<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- --- ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED June 30, 1995 OR
- --- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO
--------- ---------
Commission File Number 0-11501
BOETTCHER WESTERN PROPERTIES II LTD.
(Exact name of registrant as specified in its charter)
COLORADO 84-0879737
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
828 SEVENTEENTH STREET
DENVER, COLORADO 80202
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (303) 628-8000
Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or 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
--- ---
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I. Financial Information
Item 1. Financial Statements (unaudited)
Balance Sheets -
June 30, 1995 and September 30, 1994 3
Statements of Operations -
Three and nine months ended June 30, 1995 and 1994 4
Statement of Partners' Capital (Deficit) -
Nine months ended June 30, 1995 6
Statements of Cash Flows -
Nine months ended June 30, 1995 and 1994 7
Notes to Financial Statements 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 13
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K 17
SIGNATURE 18
</TABLE>
- 2 -
<PAGE> 3
PART I. Financial Information
Item 1. Financial Statements
BOETTCHER WESTERN PROPERTIES II LTD.
(A Limited Partnership)
Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
June 30, September 30,
1995 1994
------------- -------------
<S> <C> <C>
Assets
Real estate investments, at gross cost:
Property held for sale $4,360,126 4,360,126
Less discount on related debt (264,527) (264,527)
---------- ---------
4,095,599 4,095,599
Less accumulated depreciation (1,170,460) (1,094,979)
---------- ---------
2,925,139 3,000,620
Cash and cash equivalents at cost, which
approximates market value 382,421 324,290
Accounts receivable, interest receivable
and other assets 135,821 132,400
Mortgage loan receivable 4,920,000 4,920,000
Property tax and other escrow deposits 24,802 34,717
Deferred leasing costs, net of accumulated
amortization of $133,987 and $103,146,
respectively 85,619 115,271
Debt issuance costs, net of accumulated
amortization of $108,797 and $87,616,
respectively 3,705 8,728
---------- ---------
$8,477,507 8,536,026
========== =========
Liabilities and Partners' Capital (Deficit)
Mortgages payable $5,575,338 5,733,532
Payable to managing general partner 315,094 176,053
Property taxes payable 25,468 38,427
Tenants' deposits 25,748 26,690
Accrued interest payable 27,668 27,897
Unearned rental income 0 1,486
Accounts payable and other liabilities 11,932 12,441
---------- ---------
Total liabilities 5,981,248 6,016,526
Partners' capital (deficit):
General partners (60,758) (60,526)
Limited partners 2,557,017 2,580,026
---------- ---------
Total partners' capital (deficit) 2,496,259 2,519,500
---------- ---------
$8,477,507 8,536,026
========== ==========
</TABLE>
See accompanying notes to financial statements.
- 3 -
<PAGE> 4
BOETTCHER WESTERN PROPERTIES II LTD.
(A Limited Partnership)
Statements of Operations
Three and Nine Months Ended June 30, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
- ----------------------------------------------------------------------------------------------- -----------------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue:
Rental income 104,342 111,873 326,754 1,687,285
Tenant reimbursements for
common area charges,
insurance and taxes 27,523 52,158 88,386 113,203
Interest income
123,173 123,006 368,391 368,195
Other income
1,444 18,425 1,841 49,517
------- --------- -------- ---------
256,482 305,462 785,372 2,218,200
------- --------- -------- ---------
Expenses:
Interest, including
amortization of debt
discount and debt
issuance costs 154,480 425,510 469,928 1,320,787
Depreciation 25,161 27,196 75,482 328,422
Property taxes 12,734 11,145 37,977 96,078
Fees and reimbursements to
managing general partner 20,803 22,407 62,852 109,680
Other management fees 5,546 6,050 17,067 76,155
Salaries of on-site
property managers 0 40 0 135,992
Repairs and maintenance 16,036 13,128 40,718 177,325
Utilities 4,470 10,725 11,475 78,742
Other administrative 20,674 39,325 93,114 189,336
------- --------- -------- ---------
259,904 555,526 808,613 2,512,517
------- --------- -------- ---------
Net loss
before gain on sale
of real estate
investment (3,422) (250,064) (23,241) (294,317)
Gain on sale of real estate
investment 0 6,472,809 0 6,472,809
------- --------- -------- ---------
Net earnings (loss)
before extraordinary
gain (3,422) 6,222,745 (23,241) 6,178,492
Extraordinary item - gain on
extinguishment of debt in
connection with the sale of
Fairway Apartments 0 535,618 0 535,618
------- --------- -------- ---------
Net earnings (loss) before
minority interest (3,422) 6,758,363 (23,241) 6,714,110
</TABLE>
(Continued)
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<PAGE> 5
BOETTCHER WESTERN PROPERTIES II LTD.
(A Limited Partnership)
Statements of Operations (Continued)
Three and Nine Months Ended June 30, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
- ----------------------------------------------------------------------------------------------- -----------------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Minority interest in net
earnings and gain on sale
of real estate investment
allocable to joint venture
partner 0 (7,648) 0 (7,648)
------- --------- ------- ---------
Net earnings (loss) $(3,422) 6,750,715 (23,241) 6,706,462
======= ========= ======= =========
Net earnings (loss) per
limited partnership
unit, using the weighted
average number of limited
partnership units out-
standing of 16,495:
Operations (.21) 374.38 (1.39) 371.72
Extraordinary item 0 31.83 0 31.83
------- --------- ------- ---------
$(.21) 406.21 (1.39) 403.55
======= ========= ======= =========
</TABLE>
See accompanying notes to financial statements.
- 5 -
<PAGE> 6
BOETTCHER WESTERN PROPERTIES II LTD.
(A Limited Partnership)
Statement of Partners' Capital (Deficit)
Nine Months ended June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
Total
partners'
General Limited capital
Partners Partners (deficit)
-------- -------- ---------
<S> <C> <C> <C>
Capital (deficit)
at October 1, 1994 $(60,526) 2,580,026 2,519,500
Net loss for the nine months
ended June 30, 1995 (232) (23,009) (23,241)
-------- --------- ---------
Capital (deficit)
at June 30, 1995 $(60,758) 2,557,017 2,496,259
========= ========= =========
</TABLE>
See accompanying notes to financial statements.
- 6 -
<PAGE> 7
BOETTCHER WESTERN PROPERTIES II LTD.
(A Limited Partnership)
Statements of Cash Flows
Nine Months Ended June 30, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
June 30,
--------------------------------
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ (23,241) 6,706,462
Adjustments to reconcile net earnings
(loss) to net cash provided by
(used by) operating activities:
Depreciation and amortization 127,494 713,371
Minority interest in net earnings and
gain on sale of real estate investment - 7,648
Interest expense added to mortgage balance - 65,625
Gain on extinguishment of debt in connec-
tion with the sale of Fairway Apartments - (535,618)
Gain on sale of Fairway Apartments - (6,472,809)
Change in assets and liabilities:
Increase in accounts receivable
interest receivable and other assets (3,421) (2,931)
Decrease in property tax
and other escrow deposits 9,915 140,577
Increase (decrease) in payable to managing
general partner relating to operations 139,041 (366,080)
Decrease in property taxes payable (12,959) (98,750)
Decrease in tenants' deposits (942) (114,815)
Decrease in accrued interest payable (229) (71,325)
Decrease in unearned rental income (1,486) (83,194)
Decrease in accounts payable
and other liabilities (509) (71,556)
-------- ------------
Net cash provided by (used by)
operating activities 233,663 (183,395)
-------- ------------
Cash flows provided by (used by)
investing activities:
Additions to real estate investments - (48,046)
Increase in deferred leasing costs (1,180) (14,360)
Proceeds from sale of real estate
investment, net of closing costs
and other costs of sale - 16,512,906
-------- ------------
Net cash provided by (used by)
investing activities (1,180) 16,450,500
-------- ------------
Cash flows used by financing activities:
Prepayment penalty on sale of
real estate investment - (33,559)
Reduction in mortgage principal (158,194) (15,052,679)
Debt issuance costs (16,158) (23,855)
Distribution to minority interest - (7,648)
Distributions to limited partners - (1,748,470)
-------- ------------
Net cash used by
financing activities (174,352) (16,866,211)
-------- ------------
</TABLE>
(Continued)
- 7 -
<PAGE> 8
BOETTCHER WESTERN PROPERTIES II LTD.
(A Limited Partnership)
Statements of Cash Flows (Continued)
Nine Months Ended June 30, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
June 30,
---------------------------------------
1995 1994
---- ----
<S> <C> <C>
Net increase (decrease) in cash
and cash equivalents 58,131 (599,106)
Cash and cash equivalents at September 30 324,290 851,325
------- ---------
Cash and cash equivalents at June 30 $ 382,421 252,219
========= =========
Supplemental disclosure of cash flow
information:
Interest paid in cash during the
nine month period
$ 448,976 972,650
========= =========
</TABLE>
See accompanying notes to financial statements.
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<PAGE> 9
BOETTCHER WESTERN PROPERTIES II LTD.
(A Limited Partnership)
Notes to Financial Statements
June 30, 1995
(Unaudited)
(1) Financial Statement Adjustments and Footnote Disclosure
The accompanying financial statements are unaudited. However,
Boettcher Properties, Ltd. (BPL), the Managing General Partner of
Boettcher Western Properties II Ltd. (the Partnership), believes all
material adjustments necessary for a fair presentation of the interim
financial statements have been made and that such adjustments are of a
normal and recurring nature. Certain information and footnotes
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been omitted pursuant to
Securities and Exchange Commission rules and regulations. BPL
believes the disclosures made are adequate to make the information not
misleading and suggests that the condensed financial statements be
read in conjunction with the financial statements and notes thereto
included in the Boettcher Western Properties II Ltd. September 30,
1994 Annual Report.
(2) Significant Accounting Principles
Principles of Consolidation
The accompanying financial statements include the accounts of the
Partnership and for the periods prior to fourth quarter of fiscal 1994
also include and are consolidated with, the BWP II/FAIRWAY partnership
(the "Fairway Partnership") in which the Partnership was a 99%
participant. All intercompany transactions have been eliminated in
consolidation.
Deferred Leasing Costs
Costs associated with the leasing of the Partnership's shopping center
are deferred and amortized over the life of the related leases and are
recorded at cost. These costs are comprised of lease commissions and
construction costs related to the buildout of tenant space.
Income Taxes
No provision has been made for federal income taxes, as the taxable
income (loss) is reported by the partners rather than the Partnership.
The Partnership reports certain transactions differently for tax and
consolidated financial statement purposes, primarily depreciation and
debt discount.
Real Estate Investments
The property held for sale and the mortgage loan receivable are
recorded at the lower of cost or fair market value, based upon
independent appraised values or current purchase offers. Buildings
and improvements are depreciated using the straight-line method over
an estimated useful life of 30 years. Equipment and furnishings are
depreciated using the straight-line method over an
- 9 -
<PAGE> 10
BOETTCHER WESTERN PROPERTIES II LTD.
(A Limited Partnership)
Notes to Financial Statements, Continued
June 30, 1995
(Unaudited)
(2) Continued
estimated useful life of 5 years. Renewals and betterments are
capitalized, and repairs and maintenance are charged to operations
as incurred.
Debt Issuance Costs and Debt Discount
Costs incurred in arranging financing, such as loan origination
fees, commitment fees and extension fees, are deferred and amortized to
interest expense using the level-interest-yield method over the term of
the related debt or the extension period.
Debt discount is amortized to interest expense using the
level-interest yield method over the term of the related debt.
Statement of Cash Flows
For purposes of the statement of cash flows, cash and cash equivalents
include highly liquid debt instruments purchased with an
original maturity of three months or less. Cash and cash equivalents
are comprised of the following:
<TABLE>
<CAPTION>
As of June 30,
1995 1994
------- -------
<S> <C> <C>
Money market fund $368,587 250,335
Operating cash 13,834 1,884
-------- -------
Cash and cash equivalents $382,421 252,219
======== =======
</TABLE>
(3) Mortgages Payable - Iliff Crossing
On December 6, 1994, the Partnership executed an extension and
modification agreement with the existing lenders on the mortgage
indebtedness secured by the Iliff Crossing Shopping Center, which
extended the due date of such indebtedness from June 1, 1994 to June 1,
1995. In conjunction with this extension, the Partnership was required
to make a $130,000 principal paydown from Partnership cash reserves.
The Partnership entered into an additional extension agreement with the
existing lenders extending the due date of the mortgage indebtedness
from June 1, 1995 to August 31, 1995. The indebtedness continues to
carry an interest rate of 12% and requires interest-only payments of
$21,700 per month. On August 8, 1995 the Partnership paid the balance
due on the mortgage indebtedness secured by Iliff Crossing Shopping
Center. See Note 5 to the Financial Statements for further
discussion.
(4) Transactions with Related Parties
Deferred Acquisition Fee: Pursuant to the Management Agreement,
BPL is to receive an annual fee for acquisition services provided to
the Partnership for each fiscal year equal to (a) 2% of the average
daily Aggregate Capital Investment Account plus (b) 1/2 of 1% of the
average daily Capital Cash Account, as those terms are defined in the
Partnership Agreement. Payments may be made for the lesser of 15 years
or until the limit on payments is reached. For the quarter ended June
30, 1995 the amount earned by BPL was $14,890.
Property Management Fee: In accordance with the provisions of the
Management Agreement, property management fees are payable to BPL,
regardless of the profitability of the Partnership, equal to 5% of the
actual gross receipts from properties owned by the Partnership,
- 10 -
<PAGE> 11
BOETTCHER WESTERN PROPERTIES II LTD.
(A Limited Partnership)
Notes to Financial Statements, Continued
June 30, 1995
(Unaudited)
(4) Continued
less management fees paid to others. For the quarter ended
June 30, 1995 the amount earned by BPL was $1,138.
Direct Services: BPL and its affiliates provide various services
directly related to the operation of the Partnership and its
properties. The Partnership reimburses BPL for its allocable share of
salaries of non-management and non-supervisory personnel providing
accounting, investor reporting and communications and legal services
to the Partnership; as well as allowable expenses related to the
maintenance and repair of data processing equipment used for or by the
Partnership. For the quarter ended June 30, 1995, the amount due to
BPL for such reimbursements was $4,776.
(5) Liquidity and Debt Maturities
Based upon projected future net cash flow to be generated by the
Partnership's real estate investments, the Managing General Partner
believes that the Partnership's working capital position is sufficient
as of June 30, 1995.
During the first nine months of fiscal 1995, the payable to managing
general partner increased by $139,041 to a total of $315,094.
This increase was the net result of payments totalling $100,000 and
the accrual of fees and reimbursements earned by the Managing General
Partner and cash advances received from the Managing General Partner
in the nine months ended June 30, 1995 totalling $62,852 and $76,189
respectively. During the first three quarters of fiscal 1995, the
Managing General Partner advanced approximately $142,500 to extend the
mortgage indebtedness related to Iliff Crossing. The Partnership
intends to apply cash flow generated from Partnership operations
during the remainder of fiscal 1995 to maintain cash reserves, as
necessary. Thereafter, the Partnership intends to pay the Managing
General Partner all unpaid cash advances made to the Partnership, all
unpaid administrative reimbursements and all deferred fees earned by
the Managing General Partner, which totalled $99,223, $27,955 and
$187,916, respectively, as of June 30, 1995.
Subsequent to June 30, 1995 the maturity date of the mortgage loan
receivable, was extended to August 1, 1995 by agreement of the parties
to coincide with the due date of the First Deed of Trust Note. On
August 17, 1995, the Partnership collected principal and interest on
this receivable of $4,934,353; paid off the
- 11 -
<PAGE> 12
BOETTCHER WESTERN PROPERTIES II LTD.
(A Limited Partnership)
Notes to Financial Statements, Continued
June 30, 1995
(Unaudited)
underlying note which had a balance due of $3,419,089, resulting in net
proceeds of $1,515,264 to the Partnership.
As of June 30, 1995, the Partnership has recorded its remaining real
estate investment as property held for sale. On April 26, 1995 the
Partnership entered into a contract to sell Iliff Crossing Shopping
Center to an unrelated third party (the "Purchaser") for $3,100,000.
The Purchaser completed its due diligence period and waived the
financing contingency effective July 7, 1995. On August 8, 1995, the
Partnership sold the land, related improvements and personal property
of Iliff Crossing Shopping Center to the Purchaser. The net proceeds
to the Partnership, before proration of operating income and expenses,
were as follows:
<TABLE>
<S> <C>
Total contract sales price $3,100,000
Less costs of sale -
sales commissions (124,000)
estimated title, legal fees, and other (25,000)
Mortgage payoff (2,176,429)
Security deposit liability (25,748)
----------
Net proceeds $ 748,823
==========
</TABLE>
The Partnership intends to apply net proceeds to pay all remaining
liabilities identified by the Managing General Partner arising out of or in
connection with the operations of the Partnership and/or the sale of Iliff
Crossing, including amounts owed to the Managing General Partner. After
payment of the foregoing amounts, all remaining cash reserves of the
Partnership will be utilized to first pay the costs of liquidation and
dissolution of the Partnership, and then to make a final distribution to
limited partners.
- 12 -
<PAGE> 13
Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
For the three and nine months ended June 30, 1995, the Partnership
generated total revenue of $256,482 and $785,372 and incurred total expenses in
the amount of $259,904 and $808,613 resulting in net losses of $3,422 and
$23,241, which represents decreases in net losses of $246,642 and $271,076 when
compared with net losses before gain on sale of real estate investment in the
corresponding periods of fiscal 1994. The most significant factors affecting
the Partnership's results of operations were decreased total revenue,
specifically rental and other income, and decreased total expenses, in every
category. In general, revenue generated and expenses incurred for the three
and nine month periods of fiscal 1995 have decreased when compared with the
corresponding periods of fiscal 1994 as a result of the sale of Fairway
Apartments on April 1, 1994. A summary of the Partnership's operations and
period-to-period comparisons in presented below.
<TABLE>
<CAPTION>
Three Months Ended June 30 Nine Months Ended June 30
(In Thousands) (In Thousands)
-------------------------- ---------------------------
Amount Amount
of % of %
1995 1994 Change Change 1995 1994 Change Change
---- ---- ------ ------ ---- ---- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total revenue $257 305 (48) (16)% $785 2,218 (1,433) (65)%
Total expenses 260 555 (295) (53)% 808 2,513 (1,705) (68)%
--- --- --- --- ----- -----
Net earnings
(loss) $ (3) (250) 247 $(23) (295) 272
==== ==== === ==== ===== ===
</TABLE>
In making period-to-period comparisons, the exclusion of the
operations of Fairway Apartments from the results of the first three quarters
of fiscal 1994 allows for a more meaningful analysis of the operations of the
Partnership's remaining investments. For comparison purposes only, if the
operations of Fairway Apartments had been excluded from revenue and expenses in
the first three quarters of fiscal 1994, the Partnership's Statements of
Operations for the three and nine months ended June 30, 1995 compared with the
same periods of fiscal 1994 would have been as follows:
<TABLE>
<CAPTION>
Three Months Ended June 30 Nine Months Ended June 30
(In Thousands) (In Thousands)
-------------------------- ---------------------------
Amount Amount
of % of %
1995 1994 Change Change 1995 1994 Change Change
---- ---- ------ ------ ---- ---- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total revenue $257 284 (27) (10)% $785 799 (14) (18)%
Total expenses 260 267 (7) (3)% 808 888 (80) (9)%
--- --- ---- --- --- ----
Net earnings
(loss) $ (3) 17 (20) $(23) (89) 66
==== == ==== === === ==
</TABLE>
In analyzing the pro forma amounts shown above, which exclude Fairway
- 13 -
<PAGE> 14
Apartments, total revenue generated by the Partnership for the three and nine
months ended June 30, 1995 totalled $256,482 and $785,372, which represents
decreases of $27,904 (10%) and $13,259 (2%), respectively, over the same
periods of fiscal 1994. Rental income generated by Iliff Crossing Shopping
Center for the three and nine months ended June 30, 1995 totalled $104,342 and
$326,754, representing a decrease of $7,412 (7%) and an increase of $5,547
(2%). Iliff Crossing Shopping Center maintained a 94% average occupancy rate
and generated an annual average effective rental rate of $8.96 per square foot
for the quarter ended June 30, 1995, which represents no change and a decrease
of $.32, respectively, when compared with the corresponding period of fiscal
1994. In addition, in the third quarter of 1995 the Partnership refunded
approximately $3,500 to a tenant of Iliff Crossing that had overpaid certain
triple net charges. This resulted in a decrease of tenant reimbursement
income.
Total expenses incurred by the Partnership during the three and nine
months ended June 30, 1995 amounted to $259,904 and $808,613, which represent
decreases of $7,071 (3%) and $79,279 (9%), respectively. For the nine months
ended June 30, 1995 fees and reimbursements to managing general partner
decreased $46,828 (43%) as a result of the sale of Fairway Apartments in the
third quarter of fiscal 1994. Interest expense decreased $26,173 (5%) for the
first three quarters of fiscal 1995 when compared with the corresponding
periods of fiscal 1994, the result of both decreased interest expense on the
mortgage payable of $13,366 and decreased amortization of debt issuance costs
of $12,807, respectively. The decrease in interest expense on the mortgage
payable was the result of principal reductions on Iliff Crossing Shopping
Center's mortgage payable made in the first quarter of 1994 in the amount of
$200,000 and the first quarter of 1995 in the amount of $130,000. The decrease
in amortization of debt issuance costs is the result of less debt issuance
costs incurred for the loan extension of Iliff Crossing Shopping Center's
mortgage payable in fiscal 1995 when compared with fiscal 1994. Repairs and
Maintenance expense decreased $6,076 (13%) for the first three quarters of
fiscal 1995 when compared with the corresponding periods of fiscal 1994, the
result of a savings in snow removal cost due to low precipitation and the
curtailment of security costs at Iliff Crossing Shopping Center.
A summary of the Partnership's average occupancy and average effective
rental rates is presented below.
<TABLE>
<CAPTION>
Quarter Ended Quarter Ended
June 30, 1995 June 30, 1994
------------------------------ --------------------------
Average Avg. Effective Average Avg. Effective
Occupancy Rental Rate (1) Occupancy Rental Rate (1)
--------- --------------- --------- ---------------
<S> <C> <C> <C> <C>
Commercial
- ----------
Iliff Crossing
Shopping Center 94% $8.96(2) 94% $9.28(2)
</TABLE>
(1) Average effective rental rates for commercial properties are stated in
terms of an average annual effective rental rate per square foot.
Effective rental rates take into account the effect of leasing
concessions and bad debts.
(2) These rates are "triple net". In addition to this base rent, the
majority of tenants pay their pro rata share of taxes, insurance and
common area maintenance expenses at the property.
- 14 -
<PAGE> 15
Liquidity and Capital Resources
Combined cash and cash equivalent balances, which represent
Partnership reserves, were $382,421 at June 30, 1995, representing an increase
of $58,131 when compared with fiscal 1994 year end. Net cash provided by
operating activities for the nine months ended June 30, 1995 totalled $233,663,
which included an increase in payable to managing general partner relating to
operations of $139,041. This increase represents the accrual of deferred fees
and reimbursements earned by the Managing General Partner and unpaid cash
advances also from the Managing General Partner. As of June 30, 1995 the
payable to managing general partner totalled $315,094 and is comprised of
deferred fees and unpaid reimbursements and cash advances received from the
Managing General Partner in the amount of $215,871 and $99,223, respectively.
Net cash used by investing activities amounted to $1,180 for the nine
months ended June 30, 1995 and is comprised solely of deferred leasing costs
incurred at Iliff Crossing Shopping Center.
Net cash used by financing activities for the nine months ended June
30, 1995 amounted to $174,352 and is comprised of a reduction in mortgage
principal of approximately $158,200 related primarily to the paydown required
for the extension of the mortgage payable secured by Iliff Crossing; and an
increase in debt issuance costs of approximately $16,000 at Iliff Crossing
Shopping Center.
To the knowledge of the Managing General Partner, Iliff Crossing and
West Lakes Apartments are in good physical condition. For the three months
remaining in fiscal 1995 there are no budgeted tenant finish or lease
commission costs.
Based upon projected future net cash flow to be generated by the
Partnership's real estate investments, disposition of Iliff Crossing and
collection of the All-Inclusive Deed of Trust Note; the Managing General
Partner believes that the Partnership's working capital position is sufficient
as of June 30, 1995. The Partnership intends to apply net cash flow generated
from the aforementioned transactions to pay all remaining liabilities
identified by the Managing General Partner arising out of or in connection with
the operations of the Partnership and/or sale of Iliff Crossing Shopping
Center. Thereafter, the Partnership intends to pay amounts owed to the
Managing General Partner which, at June 30, 1995, were comprised of unpaid cash
advances, administrative reimbursements and deferred fees totalling $99,223,
$27,955 and $187,916 respectively.
On December 6, 1994, the Partnership executed an extension and
modification agreement with the existing lenders on the mortgage indebtedness
secured by the Iliff Crossing Shopping Center, which extended the due date of
such indebtedness from June 1, 1994 to June 1, 1995. In conjunction with this
extension, the Partnership was required to make a $130,000 principal paydown
from Partnership cash reserves. The Partnership entered into an additional
extension agreement with the existing lenders extending the due date of the
mortgage indebtedness from June 1, 1995 to August 31, 1995. The indebtness
continues to carry an interest rate of 12% and requires interest-only payments
of $21,700 per month. On August 8, 1995 the Partnership paid the balance due
on the mortgage indebtedness secured by Iliff Crossing Shopping Center. See
Note 5 to the Financial Statements as contained in Item 1 of this report for
further discussion.
The amount owed to the holder
- 15 -
<PAGE> 16
of the First Deed of Trust Note secured by the West Lakes Apartments
will be paid out of the proceeds from the collection of the All-Inclusive Deed
of Trust Note (the "AIDT Note") held by the Partnership. Subsequent to June
30, 1995 the maturity date of the AIDT note was extended to August 1, 1995 by
agreement of the parties to coincide with the due date of the First Deed of
Trust Note. On August 17, 1995, the Partnership collected principal and
interest on its AIDT Note of $4,934,353; paid off the underlying note which had
a balance due of $3,419,089, resulting in net proceeds of $1,515,264 to the
Partnership. In addition, the debt secured by the Iliff Crossing Shopping
Center will be retired in conjunction with the sale of the property, as
discussed below.
As of June 30, 1995, the Partnership has recorded its remaining real estate
investment as property held for sale. On April 26, 1995 the Partnership
entered into a contract to sell Iliff Crossing Shopping Center to an unrelated
third party (the "Purchaser") for $3,100,000. The Purchaser completed its due
diligence period and waived the financing contingency effective July 7, 1995.
On August 8, 1995, the Partnership sold the land, related improvements and
personal property of Iliff Crossing Shopping Center to the Purchaser. The net
proceeds to the Partnership, before proration of operating income and expenses,
were as follows:
<TABLE>
<S> <C>
Total contract sales price $3,100,000
Less costs of sale -
sales commissions (124,000)
estimated title, legal fees, and other (25,000)
Mortgage payoff (2,176,429)
Security deposit liability (25,748)
----------
Net proceeds $ 748,823
==========
</TABLE>
The Partnership intends to apply net proceeds to pay all remaining
liabilities identified by the Managing General Partner arising out of or in
connection with the operations of the Partnership and/or the sale of Iliff
Crossing, including amounts owed to the Managing General Partner. After
payment of the foregoing amounts, all remaining cash reserves of the
Partnership will be utilized to first pay the costs of liquidation and
dissolution of the Partnership, and then to make a final distribution to
limited partners.
- 16 -
<PAGE> 17
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K
No reports were required or filed by the Registrant during
the period for which this report is filed.
- 17 -
<PAGE> 18
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
BOETTCHER WESTERN PROPERTIES II LTD.
------------------------------------
Registrant
By: Boettcher Properties, Ltd., as
Managing General Partner
By: BPL Holdings, Inc., as
Managing General Partner
Dated: August 21, 1995 By:
---------------------------------
Thomas M. Mansheim
Treasurer; Principal Financial and Accounting
Officer of the Partnership
- 18 -
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000703152
<NAME> BOETTCHER WESTERN PROPERTIES II, LTD.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> JUN-30-1995
<CASH> 382,421
<SECURITIES> 0
<RECEIVABLES> 135,821
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 4,095,599
<DEPRECIATION> (1,170,460)
<TOTAL-ASSETS> 8,477,507
<CURRENT-LIABILITIES> 0
<BONDS> 5,575,338
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 8,477,507
<SALES> 0
<TOTAL-REVENUES> 785,372
<CGS> 0
<TOTAL-COSTS> 808,613
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 469,928
<INCOME-PRETAX> (23,241)
<INCOME-TAX> 0
<INCOME-CONTINUING> (23,241)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (23,241)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
