FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
[] 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 0-2673
NAVARRE-500 BUILDING ASSOCIATES
(Exact name of Registrant as specified in its charter)
A New York Partnership 13-6082674
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
60 East 42nd Street, New York, New York 10165
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 687-8700
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
$3,190,000 of Participations in Partnership Interests
(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 [ ]
The aggregate market value of the voting stock held by non-
affiliates of the Registrant: Not applicable, but see Items 5 and
10 of this report.
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 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. ___
An Exhibit Index is located on pages 27 through 29 of this Report.
Number of pages (including exhibits) in this filing: 43 <PAGE>
<PAGE>
PART I
Item 1. Business.
(a) General
Registrant, a partnership, was organized on March 21,
1958. Registrant owns the tenant's interest in the master
operating leasehold of the buildings located at 500 and 512
Seventh Avenue and 228 West 38th Street, New York, New York (the
"Property"). Registrant's partners are Peter L. Malkin and
Stanley Katzman (the "Partners"). The land underlying the
buildings is owned by an unaffiliated third party and is leased to
Registrant under a long-term ground lease (the "Lease"). The
current term of the Lease as extended expires on May 1, 2024. The
Lease provides for one additional 21-year renewal option. If this
option is exercised, the Lease will expire on May 1, 2045. The
annual rent payable by Registrant under the Lease is $487,500
during the current and each renewal term.
Registrant does not operate the Property, but subleases
the Property to 500-512 Seventh Avenue Associates (the
"Sublessee") pursuant to a net operating sublease (the
"Sublease"). The current renewal term, as extended, of the
Sublease will expire on April 30, 2024. The Sublease provides for
one renewal option for a term co-extensive with the period
contained in the Lease. Peter L. Malkin, a partner in Registrant,
is also a partner in Sublessee. The Partners in Registrant are
also members of the law firm of Wien & Malkin LLP, counsel to
Registrant and to Sublessee (the "Counsel"). See Items 10, 11, 12
and 13 hereof for a description of the ongoing services rendered
by, and compensation paid to, Counsel and for a discussion of
certain relationships which may pose actual or potential conflicts
of interest among Registrant, Sublessee and certain of their
respective affiliates.
As of December 31, 1996, 500 Seventh Avenue was
approximately 59% occupied and 512 Seventh Avenue was
approximately 70% occupied by a total (for the two buildings) of
approximately 180 tenants who engage primarily in the sale of
women's apparel. Registrant does not maintain a full-time staff.
See Item 2 hereof for additional information concerning the
Property.
(b) The Sublease
Under the Sublease, Sublessee must pay (i) annual basic
rent of $1,167,500 during the current renewal term and each
additional renewal term (the "Basic Rent") and (ii) additional
rent to Registrant during the current term and each renewal term
equal to 50% of Sublessee's net operating profit in excess of<PAGE>
<PAGE>
$620,000 for each lease year ending June 30 (the "Additional
Rent").
For the lease year ended June 30, 1996, Sublessee paid
Additional Rent of $1,071,252. After additional payment for
supervisory services of $97,525 to Counsel, the $973,727 balance
was distributed to the Participants on August 31, 1996.
Additional Rent income is recognized when earned from
the Sublessee, at the close of the lease year ending June 30.
Such income is not determinable until the Sublessee, pursuant to
the Sublease, renders to Registrant a certified report on the
Sublessee's operation of the Property. The Sublease requires that
this report be delivered to Registrant annually within 60 days
after the end of each such lease year. Accordingly, all
Additional Rent income and certain supervisory service expense can
only be determined after the receipt of such report. The Lease
does not provide for the Lessee to render interim reports to
Registrant, so no Additional Rent income is reflected for the
period between the end of the lease year and the end of
Registrant's fiscal year. See Note 3 of the Notes to the
Financial Statements filed under Item 8 hereof (the "Notes")
regarding Additional Rent payments by Sublessee for the fiscal
years ended December 31, 1996, 1995 and 1994.
(c) Competition
Pursuant to tenant space leases at the Property, the
average annual base rentals payable to Sublessee range from $8 to
$25 per square foot (exclusive of electricity charges and
escalation). Based on an average rental rate of $16 per square
foot, the rate is competitive with the average rental rates
charged by similar office buildings offering comparable space in
the immediate vicinity. Registrant has been advised that at one
neighboring office building, which has upgraded certain interior
improvements and is located at 485 Seventh Avenue (at 36th
Street), the approximate range of rental rates is from $20 to $22
per square foot. Two similar buildings of approximately the same
age as the buildings at the Property, and which are located across
the street from each other at 530 Seventh Avenue and 550 Seventh
Avenue (at 39th Street), offer space for approximately $25 to $30
per square foot. At 1407 Broadway and 1411 Broadway, the
approximate range of rental rates is from $30 to $35 per square
foot for space in buildings which offer more modern, upgraded
facilities than the buildings at the Property.
In the overall rental market for commercial space in
Manhattan, rents range from approximately $50 per square foot for
prime office space to approximately $12 per square foot in less
developed industrial and/or secondary commercial areas.
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<PAGE>
Accordingly, rents at the Property may be considered competitive
in the area, given the relative condition of surrounding buildings
and the nature of the services and amenities offered by them as
compared to the Building.
(d) Tenant Leases
Sublessee operates the Property free from any federal,
state or local government restrictions involving rent control or
other similar rent regulations which may be imposed upon
residential real estate in Manhattan. Any increase or decrease in
the amount of rent payable by a tenant is governed by the
provisions of the tenant's lease.
Item 2. Property.
As stated in Item 1 hereof, Registrant owns the master
leasehold upon the buildings located at 500 and 512 Seventh
Avenue, New York, New York. The building at 500 Seventh Avenue
contains 17 stories; the building at 512 Seventh Avenue contains
44 stories. The buildings together occupy the entire block front
on the west side of Seventh Avenue between 37th and 38th Streets
in New York City's Garment District. Pursuant to the Lease,
Registrant also holds a master leasehold interest in an adjacent
5-story building located at 228 West 38th Street. The two
principal buildings, erected in 1921 and 1931, respectively,
contain showroom, office and loft space.
Item 3. Legal Proceedings.
There are no material pending legal proceedings to which
Registrant is a party.
Item 4. Submission of Matters to a Vote of Participants.
During the fourth quarter of the fiscal year ended
December 31, 1996, Registrant did not submit any matter to the
vote or consent of the Participants.
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<PAGE>
PART II
Item 5. Market for the Registrant's Common Equity and Related
Security Holder Matters.
Registrant is a partnership organized pursuant to a
partnership agreement dated March 21, 1958.
Registrant has not issued any common stock. The
securities registered by it under the Securities Exchange Act of
1934, as amended, consisted of participations in the partnership
interests of the Partners in Registrant (the "Participations") and
are not shares of common stock nor their equivalent. The
Participations represent each Participant's fractional share in a
Partner's undivided interest in Registrant, and are divided
approximately equally among the Partners. A full unit of the
Participations was offered originally at a purchase price of
$5,000; fractional units were also offered at proportionate
purchase prices. Registrant has not repurchased Participations in
the past and it is not likely to change its policy in the future.
(a) The Participations neither are traded on an
established securities market nor are readily tradable on a
secondary market or the substantial equivalent thereof. Based on
Registrant's transfer records, Participations are sold from time
to time in privately negotiated transactions and, in many
instances, Registrant is not aware of the prices at which such
transactions occur. Registrant was advised of 32 transfers of
Participations for the year ended December 31, 1996. In all
instances, the consideration paid was not indicated.
(b) As of December 31, 1996, there were 600
Participants of record.
(c) Registrant does not pay dividends. During the
years ended December 31, 1996 and December 31, 1995, Registrant
made regular monthly distributions of $83.33 for each $5,000
Participation. On August 31, 1996 and August 31, 1995, Registrant
made additional distributions for each $5,000 Participation of
$1,521.45 and $1,197.24, respectively. Such distributions
represented Additional Rent paid by the Sublessee in accordance
with the terms of the Sublease less additional supervisory fees
paid. There are no restrictions on Registrant's present or future
ability to make distributions; however, the amount of such
distributions, particularly distributions of Additional Rent,
depends solely on Sublessee's ability to make payments of Basic
Rent and Additional Rent to Registrant. See Item 1 hereof.
Registrant expects to make distributions so long as it receives
the payments provided for under the Sublease. See Item 7 hereof.
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<PAGE>
Item 6.
NAVARRE-500 BUILDING ASSOCIATES
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Year ended December 31,
1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Basic rent income................. $1,167,500 $1,167,500 $1,167,500 $1,167,500 $1,167,500
Additional rent income............ 1,071,252 840,704 503,579 1,758,397 3,136,313
Total revenue.................. $2,238,752 $2,008,204 $1,671,079 $2,925,897 $4,303,813
Net income........................ $1,607,202 $1,399,709 $1,079,855 $2,209,190 $3,449,316
Earnings per $5,000 participation
unit, based on 640 participation
units outstanding during the
year............................. $ 2,511 $ 2,187 $ 1,687 $ 3,452 $ 5,389
Total assets...................... $ 231,668 $ 238,193 $ 244,718 $ 267,684 $ 290,651
Long-term obligations............. None None None None None
Distributions per $5,000
participation unit, based on
640 participation units
outstanding during the year:
Income.......................... $ 2,511 $ 2,187 $ 1,687 $ 3,452 $ 5,389
Return of capital............... 10 10 36 36 36
Total distributions............ $ 2,521 $ 2,197 $ 1,723 $ 3,488 $ 5,425
</TABLE>
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<PAGE>
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operation.
Registrant was organized solely for the purpose of
owning the master leasehold on the Property subject to a net
operating sublease of the Property held by Sublessee. Registrant
is required to pay from Basic Rent the annual rent under the Lease
and amounts for supervisory services. Registrant distributes the
balance of such Basic Rent to the Participants. Pursuant to the
Sublease, Sublessee has assumed sole responsibility for the
condition, operation, repair, maintenance and management of the
Property. Registrant need not maintain substantial reserves or
otherwise maintain liquid assets to defray any operating expenses
of the Property.
Registrant's results of operations are affected
primarily by the amount of rent payable to it under the Sublease.
The following summarizes the material factors affecting
Registrant's results of operations for the three preceding years:
(a) Total income increased for the year ended December 31,
1996 as compared with the year ended December 31, 1995.
Such increase is attributable to the increased amount of
Additional Rent having been received by Registrant for
the lease year ended June 30, 1996. See Note 3 of the
Notes. Total income increased for the year ended
December 31, 1995 as compared with the year ended
December 31, 1994. Such increase is attributable to the
increased amount of Additional Rent having been received
by Registrant for the lease year ended June 30, 1995.
See Note 3 of the Notes.
(b) Total expenses increased for the year ended December 31,
1996 as compared with the year ended December 31, 1995.
Such increase resulted from an increase in the
additional payment for supervisory services payable with
respect to an increased amount of Additional Rent
received by Registrant in 1996. See Note 5 of the
Notes. Total expenses increased for the year ended
December 31, 1995 as compared with the year ended
December 31, 1994. Such increase resulted from an
increase in the additional payment for supervisory
services payable with respect to an increased amount of
Additional Rent received by Registrant in 1995 net of a
decrease in amortization of leasehold. See Note 5 of
the Notes.
The amount of Additional Rent payable to Registrant is
affected by the cycles in the New York City economy, the ladies'
garment industry and the real estate rental market. It is
difficult for Registrant to forecast when these markets will
improve or deteriorate.
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<PAGE>
Liquidity and Capital Resources
There has been no significant change in Registrant's
liquidity for the year ended December 31, 1996 as compared with
the year ended December 31, 1995.
Inflation
Inflationary trends in the economy do not directly
impact Registrant's operations, since as noted above, Registrant
does not actively engage in the operation of the Property.
Inflation may impact the operations of Sublessee. Sublessee is
required to pay Basic Rent, regardless of the results of its
operations. Inflation and other operating factors affect only the
amount of Additional Rent payable by Sublessee, which is based on
Sublessee's net operating profit.
Item 8. Financial Statements and Supplementary Data.
The financial statements, together with the accompanying
report by, and the consent to the use thereof, of Jacobs Evall &
Blumenfeld LLP immediately following, are being filed in response
to this item.
Item 9. Disagreements on Accounting and Financial Disclosure.
Not applicable.
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<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant.
Registrant has no directors or officers or any other
centralization of management. There is no specific term of office
for any Partner. The table below sets forth, as to each Partner
as of December 31, 1996, the following: name, age, nature of any
family relationship with any other Partner, business experience
during the past five years and principal occupation and employment
during such period, including the name and principal business of
any corporation or any organization in which such occupation and
employment was carried on and the date such individual became a
Partner:
Principal Date
Nature of Occupation Individual
Family Business and became
Name Age Relationship Experience Employment Partner
Peter L. Malkin 63 None Attorney-at-Law Senior Partner 1988
Wien & Malkin
LLP
Counselors-
at-Law
Stanley Katzman 64 None Attorney-at-Law Senior Partner 1996
Wien & Malkin
LLP
Counselors-
at-Law
Mr. Malkin and Mr. Katzman are also members of Counsel.
See Items 11, 12 and 13 hereof for a description of the services
rendered by, and the compensation paid to, Counsel and for a
discussion of certain relationships which may pose actual or
potential conflicts of interest among Registrant, Sublessee and
certain of their respective affiliates.
The names of entities which have a class of securities
registered pursuant to Section 12 of the Securities Exchange Act
of 1934 or are subject to the requirements of Section 15(d) of
that Act, and in which the Partners are either a joint venturer or
general partner are as follows:
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<PAGE>
Peter L. Malkin is a joint venturer in 250 West 57th St.
Associates; and a general partner in Empire State
Building Associates, Garment Capitol Associates and 60
East 42nd St. Associates.
Stanley Katzman is a joint venturer in 250 West 57th St.
Associates; and a general partner in Empire State
Building Associates, Garment Capitol Associates and 60
East 42nd St. Associates.
Item 11. Executive Compensation.
As stated in Item 10 hereof, Registrant has no directors
or officers or any other centralization of management.
No remuneration was paid during the current fiscal year
ended December 31, 1996 by Registrant to any of the Partners as
such. Registrant pays Counsel, for supervisory services and
disbursements, fees of $40,000 per annum, plus 10% of all
distributions to Participants in any year in excess of the amount
representing 23% per annum on the Participants' remaining cash
investment in Registrant. At December 31, 1996, such remaining
cash investment (representing the Participant's original cash
investment) in Registrant was $3,200,000. Pursuant to the fee
arrangements described herein, Registrant paid Counsel $137,525
during the fiscal year ended December 31, 1996. The supervisory
services include the preparation of reports and related
documentation required by the Securities and Exchange Commission,
the monitoring of all areas of federal and local securities
compliance, the preparation of certain financial reports, as well
as the supervision of accounting and other documentation related
to the administration of Registrant's business. Out of its fees,
Counsel paid all disbursements and costs of regular accounting
services. As noted in Items 1 and 10 hereof, the Partners in
Registrant are also among the members of Counsel.
Item 12. Security Ownership of Certain Beneficial Owners
and Management.
(a) Registrant has no voting securities (see Item 5
hereof). At December 31, 1996, no person owned of record or was
known by Registrant to own beneficially more than 5% of the
outstanding Participations.
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<PAGE>
(b) At December 31, 1996, the Partners in Registrant
(see Item 10 hereof) beneficially owned, directly or indirectly,
the following Participations:
Name and
Address of Amount of
Beneficial Beneficial Percent
Title of Class Owners Ownership of Class
Participations in Peter L. Malkin $ 33,125 1.035
Partnership 21 Bobolink Lane
Interests Greenwich, CT 06830
At such date, certain of the Partners (or their
respective spouses) held additional Participations as follows:
Isabel W. Malkin, the wife of Peter L. Malkin, owned of
record and beneficially $5,000 of Participations. Mr. Malkin
disclaims any beneficial ownership of such Participations.
Peter L. Malkin, Trustee of Mattie Saunders 1983 Trust,
owned $2,500 of Participations. Mr. Malkin disclaims any
beneficial ownership of such Participations.
Stanley Katzman owned of record as trustee but not
beneficially $5,000 of Participations. Mr. Katzman disclaims any
beneficial ownership of such Participations.
(c) Not applicable.
Item 13. Certain Relationships and Related Transactions.
(a) As stated in Items 1 and 10 hereof, Messrs. Peter
L. Malkin and Stanley Katzman are the Partners of Registrant and
also act as agent for the Participants in their respective
partnership interests. Mr. Malkin is also a partner in Sublessee.
As a consequence of Mr. Malkin being a partner in Sublessee and
both Mr. Malkin and Mr. Katzman being members of Counsel, certain
actual or potential conflicts of interest may arise with respect
to the management and administration of the business of
Registrant. However, under the respective participating
agreements pursuant to which Mr. Malkin and Mr. Katzman act as
agents for the Participants, certain transactions require the
prior consent from Participants owning a specified interest under
the Agreements in order for them to act on their behalf. Such
-10-<PAGE>
<PAGE>
transactions include modifications and extensions of the Lease and
the Sublease or a sale or other disposition of the Property or
substantially all of Registrant's other assets.
See Item 1 for a description of the terms of the
Sublease. The interest of Mr. Malkin in the Sublease arises
solely from the ownership of his partnership interest in
Sublessee, and he receives no extra or special benefit not shared
on a pro rata basis with all other partners in Sublessee, except
that Mr. Malkin and Mr. Katzman, by reason of their respective
interests in Counsel, are entitled to receive their pro rata share
of any legal fees or other remuneration paid to Counsel for legal
services rendered to Registrant and Sublessee. See Item 11 hereof
for a description of the remuneration arrangements between
Registrant and Counsel relating to supervisory services provided
by Counsel.
See Items 1 and 10 hereof for a description of the
relationship between Registrant and Counsel, of which the Partners
in Registrant are among its members. The interest of each of Mr.
Malkin and Mr. Katzman in any remuneration paid or given by
Registrant to Counsel arises solely from such person's ownership
of an interest in Counsel. See Item 11 hereof for a description
of the remuneration arrangements between Registrant and Counsel
relating to supervisory services provided by Counsel.
(b) Reference is made to paragraph (a) above.
(c) Not applicable.
(d) Not applicable.
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<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K.
(a)(1) Financial Statements:
Consent of Jacobs Evall & Blumenfeld LLP, Certified
Public Accountants, dated February 18, 1997.
Accountant's Report of Jacobs Evall & Blumenfeld LLP,
Certified Public Accountants, dated January 28, 1997.
Balance Sheets at December 31, 1996 and at December 31,
1995 (Exhibit A).
Statements of Income for the fiscal years ended December
31, 1996, 1995 and 1994 (Exhibit B).
Statement of Partners' Capital for the fiscal year ended
December 31, 1996 (Exhibit C-1).
Statement of Partners' Capital for the fiscal year ended
December 31, 1995 (Exhibit C-2).
Statement of Partners' Capital for the fiscal year ended
December 31, 1994 (Exhibit C-3).
Statements of Cash Flows for the fiscal years ended
December 31, 1996, 1995 and 1994 (Exhibit D).
Notes to Financial Statements for the fiscal years ended
December 31, 1996, 1995 and 1994.
(2) Financial Statement Schedules:
List of Omitted Schedules.
Real Estate and Accumulated Depreciation - December 31,
1996 (Schedule III).
(3) Exhibits: See Exhibit Index.
(b) No report on Form 8-K was filed by Registrant
during the last quarter of the period covered by
this report.
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<PAGE>
[LETTERHEAD OF
JACOBS EVALL & BLUMENFELD LLP
CERTIFIED PUBLIC ACCOUNTANTS]
February 18, 1997
Navarre-500 Building Associates
New York, N.Y.
We consent to the use of our independent accountants' report dated
January 28, 1997 covering our audits of the accompanying financial
statements of Navarre-500 Building Associates in connection with and as
part of your December 31, 1996 annual report (Form 10-K) to the
Securities and Exchange Commission.
Jacobs Evall & Blumenfeld LLP
Certified Public Accountants
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<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To the participants in Navarre-500 Building Associates
(a Partnership)
New York, N. Y.
We have audited the accompanying balance sheets of Navarre-500 Building
Associates as of December 31, 1996 and 1995, and the related statements
of income, partners' capital and cash flows for each of the three years
in the period ended December 31, 1996, and the supporting financial
statement schedule as contained in Item 14(a)(2) of this Form 10-K.
These financial statements and schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements and financial statement schedule 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 Navarre-500
Building Associates as of December 31, 1996 and 1995, and the results of
its operations and its cash flows for each of the three years in the
period ended December 31, 1996 in conformity with generally accepted
accounting principles, and the related financial statement schedule,
when considered in relation to the basic financial statements, presents
fairly, in all material respects, the information set forth therein.
Jacobs Evall & Blumenfeld LLP
Certified Public Accountants
New York, N. Y.
January 28, 1997
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<PAGE>
EXHIBIT A
NAVARRE-500 BUILDING ASSOCIATES
BALANCE SHEETS
A S S E T S
<TABLE>
<CAPTION>
December 31,
1996 1995
<S> <C> <C>
Current Assets:
Cash in distribution account held by
Wien, Malkin & Bettex LLP (Note 9)........................ $ 53,333 $ 53,333
TOTAL CURRENT ASSETS............................... 53,333 53,333
Real Estate (Note 2):
Leasehold on property situated at
500 and 512 Seventh Avenue, New York, NY.................. 3,200,000 3,200,000
Less: Accumulated amortization........................... 3,021,665 3,015,140
178,335 184,860
TOTAL ASSETS....................................... $ 231,668 $ 238,193
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities.......................................... - -
Partners' Capital (Exhibit C)................................ $ 231,668 $ 238,193
TOTAL LIABILITIES AND PARTNERS' CAPITAL............ $ 231,668 $ 238,193
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
EXHIBIT B
NAVARRE-500 BUILDING ASSOCIATES
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Year ended December 31,
1996 1995 1994
<S> <C> <C> <C>
Revenues:
Rent income, from a related party (Note 3)........ $2,238,752 $2,008,204 $1,671,079
Expenses:
Leasehold rent (Note 4)........................... 487,500 487,500 487,500
Supervisory services, to a related party (Note 5). 137,525 114,470 80,758
Amortization of leasehold (Note 2)................ 6,525 6,525 22,966
631,550 608,495 591,224
NET INCOME, CARRIED TO
PARTNERS' CAPITAL (NOTE 8)............... $1,607,202 $1,399,709 $1,079,855
Earnings per $5,000 participation
unit, based on 640 participation
units outstanding during each year................. $ 2,511 $ 2,187 $ 1,687
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
EXHIBIT C-1
NAVARRE-500 BUILDING ASSOCIATES
STATEMENT OF PARTNERS' CAPITAL
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Stanley
Katzman
Group
(formerly
Peter L. C. Michael
Malkin Spero
Total Group Group)
<S> <C> <C> <C>
Partners' capital, January 1, 1996................... $ 238,193 $ 119,097 $ 119,096
Share of net income.................................. 1,607,202 803,601 803,601
1,845,395 922,698 922,697
Distributions........................................ 1,613,727 806,864 806,863
PARTNERS' CAPITAL, DECEMBER 31, 1996........ $ 231,668 $ 115,834 $ 115,834
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
EXHIBIT C-3
NAVARRE-500 BUILDING ASSOCIATES
STATEMENT OF PARTNERS' CAPITAL
YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
Peter L. Alvin
Malkin Silverman
Total Group Group
<S> <C> <C> <C>
Partners' capital, January 1, 1994................... $ 267,684 $ 133,842 $ 133,842
Share of net income.................................. 1,079,855 539,928 539,927
1,347,539 673,770 673,769
Distributions........................................ 1,102,821 551,411 551,410
PARTNERS' CAPITAL, DECEMBER 31, 1994........ $ 244,718 $ 122,359 $ 122,359
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
EXHIBIT C-2
NAVARRE-500 BUILDING ASSOCIATES
STATEMENT OF PARTNERS' CAPITAL
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
C. Michael
Spero
Group
(formerly
Peter L. Alvin
Malkin Silverman
Total Group Group)
<S> <C> <C> <C>
Partners' capital, January 1, 1995.................. $ 244,718 $ 122,359 $ 122,359
Share of net income................................. 1,399,709 699,855 699,854
1,644,427 822,214 822,213
Distributions....................................... 1,406,234 703,117 703,117
PARTNERS' CAPITAL, DECEMBER 31, 1995...... $ 238,193 $ 119,097 $ 119,096
</TABLE>
See accompanying notes to financial statements.
-19-<PAGE>
<PAGE>
EXHIBIT D
NAVARRE-500 BUILDING ASSOCIATES
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year ended December 31,
1996 1995 1994
<S> <C> <C> <C>
Cash flows from operating activities:
Net income........................................ $ 1,607,202 $ 1,399,709 $ 1,079,855
Adjustments to reconcile net income to
cash provided by operating activities:
Amortization of leasehold...................... 6,525 6,525 22,966
Net cash provided by operating
activities............................... 1,613,727 1,406,234 1,102,821
Cash flows from financing activities:
Cash distributions................................ (1,613,727) (1,406,234) (1,102,821)
Net cash used in financing
activities............................... (1,613,727) (1,406,234) (1,102,821)
Net change in cash........................ - - -
Cash, beginning of year............................. 53,333 53,333 53,333
CASH, END OF YEAR......................... $ 53,333 $ 53,333 $ 53,333
</TABLE>
See accompanying notes to financial statements.
-20-<PAGE>
<PAGE>
NAVARRE-500 BUILDING ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
1. Business Activity
Navarre-500 Building Associates ("Associates") is a general partnership
which holds the tenant's position in the master leasehold of property
situated at 500 and 512 Seventh Avenue, New York, New York. Associates'
building is located in the heart of New York City's "Garment District"
and its tenants are almost exclusively in the garment business.
Associates subleases the property to 500-512 Seventh Avenue Associates.
2. Summary of Significant Accounting Policies
Real Estate and Amortization of Leasehold:
Real estate, consisting of leasehold, is stated at cost. In 1978,
Associates exercised its first renewal option on the lease.
Amortization of the leasehold was being computed by the straight-line
method over the estimated useful life of 25 years, 4 months, from
January 1, 1978 to May 1, 2003. The second renewal option for a period
of 21 years through May 1, 2024, was exercised in October 1995 (see
Note 4) and the estimated life of the leasehold was revised as of
January 1, 1995 to 29 years and 4 months until May 1, 2024. The effect
of this change was to increase net income in 1995 by $16,441, or $26
per $5,000 participation unit based on 640 participation units
outstanding during the year.
Use of Estimates:
In preparing financial statements in conformity with generally accepted
accounting principles, management often makes estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the
financial statements, as well as the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
3. Related Party Transactions - Rent Income
Rent income for the years ended December 31, 1996, 1995 and 1994
represents the annual basic rent of $1,167,500, under an operating
sublease, as modified, with 500-512 Seventh Avenue Associates (the
"Sublessee"), plus payments of additional rent. Additional rent is
payable in an amount equal to 50% of the Sublessee's defined net income
from operations for lease years ending June 30th.
For the years ended December 31, 1996, 1995 and 1994, additional rent of
$1,071,252, $840,704 and $503,579 was earned for the lease years ended
June 30, 1996, 1995 and 1994, respectively.
No additional rent is accrued by Associates for the period between the
end of the Sublessee's lease year ending June 30th and the end of
Associates' fiscal year ending December 31st.
-21-<PAGE>
<PAGE>
NAVARRE-500 BUILDING ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
(continued)
3. Related Party Transactions - Rent Income (continued)
In 1995, the Sublessee exercised its renewal option for the second
renewal term commencing May 1, 2003 and ending April 30, 2024. Renewal
privileges for one additional term of 21 years may extend the sublease
to April 30, 2045 at an annual basic rent of $1,167,500 during the
renewal period.
A partner in Associates is also a partner in the Sublessee.
4. Leasehold Rent
Leasehold rent paid during the years ended December 31, 1996, 1995 and
1994 consists of the annual net rent of $487,500 under an operating
leasehold, as modified, with GSL Enterprises, Inc. In 1995, Associates
exercised its option to renew the lease for the second renewal period
from May 2, 2003 to May 1, 2024. A renewal option is available for one
additional term of 21 years extending the leasehold to May 1, 2045;
during the renewal periods the rent payable remains at $487,500 per year.
5. Related Party Transactions - Supervisory Services
Supervisory services (including disbursements and cost of regular
accounting services) during the years ended December 31, 1996, 1995 and
1994, totaling $137,525, $114,470 and $80,758, respectively, were paid
to the firm of Wien, Malkin & Bettex LLP. Some members in that firm are
partners in Associates. Fees for supervisory services are paid pursuant
to an agreement, which amount is based on a rate of return of investment
achieved by the participants of Associates each year.
6. Number of Participants
There were approximately 600 participants in the two participating groups
at December 31, 1996, 1995 and 1994.
7. Determination of Distributions to Participants
Distributions to participants during each year represent the excess of
rent income received over the cash expenses.
-22-<PAGE>
<PAGE>
NAVARRE-500 BUILDING ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
(continued)
8. Distributions and Amount of Income per $5,000 Participation Unit
Distributions per $5,000 participation unit during the years 1996, 1995
and 1994, based on 640 participation units outstanding during each year,
consisted of the following:
Year ended December 31,
1996 1995 1994
Income.......................... $2,511 $2,187 $1,687
Return of capital............... 10 10 36
TOTAL DISTRIBUTIONS......... $2,521 $2,197 $1,723
Net income is computed without regard to income tax expense since
Associates does not pay a tax on its income; instead, any such taxes are
paid by the participants in their individual capacities.
9. Concentration of Credit Risk
Associates maintains cash balances in a bank, and in a distribution
account held by Wien, Malkin & Bettex LLP which is not insured. The
funds held in the distribution account were paid to the participants on
January 1, 1997.
-23-<PAGE>
<PAGE>
NAVARRE-500 BUILDING ASSOCIATES
OMITTED SCHEDULES
The following schedules have been omitted as not applicable in the
present instance:
SCHEDULE I - Condensed financial information of registrant.
SCHEDULE II - Valuation and qualifying accounts.
SCHEDULE IV - Mortgage loans on real estate.
-24-<PAGE>
<PAGE>
SCHEDULE III
NAVARRE-500 BUILDING ASSOCIATES
Real Estate and Accumulated Depreciation
December 31, 1996
<TABLE>
Column
<S> <C> <C>
A Description Leasehold on property situated at
500 and 512 Seventh Avenue,
New York, New York.
B Encumbrances.................................................. None
C Initial cost to company
Leasehold................................................... $3,200,000
D Costs capitalized subsequent to acquisition................... None
E Gross amount at which carried at
close of period
Leasehold.................................................. $3,200,000(a)
F Accumulated amortization...................................... $3,021,665(b)
G Date of construction 1921
H Date acquired July 1, 1958
I Life on which leasehold amortization in
latest income statements is computed 29 years, 4 months
(a) There have been no changes in the carrying values of real estate for the years
ended December 31, 1996, December 31, 1995 and December 31, 1994. The costs for
federal income tax purposes are the same as for financial statement purposes.
(b) Accumulated amortization
Balance at January 1, 1994 $2,985,649
Amortization:
F/Y/E 12/31/94 $22,966
12/31/95 6,525
12/31/96 6,525 36,016
Balance at December 31, 1996 $3,021,665
-25-<PAGE>
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
The individual signing this report on behalf of
Registrant is Attorney-in-Fact for Registrant and each of the
Partners in Registrant, pursuant to a Power of Attorney, dated
August 6, 1996 (the "Power").
NAVARRE-500 BUILDING ASSOCIATES (Registrant)
By:/s/ Stanley Katzman
Stanley Katzman, Attorney-in-Fact*
Date: March 31, 1997
Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed by the
undersigned as Attorney-in-Fact for each of the Partners in
Registrant, pursuant to the Power, on behalf of the Registrant
and as a Partner in Registrant on the date indicated.
By:/s/ Stanley Katzman
Stanley Katzman, Attorney-in-Fact*
Date: March 31, 1997
______________________
* Mr. Katzman supervises accounting functions for Registrant.
-26-<PAGE>
<PAGE>
EXHIBIT INDEX
Number Document Page*
3(a) Partnership Agreement, dated March
21, 1958, which was filed as Exhibit
No. 1 to Registrant's Form S-1
Registration Statement, as amended
(the "Registration Statement") by
letter dated April 3, 1958 and
assigned File No. 2-14019, is
incorporated by reference as an
exhibit hereto.
3(b) Amended Business Certificate of
Registrant filed with the Clerk of
New York County on June 10, 1996
reflecting a change in Partners.
4 Form of Participating Agreement,
which was filed as Exhibit No. 4 to
Registrant's Registration Statement
by letter dated April 3, 1958 and
assigned File No. 2-14019, is
incorporated by reference as an
exhibit hereto.
10(a) Deed from Garment Center Capitol
Inc. to The Prudential Insurance
Company of America ("Prudential")
dated May 1, 1957, filed by letter
dated March 31, 1981 (Commission
File No. 0-2673) as Exhibit No.
10(a) to Registrant's Form 10-K for
the fiscal year ended December 31,
1980, is incorporated by reference
as an exhibit hereto.
______________________
* Page references are based on a sequential numbering system.
-27-<PAGE>
<PAGE>
Number Document Page*
10(b) Purchase Agreement between Navarre-
500 Building Associates and 500-512
Seventh Avenue Associates, dated
March 25, 1958, which was filed as
Exhibit No. 2 to Registrant's
Registration Statement by letter
dated April 3, 1958 and assigned
File No. 2-14019, is incorporated by
reference as an exhibit hereto.
10(c) Net Lease, dated May 1, 1957, between
Prudential and 500-512, Inc., which
was filed as Exhibit No. 3 to
Registrant's Registration Statement
by letter dated April 3, 1958 and
assigned File No. 2-14019, is
incorporated by reference as an
exhibit hereto.
10(d) Assignment of Net Lease from 500-512,
Inc. to 500-512 Seventh Avenue
Associates, dated May 1, 1957, which
was filed as Exhibit No. 3(a) to
Registrant's Registration Statement
by letter dated April 3, 1958 and
assigned File No. 2-14019, is
incorporated by reference as an
exhibit hereto.
13(a) Letter to Participants, dated February
3, 1997 and accompanying financial
reports for the fiscal year ended
December 31, 1996. The foregoing
material shall not be deemed to be
"filed" with the Commission or
otherwise subject to the liabilities
of Section 18 of the Securities
Exchange Act of 1934.
13(b) Letter to Participants, dated August
31, 1996 and accompanying financial
reports for the lease years ended
June 30, 1996 and June 30, 1995.
The foregoing material shall not be
deemed to be "filed" with the
Commission or otherwise subject to
the liabilities of Section 18 of the
Securities Exchange Act of 1934.
______________________
* Page references are based on a sequential numbering system.
-28-<PAGE>
<PAGE>
Number Document Page*
24 Power of Attorney dated August 6, 1996
between Peter L. Malkin and Stanley
Katzman as Partners in Registrant
and Stanley Katzman and Richard
Shapiro, was filed as Exhibit 24 to
Registrants 10-Q dated September 30,
1996 and is incorporated herein by
reference.
27 Financial Data Schedule of Registrant
for the fiscal year ended December 31, 1996.
______________________
* Page references are based on a sequential numbering system.
-29-
</TABLE>
Exhibit 3(b)
AMENDED BUSINESS CERTIFICATE
The undersigned hereby certify that a certificate of business
under the assumed name
NAVARRE-500 BUILDING ASSOCIATES
for the conduct of business at 60 East 42nd Street, New York, New
York, was filed in the office of the County Clerk New York County,
State of New York, on the 14th day of April, 1958, under index
number 3507/58; that the last amended certificate was filed on the
12th day of January, 1989 in the office of said County Clerk under
index number 3507/58
It is hereby further certified that this amended certificate
is made for the purposes of more accurately setting forth the
facts recited in the original certificate or the last amended
certificate and to set forth the following changes in such facts.
C. MICHAEL SPERO, residing at 1165 Park Avenue, New York, New York
10128 has been succeeded as a partner of Navarre-500 Building
Associates by STANLEY KATZMAN, residing at 75-18 193rd Street,
Flushing, New York 11366.
The members of NAVARRE-500 BUILDING ASSOCIATES now consist of:
Peter L. Malkin and Stanley Katzman.
IN WITNESS WHEREOF, the undersigned have as of this 2nd day
of April, 1996 made and signed this certificate.
/s/ Stanley Katzman /s/ Peter L. Malkin
STANLEY KATZMAN PETER L. MALKIN
/s/ C. Michael Spero
C. MICHAEL SPERO
State of New York, County of New York ss.:
On this 9th day of May, 1996, before me personally appeared
STANLEY KATZMAN, C. MICHAEL SPERO and PETER L. MALKIN to me known
and known to me to be the individual described in and who executed
the foregoing certificate, and they thereupon duly acknowledged to
me that they executed the same.
/s/ Marilyn Pfeiffer
Notary Public
State of New York
No. 24-4711035
Qualified in Kings County
Commission Expires 7/31/96
[LETTERHEAD OF
WIEN & MALKIN LLP]
February 3, 1997
To Participants in Navarre-500 Building Associates
Federal Identification Number 13-6082674
We enclose the annual report of the partnership which owns
the leasehold on the premises at 500 and 512 Seventh Avenue, New
York City, for the year ended December 31, 1996.
The reported income for 1996 was $1,607,202. This included
additional rent of $1,071,252, which was received from the lessee
for the lease year ended June 30, 1996. As approved by the par-
ticipants, $97,525 was paid to Wien, Malkin & Bettex as an ad-
ditional payment for supervisory services, and $973,727 was dis-
tributed to the participants on August 31, 1996.
Income of $1,607,202 was less than distributions totalling
$1,613,727. The difference represents amortization of the cost of
the leasehold, and is treated as a return of capital, rather than
as taxable income.
Distributions of $1,613,727 represented an annual return of
about 50.4% on the original cash investment of $3,200,000. Taking
into account that a portion of prior distributions constituted a
return of capital, the average capital investment for the year
ended December 31, 1996 was $234,935. Distributions of $1,613,727
were about 687% on the average capital. The book value on
December 31, 1996 of an original cash investment of $10,000 was
$724.
The enclosed Schedule K-1 form(s) (Form 1065) containing 1996
tax information must be reviewed in detail by your accountant.
If you have any question about the enclosed material, please
communicate with our office.
Please retain this letter and the enclosed Schedule K-1
form(s) for the preparation of your income tax returns for the
year 1996.
Cordially yours,
WIEN & MALKIN LLP
By: Stanley Katzman
SK:fm
Encs.<PAGE>
<PAGE>
[LETTERHEAD OF
ORLIN & FEUERSTEIN, CPAS, P.C.]
ACCOUNTANTS' REPORT
To the participants in Navarre-500 Building Associates ( a Partnership):
We have audited the accompanying balance sheet of Navarre-500 Building
Associates ("Associates") as of December 31, 1996 and the related
statements of income, partners' capital, and cash flows for the year then
ended. These financial statements are the responsibility of Associates'
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit 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 audit provides 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 Associates as of December 31,
1996, and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
_____________________________
Orlin & Feuerstein, CPAs, P.C.
60 East 42nd Street
New York, NY 10165
January 23, 1997
<PAGE>
<PAGE>
Navarre-500 Building Associates
Balance Sheet
December 31, 1996
Assets
Cash:
Distribution account held by Wien, Malkin & Bettex LLP $ 53,333
Chase Manhattan Bank 1
53,334
Leasehold at 500 and 512 Seventh Avenue, New York City $3,200,000
Less: Accumulated amortization of cost of leasehold 3,021,662 178,338
Total assets $231,672
Partners' Capital
Partners' capital, December 31, 1996 $231,672
Statement of Income
For the Year Ended December 31, 1996
Rent income:
Basic rent $1,167,500
Additional rent for the lease year ended June 30, 1996 1,071,252
Total rent income 2,238,752
Expenses:
Leasehold rent $487,500
Supervisory services 137,525
Total expenses 625,025
Income before amortization of cost of leasehold 1,613,727
Amortization of cost of leasehold 6,525
Net income $1,607,202
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE>
Navarre-500 Building Associates
Statement of Partners' Capital
December 31, 1996
Partners' capital, January 1, 1996 $ 238,197
Add, Net income for the year ended December 31, 1996 1,607,202
1,845,399
Less, Distributions:
Monthly distributions January 1, 1996 through
December 31, 1996 $640,000
Distribution on August 31, 1996 of
additional rent for the lease year
ended June 30, 1996 973,727
1,613,727
Partners' capital, December 31, 1996 $ 231,672
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE>
Navarre-500 Building Associates
Statement of Cash Flows
December 31, 1996
Cash flows from operating activities:
Net income $1,607,202
Adjustments to reconcile net income to net cash provided
by operating activities:
Amortization of cost of leasehold 6,525
Net cash provided by operating activities 1,613,727
Cash flows from financing activities:
Monthly distributions to participants ($640,000)
Distribution on August 31, 1996 of additional rent
for the lease year ended June 30, 1996 ( 973,727)
Net cash used in financing activities (1,613,727)
Net change in cash -0-
Cash at beginning of year 53,334
Cash at end of year $ 53,334
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE>
Navarre-500 Building Associates
Notes to Financial Statements
December 31, 1996
1. Business Activity:
Navarre-500 Building Associates ("Associates") is a general partnership
which owns and leases the leasehold at 500 and 512 Seventh Avenue, New York
City.
2. Significant Accounting Policy:
The leasehold is stated at cost. The unamortized leasehold cost of
$191,388 at December 31, 1994 is being amortized over the period of 29 years
and 4 months from January 1, 1995 to May 1, 2024, the end of the second
renewal period, with amortization at $6,525 per annum. Amortization of
leasehold from July 1, 1958 through December 31, 1977 was $134,266 per annum,
and from January 1,1978 through December 31,1994 was $22,966 per annum.
3. Leasehold at 500 and 512 Seventh Avenue, New York City:
The lease includes an initial term which expired April 30,1982, and
options to renew for three additional terms of 21 years each. Associates has
exercised the first renewal option for the period
from May 1, 1982 to May 1, 2003, and the second renewal option for the period
from May 1, 2003 to
May 1, 2024. The lease rent was $937,500 per annum during the initial term,
and was $437,500 per annum through April 30, 1985. Pursuant to a lease
modification effective May 1, 1985, the lease rent was increased by $50,000
from $437,500 to $487,500 per annum during the present term and all future
renewal terms.
4. Rent Income and Related Party Transactions:
The sublease includes an initial term which expired April 30, 1982 and
three additional terms of 21 years each, provided that the lease remains in
effect. The sublessee has exercised its first and second renewal options for
the terms from May 1, 1982 through April 30, 2003, and from May 1, 2003
through April 30, 2024. Basic rent under the sublease was $1,337,500 during
the initial term, and $ 1,117,500 through April 30, 1985. Pursuant to the
modification of the sublease effective May 1, 1985, basic rent was increased
by $50,000 from $1,117,500 to $1,167,500 during the present term and all
future renewal terms.
Additional rent is payable to Navarre-500 Building Associates
equivalent to one-half the net operating profit, as defined, in excess of
$400,000, in any year during the initial term, and $620,000 during renewal
terms. For the lease year ended June 30, 1996, the sublessee's net profit was
$2,762,504 so that additional rent of $1,071,252 was received.
Some partners in Associates are also partners in the sublessee.
<PAGE>
<PAGE>
Navarre-500 Building Associates
Notes to Financial Statements
December 31, 1996
5. Supervisory Services and Related Party Transactions:
Payments for supervisory services, including disbursements and cost of
accounting services, are made to the firm of Wien, Malkin & Bettex LLP. Some
partners in that firm are also partners in Associates.
6. Income Taxes:
Net income is computed without regard to income tax expense since the
partnership does not pay a tax on its income; instead, any such taxes are paid
by the participants in their individual capacities.
7. Concentration of Credit Risk:
Associates maintains cash balances in a bank and in a distribution
account held by Wien, Malkin & Bettex LLP. The bank balance is insured by the
Federal Deposit Insurance Corporation up to $100,000, and at December 31,
1996, was completely insured. The distribution account held by Wien, Malkin &
Bettex LLP is not insured. The funds held in the distribution account were
paid to the participants on January 1, 1997.
[LETTERHEAD OF
WIEN, MALKIN & BETTEX]
August 31, 1996
TO PARTICIPANTS IN NAVARRE-500 BUILDING ASSOCIATES
We enclose the comparative operating report of the sublessee,
500-512 Seventh Avenue Associates, for the fiscal years of the
lease ended June 30, 1996 and June 30, 1995.
Under the sublease, 50% of the annual net income of the
sublessee in excess of $620,000 is payable as additional rent.
The sublessee reported net income of $2,762,504 for the year ended
June 30, 1996 and paid additional rent of $1,071,252. For the
year ended June 30, 1995 the reported income was $2,301,408, so
that additional rent of $840,704 was received. You were
previously advised that as the result of conditions in the Garment
Center and the New York City economy in general, there are large
vacancies in the buildings and new and renewal leases are at
reduced rates. In addition, the enclosed operating report
indicates that there were substantial charges for tenant and other
alterations and repairs in the current year as a result of
required work.
The participants have approved an additional payment for
supervisory services to Wien, Malkin & Bettex equivalent to 10% of
distributions in excess of 23% on the cash investment in any year,
commencing May 1, 1982. The additional payment to Wien, Malkin &
Bettex for the year ended June 30, 1996 is $97,525 and $973,727 is
being distributed to the participants. A check for your share of
the additional distribution and the computation of the additional
payment are enclosed. For the lease year ended June 30, 1995,
Wien, Malkin & Bettex received $74,470 and $766,234 was
distributed to the participants.
The distribution of $973,727 for the lease year ended
June 30, 1996 represents a return of about 30.4% on the cash
investment of $3,200,000 in Navarre-500 Building Associates.
(over)<PAGE>
<PAGE>
Re: Navarre-500 Building Associates 2.
Regular monthly distributions are at the rate of 20%, so that
total distributions for the year 1996 will be at the rate of about
50.4% per annum.
If you have any question, please communicate with Stanley
Katzman (212) 850-2630.
Cordially yours,
WIEN, MALKIN & BETTEX
By: Stanley Katzman
SK/fm
Encs:
<PAGE>
<PAGE>
[LETTERHEAD OF
REILLY, DEANE & RABOY
CERTIFIED PUBLIC ACCOUNTANTS]
Navarre-500 Building Associates
60 East 42nd Street
New York, New York 10165
We have examined the Comparative Statement of Income and
Expense of 500-512 Seventh Avenue Associates, the sublessee of
500 Seventh Avenue, 512 Seventh Avenue and 228 West 38th Street,
New York, New York for the sublease years ended June 30, 1996 and
June 30, 1995, prepared in accordance with the 500-512 Seventh
Avenue Associates sublease dated June 27, 1958. Our examination
was made in accordance with generally accepted auditing
standards, and accordingly included such tests of the accounting
records and such other auditing procedures as we considered
necessary in the circumstances.
In our opinion, the Comparative Statement of Income and
Expense fairly presents the operations of 500-512 Seventh Avenue
Associates for sublease years ended June 30, 1996 and June 30,
1995, in accordance with generally accepted accounting principles
and the sublease.
/s/ Reilly, Deane & Raboy
New York, New York
July 29, 1996
<PAGE>
<PAGE>
500-512 SEVENTH AVENUE ASSOCIATES
COMPARATIVE STATEMENT OF INCOME AND EXPENSE
FOR THE SUBLEASE YEARS ENDED JUNE 30,
Increase
1996 1995 (Decrease)
Income:
Rent income $13,339,945 $13,179,186 $ 160,759
Electricity, net 316,979 353,692 ( 36,713)
Air conditioning 32,777 31,630 1,147
Sprinkler 92,009 96,785 ( 4,776)
Water, net 44,827 ( 41,634) 86,461
Other 59,539 53,380 6,159
Total income 13,886,076 13,673,039 213,037
Expenses:
Base rent 1,167,500 1,167,500 -
Labor costs 2,021,333 1,910,117 111,216
Real estate taxes 3,200,102 3,248,605 ( 48,503)
Tenant and other alterations,
repairs and supplies 2,742,614 3,322,436 ( 579,822)
Management & leasing 663,262 521,062 142,200
Fuel 501,043 332,207 168,836
Insurance 279,860 295,613 ( 15,753)
Legal and accounting fees 222,933 201,600 21,333
Sprinkler alarm 36,415 35,951 464
Vault taxes 12,230 12,230 -
Telephone 8,781 9,694 ( 913)
Interest - 1,180 ( 1,180)
Amortization of leasehold
improvements - elevators 239,532 285,252 ( 45,720)
Miscellaneous 27,967 28,184 ( 217)
Total expenses 11,123,572 11,371,631 ( 248,059)
Net income for sublease year 2,762,504 2,301,408 461,096
Less: Exclusion 620,000 620,000 -
Net income subject to
additional rent $ 2,142,504 $ 1,681,408 $ 461,096
Additional rent at 50% $ 1,071,252 $ 840,704 $ 230,548
<PAGE>
<PAGE>
Navarre - 500 Building Associates
Computation of Additional Payment
for Supervisory Services and Distribution
for the Lease Year Ended June 30, 1996
Additional rent $1,071,252
Add, basic monthly distributions for lease
year ended June 30, 1996 640,000
Total rent to be distributed 1,711,252
23% return on $3,200,000 investment 736,000
Subject to additional payment of 10%
to Wien & Malkin LLP $ 975,252
Additional payment at 10% $ 97,525
Summary of additional distribution:
Additional rent $1,071,252
Less, additional payment to Wien,
Malkin & Bettex 97,525
Additional distribution to participants $ 973,727
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's Balance Sheet as of December 31, 1996 and the Statement Of Income
for the year ended December 31, 1996, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 53,333
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 53,333
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 231,668<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 231,668<F2>
<TOTAL-LIABILITY-AND-EQUITY> 231,668
<SALES> 2,238,752<F3>
<TOTAL-REVENUES> 2,238,752
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 631,550<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,607,202
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,607,202
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,607,202<F5>
<EPS-PRIMARY> 2,511
<EPS-DILUTED> 2,511
<FN>
<F1>Includes unamortized leasehold at book value of $178,335
<F2>Partnership capital
<F3>Rental income
<F4>Leasehold rent expense of $487,500, supevisory servises of $137,525 and
amortization of leasehold of $6,525
<F5>Earnings per $5,000 participation unit, based on 640 participation units
outstanding during the year.
</FN>
</TABLE>
