<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the Quarterly Period Ended MARCH 31, 1997
Commission File Number 2-82765
REAL EQUITY PARTNERS
(A California Limited Partnership)
I.R.S. Employer Identification No. 95-3784125
9090 WILSHIRE BLVD., SUITE 201
BEVERLY HILLS, CA 90211
Registrant's Telephone Number,
Including Area Code (310) 278-2191
Indicate by check mark whether the registrant (1) has filed all documents and
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding twelve 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 [ ]
<PAGE> 2
REAL EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1997
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements and Notes to Financial Statements
Balance Sheets, March 31, 1997 and December 31, 1996 1
Statements of Operations,
Three Months Ended March 31, 1997 and 1996 ... 2
Statement of Partners' Equity (Deficiency),
Three Months Ended March 31, 1997 ............ 3
Statements of Cash Flows,
Three Months Ended March 31, 1997 and 1996 ... 4
Notes to Financial Statements ...................... 5
Item 2. Management's Discussion and Analysis of Financial
Position and Results of Operations ................. 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings ........................................ 12
Item 6. Exhibits and Reports on Form 8-K ......................... 12
Signatures ........................................................ 13
<PAGE> 3
REAL-EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
MARCH 31, 1997 AND DECEMBER 31, 1996
<TABLE>
<CAPTION>
ASSETS
1997 1996
(Unaudited) (Audited)
------------ ------------
<S> <C> <C>
RENTAL PROPERTY, at cost (Notes 1 and 2)
Land $ 6,553,357 $ 6,553,357
Buildings 22,096,723 22,096,723
Furniture and equipment 3,720,901 3,720,901
------------ ------------
32,370,981 32,370,981
Less accumulated depreciation (13,285,987) (13,101,384)
------------ ------------
19,084,994 19,269,597
------------ ------------
CASH AND CASH EQUIVALENTS 895,057 1,884,218
------------ ------------
OTHER ASSETS:
Due from affiliated rental agent (Note 4) 807,774 652,923
Other receivables and prepaid expenses 292,514 243,257
------------ ------------
1,100,288 896,180
------------ ------------
TOTAL ASSETS $ 21,080,339 $ 22,049,995
============ ============
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Mortgage notes payable (Notes 2 and 7) $ 14,006,034 $ 14,064,914
Accrued fees and expenses due general partner
(Notes 5 and 7) 703,947 693,560
Accrued interest payable 56,541 56,541
Accounts payable and accrued expenses (Note 1) 180,276 179,681
Liability for earthquake loss (Note 1) 500,557 516,150
Tenant security deposits 229,690 229,690
------------ ------------
15,677,045 15,740,536
COMMITMENTS AND CONTINGENCIES (Notes 5 and 6)
PARTNERS' EQUITY 5,403,294 6,309,459
------------ ------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 21,080,339 $ 22,049,995
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
1
<PAGE> 4
REAL-EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
---------- -----------
<S> <C> <C>
RENTAL OPERATIONS:
Revenues
Rental income $1,170,104 $ 1,241,483
Other income 48,530 49,022
---------- -----------
1,218,634 1,290,505
---------- -----------
Expenses
Operating expenses 515,997 601,803
Management fees - affiliate (Note 4) 59,851 67,808
Depreciation (Note 1) 184,603 227,614
General and administrative expenses 46,031 72,679
Interest expense (Note 2) 343,121 438,064
---------- -----------
1,149,603 1,407,968
---------- -----------
Income (loss) from rental operations 69,031 (117,463)
---------- -----------
PARTNERSHIPS OPERATIONS:
Interest and other income 64,180 16,269
---------- -----------
Expenses
General and administrative expenses 24,068 19,481
Professional fees 20,733 21,265
Interest expense - general partner (Note 5) 10,387 10,502
---------- -----------
55,188 51,248
---------- -----------
Income (loss) from partnership operations 8,992 (34,979)
---------- -----------
NET INCOME (LOSS) $ 78,023 $ (152,442)
========== ===========
NET INCOME (LOSS) PER LIMITED PARTNERSHIP
INTEREST $ 3 $ (5)
========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 5
REAL-EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENT OF PARTNERS' EQUITY (DEFICIENCY)
THREE MONTHS ENDED MARCH 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
----------- ----------- -----------
<S> <C> <C> <C>
PARTNERSHIP INTERESTS,
March 31, 1997 30,000
===========
EQUITY (DEFICIENCY),
January 1, 1997 $ (718,484) $ 7,027,943 $ 6,309,459
Net loss for the three months
ended March 31,1997 780 77,243 78,023
Cash distributions (834,188) (150,000) (984,188)
----------- ----------- -----------
EQUITY (DEFICIENCY),
March 31, 1997 $(1,551,892) $ 6,955,186 $ 5,403,294
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 6
REAL-EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 78,023 $ (152,442)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation 184,603 227,614
Increase in:
Due from affiliated rental agent (154,851) (120,558)
Other receivables and prepaid expenses (49,257) (920)
Increase in:
Accrued fees and expenses due general partner 10,387 10,502
Accounts payable and accrued expenses 595 13,109
Accrued interest payable 0 31,339
----------- -----------
Net cash provided by operating activities 69,500 8,644
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (984,188) -
Principal payments on mortgage notes payable (58,880) (60,755)
Payments on liability for earthquake loss (15,593) (6,876)
----------- -----------
Net cash used in financing activities (1,058,661) (67,631)
----------- -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (989,161) (58,987)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,884,218 1,794,041
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 895,057 $ 1,735,054
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 7
REAL EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL
The information contained in the following notes to the financial
statements is condensed from that which would appear in the annual
audited financial statements; accordingly, the financial statements
included herein should be reviewed in conjunction with the financial
statements and related notes thereto contained in the annual report for
the year ended December 31, 1996 filed by Real Equity Partners (the
"Partnership"). National Partnership Investments Corp. ("NAPICO") is the
corporate general partner of the Partnership. Accounting measurements at
interim dates inherently involve greater reliance on estimates than at
year end. The results of operations for the interim periods presented
are not necessarily indicative of the results for the entire year.
In the opinion of the general partners of the Partnership, the
accompanying unaudited financial statements contain all adjustments
(consisting primarily of normal recurring accruals) necessary to present
fairly the financial position of the Partnership as of March 31, 1997,
and the results of operations and changes in cash flows for the three
months then ended.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
RENTAL PROPERTY AND DEPRECIATION
Rental property is stated at cost. Depreciation is provided for on the
straight-line method over the estimated useful lives of the buildings
and equipment.
On January 17, 1994, the Park Creek and Warner Willows I and II rental
properties sustained damage, estimated at approximately $1,454,000, due
to the Northridge earthquake in the Los Angeles area. Insurance proceeds
of approximately $630,000 were allocated to the Partnership in 1994, as
the estimated full settlement under a master umbrella insurance policy
covering earthquake damage for these and other properties managed by a
related party. The total estimated expenditures needed to repair the
properties, net of the insurance recoveries, of approximately $824,000,
were expensed in 1994 since they did not extend the useful life of the
properties.
In March 1996, the Partnership received from the insurance company a
final settlement payment of $334,591 related to the earthquake loss.
This was reflected in income in 1995 and as a receivable at December 31,
1995.
5
<PAGE> 8
REAL EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Parkside Apartments rental property was operating at a deficit and
NAPICO was unsuccessful in its attempt to negotiate a mortgage
modification with the lender to improve the situation. In March 1995,
the Parkside Apartments rental property ceased making payments to the
mortgage lender. The mortgage lender filed a notice of default on
January 17, 1996, and foreclosed on the property on May 23, 1996. The
foreclosure resulted in a gain of $259,088 in May 1996 because the
Partnership was relieved of nonrecourse liabilities which were in excess
of the net book value of the property. The gain was classified as an
ordinary gain because the fair value of the property approximated the
liabilities that were relieved.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash and bank certificates of
deposit with an original maturity of three months or less. The
Partnership has its cash and cash equivalents on deposit primarily with
one high credit quality financial institution. Such cash and cash
equivalents are in excess of the FDIC insurance limit.
IMPAIRMENT OF LONG-LIVED ASSETS
The Partnership adopted Statement of Financial Accounting Standards No.
121, Accounting for the Improvement of Long-Lived Assets and for
Long-Lived Assets To Be Disposed Of as of January 1, 1996 without a
significant effect on its financial statements. The Partnership reviews
long-lived assets to determine if there has been any permanent
impairment whenever events or changes in circumstances indicate that the
carrying amount of the asset may not be recoverable. If the sum of the
expected future cash flows is less than the carrying amount of the
assets, the Partnership recognizes an impairment loss.
NOTE 2 - MORTGAGE NOTES PAYABLE
Mortgage notes payable consist of the following:
a. Conventional mortgage notes bearing interest at rates ranging
from 10.25 percent to 10.375 percent per annum, payable in
monthly installments ranging from $13,653 to $44,300 per month
and having maturity dates from August 1997 to March 2001. These
notes total $11,729,980 March 31, 1997.
b. Mortgage note, insured by the Department of Housing and Urban
Development under the Section 221(d)(4) program, bearing interest
at the rate of 7 percent per annum, payable in monthly
installments of approximately $19,500, including interest through
maturity in the year 2013. The note has a balance of $2,276,054
at March 31, 1997.
The mortgage notes are secured by deeds of trust on the rental
properties.
6
<PAGE> 9
REAL EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1997
NOTE 2 - MORTGAGE NOTES PAYABLE (CONTINUED)
In March 1995, the Parkside Apartments rental property ceased making
payments to the mortgage lender and the mortgage was in default. A
Trust Deed Sale was completed and the property was foreclosed upon on
May 23, 1996. The assets and liabilities were written off in May 1996.
NOTE 3 - INCOME TAXES
No provision has been made for income taxes in the accompanying
financial statements as such taxes, if any, are the liability of the
individual partners.
NOTE 4 - RELATED PARTY TRANSACTIONS
The Partnership has entered into agreements with an affiliate of NAPICO
to manage the operations of the rental properties. The agreements are
on a month-to-month basis and provide, among other things, for a
management fee equal to 5 percent of gross rentals and other
collections plus reimbursement of certain expenses. Management fees
charged to operations under this agreement were approximately $59,900
and $67,800 for the three months ended March 31, 1997 and 1996,
respectively.
An affiliate of NAPICO performed certain of the earthquake repairs at
the Park Creek and Warner Willows I and II rental properties. The
payments to this affiliate for these repairs were approximately
$856,262 as of March 31, 1997 (Note 1). Included in payments to the
affiliate of NAPICO was $121,357 paid under a contract for $121,607
entered into by the Partnership on February 22, 1996, after receiving
competitive bids. The remaining earthquake repair work will be
competitively bid.
NOTE 5 - FEES AND EXPENSES DUE GENERAL PARTNER
Under the terms of the Partnership Agreement, the Partnership is
obligated to NAPICO for a deferred acquisition fee. This fee is for
services rendered in connection with the selection, purchase,
acquisition, development, and monitoring the operations of its
properties. Distribution of any part of this from net cash from
operations shall be subordinated to receipt by each Limited Partner of
an amount equal to a cumulative non-compounded 6 percent annual
distribution with respect to the adjusted capital value (as defined in
the Partnership Agreement). The aggregate amount of the deferred
acquisition fee distributed in any year from net cash from operations
shall not exceed an amount equal to 3 percent of the investment in
properties plus any proceeds from sale or refinancing of the
properties. The deferred acquisition fee shall be an amount which, when
present valued at 8 percent from certain dates as defined in the
Partnership Agreement, equals 10 percent of the gross proceeds of the
offering ($3,000,000). Distribution of the deferred acquisition fee
will be made from net cash from operations and net proceeds from sale
or refinancing for a maximum of 15 years, or until the above limit is
met.
7
<PAGE> 10
REAL EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1997
NOTE 5 - FEES AND EXPENSES DUE GENERAL PARTNER (CONTINUED)
The present value of the deferred acquisition fee plus accrued interest
has been reflected in the accompanying financial statements and has been
capitalized as part of the cost of rental property acquired. In March
1994, the Partnership paid approximately $2,300,000 to the corporate
general partner from refinancing proceeds. The amount outstanding as of
March 31, 1997 and December 31, 1996 was $703,947 and $693,560,
respectively.
Under the terms of the Partnership Agreement, cash available for
distribution is to be allocated 90 percent to the limited partners as a
group and 10 percent to the general partners. Based on cash
distributions made to the limited partners as of December 31, 1996,
$834,188 was due to the general partners as their 10% percent share of
cash available for distribution. This amount was paid to the general
partners in February 1997.
The Partnership made one distribution in the amount of $150,000 to the
limited partners in 1997. At March 31, 1997, $16,667 is due to the
general partners.
The Partnership reimburses NAPICO for certain expenses. The
reimbursement paid to NAPICO was $2,804 and $2,676 for the three months
ended March 31, 1997 and 1996, respectively, and is included in general
and administrative expenses.
NOTE 6 - CONTINGENCIES
The corporate general partner of the Partnership is involved in various
lawsuits lawsuits arising from transactions in the ordinary course of
business. In the opinion of management and the corporate general
partner, the claims will not result in any material liability to the
Partnership.
NOTE 7 - FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosure about
Fair Value of Financial Instruments," requires disclosure of fair value
information about financial instruments, when it is practicable to
estimate that value. One of the mortgage notes payable is insured by HUD
and is secured by a rental property. The operations generated by the
property are subject to various government rules, regulations and
restrictions which make it impracticable to estimate the fair value of
this mortgage note payable. The book values of all other debt
instruments approximate their fair values because the interest rates of
these instruments are comparable to rates currently offered to the
Partnership. The carrying amount of other assets and liabilities
reported on the balance sheets that require such disclosure approximates
fair value due to their short-term maturity.
8
<PAGE> 11
REAL EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 1997
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Partnership was formed to invest in residential rental properties
either directly or through investments in joint ventures and other
partnerships which will invest in such real estate. The Partnership
acquired 6 buildings at various dates during 1984 and 1985. One of the
buildings was foreclosed in 1996.
The Partnership's primary sources of funds are income from rental
operations and interest income earned on cash reserves.
Under the terms of the Partnership Agreement, cash available for
distribution is to be allocated 90 percent to the limited partners as a
group and 10 percent to the general partners. Distributions of net cash
from operations were normally intended to be made to the partners of
record on a quarterly basis during the months of February, May, August,
and November pro rata in proportion to the number of units held. From
November 1994 through May 1996, distributions to the partners were not
made due to the Partnership setting aside funds for losses incurred by
REP as a result of the January 17, 1994 Northridge Earthquake. Based on
cash distributions made to the partners as of December 31, 1996,
$834,188 was due to the general partners as their 10% percent share of
cash available for distribution. This amount was paid to the general
partners in February 1997. The Partnership made one distribution in the
amount of $150,000 to the limited partners in 1997. At March 31, 1997,
$16,667 is due to the general partners.
Currently, it is anticipated that the Partnership will continue to meet
its current and long term obligations as they become due.
RESULTS OF OPERATIONS
Rental operations consist primarily of rental income and depreciation
expense, debt service, and normal operating expenses to maintain the
properties. Depreciation is provided on the straight-line method over
the estimated useful lives of the buildings and equipment. Substantially
all of the rental units in the apartment projects are leased on a
month-to-month basis.
An annual property management fee, which shall in any event not exceed 5
percent of gross revenues from each property under management, is
payable by the properties to an affiliate of NAPICO.
The Parkside Apartments rental property was operating at a deficit and
NAPICO was unsuccessful in its attempt to negotiate a mortgage
modification with the lender to improve the situation. In March 1995,
the Parkside Apartments rental property ceased making payments to the
mortgage lender. The mortgage lender filed a notice of default on
January 17, 1996, and foreclosed on the property on May 23, 1996. The
foreclosure resulted in a gain of $259,088 because the Partnership was
relieved of nonrecourse liabilities which were in excess of the net book
value of the property.
9
<PAGE> 12
REAL EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 1997
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND
RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
Occupancy at the Warner Willows I and II properties averaged 93 percent
for the three months ended March 31, 1997, and 1996. Both properties
operated with positive cash earnings for the three months ended March
31, 1997, (excluding earthquake repair costs, depreciation and principal
payments on the mortgage loans). Positive cash earnings for the three
months ended March 31, 1997 were approximately $35,000 and $19,000 for
Warner Willows I and II, respectively.
Occupancy at the Arbor Glen property averaged 99 percent during the
first three months of 1997, a 4 percent increase from the same period in
1996. The property operated with a positive cash flows of approximately
$48,600 during the first three months of 1997. The existing loan of $5
million maturing on May 1, 1996 was extended to August 1997 while
concurrently entering into negotiations with Home Savings of America to
refinance the existing loan. A good faith deposit check was given to
Home Savings of America on February 28, 1996.
Occupancy at the Park Creek property averaged 91 percent during the
first three months of 1997, a 20 percent increase from the same period
in 1996. The property operated with a positive cash flows of
approximately $46,900 (excluding earthquake repair costs, depreciation
and principal payments on the mortgage loan) during the first three
months of 1997.
Occupancy at the Willowbrook property averaged 92 percent during the
first three months of 1997 and 1996. The property operated with a
positive cash flow of approximately $69,000, (excluding depreciation and
principal payments on the mortgage loan) during the first three months
of 1997.
On January 17, 1994, the Park Creek and Warner Willows I and II rental
properties sustained damage, estimated at approximately $1,454,000, due
to the earthquake in January 1994. Included in liabilities as of March
31, 1997 is approximately $500,000 related to the earthquake damages.
The total estimated expenditures needed to repair the properties, net of
the insurance recoveries in 1994 of $630,000, which nets to
approximately $824,000, were expensed in 1994, since they did not extend
the useful life of the properties. In April 1996, the Partnership
received from the insurance company a final settlement payment of
$334,591 related to the earthquake loss.
An affiliate of NAPICO performed certain of the earthquake repairs at
the Park Creek and Warner Willows I and II rental properties. The
payments to this affiliate for these repairs were approximately $863,000
as of March 31, 1997. Included in payments to the affiliate of NAPICO
was $121,357 paid under a contract for $121,607 entered into by the
Partnership on February 22, 1996, after receiving competitive bids. The
remaining earthquake work to be performed will be competitively bid.
10
<PAGE> 13
REAL EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 1997
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND
RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
The Partnership operations consist primarily of interest income earned
on certificates of deposit and other temporary investments of funds not
required for investment in projects. The amount of interest income
varies with market rates available on certificates of deposit and with
the amount of funds available for investment.
Operating expenses of the Partnership consist substantially of recurring
general and administrative expenses and professional fees for services
rendered to the Partnership and interest on the deferred acquisition fee
due the General Partners.
The Partnership is incurring interest expense at a rate of 8 percent per
annum on the unpaid fees due the general partner. Under the terms of the
Amended and Restated Certificate and Agreement of Limited Partnership
Agreement Partnership, the Partnership is obligated to the general
partner for a deferred acquisition fee for services rendered in
connection with the selection, purchase, development, and management of
the Partnership and monitoring the operations of the properties, in an
amount which, when calculated on a present value basis (using a discount
factor of 8 percent for this purpose) from the date of payment to the
general partners to September 27, 1984 equals 10 percent of the gross
proceeds of the offering ($3,000,000). Distribution of any part of this
fee from net cash from operations shall be subordinate to receipt by
each Limited Partner of an amount equal to a cumulative noncompounded 6%
distribution. The acquisition fee distributed in any year from net cash
from operations shall not exceed an amount equal to 3 percent of
investment in properties (approximately $600,000) plus any proceeds from
sale or refinancing of the properties. An annual property management
fee, which shall not in any event exceed 5% of gross revenues from each
property under management, is also payable to an affiliate of the
corporate general partner. On March 21, 1994, the excess proceeds
received from the Park Creek and the Warner Willows I and II
refinancings were used to partially pay the deferred acquisition fees
due the general partner. The amount outstanding as of March 31, 1997 was
approximately $704,000.
11
<PAGE> 14
REAL EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 1997
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As of March 31, 1997, the Partnership's corporate general partner is involved in
various lawsuits. None of these are related to the Partnership.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) No exhibits are required per the provision of Item 7 of regulation
S-K.
12
<PAGE> 15
REAL EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 1997
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.
REAL EQUITY PARTNERS
(a California limited partnership)
By: National Partnership Investments Corp.
Corporate General Partner
Date:__________________________________
By:___________________________________
Bruce Nelson
President
Date:__________________________________
By:___________________________________
Shawn Horwitz
Executive Vice President and
Chief Financial Officer
Date:__________________________________
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
PARTNERSHIP'S STATEMENTS OF EARNINGS AND BALANCE SHEETS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 895,057
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,995,345
<PP&E> 32,370,981
<DEPRECIATION> 13,285,987
<TOTAL-ASSETS> 21,080,339
<CURRENT-LIABILITIES> 884,223
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,403,294
<TOTAL-LIABILITY-AND-EQUITY> 21,080,330
<SALES> 0
<TOTAL-REVENUES> 1,291,806
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 851,283
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,535
<INCOME-PRETAX> 78,023
<INCOME-TAX> 0
<INCOME-CONTINUING> 78,023
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 78,023
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
