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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 20, 1998
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Indepro Property Fund I, L.P.
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(Exact name of registrant as specified in its charter)
Delaware 2-80756 51-0265801
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation of organization) Identification No.)
600 Dresher Road Horsham, PA 19044
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(Address of principal executive offices)
Registrant's telephone number, including area code 215-956-0400
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(Former name or former address, if changed since last report)
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Index to Form 8-K
Page Number
Item 2. Acquisitions and Dispositions of Assets 3
Item 5. Other Events 3
General Information 4
Pro Forma Balance Sheet
as of September 30, 1997 5
Pro Forma Statement of Operations
for the nine months ended September 30, 1997 6
Pro Forma Statement of Operations
for the year ended December 31, 1996 7
Notes to Unaudited Pro Forma Balance Sheet
and Statements of Operations 8
2
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Item 2. Acquisitions or Dispositions of Assets
On January 20, 1998, Indepro Property Fund I, L.P. (the "Registrant") conveyed
title to the Brunswick Hotel and Conference Center to L.A. Brunswick Associates,
L.P. (the "Purchaser.") The Purchaser is a Pennsylvania limited partnership
affiliated with GF Management, Inc., a Pennsylvania corporation, which owns
and/or manages hotels and other real estate investments primarily in the greater
Philadelphia area and which has no affiliation to the Registrant, the General
Partner of the Registrant or Indepro Corp., the Advisor to the Registrant. The
Brunswick Hotel and Conference Center (the "Hotel") is a 227 guest room hotel
and an approximately 40,000 square foot office/conference center located on
approximately 1 acre in Lancaster, Pennsylvania. The Registrant acquired the
Brunswick Hotel and Conference Center on January 1, 1987 via transfer from the
Penn Mutual Life Insurance Company with an appraised value of $6,650,000 at that
date and no mortgage. During 1991, the Hotel obtained third party financing from
the Bank of Lancaster County in the form of a promissory note to fund major
renovations to the Hotel. Approximately $791,443 was advanced under the note
from 1991 through 1993.
The total consideration received by the Registrant for the sale of the property
was $4,715,000, which was negotiated at arm's length through a competitive
bidding process. Relevant factors utilized in determining the adequacy of the
consideration were the sale prices of comparable properties in the marketplace,
the age and physical condition of the property sold, present and anticipated
future market conditions for hotel properties in the Lancaster area, the
duration of the Registrant's investment in the property, and the decision of the
Office of Personnel Management and the Department of Defense, the two largest
users of guest rooms at the hotel, not to extend their agreements with the Hotel
beyond June 1998. After payment of the costs of sale of approximately $361,371
and the balance of the mortgage loan on the property of $381,472, the total net
cash proceeds of $3,972,157 will be distributed to the General and Limited
Partners of the Registrant.
Item 5. Other Events
The Brunswick Hotel and Conference Center was the last real property investment
owned by the Registrant, and in accordance with the provisions of the limited
partnership agreement, the Partnership terminates upon sale or disposition of
all real property investments. The General Partner will be making a distribution
of all remaining cash to the partners as well as payment of the guaranteed
return of 8%. The General Partner will be implementing a dissolution of the
Partnership once the liquor license which is held by Hotel Brunswick, Inc. (an
entity whose stock is wholly-owned by the Registrant) is transferred to the new
owner.
3
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Unaudited Pro Forma Financial Statements
The following unaudited pro forma balance sheet as of September 30, 1997 sets
forth the financial position of the Registrant under the assumption that the
sale of the Brunswick Hotel and Conference Center occurred on September 30,
1997. The unaudited pro forma statements of operations for the year ended
December 31, 1996 and the nine months ended September 30, 1997 sets forth the
historical results of operations for the Registrant assuming that the sale of
the Brunswick Hotel and Conference Center occurred at the beginning of the
respective periods. It reflects only changes that would result in income from
operations, and does not reflect the loss on the sale.
The unaudited pro forma balance sheet and statements of operations should be
read in conjunction with their accompanying notes.
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Indepro Property Fund I, L.P.
Consolidated Pro Forma Balance Sheet
(Unaudited)
As of September 30, 1997
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<CAPTION>
Historical Data Pro Forma
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Adjustments to Indepro Property
Indepro Historical Data Fund I, L.P.
Property for the sale of the with Sale of
Fund I, L.P. Brunswick Hotel Brunswick Hotel
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<S> <C> <C> <C>
Assets
Investments in real estate at
cost, net of accumulated
depreciation and valuation
allowance $ 4,599,666 a $ (4,599,666) $ --
Cash and cash equivalents 1,250,512 b 4,335,999 5,586,511
Accounts receivable net of
allowance for doubtful accounts 455,711 c (453,088) 2,623
Prepaid expenses and other assets net
of accumulated amortization 114,550 d (81,310) 33,240
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Total assets $ 6,420,439 $ (798,065) $ 5,622,374
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Liabilities and Partners' Capital
Notes payable $ 399,840 e $ (399,840) $ --
Accrued liabilities 223,750 f (133,478) 90,272
Advance deposits 18,710 g (18,710) --
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Total Liabilities 642,300 (552,028) 90,272
Partners' Capital 5,778,139 h (246,037) 5,532,102
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Total Liabilities and Partners'
Capital $ 6,420,439 $ (798,065) $ 5,622,374
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Indepro Property Fund I, L.P.
Consolidated Pro Forma Statement of Operations
(Unaudited)
For the nine months ended September 30, 1997
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<CAPTION>
Historical Data Pro Forma
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Adjustments to Indepro Property
Indepro Historical Data Fund I, L.P.
Property for Sale of the with Sale of
Fund I, L.P. Brunswick Hotel Brunswick Hotel
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<S> <C> <C> <C>
Income
Hotel revenues $ 3,459,748 i $ (3,459,748) $ --
Hotel cost of revenues 1,308,892 j (1,308,892) --
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Gross profit from hotel operations 2,150,856 (2,150,856) --
Investment income 33,948 k (1,362) 32,586
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Total Income 2,184,804 (2,152,218) 32,586
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Expenses
Property operating expenses 802,246 l (802,246) --
Depreciation and amortization 1,500 m (1,500) --
Real estate taxes 177,131 n (177,131) --
Administrative 27,166 -- 27,166
Repairs and maintenance 71,455 o (71,455) --
Insurance 30,837 p (30,837) --
Provision for doubtful accounts 4,124 q (4,124) --
Interest expense 27,120 r (27,120) --
Property valuation allowance 965,000 s (965,000)
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--
Total Expenses 2,106,579 (2,079,413) 27,166
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Net income (loss) $ 78,225 $ (72,805) $ 5,420
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Net income per Limited
Partnership interest outstanding $ 3 $ (2) $ --
=============== =============== ==============
Limited Partnership interests
outstanding 30,000
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Indepro Property Fund I, L.P.
Consolidated Pro Forma Statement of Operations
(Unaudited)
For the year ended December 31, 1996
<TABLE>
<CAPTION>
Historical Data Pro Forma
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Adjustments to Indepro Property
Indepro Historical Data Fund I, L.P.
Property for Sale of the with Sale of
Fund I, L.P. Brunswick Hotel Brunswick Hotel
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<S> <C> <C> <C>
Income
Hotel revenues $ 4,550,037 i $ (4,550,037) $ --
Hotel cost of revenues 1,765,771 j (1,765,771) --
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Gross profit from hotel operations 2,784,266 (2,784,266) --
Investment income 40,019 k (1,889) 38,130
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Total Income 2,824,285 (2,786,155) 38,130
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Expenses
Property operating expenses 1,034,538 l (1,034,538) --
Depreciation and amortization 2,000 m (2,000) --
Real estate taxes 161,540 n (161,540) --
Administrative 74,462 -- 74,462
Repairs and maintenance 95,280 o (95,280) --
Insurance 58,211 p (58,211) --
Provision for doubtful accounts (3,093) q 3,093 --
Interest expense 42,491 r (42,491) --
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Total Expenses 1,465,429 (1,390,967) 74,462
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Net income (loss) $ 1,358,856 $ (1,395,188) $ (36,332)
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Net income per Limited
Partnership interest outstanding $ 45 $ (46) $ (1)
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Limited Partnership interests
outstanding 30,000
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Notes to Unaudited Pro Forma Balance Sheet
1. Pro Forma Adjustments
(a) To eliminate the investment in the Brunswick Hotel and Conference
Center.
(b) To reflect the net cash sales proceeds received from the sale of
the Brunswick Hotel and Conference Center of $3,972,157, collection
of receivables of $453,088 and payment of accrued liabilities of
$89,246.
(c) To eliminate accounts receivable related to the Brunswick Hotel and
Conference Center.
(d) To eliminate prepaid assets and inventory associated with the
Brunswick Hotel and Conference Center.
(e) To reflect the payment of the mortgage loan payable for the
Brunswick Hotel and Conference Center.
(f) To eliminate accrued liabilities associated with the Brunswick
Hotel and Conference Center.
(g) To eliminate advance deposits associated with the Brunswick Hotel
and Conference Center.
(h) To reflect the gain on disposition of the Brunswick Hotel and
Conference Center.
Notes to Unaudited Pro Forma Statements of Operations
1. Pro Forma Adjustments
(i) To eliminate room revenues and food and beverage income from the
Brunswick Hotel and Conference Center.
(j) To eliminate the cost of revenues associated with the Brunswick
Hotel and Conference Center.
(k) To eliminate interest income earned at the Brunswick Hotel and
Conference Center.
(l) To eliminate property operating expenses associated with the
Brunswick Hotel and Conference Center.
(m) To eliminate amortization of loan fees associated with the
Brunswick Hotel and Conference Center.
(n) To eliminate real estate taxes for the Brunswick Hotel and
Conference Center.
(o) To eliminate repair and maintenance expense for the Brunswick Hotel
and Conference Center.
(p) To eliminate insurance expense for the Brunswick Hotel and
Conference Center.
(q) To eliminate the allowance for doubtful accounts associated with
the Brunswick Hotel and Conference Center.
(r) To eliminate interest expense on Brunswick Hotel and Conference
Center mortgage loan.
(s) To eliminate property valuation allowance established on the
Brunswick Hotel and Conference Center.
2. Sale of the Brunswick Hotel and Conference Center
The pro forma statements of operations for the nine months ended
September 30, 1997 and for the year ended December 31, 1996 do not include any
loss that would have been recognized upon the sale of the Brunswick Hotel and
Conference Center. The loss on the above mentioned transaction would have been
$(246,037) at September 30, 1997.
8
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Indepro Property Fund I, L.P.
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(Registrant)
By: /s/ Ronald M. Pappas
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Ronald M. Pappas
President
By: /s/ Wayne L. Harris
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Wayne L. Harris
Vice President
By: /s/ Ann M. Strootman
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Ann M. Strootman
Controller
Date: January 30, 1998
9
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