SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Commission File
For the fiscal year ended December 31, 1994 Number 2-84760
-------------------------
WINTHROP GROWTH INVESTORS 1 LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Massachusetts 04-2839837
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One International Place, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 330-8600
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
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 _____
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10- K or any amendment to
this Form 10-K. [ X ]
No voting stock is held by non-affiliates of the Registrant.
No market exists for the limited partnership interests of the Registrant,
and, therefore, no aggregate market value can be computed.
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
Part of the
Form 10-K into Document
which Incorporated Incorporated by Reference
I Pages 17-24 of the Prospectus of the Registrant dated May 11, 1984 (the
"Prospectus")
Supplement to the Prospectus dated August 24, 1984
Supplement to the Prospectus dated November 2, 1984
Current Report on Form 8-K filed January 6, 1986
Current Report on Form 8-K filed March 17, 1986
III Pages 7-10 and 24-27 of the Prospectus
<PAGE>
PART I
Item 1. Business.
Winthrop Growth Investors 1 Limited Partnership (the "Partnership") was
organized under the Uniform Limited Partnership Act of the Commonwealth of
Massachusetts on June 20, 1983 for the purpose of owning and leasing
income-producing residential, commercial and industrial properties. The General
Partners of the Partnership are Two Winthrop Properties, Inc. and
Linnaeus-Lexington Associates Limited Partnership. Two Winthrop Properties,
Inc., a Massachusetts corporation (the "Managing General Partner") is
wholly-owned by First Winthrop Corporation, a Delaware corporation ("First
Winthrop"), which is wholly-owned by Winthrop Financial Associates, A Limited
Partnership, a Maryland limited partnership ("WFA").
Until December 22, 1994, Arthur J. Halleran, Jr. was the sole general
partner of Linnaeus Associates Limited Partnership ("Linnaeus") which is the
sole general partner of WFA. On December 22, 1994, pursuant to an Investment
Agreement entered into among Nomura Asset Capital Corporation ("NACC"), Mr.
Halleran and certain other individuals who comprise the senior management of
WFA, the general partnership interest in Linnaeus was transferred to W.L.
Realty, L.P. ("W.L. Realty"). W.L. Realty is a Delaware limited partnership, the
general partner of which is A.I. Realty Company, LLC ("Realtyco"). The equity
securities of Realtyco are currently held by certain employees of NACC. Such
securities are subject to a call option agreement pursuant to which NACC may, at
any time, elect to purchase such securities for $1.00.
Linnaeus-Lexington Associates Limited Partnership is a Massachusetts
limited partnership (the "Associate General Partner"). The general partners are
Arthur J. Halleran, Jr. and Jonathan W. Wexler. The other partners of the
Associate General Partner are former employees and former officers of First
Winthrop Corporation and WFA. On January 27, 1995, NACC acquired indirect
control of (but no economic interest in) the Associate General Partner.
The Partnership was initially capitalized with contributions of $1,000 from
each of the General Partners and $5,000 from the Initial Limited Partner. On
June 24, 1983, the Partnership filed a Registration Statement on Form S-11 (the
"Registration Statement") with the Securities and Exchange Commission (the
"Commission") with respect to the public offering of units of limited
partnership interest ("Units") in the Partnership. The Registration Statement,
covering the offering of 50,000 Units at a purchase price of $1,000 per Unit (an
aggregate of $50,000,000) was declared effective on May 11, 1984. The offering
terminated in February 1985, at which time Limited Partners had subscribed for
23,144 Units, representing capital contributions from Limited Partners of
$23,144,000. An additional five Units are held by WFC Realty Co., Inc., a
subsidiary of WFA ("WFC Realty"), such that there were 23,149 Units issued and
outstanding. During 1994, certain Limited Partners elected to abandon their
interests in the Partnership, reducing the number of outstanding Units to
23,139.
<PAGE>
The Partnership's only business is owning and leasing income producing real
estate. The Partnership's investment objectives and policies are described at
pages 17-24 of its Prospectus dated May 11, 1984 (the "Prospectus") under the
caption "Investment Objectives and Policies," which description is attached
hereto as an exhibit and incorporated herein by this reference. The Prospectus
was filed with the Commission pursuant to Rule 424(b) on July 3, 1984.
The Partnership invested $18,176,787 of the original offering proceeds
(net of sales commissions and sales and organizational costs, but including
acquisition fees and expenses) in four properties. Two of the properties were
acquired in joint venture arrangements, one in a partnership arrangement and one
directly. Subsequent to the acquisition, the joint venture arrangements were
converted to limited partnerships.
The Partnership allocated $2,421,373 of the original proceeds for
operating reserves (the "Operating Reserve"). To the extent not used, these
funds have been invested in interest-bearing short-term money market
instruments. From 1987 to 1990 the Partnership added funds otherwise available
for distribution to these reserves. As discussed later in this report under
Management's Discussion and Analysis of Financial Condition and Results of
Operations, in 1994 the Partnership used $1.5 million of its reserves to reduce
the principal balance of the mortgage loan encumbering Sunflower Apartments.
Funds are also held at each of the properties in which the Partnership has
invested, such that on December 31, 1994, $923,214 in cash and cash equivalents
were available to the Partnership.
<PAGE>
The following table sets forth certain information regarding the
properties in which the Partnership has acquired interests:
<TABLE>
Partnership's Equity
Property Date of No. of Total Cost as of Investment as of
Name/Location Acquisition Units December 31, 1994(1) December 31, 1994(2)
------------- ----------- ------- -------------------- --------------------
<S> <C> <C> <C> <C>
Sunflower Apartments,
Dallas, Texas(3) 8/31/84 248 $ 8,087,007 $ 6,999,930(7)
Meadow Wood Apartments
Jacksonville, FL(4) 12/03/84 356 10,632,164 6,263,638(8)
Stratford Place
Apartments
Gaithersburg, MD(5) 12/18/85 350 14,075,816 4,093,803(9)
Stratford Village
Apartments
Montgomery, AL(6) 2/28/86 224 8,438,965 3,793,821(10)
------ ------------ ------------
TOTAL 1,178 $ 41,233,952 $ 21,151,192
====== ============ ============
</TABLE>
--------------------
(1) Reflects total cost of property including capital improvements subsequent
to acquisition but excluding acquisition fees and expenses. In connection
with its ongoing evaluation, management of the Partnership wrote down the
carrying value of Sunflower Apartments by $2,107,738 to its net
realizable value (approximately $3.7 million) at December 31, 1993. The
"Total Cost" does not reflect this writedown.
(2) Reflects the Partnership's total investment in the property, including
amounts invested to fund capital improvements and operating deficits
subsequent to acquisition and acquisition fees and expenses.
(3) The Partnership invested in Sunflower Apartments through a joint venture
arrangement in which it owned a 99% general partnership interest. On
October 7, 1988, the Partnership converted the joint venture to a limited
partnership with the Partnership as the general partner and its former
co-venturer as the limited partner. On May 1, 1990, Winthrop Management,
an affiliate of WFA, was hired as property manager.
(4) The Partnership originally invested in Meadow Wood in a joint venture
arrangement in which it owned a 95% general partnership interest.
Effective as of December 1, 1988, the Partnership converted the joint
venture to a limited partnership. In 1990, the limited partnership was
restructured into a general partnership. On February 1, 1990, Winthrop
Management, an affiliate of WFA, was hired as property manager.
(5) The Partnership invested in Stratford Place Apartments through a
partnership arrangement with WFA and WFC Realty. The Partnership holds a
99.98% interest in such partnership and WFA and WFC Realty each hold a
.01% interest for which they each made pro rata capital contributions. On
February 1, 1988, Winthrop Management, an affiliate of WFA, was hired as
property manager.
(6) In connection with the mortgage refinancing on this property in 1989,
title to this property was transferred to the Stratford Village Realty
Trust, a Massachusetts trust whose sole beneficiary is the Partnership.
(7) Reflects $2,237,420 of reserves funded subsequent to acquisition
primarily for capital improvements and principal payments on the
property's mortgage loan.
(8) Reflects $108,513 of reserves funded subsequent to acquisition primarily
for capital improvements.
(9) Reflects $359,733 of reserves funded subsequent to acquisition primarily
for capital improvements.
(10) Reflects $676,221 of reserves funded subsequent to acquisition primarily
for capital improvements.
<PAGE>
Following are historical average occupancies and rental rates for the four
properties in which the Partnership has acquired interests:
<TABLE>
<S> <C> <C> <C> <C> <C>
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
Sunflower
Average Rent $401 $387 $371 $355 $339
Average Occupancy 91.1% 88.2% 91.9% 95.3% 93.4%
Meadow Wood
Average Rent $457 $448 $436 $426 $409
Average Occupancy 88.4% 91.8% 86.8% 92.2% 93.7%
Stratford Place
Average Rent $634 $620 $610 $588 $563
Average Occupancy 92.1% 94.5% 91.4% 95.1% 95.9%
Stratford Village
Average Rent $518 $477 $457 $445 $435
Average Occupancy 93.3% 97.5% 96.0% 94.7% 96.0%
</TABLE>
Sunflower Apartments. Sunflower Apartments are located in Dallas, Texas
approximately eight miles northeast of the central business district. A
description of the general character of this property and the terms of
acquisition is contained in the Supplement to the Prospectus dated August 24,
1984, filed with the Commission pursuant to Rule 424(c) on September 7, 1984,
which description is attached hereto as an exhibit and incorporated herein by
reference.
Sunflower is encumbered by a first mortgage securing a loan with a
principal balance, as of December 31, 1994, of $1,043,092. In April 1989, the
loan was modified pursuant to a modification agreement that became effective as
of October 1, 1988. From November 1, 1988 through October 1, 1991 (the "Reduced
Payment Period"), interest only payments were required on the outstanding
principal balance at 7% per annum. The note continued to accrue interest at the
rate of 9.5% per annum, and the resulting "deferred interest" was added to the
principal balance. From November 1, 1990 through December 1, 1993, the loan
required minimum payments of $29,256, which were first used to eliminate the
deferred interest amounts. In addition, the loan required that available
operating cash flow, as defined in the modification agreement, be used as
additional loan payments. No cash flow payments were required during 1991, 1992
or 1993.
The loan matured on January 1, 1994 at which point a balloon payment in the
approximate amount of $2,808,696 was due. In March 1994, the Partnership used $1
million of its reserves to make a principal payment on the loan. As a result of
that payment, the lender extended the maturity of the loan to June 30, 1994. In
June 1994, the Partnership made an additional principal payment of $500,000 to
further extend the maturity date to August 31, 1994. On September 9, 1994, the
Partnership and the lender agreed to a modification of the loan that calls for
fixed monthly payments of principal and interest in the amount of $47,893. Such
payments will retire the remaining balance of the loan on December 1, 1996.
In 1993, in connection with its ongoing evaluation, management of the
Partnership wrote down the carrying value of the property by $2,107,738 to its
estimated net realizable value (approximately $3.7 million).
During 1994, the Partnership completed $62,464 of capital improvements at
the property, consisting primarily of apartment upgrades, including replacing
appliances, carpeting and air conditioning units. These improvements were funded
primarily from the Partnership's reserves. Capital improvements planned for 1995
consist of additional apartment upgrades as well as balcony repairs, some
exterior painting and parking lot repairs. These improvements are expected to
cost approximately $131,000, which amount will be funded from operating cash
flow or, if needed, Partnership reserves.
The Managing General Partner believes that the Dallas residential rental
market where Sunflower is located has been competitive but is stable.
Meadow Wood Apartments. Meadow Wood Apartments are located in
Jacksonville, Florida. A description of the general character of this property
and the terms of acquisition is contained in the Supplement to the Prospectus
dated November 2, 1984, filed with the Commission pursuant to Rule 424(c) on
November 6, 1984, which description is attached hereto as an exhibit and
incorporated herein by this reference.
Meadow Wood is encumbered by a first mortgage securing a loan with a
principal balance, as of December 31, 1994, of $4,233,492. This loan bears
interest at an annual rate of 10% and matures on December 1, 2000. Monthly debt
service payments are $36,966.
In 1994, the Partnership expended $113,543 on capital improvements,
consisting primarily of replacing carpeting and appliances in apartment units as
well as upgrading the property's clubhouse. These improvements were funded from
a combination of Partnership reserves and cash flow. Capital improvements
costing approximately $190,000 are planned for 1994, including additional
upgrading of apartment unit interiors, exterior painting, drainage improvements
and a new sprinkler system. These improvements will be funded from cash flow
and, if necessary, from Partnership reserves.
The Jacksonville rental market became extremely competitive in 1991, and
was further impacted by the closing of the Jacksonville Naval Shipyard in 1992.
The market stabilized somewhat in 1993 but became increasingly competitive in
1994.
Stratford Place Apartments. Stratford Place Apartments are located in
Gaithersburg, Maryland. A description of the general character of this property
and the terms of acquisition (including the terms of the partnership arrangement
with WFA and WFC Realty through which the Partnership invested in Stratford
Place Apartments) is contained in the Partnership's Current Report on Form 8-K
filed with the Commission on March 17, 1986, which description is attached
hereto as an exhibit and incorporated herein by this reference.
<PAGE>
Stratford Place is encumbered by a first mortgage securing a loan with a
principal balance, as of December 31, 1994, of $10,092,324. This loan bears
interest at an annual rate of 9.687% and matures on February 1, 1996.
In 1994, the Partnership spent $64,288 on capital improvements, which
included replacing a hot water tank, exterior painting, replacing some common
area carpeting and upgrading unit interiors. These improvements were funded from
cash flow and Partnership reserves. Anticipated capital improvements of
approximately $87,000 for 1995 include replacing additional hot water tanks,
exterior painting and upgrading unit interiors, primarily carpet replacement.
These capital improvements will be funded from operating cash flow and, if
necessary, Partnership reserves.
In the opinion of the Managing General Partner, the Gaithersburg, Maryland
rental apartment market is currently stable.
Stratford Village. Stratford Village Apartments are located in Montgomery,
Alabama. A description of the general character of this property and the terms
of acquisition is contained in the Partnership's Current Report on Form 8-K
filed with the Commission on January 6, 1986, which description is attached
hereto as an exhibit and incorporated herein by this reference.
Stratford Village is encumbered by a first mortgage securing a loan with a
principal balance, as of December 31, 1994, of $5,342,906. This loan bears
interest at an annual rate of 7.72% and matures on November 1, 2024. Monthly
debt service payments are $38,194.
In 1994, the Partnership spent $63,466 on capital improvements, primarily
on replacing windows, carpeting in apartment units and roofs. These improvements
were funded from cash flow. The Partnership has budgeted capital improvements of
approximately $109,000 for 1995, including additional window replacement,
interior carpet replacement, parking lot repairs, landscaping and gutter
replacement.
The Managing General Partner believes that the Montgomery, Alabama rental
apartment market is currently strong.
In the opinion of the Managing General Partner each of the four Properties
has adequate insurance coverage.
Employees
The Partnership does not have any employees. Services are performed for
the Partnership by its General Partners and agents retained by the General
Partners, including an affiliate of the General Partners, Winthrop Management.
Item 2. Properties. See Item 1 above.
<PAGE>
Item 3. Legal Proceedings.
The Partnership is not a party, nor are any of its properties subject, to
any material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders. None.
PART II
Item 5. Market Price of and Dividends on the Registrant's Common Equity and
Related Stockholder Matters.
The Registrant is a partnership and thus has no common stock. There is no
active market for the Units. Trading in the Units is sporadic and occurs solely
through private transactions.
As of December 31, 1994, there were 1,403 holders of Units.
The Partnership Agreement requires that any "Cash Available for
Distribution" (defined under the Partnership Agreement as Cash Flow less any
amounts set aside from Cash Flow for the restoration or creation of reserves) be
distributed quarterly to the Partners in specified proportions and priorities.
As a result of the Managing General Partner's initial determination to retain
Cash Flow to fund reserves, there was no Cash Available for Distribution and
therefore no distributions paid to the Limited Partners between 1987 and 1990.
In 1991, the Managing General Partner determined that the current year's Cash
Available for Distribution together with a portion of the cash retained as
reserves from prior years' operations were sufficient to permit a distribution
to the limited partners of $962,535. Of this amount, $574,879 was funded from
reserves established from prior years' operations and $387,656 was funded from
1991 operations. The 1991 distribution was made as a result of the overall
improved operations of the Properties in 1990. An additional distribution of
$100,004 was made during the first quarter of 1992 attributable to 1991
operations. This distribution level was maintained for each quarter in 1992.
During 1993, the quarterly distribution was reduced to $50,002 because the
Partnership anticipated needing its reserves to address the January 1, 1994,
maturity of the loan encumbering Sunflower Apartments. In 1994, the Partnership
used $1.5 million of its reserves to reduce the principal balance of the
Sunflower loan. In addition, the modification of the Sunflower loan requires
higher monthly debt service payments in order to fully amortize the loan by
December 1, 1996. As a result, the Partnership maintained quarterly
distributions at $50,000 during 1994. The Partnership continues to review its
distribution policy on a quarterly basis.
Item 6. Selected Financial Data.
<TABLE>
For the years ended or as of December 31,
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Rental income $ 6,118,605 $ 6,206,712 $ 5,896,067 $ 5,909,583 $ 5,844,606
Income from short-term investments 64,797 83,073 90,572 131,581 153,776
Other income 265,873 219,853 247,178 277,236 313,456
------------- ------------ ---------- ---------- ------------
Total Income $ 6,449,275 $ 6,509,638 $ 6,233,817 $ 6,318,400 $ 6,311,838
============ =========== =========== =========== ============
Total Expenses $ 7,223,037 $ 9,431,805 $ 7,312,562 $ 7,072,300 $ 7,026,202
Net income (loss) $ (773,762) $(2,922,167) $(1,078,745) $ (753,900) $ (714,364)
============ =========== =========== =========== ============
Net income (loss) per weighted average
Unit of limited partnership interest
outstanding: $ (30.10) $ (113.61) $ (41.94) $ (29.31) $ (27.77)
============= ============ ============ ============ =============
Total assets $27,511,241 $30,361,979 $33,717,221 $35,234,914 $37,249,415
=========== =========== =========== =========== ===========
Mortgage notes payable $20,711,814 $22,599,665 $22,788,736 $22,938,375 $23,034,102
=========== =========== =========== =========== ===========
Total cash distributions per Unit of limited partnership interest, including
amounts distributed after year end with
respect to the year: $ 8.64 $ 8.64 $ 15.12 $ 45.90 $ -0-
============== ============= ============= =========== ============
</TABLE>
See Item 7 for a discussion of the factors that may materially affect the
foregoing information in future years.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Capital Resources.
As of December 31, 1994, the Partnership's balance of cash and cash
equivalents was $923,214, including funds held at the various properties in
which the Partnership has invested. The Partnership has invested, and expects to
continue to invest, such amounts in short-term money market instruments until
required for Partnership purposes.
The Partnership's interest income from its short-term investments and cash
flow derived from its investments in real properties were sufficient in 1994 to
pay general and administrative expenses, and are expected to be sufficient in
future years to pay these amounts. In 1994, the Partnership used $1.5 million of
its reserves to reduce the principal balance of the loan encumbering Sunflower
Apartments.
Each of the properties in which the Partnership has invested requires cash
to make principal and interest payments on its mortgage indebtedness, to pay
operating expenses, management fees, general and administrative expenses and to
complete capital improvements. Two of the four properties (Stratford Village
Apartments and Meadow Wood Apartments) were able to meet these obligations from
their operating income in 1994. Stratford Place Apartments operated at a slight
deficit, which was funded by the Partnership's reserves and the Partnership used
$1.5 million of its reserves to reduce the principal balance of the mortgage
loan encumbering Sunflower Apartments. Anticipated capital improvements in 1995
will be funded from a combination of the Partnership's reserves and property
cash flow. For a discussion of the proposed capital improvements and estimated
cost for each property see the discussion under Item 1 above, which is
incorporated herein by reference.
Based upon improved operating results in 1990 and the substantial reserves
funded from operations in 1987 through 1990, the Managing General Partner
reassessed its decision not to make distributions in 1990 and made a substantial
distribution in the first quarter of 1991 ($30.24 per Unit, or approximately
$700,000 in the aggregate). Of the amount distributed, $24.84 per Unit was
attributable to Cash Flow from 1990 operations and $5.40 per Unit was
attributable to Cash Flow from operations during the first quarter of 1991. The
Managing General Partner made smaller distributions in the second quarter ($7.02
per Unit, or approximately $162,510 in the aggregate) and in the third and
fourth quarters ($4.32 per Unit per quarter, or approximately $100,000 in the
aggregate per quarter). The fourth quarter distribution was made in February
1992. The declining performance of the properties in 1991, primarily as a result
of market factors, led the Managing General Partner to reduce Cash Available for
Distribution for the last two quarters of 1991. The distribution was further
reduced for the last quarter of 1992 and the 1993 quarterly distributions in
anticipation of the maturity of the first mortgage loan encumbering Sunflower
Apartments. The Partnership maintained its quarterly distributions at the same
level during 1994 because it required a significant portion of its reserves to
reduce the principal balance of the Sunflower Apartments mortgage loan.
<PAGE>
The loan encumbering Sunflower Apartments matured on January 1, 1994 at
which point a balloon payment in the approximate amount of $2,808,696 was due.
In March 1994, the Partnership used $1 million of its reserves to make a
principal payment on the loan. As a result of that payment, the lender extended
the maturity of the loan to June 30, 1994. In June 1994, the Partnership made an
additional principal payment of $500,000 to further extend the maturity date to
August 31, 1994. On September 9, 1994, the Partnership and the lender agreed to
a modification of the loan that calls for fixed monthly payments of principal
and interest to increase from $29,256 to $47,893. Such payments will retire the
remaining balance of the loan on December 1, 1996. The Partnership anticipates
having to use additional reserves or the cash flow being generated by its other
properties to make the increased debt service payments on the Sunflower loan.
Inflation and changing economic conditions could continue, however, to
affect vacancy levels, rental payment defaults and operating expenses, and thus,
would likely affect the Partnership's revenues and net income. The ability of
these properties to improve operations will also affect the liquidity of the
Partnership. The Partnership's liquidity could be adversely affected by
unanticipated or greater than anticipated operating expenses.
Results of Operations
1994 Compared to 1993: The Partnership's total revenue decreased by
approximately 1.0% in 1994 compared to 1993. Rental income declined by 1.4%,
from $6,206,712 in 1993 to $6,118,605 in 1994 as lower rental income at
Stratford Place and Meadow Wood more than offset higher rental income at
Sunflower and Stratford Village. While average apartment rents for the
Partnership's properties increased by approximately 3.7%, from $492 to $510,
average occupancy declined from 93% in 1993 to 91% in 1994. Interest income
declined from $83,073 to $64,797 because the Partnership used a significant
portion of its reserves to reduce the principal balance of the mortgage loan
encumbering Sunflower Apartments. Other income (including revenues from laundry,
vending, late fees and lease termination fees) increased by approximately 20.1%
from $219,853 in 1993 to $265,873 in 1994, primarily as a result of increased
lease termination fees at Stratford Place and Stratford Village.
Expenses of operating the Partnership's properties increased by less than
1%, from $3,453,049 in 1993 to $3,471,106 in 1994. Increases in payroll and
insurance costs as well as higher real estate taxes were offset by lower utility
and repair and maintenance expenses. Other expenses of the Partnership
(depreciation and amortization, interest expense and provision for writedown of
real estate) decreased significantly from 1993 to 1994, predominantly because of
a $2,107,738 provision in 1993 for investment property writedown with respect to
Sunflower Apartments. Aside from this writedown, the Partnership's other
expenses decreased by approximately 3.1% from 1993 to 1994. Interest expense on
the Partnership's mortgages decreased by approximately 5.5% from 1993 to 1994,
primarily as a result of lower interest expense on the Sunflower mortgage loan,
while depreciation and amortization expenses remained essentially flat between
1993 and 1994.
The Partnership's net loss declined from $2,922,167 in 1993 to $773,762 in
1994, primarily as a result of the 1993 investment property writedown.
<PAGE>
The Partnership's expenditures for capital improvements increased from
$148,349 in 1993 to $303,761 in 1994.
1993 Compared to 1992: The Partnership's total revenue increased by
approximately 4.4% in 1993 compared to 1992. Rental income increased by
approximately 5.3%, from $5,896,067 in 1992 to $6,206,712 in 1993, primarily as
a result of stronger occupancy at Meadow Wood and Stratford Place and higher
rental rates at Stratford Village. Average apartment rents for the Partnership's
properties increased by approximately 2.9%, from $478 to $492, and average
occupancy improved from 91% in 1992 to 93% in 1993. Interest and other income
(including revenues from laundry, vending, late fees and lease termination fees)
decreased by approximately 10.3% from $337,750 in 1992 to $302,926 in 1993.
Expenses of operating the Partnership's properties increased by less than
1%, from $3,435,747 in 1992 to $3,453,049 in 1993, as utility cost increases
were offset by a reduction in general and administrative expenses. Other
expenses of the Partnership (including depreciation and amortization, interest
expense and partnership administrative expenses) increased significantly in
1993, predominantly because of a $2,107,738 provision for investment property
writedown with respect to Sunflower Apartments. Aside from this writedown, the
Partnership's other expenses were essentially flat from 1992 to 1993.
As a result of the investment property writedown, the Partnership's net
loss increased from $1,078,745 in 1992 to $2,922,167 in 1993.
The Partnership's expenditures for capital improvements decreased
dramatically from $451,876 in 1992 to $148,349 in 1993.
The tax losses of the Partnership will gradually decrease over time since
the advantages of accelerated depreciation taken with respect to the properties
are greatest in the earliest years. Also, the deductions for mortgage interest
expense will steadily decrease as the mortgage principal is amortized.
Item 8. Financial Statements and Supplementary Data.
See the Consolidated Financial Statements of the Partnership included as
part of this Annual Report on Form 10-K.
Item 9. Changes in and Disagreements on Accounting and Financial Disclosure.
None.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant.
(a) and (b) Identification of directors and executive officers. The
following table sets forth the names and ages of the directors and executive
officers of the Managing General Partner and the position held by each of them.
<TABLE>
Position Held with
Name the Managing General Partner Age
<S> <C> <C>
Arthur J. Halleran, Jr. Director and President 47
Jonathan W. Wexler Director, Vice President, Assistant Clerk and 44
Treasurer
Richard J. McCready Director, Vice President and Clerk 36
</TABLE>
Mr. Halleran has served in an executive capacity with the Managing General
Partner since its organization in 1978, Mr. Wexler was elected an officer in
1983 and Mr. McCready in 1990. All of these individuals will continue to serve
in such capacities until their successors are duly elected and qualified.
Messrs. Halleran and Wexler are also general partners of the Associate
General Partner.
(c) Identification of certain significant employees. None.
(d) Family relationships. None.
(e) Business Experience.
The Managing General Partner was incorporated in Massachusetts in October
1978. The background and experience of the executive officers and directors of
the Managing General Partner, described above in Items 10(a) and (b), are as
follows:
Arthur J. Halleran, Jr. is the Chairman of WFA. He is also Director and
President of the Managing General Partner and other subsidiaries of WFA. In such
capacities he is responsible for all aspects of the business of WFA and its
subsidiaries, with special emphasis on the evaluation, acquisition and
structuring of real estate investments. Mr. Halleran joined the Winthrop
organization in 1977. He is a graduate of Villanova University and holds an
M.B.A. degree from the Harvard Business School.
Jonathan W. Wexler is a Vice Chairman and Vice President of WFA and a
Director, Vice President, Assistant Clerk and Treasurer of the Managing General
Partner and other subsidiaries of WFA. His primary responsibility is the
evaluation, acquisition and structuring of real estate investments. Mr. Wexler
joined the Winthrop organization in 1977. He is a graduate of the Massachusetts
Institute of Technology and holds a Master of Science degree from the Sloan
School of Management of the Massachusetts Institute of Technology.
Richard J. McCready is a Managing Director, Vice President and Clerk of WFA
and a Director, Vice President and Clerk of the Managing General Partner and all
other subsidiaries of WFA. He also has responsibility for all the legal affairs
of WFA and its affiliates. Mr. McCready joined the Winthrop organization in
1990. He is a graduate of the University of New Hampshire and holds a J.D.
degree from Boston College Law School.
One or more of the above persons are also directors or officers of a
general partner (or general partner of a general partner) of the following
limited partnerships which either have a class of securities registered pursuant
to Section 12(g) of the Securities and Exchange Act of 1934, or are subject to
the reporting requirements of Section 15(d) of such Act: Winthrop Partners 79
Limited Partnership; Winthrop Partners 80 Limited Partnership; Winthrop Partners
81 Limited Partnership; Winthrop Residential Associates I, A Limited
Partnership; Winthrop Residential Associates II, A Limited Partnership; Winthrop
Residential Associates III, A Limited Partnership; 1626 New York Associates
Limited Partnership; 1999 Broadway Associates Limited Partnership; Indian River
Citrus Investors Limited Partnership; Nantucket Island Associates Limited
Partnership; One Financial Place Limited Partnership; Presidential Associates I
Limited Partnership; Riverside Park Associates Limited Partnership; Sixty-Six
Associates Limited Partnership; Springhill Lake Investors Limited Partnership;
Twelve AMH Associates Limited Partnership; Winthrop California Investors Limited
Partnership; Winthrop Interim Partners I, A Limited Partnership; Winthrop
Financial Associates, A Limited Partnership; Southeastern Income Properties
Limited Partnership; Southeastern Income Properties II Limited Partnership;
Winthrop Miami Associates Limited Partnership; and Winthrop Apartment Investors
Limited Partnership.
(f) Involvement in Certain Legal Proceedings. None.
Item 11. Executive Compensation.
Under the Partnership Agreement, the General Partners and their affiliates
are entitled to receive various fees, commissions, cash distributions,
allocations of taxable income or loss and expense reimbursements from the
Partnership. The amounts of these items and the times at which they are payable
to the General Partners or their affiliates are described at pages 7-10 and
24-27 of the Prospectus under the captions "Management Compensation" and
"Profits or Losses for Tax Purposes and Cash Distributions," respectively, which
descriptions are attached hereto as an exhibit and incorporated herein by this
reference.
The total management fees paid to Winthrop Management, an affiliate of
WFA, for managing the Partnership's four properties for the years ended December
31, 1994, 1993 and 1992 was $316,494, $315,588 and $300,832, respectively. The
property management fee for each property is calculated as 5.0% of the
property's gross collections for the year.
<PAGE>
For the year ended December 31, 1994, the Partnership allocated $44,027,
$26,416 and $152 of taxable losses to the Managing General Partner, Associate
General Partner and WFC Realty, respectively. In addition, WFC Realty, which
owns 5 Units of the Partnership, was allocated $43 of the Partnership's cash
distributions during 1994. WFA and WFC Realty were each allocated $45 in taxable
losses with respect to their partnership interests in the partnership that owns
Stratford Place Apartments.
See Note 4 of Notes to Consolidated Financial Statements for additional
information about transactions between the Partnership and the General Partners
and their affiliates.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
(a) Security ownership of certain beneficial owners.
No person or group is known by the Partnership to be the beneficial owner
of more than 5% of the outstanding Units at December 31, 1994. Under the Amended
and Restated Agreement of Limited Partnership of the Partnership dated as of May
11, 1984 (the "Partnership Agreement"), the voting rights of the Limited
Partners are limited and, in some circumstances, are subject to the prior
receipt of certain opinions of counsel or judicial decisions.
Under the Partnership Agreement, the right to manage the business of the
Partnership is vested in the General Partners and is generally to be exercised
only by the Managing General Partner, although the consent of the Associate
General Partners is required for all purchases, financings, refinancings and
sales or other dispositions of the Partnership's real properties and with
respect to certain other matters. See Item 1 above for a description of the
General Partners.
(b) Security ownership of management.
As of December 31, 1994, an affiliate of the General Partner owned 10
Units in the Partnership. No officers, directors or general partners of the
General Partners own any Units.
(c) Changes in control.
There exists no arrangement known to the Partnership the operation of
which may at a subsequent date result in a change in control of the Partnership.
Item 13. Certain Relationships and Related Transactions.
See Note 4 of Notes to Consolidated Financial Statements for information
about transactions between the Partnership and the General Partners and their
affiliates. See Item 11 above for information concerning the fees, commissions
and cash distributions which the Partnership paid to or accrued for the account
of the General Partners and their affiliates for the year ended December 31,
1994. See Item 1 above for a description of the partnership
<PAGE>
arrangements with WFA and WFC Realty through which the Partnership invested in
Stratford Place Apartments.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) The following documents are filed as part of this report:
1. Financial Statements - The Financial Statements listed on the
accompanying Index to Financial Statements and Schedule are filed as a part of
this Annual Report.
2. Financial Statement Schedule - The Financial Statement Schedule
listed on the accompanying Index to Financial Statements and Schedule is filed
as a part of this Annual Report.
3. Exhibits - The Exhibits listed in the accompanying Index to
Exhibits are filed as part of this Annual Report and incorporated in this Annual
Report as set forth in said Index.
(b) Reports on Form 8-K - The Partnership filed one Current Report on Form
8-K during the fourth quarter of 1994. That report was filed on December 16,
1994 and reported a Change in Control of Registrant (Item 1 of Form 8-K). No
financial statements were filed with that Form 8-K.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
WINTHROP GROWTH INVESTORS I
LIMITED PARTNERSHIP
By: TWO WINTHROP PROPERTIES, INC.,
Managing General Partner
Date: March 31, 1995 By: /s/ Arthur J. Halleran, Jr.
-------------------------------
Arthur J. Halleran, Jr.
President of Managing General Partner
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Partnership and in the capacities and on the dates indicated.
/s/ Arthur J. Halleran, Jr. Director and President of Managing General Partner
Arthur J. Halleran, Jr. (Principal Executive Officer)
Date: March 31, 1995
/s/ Jonathan W. Wexler Director, Vice President, Treasurer and
Jonathan W. Wexler Assistant Clerk of Managing General Partner
Date: March 31, 1995
/s/ Richard J. McCready Director, Vice President and Clerk of Managing
Richard J. McCready General Partner
Date: March 31, 1995
<PAGE>
WINTHROP GROWTH INVESTORS 1 LIMITED PARTNERSHIP
CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
INDEX
FINANCIAL STATEMENTS
Report of Independent Public Accountants
Consolidated Statements of Operations for the Years
Ended December 31, 1994, 1993 and 1992
Consolidated Balance Sheets as of December 31, 1994 and 1993
Statements of Changes in Partners' Capital for the Years
Ended December 31, 1994, 1993 and 1992
Consolidated Statements of Cash Flows for the Years
Ended December 31, 1994, 1993 and 1992
Notes to Consolidated Financial Statements
SCHEDULE
III - Real Estate and Accumulated Depreciation as of December 31, 1994
All schedules prescribed by Regulation S-X, other than the one indicated
above, have been omitted, as the required information is inapplicable or
the information is presented in the consolidated financial statements or
related notes.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To WINTHROP GROWTH INVESTORS I LIMITED PARTNERSHIP:
We have audited the accompanying consolidated balance sheets of WINTHROP
GROWTH INVESTORS I LIMITED PARTNERSHIP (a Massachusetts limited partnership) as
of December 31, 1994 and 1993, and the related consolidated statements of
operations, changes in partners' capital and cash flows for each of the three
years in the period ended December 31, 1994. These financial statements are the
responsibility of the Partnership's General Partners. Our responsibility is to
express an opinion on these financial statements based on our audits. We did not
audit the financial statements of two of the Properties, which statements
reflect approximately 49% and 49% of total consolidated assets as of December
31, 1994 and 1993, respectively and 47%, 47% and 35% of consolidated revenues in
1994, 1993 and 1992, respectively. Those statements were audited by other
auditors whose reports have been furnished to us and our opinion, insofar as it
relates to the amounts included for those entities, is based solely on the
reports of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the reports of other auditors provide a
reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of Winthrop Growth Investors I Limited Partnership as of
December 31, 1994 and 1993, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1994, in conformity
with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. Schedule III listed in Item 14(a)(2) is
the responsibility of Winthrop Growth Investors I Limited Partnership Management
and is presented for purposes of complying with the Securities and Exchange
Commission's rules and is not a required part of the basic financial statements.
This schedule has been subjected to the auditing procedures applied in our audit
of the basic financial statements and, in our opinion, fairly states, in all
material respects, the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
/s/ Arthur Andersen LLP
Boston, Massachusetts
February 6, 1995
<PAGE>
WINTHROP GROWTH INVESTORS I LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
1994 1993 1992
-------- -------- ------
Income
<S> <C> <C> <C>
Rental $ 6,118,605 $ 6,206,712 $ 5,896,067
Interest on short-term investments 64,797 83,073 90,572
Other 265,873 219,853 247,178
----------- ----------- -----------
6,449,275 6,509,638 6,233,817
----------- ----------- -----------
Expenses
Real estate taxes 501,783 466,822 461,995
Payroll 657,827 551,748 564,309
Utilities591,909 591,909 630,796 562,702
Repairs and maintenance 808,596 900,742 917,044
Insurance 159,038 127,155 118,511
General and administrative 435,459 460,198 510,354
Management fees 316,494 315,588 300,832
Interest 2,000,474 2,000,474 2,116,212 2,133,562
Depreciation 1,636,723 1,631,193 1,611,332
Amortization 114,734 123,613 131,921
Provision for writedown of
real estate 0 2,107,738 -
-------------- ----------- -----------
7,223,037 9,431,805 7,312,562
----------- ----------- -----------
Net loss $ (773,762) $(2,922,167) $(1,078,745)
=========== =========== ===========
Net loss allocated:
General Partners $ (77,376) $ (292,217) $ (107,875)
Limited Partners (696,386) (2,629,950) (970,870)
----------- ----------- -----------
$ (773,762) $(2,922,167) $(1,078,745)
=========== =========== ===========
Net loss per Unit of Limited
Partnership Interest $ (30.10) $ (113.61) $ (41.94)
============ ============= =============
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
WINTHROP GROWTH INVESTORS I LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
DECEMBER 31,
<TABLE>
1994 1993
----------- --------
<S> <C> <C>
ASSETS
Real Estate, at cost
Land $ 4,015,369 $ 4,015,369
Buildings and improvements, net of
accumulated depreciation of $16,783,845
and $15,147,122, respectively 20,434,738 21,767,697
------------ -----------
24,450,107 25,783,066
Other Assets
Cash and cash equivalents, at cost, which
approximates market value 923,214 2,394,552
Escrow accounts and other receivables 816,923 696,534
Deferred costs, net of accumulated
amortization of $922,723 and $807,989,
respectively 1,120,998 1,223,750
Other 199,999 264,077
----------- -----------
$27,511,241 $30,361,979
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage notes payable $20,711,814 $22,599,665
Accounts payable 105,449 118,518
Security deposits 133,245 138,136
Accrued expenses and other liabilities 343,958 315,180
----------- -----------
21,294,466 23,171,499
Commitments and Contingencies (Note 7)
Partners' Capital:
Limited Partners
Units of Limited Partnership Interest, $1,000 stated value per Unit;
authorized - 50,005 Units; issued and outstanding -
23,139 Units 7,330,343 8,226,672
General Partners (1,113,568) (1,036,192)
----------- -----------
6,216,775 7,190,480
$27,511,241 $30,361,979
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
WINTHROP GROWTH INVESTORS I LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<TABLE>
Units of
Limited General Limited Total
Partnership Partners' Partners' Partners'
Interest Capital Capital Capital
<S> <C> <C> <C> <C>
Balance, December 31, 1991 $ 23,149 $ (636,100) $12,427,514 $11,791,414
Net loss (107,875) (970,870) (1,078,745)
Partner distributions - (400,015) (400,015)
---------- ----------- ----------- -----------
Balance, December 31, 1992 23,149 (743,975) 11,056,629 10,312,654
Net loss (292,217) (2,629,950) (2,922,167)
Partner distributions - (200,007) (200,007)
---------- ----------- ----------- -----------
Balance, December 31, 1993 23,149 (1,036,192) 8,226,672 7,190,480
-----------
Net loss (77,376) (696,386) (773,762)
Partners distributions - (199,943) (199,943)
---------- ----------- ----------- -----------
Balance, December 31, 1994 $ 23,139 $(1,113,568) $ 7,330,343 $ 6,216,775
========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
WINTHROP GROWTH INVESTORS I LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED
<TABLE>
1994 1993 1992
-------- -------- ------
Cash flows from operating activities:
<S> <C> <C> <C>
Net loss $ (773,762) $(2,922,167) $(1,078,745)
Adjustments to reconcile net loss to
net cash provided by operating
activities -
Depreciation and amortization 1,751,457 1,754,806 1,743,253
Provision for writedown of real
estate - 2,107,738 -
Changes in assets and liabilities -
Increase (decrease) in accounts
payable, accrued expenses and
and security deposits 10,818 (43,997) 110,706
Increase in escrow accounts
and other assets (56,311) (15,587) (53,615)
Increase in deferred costs (11,982) - -
----------- ---------- -------
Net cash provided by operating
activities 920,220 880,793 721,599
----------- ----------- -----------
Cash flows from investing activities:
Additions to land, buildings and
improvements (303,764) (148,349) (451,876)
----------- ----------- -----------
Net cash used by investing
activities (303,764) (148,349) (451,876)
----------- ----------- -----------
Cash flows from financing activities:
Refinancing costs refunded net - 47,025 -
Principal payments on mortgage notes (1,887,851) (189,071) (149,639)
Partner distributions (199,943) (200,007) (400,015)
----------- ----------- -----------
Net cash used by financing
activities (2,087,794) (342,053) (549,654)
----------- ----------- -----------
Net (decrease) increase in cash and
cash equivalents (1,471,338) 390,391 (279,931)
Cash and cash equivalents, beginning
of year 2,394,552 2,004,161 2,284,092
----------- ----------- -----------
Cash and cash equivalents, end
of year $ 923,214 $ 2,394,552 $ 2,004,161
============ =========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
WINTHROP GROWTH INVESTORS I LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
1. ORGANIZATION
Winthrop Growth Investors I Limited Partnership (the "Partnership") was
organized on June 20, 1983 under the Uniform Limited Partnership Act of the
Commonwealth of Massachusetts for the purpose of investing in income-producing
residential, commercial and industrial real properties. The Partnership has
acquired two properties through joint venture agreements, one through a
partnership agreement and one through a fee simple interest (the "Properties"),
all of which are residential apartment complexes. The Partnership shall continue
in full force and effect until December 31, 2003 or until dissolution in
accordance with the terms of the Partnership Agreement.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The accompanying consolidated financial statements are
prepared on the accrual basis of accounting in accordance with generally
accepted accounting principles. Revenues consist of rents, interest on
investments, and laundry/vending income. Rental revenue is recognized under the
gross rent potential method by crediting gross rent potential at the beginning
of each month and reducing gross potential by vacancies and concessions at the
end of each month.
Basis of Consolidation - The accompanying financial statements of the
Partnership have been consolidated with those of the Properties. All significant
intercompany accounts and transactions have been eliminated in consolidation.
The Partnership acquired a 99%, 99.99%, 99.98% and 100% interest (the
"Controlling Interest") in four real properties, DEK Associates, Meadow Wood
Associates, Stratford Place Investors Limited Partnership and Stratford Village
Realty Trust, respectively. The Partnership's original investment in Meadow Wood
Associates was through a joint venture agreement in which it owned a 95% general
partnership interest. Effective December 1, 1988, the Partnership converted the
joint venture into a limited partnership in which the Partnership is the sole
general partner. Subsequently, on November 15, 1990, the Partnership
restructured Meadow Wood Associates into a general partnership in which the
Partnership now owns a 99.99% general partnership interest. Effective October 7,
1988, the Partnership also converted the joint venture of DEK Associates into a
limited partnership. The Partnership has become the sole general partner for
both partnerships and continues to receive the same allocation of income, losses
and cash distributions as prior to the conversion. Due to cumulative minority
interest losses exceeding the minority interest capital, the Partnership records
100% of the losses of all the Properties.
Income Taxes - No provision has been made for federal, state or local income
taxes in the accompanying consolidated financial statements of the Partnership.
The Partners are required to report on their individual tax returns their
allocable share of income, gains, losses, deductions and credits of the
Partnership. The Partnership files its tax returns on the accrual basis. On
October 19, 1983, the Internal Revenue Service issued a ruling that the
Partnership will be classified as a partnership for federal income tax purposes.
Distributions to Partners - The Managing General Partner has determined that
current year cash available for distribution and cash retained from prior years'
operations were sufficient to support a distribution to the limited partners of
$199,943 in 1994, $200,007 in 1993 and $400,015 in 1992.
Depreciation - For financial statement purposes, each of the Properties
depreciates the cost of its real property over 25 years and its personal
property over 10 years using the straight-line method.
For tax purposes, depreciation is computed using the accelerated cost recovery
system (ACRS) over 18 or 19 years for real property and 5 years for personal
property.
Deferred Costs and Amortization - Costs relating to the acquisition and
selection of the Partnership's investment in the Properties are deferred and
amortized over 25 years. Costs in excess of the Partnership's initial basis in
the net assets of the Properties are amortized over the estimated useful lives
of the underlying assets.
<PAGE>
WINTHROP GROWTH INVESTORS I LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
Reclassifications - Certain prior year amounts have been reclassified to conform
with the current year's presentation.
3. STATEMENTS OF CASH FLOWS
For the purpose of the consolidated statements of cash flows, the Partnership
considers all highly liquid investments purchased with a maturity of three
months or less to be cash equivalents.
The following details supplemental cash flow information:
<TABLE>
1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
Cash paid for interest $1,994,040 $2,031,935 $2,156,834
</TABLE>
4. TRANSACTIONS WITH RELATED PARTIES
Two Winthrop Properties, Inc. ("Two Winthrop"), the Managing General Partner,
Winthrop Securities Co., Inc. ("Winthrop Securities"), the Selling Agent, and
Winthrop Management, the manager of all of the Properties, are wholly owned
subsidiaries of First Winthrop Corporation which, in turn, is wholly owned by
Winthrop Financial Associates, a Limited Partnership ("WFA"). Linnaeus-Lexington
Associates Limited Partnership, the Associate General Partner of the
Partnership, is a limited partnership, some of whose general partners are
partners of WFA. WFA and its affiliates manage or advise a large number of
partnerships organized to own or operate apartment complexes, as well as other
real estate investments, or to invest in other limited partnerships that own or
operate apartment complexes or other real estate investments. WFA has formed and
is planning to form, directly or through affiliates, additional partnerships or
other entities, both public and private, some of which may have the same
investment objectives as those of the Partnership.
Winthrop Management is the management agent for all four properties. Pursuant to
each management agreement the partnerships and trust pay a 5% management fee
based on gross rental collections. The total management fee for the properties
for the years ended December 31, 1994, 1993 and 1992 was $316,494, $315,588 and
$300,832, respectively.
Beginning with the quarter in which the Investment Date occurs (February 1986)
and for each quarter thereafter, the General Partners generally are entitled to
percentages of Cash Available for Distribution subordinated to a specified
minimum return to the Limited Partners, as described in the Partnership
Agreement.
During the liquidation stage of the Partnership, the General Partners and their
affiliates are entitled to receive certain distributions, subordinated to a
specified minimum return to the Limited Partners, as described in the
Partnership Agreement.
5. MORTGAGE NOTES PAYABLE
The mortgage notes payable by the Properties at December 31, 1994, 1993 and 1992
are as follows:
<TABLE>
1994 1993
----------- -----------
<S> <C> <C>
9.50% mortgage note, beginning November 1, 1991 through
August 1, 1994, monthly payments of $29,256, were applied
first to accrued interest and then to principal; effective
January 1, 1994, management renegotiated the loan. Two
principal payments totaling $1,500,000 reduced the
outstanding loan balance to $1,198,544 as of August 31,
1994; beginning September 1, 1994, the note is due in
monthly payments of $47,893 for principal and interest
through maturity on December 1, 1996. $ 1,043,092 $ 2,808,696
10.00% mortgage note, payable in equal monthly installments
of $36,966 for principal and interest, with a final payment
of $4,071,038 due at maturity on December 1, 2000 4,233,492 4,252,679
Wrap note, payable in monthly installments of principal and
interest at 9.6875% per annum, totalling $87,789, through
February 1, 1996. All unpaid interest and principal is due
and payable in full on February 1, 1996 10,092,324 10,151,394
7.72% mortgage note, payable in
equal monthly installments
of $38,194 for principal and
interest, through maturity on
November 1, 2024 5,342,906 5,386,896
----------- -----------
$20,711,814 $22,599,665
=========== ===========
</TABLE>
The 9.50% mortgage note represents an agreement between Travelers Insurance
Company and the Partnership which became effective in 1988. Under the terms of
the agreement the Partnership was to make a final payment of $2,808,696 on
January 1, 1994. Management has renegotiated the loan under the terms specified
above. In connection with its ongoing evaluation of the property, management of
the Partnership wrote down the carrying value of the property by $2,107,738 to
its estimated net realizable value (approximately $3.7 million) at December 31,
1993. The reserve is reflected as a component of accumulated depreciation in the
accompanying balance sheet.
The mortgage notes payable are collateralized by the Properties' land and
buildings.
<PAGE>
WINTHROP GROWTH INVESTORS I LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
As of December 31, 1994, anticipated future principal payments are as follows:
<TABLE>
<S> <C>
1995 $ 630,734
1996 10,648,111
1997 81,281
1998 88,422
1999 96,202
Thereafter 9,167,064
-----------
TOTAL $20,711,814
</TABLE>
6. TAX LOSS
The Partnership's tax loss for 1994 differs from that for financial reporting
purposes primarily due to the accounting differences in the recognition of
depreciation and the amortization of deferred costs. A reconciliation of the tax
loss for 1994 is as follows:
<TABLE>
<S> <C>
Net loss for financial reporting purposes $ (773,762)
Amortization of costs in excess of the
Partnership's initial basis in the
net assets of the Properties 13,246
Income in excess of expenses for tax and
not financial reporting (7,412)
Excess depreciation under ACRS 68,094
Amortization of deferred costs (4,586)
------------
Tax loss $ (704,420)
============
</TABLE>
7. COMMITMENTS AND CONTINGENCIES
As a General Partner of the Properties, the Partnership, along with other
General Partners of the Properties, is liable for all debts, liabilities and
other obligations of the Properties to the extent that they are not paid by the
respective Properties.
There is no leasing other than to individual tenants of residential complexes.
The leases normally are for one year with rent payable on the first of each
month. Rents are consistent with market rates in locations where the properties
are situated.
8. PROPERTY SUMMARY
The following is a summary of the Properties and the related mortgage notes
payable as of December 31, 1994.
<TABLE>
Land
Buildings
Property/ Date of and Accumulated Interest Principal
Location Purchase Improvements Depreciation Rate Maturity Outstanding
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sunflower Apartments 08/31/84 $ 8,087,007 $ 4,616,072 9.50% 12/01/96 $ 1,043,092
Dallas, TX
Meadow Wood
Apartments 12/03/84 10,632,164 4,210,790 10.00% 12/01/00 4,233,492
Jacksonville, FL
Stratford Place
Apartments 12/18/85 14,075,816 4,847,060 9.69% 02/01/96 10,092,324
Gaithersburg, MD
Stratford Village
Apartments 02/28/86 8,438,965 3,109,923 7.72% 11/01/24 5,342,906
----------- ----------- -----------
Montgomery, AL
$41,233,952 $16,783,845 $20,711,814
=========== =========== ===========
</TABLE>
<PAGE>
WINTHROP GROWTH INVESTORS I LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
SUPPLEMENTARY INFORMATION REQUIRED
PURSUANT TO SECTION 9.4 OF THE PARTNERSHIP AGREEMENT
<TABLE>
Three
Months Year
Ended Ended
December 31, December 31,
1994 1994
(Unaudited) (Unaudited)
1. Statements of Cash Available for Distribution
<S> <C> <C>
Net loss $ (83,436) $ (773,762)
Add: Amortization charges to income not
affecting cash available for distribution 2,691 56,598
Net loss from the Properties 79,271 682,148
Cash from reserves 51,454 234,959
----------- -----------
Cash Available for Distribution $ 49,980 $ 199,943
----------- -----------
Distributions Allocated to General Partners $ - $ -
-------------- -----------
Distributions Allocated to Limited Partners $ 49,980 $ 199,943 (a)
----------- -----------
</TABLE>
(a) Cash distributions were paid from current year cash available for
distribution and from cash retained from prior years' operations (see
Note 2).
2. Fees and other compensation paid or accrued by the Partnership to the
General Partners, or their affiliates, during the three months ended
December 31, 1994
Entity Receiving Form of
Compensation Compensation Amount
Winthrop Management Property Management Fees $ 79,435
All other information required pursuant to Section 9.4 of the Partnership
Agreement is set forth in the attached Consolidated Financial Statements and
related notes or Annual Partnership Report.
WINTHROP GROWTH INVESTORS I LIMITED PARTNERSHIP
SCHEDULE III
DECEMBER 31, 1994
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY THE PROPERTIES AS OF DECEMBER 31, 1994
Initial cost to the Properties and gross amount at which carried as of December
31, 1994 (B, C and D)
----------------------------------------------------------------------------
<TABLE>
Description Number Buildings
& Ownership of Outstanding and
Percentage Apartments Encumbrance(A) Land Improvements Total(D)
----------------------------------------------------------------------------------------
Apartment Complexes,
Location:
<S> <C> <C> <C> <C> <C>
The Sunflower
Apartments, 248 $1,043,092 $1,624,345 $6,462,662 8,087,007
Dallas, TX
- 99%
Meadow Wood
Apartments, 356 4,233,492 689,883 9,942,281 10,632,164
Jacksonville, FL
- 99.99%
Stratford Place
Apartments, 350 10,092,324 1,368,000 12,707,816 14,075,816
Gaithersburg, MD
- 99.98%
Stratford Village
Apartments, 224 5,342,906 333,141 8,105,824 8,438,965
Montgomery, AL
- 100%
----------------------------------------------------------------------------------------
1,178 $20,711,814 $4,015,369 $37,218,583 $41,233,952
</TABLE>
<TABLE>
Accumulated
Depreciation
Description as of Date
& Ownership Dec. 31, Interest Depreciable
Percentage 1994 (E) Acquired Life
----------------------------------------------------------------------------------------
Apartment Complexes,
Location:
<S> <C> <C> <C>
The Sunflower
Apartments,
Dallas, TX
-99% $4,616,072 08/31/84 10-25 Yrs.
Meadow Wood
Apartments,
Jacksonville, FL
-99.98% 4,210,790 12/03/84 10-25 Yrs.
Stratford Place
Apartments,
Gaithersburg, MD
-99.98% 4,847,060 12/18/85 10-25 Yrs.
Stratford Village
Apartments,
Montgomery, AL
-100% 3,109,938 02/28/86 10-25 Yrs.
$16,783,845
</TABLE>
<PAGE>
WINTHROP GROWTH INVESTORS I LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
(A) See Note 5 of Notes to Consolidated Financial Statements for
information regarding the terms of the various encumbrances.
(B) The cost of the properties represents the purchase price of the
properties, but excluding acquisition fees and expenses.
(C) The total cost of land, buildings and improvements, net of accumulated
depreciation at December 31, 1994 for Federal income tax purposes is
$21,330,495.
(D) Reconciliation of Cost:
Balance as of December 31, 1991 $40,329,963
Additions during 1992 451,876
-----------
Balance as of December 31, 1992 40,781,839
Additions during 1993 148,349
-----------
Balance as of December 31, 1993 40,930,188
Additions during 1994 303,764
-----------
Balance as of December 31, 1994 $41,233,952
(E) Reconciliation of Accumulated Depreciation:
Balance as of December 31, 1991 $ 9,987,894
Depreciation Expense for 1992 1,611,332
-----------
Balance as of December 31, 1992 11,599,226
Provision for write-down of real estate 1,916,703
Depreciation Expense for 1993 1,631,193
-----------
Balance as of December 31, 1993 15,147,122
Depreciation Expense 1,636,723
-----------
Balance as of December 31, 1994 $16,783,845
===========
<PAGE>
WINTHROP GROWTH INVESTORS I LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
WINTHROP GROWTH INVESTORS I LIMITED PARTNERSHIP
INDEX TO EXHIBITS
Exhibit Title of Document Page
No.
3 Amended and Restated Agreement of Limited Partnership of Winthrop
Growth Investors I Limited Partnership dated as of May 11, 1984 (filed
as an exhibit to the Partnership's Registration Statement on Form
2-11, File No. 2-84760, and incorporated herein by reference)
4(a) See Exhibit 3
10(a) Property Management Agreement between Winthrop Growth Investors I
Limited Partnership and WP Management Co., Inc. dated May 11, 1984
(filed as an exhibit to the Partnership's Registration Statement on
Form S-11, File No. 2-84760, and incorporated herein by reference)
(b) Documents relating to the Sunflower Apartments property in Dallas,
Texas (filed as a part of Post-Effective Amendment No. 1 to the
Partnership's Registration Statement on Form S-11, File No. 2-84760,
and incor- porated herein by reference)
(c) Documents relating to the Meadow Wood Apartments prop- erty in
Jacksonville, Florida (filed as part of Post- Effective Amendment No.
2 to the Partnership's Registration Statement on Form S-11, File No.
2-84760, and incorporated herein by reference)
(d) Documents relating to the Stratford Place Apartments property in
Gaithersburg, Maryland (filed as an exhibit to the Partnership's
Current Report on Form 8-K filed January 6, 1986 and incorporated
herein by reference)
(e) Documents relating to the Stratford Village Apartments property in
Montgomery, Alabama (filed as an Exhibit to the Partnership's Current
Report on Form 8-K filed on March 17, 1986 and incorporated herein by
reference)
(f) Amendment Number One to the Joint Venture Agreement of DEK Associates
Joint Venture, dated October 7, 1988 (Sunflower) (filed as Exhibit
10(f) to the Partnership's Annual Report on Form 10-K, filed on March
31, 1989 and incorporated herein by reference)
(g) Meadow Wood Winthrop Associates Limited Partnership Certificate and
Agreement filed on December 1, 1988 (filed as Exhibit 10(g) to the
Partnership's Annual Report on Form 10-K filed on March 31, 1989 and
incorporated herein by reference)
(h) Management Agreement between Winthrop Management and Meadow Wood dated
February 1, 1990
(i) Management Agreement between Stratford Place and Winthrop Management
dated January 1, 1990
(j) Management Agreement between Sunflower and Winthrop Management dated
April 1, 1990
28(a) Pages 7-10, 17-24 and 24-27 of the Partnership's Prospectus dated May
11, 1984 (filed with the Commission pursuant to Rule 424(b) on July 3,
1984) P
(b) Supplement to the Partnership's Prospectus dated August 24, 1984
(filed with the Commission pursuant to Rule 424(c) on September 7,
1984) P
(c) Supplement to the Partnership's Prospectus dated November 2, 1984
(filed with the Commission pursuant to Rule 424(c) on November 6,
1984) P
(d) Supplement to the Partnership's Prospectus dated November 8, 1984
(filed as a part of Post-Effective Amendment No. 1 to the
Partnership's Registration Statement on Form S-11, File No. 2-84760,
and incorporated herein by reference)
28(e) Supplement to the Partnership's Prospectus dated February 5, 1985
(filed as a part of Post-Effective Amendment No. 2 to the
Partnership's Registration Statement on Form S-11, File No. 2-84760,
and incorporated herein by reference)
(f) Current Report on Form 8-K (filed January 6, 1986) P
(g) Amendment No. 1 to January 6, 1986 Current Report on Form 8-K (filed
on February 20, 1986 and incorporated herein by reference)
(h) Current Report on Form 8-K (filed March 17, 1986) 124
