SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 23, 1997
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
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(Exact name of registrant as specified in its charter)
Illinois 0-12791 36-3207212
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(State or other) (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Organization
900 N. Michigan Avenue, Chicago, Illinois 60611-1575
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(Address of principal executive office)
Registrant's telephone number, including area code: (312) 915-1987
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. Carlyle Real Estate Limited
Partnership-XIII, an Illinois limited partnership (the "Partnership"), was
a 50% partner in Copley Place Associates ("CPA"), which was the 100% owner
of the issued and outstanding common stock of Copley Place Associates
Nominee Corporation ("Nominee"). The Nominee is the owner of certain air
rights and improvements relative to a mixed-use development known as Copley
Place, in Boston, Massachusetts. The joint venture partners of the
Partnership in CPA were JMB Realty Corporation ("JMB"), the Corporate
General Partner of the Partnership, and Urban Investment and Development
Co. ("Urban"), an affiliate of JMB. On January 23, 1997, the Partnership,
JMB, and Urban formed Copley Place Associates LLC, a Delaware limited
liability company (the "Company"). The membership interests of the Company
were owned by the Partnership, JMB, and Urban in the same proportion as
their respective interests in CPA. Immediately after the formation of the
Company, the Partnership, JMB, and Urban merged CPA into the Company. The
Company became the 100% owner of the stock of the Nominee. After the
merger, Urban contributed additional property to the Company and,
immediately thereafter the Partnership and Urban each sold its entire
interest in the Company and JMB sold a portion of its interest in the
Company to Overseas Partners Capital Corp. ("Overseas"), as described
below. Copley Place consists of a multi-use complex consisting of 845,000
square feet of office space in four seven-story office towers, a 104,000
square foot Neiman Marcus department store, a 271,000 square foot, two-
level retail mall of shops, boutiques, restaurants, a nine-screen movie
theater, and associated parking facilities. As of December 31, 1996 the
office tower and retail space occupancy were 86% and 99%, respectively.
Also, included in the complex are 101 residential apartments, an 804-room
Westin Hotel and a 1,139-room Marriott Hotel in which the Partnership and
the Company had no ownership interest.
In connection with its purchase of the membership interests, Overseas
made certain additional capital contributions to the Company, resulting in
Overseas owning a 66-2/3% aggregate membership interest therein.
Overseas's purchase was subject to the Company's outstanding share of
mortgage indebtedness which had an outstanding balance of approximately
$209,750,000, and all other liabilities of the Company from and after the
effective date of the transaction. Overseas is not affiliated with the
Company or its members, and the terms of the sale were determined by arm's-
length negotiations.
Pursuant to the CPA joint venture agreement, JMB had made various
loans to CPA to fund certain operating deficits. At January 23, 1997,
the outstanding principal balance and related accrued interest on these
loans (the "Deficit Loans") was approximately $17,942,000. The
Partnership's share of the Deficit Loans were recourse obligations of the
Partnership to CPA. In addition, the Partnership continued to be liable
2
under the $20,000,000 purchase price note (the "Note") which the
Partnership had given to its original joint venture partner when it
purchased its interest in CPA in 1983. The balance of the Note at January
23, 1997, including accrued interest at 11-1/2% per annum, was
approximately $89,000,000 and was held by an affiliate of the Corporate
General Partner of the Partnership.
The Partnership's outstanding obligations on the Note and for the
Deficit Loans, and the projected continuing accruals of additional interest
on such amounts made it unlikely that CPA's interest in Copley Place would
ever be sold for an amount which would result in any net proceeds to the
Partnership. Therefore, in order to provide the Partnership with incentive
to consummate the sale of its interest in the Company as described above,
the joint venture partners, the holder of the Note and the Partnership
executed an agreement whereby the net proceeds were distributed in a manner
which permitted the Partnership to satisfy its obligations relative to the
Note and the Deficit Loans and still realize some modest cash proceeds. In
addition, the holder of the Note agreed on a discounted payoff of the Note.
In general, the Partnership received $43,900,000 of sale proceeds, of which
$34,000,000 was remitted to the holder of the Note as payment in full
satisfaction of the Note. As a result, the Partnership was relieved of an
approximately $55,000,000 obligation. The Partnership's obligation under
the Deficit Loans were next satisfied in full out of the Partnership's
remaining sale proceeds. After the repayment of the Note and Deficit
Loans, as discussed above, the Partnership's remaining net proceeds
amounted to approximately $929,000, all of which was received in cash at
closing. The Partnership currently intends to retain these funds as
necessary working capital reserves.
The effect on the Partnership's consolidated financial statements as
of a result of the sale will be to eliminate the Partnership's investment
in CPA and to recognize a gain on sale of the Partnership's interest in the
consolidated venture of approximately $126,500,000 for financial reporting
purposes. Accordingly, no future share of the results of operations
subsequent to the sale would be reflected for 1997. The Partnership also
expects to recognize a gain on the sale of approximately $ 171,500,000 for
Federal income tax purposes for 1997.
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ITEM 7. FINANCIAL STATEMENT AND EXHIBITS
(a) Financial Statements - Not Applicable.
(b) Pro Forma Financial Information
The following unaudited pro forma condensed consolidated
financial statements for the Partnership reflect the sale of the
Partnership's interest in CPA. The pro forma condensed consolidated
financial statements have been prepared based upon certain pro forma
parenthetical adjustments for Copley Place to the historical financial
statements of the Partnership.
The accompanying unaudited pro forma condensed
consolidated balance sheet as of September 30, 1996 has been prepared as if
CPA's interests had been sold as of the balance sheet date.
The accompanying unaudited pro forma condensed
consolidated statements of operations for the nine months ended September
30, 1996 and for the year ended December 31, 1995 have been prepared as if
the sale of the Partnership's interest in CPA had occurred as of the
beginning of the respective period.
The unaudited pro forma condensed consolidated financial
statements do not purport to be indicative of the results which would
actually have been obtained had the transactions described above been
completed on the dates indicated or which may be obtained in the future.
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<TABLE>
ITEM 7. - EXHIBIT (b)
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR PERIOD ENDING 12/31/95
<CAPTION>
AS REPORTED
IN THE
DECEMBER 31, DECEMBER 31,
1995 1995
10-K PRO FORMA
CONSOLIDATED ADJUSTMENT CONSOLIDATED
INCOME FOR COPLEY INCOME
STATEMENT PLACE STATEMENT
------------- ------------ --------------
<S> <C> <C> <C>
INCOME:
RENTAL INCOME . . . . . . . . . . . . . . . . . . $ 65,729,288 $(42,691,827) $ 23,037,461
INTEREST INCOME . . . . . . . . . . . . . . . . . 1,034,061 (497,541) 536,520
------------ ------------ ------------
TOTAL INCOME. . . . . . . . . . . . . . . 66,763,349 (43,189,368) 23,573,981
------------ ------------ ------------
EXPENSES:
MORTGAGE AND OTHER INTEREST . . . . . . . . . . . 38,615,594 (28,974,556) 9,641,038
DEPRECIATION. . . . . . . . . . . . . . . . . . . 13,784,147 (9,466,300) 4,317,847
PROPERTY OPERATING EXPENSES . . . . . . . . . . . 35,234,465 (22,111,460) 13,123,005
PROFESSIONAL SERVICES . . . . . . . . . . . . . . 647,443 -- 647,443
AMORTIZATION OF DEFERRED EXPENSES . . . . . . . . 1,421,951 (359,836) 1,062,115
GENERAL AND ADMINISTRATIVE. . . . . . . . . . . . 781,049 -- 781,049
------------ ------------ ------------
TOTAL EXPENSES. . . . . . . . . . . . . . 90,484,649 (60,912,152) 29,572,497
------------ ------------ ------------
PARTNERSHIP'S SHARE OF GAIN (LOSS) FROM OPERATIONS
OF UNCONSOLIDATED VENTURES. . . . . . . . . . . . (6,600,158) -- (6,600,158)
VENTURE PARTNERS' SHARE OF EARNINGS (LOSS)
FROM CONSOLIDATED VENTURES' OPERATIONS. . . . . . 4,588,759 (4,590,860) (2,101)
------------ ------------ ------------
NET OPERATING EARNINGS (LOSS) . . . . . . . . . . . (25,732,699) 13,131,924 (12,600,775)
PARTNERSHIP'S SHARE OF LOSS ON SALE OF PROPERTY
OF UNCONSOLIDATED VENTURES. . . . . . . . . . . . (14,789,529) -- (14,789,529)
EXTRAORDINARY ITEMS . . . . . . . . . . . . . . . . 15,632,407 -- 15,632,407
------------ ------------ ------------
NET EARNINGS (LOSS) . . . . . . . . . . . . . . . . $(24,889,821) $ 13,131,924 $(11,757,897)
============ ============ ============
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CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - CONTINUED
AS REPORTED
IN THE
DECEMBER 31, DECEMBER 31,
1995 1995
10-K PRO FORMA
CONSOLIDATED ADJUSTMENT CONSOLIDATED
INCOME FOR COPLEY INCOME
STATEMENT PLACE STATEMENT
------------- ------------ --------------
NET EARNINGS (LOSS) PER LIMITED PARTNERSHIP INTEREST:
NET OPERATING EARNINGS (LOSS) . . . . . . . . . . $ (67.47) $ 34.43 $ (33.04)
SHARE OF GAIN (LOSS) ON SALE OF PROPERTY OR
INTEREST IN PROPERTY OF UNCONSOLIDATED VENTURES . (39.99) -- (39.99)
EXTRAORDINARY ITEMS . . . . . . . . . . . . . . . . 42.27 -- 42.27
------------ ------------ ------------
NET EARNINGS (LOSS) . . . . . . . . . . . $ (65.19) $ 34.43 $ (30.76)
============ ============ ============
</TABLE>
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<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF 9/30/96
<CAPTION>
AS REPORTED
IN THE
SEPTEMBER 30, SEPTEMBER 30,
1996 1996
10-Q ADJUSTMENT PRO FORMA
CONSOLIDATED FOR COPLEY CONSOLIDATED
BALANCE SHEET PLACE BALANCE SHEET
-------------- ------------ --------------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS . . . . . . . . . . $ 8,758,234 $ (5,520,836) $ 3,237,398
SHORT-TERM INVESTMENTS. . . . . . . . . . . . 374,085 - 374,085
RESTRICTED FUNDS. . . . . . . . . . . . . . . 3,028,455 (2,769,093) 259,362
RENTS AND OTHER RECEIVABLES . . . . . . . . . 3,953,364 (730,549) 3,222,815
PREPAID EXPENSES. . . . . . . . . . . . . . . 420,456 (214,395) 206,061
ESCROW DEPOSITS . . . . . . . . . . . . . . . 9,027,541 (6,628,531) 2,399,010
------------ ------------- ------------
TOTAL CURRENT ASSETS . . . . . . . . . . . 25,562,135 (15,863,404) 9,698,731
INVESTMENT PROPERTIES, AT COST:
LAND AND LEASEHOLD INTERESTS. . . . . . . . . 19,309,005 (4,769,912) 14,539,093
BUILDINGS AND IMPROVEMENTS. . . . . . . . . . 404,710,317 (285,329,944) 119,380,373
------------ ------------- ------------
424,019,322 (290,099,856) 133,919,466
LESS ACCUMULATED DEPRECIATION . . . . . . . . (172,851,871) 117,746,405 (55,105,466)
------------ ------------- ------------
TOTAL INVESTMENT PROPERTIES
NET OF ACCUMULATED DEPRECIATION . . . . 251,167,451 (172,353,451) 78,814,000
INVESTMENT IN UNCONSOLIDATED VENTURES,
AT EQUITY . . . . . . . . . . . . . . . . . 1,231,962 -- 1,231,962
DEFERRED EXPENSES . . . . . . . . . . . . . . 5,448,962 (3,116,685) 2,332,277
ACCRUED RENTS RECEIVABLE. . . . . . . . . . . 467,013 -- 467,013
VENTURE PARTNERS' DEFICITS IN VENTURES. . . . 14,341,528 (14,200,862) 140,666
------------ ------------- ------------
$298,219,051 $(205,534,402) $ 92,684,649
============ ============= ============
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CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET - CONTINUED
AS REPORTED
IN THE
SEPTEMBER 30, SEPTEMBER 30,
1996 1996
10-Q ADJUSTMENT PRO FORMA
CONSOLIDATED FOR COPLEY CONSOLIDATED
BALANCE SHEET PLACE BALANCE SHEET
-------------- ------------ --------------
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
CURRENT LIABILITIES:
CURRENT PORTION OF LONG-TERM DEBT . . . . . . $ 39,449,273 $ - $ 39,449,273
ACCOUNTS PAYABLE. . . . . . . . . . . . . . . 3,953,087 (2,285,397) 1,667,690
AMOUNTS DUE TO AFFILIATES . . . . . . . . . . 4,410,656 - 4,410,656
UNEARNED RENTS. . . . . . . . . . . . . . . . 2,145,351 (1,946,869) 198,482
ACCRUED INTEREST. . . . . . . . . . . . . . . 16,290,186 (2,880,367) 13,409,819
ACCRUED REAL ESTATE TAX . . . . . . . . . . . 2,434,142 -- 2,434,142
------------ ------------- ------------
TOTAL CURRENT LIABILITIES . . . . . . . . 68,682,695 (7,112,633) 61,570,062
TENANT SECURITY DEPOSITS . . . . . . . . . . 2,937,564 (2,258,148) 679,416
INVESTMENT IN UNCONSOLIDATED VENTURE,
AT EQUITY . . . . . . . . . . . . . . . . . 87,312,342 - 87,312,342
LONG-TERM DEBT LESS CURRENT PORTION . . . . . 392,468,300 (318,997,967) 73,470,333
------------ ------------- ------------
COMMITMENTS AND CONTINGENCIES
TOTAL LIABILITIES. . . . . . . . . . . . . 551,400,901 (328,368,748) 223,032,153
------------ ------------- ------------
VENTURE PARTNER'S SUBORDINATED EQUITY IN VENTURES . 329,798 - 329,798
TOTAL PARTNERS' DEFICITS . . . . . . . . . . . . . (253,511,648) 122,834,346 (130,677,302)
------------ ------------- ------------
$298,219,051 $(205,534,402) $ 92,684,649
============ ============= ============
</TABLE>
8
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR PERIOD ENDING 9/30/96
<CAPTION>
AS REPORTED
IN THE
SEPTEMBER 30, SEPTEMBER 30,
1996 1996
10-Q PRO FORMA
CONSOLIDATED ADJUSTMENT CONSOLIDATED
INCOME FOR COPLEY INCOME
STATEMENT PLACE STATEMENT
------------- ------------ --------------
<S> <C> <C> <C>
INCOME:
RENTAL INCOME . . . . . . . . . . . . . . . . . . $ 51,521,252 $(34,829,367) $ 16,691,885
INTEREST INCOME . . . . . . . . . . . . . . . . . 578,848 (359,054) 219,794
------------ ------------ ------------
TOTAL INCOME. . . . . . . . . . . . . . . 52,100,100 (35,188,421) 16,911,679
------------ ------------ ------------
EXPENSES:
MORTGAGE AND OTHER INTEREST . . . . . . . . . . . 29,875,398 (22,534,472) 7,340,926
DEPRECIATION. . . . . . . . . . . . . . . . . . . 9,542,318 (7,105,872) 2,436,446
PROPERTY OPERATING EXPENSES . . . . . . . . . . . 28,457,206 (18,776,577) 9,680,629
PROFESSIONAL SERVICES . . . . . . . . . . . . . . 275,698 -- 275,698
AMORTIZATION OF DEFERRED EXPENSES . . . . . . . . 1,155,596 (329,874) 825,722
GENERAL AND ADMINISTRATIVE. . . . . . . . . . . . 558,325 -- 558,325
PROVISION FOR VALUE IMPAIRMENT. . . . . . . . . . 13,100,000 -- 13,100,000
------------ ------------ ------------
TOTAL EXPENSES. . . . . . . . . . . . . . 82,964,541 (48,746,795) 34,217,746
------------ ------------ ------------
OPERATING EARNINGS (LOSS) . . . . . . . . (30,864,441) 13,558,374 (17,306,067)
------------ ------------ ------------
PARTNERSHIP'S SHARE OF GAIN (LOSS) FROM OPERATIONS
OF UNCONSOLIDATED VENTURES. . . . . . . . . . . . (2,285,947) -- (2,285,947)
VENTURE PARTNERS' SHARE OF EARNINGS (LOSS) FROM
VENTURES' OPERATIONS. . . . . . . . . . . . . . . 3,237,785 (3,239,764) (1,979)
------------ ------------ ------------
NET EARNING (LOSS). . . . . . . . . . . . $(29,912,603) $ 10,318,610 $(19,593,993)
============ ============ ============
NET EARNINGS (LOSS) PER LIMITED PARTNERSHIP INTEREST:
NET OPERATING EARNINGS (LOSS) . . . . . . . . . . $ (78.42) $ 27.05 $ (51.37)
------------ ------------ ------------
NET EARNINGS (LOSS) . . . . . . . . . . . $ (78.42) $ 27.05 $ (51.37)
============ ============ ============
</TABLE>
9
ITEM 7. FINANCIAL STATEMENT AND EXHIBITS - CONTINUED
(c) Exhibits - None.
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.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
BY: JMB Realty Corporation
(Corporate General Partner)
By: GAILEN J. HULL
Gailen J. Hull
Senior Vice President
Dated: February 7, 1997
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