SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended: June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 0-12166
MERIDIAN POINT REALTY TRUST '83
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(Exact name of Registrant as specified in its Charter)
California 94-6542723
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
655 Montgomery Street, Suite 800, San Francisco, California 94111
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(Address and zip code of principal executive offices)
Registrant's telephone number, including area code: (415) 981-4900
NONE
- - --------------------------------------------------------------------------
(Former name, address and former fiscal year, if changed since last report)
Indicate by check mark 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 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
----- -----
Indicate the number of shares outstanding of the common stock as of the
latest practicable date:
Shares of beneficial interest outstanding as of August 1, 1996: 3,031,618
<PAGE>
___________________________________________________________________________
PART I: FINANCIAL INFORMATION
___________________________________________________________________________
ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements should be
read in conjunction with the 1995 Form 10-K of the registrant (the
"Company"). These statements have been prepared in accordance with the
instructions of the Securities and Exchange Commission Form 10-Q and do not
include all the information and footnotes required by generally accepted
accounting principles for complete consolidated financial statements.
In the opinion of the Company's management, all material adjustments
of a normal and recurring nature considered necessary for a fair
presentation of results of operations for the interim periods have been
included. The results of consolidated operations for the three and six
month periods ended June 30, 1996 are not necessarily indicative of the
results that may be expected for the year ending December 31, 1996.
<PAGE>
<TABLE>
MERIDIAN POINT REALTY TRUST '83
CONSOLIDATED BALANCE SHEETS
June 30, 1996 and December 31, 1995
(Unaudited)
1996 1995
- - -----------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Investment in Real Estate Held for Sale:
Rental Properties, Net $ 8,701,564 $40,276,221
Less: Accumulated Depreciation (2,515,563) (11,495,736)
- - -----------------------------------------------------------------------------------------
6,186,001 28,780,485
Other Assets:
Cash and Cash Equivalents 4,302,530 2,525,918
Cash Held in Escrow -- 98,363
Restricted Cash 1,346,942 1,119,831
Accounts Receivable, Net of Reserves of $216,185 and
$178,146
as of June 30, 1996 and December 31, 1995, respectively 165,835 193,796
Notes Receivable From Affiliates 77,750 84,000
Investment in Real Estate Investment Trust -- 79,500
Capitalized Loan Costs, Net of Accumulated Amortization of
$91,341 and 324,324 as of June 30, 1996 and
December 31, 1995, respectively 22,133 65,445
Capitalized Lease Commissions, Net of Accumulated
Amortization
of $35,282 and $522,059 as of June 30, 1996 and
December 31, 1995, respectively 49,796 548,856
Other Assets, Net of Accumulated Amortization of
$50,663 as of December 31, 1995 116,561 557,142
- - -----------------------------------------------------------------------------------------
Total Assets $12,267,548 $34,053,336
=========================================================================================
Liabilities and Shareholders' Equity
Liabilities:
Mortgage Notes Payable $ 4,684,057 $21,177,787
Less Unamortized Discount -- (304,776)
- - -----------------------------------------------------------------------------------------
4,684,057 20,873,011
Due to Affiliates 40,078 67,046
Accounts Payable 21,472 368,861
Prepaid Rent, Tenant Deposits and Other Liabilities 220,903 518,265
- - -----------------------------------------------------------------------------------------
Total Liabilities 4,966,510 21,827,183
- - -----------------------------------------------------------------------------------------
Shareholders' Equity:
Shares of Beneficial Interest - $1.00 stated value:
Authorized - Unlimited; 3,031,618 shares issued and
outstanding as of June 30, 1996 and December 31, 1995 3,031,618 3,031,618
Paid-in Capital 22,755,694 22,755,694
Distributions in Excess of Income (18,486,274) (13,561,159)
- - -----------------------------------------------------------------------------------------
Total Shareholders' Equity 7,301,038 12,226,153
- - -----------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $12,267,548 $34,053,336
=========================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
MERIDIAN POINT REALTY TRUST '83
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Six Months Ended June 30, 1996 and 1995
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
- - ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Rentals from Real Estate Investments $310,251 $1,477,022 $1,391,698 $2,925,469
Interest and Other 68,262 70,768 126,698 149,589
- - ---------------------------------------------------------------------------------------------------------
Total Revenues 378,513 1,547,790 1,518,396 3,075,058
- - ---------------------------------------------------------------------------------------------------------
Expenses:
Interest and Amortization of Debt Discount 104,941 596,089 443,062 1,155,284
Property Taxes 25,002 143,675 129,120 298,434
Property Operating Costs, Including
Amounts Paid to Related Parties of
$33,333, $54,784, $132,786 and
$97,732, respectively 103,408 347,861 461,156 556,201
General and Administrative, Including
Amounts Paid to Related Parties of
$24,171, $114,886, $92,235 and
$204,802, respectively 120,955 189,010 258,308 419,676
Expenses from Terminated Stock Purchase -- 363,133 -- 363,133
Depreciation and Amortization 67,290 360,980 341,892 719,464
- - ---------------------------------------------------------------------------------------------------------
Total Expenses 421,596 2,000,748 1,633,538 3,512,192
- - ---------------------------------------------------------------------------------------------------------
Net Loss before Gain
on Disposition of Assets (43,083) (452,958) (115,142) (437,134)
Gain on Disposition of Assets -- -- 2,582,606 --
- - ---------------------------------------------------------------------------------------------------------
Net Income (Loss) ($43,083) ($452,958) $2,467,464 ($437,134)
=========================================================================================================
Net Income (Loss) per Common Share ($0.02) ($0.15) $0.81 ($0.14)
=========================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
MERIDIAN POINT REALTY TRUST '83
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 1996 and 1995
(Unaudited)
1996 1995
- - -------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash Flows From Operating Activities
Net Income (Loss) $2,467,464 ($437,134)
Adjustments to Reconcile Net Income (Loss) to
Net Cash Provided by Operating Activities:
Gain on Disposition of Assets (2,582,606) --
Depreciation 300,545 645,858
Amortization - Debt Discount 5,438 72,814
Amortization - Other 48,783 87,614
Rent Adjustment -- 35,457
Decrease (Increase) in Cash Held in Escrow 98,363 (2,830)
Increase in Restricted Cash (227,111) (223,815)
Decrease in Accounts Receivable 27,961 117,250
Decrease (Increase) in Other Assets (199,919) 107,300
Decrease (Increase) in Due to Affiliates (20,718) 19,524
Decrease in Accounts Payable (252,021) (76,020)
Decrease in Other Liabilities (297,362) (68,657)
- - -------------------------------------------------------------------------------------------------
Net Cash Provided By (Used In) Operating Activities (631,183) 277,361
- - -------------------------------------------------------------------------------------------------
Cash Flows from Investing Activities:
Improvements to Existing Real Estate (48,322) (288,156)
Increase in Capitalized Lease Commissions (41,885) (163,428)
Investment in Real Estate Investment Trust -- (79,500)
- - -------------------------------------------------------------------------------------------------
Net Cash Used in Investing Activities (90,207) (531,084)
- - -------------------------------------------------------------------------------------------------
Cash Flows from Financing Activities:
Proceeds from Disposition of Assets 3,693,309 --
Closing Costs on Disposition of Assets (89,460) --
Principal Payments on Mortgage Notes (105,413) (1,594,743)
Cash Dividends Paid (1,000,434) --
- - -------------------------------------------------------------------------------------------------
Net Cash Provided By (Used in) Financing Activities 2,498,002 (1,594,743)
- - -------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents 1,776,612 (1,848,466)
Cash and Cash Equivalents - Beginning of Period 2,525,918 4,984,963
- - -------------------------------------------------------------------------------------------------
Cash and Cash Equivalents - End of Period $4,203,530 $3,136,497
=================================================================================================
Supplemental Disclosure of Non-Cash Transactions
Proceeds from Disposition of Assets - Shares of Meridian
Industrial Trust, Inc. (MIT) Common Stock $ 6,392,145 $ --
Mortgages Assumed by MIT 16,334,297 --
Reduction of Investment in Real Estate for Properties Sold (22,343,612) --
Reduction of Other Assets for Properties Sold (1,402,967) --
Dividend Paid in Shares of MIT Common Stock (6,392,145) --
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
MERIDIAN POINT REALTY TRUST '83
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
1. General.
Meridian Point Realty Trust '83 (the "Company") is a business trust
organized under the laws of the State of California for the purpose of
acquiring, operating, holding for investment and ultimately selling income-
producing commercial and industrial real estate. It is the Company's
intention not to invest net proceeds from sales or refinancing in
additional properties and accordingly, the Company is a self-
liquidating/finite life trust. The Company was formed on June 24, 1982 and
commenced operations on April 12, 1983. On February 23, 1996, the Company
sold all of its real estate properties except for the Charleston Business
Park ("Charleston") (See Note 5). The Company's management is currently
evaluating its ongoing operating strategy.
2. Cash Equivalents.
The Company considers all investments with an original maturity of
three months or less to be cash equivalents.
Cash paid for interest was $102,866 and $692,103 for the three months
ended June 30, 1996 and 1995, respectively. Cash paid for interest of
$430,188 and $1,060,694 for the six months ended June 30, 1996 and 1995,
respectively.
3. Rentals from Real Estate Investments.
Certain of the Company's leases relating to its properties require
lessees to pay all or a portion of real estate taxes, insurance and
operating costs ("Expense Recaptures"). Expense Recaptures of $60,923 and
$189,006 for the three months ended June 30, 1996 and 1995, respectively,
have been included in Rentals from Real Estate Investments. For the six
months ended June 30, 1996 and 1995, Expense Recaptures of $240,719 and
$330,795, respectively, have been included in Rentals from Real Estate
Investments.
All leases are classified as operating leases. The Company recognizes
rental income on the straight-line basis over the terms of the leases.
Deferred rent receivable, included in accounts receivable, represents the
excess of rental revenue recognized on a straight-line basis over cash
received under the applicable lease provisions.
4. Investments in Real Estate and Depreciation Methods.
Investments in Real Estate are stated at the lower of depreciated cost
or net realizable value. Net realizable value for financial reporting
purposes: (i) is evaluated and identified quarterly by the Company on a
property by property basis using undiscounted cashflows; (ii) is measured
by comparing the Company's estimate of fair value based upon either sales
comparables or the net cash expected to be generated by the property
(comprised of the forecasted operations for the property based upon
historical results, together with management's estimates of the property's
future occupancy, lease rates and capital improvement requirements), less
estimated carrying costs (including interest) throughout the anticipated
holding period, plus the estimated cash proceeds from the ultimate
disposition of the property; and (iii) is not necessarily an indication of
the property's current value of the amount that will be realized upon the
ultimate disposition of the property. To the extent net realizable value
is less than the carrying value of the property, a Provision for Decrease
in Net Realizable Value is recorded in the amount by which the carrying
value exceeds estimated fair value. As of December 31, 1995, the Company's
Investment in Real Estate is stated net of a cumulative Provision for
Decrease in Net Realizable Value of $838,000. As of June 30, 1996, the
Company's Investment in Real Estate is stated at depreciated cost.
Depreciation and Amortization have been calculated under the straight-
line method, based upon the estimated useful lives of the assets. Property
and property additions are depreciated over 35 years. Expenditures for
maintenance, repairs and improvements which do not materially prolong the
normal useful life of an asset are charged to operations as incurred.
Leasing commissions and tenant improvements are amortized under the
straight-line method over the term of the related lease.
5. Disposition of Assets.
On February 23, 1996, the Company sold all of its real estate assets
except Charleston to Meridian Industrial Trust, Inc. ("MIT") for $3.6
million in cash, 390,360 shares of MIT common stock, and the assumption of
certain mortgage notes and other liabilities by MIT. The MIT common stock
was valued at $6,392,145 (See Note 6). In addition, the Company sold all
of its personal property and its $79,500 investment in common stock of
Meridian Point Properties, Inc. to MIT. The details of these transactions
are as follows:
<TABLE>
Mortgage
Selling Notes Property Other Gain or
Property Price Assumed Basis Costs (Loss)
- - ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Scripps $ 3,472,070 $ 7,965,980 $ 8,254,258 $ 328,805 $2,854,987
Golden Cove 1,814,467 3,195,467 3,364,489 39,278 1,606,167
Airport #14 996,870 813,290 2,129,470 196,496 (515,806)
North Irvine 995,329 2,080,234 2,435,232 136,489 503,842
El Dorado 849,252 1,310,809 2,060,263 117,905 (18,107)
Airport #17 782,313 0 1,972,250 129,636 (1,319,573)
Airport #16A 528,714 648,906 910,384 224,213 43,023
Airport #3 384,071 0 760,232 81,775 (457,936)
Airport #16B 169,059 319,611 457,034 148,370 (116,734)
-------------------------------------------------------------------------
9,992,145 16,334,297 22,343,612 1,402,967 2,579,863
Personal Property
and Investments 93,309 -- 90,566 -- 2,743
-------------------------------------------------------------------------
Total $10,085,454 $16,334,297 $22,434,178 $1,402,967 $2,582,606
=========================================================================
</TABLE>
In addition to the costs shown above, the Company paid $89,460 in
closing costs related to the sale of the real estate assets.
If the sale of the properties and investments had occurred on January
1, 1995, the employee leasing agreement with Meridian Point Properties,
Inc. had been terminated and replaced with the management agreement with E
& L Associates, Inc., the Company's pro forma results of operations for the
six months ended June 30, 1996 and 1995 would have been:
<TABLE>
1996 1995
----------------------------
<S> <C> <C>
Revenues $761,856 $787,691
Expenses 706,545 713,706
----------------------------
Net Income $ 55,311 $ 73,985
----------------------------
Net Income per Share $0.02 $0.02
============================
</TABLE>
6. Earnings Per Share.
Earnings per share of beneficial interest is determined by dividing
net income by the weighted average number of shares of beneficial interest
outstanding during the period. Weighted average number of shares
outstanding was 3,031,618 for the six months ended June 30, 1996 and 1995,
respectively. No distributions were made during the six months ended June
30, 1995. During the six months ended June 30, 1996, the Company
distributed cash of $1,000,434, or $0.33 per share of beneficial interest,
and all of the 390,360 shares of Meridian Industrial Trust, Inc. ("MIT")
common stock (or 0.1287 of a share of MIT common stock per share of
beneficial ownership in the Company) to stockholders of record at the close
of business on March 12, 1996.
7. Mortgage Notes Payable.
The mortgage note securing Charleston has an outstanding principal
balance of $4,684,057 at June 30, 1996. This loan has a maturity date of
March 1, 1999 and calls for monthly principal and interest payments based
on an interest rate of 8.75% per annum and a twenty-year amortization
schedule. In addition, the Company has made monthly payments of $35,000 to
an escrow account which will be available to fund the cost of remediation,
if any (see Note 10). Any funds remaining will be applied to the mortgage
loan as a principal paydown upon the maturity of the loan. As of June 30,
1996, the escrow account has a balance of $1,346,942.
8. Income Taxes.
The Company intends to qualify and be treated as a real estate
investment trust under Section 856-860 of the Internal Revenue Code for the
year ending December 31, 1996. As such, the Company should be allowed a
deduction for dividends paid to shareholders if the Company satisfies
certain income, asset and distribution requirements. Accordingly, no
provision for federal income taxes has been made in the accompanying
Consolidated Statements of Operations for the three and six months ended
June 30, 1996 and 1995.
9. Management Agreement.
Effective February 24, 1996, the Company appointed E & L Associates,
Inc. to provide property management and certain other administrative
services to the Company. The management agreement is on a month-to-month
basis and requires monthly management fee payments of $8,333.33. Effective
July 1, 1996 the monthly management fee payment is $10,000.
10. Commitments and Contingencies.
In the late 1980s, the San Francisco Bay Region of the California
Regional Water Quality Control Board (the "RWQCB") requested that the
Company investigate and characterize soil and groundwater contamination at
Charleston. In response to that request, the Company engaged an
environmental engineering firm which discovered the presence of
trichloroethylene and other solvent chemicals in the groundwater below
Charleston. Based on the preliminary reports of this environmental firm,
it appears that such contamination is the result of contamination generated
by (i) one or more sources located at properties adjacent to Charleston,
and possibly, (ii) a former tenant at Charleston. The exact locations of
the off-site sources have not yet been determined. During 1993, a further
investigation of the on-site contamination was conducted by the
environmental engineering firm and a firm of environmental health and
safety specialists. The information gathered suggests that the on-site
groundwater contamination resulted from an incident which occurred sometime
before 1986. It has not been determined whether the contamination occurred
before or after the Company acquired Charleston in 1983, or that
contamination has migrated off-site. The Company has requested that the
RWQCB pursue the responsible parties for the remediation costs. The RWQCB
has not yet responded to the Company's request. Charleston has not been
classified as a superfund site by the Environmental Protection Agency.
The RWQCB has taken jurisdiction as the "lead agency" with regard to
the environmental conditions at Charleston. Generally, the RWQCB
approaches remediation of such sites by designating "potentially
responsible parties" in two categories: (i) primarily responsible parties
that are jointly and severally obligated to perform and pay for all of the
necessary remedial or clean up work, and (ii) secondarily responsible
parties that are jointly and severally obligated to perform and pay for the
remedial work only if the primarily responsible parties have failed or
refused to comply with the agency's orders. Parties that have directly
caused environmental contamination are generally included in the class of
primarily responsible parties while landowners and property occupants that
have not directly caused the contamination are generally included in the
category of secondarily responsible parties. The Company believes there
are multiple parties that will be identified as primarily and secondarily
liable parties with respect to the contamination at Charleston.
The Company owns Charleston but never conducted operations there that
contributed to soil and groundwater conditions. Based on this fact and
other facts that are currently known, the Company believes the most likely
scenario, if the RWQCB takes action against the Company, is that the
Company: (i) will be named as a secondarily responsible party with respect
to the contamination that originated on Charleston, and (ii) should not be
named as a potentially responsible party with respect to contamination that
migrated onto Charleston from offsite origins. Accordingly, management
believes that, under current RWQCB policies, only if all the primarily
responsible parties fail or refuse to comply with the agency's orders will
the Company be required to take any remedial action with respect to
contamination that originated on Charleston. However, there is always a
risk that the Company might be named as a secondarily responsible party for
all the soil and groundwater conditions at the site, particularly if it
becomes impossible to distinguish between contamination that originated at
Charleston and contamination that migrated onto Charleston. There is also
a risk that enforcement policies may change, in which case the Company and
all other parties involved could be named as jointly and severally liable
parties with no distinction between primary and secondary liability. If
the Company were ordered to remediate the property under those
circumstances, however, it would have statutory and common law rights to
contribution and indemnity for the remediation costs against the parties
that actually caused the contamination.
The Company is not presently able to reasonably estimate the amount or
range of remediation costs, if any, or the amount or range of further costs
that may be required to be expended by it to resolve this matter because of
the uncertainty associated with the current limited information about the
extent and sources of the contamination, the types of remedial work that
may be required, and the relative liabilities of the multiple responsible
parties under regulatory enforcement policies. Accordingly, the
accompanying consolidated financial statements do not reflect any
adjustments for this matter. The Company has retained legal counsel to
assist in determining its legal obligations with respect to remediating the
contamination and in determining its legal right vis-a-vis the party or
parties directly responsible for the contamination.
In March 1994 the mortgage note secured by Charleston was restructured
providing for, among other things, a maturity date of March 1, 1999. In
connection with the restructuring, the Company made monthly payments of
$35,000 to a restricted cash account through December 1995. From December
1995 until the maturity of the loan, the Company will make monthly payments
to the restricted cash account equal to ninety percent (90%) of the
property's net cash flow. The escrow account will be available to fund the
cost of remediation, if any. Any funds remaining will be applied to the
mortgage loan as a principal paydown upon the maturity of the loan. Prior
to the restructuring of the loan, the Company had been making deposits to
the restricted cash account equal to the net cash flow of the property. As
part of the restructuring, the Company made a cash disbursement totaling
$209,829 to cover closing costs and a required cash deposit into the
restricted cash account. As of June 30, 1996, the restricted cash account
has a balance of $1,346,942.
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The Company was formed and currently operates as a self-liquidating,
finite-life REIT. The following discussion should be read in conjunction
with the Company's Consolidated Balance Sheets and Consolidated Statements
of Operations and Cash Flows and the notes thereto included in this report.
Unless otherwise defined in this report, or unless the context otherwise
requires, the capitalized words or phrases referred to in this section
either: (a) describe accounting terms that are used as line items in such
financial statements, or (b) have the meanings ascribed to them in such
financial statements and the notes thereto.
Before February 23, 1996, the Company's principal asset and source of
revenue was its portfolio of ten industrial and commercial properties. On
February 23, 1996, the Company: (1) sold nine of the ten properties in its
portfolio to MIT for $3.6 million in cash, 390,360 shares of MIT common
stock, and the assumption of certain mortgage notes and other liabilities
by MIT; (2) announced a dividend which was paid March 22, 1996 of
approximately $1 million in cash (or $0.33 per share of beneficial interest
in the Company) and all of the 390,360 shares of MIT common stock (or
0.1287 of a share of MIT common stock per share of beneficial interest in
the Company) to stockholders of record at the close of business on March
12, 1996; and (3) appointed E & L Associates, Inc. to provide property
management and certain other administrative services to the Company,
effective February 24, 1996.
The Company's future sources of liquidity will be significantly
influenced by the operations at Charleston, the Company's only remaining
real estate investment. Leases covering approximately 90% of the space at
Charleston will expire over the next 24 months. There can be no assurances
that the current tenants will renew or that they will not renew on less
favorable terms. Furthermore, the mortgage loan agreement requires that
90% of Charleston's cash flow be escrowed into a restricted cash account to
fund future retenanting costs and/or any environmental remediation work
(see Note 9 to the Company's financial statements). Finally, before the
property can be sold, management must first quantify the cost to remediate
the ground water contamination situation at Charleston. Accordingly, the
Company's future cash flow and results of operations remain uncertain in
light of the above operating challenges at Charleston.
Liquidity and Capital Resources
- - -------------------------------
The Company's liquidity and capital resources have been dramatically
changed as a result of the February 23, 1996 asset sale. The Company's
primary source of near-term liquidity is its unrestricted cash which, at
June 30, 1996, totaled $4,302,530. Secondary sources of liquidity include
cash flow from Charleston, 90% of which is required to be escrowed, and net
proceeds from the eventual sale of Charleston. Given the environmental
situation at Charleston, management believes it is unlikely the property
could be refinanced at interest rates or terms more favorable than those in
the existing first mortgage loan (which loan bears an annual fixed interest
rate of 8.75% and matures on March 1, 1999). Furthermore, management
believes the relatively low total capitalization of the Company makes it
remote that it could sell either debt or equity securities in the public
markets.
The Company's principal application of its resources are: (a)
property operating costs, property taxes, general and administrative
expenses, interest expense and legal costs; (b) environmental remediation,
tenant leasing and capital improvements at Charleston, (c) principal
payments on the Charleston mortgage note, (d) the escrowing of 90% of the
cash flow from Charleston as required under its mortgage loan agreements,
and (e) dividends.
During the six months ended June 30, 1996, funds used in operating
activities totaled $631,183 and were insufficient to fully meet the cash
needs of the Company. However, the quarter ended June 30, 1996 better
reflects the future cash needs of the Company. In that quarter funds used
in operations totaled $103,731. The Company anticipates this trend to
continue which would result in further declines in its unrestricted cash of
approximately $4.3 million at June 30, 1996.
Management is actively preparing the Charleston property for sale. On
June 27, 1996, the Company announced that it has entered into an exclusive
listing agreement for the sale of the property. It is expected that the
property will be offered for sale at $13,000,000. There can be no
assurances that the Company will be able to find a qualified buyer for the
property.
Capital expenditures for the six months ended June 30, 1996 and 1995
were $48,322 and $288,156, respectively. At the present time, however,
there are no commitments for capital improvements to the property.
The Company paid a cash dividend of $0.33 and 0.1287 of a share of MIT
common stock per share of beneficial interest.
Material Changes in Results of Operations
- - -----------------------------------------
Rentals from Real Estate Investments totaled $1,391,698 and $2,925,469
for the six months ended June 30, 1996 and 1995, respectively. The 1996
rentals were less than 1995 because of the sale of nine of the Company's
ten properties in its real estate portfolio on February 23, 1996. In the
six months ended June 30, 1996, rentals from Charleston were $639,485 which
approximates the rental income to be expected in future quarters until such
time as the property is sold.
Interest and other revenues declined by $22,891 to $126,698 in the six
months ended June 30, 1996 because of decreases in the Company's average
cash balances available for investment.
Property taxes and depreciation and amortization also declined from
period to period because of the February 23, 1996 property sale. Property
operating costs decreased in 1996. However, the decrease was not in
proportion to the decrease in rental income because of the write-off of
uncollectible receivables and legal and professional fees related to the
Charleston environmental situation and the fact that all of the management
fee paid to E & L Associates is included in property operating costs
whereas only a portion of the fees paid to MPP were previously included in
this category. See Note 5 to the consolidated financial statements for pro
forma results of operations from the ongoing operations.
General and administrative expense was $258,308 and $419,676 in the
six months ended June 30, 1996 and 1995, respectively. The decline
resulted from the lower level of allocated expense following the
termination of the MPP Employee Leasing Agreement.
<PAGE>
___________________________________________________________________________
PART II: OTHER INFORMATION
___________________________________________________________________________
ITEM 1. LEGAL PROCEEDINGS.
There are no material pending legal proceedings to which the Company
is a party or to which any of the assets of the Company is subject.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits: None.
(b) Reports on Form 8-K. The following Form 8-K was filed during the
quarter ended June 30, 1996:
Current Report on Form 8-K under Item 5 - Other Events, dated June 27,
1996, concerning the Company's announcement that it has entered into
an exclusive listing agreement for the sale of the Trust's last
remaining real estate asset, the Charleston Business Park.
SIGNATURES
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.
REGISTRANT
MERIDIAN POINT REALTY TRUST '83
Date: August 12, 1996 By: /s/ Lorraine O. Legg
----------------------
Lorraine O. Legg,
President and
Chief Executive Officer
(Principal Executive Officer)
Date: August 12, 1996 By: /s/ John E. Castello
----------------------
John E. Castello,
Senior Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE CONDENSED CONSOLIDATED BALANCE SHEET AS
OF JUNE 30, 1996 AND THE CONDENSED CONSOLIDATED STATEMENT
OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 5,649,472
<SECURITIES> 0
<RECEIVABLES> 459,770
<ALLOWANCES> 216,185
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 8,701,564
<DEPRECIATION> 2,515,563
<TOTAL-ASSETS> 12,267,548
<CURRENT-LIABILITIES> 282,453
<BONDS> 0
<COMMON> 3,031,618
0
0
<OTHER-SE> 4,269,420
<TOTAL-LIABILITY-AND-EQUITY> 12,267,548
<SALES> 0
<TOTAL-REVENUES> 4,101,002
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,190,476
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 443,062
<INCOME-PRETAX> 2,467,464
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,467,464
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,467,464
<EPS-PRIMARY> .81
<EPS-DILUTED> .81
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