SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended June 30, 1996 Commission file #0-12791
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(Exact name of registrant as specified in its charter)
Illinois 36-3207212
(State of organization) (IRS Employer Identification No.)
900 N. Michigan Ave., Chicago, IL 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312/915-1987
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
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . . 13
PART II OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . 17
Item 3. Defaults upon Senior Securities. . . . . . . . . . 17
Item 5. Other Information. . . . . . . . . . . . . . . . . 18
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . 19
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1996 AND DECEMBER 31, 1995
(UNAUDITED)
ASSETS
------
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . $ 9,080,403 5,908,236
Short-term investments. . . . . . . . . . . . . . . . . . . . . . . . 374,085 2,568,329
Restricted funds. . . . . . . . . . . . . . . . . . . . . . . . . . . 2,279,544 1,312,240
Rents and other receivables . . . . . . . . . . . . . . . . . . . . . 3,674,493 2,963,711
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 27,440 289,250
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,711,405 6,191,089
------------ ------------
Total current assets. . . . . . . . . . . . . . . . . . . . . . 22,147,370 19,232,855
------------ ------------
Investment properties, at cost:
Land and leasehold interests. . . . . . . . . . . . . . . . . . . . 19,309,005 20,935,810
Buildings and improvements. . . . . . . . . . . . . . . . . . . . . 404,156,313 412,286,995
------------ ------------
423,465,318 433,222,805
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . 169,801,753 163,309,553
------------ ------------
Total investment properties, net of
accumulated depreciation. . . . . . . . . . . . . . . . . . . 253,663,565 269,913,252
------------ ------------
Investment in unconsolidated ventures, at equity. . . . . . . . . . . . 1,231,962 1,459,879
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,166,311 5,261,096
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . 471,792 489,911
Venture partners' deficits in ventures. . . . . . . . . . . . . . . . . 12,936,037 11,103,113
------------ ------------
$295,617,037 307,460,106
============ ============
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . . $ 39,522,276 39,666,113
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . 3,657,612 2,858,162
Amounts due to affiliates . . . . . . . . . . . . . . . . . . . . . . 4,380,476 4,249,390
Unearned rents. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,669,157 600,610
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 14,871,183 13,252,892
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . 1,604,779 1,330,231
------------ ------------
Total current liabilities . . . . . . . . . . . . . . . . . . . 65,705,483 61,957,398
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . 2,337,682 1,704,872
Investment in unconsolidated venture, at equity . . . . . . . . . . . . 87,951,517 84,764,207
Long-term debt, less current portion. . . . . . . . . . . . . . . . . . 388,691,275 382,303,505
------------ ------------
Commitments and contingencies
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . 544,685,957 530,729,982
Venture partners' subordinated equity in ventures . . . . . . . . . . . 328,676 329,169
Partners' capital accounts (deficits):
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . . (22,547,433) (21,515,491)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (1,149,967) (1,149,967)
------------ ------------
(23,696,400) (22,664,458)
------------ ------------
Limited partners:
Capital contributions, net of offering costs. . . . . . . . . . . . 326,224,167 326,224,167
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . . (510,966,946) (486,200,337)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (40,958,417) (40,958,417)
------------ ------------
(225,701,196) (200,934,587)
------------ ------------
Total partners' deficits. . . . . . . . . . . . . . . . . . . . (249,397,596) (223,599,045)
------------ ------------
$295,617,037 307,460,106
============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE> CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------- --------------------------
1996 1995 1996 1995
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . . . $17,099,082 14,545,427 34,373,882 31,711,971
Interest income . . . . . . . . . . . . . . . . 226,024 120,965 357,269 444,737
----------- ---------- ----------- -----------
17,325,106 14,666,392 34,731,151 32,156,708
----------- ---------- ----------- -----------
Expenses:
Mortgage and other interest . . . . . . . . . . 10,026,822 9,703,285 19,866,610 19,341,856
Depreciation. . . . . . . . . . . . . . . . . . 3,054,607 3,391,078 6,492,200 6,782,157
Property operating expenses . . . . . . . . . . 9,762,021 9,375,518 18,428,503 17,872,656
Professional services . . . . . . . . . . . . . 75,956 411,132 174,218 423,016
Amortization of deferred expenses . . . . . . . 377,314 309,355 746,289 618,711
General and administrative. . . . . . . . . . . 169,354 216,718 402,572 379,353
Provision for value impairment. . . . . . . . . -- -- 13,100,000 --
----------- ---------- ----------- -----------
23,466,074 23,407,086 59,210,392 45,417,749
----------- ---------- ----------- -----------
Operating earnings (loss) . . . . . . . . (6,140,968) (8,740,694) (24,479,241) (13,261,041)
Partnership's share of gain (loss) from
operations of unconsolidated ventures . . . . . (1,754,971) (2,449,856) (3,152,727) (4,441,887)
Venture partners' share of (earnings) loss
from ventures' operations . . . . . . . . . . . 880,476 2,106,920 1,833,417 2,373,550
----------- ---------- ----------- -----------
Net operating earnings (loss) . . . . . . $(7,015,463) (9,083,630) (25,798,551) (15,329,378)
=========== ========== =========== ===========
Net earnings (loss) per
limited partnership interest:
Net operating earnings (loss) . . . . . $ (18.39) (23.81) (67.64) (40.19)
=========== ========== =========== ===========
Cash distributions per limited
partnership interest. . . . . . . . . . $ -- -- -- (30.00)
=========== ========== =========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
<CAPTION>
1996 1995
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . $(25,798,551) (15,329,378)
Items not requiring (providing) cash or cash equivalents:
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,492,200 6,782,157
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . . 746,289 618,711
Amortization of discount on long-term debt. . . . . . . . . . . . . . . 71,692 63,623
Partnership's share of operations of unconsolidated
ventures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,152,727 4,441,887
Venture partners' share of loss from ventures'
operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,833,417) (2,373,550)
Long-term debt - deferred accrued interest. . . . . . . . . . . . . . . 6,489,314 5,830,078
Provision for value impairment. . . . . . . . . . . . . . . . . . . . . 13,100,000 --
Changes in:
Restricted funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . (967,304) 283,351
Rents and other receivables . . . . . . . . . . . . . . . . . . . . . . (710,782) 2,509,834
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . 261,810 318,336
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520,316) (373,621)
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . 18,119 16,972
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . 799,450 318,442
Amounts due to affiliates . . . . . . . . . . . . . . . . . . . . . . . 131,086 (10,051,364)
Unearned rents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,068,547 (442,414)
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,618,291 1,416,561
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . . 274,548 (764,129)
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . 632,810 64,348
------------ -----------
Net cash provided by (used in) operating activities . . . . . . . . 5,026,513 (6,670,156)
------------ -----------
Cash flows from investing activities:
Net sales and maturities (purchases) of short-term investments. . . . . . 2,194,244 16,920,814
Additions to investment properties. . . . . . . . . . . . . . . . . . . . (3,342,513) (1,534,593)
Partnership's distribution from unconsolidated ventures . . . . . . . . . 262,500 --
Payment of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . (651,504) (588,616)
------------ -----------
Net cash provided by (used in) investing activities . . . . . . . . (1,537,273) 14,797,605
------------ -----------
Cash flows from financing activities:
Cash distributions to limited partners. . . . . . . . . . . . . . . . . . -- (10,983,528)
Cash distributions to general partners. . . . . . . . . . . . . . . . . . -- (110,945)
Principal payments on long-term debt. . . . . . . . . . . . . . . . . . . (317,073) (2,967,405)
------------ -----------
Net cash provided by (used in) financing activities . . . . . . . . (317,073) (14,061,878)
------------ -----------
Net increase (decrease) in cash and cash equivalents. . . . . . . . 3,172,167 (5,934,429)
Cash and cash equivalents, beginning of year. . . . . . . . . . . . 5,908,236 9,551,909
------------ -----------
Cash and cash equivalents, end of period. . . . . . . . . . . . . . $ 9,080,403 3,617,480
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . . . . . . . . . . . . . $ 10,404,371 12,061,602
============ ===========
Non-cash investing and financing activities . . . . . . . . . . . . . . . $ -- --
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996 AND 1995
(UNAUDITED)
GENERAL
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1995,
which are included in the Partnership's 1995 Annual Report on Form 10-K (
File No. 0-12791) filed on March 25, 1996, as certain footnote disclosures
which would substantially duplicate those contained in such audited
financial statements have been omitted from this report. Capitalized terms
used but not defined in this quarterly report have the same meanings as in
the Partnership's 1995 Annual Report on Form 10-K.
The preparation of financial statements in accordance with GAAP
requires the Partnership to make estimates and assumptions that affect the
reported or disclosed amount of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Statement of Financial Accounting Standards No. 121 was adopted by the
Partnership on January 1, 1996.
TRANSACTIONS WITH AFFILIATES
The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Corporate General Partner
and its affiliates, including the reimbursement for salaries and salary-
related expenses of its employees and certain of its officers, and other
direct expenses relating to the administration of the Partnership and the
operation of the Partnership's investments. Fees, commissions and other
expenses required to be paid by the Partnership to the General Partners and
their affiliates as of June 30, 1996 and for the six months ended June 30,
1996 and 1995 were as follows:
Unpaid at
June 30,
1996 1995 1996
---------- ------- ----------
Property management
and leasing fees . . . . . . $ 855,022 501,973 2,852,099
Insurance commissions . . . . 60,249 53,978 --
Reimbursement (at
cost) for out-of-
pocket salary and
salary-related
expenses related
to the on-site
and other costs
for the Partner-
ship and its
investment
properties . . . . . . . . . 94,260 117,326 80,483
---------- ------- ---------
$1,009,531 673,277 2,932,582
========== ======= =========
Payment of certain pre-1993 property management and leasing fees
payable under the terms of the management agreements ($2,821,893 or approx-
imately $8 per $1,000 Interest at June 30, 1996) has been deferred. All
property management fees and leasing fees are being paid currently.
The Partnership has an obligation to fund, on demand, $600,000 and
$600,000 to Carlyle Managers, Inc. and Carlyle Investors, Inc.,
respectively, of additional paid-in capital (reflected in amounts due to
affiliates in the accompanying financial statements). As of June 30, 1996,
these obligations bore interest at 4.99% per annum and interest accrued on
these obligations was $208,669.
UNCONSOLIDATED VENTURE - SUMMARY INFORMATION
Summary income statement information for JMB/NYC for the six months
ended June 30, 1996 and 1995 is as follows:
1996 1995
----------- ----------
Total income from
properties
(unconsolidated). . . . . . $61,184,806 65,462,753
=========== ==========
Operating loss. . . . . . . . $26,246,650 34,965,536
=========== ==========
Partnership's share
of loss . . . . . . . . . . $ 3,187,310 4,441,887
=========== ==========
JMB/NYC
The Corporate General Partner of the Partnership believes that the
agreement discussed below, although subject to the satisfaction of certain
conditions, will in substance be effected (with some changes in the form or
structure of such transactions) as to the elimination (beyond the guaranty
or letter of credit described below) of any potential funding obligations
of the Partnership in the future.
In October 1994, the Partnership and its affiliated partners (together
with the Partnership, the "Affiliated Partners"), through JMB/NYC Office
Building Associates, L.P. ("JMB/NYC"), entered into an agreement (the
"Agreement") with the affiliates (the "Olympia & York affiliates") of
Olympia & York Developments, Ltd. ("O&Y") who are the venture partners in
the joint ventures which own or owned 237 Park Avenue, 1290 Avenue of the
Americas and 2 Broadway to resolve certain disputes. Certain provisions of
the Agreement were immediately effective and, therefore, binding upon the
partners, while others become effective either upon certain conditions
being met or upon execution and delivery of final documentation. In
general, the parties agreed to: (i) amend the joint ventures' agreements to
eliminate any funding obligation by JMB/NYC for any purpose in return for
JMB/NYC relinquishing its rights to approve almost all property management,
leasing, sale (certain rights to control a sale would be retained by
JMB/NYC through March 31, 2001) or refinancing decisions and the
establishment of a new preferential distribution level payable to the
Olympia & York affiliates from all future sources of cash, (ii) sell the 2
Broadway Building, and (iii) restructure the first mortgage loan. In
anticipation of this sale and in accordance with the Agreement, the unpaid
first mortgage indebtedness previously allocated to 2 Broadway was
allocated to 237 Park Avenue and 1290 Avenue of the Americas during 1994.
A more detailed discussion of these items is contained in the Partnership's
1995 Annual Report.
As part of the Agreement, in order to facilitate the restructuring,
JMB/NYC and the Olympia & York affiliates agreed to file for each of the
property owning joint ventures a pre-arranged bankruptcy plan for
reorganization under Chapter 11 of the Bankruptcy Code. In June 1995, the
2 Broadway joint ventures filed their pre-arranged bankruptcy plans for
reorganization, and in August 1995, the bankruptcy court entered an order
confirming their plans of reorganization. In September 1995, the sale of
the 2 Broadway Building was completed. Bankruptcy filings for the other
property owning joint ventures were made in April 1996. JMB/NYC is seeking
to incorporate much of the substance of the transactions proposed in the
Agreement in the reorganization plans for the other property owning joint
ventures, although such reorganization plans will be subject to the
approval of various creditors of the property owning joint ventures and of
the Olympia & York affiliates as well as the bankruptcy court and various
specifics of the proposed transactions are expected to be changed.
Consequently, there is no assurance such transactions in the Agreement will
be substantially incorporated or that the transactions contemplated in the
Agreement will be finalized. In addition, in connection with such
restructuring and reorganizations, it is currently expected that the
Partnership and its Affiliated Partners will be required to provide a joint
and several guaranty or letter of credit in order to secure their
compliance with certain covenants related to the restructuring and
reorganizations.
Even if the restructuring and reorganizations are consummated with the
substance of the transactions in the Agreement incorporated, the property
owning joint ventures and JMB/NYC will each have a substantial amount of
indebtedness. It is not expected that JMB/NYC would receive any
distributions from the operations of the 237 Park Avenue or 1290 Avenue of
the Americas office buildings. Moreover, if the properties were sold and
the property mortgage indebtedness repaid, the purchase money notes
(including accrued and deferred interest) payable by JMB/NYC to the Olympia
& York affiliates and certain cash distribution preferences in favor of the
Olympia & York affiliates must be paid before a portion of any sale
proceeds would be distributable to the Partnership. As a result, it is
unlikely that the Partnership will receive any significant amount of
distributions from JMB/NYC in the future.
If the restructuring and reorganizations are consummated with the
substance of the transactions in the Agreement incorporated, it is expected
that the Partnership and the Limited Partners would recognize in 1996 a
significant amount of gain for Federal income tax purposes with no
corresponding distributable proceeds, but with the recognition of
additional gain from the investment in JMB/NYC deferred until the next and
succeeding years. In the event that one or more of the transactions in the
Agreement are not consummated as part of the restructuring and
reorganizations, the Partnership and the Limited Partners may, among other
things, recognize in 1996 a substantially greater amount of gain for
Federal income tax purposes with no corresponding distributable proceeds
and no amount of gain deferred. JMB/NYC would likely then proceed to
terminate its affairs.
ORCHARD ASSOCIATES
The Partnership's interest in Old Orchard shopping center (through
Orchard Associates and Old Orchard Urban Venture ("OOUV") was sold in
September 1993.
Old Orchard Urban Venture still may earn, under certain conditions, up
to an additional $3,400,000 (of which Orchard Associates has a 79.1667
interest) based upon certain future earnings of the property (as defined),
none of which has been earned or received as of the date of this report.
In August 1996, OOUV distributed to Orchard Associates $455,000 in
proceeds from the partial settlement of operating prorations. As a result,
Orchard Associates distributed $227,500 to the Partnership representing its
share of such operating prorations.
COPLEY PLACE
The joint venture modified the existing first mortgage note effective
March 1, 1992. Any cash flow from the property, after all current capital
and leasing expenditures, is being escrowed for the purpose of paying for
future capital and leasing requirements. As a result of the debt
modification, the property produced cash flow in 1993, 1994 and 1995, which
has been escrowed for future potential leasing requirements as set forth in
the current loan modification. At June 30, 1996, such escrowed funds
approximated $4,711,000.
It is not expected that the Partnership will receive any distributions
from the operations of the property. Moreover, if the property were sold
and the property indebtedness repaid, proceeds to the Partnership would be
used to repay the purchase price note and loans for operating deficits
payable to an affiliate of the General Partners. If such proceeds were
insufficient, the Partnership would remain liable for any unpaid balances.
As a result, it is unlikely that the Partnership will receive any
significant amount of distributions in the future from its interest in
Copley Place. However, a sale or other disposition of the property would
result in significant amount of gain to the Partnership for financial
reporting and Federal income tax purposes.
In May 1996, the venture used approximately $945,000 of Copley Place
cash reserves to repay a 1996 advance of approximately $720,000 from the
affiliated venture partner with the remaining balance applied to accrued
interest on the operating deficit loans.
In 1996 and 1997, leases for approximately 19% and 7% of the tenant
space expire, respectively. There can be no assurance that the expiring
tenant space will be renewed. Subsequent to the quarter end, the joint
venture signed a new five year lease with a tenant whose lease for
approximately 129,000 square feet was scheduled to expire in July 1996.
SHERRY LANE PLACE
All excess cash flow is remitted to the lender as additional debt
service on the modified mortgage. During 1996, the Partnership remitted
approximately $113,000 to the lender representing excess cash flow
generated through June 1996. The Partnership does not consider this
investment to be a source of future liquidity. The joint venture may
decide not to commit any significant additional amounts to the property,
which may result in the joint venture no longer having an ownership in the
property. In such event, the joint venture would recognize a gain for
financial reporting and Federal income tax purposes with no corresponding
distributable proceeds.
MARSHALL'S AURORA PLAZA
In February 1996, the Partnership was notified by TJX, the new owner
of the Marshall's store, of its intent to sublease or assign its lease as
permitted by Marshall's current lease agreement. The Partnership was
working with TJX to secure another tenant for its 28,000 square foot store
and issued a proposal for a replacement tenant. In May 1996, the
Partnership was notified that an agreement in principle was reached between
TJX and a national retailer specializing in crafts and hobby supplies,
whereby TJX will assign its lease to the national retailer. This
transaction will have no adverse financial impact on the property and the
new national retailer's store is expected to generate additional traffic to
the center. There can be no assurance this transaction will be finalized.
The Partnership intends to market the property for sale once the issue with
the Marshall's store is resolved. In addition, the Partnership has
initiated discussions with the first mortgage lender for a short-term
extension of the mortgage loan which is due in November 1996. Although,
the Partnership is optimistic, there can be no assurance such extension
will be obtained.
PLAZA TOWER
In accordance with the terms of the 1995 refinancing of the Plaza
Tower Office Building, beginning April 1996, the Partnership is obligated
to deposit into escrow $100,000 annually for five years to cover future
tenant improvement obligations pursuant to a lease executed with a major
tenant. Should the current tenant lease be terminated or amended such that
the Partnership's obligation to the tenant is eliminated, such escrowed
funds (plus interest earned thereon) would be released to the Partnership.
CARROLLWOOD APARTMENTS
In September 1993, the venture refinanced the mortgage loan with an
unaffiliated third party. The venture was obligated to establish an escrow
account for future capital improvements. The escrow account was initially
funded by the Partnership's capital contribution to the venture and is
subsequently funded by the operations of the venture. As of the date of
this report, the escrow account has approximately $123,000 and no amounts
have been withdrawn.
In April 1996, the property manager (an affiliate of the Partnership's
joint venture partner in the property) of the apartment complex notified
the Partnership of potential sub-terranean termite damage at the property.
This damage was discovered as a result of a wood replacement project that
was undertaken to prepare the property to market for sale. The property
manager obtained three competitive bids to repair the damage, each of which
totalled approximately $1,400,000. In addition, the exterminating company
that had been treating the property for several years has been notified of
the extensive damage and will meet with property management and the venture
partners in mid-August to discuss its potential liability regarding the
damage. The joint venture is currently exploring its alternatives
regarding this issue and if an agreement with the exterminating company
cannot be reached whereby the exterminating company will agree to pay for
substantially all the damage, the joint venture will likely pursue its
remedies against the exterminating company. Accordingly, in June 1996, the
Partnership recorded, for financial reporting purposes, a liability and a
related receivable for the estimated repair costs and recovery of such
repair costs.
LONG BEACH PLAZA
The Partnership has not remitted all of the scheduled debt service
payments for the mortgage loan secured by the Long Beach Plaza shopping
center since June 1993. Accordingly, the combined balances of the mortgage
note and related accrued interest of approximately $45,431,000 at June 30,
1996 and approximately $44,220,000 at December 31, 1995 are in default and
have been classified as current liabilities in the accompanying
consolidated financial statements. The Partnership had initiated
discussions with the first mortgage lender regarding a modification of its
mortgage loan secured by the property, which was originally due in June
1994. The lender agreed to a short-term loan extension until August 31,
1995. The Partnership has been unable to secure a modification or further
extension to the loan. The Partnership has decided not to commit any
significant additional amounts to the property. In March 1996, a receiver
was appointed for the benefit of the lender. As a result, the Partnership
was required to submit to the lender approximately $1,000,000 of prior
years' cash generated from the property. Title is expected to be
transferred in late 1996 or 1997. This will result in the Partnership no
longer having an ownership interest in such property and will result in
gain for financial reporting and Federal income tax purposes to the
Partnership with no corresponding distributable proceeds.
The Partnership recorded a provision for value impairment of
$13,100,000 as of January 1, 1996.
THE GLADES APARTMENTS
The joint venture had commenced marketing the Glades Apartments for
sale. In July 1996, the joint venture signed a letter of intent to sell
the property to an unaffiliated third party. If consummated, the sale
would result in a gain for financial reporting and Federal income tax
purposes. The sale is subject to certain contingencies which must be
satisfied prior to the proposed closing date in October 1996. There can be
no assurances that a sale of the property will be consummated on the terms
outlined in the letter of intent or on any other terms. The property was
classified as held for sale or disposition as of April 1, 1996 and
therefore has not been subject to continued depreciation. The accompanying
consolidated financial statements include $571,472 and $552,484 of revenues
and $594,663 and $545,705 of operating expenses for the three months ended
June 30, 1996 and 1995, respectively. The property had a net carrying
value of $7,842,461 and $7,963,205 at June 30, 1996 and December 31, 1995,
respectively.
ALLIED AUTOMOTIVE CENTER
On October 10, 1990, the Partnership sold the land, building, and
related improvements of the Allied Automotive Center located in Southfield,
Michigan.
The Partnership has retained title to a defined 1.9 acre piece of land
(the "Parcel"). During the buyer's due diligence investigation, the buyer
found traces of contamination located on a portion of the Parcel as well as
on a portion of the land owned by the two affiliated selling entities. It
was subsequently determined that such contamination was most likely the
result of certain activities of the previous owner. As a result, the
purchase price was reduced by approximately $682,000 for the Partnership's
excluded land. The land may be purchased by the buyer after the
environmental clean-up is completed. Recently, the Partnership has been
informed that certain regulatory agencies have approved the clean-up of the
site and approved the shut-down of the clean-up operation. The Partnership
is currently awaiting final written approval from the state regulatory
agency. The gain associated with this Parcel, approximately $543,000, will
be recognized if and when the closing occurs (currently expected to be in
late 1996 or early 1997). There can be no assurance that the sale of this
Parcel will be consummated on these or any other terms.
ADJUSTMENTS
In the opinion of the Corporate General Partner, all adjustments
(consisting solely of normal recurring adjustments and adjustments to
reflect the treatment given certain transactions in the Partnership's 1995
Annual Report) necessary for a fair presentation have been made to the
accompanying figures as of June 30, 1996 and for the three and six months
ended June 30, 1996 and 1995.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the notes to the accompanying consolidated
financial statements for additional information concerning certain of the
Partnership's investments.
At June 30, 1996, the Partnership and its consolidated ventures had
cash and cash equivalents of approximately $9,080,000. Included in cash
and cash equivalents at June 30, 1996 is $6,140,000 of Copley Place venture
cash of which approximately $3,800,000 is to be used for payment of a
portion of the real estate taxes for the property (of which approximately
$1,900,000 was paid in July 1996), approximately $94,000 and $1,775,000
represents excess cash flow generated by Copley Place related to the fourth
quarter of 1995 and the first quarter of 1996, respectively, which will be
remitted to the lender during the third quarter and approximately $179,000
represents lease termination proceeds which are being amortized and
remitted to the lender over the remaining terms of the related original
leases (as defined). Remaining amounts are available for working capital
requirements and potential leasing, tenant improvement and other costs at
certain of the Partnership's other investment properties. The Partnership
and its consolidated ventures have currently budgeted in 1996 approximately
$7,078,000 for tenant improvements and other capital expenditures which is
a reduction of approximately $2,344,000 from original budget estimates due
to expected releasing cost savings at the Copley Place multi-use complex.
The Partnership's share of such items in 1996 is currently budgeted to be
approximately $4,436,000.
Based upon estimated operations of certain of the Partnership's
investment properties and on the anticipated requirements of the
Partnership to fund its share of potential leasing and capital improvement
costs at these properties, the Partnership suspended operating cash
distributions to the Limited and General Partners effective as of the first
quarter of 1992.
The Partnership has held certain of its investment properties longer
than originally anticipated in an effort to maximize the return to the
Limited Partners. After reviewing the remaining properties and their
competitive marketplace, the General Partners of the Partnership expect to
be able to conduct an orderly liquidation of most of the remaining assets
as quickly as practicable. Therefore, it is currently expected that the
Partnership will sell or dispose of its remaining investment properties,
with the possible exception of the Partnership's interest in the 237 Park
Avenue and 1290 Avenue of Americas properties, no later than 1999 (sooner
if the properties are sold or disposed of in the nearer term) barring
unforeseen economic developments.
Although the Partnership expects to distribute sale proceeds from the
disposition of certain of the Partnership's remaining investment
properties, aggregate distributions of net cash flow and sale and
refinancing proceeds received by the Limited Partners over the entire term
of the Partnership will be substantially less than half of their original
investment. However, in connection with sales or other dispositions
(including a transfer of title to a lender) of properties (or interests
therein) owned by the Partnership or its ventures, the Limited Partners may
be allocated substantial gain for Federal income tax purposes regardless of
whether any proceeds are distributable from such sales or other
dispositions.
RESULTS OF OPERATIONS
The aggregate increase in cash and cash equivalents and short-term
investments at June 30, 1996 as compared to December 31, 1995 is primarily
due to cash generated from operations at the Copley Place multi-use
complex, a portion of which is reserved as discussed above.
The increase in restricted funds and the corresponding increase in
tenant security deposits at June 30, 1996 as compared to December 31, 1995
is primarily due to additional deposits received from a tenant at Copley
Place as required per the tenant's lease which will be refunded to the
tenant in the fall of 1996 due to the recent renewal of their lease.
The increase in rents and other receivables and the corresponding
increase in accounts payable at June 30, 1996 as compared to December 31,
1995 is primarily due to a recorded liability and a related receivable at
Carrollwood Apartments relating to termite damage for which the
exterminating company is potentially liable for the repair costs.
The decrease in prepaid expenses at June 30, 1996 as compared to
December 31, 1995 is primarily due to the timing of insurance premium
payments at certain of the Partnership's investment properties.
The increase in escrow deposits at June 30, 1996 as compared to
December 31, 1995 is primarily due to the timing of real estate tax
payments and insurance premiums at certain of the Partnership's investment
properties.
The decrease in land and building and improvements at June 30, 1996 as
compared to December 31, 1995 is primarily due to the $13,100,000 provision
for value impairment recorded for the Long Beach Plaza Shopping Center at
January 1, 1996.
The increase in venture partners' deficits in ventures at June 30,
1996 as compared to December 31, 1995 is primarily due to the allocation to
the venture partner of its share of operating losses being incurred at the
Copley Place multi-use complex.
The increase in unearned rents at June 30, 1996 as compared to
December 31, 1995 is primarily due to the timing of receipt of rental
income at Copley Place multi-use complex.
The increase in accrued interest at June 30, 1996 as compared to
December 31, 1995 is primarily due to the continued suspension of debt
service payments on the long-term mortgage loan secured by Long Beach
Plaza.
The increase in accrued real estate taxes at June 30, 1996 as compared
to December 31, 1995 is due to the timing of real estate tax payments at
certain of the Partnership's investment properties.
The increased deficit in unconsolidated venture at June 30, 1996 as
compared to December 31, 1995 is primarily due to the allocation of the
Partnership's share of operating losses from JMB/NYC Office Building
Associates, L.P.
The increase in long-term debt, less current portion at June 30, 1996
as compared to December 31, 1995 is primarily due to the accrual of long-
term deferred interest of approximately $4,651,000 on the Copley Place
purchase price note and the accrual of long-term deferred interest of
approximately $1,838,000 on the Copley Place mortgage note.
The increase in rental income for the three and six months ended June
30, 1996 as compared to the three and six months ended June 30, 1995 is
primarily due to higher average occupancy at Copley Place in 1996.
The decrease in interest income for the six months ended June 30, 1996
as compared to the six months ended June 30, 1995 is primarily due to a
lower average balance in short-term investments in 1996 as a result of the
February 1995 distribution to partners of previous undistributed sales
proceeds of $11,094,473 and the February 1995 payment of $10,000,000 for
previously deferred property management and leasing fees. The increase in
interest income for the three months ended June 30, 1996 as compared to the
three months ended June 30, 1995 is primarily due to cash generated from
operations at the Copley Place multi-use complex in 1995 and 1996, a
substantial portion of which is held in an interest-bearing escrow account.
The increase in mortgage and other interest for the three and six
months ended June 30, 1996 as compared to the three and six months ended
June 30, 1995 is primarily due to the higher average balance in 1996 on the
Copley Place purchase price note.
The increase in property operating expenses for the three and six
months ended June 30, 1996 as compared to the three and six months ended
June 30, 1995 is primarily due to the increase in real estate taxes (which
are partially recoverable from tenants) at the Copley Place multi-use
complex.
The provision for value impairment in the amount of $13,100,000 for
the six months ended June 30, 1996 is due to the uncertainty of the
Partnership's ability to recover the net carrying value of the Long Beach
Plaza Shopping Center from future operations or sale.
The decrease in the Partnership's share of loss from operations of
unconsolidated ventures for the three and six months ended June 30, 1996 as
compared to the three and six months ended June 30, 1995 is primarily due
to the lower interest expense incurred related to the discharge of
principal and accrued interest on the 2 Broadway Purchase Notes of
$62,529,627 as a result of the sale of 2 Broadway in September 1995
partially offset by a decrease in rental income at the 1290 Avenue of the
Americas office building due to greater vacancy in 1996.
The decrease in venture partners' share of loss from ventures'
operations for the three and six months ended June 30, 1996 as compared to
the three and six months ended June 30, 1995 is primarily due to increased
net earnings at Copley Place as a result of higher rental income due to
increased average occupancy, partially offset by increased real estate
taxes.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In February 1996, an action entitled TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA V. CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XIII, JMB
REALTY CORPORATION, et. al. was initiated in California Superior Court of
Orange County, California. In the proceeding, Teachers Insurance and
Annuity Association of America ("Teachers"), as the holder of the mortgage
notes secured by the Long Beach Plaza Shopping Center, sought the
appointment of a receiver for the benefit of the lender to take exclusive
possession, control and operation of the property. Due to declining retail
sales at the shopping center and one of its anchor tenant's previously
vacating its space, the Partnership has not made all of the scheduled debt
service payments on the mortgage notes since June 1993. The Partnership
also did not pay the outstanding principal and accrued interest on the
first mortgage note at its maturity in August 1995 (combined principal and
accrued interest balance at June 30, 1996 was approximately $45,431,000).
The Partnership was unable to obtain a long-term modification of the
mortgage notes from Teachers, and the Partnership decided not to commit any
significant additional amounts to the property. In March 1996, the Court
granted Teachers' application and entered an order for a receiver to take
exclusive possession, control and operation of the property. Accordingly,
the receiver has control of the property and its operations. An affiliate
of the General Partners continues as the property manager, at the
discretion of the receiver. Title to the property is expected to be
transferred to Teachers or its designee in 1996 or 1997.
The Partnership is not subject to any other material legal
proceedings.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Reference is made to Notes to Consolidated Financial Statements filed
with this report for a discussion of the default under the mortgage loan
secured by Long Beach Plaza, which discussion is hereby incorporated by
reference.
Prior to 1996, the lender assert various defaults under the mortgage
loan secured by the 237 Park Avenue and 1290 Avenue of the Americas Office
Buildings. Commencing in January 1996, the property owning joint ventures
ceased making monthly debt service payments on the mortgage loan.
Principal and interest in arrears related to the mortgage loan at June 30,
1996 is approximately $44,324,000. A restructuring of the first mortgage
loan now appears likely to depend on the restructuring of the ownership
interest of various affiliates of O & Y in a number of office buildings and
the reorganization of the property owning joint ventures, which have filed
for bankruptcy under Chapter 11 of the Bankruptcy Code, as more fully
discussed in the Notes to Consolidated Financial Statements included in the
Partnership's 1995 Annual Report on Form 10-K.
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
OCCUPANCY
The following is a listing of approximate physical occupancy levels by quarter for the Partnership's
investment properties owned during 1996.
<CAPTION>
1995 1996
------------------------------------- ------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Marshall's Aurora Plaza
shopping center
Aurora (Denver), Colorado. . 94% 94% 92% 92% 95% 96%
2. Carrollwood Station
Apartments
Tampa, Florida . . . . . . . 99% 99% 97% 96% 96% 98%
3. Long Beach Plaza
shopping center
Long Beach, California . . . 55% 53% 53% 55% 55% 55%
4. The Glades Apartments
Jacksonville, Florida. . . . 87% 94% 96% 95% 92% 93%
5. Sherry Lane Place
office building
Dallas, Texas. . . . . . . . 98% 99% 97% 97% 96% 97%
6. Copley Place
multi-use complex
Boston, Massachusetts. . . . 73% 73% 88% 86% 89% 93%
7. Plaza Tower office building
Knoxville, Tennessee . . . . 92% 92% 93% 92% 91% 93%
8. 237 Park Avenue Building
New York, New York . . . . . 98% 98% 98% 98% 98% 98%
9. 1290 Avenue of the Americas
Building
New York, New York . . . . . 94% 94% 94% 78% 78% 71%
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
3. Amended and Restated Agreement of Limited Partnership set
forth as Exhibit A to the Prospectus is hereby incorporated by reference to
the Partnership's Report for December 31, 1992 on Form 10-K (File No. 0-
12791) dated March 30, 1993.
4-A. Documents relating to the mortgage loan secured by the
Copley Place multi-use complex, in Boston Massachusetts, are also hereby
incorporated herein by reference to Post-Effective Amendment No. 2 in the
Partnership's Registration Statement on Form S-11 (File No. 2-81125) dated
June 9, 1983.
4-B. Documents relating to the modification of the mortgage
loan secured by the Copley Place multi-use complex are hereby incorporated
by reference to the Partnership's report for December 31, 1992 on Form 10-K
(File No. 0-12791) dated March 29, 1993.
10-A. Acquisition documents relating to the purchase by the
Partnership of an interest in the Copley Place multi-use complex in Boston,
Massachusetts, are hereby incorporated herein by reference to Post-
Effective Amendment No. 2 to the Partnership's Registration Statement on
Form S-11 (File No. 2-81125) dated June 9, 1983.
10-B. Documents relating to the sale by the Partnership of an
interest in the Allied Automotive Center, in Southfield, Michigan, are
hereby incorporated herein by reference to the Partnership's Report on Form
8-K (File No. 0-12791) for October 10, 1990, dated October 30, 1990.
10-C. Agreement dated March 25, 1993 between JMB/NYC and the
Olympia & York affiliates regarding JMB/NYC's deficit funding obligations
from January 1, 1992 through June 30, 1993 are hereby incorporated by
reference to the Partnership's report for December 31, 1992 on Form 10-K
(File No. 0-12791) dated March 29, 1993.
10-D. Agreement of Limited Partnership of Carlyle - XIII
Associates L.P. is hereby incorporated by reference to the Partnership's
Report for March 31, 1993 on Form 10-Q (File No. 0-12791) dated May 14,
1993.
10-E. Documents relating to the sale by the Partnership of its
interest in the Old Orchard Urban Venture are herein incorporated by
reference to the Partnership's Report on Form 8-K (File No. 0-12791) for
August 30, 1993, dated November 12, 1993.
10-F. Second Amended and Restated Articles of Partnership of
JMB/NYC Office Building Associates, are herein incorporated by reference to
the Partnership's report for December 31, 1993 on Form 10-K (File No. 0-
12791) dated March 28, 1994.
10-G. Amended and Restated Certificate of Incorporation of
Carlyle-XIV Managers, Inc. (known as Carlyle Managers, Inc.), is hereby
incorporated by reference to the Partnership's report for December 31, 1993
on Form 10-K (File No. 0-12791) dated March 28, 1994.
10-H. Amended and Restated Certificate of Incorporation of
Carlyle-XIII Managers, Inc. (known as Carlyle Investors, Inc.), is hereby
incorporated by reference to the Partnership's report for December 31, 1993
on Form 10-K (File No. 0-12791) dated March 28, 1994.
10-I. $600,000 demand note between Carlyle-XIII Associates, L.P.
and Carlyle Managers, Inc., are herein incorporated by reference to the
Partnership's report for December 31, 1993 on Form 10-K (File No. 0-12791)
dated March 28, 1994.
10-J. $600,000 demand note between Carlyle-XIII Associates, L.P.
and Carlyle Investors, Inc., are herein incorporated by reference to the
Partnership's report for December 31, 1993 on Form 10-K (File No. 0-12791)
dated March 28, 1994.
10-K. Proposed Restructure of Two Broadway, 1290 Avenue of the
Americas and 237 Park Avenue, New York, New York and Summary of Terms dated
October 14, 1994, is hereby incorporated by reference to the Partnership's
report for December 31, 1994 on Form 10-K (File No. 0-12791) dated March
27, 1995.
10-L. Assumption Agreements dated October 14, 1994 made by 237
Park Avenue Associates and by 1290 Associates in favor and for the benefit
of O&Y Equity Company, L.P., O&Y NY Building Corp. and JMB/NYC Office
Building Associates, L.P., are hereby incorporated by reference to the
Partnership's report for December 31, 1994 on Form 10-K (File No. 0-12791)
dated March 27, 1995.
10-M. Assumption Agreements dated October 14, 1994 made by O&Y
Equity Company, L.P., and by O&Y NY Building Corp. and by JMB/NYC Office
Building Associates, L.P. in favor and for the benefit of 2 Broadway
Associates and 2 Broadway Land Company, are hereby incorporated by
reference to the Partnership's report for December 31, 1994 on Form 10-K
(File No. 0-12791) dated March 27, 1995.
10-N. Amendment No. 1 to the Agreement of Limited Partnership of
Carlyle-XIII Associates, L.P. is hereby incorporated by reference to the
Partnership's report for March 31, 1995 on Form 10-Q (File No. 0-12791)
dated May 11, 1995.
10-O. Amendment No. 1 to the Second Amended and Restated
Articles of Partnership of JMB/NYC Office Building Associates, L.P. is
hereby incorporated by reference to the Partnership's report for March 31,
1995 on Form 10-Q (File No. 0-12791) dated May 11, 1995.
10-P. Agreement of Sale between 2 Broadway Associates, L.P. and
2 Broadway Acquisition Corp. dated August 10, 1995, is hereby incorporated
by reference to the Partnership's report on Form 10-K (File No. 0-12791)
dated March 25, 1996.
10-Q. Agreement of Conversion of 1290 Associates into 1290
Associates, L.L.C. dated October 10, 1995 among JMB/NYC Office Building
Associates, L.P., an Illinois limited partnership, O&Y Equity Company,
L.P., a Delaware limited partnership and O&Y NY Building Corp., a Delaware
corporation, is hereby incorporated by reference to the Partnership's
report on Form 10-K (File No. 0-12791) dated March 25, 1996.
10-R. Agreement of Conversion of 237 Park Avenue Associates into
237 Park Avenue Associates, L.L.C., dated October 10, 1995 among JMB/NYC
Office Building Associates, L.P., an Illinois limited partnership, O&Y
Equity Company, L.P., a Delaware limited partnership and O&Y NY Building
Corp., a Delaware corporation, is hereby incorporated by reference to the
Partnership's report on Form 10-K (File No. 0-12791) dated March 25, 1996.
27. Financial Data Schedule
Although certain additional long-term debt instruments of the
Registrant have been excluded from Exhibit 4 above, pursuant to Rule 601(b)
(4) (iii), the Registrant commits to provide copies of such agreements to
the Securities and Exchange Commission upon request.
(b) No reports on Form 8-K were filed since the beginning of
the last quarter of the period covered by this report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
BY: JMB Realty Corporation
(Corporate General Partner)
By: GAILEN J. HULL
Gailen J. Hull, Senior Vice President
Date: August 9, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.
GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date: August 9, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 9,080,403
<SECURITIES> 374,085
<RECEIVABLES> 12,692,882
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 22,147,370
<PP&E> 423,465,318
<DEPRECIATION> 169,801,753
<TOTAL-ASSETS> 295,617,037
<CURRENT-LIABILITIES> 65,705,483
<BONDS> 388,691,275
<COMMON> 0
0
0
<OTHER-SE> (249,397,596)
<TOTAL-LIABILITY-AND-EQUITY>295,617,037
<SALES> 34,373,882
<TOTAL-REVENUES> 34,731,151
<CGS> 0
<TOTAL-COSTS> 38,766,992
<OTHER-EXPENSES> 576,790
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,866,610
<INCOME-PRETAX> (24,479,241)
<INCOME-TAX> 0
<INCOME-CONTINUING> (25,798,551)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (25,798,551)
<EPS-PRIMARY> (67.64)
<EPS-DILUTED> (67.64)
</TABLE>
