of Changes in Partners' Deficit - Years ended December
31, 1998 and 1997
Consolidated Statements of Cash Flows - Years ended December 31, 1998 and 1997
Notes to Consolidated Financial Statements
Report of Ernst & Young LLP, Independent Auditors
The Partners
Angeles Partners XI
We have audited the accompanying consolidated balance sheet of Angeles Partners
XI as of December 31, 1998, and the related consolidated statements of
operations, changes in partners' deficit and cash flows for each of the two
years in the period ended December 31, 1998. 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 the
Partnership's 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 consolidated financial position of Angeles Partners
XI at December 31, 1998, and the consolidated results of its operations and its
cash flows for each of the two years in the period ended December 31, 1998, in
conformity with generally accepted accounting principles.
/S/ ERNST & YOUNG LLP
Greenville, South Carolina
March 3, 1999
ANGELES PARTNERS XI
CONSOLIDATED BALANCE SHEET
(in thousands, except unit data)
December 31, 1998
Assets
Cash and cash equivalents $ 1,207
Receivables and deposits 1,209
Other assets 346
Investment in, and advances of $164 to,
joint venture (Note C) 196
Investment property (Notes D and G):
Land $ 3,998
Buildings and related personal property 25,745
29,743
Less accumulated depreciation (18,662) 11,081
$ 14,039
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 58
Due to affiliates (Note F) 33
Tenant security deposits 562
Other liabilities 657
Notes payable, (Notes D, G, and F) 31,268
Partners' Deficit
General partners $ (501)
Limited partners (39,627 units
issued and outstanding) (18,038) (18,539)
$ 14,039
See Accompanying Notes to Consolidated Financial Statements
ANGELES PARTNERS XI
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except unit data)
Years Ended December 31,
1998 1997
Revenues:
Rental income $ 7,204 $ 6,877
Other income 403 283
Casualty gain (Note I) 421 --
Total revenues 8,028 7,160
Expenses:
Operating 2,558 2,493
General and administrative 216 183
Depreciation 1,514 1,516
Interest 2,907 2,917
Property taxes 809 762
Total expenses 8,004 7,871
Equity in (loss) income of joint venture (Note C) (5) 38
Net income (loss) $ 19 $ (673)
Net income (loss) allocated to general partners (1%) $ -- $ (7)
Net income (loss) allocated to limited partners (99%) 19 (666)
Net income (loss) $ 19 $ (673)
Net income (loss) per Partnership unit $ .48 $ (16.81)
See Accompanying Notes to Consolidated Financial Statements
ANGELES PARTNERS XI
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partners Partners Total
Original capital contributions 40,000 $ 30 $ 40,000 $ 40,030
Partners' deficit at
December 31, 1996 39,637 $ (494) $ (17,391) $ (17,885)
Net loss for the year
ended December 31, 1997 -- (7) (666) (673)
Partners' deficit at
December 31, 1997 39,637 $ (501) $ (18,057) $ (18,558)
Net income for the year
ended December 31, 1998 -- -- 19 19
Abandonment of Limited
Partnership units (Note H) (10) -- -- --
Partners' deficit at
December 31, 1998 39,627 $ (501) $ (18,038) $ (18,539)
See Accompanying Notes to Consolidated Financial Statements
ANGELES PARTNERS XI
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended December 31,
1998 1997
Cash flows from operating activities:
Net income (loss) $ 19 $ (673)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Equity in (income) loss of joint venture 5 (38)
Depreciation 1,514 1,516
Amortization of loan costs 113 122
Casualty gain (421) --
Change in accounts:
Receivables and deposits (202) 16
Other assets 14 (21)
Accounts payable (14) (518)
Tenant security deposit liabilities 21 30
Due to affiliates (437) (28)
Other liabilities 224 88
Net cash provided by operating activities 836 494
Cash flows from investing activities:
Property improvements and replacements (601) (438)
Advances to joint venture -- (7)
Net proceeds from casualty 230 50
Net cash used in investing activities (371) (395)
Cash flows from financing activities:
Payments on mortgage notes payable (4) (3)
Loan costs paid -- (12)
Net cash used in financing activities (4) (15)
Increase in cash and cash equivalents 461 84
Cash and cash equivalents at beginning of period 746 662
Cash and cash equivalents at end of period $ 1,207 $ 746
Supplemental disclosure of cash flow information:
Cash paid for interest $ 2,794 $ 2,631
Supplemental disclosure of non-cash activity:
At December 31, 1997, accounts payable was adjusted by approximately $50,000 for
non-cash amounts in connection with property improvements and replacements.
See Accompanying Notes to Consolidated Financial Statements
ANGELES PARTNERS XI
Notes to Consolidated Financial Statements
December 31, 1998
NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization: Angeles Partners XI (the "Partnership" or "Registrant") is a
California limited partnership organized on February 14, 1983, to acquire and
operate residential and commercial real estate properties. The Partnership's
managing general partner is Angeles Realty Corporation II ("ARC II" or the
"Managing General Partner"), an affiliate of Insignia Financial Group, Inc.
("Insignia") and a wholly-owned subsidiary of MAE GP Corporation ("MAE GP").
Effective February 25, 1998, MAE GP was merged into Insignia Properties Trust
("IPT"), which was an affiliate of Insignia Financial Group, Inc. ("Insignia").
Effective February 26, 1999, IPT was merged into Apartment Management and
Investment Company ("AIMCO") (See "Note B _ Transfer of Control"). Thus the
Managing General Partner is now a wholly-owned subsidiary of AIMCO. Until
December 31, 1997, the Elliott Accommodation Trust, the Elliott Family
Partnership, Ltd. and ARC II/AREMCO Partners, Ltd. were the non-managing general
partners. As of December 31, 1997, the Elliott Family Partnership, Ltd.
acquired the Elliott Accommodation Trust's general partner interest in the
Registrant. The Managing General Partner and the non-managing general partners
are herein collectively referred to as the "General Partners". The Partnership
Agreement provides that the Partnership is to terminate on December 31, 2035,
unless terminated prior to such date. As of December 31, 1998, the Partnership
operates one residential property located in Plainsboro, New Jersey and owns a
general partnership interest in a joint venture.
Principles of Consolidation: For the year ended December 31, 1997, the
Partnership's financial statements included the accounts of Fox Run AP XI, L.P.,
and Fox Run AP XI GP, L.P., of which the Partnership owned 99% limited
partnership interests. The Partnership could remove the general partner of Fox
Run AP XI, L.P., and Fox Run AP XI GP, L.P.; therefore, these partnerships were
controlled by the Partnership.
On December 31, 1997, the 1% general partner interest of Fox Run AP XI, L.P. was
transferred to AP XI Fox Run GP, LLC, a single member LLC wholly-owned by the
Registrant. Since the Registrant also owned the 99% limited partner interest of
Fox Run AP XI, L.P., 100% of this partnership became effectively owned by the
Registrant. Also, on December 31, 1997, the 1% partner of Fox Run AP XI GP, L.P.
withdrew from the Partnership and its interest was transferred to the
Registrant. Immediately following this transaction, Fox Run AP XI GP, L.P. was
left with only a single partner, effectively terminating the Partnership.
For both years ended December 31, 1997 and 1998, all interpartnership balances
have been eliminated.
Allocations and Distributions to Partners: In accordance with the Agreement,
any gain from the sale or other disposition of Partnership assets will be
allocated first to the managing general partner to the extent of the amount of
any brokerage compensation and incentive interest to which the Managing General
Partner is entitled. Any gain remaining after said allocation will be allocated
to the General Partners and Limited Partners in proportion to their interests in
the Partnership.
The Partnership will allocate other profits and losses 1% to the General
Partners and 99% to the Limited Partners.
Except as discussed below, the Partnership will allocate distributions 1% to the
General Partners and 99% to the Limited Partners.
Upon the sale or other disposition, or refinancing, of any asset of the
Partnership, the Distributable Net Proceeds shall be distributed as follows: (i)
First, to the Partners in proportion to their Original Capital Investment
applicable to the property; (ii) Second, to the Partners until the Limited
Partners have received distributions from all sources equal to their 6%
Cumulative Distribution; (iii) Third, to the Managing General Partner until it
has received an amount equal to the difference between (a) 3% of the Aggregate
Disposition Prices (as defined in the Partnership Agreement) of all properties
and investments sold or otherwise disposed of, or refinanced by the Partnership,
on a cumulative basis and (b) all distributions previously received by the
Managing General Partner pursuant to this clause; (iv) Fourth, to the Partners
until the Limited Partners have received distributions from all sources equal to
an additional cumulative return of 4% per annum on their Adjusted Capital
Investment; and (v) Thereafter, 85% to the Limited Partners and Non-Managing
General Partners in proportion to their interests and 15% ("Incentive Interest")
to the Managing General Partner.
Fair Value of Financial Instruments: Statement of Financial Accounting Standards
("SFAS") No. 107, "Disclosures about Fair Value of Financial Instruments", as
amended by SFAS No. 119, "Disclosures about Derivative Financial Instruments and
Fair Value of Financial Instruments", requires disclosure of fair value
information about financial instruments, whether or not recognized in the
balance sheet, for which it is practicable to estimate fair value. Fair value
is defined in the SFAS as the amount at which the instruments could be exchanged
in a current transaction between willing parties, other than in a forced or
liquidation sale. The Partnership believes that the carrying amount of its
financial instruments (except for long term debt) approximates their fair value
due to the short term maturity of these instruments. The fair value of the
Partnership's long term debt, after discounting the scheduled loan payments at
an estimated borrowing rate currently available to the Partnership, approximates
its carrying value.
Cash and Cash Equivalents: Includes cash on hand and in banks, money market
cash accounts, and certificates of deposit with original maturities of less than
90 days. At certain times, the amount of cash deposited at a bank may exceed the
limit on insured deposits.
Tenant Security Deposits: The Partnership requires security deposits from all
apartment lessees for the duration of the lease and such deposits are included
in receivables and deposits. Deposits are refunded when the tenant vacates the
apartment if there has been no damage to the unit and the tenant is current on
its rental payments.
Loan Costs: Loan costs of approximately $564,000 at December 31, 1998, are
included in other assets on the balance sheet and are being amortized on a
straight-line basis over the life of the loan. Accumulated amortization of
approximately $235,000 at December 31, 1998, is also included in other assets.
Investment in Joint Venture: The Partnership accounts for its 41.1% investment
in Princeton Meadows Golf Course Joint Venture (the "Joint Venture") using the
equity method of accounting (see "Note C"). Under the equity method of
accounting, the Partnership records its equity interest in earnings or losses of
the Joint Venture; however, the investment in the Joint Venture will be recorded
at an amount less than zero (a liability) to the extent of the Partnership's
share of net liabilities of the Joint Venture.
Investment Properties: The Partnership owns and operates one investment
property consisting of an apartment complex, which is stated at cost.
Acquisition fees are capitalized as a cost of real estate. In accordance with
Financial Accounting Standards Board Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,"
the Partnership records impairment losses on long-lived assets used in
operations when events and circumstances indicate that the assets might be
impaired and the undiscounted cash flows estimated to be generated by those
assets are less than the carrying amounts of those assets. No adjustments for
impairment of value were necessary for the years ended December 31, 1998 or
1997.
Depreciation: Depreciation is calculated by the straight-line and accelerated
methods over the estimated lives of the rental property and related personal
property. For Federal income tax purposes, the accelerated cost recovery method
is used (1) for real property over 18 years for additions after March 15, 1984,
and before May 9, 1985, and 19 years for additions after May 8, 1985, and before
January 1, 1987, and (2) for personal property over 5 years for additions prior
to January 1, 1987. As a result of the Tax Reform Act of 1986, for additions
after December 31, 1986, the alternative depreciation system is used for
depreciation of (1) real property additions over 40 years, and (2) personal
property additions over 6-20 years.
Leases: The Partnership generally leases apartment units for twelve-month terms
or less. The Partnership recognizes income as earned on its leases. In
addition, the Managing General Partner's policy is to offer rental concessions
during particularly slow months or in response to heavy competition from other
similar complexes in the area. Concessions are charged against rental income as
incurred.
Segment Reporting: In June 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 131, Disclosure about
Segments of an Enterprise and Related Information ("Statement 131"), which is
effective for years beginning after December 15, 1997. Statement 131
established standards for the way that public business enterprises report
information about operating segments in annual financial statements and requires
that those enterprises report selected information about operating segments in
interim financial reports. It also establishes standards for related
disclosures about products and services, geographic areas, and major customers
(see "Note K" for detailed disclosure of the Partnership's segments).
Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Advertising: The Partnership expenses the costs of advertising as incurred.
Advertising expense was approximately $54,000 and $52,000 for the years ended
December 31, 1998 and 1997, respectively and was charged to expense as incurred.
Reclassification: Certain reclassifications have been made to the 1997
information to conform to the 1998 presentation.
NOTE B - TRANSFER OF CONTROL
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. and Insignia Properties Trust
merged into Apartment Investment and Management Company, a publicly traded real
estate investment trust, with AIMCO being the surviving corporation (the
"Insignia Merger"). As a result, AIMCO ultimately acquired a 100% ownership
interest in Insignia Properties Trust ("IPT"), the entity which controls the
Managing General Partner. The Managing General Partner does not believe that
this transaction will have a material effect on the affairs and operations of
the Partnership.
NOTE C - INVESTMENT IN JOINT VENTURE
Condensed balance sheet information of the Joint Venture at December 31, 1998,
is as follows (in thousands):
Assets
Cash $ 118
Other assets 169
Investment property, net 2,036
Total $ 2,323
Liabilities and Partners' Capital
Note payable to AMIT, (Note F) $ 1,567
Other liabilities 671
Partners' capital 85
Total $ 2,323
The condensed statements of operations of the Joint Venture for the years ended
December 31, 1998 and 1997, are summarized as follows:
Years Ended
December 31,
(in thousands)
1998 1997
Revenue $ 1,667 $ 1,628
Costs and expenses (1,681) (1,535)
Net (loss) income $ (14) $ 93
The Partnership realized its 41.1% equity loss of approximately $5,000 and
equity income of approximately $38,000 in the Joint Venture for the years ended
December 31, 1998 and 1997, respectively.
The Princeton Meadows Golf Course property had an underground fuel storage tank
that was removed in 1992. This fuel storage tank caused contamination to the
area. Management installed monitoring wells in the area where the tank was
formerly buried. Some samples from these wells indicated lead and phosphorous
readings that were higher than the range prescribed by the New Jersey Department
of Environmental Protection ("DEP"). The Joint Venture notified DEP of the
findings when they were first discovered. However, DEP did not give any
directives as to corrective action until late 1995.
In November 1995, representatives of the Joint Venture and the New Jersey DEP
met and developed a plan of action to clean-up the contamination site at
Princeton Meadows Golf Course. The Joint Venture has engaged an engineering
firm to conduct consulting and compliance work and a second firm to perform the
field work necessary for the clean-up. Field work is in process, with skimmers
having been installed at three test wells on the site. These skimmers are in
place to detect any residual fuel that may still be in the ground. The expected
completion date of field work should be sometime in 1999. The Joint Venture
originally recorded a liability of $199,000 for the costs of the clean-up. For
the year ended December 31, 1997, the Joint Venture recorded an additional
liability of approximately $45,000 as an adjustment to estimated costs remaining
to complete the clean-up. At December 31, 1998, the balance in the liability
for clean-up costs is approximately $53,000. Funds from the property will be
used to cover this excess. Upon the sale of the Golf Course, as noted below,
the Joint Venture received documents from the Purchaser releasing the joint
Venture from any further responsibility or liability with respect to the clean-
up.
On February 26, 1999, the Joint Venture sold the Princeton meadows Golf Course
to an unaffiliated third party for gross sale proceeds of $5,100,000. The Joint
Venture received net proceeds of $3,452,000 after payment of closing costs,
resulting in a gain on sale of approximately $2,932,000. The Partnership's 1999
pro-rata share of this gain is expected to be approximately $1,205,000.
Furthermore, as a result of the sale, unamortized loan costs in the amount of
$6,500 were written off. This resulted in an extraordinary loss on early
extinguishment of debt of approximately $6,500. The Partnership's 1999 pro-rata
share of this extraordinary loss is expected to be approximately $2,700.
NOTE D - NOTES PAYABLE
The principle terms of notes payable are as follows:
Monthly Principal Principal
Payment Stated Balance Balance At
Including Interest Maturity Due At December 31,
Property Interest Rate Date Maturity 1998
(in thousands) (in thousands)
Fox Run Apartments
1st mortgage $ 194 (1) 8.32% 1/2002 $ 26,916 $ 28,000
2nd mortgage 31 (1) 15.29% 1/2002 2,192 2,400
3rd mortgage 8 (2) 11.25% 1/2002 852 868
Totals $ 233 $ 29,960 $ 31,268
(1) Interest only payments, until February 1999, at which time the monthly
payment will be increased to include principal and interest.
(2) Payable to Angeles Mortgage Investment Trust ("AMIT"). This note is also
collateralized by the Partnership's general partnership interest in the
Joint Venture.
The mortgage notes payable are nonrecourse and are secured by pledge of the
Partnership's investment property and by pledge of revenues from the rental
property. The notes impose prepayment penalties if repaid prior to maturity.
Further, the properties may not be sold subject to existing note indebtedness.
Scheduled principal payments of mortgage notes payable subsequent to December
31, 1998, are as follows (in thousands):
1999 $ 373
2000 445
2001 490
2002 29,960
$ 31,268
NOTE E - INCOME TAXES
The Partnership has received a ruling from the Internal Revenue Service that it
will be classified as a partnership for Federal income tax purposes.
Accordingly, taxable income or loss of the Partnership is reported in the income
tax returns of its partners. No provision for income taxes is made in the
financial statements of the Partnership.
The following is a reconciliation of reported net income (loss) and Federal
taxable income (loss):
1998 1997
(in thousands, except unit data)
Net income (loss) as reported $ 19 $ (673)
Add (deduct)
Depreciation differences 1,144 134
Unearned income (14) 60
Miscellaneous 17 (4)
Federal taxable income (loss) $ 1,166 $ (483)
Federal taxable income (loss)
per limited partnership unit $ 29.14 $ (12.06)
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities (in thousands):
Net liabilities as reported $ (18,539)
Land and buildings 2,896
Accumulated depreciation (5,276)
Syndication and distribution costs 5,261
Other 697
Net deficiency - Federal tax basis $ (14,961)
NOTE F - TRANSACTIONS WITH AFFILIATED PARTIES
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
Partnership activities. The Partnership Agreement provides for certain payments
to affiliates for services and reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.
The following expenses owed to the Managing General Partner and affiliates in
1998 and in 1997 were paid or accrued:
1998 1997
(in thousands)
Property management fees (included in
operating expenses) $ 376 $ 352
Partnership management fee (included in general
and administrative expense(*)) 23 --
Reimbursement for services of affiliates
(included in operating and general and
administrative expenses and investment property) 142 145
Due to affiliates 33 470
(*) The Partnership Agreement provides for a fee equal to 5% of "net cash flow
from operations", as defined in the Partnership Agreement to be paid to the
managing General partner for executive and administrative management
services.
Included in reimbursements for services of affiliates at December 31, 1998, and
1997 is approximately $13,000 and $14,000, respectively, in reimbursements for
construction oversight costs.
The decrease in "Due to affiliates" relates to the payment of amounts owing to
affiliates of the Managing General Partner for reimbursement of expenses in
prior years. The amounts had been previously accrued by the Partnership due to
the Partnership's liquidity problems in previous years. The Managing General
Partner postponed payment of the amounts until the Partnership's cash flow
position improved. In the third quarter of 1998, the Managing General Partner
determined that the Partnership had sufficient liquid assets to meet its current
operational needs and to provide the necessary maintenance and improvements to
its investment property in the near term. As a result, an amount for
approximately $460,000 was paid to an affiliate of the Managing General Partner.
During the years ended December 31, 1998 and 1997, affiliates of the Managing
General Partner were entitled to receive 5% of the gross receipts from all of
the Registrant's properties for providing property management services. The
Registrant paid to such affiliates $376,000 and $352,000 for the years ended
December 31, 1998 and 1997, respectively.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $142,000 and
$145,000 for the years ended December 31, 1998 and 1997, respectively.
Angeles Mortgage Investment Trust ("AMIT"), a real estate investment trust,
provides financing (the "AMIT Loan") to the Princeton Meadows Golf Course Joint
Venture ("Joint Venture"), (see "Note C"). The AMIT Loan had a principal
balance of $1,567,000 at December 31, 1998, accrues interest at a rate of 12.5%
per annum and matures on September 1, 2000, at which time the outstanding
principal and any unpaid interest is due. Interest expense on the debt secured
by the Joint Venture was approximately $196,000 for each of the years ended
December 31, 1998 and 1997, respectively. Accrued interest was $18,000 at
December 31, 1998. Pursuant to a series of transactions, affiliates of the
Managing General Partner acquired ownership interests in AMIT. On September 17,
1998, AMIT was merged with and into Insignia Properties Trust ("IPT"), the
entity which controlled the Managing General Partner. Effective February 26,
1999, IPT was merged into AIMCO. As a result, AIMCO is the current holder of
the AMIT loan.
On February 26, 1999, Princeton Meadows Golf Course was sold to an unaffiliated
third party. Upon closing, the AMIT principal balance of $1,567,000 plus
accrued interest of approximately $17,000 was paid off.
The Partnership may make advances to the Joint Venture as deemed appropriate by
the Managing General Partner. These advances do not bear interest and do not
have stated terms of repayment. At December 31, 1998, the amount of advances
receivable from the Joint Venture was approximately $164,000.
On August 12, 1998, an affiliate of the Managing General Partner (the
"Purchaser") commenced a tender offer for limited partnership interests in the
Partnership. The Purchaser offered to purchase up to 18,000 of the outstanding
units of limited partnership interest in the Partnership at $150 per Unit, net
to the seller in cash. The Purchaser acquired 8,782 units or 22.162% pursuant to
this tender offer. As a result of this purchase AIMCO currently owns, through
its affiliates, a total of 10,768 limited partnership units or 27.174% of the
outstanding partnership units as of December 31, 1998. Consequently, AIMCO could
be in a position to significantly influence all voting decisions with respect to
the Registrant. Under the Partnership Agreement, unitholders holding a majority
of the Units are entitled to take action with respect to a variety of matters.
When voting on matters, AIMCO would in all likelihood vote the Units it acquired
in a manner favorable to the interest of the Managing General Partner because of
their affiliation with the Managing General Partner.
For the period January 1, 1997 to August 31, 1997, the Partnership insured its
properties under a master policy through an agency affiliated with the Managing
General Partner. However, the insurer was unaffiliated with the Managing
General Partner. An affiliate of the Managing General Partner acquired, in the
acquisition of a business, certain financial obligations from an insurance
agency which was later acquired by the agent who placed the master policy. The
agent assumed the financial obligations to the affiliate of the Managing General
Partner which receives payments on these obligations from the agent. The amount
of the Partnership's insurance premiums accruing to the benefit of the affiliate
of the Managing General Partner by virtue of the agent's obligations was not
significant.
NOTE G - REAL ESTATE AND ACCUMULATED DEPRECIATION
Initial Cost
To Partnership
Cost
Buildings Capitalized
and Related (Removed)
Personal Subsequent to
Description Encumbrances Land Property Acquisition
(in thousands)
Fox Run Apartments $ 30,400 $ 3,998 $ 20,990 $ 4,755
Angeles Partners XI 868 -- -- --
Totals $ 31,268 $ 3,998 $ 20,990 $ 4,755
<TABLE>
<CAPTION>
Gross Amount At Which Carried
At December 31, 1998
Buildings
And Related
Personal Accumulated Date Depreciable
Description Land Property Total Depreciation Acquired Life-Years
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Fox Run Apartments $ 3,998 $ 25,745 $ 29,743$ 18,662 5/27/83 5-20
The depreciable lives included above are for the buildings and components. The
depreciable lives for related personal property are for 5 to 7 years.
Reconciliation of "Real Estate and Accumulated Depreciation":
Years Ended December 31,
1998 1997
(in thousands)
Investment Property
Balance at beginning of year $ 29,142 $ 28,928
Property improvements 601 438
Disposition -- (224)
Balance at end of year $ 29,743 $ 29,142
Accumulated Depreciation
Balance at beginning of year $ 17,148 $ 15,795
Additions charged to expense 1,514 1,516
Disposition -- (163)
Balance at end of year $ 18,662 $ 17,148
The aggregate cost of the investment properties for Federal income tax purposes
at December 31, 1998 and 1997, is $32,639,000 and $31,990,000, respectively.
The accumulated depreciation taken for Federal income tax purposes at December
31, 1998 and 1997, is $23,938,000 and $23,569,000, respectively.
NOTE H - ABANDONMENT OF LIMITED PARTNERSHIP UNITS
In 1998, the number of Limited Partnership Units decreased by 10 units due to
limited partners abandoning their units. In abandoning his or her Limited
Partnership Unit(s), a limited partner relinquishes all right, title, and
interest in the Partnership as of the date of abandonment. However, the limited
partner is allocated his or her share of the net income or loss for that entire
year. The income or loss per Limited Partnership Unit in the accompanying
statements of operations is calculated based on the number of units outstanding
at the beginning of the year.
NOTE I - CASUALTY
In October, 1997, there was a fire at Fox Run Apartments that completely
destroyed the clubhouse and office. The undepreciated value of the clubhouse
and office was written off and netted with a portion of the insurance proceeds
which was received in 1997, resulting in no gain or loss recognized in 1997.
Total insurance proceeds have been agreed upon with the insurance carrier and
are estimated to cover the cost of replacement of the assets. A casualty gain
of approximately $421,000 resulting from the recording of these insurance
proceeds was recognized during the year ended December 31, 1998.
NOTE J - SUBSEQUENT EVENT
On February 26, 1999, the Joint Venture sold the Princeton Meadows Golf Course
to an unaffiliated third party for gross sale proceeds of $5,100,000. The Joint
Venture received net proceeds of $3,452,000 after payment of closing costs,
resulting in a gain on sale of approximately $2,932,000. The Partnership's 1999
pro-rata share of this gain is expected to be approximately $1,205,000.
Furthermore, as a result of the sale, unamortized loan costs in the amount of
$6,500 were written off. This resulted in an extraordinary loss on early
extinguishment of debt of approximately $6,500. The Partnership's 1999 pro-rata
share of this extraordinary loss is expected to be approximately $2,700.
NOTE K - SEGMENT REPORTING
Description of the types of products from which the reportable segment derives
its revenues
As defined by SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information", the Partnership has one reportable segment: residential
properties. The Partnership's residential property segment consists of one
apartment complex located in Plainsboro, New Jersey. The Partnership rents
apartment units to people for terms that are typically twelve months or less.
Measurement of segment profit or loss
The Partnership evaluates performance based on net income. The accounting
policies of the reportable segment are the same as those described in the
summary of significant accounting policies (See "Note A").
Factors management used to identify the enterprise's reportable segment
The Partnership's reportable segment consists of investment properties that
offer similar products and services. Although each of the investment properties
are managed separately, they have been aggregated into one segment as they
provide services with similar types of products and customers.
Segment information for the years 1998 and 1997 is shown in the tables below.
The "Other" column includes partnership administration related items and income
and expense not allocated to reportable segment.
1998 RESIDENTIAL OTHER TOTALS
Rental income $ 7,204 $ -- $ 7,204
Other income 374 29 403
Interest expense 2,907 -- 2,907
Depreciation 1,514 -- 1,514
General and administrative expense -- 216 216
Gain on casualty 421 -- 421
Equity in loss of JV -- (5) (5)
Segment profit (loss) 211 (192) 19
Total assets 13,087 952 14,039
Capital expenditures for
investment property 601 -- 601
1997
Rental income 6,877 -- 6,877
Other income 278 5 283
Interest expense 2,917 -- 2,917
Depreciation 1,516 -- 1,516
General and administrative expense -- 183 183
Equity in income of JV -- 38 38
Segment profit (loss) (533) (140) (673)
Total assets 13,866 407 14,273
Capital expenditures for
investment property 438 -- 438
NOTE L - LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled ROSALIE NUANES, ET AL. V. INSIGNIA
FINANCIAL GROUP, INC., ET AL. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the Managing General Partner and several of their affiliated
partnerships and corporate entities. The complaint purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia
("Insignia Affiliates") of interests in certain general partner entities, past
tender offers by Insignia Affiliates to acquire limited partnership units, the
management of partnerships by Insignia Affiliates as well as a recently
announced agreement between Insignia and Apartment Investment and Management
Company. The complaint seeks monetary damages and equitable relief, including
judicial dissolution of the Partnership. On June 25, 1998, the Managing General
Partner filed a motion seeking dismissal of the action. In lieu of responding to
the motion, the plaintiffs have filed an amended complaint. The Managing
General Partner has filed demurrers to the amended complaint which were heard
during February 1999. No ruling on such demurrers has been received. The
Managing General Partner does not anticipate that costs associated with this
case, if any, to be material to the Partnership's overall operations.
On July 30, 1998, certain entities claiming to own limited partnership interests
in certain limited partnerships whose general partners were, at the time,
affiliates of Insignia filed a complaint entitled EVEREST PROPERTIES, LLC. V.
INSIGNIA FINANCIAL GROUP, INC., ET AL. in the Superior Court of the State of
California, county of Los Angeles. The action involves 44 real estate limited
partnerships (including the Partnership) in which the plaintiffs allegedly own
interests and which Insignia Affiliates allegedly manage or control (the
"Subject Partnerships"). This case was settled on March 3, 1999. The
Partnership is responsible for a portion of the settlement costs. The expense
will not have a material effect on the Partnership's net income.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANT ON ACCOUNTING AND
FINANCIAL DISCLOSURES
There were no disagreements with Ernst & Young LLP regarding the 1998 or 1997
audits of the Partnership's financial statements.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Angeles Realty Corporation II ("ARC II" or the "Managing General Partner"), was
a wholly-owned subsidiary of MAE GP Corporation ("MAE GP"). Effective February
25, 1998, MAE GP was merged into Insignia Properties Trust ("IPT"), which was an
affiliate of Insignia Financial Group, Inc. ("Insignia"). Effective, October 1,
1998 and February 26, 1999, Insignia and IPT were respectively merged into
Apartment Investment and Management Company ("AIMCO"). Thus the Managing
General Partner is now a wholly-owned subsidiary of AIMCO.
The names of the directors and executive officers of ARC II their ages and the
nature of all positions with ARC II presently held by them are set forth below.
There are no family relationships between or among any officers or directors.
Name Age Position
Patrick J. Foye 41 Executive Vice President and Director
Timothy R. Garrick 42 Vice President - Accounting and Director
Patrick J. Foye has been Executive Vice President and Director of the Managing
General Partner since October 1, 1998. Mr. Foye has served as Executive Vice
President of AIMCO since May 1998. Prior to joining AIMCO, Mr. Foye was a
partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP from 1989 to
1998 and was Managing Partner of the firm's Brussels, Budapest and Moscow
offices from 1992 through 1994. Mr. Foye is also Deputy Chairman of the Long
Island Power Authority and serves as a member of the New York State
Privatization Council. He received a B.A. from Fordham College and a J.D. from
Fordham University Law School.
Timothy R. Garrick has served as Vice President-Accounting of AIMCO and Vice
President-Accounting and Director of the Managing General Partner since October
1, 1998. Prior to that date, Mr. Garrick served as Vice President-Accounting
Services of Insignia Financial Group since June of 1997. From 1992 until June
of 1997, Mr. Garrick served as Vice President of Partnership Accounting and from
1990 to 1992 as an Asset Manager for Insignia Financial Group. From 1984 to
1990, Mr. Garrick served in various capacities with U.S. Shelter Corporation.
From 1979 to 1984, Mr. Garrick worked on the audit staff of Ernst & Whinney.
Mr. Garrick received his B.S. Degree from the University of South Carolina and
is a Certified Public Accountant.
ITEM 10. EXECUTIVE COMPENSATION
No compensation or remuneration was paid by Angeles Partners XI (the
"Partnership" or "Registrant") to any officer or director of ARC II. However,
certain fees and other payments have been made to the Partnership's Managing
General Partner and its affiliates, as described in "Item 12." below.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Except as noted below, no person or entity was known by the Registrant to be the
beneficial owner of more than 5% of the Limited Partnership Units of the
Registrant as of December 31, 1998.
Entity Units Owned % Owned
Insignia Properties LP
(an affiliate of AIMCO) 80 0.202%
Cooper River Properties, LLC
(an affiliate of AIMCO) 8,782 22.162%
AIMCO Properties LP
(an affiliate of AIMCO) 1,906 4.810%
Cooper River Properties LLC and Insignia Properties LP are indirectly ultimately
owned by AIMCO. The business address of Insignia Properties LP and Cooper River
Properties LLC is 55 Beattie Place, Greenville, South Carolina 29602. The
business address for AIMCO Properties LP is 1873 South Bellaire Street, 17th
floor, Denver, Colorado 80222.
On October 1, 1998, Insignia Financial Group, Inc. merged into AIMCO, a real
estate investment trust whose Class A Common Shares are listed on the New York
Stock Exchange. As a result of such merger, AIMCO and AIMCO Properties, L.P., a
Delaware limited partnership and the operating partnership of AIMCO ("AIMCO OP")
acquired indirect control of the Managing General Partner. AIMCO and its
affiliates currently own 27.174% of the limited partnership interests in the
Partnership. AIMCO is presently considering whether it will engage in an
exchange offer for additional limited partnership interests in the Partnership.
There is a substantial likelihood that, within a short period of time, AIMCO OP
will offer to acquire limited partnership interests in the Partnership for cash
or preferred units or common units of limited partnership interests in AIMCO OP.
While such an exchange offer is possible, no definite plans exist as to when or
whether to commence such an exchange offer, or as to the terms of any such
exchange offer, and it is possible that none will occur.
A Registration Statement relating to these securities has been filed with the
Securities and Exchange Commission but has not yet become effective. These
securities may not be sold nor may offers to buy be accepted prior to the time
the registration statement becomes effective. This Form 10-KSB shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such state.
The Partnership knows of no contractual arrangements, the operation of the terms
of which may at a subsequent date result in a change in control of the
Partnership, except for: Article 12.1 of the Agreement, which provides that
upon a vote of the Limited Partners holding more than 50% of the then
outstanding Limited Partnership Units the General Partners may be expelled from
the Partnership upon 90 days written notice. In the event that successor
general partners have been elected by Limited Partners holding more than 50% of
the then outstanding Limited Partnership Units and if said Limited Partners
elect to continue the business of the Partnership, the Partnership is required
to pay in cash to the expelled General Partners an amount equal to the accrued
and unpaid management fee described in Article 10 of the Agreement and to
purchase the General Partners' interest in the Partnership on the effective date
of the expulsion, which shall be an amount equal to the difference between the
balance of the General Partners' capital account and the fair market value of
the share of Distributable Net Proceeds to which the General Partners would be
entitled. Such determination of the fair market value of the share of
Distributable Net Proceeds is defined in Article 12.2(b) of the Agreement.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
No transactions have occurred between the Partnership and any officer or
director of ARC II.
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
Partnership activities. The Partnership Agreement provides for certain payments
to affiliates for services and reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.
The following expenses owed to the Managing General Partner and affiliates in
1998 and in 1997 were paid or accrued:
1998 1997
(in thousands)
Property management fees (included in
operating expenses) $ 376 $ 352
Partnership management fee (included in general
and administrative expense(*)) 23 --
Reimbursement for services of affiliates
(included in operating and general and
administrative expenses and investment property) 142 145
Due to affiliates 33 470
(*) The Partnership Agreement provides for a fee equal to 5% of "net cash flow
from operations", as defined in the Partnership Agreement to be paid to the
managing General partner for executive and administrative management services.
Included in reimbursements for services of affiliates at December 31, 1998, and
1997 is approximately $13,000 and $14,000, respectively, in reimbursements for
construction oversight costs.
The decrease in "Due to affiliates" relates to the payment of amounts owing to
affiliates of the Managing General Partner for reimbursement of expenses in
prior years. The amounts had been previously accrued by the Partnership due to
the Partnership's liquidity problems in previous years. The Managing General
Partner postponed payment of the amounts until the Partnership's cash flow
position improved. In the third quarter of 1998, the Managing General Partner
determined that the Partnership had sufficient liquid assets to meet its current
operational needs and to provide the necessary maintenance and improvements to
its investment property in the near term. As a result, an amount approximately
$460,000 was paid to an affiliate of the Managing General Partner.
During the years ended December 31, 1998 and 1997, affiliates of the Managing
General Partner were entitled to receive 5% of the gross receipts from all of
the Registrant's properties for providing property management services. The
Registrant paid to such affiliates $376,000 and $352,000 for the years ended
December 31, 1998 and 1997, respectively.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $142,000 and
$145,000 for the years ended December 31, 1998 and 1997, respectively.
Angeles Mortgage Investment Trust ("AMIT"), a real estate investment trust,
provides financing (the "AMIT Loan") to the Princeton Meadows Golf Course Joint
Venture ("Joint Venture"), (see "Note C"). The AMIT Loan had a principal
balance of $1,567,000 at December 31, 1998, accrues interest at a rate of 12.5%
per annum and matures on September 1, 2000, at which time the outstanding
principal and any unpaid interest is due. Interest expense on the debt secured
by the Joint Venture was approximately $196,000 for each of the years ended
December 31, 1998 and 1997, respectively. Accrued interest was $18,000 at
December 31, 1998. Pursuant to a series of transactions, affiliates of the
Managing General Partner acquired ownership interests in AMIT. On September 17,
1998, AMIT was merged with and into Insignia Properties Trust ("IPT"), the
entity which controlled the Managing General Partner. Effective February 26,
1999, IPT was merged into AIMCO. As a result, AIMCO is the current holder of
the AMIT loan.
On February 26, 1999, Princeton Meadows Golf Course was sold to an unaffiliated
third party. Upon closing, the AMIT principal balance of $1,567,000 plus
accrued interest of approximately $17,000 was paid off.
The Partnership may make advances to the Joint Venture as deemed appropriate by
the Managing General Partner. These advances do not bear interest and do not
have stated terms of repayment. At December 31, 1998, the amount of advances
receivable from the Joint Venture was approximately $164,000.
On August 12, 1998, an affiliate of the Managing General Partner (the
"Purchaser") commenced a tender offer for limited partnership interests in the
Partnership. The Purchaser offered to purchase up to 18,000 of the outstanding
units of limited partnership interest in the Partnership at $150 per Unit, net
to the seller in cash. The Purchaser acquired 8,782 units or 22.162% pursuant to
this tender offer. As a result of this purchase AIMCO currently owns, through
its affiliates, a total of 10,768 limited partnership units or 27.174% of the
outstanding partnership units as of December 31, 1998. Consequently, AIMCO could
be in a position to significantly influence all voting decisions with respect to
the Registrant. Under the Partnership Agreement, unitholders holding a majority
of the Units are entitled to take action with respect to a variety of matters.
When voting on matters, AIMCO would in all likelihood vote the Units it acquired
in a manner favorable to the interest of the Managing General Partner because of
their affiliation with the Managing General Partner.
For the period January 1, 1997 to August 31, 1997, the Partnership insured its
properties under a master policy through an agency affiliated with the Managing
General Partner. However, the insurer was unaffiliated with the Managing
General Partner. An affiliate of the Managing General Partner acquired, in the
acquisition of a business, certain financial obligations from an insurance
agency which was later acquired by the agent who placed the master policy. The
agent assumed the financial obligations to the affiliate of the Managing General
Partner which receives payments on these obligations from the agent. The amount
of the Partnership's insurance premiums accruing to the benefit of the affiliate
of the Managing General Partner by virtue of the agent's obligations was not
significant.
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required by Item 601 of Regulation S-B: Refer to Exhibit Index in
this report.
(b) Reports on Form 8-K:
Current Report on Form 8-K dated October 1, 1998, filed on October 16, 1998
disclosing change in control of Registrant from Insignia Financial Group,
Inc. to AIMCO.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ANGELES PARTNERS XI
(A California Limited Partnership)
(Registrant)
By: Angeles Realty Corporation II
Managing General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Timothy R. Garrick
Timothy R. Garrick
Vice President - Accounting
Date: March 29, 1999
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/Patrick J. Foye Date: March 29, 1999
Patrick J. Foye
Executive Vice President
and Director
/s/Timothy R. Garrick Date: March 29, 1999
Timothy R. Garrick
Vice President - Accounting
and Director
ANGELES PARTNERS XI
EXHIBIT INDEX
Exhibit Number Description of Exhibit
3.1 Amended Agreement of Limited Partnership dated February 26, 1982
filed in Form 10-K dated November 30, 1983, incorporated herein by
reference.
10.1 Agreement of Purchase and Sale of Real Property with Exhibits - Fox
Run I and II Apartments filed in Form 8-K dated June 30, 1983,
incorporated herein by reference.
10.2 Agreement of Purchase and Sale of Real Property with Exhibits -
Harbour Landing Apartments filed in Form 8-K dated December 21,
1983, incorporated herein by reference.
10.3 Agreement of Purchase and Sale of Real Property with Exhibits -
Westmont Village Apartments filed in Form 8-K dated March 30, 1984,
incorporated herein by reference.
10.4 Multi Family Note, dated June 11, 1986 - Fox Run Apartments I and II
filed in form 10-K dated November 30, 1986, incorporated herein by
reference.
10.5 Second trust deed dated September 22, 1987 - Fox Run Apartments
filed in form 10-K dated November 30, 1987, incorporated herein by
reference.
10.6 Agreement to Accept Deed in Lieu of Foreclosure - Boca Plaza
Shopping Center filed in form 8-K dated January 15, 1991,
incorporated herein by reference.
10.7 Order appointing receiver - Springside Apartments dated April 24,
1991 filed in Form 10Q dated May 14, 1991, incorporated herein by
reference.
10.8 Purchase and Sale Agreement with Exhibits - dated July 26, 1991
between Princeton Golf Course Joint Venture and Lincoln Property
Company No. 199 filed in Form 10-K dated March 27, 1992,
incorporated herein by reference.
10.9 Princeton Meadows Golf Course Joint Venture Agreement with Exhibits
- dated August 21, 1991 between the Partnership, Angeles Income
Properties II and Angeles Partners XII, filed in Form 10-K dated
March 27, 1992, incorporated herein by reference.
10.10 Stock Purchase Agreement dated November 24, 1992 showing the
purchase of 100% of the outstanding stock of Angeles Realty
Corporation by IAP GP Corporation, a subsidiary of MAE GP
Corporation, filed in Form 8-K dated December 31, 1992, which is
incorporated herein by reference.
10.11 Secured Promissory Note between Angeles Mortgage Investment Trust,
a California Business Trust, Fox Run AP XI, L.P., a South Carolina
limited partnership and Angeles Partners XI, a California limited
partnership dated December 19, 1996.
10.12 Loan agreement between General Electric Capital Corporation, a New
York corporation, and Fox Run AP XI, L.P., a South Carolina limited
partnership dated December 23, 1996.
16.1 Letter from the Registrant's former independent accountant
regarding its concurrence with the statements made by the
Registrant, is incorporated by reference to the exhibit filed with
Form 8-K dated September 1, 1993.
27 Financial Data Schedule.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Angeles
Partners XI 1998 Year-End 10-KSB and is qualified in its entirety by reference
to such 10-KSB filing.
</LEGEND>
<CIK> 0000702986
<NAME> ANGELES PARTNERS XI
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 1,207
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 29,743
<DEPRECIATION> (18,662)
<TOTAL-ASSETS> 14,039
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 31,268
0
0
<COMMON> 0
<OTHER-SE> (18,539)
<TOTAL-LIABILITY-AND-EQUITY> 14,039
<SALES> 0
<TOTAL-REVENUES> 8,028
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 8,004
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,907
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19
<EPS-PRIMARY> 0.48<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
