UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended: November 30, 1994
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: 0-13330
HUTTON/CONAM REALTY PENSION INVESTORS
Exact name of Registrant as specified in its charter
New York 11-2673854
State or other jurisdiction of incorporation I.R.S. Employer Identification No.
3 World Financial Center, 29th Floor, New York, New York 10285
Address of principal executive offices zip code
Registrant's telephone number, including area code: (212) 526-3237
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
Title of Class
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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. (X)
Documents Incorporated by Reference:
Portions of Prospectus of Registrant dated June 24, 1983 (included in Amendment
No. 3 to Registration Statement No. 2-79116 of Registrant filed June 21, 1983)
are incorporated herein by reference to Part III of this report.
Portions of Parts I, II, III and IV are incorporated by reference to the
Partnership's Annual Report to Unitholders for the fiscal year ended November
30, 1994.
PART I
Item 1. Business
General Development of Business
Hutton/ConAm Realty Pension Investors (the "Registrant" or the "Partnership")
is a New York limited partnership organized pursuant to a Certificate and
Agreement of Limited Partnership dated January 23, 1984, as amended on January
26, 1984, of which RPI Real Estate Services, Inc. ("RPI Services," formerly
Hutton Real Estate Services VI, Inc.), a Delaware corporation, and ConAm
Property Services III, Ltd., a California limited partnership ("ConAm
Services"), are the general partners (together, the "General Partners").
Commencing June 24, 1983, the Registrant began offering through E. F. Hutton &
Company Inc., an affiliate of the Registrant, up to a maximum of 100,000 units
of limited partnership interest (the "Units") at $500 per Unit. Investors who
purchased the Units (the "Limited Partners") are not required to make any
additional capital contributions. The Units were registered under the
Securities Act of 1933, as amended (the "Act"), under Registration Statement
No. 2-79116, which Registration Statement was declared effective on June 24,
1983. The offering of Units was terminated on May 31, 1984. Upon termination
of the offering, the Registrant had accepted subscriptions for 96,490 Units for
an aggregate of $48,245,000.
Narrative Description of Business
The Registrant is engaged in the business of owning and operating multifamily
residential real estate properties. In addition, the Registrant is engaged in
the business of investing in multifamiily residential rental properties by
making equity participating loans secured by first mortgages or deeds of trust
on such properties. Of the Registrant's gross offering proceeds, uninvested
funds totalling $5,210,460 and $7,429,730 were returned in 1985 and 1986,
respectively, resulting in net offering proceeds of $35,604,810. The
Registrant invested all of the proceeds available in five equity participating
mortgage loans, one of which was repaid in December 1987. As of November 30,
1994, the Registrant held the following interests:
(1) On September 28, 1984, the Registrant funded an equity participating
loan in the amount of $4,475,250 to Southridge Partners I, L.P. ("Southridge"),
a privately offered New York limited partnership affiliated with the
Registrant, in connection with the purchase by Southridge of Oaktree Village
("Oaktree"), a 160-unit apartment complex located in Jacksonville, Florida.
One of the corporate general partners of each of the Registrant and Southridge
are wholly owned subsidiaries of LB I Group Inc. (formerly E.F. Hutton Group,
Inc. ). LB I Group Inc. is a wholly-owned subsidiary of Lehman Brothers Inc.
("Lehman"). (See Item 10, "Certain Matters Involving Affiliates of RPI
Services").
(2) On October 30, 1984, the Registrant funded an equity participating loan
in the amount of $5,850,000 to Southridge, in connection with the purchase by
Southridge of Chaparosa Apartments ("Chaparosa"), 170-unit apartment complex
located in Irving, Texas. On January 31, 1992, the Registrant obtained legal
title to Chaparosa through a deed in lieu of foreclosure. As a result,
Chaparosa is now recorded as a real estate investment rather than a mortgage
loan investment on the Registrant's balance sheet.
(3) On December 21, 1984, the Registrant funded an equity participating
loan in the amount of $5,200,650 to Southridge, in connection with the purchase
by Southridge of Park View Village ("Park View"), a 184-unit apartment complex
located in Winter Park (a suburb of Orlando), Florida.
(4) On July 16, 1985, the Registrant funded an equity participating loan in
the amount of $6,800,000 to Fisherman's Landing Associates, Ltd., an
unaffiliated third party, in connection with the purchase of Fisherman's
Landing, a 200-unit apartment complex located in Bradenton, FL. In December of
1987, the loan secured by Fisherman's Landing of Bradenton was satisfied. The
underlying property was sold for $7,700,000 of which $7,329,649 was paid to the
Partnership to pay principal of $6,800,000 and deferred interest of $529,649.
Since the underlying property was sold for less than $8,500,000, the
Partnership did not participate in any appreciation.
(5) On November 20, 1985, the Registrant funded an equity participating
loan in the amount of $5,900,000 to Bryn Athyn Investors, Ltd., a Texas limited
partnership unaffiliated with the Registrant, in connection with its purchase
of Bryn Athyn Apartments ("Bryn Athyn"), a 172-unit apartment complex located
in Raleigh, North Carolina. In July 1989, the Registrant obtained ownership of
the property through a foreclosure sale. As a result, Bryn Athyn is now
recorded as a real estate investment rather than a mortgage loan investment on
the Registrant's balance sheet.
The terms of the loans secured by Oaktree and Park View were modified during
1993. For information pertaining to the terms of the modifications and the
mortgage loans secured by the Southridge properties see Item 7 of this report
and Note 4 to the Financial Statements incorporated herein by reference to the
Partnership's Annual Report to Unitholders for the fiscal year ended November
30, 1994.
Approximately 3% of the gross proceeds of the offering were initially reserved
and have been maintained as working capital to meet costs and expenses of the
Registrant's operations, including ongoing administrative expenses. The
General Partners believe such reserves to be reasonable, although working
capital reserves may be increased or decreased from time to time in order to
meet anticipated costs and expenses and potential losses. The General Partners
may also at their discretion set aside a reserve for the purpose of augmenting
future distributions of cash. To the extent that funds held as a working
capital reserve have not been expended, the Registrant has invested such funds
in bank certificates of deposit, unaffiliated money market funds or other
highly liquid short-term investments where there is appropriate safety of
principal in accordance with the Registrant's investment objectives and
policies.
The Registrant's principal investment objectives with respect to its interests
in real property are:
(1) To participate in the capital appreciation of the various properties in
which it invests;
(2) To provide quarterly cash distributions;
(3) To preserve and protect the capital appreciation of the properties in
which it invests; and
(4) To provide increased cash distributions as the cash flow from the
properties increases.
Distributions of income is the Registrant's objective during its operational
phase, while preservation and appreciation of capital will be the Registrant's
long-term objectives. Future economic conditions in the United States as a
whole and, in particular, in the localities in which the Registrant's
investment properties are located, will be important factors to attaining the
Registrant's investment objectives, especially with regard to achievement of
capital appreciation.
The Registrant did not incur indebtedness in connection with the making of the
loans. The loans were funded entirely out of proceeds of the offering of
Units. However, the Registrant is not prohibited from incurring indebtedness
for working capital purposes. In addition, in the event that the Registrant
becomes the owner of a property through the foreclosure of a loan, the
Registrant may subject such property to mortgage indebtedness in an amount not
to exceed 80% of the then appraised value of the property. At November 30,
1994, the Partnership had no mortgage indebtedness against Bryn Athyn or
Chaparosa.
Competition
The Registrant's real property investments and the properties securing the
Registrant's outstanding mortgage loans are subject to competition from similar
types of properties in the vicinities in which they are located and such
competition has increased since the Partnership's inception due principally to
the addition of the newly constructed apartment complexes offering increased
residential and recreational amenities. The investment properties have also
been subject to competition from condominiums and single-family properties
especially during periods of low mortgage interest rates. The Registrant
competes with other real estate owners, developers and financiers in the rental
and leasing of its properties and the properties securing its outstanding
mortgage loans by offering competitive rental rates and, if necessary, leasing
incentives. In some cases, the Registrant may compete with other partnerships
affiliated with either General Partner of the Registrant.
For information with respect to market conditions in each of the areas where
the Partnership's properties are located, please refer to Item 2 below.
Employees
The Registrant has no employees. Services are provided by RPI Services, ConAm
Services, ConAm Management Corporation ("ConAm Management"), an affiliate of
ConAm Services, as well as Service Data Corporation and The Shareholder
Services Group, both unaffiliated companies. ConAm Management provides
property management services with respect to the properties subject to the
Southridge loans pursuant to agreements with Southridge, as the property owner.
In addition, the Registrant has entered into a management agreement with ConAm
Management pursuant to which ConAm Management provides property management
services with respect to the Bryn Athyn and Chaparosa properties. The
Shareholder Services Group has been retained by the Registrant to provide all
accounting and investor communication functions, while Service Data Corporation
provides transfer agent services. See Item 13 of this report and Note 6 to
the Consolidated Financial Statements for a further description of the service
and m anagement agreements between the Registrant and affiliated entities.
Item 2. Properties
Below is a description of the Registrant's wholly owned properties and those
which secure its two remaining mortgage loans, and a discussion of current
market conditions in each of the areas where the properties are located. For
information on the acquisition of the Properties and terms of the mortgage
loans, reference is made to Note 4 to the Financial Statements on pages F7-F9
of the Partnership's Annual Report to Unitholders for the fiscal year ended
November 30, 1994, which is filed as an exhibit under Item 14. Appraised
values of the Partnership's real estate investments are incorporated by
reference to page 14 of the Partnership's Annual Report to Unitholders.
Bryn Athyn Apartments - Raleigh, North Carolina
This 172-unit apartment community is situated north of downtown Raleigh in a
suburban location composed primarily of townhouses and single family homes.
Raleigh continues to experience above average population and job growth,
fueling healthy multifamily market conditions. A local survey reports average
occupancy of over 98% and 1994 average annual rent increases of 7% in Bryn
Athyn's northern Raleigh submarket as of September 1994. Construction of new
units has increased over the past year, with 332 new units completed from
September 1993 to September 1994, and one new complex with 252 units under
construction in Bryn Athyn's north submarket. The area's strong growth,
however, is expected to keep pace with this new supply.
Chaparosa Apartments - North Irving, Texas
Located approximately fifteen miles northwest of downtown Dallas, this 170-unit
apartment complex is situated in the Las Colinas area of Irving. The local
apartment market, although competitive, evidenced improvement during 1994 and
many complexes in the area, including Chaparosa, were able to increase rental
rates during the year, despite the lease-up of several recently constructed
properties. The Las Colinas submarket reported average occupancy of 96% as of
the third quarter of 1994, up from 93% in 1993, and area apartment complexes
averaged rental rate increases of 2% during 1994. Only 40 new units were
constructed during 1994; however, two projects are nearing completion which
will add 763 units to the market, and several other complexes are in the
planning stages. Absorption in this attractive area remains the highest among
Dallas submarkets and is likely to temper the increased competition from this
new supply.
Oaktree Village - Jacksonville, Florida
This 160-unit apartment complex is situated in southeast Jacksonville,
approximately 8 miles from the central business district, in the
Baymeadows/Deerwood community. Significant prior period overbuilding has left
the Baymeadows/Deerwood area highly competitive for rental properties.
Although market conditions have improved steadily over the past two years, many
complexes continue to offer rental concessions to attract tenants. A survey of
the Baymeadows/Deerwood submarket indicated average occupancy of area
apartments has climbed to 93% as of the second quarter of 1994, and average
rental rates had increased approximately 5% from a year earlier. Although
average occupancy is rising in the Jacksonville area, the market is in a
recovery stage which is steady albeit slow. New construction, however, has
remained limited, with no new permits issued in 1992 or 1993, and only 370
units permitted in 1994.
Park View Village - Winter Park, Florida
This 184-unit apartment complex is located in metropolitan Orlando,
approximately 10 miles northeast of the central business district. The
Orlando area has experienced modest growth in apartment demand during 1994 and
new construction has remained limited. While the overall outlook for the
Orlando area is generally considered positive, the area's apartment market
continues to recover from the recent recession and prior period overbuilding.
A market sampling of the property's submarket conducted at September 30, 1994
showed average occupancy of 91% as of September 30, 1994, and a 1% increase in
rental rates from a year earlier. The decrease in the appraised value of Park
View from 1993 to 1994 reflects these competitive conditions as well as road
construction at the entrance to the property which has impacted the
Partnership's ability to market the rental units.
Item 3. Legal Proceedings
The General Partners are pursuing a settlement agreement with the manufacturers
of the polybutelene (a type of plastic) water pipes used in the construction
of the Bryn Athyn property. These pipes have been determined to be defective
and have the potential to leak at the connections. The General Partners
anticipate reaching a settlement in the first half of 1995. Any repair costs
associated with the plumbing defects not covered by the pending settlement are
not expected to have a material impact on the Partnership's operating results.
Item 4. Submission of Matters to a Vote of Security Holders
During the fourth quarter of the fiscal year ended November 30, 1994, no matter
was submitted to a vote of security holders through the solicitation of proxies
or otherwise.
PART II
Item 5. Market for the Partnership's Limited Partnership Interests and Related
Security Holder Matters
As of November 30, 1994, the number of Unitholders of record was 5,733.
No established public trading market has developed for the Units, and it is not
anticipated that such a market will develop in the future.
Distributions of adjusted cash from operations are made quarterly approximately
45 days after the close of each fiscal quarter. The Partnership has paid
quarterly cash distributions since the initial closing of the offering in
February 1984. Following is a full accounting of cash distributions paid to
the Limited Partners during the past two years.
Cash Distributions
Per Limited Partnership Unit
Years Ended November 30,
1994 1993
---- ----
1st Quarter... $ 4.00 $ 2.50
2nd Quarter... 4.00 2.50
3rd Quarter... 5.00 2.50
4th Quarter... 5.00 2.50
----- -----
TOTALS $18.00 $10.00
Distributions to the Limited Partners with respect to fiscal 1993 and 1994
operations were made primarily from interest income generated from the
Southridge loans and rental income from Bryn Athyn and Chaparosa. The General
Partners review the level and timing of cash distributions on a quarterly
basis, taking into consideration anticipated funding needs for ongoing
improvements required at the Chaparosa property and contingencies.
Item 6. Selected Financial Data
(Dollars in thousands, except per Unit data)
Periods Ended November 30,
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
Total Income $ 3,230 $ 3,272 $ 3,566 $ 3,393 $ 3,348
Net Income 452 1,157 1,458 2,306 2,078
Net Cash Provided by
Operating Activities 1,733 1,768 1,971 1,613 2,141
Total Assets
at Year End 22,650 23,813 23,603 23,365 23,135
Net Income per
Limited Partnership Unit
(96,490 units) 4.30 11.45 14.54 20.48 17.79
Distributions per
Limited Partnership Unit
(96,490 units) 18.00 10.00 10.00 20.00 20.00
The above Selected Financial Data should be read in conjunction with Item 7 and
Item 8 of this report.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
At November 30, 1994, the Partnership had cash and cash equivalents of
$2,131,720 which were invested in unaffiliated money market funds, compared
with $2,373,818 at November 30, 1993. The decrease of $242,098 from November
30, 1993 can be attributed to cash used to fund capital improvements and cash
distributions exceeding net cash provided by operating activities.
Since early in 1992, Southridge had been seeking modifications of the mortgage
loans secured by Oaktree Village and Park View Village. During the fourth
quarter of 1993, the loan modifications were executed, retroactively effective
on March 1, 1993. Pursuant to the terms of the modification, Southridge agreed
to pay the Partnership a fee of $193,518, which is equal to 2% of the original
loan amounts. Half of the fee, $96,759, was paid at the closing of the
modification and the other half will be due upon sale or refinancing of the
properties to the extent that there are net sales proceeds available. The
modifications contain the following provisions: (1) the maturity dates of the
loans secured by Oaktree Village and Park View Village are extended by three
years to September 30, 1997 and December 31, 1997, respectively; (2) the stated
interest rate of the loans is reduced from 12% to 8.5% and (3) interest ceases
to accrue on deferred interest accrued to date. For additional discus sion on
the modifications, see Note 4 to the Financial Statements incorporated herein
by reference to the Partnership's Annual Report to Unitholders for the fiscal
year ended November 30, 1994.
Significant capital improvements were necessary at Chaparosa to address
original construction defects. In the second quarter of fiscal 1993, the
General Partners began the project to repair the stairways, foundation and
roof. The project was substantially completed at the close of the first
quarter of 1994, and placed in service as of March 1, 1994 at a total cost of
$950,870, of which $400,803 was paid in fiscal 1994. Such costs were funded
from: (i) approximately $800,000 received by the Partnership as its share of
the construction litigation proceeds from Southridge and (ii) approximately
$151,000 from Partnership cash reserves.
The General Partners declared a cash distribution of $5.00 per Unit for the
quarter ended November 30, 1994 which was paid to investors on January 17,
1995. A portion of this distribution was funded from Partnership cash reserves
and reflects the General Partner's decision to gradually release excess cash
reserves in consideration of the completion of the Chaparosa construction. The
level of future distributions will be reviewed and determined on a quarterly
basis.
Results of Operations
1994 versus 1993
Partnership operations for the year ended November 30, 1994 generated net
income of $452,116 compared with net income of $1,156,690 for fiscal 1993. The
decrease is primarily attributable to a reduction in mortgage interest, higher
operating costs and an increased provision for losses, discussed below.
Rental income totaled $2,294,509 for the year ended November 30, 1994 compared
with $2,119,923 for fiscal 1993. This increase is mainly attributable to
higher rental rates at both of the Partnership's wholly-owned properties.
Mortgage interest income totaled $822,452 for the year ended November 30, 1994
compared with $1,051,902 for fiscal 1993. The decrease is due to the
restructuring of the Partnership's mortgage loans secured by Oaktree Village
and Park View Village which resulted in a lower interest rate.
Total expenses for the year ended November 30, 1994 were $2,777,424 compared
with $2,114,810 for fiscal 1993. The provision for losses was $937,593 for the
year ended November 30, 1994 compared with $411,769 for the year ended November
30, 1993. The provision for losses relates to the difference between the
carrying amount of the Partnership's loans, including deferred interest
receivable, and the fair market value of the properties, as determined by an
independent appraisal conducted in November 1994. The higher provision in 1994
is due to a decrease in appraised value of both Oaktree Village and Park View
Village. The decrease in the appraised values reflects competitive conditions
in Orlando and Jacksonville, and for Park View Village, ongoing road
construction at the entrance to the property which has impacted the
Partnership's ability to market the rental units. The loans remain current,
and the provision does not impede full collectability of the loan payments.
Property operating expenses totaled $1,314,991 for the year ended November 30,
1994 compared with $1,181,083 for fiscal 1993. The increase is primarily due
to expenses incurred at the Chaparosa property to repair breaks in the
property's sewer lines. In addition, the Bryn Athyn property incurred
additional plumbing expenses in 1994 as a result of the leaking plastic water
pipes, discussed in "Liquidity and Capital Resources." The increase can also
be attributed to routine repairs and maintenance expenditures for carpet and
flooring replacement, pool repairs and landscaping at both of the Partnership's
wholly-owned properties.
General and administrative expenses totaled $134,569 for the year ended
November 30, 1994, compared with $153,804 in fiscal 1993. The decrease is
primarily attributable to reductions in Partnership out of pocket expenses and
professional fees.
1993 versus 1992
Partnership operations for the year ended November 30, 1993 generated net
income of $1,156,690, compared with net income of $1,457,990 for fiscal 1992.
The decrease in net income is attributable primarily to lower mortgage interest
income associated with the restructuring of the Southridge loans. This
decrease was offset partially by increased rental income and a reduction in the
provision for losses.
Rental income totaled $2,119,923 for the year ended November 30, 1993, compared
with $1,929,615 in fiscal 1992. The increase is mainly attributable to the
acquisition of the Chaparosa Apartments on January 31, 1992 and the recording
of two additional months of income at the property in fiscal 1993 as compared
with fiscal 1992. Mortgage interest income decreased to $1,051,902 for the
year ended November 30, 1993 from $1,545,019 for fiscal 1992 due primarily to
the restructuring of the Southridge loans.
Total expenses for the year ended November 30, 1993 were $2,114,810, largely
unchanged from $2,107,840 for the year ended November 30, 1992. For the year
ended November 30, 1993, the provision for losses was $411,769, compared with
$554,163 in fiscal 1992. See "Results of Operations, 1994 versus 1993" and
Note 5 to the Consolidated Financial Statements for further discussion of such
provision.
Property operating expenses increased to $1,181,083 for the year ended November
30, 1993 from $1,005,292 for the year ended November 30, 1992. The increase in
property operating expenses is primarily a result of the acquisition of the
Chaparosa property on January 31, 1992 and the recording of two additional
months of expenses at the property in fiscal 1993. In addition, the
Partnership incurred increased repairs and maintenance expenses relating to the
Chaparosa property. These increases represent routine expenses deemed
non-capital expenditures including repairs to air conditioning units,
extermination services, carpet replacements, and plumbing repairs. All
expenditures incurred in conjunction with the improvements at the property were
capitalized.
General and administrative expenses totaled $153,804 for the year ended
November 30, 1993, compared with $179,695 in fiscal 1992. The decrease in
fiscal 1993 is primarily attributable to a reduction in legal fees and
construction consulting fees which were higher in fiscal 1992 as a result of
the acquisition of the Chaparosa Apartments. In addition, the Partnership
incurred lower printing and postage expenses in fiscal 1993.
For the years ended November 30, 1994, 1993 and 1992, average occupancy levels
at the Partnership's two properties and at the properties securing the
Partnership's equity participating loans were as follows:
Real Estate Investments 1994 1993 1992
---- ---- ----
Bryn Athyn Apartments 97% 96% 96%
Chaparosa Apartments 95% 95% 93%
Mortgage Loan Investments:
Oaktree Village 95% 95% 96%
Park View Village 95% 93% 95%
Item 8. Financial Statements and Supplementary Data
Incorporated by reference to page 4-14 of the Partnership's Annual Report to
Unitholders for the fiscal year ended November 30, 1994, which is filed as an
exhibit under Item 14, and pages F-1 through F-3 of this report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
The Registrant has no officers or directors. RPI Services and ConAm Services,
the co-General Partners of the Registrant, jointly manage and control the
affairs of the Registrant and have general responsibility and authority in all
matters affecting its business.
RPI Services
RPI Services (formerly Hutton Real Estate Services VI, Inc.) is a Delaware
Corporation formed on August 2, 1982, as a wholly-owned subsidiary of LB I
Group Inc. (formerly E.F. Hutton Group Inc.). LB I Group Inc. is now a
wholly-owned subsidiary of Lehman Brothers Inc. ("Lehman"). See the section
captioned "Certain Matters Involving Affiliates of RPI Services" for a
description of Hutton's acquisition by Shearson Lehman Brothers, Inc.
("Shearson") and the subsequent sale of certain of Shearson's domestic retail
brokerage and asset management businesses to Smith Barney, Harris Upham & Co.
Incorporated ("Smith Barney"), which resulted in a change in the general
partner's name.
Certain officers and directors of RPI Services are now serving (or in the past
have served) as officers or directors of entities which act as general partners
of a number of real estate limited partnerships which have sought protection
under the provisions of the Federal Bankruptcy Code. The partnerships which
have filed bankruptcy petitions own real estate which has been adversely
affected by the economic conditions in the markets in which the real estate is
located and, consequently, the partnerships sought the protection of the
bankruptcy laws to protect the partnerships' assets from loss through
foreclosure. The names and ages of, as well as the positions held by, the
directors and executive officers of RPI Services who perform policy making
functions for the Partnership are set forth below. There are no family
relationships between any executive officers or directors.
Name Age Office
---- --- ------
Paul L. Abbott 49 Director, President, Chief
Executive Officer and Chief
Financial Officer
Janet M. Hoynes 30 Vice President
Kate Hobson 28 Vice President
Paul L. Abbott is a Managing Director of Lehman Brothers. Mr. Abbott joined
Lehman Brothers in August 1988, and is responsible for investment management of
residential, commercial and retail real estate. Prior to joining Lehman
Brothers, Mr. Abbott was a real estate consultant and a senior officer of a
privately held company specializing in the syndication of private real estate
limited partnerships. From 1974 through 1983, Mr. Abbott was an officer of two
life insurance companies and a director of an insurance agency subsidiary. Mr.
Abbott received his formal education in the undergraduate and graduate schools
of Washington University in St. Louis.
Janet M. Hoynes is a Vice President at Lehman Brothers in the Diversified Asset
Group and is responsible for asset management of residential real estate.
Prior to joining Shearson in July 1989, she was employed as an analyst in a
public real estate investment trust based in California. Ms. Hoynes received a
B.A. in Economics from the State University of New York at Stony Brook in 1986.
Kate Hobson is an Assistant Vice President of Lehman Brothers and has been a
member of the Diversified Asset Group since 1992. Prior to joining Lehman
Brothers, Ms. Hobson was associated with Cushman & Wakefield serving as a real
estate accountant from 1990 to 1992. Prior to that, Ms. Hobson was employed by
Cambridge Systematics, Inc. as a junior land planner. Ms. Hobson received a
B.A. degree in sociology from Boston University in 1988.
ConAm Services
ConAm Services is a California limited partnership organized on August 30,
1982. The sole general partner of ConAm Services is Continental American
Development, Inc. ("ConAm Development"). The names and ages of, as well as the
positions held by, the directors and executive officers of ConAm Development
are set forth below. There are no family relationships between any officers or
directors.
Name Age Office
---- --- ------
Daniel J. Epstein 55 President and Director
Nancie Larimore 55 Secretary/Treasurer and Director
E. Scott Dupree 44 Vice President
Robert J. Svatos 36 Vice President
Ralph W. Tilley 40 Vice President
Daniel J. Epstein has been the President and a Director of ConAm Development
and ConAm Management (or its predecessor firm) and a general partner of
Continental American Properties, Ltd. ("ConAm"), an affiliate of ConAm
Services, since their inception. Prior to that time Mr. Epstein was Vice
President and a Director of American Housing Guild, which he joined in 1969.
At American Housing Guild, he was responsible for the formation of the
Multi-Family Division and directed its development and property management
activities. Mr. Epstein holds a Bachelor of Science degree in Engineering from
the University of Southern California.
Nancie Larimore has been employed by ConAm Management or its affiliates since
1976 and has been a Vice President of ConAm Management (or its predecessor
firm) and the Secretary/Treasurer and a Director of ConAm Development since
their inception. Ms. Larimore's responsibilities include leasing, consumer
relations, advertising and promotion. From 1972 to 1975, she held a similar
position with American Housing Guild. From 1969 to 1972, she was Director of
Property Management for Larwin Group, Inc. Ms. Larimore is a graduate of the
University of California at Los Angeles, and holds a Master's of Business
Administration degree from the University of California at Los Angeles.
E. Scott Dupree is a Vice President and general counsel of ConAm Management
responsible for negotiation, documentation, review and closing of acquisition,
sale and financing proposals. Mr. Dupree also acts as principal legal advisor
on general legal matters ranging from issues and contracts involving the
management company to supervision of litigation and employment issues. Prior
to joining ConAm Management in 1985, he was corporate counsel to Trusthouse
Forte, Inc., a major international hotel and restaurant corporation. Mr.
Dupree holds a B.A. from United States International University and a Juris
Doctorate degree from the University of San Diego.
Robert J. Svatos is a Vice President and has been the Chief Accounting Officer
of ConAm Management since 1988. His responsibilities include the accounting,
treasury and data processing functions of the organization. Mr. Svatos is part
of the firm's due diligence team, analyzing a broad range of projects for ConAm
Management's fee client base. Prior to joining ConAm Management, he was the
Chief Financial Officer for AmeriStar Financial Corporation, a nationwide
mortgage banking firm. Mr. Svatos holds an M.B.A. in Finance from the
University of San Diego and a Bachelor's of Science degree in Accounting from
the University of Illinois. He is a Certified Public Accountant.
Ralph W. Tilley is a Vice President and Treasurer of ConAm Management. He is
responsible for the financial aspects of syndications and acquisitions, the
company's asset management portfolio and risk management activities. Prior to
joining ConAm Management in 1980, he was a senior accountant with KPMG Peat
Marwick, specializing in real estate. He holds a Bachelor's of Science degree
in Accounting from San Diego State University and is a Certified Public
Accountant.
Certain Matters Involving Affiliates of RPI Services
On January 13, 1988, SLBP Acquisition Corp. (the "Purchaser"), a wholly-owned
subsidiary of Shearson Lehman Brothers Holding Inc., acquired 29,610,000 shares
of stock of the Hutton Group pursuant to a cash tender offer commenced on
December 7, 1987. On January 21, 1988, the Purchaser assigned its right to
purchase the shares so accepted to Shearson. Shearson purchased the 29,610,000
shares which constituted approximately 90% of the outstanding shares of the
Hutton Group. Shearson subsequently acquired the remaining shares of the
Hutton Group. Thus, the Hutton Group became a wholly-owned subsidiary of
Shearson.
On July 31, 1993, Shearson sold certain of its domestic retail brokerage and
asset management businesses to Smith Barney. Subsequent to the sale, Shearson
changed its name to "Lehman Brothers Inc". The transaction did not affect the
ownership of the Partnership's General Partners. However, the assets acquired
by Smith Barney included the name "Hutton." Consequently, the Hutton Real
Estate Services VI, Inc. general partner changed its name to "RPI Real Estate
Services, Inc.," and the Hutton Group changed its name to "LB I Group Inc." to
delete any reference to "Hutton."
Item 11. Executive Compensation
Neither of the General Partners nor any of their directors or executive
officers received any compensation from the Registrant. See Item 13 below with
respect to a description of certain transactions of the General Partners and
their affiliates with the Registrant.
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of January 31, 1995, no person was known by the Registrant to be the
beneficial owner of more than five percent of the Units of the Registrant.
Neither of the General Partners nor any of their directors or executive
officers owns any Units.
Item 13. Certain Relationships and Related Transactions
RPI Services and ConAm Services each received $45,706 as its allocable share of
Net Cash from Operations with respect to the fiscal year ended November 30,
1994, pursuant to the Certificate and Agreement of Limited Partnership of
Registrant. Pursuant to the Certificate and Agreement of Limited Partnership
of Registrant, for the fiscal year ended November 30, 1994, $37,087 of the
Registrant's income was allocated to the General Partners ($24,725 to RPI
Services and $12,362 to ConAm Services). For a description of the share of Net
Cash from Operations and the allocation of income and loss to which the General
Partners are entitled, reference is made to the material contained on pages 76
through 78 of the Prospectus of the Registrant dated June 24, 1983 (the
"Prospectus"), contained in Amendment No. 3 to Registrant's Registration
Statement No. 2-79116, under the section captioned "Profit and Losses and Cash
Distributions," which section is incorporated herein by reference thereto.
The Registrant has entered into property management agreements with ConAm
Management pursuant to which ConAm Management has assumed direct responsibility
for day to day management of the Bryn Athyn Apartments and Chaparosa
Apartments. The services include the supervision of leasing, rent collection,
maintenance, budgeting, employment of personnel, payment of operating expenses,
etc. For such services, ConAm Management is entitled to receive a property
management fee as described on page 33 of the Prospectus under the caption,
"Investment Objectives and Policies - Management of Properties," which
description is herein incorporated by reference. A summary of property
management fees earned by ConAm Management during the past three fiscal years
is incorporated herein by reference to Note 6 to the Financial Statements
included in the Partnership's Annual Report to Unitholders for the fiscal year
ended November 30, 1994.
Southridge Partners I, the owner of Oaktree and Park View has entered into
property management agreements with ConAm Management pursuant to which ConAm
Management has assumed direct responsibility for day to day management of the
Southridge properties subject to the Southridge loans and, prior to January 31,
1992, the Chaparosa loan. For such services, during the twelve months ended
November 30, 1994, ConAm Management earned property management fees aggregating
$103,179, from Southridge.
Pursuant to Section 11(g) of Registrant's Certificate and Agreement of Limited
Partnership, the General Partners and affiliates may be reimbursed by the
Registrant for certain of their costs as described on page 14 of the
Prospectus, which description is incorporated herein by reference thereto. The
Shareholder Services Group provides partnership accounting and investor
relations services for the Registrant. Prior to May 1993, these services were
provided by an affiliate of a general partner. The Registrant's transfer agent
and certain tax reporting services are provided by Service Data Corporation, an
unaffiliated company. A summary of amounts paid to the General Partners or
their affiliates during the past three fiscal years is incorporated by
reference to Note 6 to the Financial Statements included in the Partnership's
Annual Report to Unitholders for the fiscal year ended November 30, 1994.
PART IV
Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K
(a)(1) Financial Statements: Page
----
Balance Sheets - November 30, 1994 and 1993 (1)
Statements of Operations - For the years ended
November 30, 1994, 1993 and 1992 (1)
Statements of Partners' Capital - For the years
ended November 30, 1994, 1993 and 1992 (1)
Statements of Cash Flows - For the years ended
November 30, 1994, 1993 and 1992 (1)
Notes to Financial Statements (1)
Report of Independent Accountants (1)
(a)(2) Financial Statement Schedules:
Schedule XI - Real Estate and Accumulated Depreciation F-1
Schedule XII - Mortgage Loans on Real Estate F-2
Report of Independent Accountants F-3
(1) Incorporated by reference to the Partnership's Annual Report to
Unitholders for the fiscal year ended November 30, 1994, filed as an
exhibit under Item 14.
(a)(3) Exhibits
(4)(A) Certificate and Agreement of Limited Partnership (included as,
and incorporated herein by reference to, Exhibit A to the
Prospectus of Registrant dated June 24, 1983, contained in
Amendment No. 3 to Registration Statement No. 2-79116 of Registrant
filed June 21, 1983).
(B) Subscription Agreement and Signature Page (included as, and
incorporated herein by reference to, Exhibit 3.1 to Amendment No. 2
to Registration Statement No. 2-79116 of Registrant filed June 13,
1983).
(10)(A) Loan Documents (Loan Commitment; Promissory Note; and Mortgage,
Assignment of Rents and Security Agreement) relating to Oaktree
Village, between the Registrant and Southridge Partners I, and the
exhibits thereto (included as, and incorporated herein by reference
to, Exhibit (10)(A) to the Registrant's Annual Report on Form 10-K
for the fiscal year ended November 30, 1984 (the "1984 Annual
Report")).
(B) Loan Documents (Loan Commitment; Promissory Note; and Deed of
Trust, Assignment of Rents and Security Agreement) relating to
Chaparosa Apartments, between the Registrant and Southridge
Partners I, and the exhibits thereto (included as, and incorporated
herein by reference to, Exhibit (10)(B) to the 1984 Annual Report).
(C) Loan Documents (Loan Commitment; Promissory Note; and Mortgage,
Assignment of Rents and Security Agreement) relating to Park View
Village (formerly Park View Estates), between the Registrant and
Southridge Partners I, and the exhibits thereto (included as, and
incorporated herein by reference to, Exhibit(10)(C) to the 1984
Annual Report).
(D) Conveyance Documents relating to Chaparosa Apartments dated
January 31, 1992 (included as, and incorporated herein by reference
to, Exhibit (10)(F) to the Registrant's Annual Report on Form 10-K
filed on February 27, 1992 for the fiscal year ended November 30,
1991).
(E) Property Management Agreement between Hutton/ConAm Realty
Pension Investors and Con Am Management Corporation for the Bryn
Athyn property (included as, and incorporated herein by reference
to, Exhibit 10-E to the Registrant's 1993 Annual Report on Form
10-K filed on February 28, 1994).
(F) Property Management Agreement between Hutton/ConAm Realty
Pension Investors and Con Am Management Corporation for the
Chaparosa property (included as, and incorporated herein by
reference, to Exhibit 10-F to the Registrant's 1993 Annual Report
on Form 10-K filed on February 28, 1994).
(G) Note and Modification Agreement between Southridge Partners I
and Hutton/ConAm Realty Pension Investors dated November 23, 1993
for Park View Village (included as, and incorporated herein by
reference to, Exhibit 10-G to the Registrant's 1993 Annual Report
on Form 10-K filed on February 28, 1994).
(H) Note and Modification Agreement between Southridge Partners I
and Hutton/ConAm Realty Pension Investors dated November 23, 1993
for Oaktree Village (included as, and incorporated herein by
reference to, Exhibit 10-H to the Registrant's 1993 Annual Report
on Form 10-K filed on February 28, 1994).
(13) Annual Report to Unitholders for the fiscal year ended November
30, 1994.
(99) Portions of the Prospectus of the Registrant dated June 24, 1983
(included as, and incorporated herein by reference to, Exhibit 28
to the Registrant's 1987 Annual Report on Form 10-K for the fiscal
year ended November 30, 1987).
(b)(3) Reports on Form 8-K
No reports on Form 8-K were filed in the fourth quarter of
fiscal 1994.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Dated: February 27, 1995
HUTTON/CONAM REALTY PENSION INVESTORS
BY: RPI Real Estate Services, Inc.
General Partner
BY: /S/ Paul L. Abbott
--------------------
Director, President,
Chief Executive Officer
and Chief Financial Officer
BY: ConAm Property Services III, Ltd.
General Partner
BY: Continental American Development, Inc.
General Partner
BY: /S/ Daniel J. Epstein
----------------------
President, Director and
Principal Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant in the capabilities and on the dates indicated.
RPI REAL ESTATE SERVICES, INC.
A General Partner
Date: February 27, 1995
BY: /S/ Paul J. Abbott
-----------------------
Director, President,
Chief Executive Officer
and Chief Financial Officer
Date: February 27, 1995 BY: /S/ Janet Hoynes
----------------------
Vice President
Date: February 27, 1995 BY: /S/ Kate Hobson
--------------------
Vice President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.
CONAM PROPERTY SERVICES III, LTD.
A General Partner
By: Continental American Development, Inc.
General Partner
Date: February 27, 1995 BY: /S/ Daniel J. Epstein
--------------------------
Director, President and
Principal Executive Officer
Date: February 27, 1995 BY: /S/ Nancie Larimore
------------------------
Secretary/Treasurer
and Director
Date: February 27, 1995 BY: /S/ E. Scott Dupree
------------------------
Vice President
Date: February 27, 1995 BY: /S/ Robert J. Svatos
-------------------------
Vice President
Date: February 27, 1995 BY: /S/ Ralph W, Tilley
------------------------
Vice President
Exhibit 13
Hutton/ConAm Realty Pension Investors 1995 Annual Report
Hutton/ConAm Realty Pension Investors is a New York limited
partnership formed in 1984 to invest in multifamily housing
properties through equity participating loans secured by first
mortgages or deeds of trust. The Partnership's investment
portfolio currently consists of two mortgage loans secured by
apartment properties in Florida and two apartment complexes located
in North Carolina and Texas, which were acquired by the Partnership
in 1989 and 1992, respectively.
Average Occupancy
Property Location 1994 1993
___________________________________________________________________
Bryn Athyn Apartments Raleigh, North Carolina 97% 96%
Chaparosa Apartments Irving, Texas 95% 95%
Oaktree Village* Jacksonville, Florida 95% 95%
Park View Village* Winter Park, Florida 95% 93%
___________________________________________________________________
*The Partnership owns a mortgage interest in these properties.
Administrative Inquires Performance Inquires/Form 10-Ks
Address Changes/Transfers The Shareholder Services Group
Service Data Corporation P.O. Box 1527
2424 South 130th Circle Boston, Massachusetts 02104-1527
Omaha, Nebraska 68144 Attn: Financial Communications
(800) 223-3464 (800) 223-3464
Contents
1 Message to Investors
3 Performance Summary
4 Consolidated Financial Statements
6 Notes to Consolidated Financial Statements
12 Report of Independent Accountants
13 Net Asset Valuation
Presented for your review is the 1994 Annual Report for Hutton/ConAm Realty
Pension Investors. In this report, we review Partnership operations and market
conditions affecting the Partnership's two wholly-owned properties (Bryn Athyn
Apartments and Chaparosa Apartments) and those collateralizing its two mortgage
loans (Oaktree Village and Park View Village).
Cash Distributions
- ------------------
The Partnership paid cash distributions totaling $18 per Unit for the year
ended November 30, 1994, including the 1994 fourth quarter distribution of
$5.00 per Unit, which was credited to your brokerage account or sent directly
to you on January 17, 1995. Since inception, the Partnership has paid
distributions totalling $460.68 per original $500 Unit, including $206 per Unit
in return of capital payments. The General Partners anticipate that
distributions will continue throughout fiscal 1995 and will be based on cash
flow generated by the Partnership. The level of future distributions will be
evaluated on a quarterly basis.
Operations Overview
- -------------------
The past year witnessed a solid recovery of multifamily housing in most regions
of the country. The improving economy and limited new construction in most
areas have boosted occupancy levels and rental rates, while rising mortgage
rates have curtailed renters from purchasing condominiums and single family
homes. These favorable conditions are especially prevalent in the sunbelt
states, which continue to benefit from long-term population growth.
Operating results at the Partnership's two wholly-owned properties reflect
these strengthening market conditions. Bryn Athyn, located in Raleigh, North
Carolina, maintained an average occupancy rate of 97% and exhibited a 10.2%
increase in rental income from fiscal 1993. Apartment vacancy in the
Raleigh-Durham area remains low and Bryn Athyn, like other area complexes, has
discontinued the use of rental concessions and instituted rent increases on
many units. Maintenance at the property included repair work to the
polybutelene (plastic) water pipes. As previously reported, the Partnership is
pursuing a settlement agreement with the manufacturers of the defective pipes,
and it is anticipated that a settlement will be reached shortly. Replacement
of the pipes with a copper system is expected to be completed by midyear and
will initially be funded from Partnership cash reserves. These expenses are
not expected to have a material impact on the Partnership's operating results.
The Partnership's second wholly-owned property, Chaparosa Apartments, located
in Irving, Texas, reported an average occupancy rate of 95% during fiscal 1994.
The local apartment market, although competitive, evidenced steady improvement
and many area complexes, including Chaparosa, were able to increase rental
rates during the year, despite the lease-up of recently constructed properties.
Structural repairs related to original construction defects at the property
were completed during the 1994 first quarter. Following the completion of
these repairs, rates were raised on previously discounted apartments which
contributed to a 6.3% increase in rental income. Other capital improvements
included the repair of sewer lines and exterior painting.
The two properties which secure the Partnership's mortgage loans, Oaktree
Village in Jacksonville, Florida and Park View Village in Winter Park, Florida,
also registered stable operating results in 1994. Both maintained an average
occupancy rate of 95% and were able to eliminate the use of rental concessions.
The loan modifications which were completed in 1993 have enabled the borrower
to contiue operating the properties and complete select capital improvements.
However, both properties will require additional capital improvements to
further enhance their competitive position in their respective markets.
Summary
- -------
Strengthening market conditions and the improved performance of the
Partnership's wholly-owned properties bode well for the future. Both
properties achieved higher operating cash flow and are located in strong
markets that have favorable growth prospects. In the coming year, the General
Partners will continue to evaluate these improving market conditions,
implementing rate increases as conditions permit and making necessary capital
improvements to keep the properties competitive with local apartment complexes.
We will keep you updated on the status of the Partnership's wholly-owned
properties and mortgage loan investments in future reports.
Very truly yours,
/S/ Paul L. Abbott /S/ Daniel J. Epstein
President President
RPI Real Estate Services, Inc. Continental American Development, Inc.
General Partner of ConAm Property
Services III, Ltd.
February 24, 1995
Financial Highlights
- --------------------
1994 1993
_____________________________________________________________
Rental income $ 2,294,509 $ 2,119,923
Mortgage interest 822,452 1,051,902
Property operating expenses 1,314,991 1,181,083
Provision for losses 937,593 411,769
Net income 452,116 1,156,690
_____________________________________________________________
* Rental income at the Partnership's two wholly-owned properties increased 8.2%
in fiscal 1994, reflecting rent increases instituted during the past year.
* The decrease in mortgage interest is due to the restructuring of the
Partnership's mortgage loans secured by Oaktree Village and Park View Village
in 1993. Please see Note 4 to the Financial Statements for a discussion of the
terms of the loan restructuring.
* Property operating costs increased 11.3% from fiscal 1993, primarily due to
expenses incurred at Chaparosa to repair breaks in the property's sewer lines
and costs associated with the defective plastic water pipes at Bryn Athyn.
* The provision for losses relates to the difference between the carrying
amount of the Partnership's loans, including deferred interest receivable, and
the fair market value of the properties at year end. The higher provision in
fiscal 1994 is due to a decrease in the appraised value of both Oaktree Village
and Park View Village. Although select capital improvements have been
completed, both properties will require further improvements to enhance their
competitive positions.
* The decrease in net income is primarily due to the higher provision for
losses and the decrease in mortgage interest discussed above.
Balance Sheets
November 30, 1994 and 1993
1994 1993
---- ----
Assets
Investments in real estate:
Properties $ 10,450,002 $ 10,049,199
Less- accumulated depreciation (1,536,168) (1,174,141)
Mortgage loan investments 9,675,900 9,675,900
--------- ---------
Total investments in real estate 18,589,734 18,550,958
Cash and cash equivalents 2,131,720 2,373,818
Interest receivable - deferred, net of
accumulated provision for losses of
$1,945,176 in 1994 and $1,007,583 in 1993 1,874,100 2,824,100
Loan placement costs, net of accumulated
amortization of $320,609 in 1994
and $292,365 in 1993 - 28,244
Other assets 54,447 35,731
--------- ---------
Total Assets $ 22,650,001 $ 23,812,851
========== ==========
Liabilities and Partners' Capital
Liabilities:
Distribution payable $ 507,842 $ 253,921
Accounts payable and accrued expenses 228,662 231,093
Due to general partners and affiliates 25,675 24,338
Deferred income - loan origination fees - 25,670
Deferred income - loan modification fees 60,842 81,366
Security deposits 59,870 53,237
------- -------
Total Liabilities 882,891 669,625
------- -------
Partners' Capital:
General Partners 305,145 359,470
Limited Partners 21,461,965 22,783,756
---------- ----------
Total Partners' Capital 21,767,110 23,143,226
---------- ----------
Total Liabilities and Partners' Capital $ 22,650,001 $ 23,812,851
========== ==========
Statements of Partners' Capital
For the years ended November 30, 1994, 1993 and 1992
General Limited Total
Partners' Partners' Partners'
Capital Capital Capital
------- ------- -------
Balance at December 1, 1991 $ 353,637 $ 22,206,277 $ 22,559,914
Net income 55,207 1,402,783 1,457,990
Cash distributions (50,784) (964,900) (1,015,684)
------ --------- ---------
Balance at November 30, 1992 358,060 22,644,160 23,002,220
Net income 52,194 1,104,496 1,156,690
Cash distributions (50,784) (964,900) (1,015,684)
------ --------- ----------
Balance at November 30, 1993 359,470 22,783,756 23,143,226
Net income 37,087 415,029 452,116
Cash distributions (91,412) (1,736,820) (1,828,232)
------ --------- ----------
Balance at November 30, 1994 $ 305,145 $ 21,461,965 $ 21,767,110
======= ========== ==========
See accompanying notes to the financial statements.
Statements of Operations
For the years ended November 30, 1994, 1993 and 1992
1994 1993 1992
---- ---- ----
Income
Rental $ 2,294,509 $ 2,119,923 $ 1,929,615
Mortgage interest 822,452 1,051,902 1,545,019
Interest and other income 66,385 55,254 62,168
Loan origination fees 25,670 29,028 29,028
Loan modification fees 20,524 15,393 -
--------- --------- ---------
Total Income 3,229,540 3,271,500 3,565,830
Expenses
Property operating 1,314,991 1,181,083 1,005,292
Provision for losses 937,593 411,769 554,163
Depreciation and amortization 390,271 368,154 368,690
General and administrative 134,569 153,804 179,695
-------- --------- ---------
Total Expenses 2,777,424 2,114,810 2,107,840
--------- --------- ---------
Net Income $ 452,116 $ 1,156,690 $ 1,457,990
========= ========= =========
Net Income Allocated:
To the General Partners $ 37,087 $ 52,194 $ 55,207
To the Limited Partners 415,029 1,104,496 1,402,783
------- --------- ---------
$ 452,116 $ 1,156,690 $ 1,457,990
======= ========= =========
Per limited partnership unit
(96,490 outstanding) $4.30 $11.45 $14.54
See accompanying notes to the financial statements.
Statements of Cash Flows
For the years ended November 30, 1994, 1993 and 1992
1994 1993 1992
---- ---- ----
Cash Flows from Operating Activities:
Net income $ 452,116 $ 1,156,690 $ 1,457,990
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 390,271 368,154 368,690
Provision for losses 937,593 411,769 554,163
Increase (decrease) in cash arising
from changes in operating assets
and liabilities:
Interest receivable - current - 18,352 67,791
Interest receivable - deferred, net 12,407 (220,076) (610,296)
Other assets (18,716) (35,731) 32,659
Accounts payable and accrued expenses (2,431) 21,362 81,296
Due to general partners and affiliates 1,337 (7,296) 17,557
Deferred income - loan origination fees (25,670) (29,028) (29,028)
Deferred income - loan modification
fees (20,524) 81,366 -
Security deposits 6,633 2,231 29,970
------- ------- -------
Net cash provided by operating activities 1,733,016 1,767,793 1,970,792
--------- --------- ---------
Cash Flows from Investing Activities:
Additions to real estate (400,803) (550,067) (69,127)
Proceeds received relating to deed in
lieu of foreclosure, net of $41,458
of closing costs - - 523,590
------- ------- -------
Net cash provided by (used for)
investing activities (400,803) (550,067) 454,463
------- ------- -------
Cash Flows from Financing Activities:
Distributions (1,574,311) (1,015,684) (1,269,605)
--------- --------- ---------
Net cash used for financing activities (1,574,311) (1,015,684) (1,269,605)
--------- --------- ---------
Net increase (decrease) in cash and
cash equivalents (242,098) 202,042 1,155,650
Cash and cash equivalents at
beginning of period 2,373,818 2,171,776 1,016,126
--------- --------- ---------
Cash and cash equivalents at
end of period $ 2,131,720 $2,373,818 $ 2,171,776
========= ========= =========
Supplemental Disclosures of Non-Cash Investing Activities:
On January 31, 1992, the Partnership obtained legal title to Chaparosa through
a deed in lieu of foreclosure. The Chaparosa Real Estate Investment has been
recorded in the amount of $3,645,728 and reflects all final adjustments
regarding its acquisition including $398,000 of litigation proceeds.
See accompanying notes to the financial statements.
Notes to Financial Statements
For the years ended November 30, 1994, 1993 and 1992
1. Organization
Hutton/ConAm Realty Pension Investors (the "Partnership") was organized as a
limited partnership under the laws of the State of New York pursuant to a
Certificate and Agreement of Limited Partnership (the "Partnership Agreement")
dated January 23, 1984, as amended on January 26, 1984. The Partnership was
formed for the purpose of financing investments in certain types of residential
real estate by making equity participating loans and equity convertible loans.
The general partners of the Partnership are RPI Real Estate Services Inc., an
affiliate of Lehman Brothers Inc. (see below), and ConAm Property Services III,
Ltd., an affiliate of Continental American Properties, Ltd (the "General
Partners"). The Partnership will continue until December 31, 2010 unless
sooner terminated pursuant to the terms of the Partnership Agreement.
On July 31, 1993, Shearson Lehman Brothers Inc. sold certain of its domestic
retail brokerage and asset management businesses to Smith Barney, Harris Upham
& Co. Incorporated ("Smith Barney"). Subsequent to the sale, Shearson changed
its name to "Lehman Brothers Inc." ("Lehman Brothers"). The transaction did
not affect the ownership of the General Partners. However, the assets acquired
by Smith Barney included the name "Hutton." Consequently, effective October 8,
1993, the Hutton Real Estate Services VI, Inc. General Partner changed its name
to "RPI Real Estate Services Inc."
2. Significant Accounting Policies
Mortgage Loan Investments and Interest Receivable - The Partnership reviews, on
a periodic basis, each of the loans in its portfolio. An allowance for losses
is established when the carrying value of the loan, including deferred
interest, exceeds fair value (see Note 5). The fair value of the Partnership's
loans are determined by independent appraisals which are performed annually and
include a discounting of estimated future cash flows.
Real Estate Investments - Real estate investments consist of properties
acquired through foreclosure proceedings or acceptance of a deed in lieu of
foreclosure, and troubled loans, accounted for as in-substance foreclosures.
Such properties are recorded at the lower of cost or fair value. These
properties are the Bryn Athyn Apartment complex located in Raleigh, North
Carolina and the Chaparosa Apartment complex located in Irving, Texas.
Leases are accounted for under the operating method. Under this method,
revenue is recognized as rentals are earned and expenses (including
depreciation) are charged to operations when incurred. Leases are generally
for terms of one year or less.
Depreciation is computed using the straight-line method based upon the
estimated useful life of the property. Maintenance and repairs are charged to
operations as incurred. Significant betterments and improvements are
capitalized and depreciated over their estimated useful lives.
For assets sold or otherwise disposed of, the cost and related accumulated
depreciation are removed from the accounts, and any resulting gain or loss is
reflected in income for the period.
Loan Placement Costs - Costs incurred in connection with investments are
recorded as assets and amortized over the applicable loan periods.
Loan Origination Fees - Loan origination fees are deferred and recognized over
the applicable loan periods.
Loan Modification Fees - Loan modification fees are deferred and recognized
over the applicable extended loan periods, pursuant to the terms of the loan
modification (see Note 4).
Offering Costs - Costs relating to the sale of limited partnership units were
deferred during the offering period and charged to the limited partners'
capital accounts upon the consummation of the public offering.
Interest Income - The Partnership recognizes interest income based upon terms
of the respective mortgages. The mortgages require a current pay rate and had
provided for the deferral of interest through the effective date of the
modification (see Note 4). The continued income recognition of deferred
interest is contingent upon the fair value of the underlying property exceeding
the aggregate carrying value of the mortgage and applicable deferred interest.
Income Taxes - No provision for income taxes has been made in the financial
statements since income, losses and tax benefits are passed through to the
individual partners.
Cash and Cash Equivalents - Cash equivalents consists of short-term highly
liquid investments which have maturities of three months or less from date of
issuance. Cash and cash equivalents include security deposits of $29,945 and
$25,345 at November 30, 1994 and 1993, respectively, restricted under state
statutes.
Concentration of Credit Risk - Financial instruments which potentially subject
the Partnership to a concentration of credit risk principally consist of cash
and cash equivalents in excess of the financial institutions' insurance limits.
The Partnership invests available cash with high credit quality financial
institutions.
3. The Partnership Agreement
The Partnership Agreement provides that net distributable cash, as defined,
will be distributed, 95% to the limited partners and 5% to the General Partners
until each limited partner has received an amount equal to a 12% non-cumulative
annual return on his adjusted capital value (as defined). The balance, if any,
will be distributed 90% to the limited partners and 10% to the General
Partners.
Net loss and all depreciation for any fiscal year will be allocated 99% to the
limited partners and 1% to the General Partners.
Net income before depreciation will be allocated as follows:
(a) To the extent that net income before depreciation does not exceed the
amount of net distributable cash distributable to the partners with respect to
such fiscal year, net income before depreciation shall be allocated among the
partners, pro rata in accordance with the amount of net distributable cash
distributable to each partner with respect to such fiscal year to the extent
thereof; and
(b) To the extent that net income before depreciation exceeds the amount of
net distributable cash distributable to the partners with respect to such
fiscal year, such excess shall be allocated (1) first, 100% to the General
Partners, pro rata, in an amount equal to the excess, if any, of the General
Partners' deficits, if any, in their capital accounts, over an amount equal to
1% of the aggregate capital contributions to the Partnership as reduced by the
amount of the General Partners' capital contributions, and (2) second, 99% to
the limited partners and 1% to the General Partners.
For the year ended November 30, 1994, net income before depreciation did not
exceed the amount of net distributable cash. Pursuant to the Partnership
Agreement and as described in (a) above, net income before depreciation was
allocated among the partners pro rata in accordance with the amount of net
distributable cash distributable to each partner.
For the years ended November 30, 1993 and 1992, net income before depreciation
exceeded net distributable cash by $477,099 and $776,639, respectively.
Pursuant to the Partnership Agreement and as described in (b)(2) above, this
excess was allocated 1% to the General Partners and 99% to the limited
partners.
All residual proceeds will be distributed 99% to the limited partners and 1% to
the General Partners until each limited partner has received an amount equal to
his adjusted capital value and a 12% cumulative annual return on his adjusted
capital value. The balance, if any, will be distributed 85% to the limited
partners and 15% to the General Partners.
Generally, all gain from sales of investments will be allocated 99% to the
limited partners and 1% to the General Partners until any negative capital
account balances have been eliminated and each limited partner has received an
amount equal to his adjusted capital value and an amount equal to the excess of
a 12% cumulative annual return on his adjusted capital value over the amount of
any net distributable cash and residual proceeds distributed to such limited
partner. The balance, if any, will be allocated 85% to the limited partners
and 15% to the General Partners.
4. Mortgage Loans and Investments in Real Estate
Three loans which totaled $15,525,900 were funded to an affiliate Southridge
Partners I ("Southridge"), a New York limited partnership. The RPI Real Estate
Services Inc. general partner in the Partnership and the GP Real Estate
Services II Inc. general partner in Southridge are both wholly-owned
subsidiaries of Lehman Brothers.
The first loan was funded on September 28, 1984 in the amount of $4,475,250 in
connection with the purchase of Oaktree Village, a 160-unit apartment complex
located in Jacksonville, Florida. The second loan was funded on October 30,
1984 in the amount of $5,850,000 in connection with the purchase of Chaparosa
Apartments, a 170-unit apartment complex located in Irving, Texas. The third
loan was funded on December 21, 1984 in the amount of $5,200,650 in connection
with the purchase of Park View Village, a 184-unit apartment complex located in
Winter Park, Florida.
Originally, each loan was evidenced by a promissory note bearing interest at a
stated rate of 14% per annum collateralized by a first mortgage or trust deed
on the property, due at the earlier of (i) 10 years from the date of funding or
(ii) sale of the property. Each of the loans was payable in fixed monthly
installments of interest only at the rate of 11% per annum with the
differential of 3% paid monthly out of net cash flow, if available. Any
differential interest not paid monthly was to itself bear interest at the rate
of 14%, compounded semi-annually and became due together with the outstanding
principal upon maturity of the loan. In addition to stated interest, the
Partnership would receive contingent interest on each of the Southridge loans
equal to 25% of net cash flow, payable quarterly, and 30% of any appreciation
in value upon the sale of the project.
During the first quarter of the fiscal year ended November 30, 1988, the
General Partners accepted a request for modification of each of the Southridge
loans submitted by the borrower. Effective April 1, 1988, stated interest was
lowered from 14% to 12% and current interest was lowered from 11% to 8.5%. The
additional interest of 3.5% was payable monthly from any excess cash flow
calculated on a monthly basis. To the extent that stated interest exceeded
monthly installments, such amounts were deferred until the maturity of the
principal and accrued interest at 12% compounded semi-annually. As
consideration for reducing the stated and current interest, final additional
interest, as defined, was increased from 30% to 35% of appreciation in value,
as defined, upon the sale of the project. All other terms and conditions
remained as originally stated.
During the second quarter of the fiscal year ended November 30, 1993, the
General Partners agreed to modify the two remaining mortgage loans with
Southridge retroactive to March 1, 1993. The terms of the modification
provided for a three-year extension of the maturity dates through September 30,
1997 and December 31, 1997 for Oaktree Village and Park View Village,
respectively. The stated interest rate on the loans was reduced to 8.5%, with
excess cash flow generated by the properties on a monthly basis through 1993 to
be applied first to accrued and unpaid interest and then to principal.
Beginning in 1994, excess cash flow is calculated on an annual basis. In
addition, interest ceased to accrue on the cumulative deferred interest. In
consideration the Partnership earned a loan modification fee equal to 2% of the
original loan balance. One half of the fee, $96,759 was paid at the closing,
and the other half will be due upon either the sale or refinancing of the
properties to the extent there are net proceeds available after repayment of
the outstanding debt balance and selling costs.
As of November 30, 1994, the Partnership has recorded the Oaktree and Park View
mortgage loan investments at their fair values of approximately $5,150,000 and
$6,400,000, respectively (see Note 5).
With respect to the Chaparosa mortgage loan, in November 1990, Southridge
settled their litigation with the developer, general contractor and other
parties associated with the project with respect to original construction
defects covered under the Purchase and Development Agreement. Pursuant to the
settlement agreement, the defendants were required to pay Southridge three
installments aggregating $1,566,000. The first and second installments were
received in November 1990 and 1991 in the amounts of $750,000 and $408,000,
respectively. The final installment was received in the amount of $398,000 in
1992. The Partnership was assigned $398,000 of these proceeds from the
litigation settlement as part of a deed in lieu of foreclosure transaction.
As of November 30, 1991, the Partnership reclassified its Chaparosa loan
investment into an in-substance real estate investment, at its book value of
approximately $4,169,017. On January 31, 1992, the Partnership obtained legal
title to Chaparosa through a deed in lieu of foreclosure. As of such date, the
Chaparosa real estate investment has been recorded in the amount of $3,645,728
and reflects all final adjustments regarding its acquisition including $398,000
of litigation proceeds, as mentioned above. The General Partners intend to
hold Chaparosa as a real estate investment and continue its operations as a
residential apartment complex. There was no interruption in either management
or rental activity at Chaparosa as a result of its acquisition by the
Partnership.
In connection with the three investments in equity participating first mortgage
loans, the Partnership earned loan origination fees of $465,777, representing
3% of the principal amounts loaned to Southridge. The Partnership incurred
loan placement costs of $504,185 of which $465,777 was paid to the General
Partners for loan placement fees.
Summarized financial information pertaining to the Partnership's Mortgage Loan
Investments in Oaktree Village and Park View Village for the calendar years
ended December 31, 1994 and 1993 is as follows:
1994 1993
---- ----
Operating property, net of
accumulated depreciation $ 9,355,109 $ 9,879,914
Total assets 10,978,219 10,484,954
Total liabilities 15,483,968 15,494,536
Rental income 2,055,133 1,987,070
Net loss (704,253) (880,423)
Minimum debt service payments on the Partnership's loans have been paid
entirely from cash flow from property operations as of November 30, 1994.
The General Partners are pursuing a settlement agreement with the manufacturers
of the plastic water pipes used in the construction of the Bryn Athyn property.
These pipes have been determined to be defective and have the potential to leak
at the connections. The General Partners anticipate reaching a settlement in
the first quarter of 1995. Any repair costs associated with the plumbing
defects not covered by the pending settlement are not expected to have a
material impact on the Partnership's operating results.
5. Interest Receivable and Provision for Loss
The Partnership has provided for potential losses of $937,593, $411,769 and
$554,163 as of November 30, 1994, 1993 and 1992, respectively, relating to the
collection of principal and deferred interest with respect to the Oaktree
Village and Park View Village loans. The above provisions were based on the
fair value of the underlying properties as determined by independent
appraisals.
The following summarizes the provision for losses for the fiscal years ending
November 30, 1994, 1993 and 1992:
1994 1993 1992
---- ---- ----
Oaktree Village:
Provision for interest $544,767 $154,706 $554,163
Park View Village:
Provision for interest $392,826 $257,063 -
6. Transactions with the General Partners And Affiliates
The following is a summary of fees earned and reimbursable expenses for the
years ended November 30, 1994, 1993 and 1992, and the unpaid portion at
November 30, 1994:
Unpaid at
November 30, Earned
1994 1994 1993 1992
--------- ---- ---- ----
Reimbursement of:
Out-of-pocket expenses $ - $ 1,642 $ 11,464 $ 1,133
Administrative salaries
and expenses 15,843 34,883 34,436 39,068
Property operating
salaries - 238,610 235,897 189,735
Property management fees 9,832 114,884 105,383 92,275
------ ------- ------- -------
$25,675 $390,019 $387,180 $322,211
====== ======= ======= =======
The above amounts have been paid and/or accrued to the General Partners and
affiliates as follows:
Unpaid at
November 30, Earned
1994 1994 1993 1992
---- ---- ---- ----
Lehman Brothers and
affiliates $ 15,843 $ 36,525 $ 45,900 $ 40,201
ConAm and affiliates 9,832 353,494 341,280 282,010
------ ------- ------- -------
$ 25,675 $ 390,019 $ 387,180 $ 322,211
====== ======= ======= =======
Total mortgage interest income consists of $822,452 in 1994, $1,051,902 in 1993
and $1,545,019 in 1992 earned from mortgages to Southridge.
7. Reconciliation of Financial Statement and Tax Information
The following is a reconciliation of the net income for financial statement
purposes to net income for federal income tax purposes for the years ended
November 30, 1994, 1993 and 1992:
1994 1993 1992
---- ---- ----
Net income per financial statements $ 452,116 $ 1,156,690 $ 1,457,990
Depreciation deducted for tax purposes
in (excess of) less than depreciation
expense per financial statements (2,816) (11,520) 2,321
Provision for loan losses not
deductible for tax purposes 937,593 411,769 -
Bad debt deduction for tax purposes
previously reserved for financial
statement purposes - - (41,651)
Loan origination fees, recognized
when received for tax purposes (25,670) (44,421) (29,028)
Loan modification fees, recognized
when received for tax purposes (20,524) 96,759 -
Other - - (49,712)
------- ------- -------
Taxable net income $1,340,699 $ 1,609,277 $ 1,339,920
========= ========= =========
The following is a reconciliation of partners' capital for financial statement
purposes to partners' capital for federal income tax purposes as of November
30, 1994, 1993 and 1992:
1994 1993 1992
---- ---- ----
Partners' capital per
financial statements $ 21,767,110 $ 23,143,226 $ 23,002,220
Adjustment for cumulative
difference between tax
basis net income
and net income per
financial statements 6,995,424 6,106,841 5,654,254
---------- ---------- ----------
Partners' capital per tax return $ 28,762,534 $ 29,250,067 $ 28,656,474
========== ========== ==========
8. Distributions Paid
Cash distributions, per the statements of partners' capital, are recorded on
the accrual basis, which recognize specific record dates for payments within
each fiscal year. The statements of cash flows recognize actual cash
distributions paid during the fiscal year. The following table discloses the
annual differences as presented on the financial statements:
Distributions Distributions
Payable Distributions Distributions Payable
Beginning of Year: Declared Paid November 30:
----------------- ------------- ------------- -----------
1994 $253,921 $1,828,232 $1,574,311 $507,842
1993 253,921 1,015,684 1,015,684 253,921
1992 507,842 1,015,684 1,269,605 253,921
9. Supplementary Information
Maintenance and repairs, advertising costs and real estate taxes included in
property operating expenses for the years ended November 30, 1994, 1993 and
1992 are as follows:
1994 1993 1992
---- ---- ----
Maintenance and repairs $516,545 $402,849 $321,138
Advertising costs 40,665 41,571 48,140
Real estate taxes 191,705 190,543 149,475
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of Hutton/ConAm Realty Pension Investors:
We have audited the balance sheets of Hutton/ConAm Realty Pension Investors, a
New York limited partnership, as of November 30, 1994 and 1993, and the related
statements of operations, partners' capital and cash flows for each of the
three years in the period ended November 30, 1994. These financial statements
are the responsibility of the Partnership's management. Our responsibility is
to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Hutton/ConAm Realty Pension
Investors, a New York limited partnership, as of November 30, 1994 and 1993,
and the results of their operations and their cash flows for each of the three
years in the period ended November 30, 1994, in conformity with generally
accepted accounting principles.
/S/ COOPERS & LYBRAND
Hartford, Connecticut
January 25, 1995
Comparison of Acquisition Costs to Appraised Value
and Determination of Net Asset Value Per $294 Unit
at November 30, 1994 (Unaudited)
Partnership's
Share of
November 30,
1994 Appraised
Property Date of Acquisition Value (1)
- -------- ------------------- -------------
Bryn Athyn Apartments 07-03-89 $ 7,700,000
Chaparosa Apartments 01-31-92 5,500,000
Mortgage Loan Investments:
Oaktree Village 4,475,250
Park View Village 5,200,650
---------
22,875,900
----------
Cash and cash equivalents 2,131,720
Interest receivable, net of accumulated
provision for loss 1,874,100
Other assets 54,477
---------
26,936,197
Less:
Total liabilities net of deferred income
on loan and modification fees of $60,842 (822,049)
----------
Partnership Net Asset Value (2) 26,114,148
==========
Net Asset Value Allocated:
Limited Partners 25,853,007
General Partners 261,141
----------
26,114,148
==========
Net Asset Value Per Unit
(96,490 units outstanding) $267.93
=======
(1) This represents the Partnership's share of the November 30, 1994 Appraised
Values which were determined by an independent property appraisal firm.
(2) The Net Asset Value assumes a hypothetical foreclosure or sale of the
properties underlying the Partnership's first mortgage loan investments, and
the subsequent repayment of these loans by the respective borrowers, and a
hypothetical sale of the Bryn Athyn Apartments and Chaparosa Apartments based
upon their values as rental properties as determined by an independent property
appraisal firm, and the distribution of the proceeds of such sale, combined
with the Partnership's cash after liquidation of the Partnership's liabilities,
to the Partners.
The Partnership's mortgage loan investments are valued at the outstanding
mortgage loan balance (principal plus accrued interest), unless the loan
balance exceeds the appraised value, in which case the loan would be valued at
the appraised value. As of November 30, 1994, independent appraisals of the
properties underlying the Partnership's mortgage loan investments were as
follows: Oaktree Village - $5,150,000 and Park View Village - $6,400,000. The
mortgage loan investments of Oaktree Village and Park View Village and interest
receivable, net of accumulated provision for loss, reflect the current fair
values as determined by the independent appraisal firm.
Limited Partners should note that appraisals are only estimates of current
value and actual values realizable upon sale may be significantly different. A
significant factor in establishing an appraised value is the actual selling
price for properties which the appraiser believes are comparable. In addition,
the appraised value does not reflect the actual costs which would be incurred
in selling the properties. As a result of these factors and the illiquid
nature of an investment in Units of the Partnership, the variation between the
appraised value of the Partnership's properties and the price at which Units of
the Partnership could be sold is likely to be significant. Fiduciaries of
Limited Partners which are subject to ERISA or other provisions of law
requiring valuations of Units should consider all relevant factors, including,
but not limited to Net Asset Value per Unit, in determining the fair market
value of the investment in the Partnership for such purposes.
HUTTON/CONAM REALTY PENSION INVESTORS Schedule XI
Real Estate and Accumulated Depreciation
November 30, 1994
Cost Capitalized
Subsequent
Initial Cost to Partnership To Acquisition
--------------------------- --------------
Buildings and Buildings and
Description Encumbrances Land Improvements Improvements
- ----------- ------------- ----- ------------- -------------
Residential Property:
Partnership Owned:
Bryn Athyn
Apartments
Raleigh, NC $ - $ 857,669 $ 4,926,609 $ -
Chaparosa Apartments
Las Colinas, TX - 729,145 2,916,582 1,019,997
--------- ------- --------- ---------
$ - $1,586,814 $ 7,843,191 $ 2,094,981
======== ========= ========= =========
HUTTON/CONAM REALTY PENSION INVESTORS
Schedule XI - Real Estate and Accumulated Depreciation
(continued)
November 30, 1994
Gross Amount at Which Carried at Close of Period
------------------------------------------------
Buildings and Accumulated
Description Land Improvements Total Depreciation
- ----------- ----- ------------- ----- ------------
Residential Property:
Partnership Owned
Bryn Athyn
Apartments
Raleigh, NC $ 857,669 $ 4,926,609 $ 5,784,278 $ 1,151,340
Chaparosa
Apartments
Las Colinas, TX 729,145 3,936,579 4,665,724 384,828
-------- --------- --------- ----------
$1,586,814 $ 8,863,188 $ 10,450,002 $ 1,536,168
========= ========= ========== =========
(1) (2)
HUTTON/CONAM REALTY PENSION INVESTORS
Schedule XI - Real Estate and Accumulated Depreciation
(continued)
November 30, 1994
Life on which
Depreciation
in Latest
Date of Date Income Statements
Description Construction Acquired is Computed
- ----------- ------------ -------- ----------------
Residential Property:
Partnership Owned:
Bryn Athyn Apartments
Raleigh, NC 1985 07/14/89 (3)
Chaparosa Apartments
Las Colinas, TX 1984 11/30/91 (3)
(1) Aggregate cost for Federal income tax purposes is $10,949,035.
(2) The amount of accumulated depreciation for Federal income tax purposes is
$1,622,206.
(3) Buildings and improvements - 27.5 years; personal property - 7 years.
A reconciliation of the carrying amount of real estate and accumulated
depreciation for the years ended December 31, 1994, 1993 and 1992:
Real Estate investments: 1994 1993 1992
---- ---- ----
Beginning of year $ 10,049,199 $ 9,499,132 $ 9,953,595
Additions 400,803 550,067 69,127
Basis adjustment - - (523,590)
---------- --------- ---------
End of year $ 10,450,002 $10,049,199 $ 9,499,132
========== ========== =========
Accumulated Depreciation:
Beginning of year $ 1,174,141 $ 838,048 $ 503,715
Depreciation expense 362,027 336,093 334,333
--------- --------- ---------
End of year $ 1,536,168 1,174,141 $ 838,048
========= ========= ========
HUTTON/CONAM REALTY PENSION INVESTORS
Schedule XII - Mortgage Loans on Real Estate
November 30, 1994
Maturity Periodic
Classification Interest Rate Date Payment Terms Prior Liens
- -------------- ------------- -------- ------------- -----------
Oaktree Village
(Southridge)
Residential, Florida 8.5% 09/30/97 Interest only -
Park View Village
(Southridge)
Residential, Florida 8.5% 12/31/97 Interest only -
HUTTON/CONAM REALTY PENSION INVESTORS
Schedule XII - Mortgage Loans on Real Estate
(continued)
November 30, 1994
Principal Amount of
Loans Subject to
Face Amount Carrying Amount Delinquent Principal
Classification of Mortgage of Mortgage or Interest
- -------------- ----------- --------------- --------------------
Oaktree Village
(Southridge)
Residential, Florida $ 4,475,250 $ 4,475,250 $ -
Park View Village
(Southridge)
Residential, Florida 5,200,650 5,200,650 -
--------- --------- ------------
$ 9,675,900 $ 9,675,900 $ -
========= ========= ============
The aggregate cost for Federal income tax purposes of the mortgage loans at
November 30, 1994 is $9,675,900.
Following is a reconciliation of the carrying amount of mortgage loans for the
years ended November 30, 1994, 1993 and 1992:
1994 1993 1992
---- ---- ----
Balance at beginning of period $ 9,675,900 $ 9,675,900 $ 9,675,900
- - -
--------- --------- ---------
Balance at end of period $ 9,675,900 $ 9,675,900 $ 9,675,900
========= ========= =========
REPORT OF INDEPENDENT ACCOUNTANTS
Our report on the financial statements of Hutton/ConAm Realty Pension
Investors, a New York limited partnership, has been incorporated by reference
in this Form 10-K from the Annual Report to unitholders of Hutton/ConAm Realty
Pension Investors for the year ended November 30, 1994. In connection with our
audits of such financial statements, we have also audited the related financial
statement schedules listed in the index of this Form 10-K.
In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information required to be
included therein.
COOPERS & LYBRAND
Hartford, Connecticut
January 25, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1994
<PERIOD-END> NOV-30-1994
<CASH> 2,131,720
<SECURITIES> 000
<RECEIVABLES> 000
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 54,447
<PP&E> 10,450,002
<DEPRECIATION> 1,536,168
<TOTAL-ASSETS> 22,650,001
<CURRENT-LIABILITIES> 762,179
<BONDS> 000
<COMMON> 000
000
000
<OTHER-SE> 000
<TOTAL-LIABILITY-AND-EQUITY> 22,650,001
<SALES> 2,294,509
<TOTAL-REVENUES> 3,229,540
<CGS> 000
<TOTAL-COSTS> 1,314,991
<OTHER-EXPENSES> 524,840
<LOSS-PROVISION> 937,593
<INTEREST-EXPENSE> 000
<INCOME-PRETAX> 452,116
<INCOME-TAX> 000
<INCOME-CONTINUING> 452,116
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> 452,116
<EPS-PRIMARY> 4.30
<EPS-DILUTED> 4.30
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