FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________to _________
Commission file number 2-85829
DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II
(Exact name of small business issuer as specified in its charter)
New York 13-3202289
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 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___
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II
BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 2000
<TABLE>
<CAPTION>
Assets
<S> <C>
Cash and cash equivalents $ 226
Receivables and deposits 93
Other assets 192
Investment property:
Land $ 1,287
Buildings and related personal property 6,870
8,157
Less accumulated depreciation (6,050) 2,107
$ 2,618
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 44
Tenant security deposit liabilities 67
Accrued property taxes 118
Other liabilities 80
Mortgage note payable 4,186
Partners' Capital (Deficit)
General partner $ 34
Limited partners (37,273 units issued and
outstanding) (1,911) (1,877)
$ 2,618
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
b)
DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
2000 1999 2000 1999
(Restated) (Restated)
Revenues:
<S> <C> <C> <C> <C>
Rental income $ 389 $ 348 $ 1,103 $ 1,002
Other income 34 19 96 57
Total revenues 423 367 1,199 1,059
Expenses:
Operating 169 170 488 455
General and administrative 47 28 129 105
Depreciation 80 71 240 208
Interest 86 69 220 208
Property taxes 36 37 110 112
Total expenses 418 375 1,187 1,088
Income (loss) before equity in net (loss)
income of joint venture, (loss) gain on sale
of investment in joint venture, discontinued
operations, gain on sale of discontinued
operations, and extraordinary loss 5 (8) 12 (29)
Equity in net (loss) income of joint venture -- (62) 50 35
Income (loss) before (loss) gain on sale of
investment in joint venture, discontinued
operations, gain on sale of discontinued
operations, and extraordinary loss 5 (70) 62 6
(Loss) gain on sale of investment in joint
venture (7) -- 2,667 --
(Loss) income from continuing operations (2) (70) 2,729 6
Loss from discontinued operations -- (35) -- (29)
Gain on sale of discontinued operations -- 1,837 -- 1,837
Extraordinary loss on early extinguishment
of debt of discontinued operations -- (45) -- (45)
Net (loss) income $ (2) $ 1,687 $ 2,729 $ 1,769
Net (loss) income allocated to general
partner $ -- $ (2) $ 27 $ (1)
Net (loss) income allocated to limited
partners (2) 1,689 2,702 1,770
$ (2) $ 1,687 $ 2,729 $ 1,769
Per limited partnership unit:
Income (loss) before (loss) gain on sale of
investment in joint venture, discontinued
operations, gain on sale of discontinued
operations, and extraordinary loss $ 0.14 $ (1.83) $ 1.66 $ 0.19
(Loss) gain on sale of investment in
joint venture (0.19) -- 70.83 --
(Loss) income from continuing operations (0.05) (1.83) 72.49 0.19
Loss from discontinued operations -- (0.94) -- (0.78)
Gain on sale of discontinued operations -- 49.29 -- 49.29
Extraordinary loss -- (1.21) -- (1.21)
Net (loss) income $ (0.05) $ 45.31 $ 72.49 $ 47.49
Distributions per limited partnership unit $ 26.88 $ -- $123.79 $ --
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
c)
DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partner Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 37,273 $ 1 $18,637 $18,638
Partners' capital at
December 31, 1999 37,273 $ 7 $ 1 $ 8
Distributions to limited partners -- -- (4,614) (4,614)
Net income for the nine months
ended September 30, 2000 -- 27 2,702 2,729
Partners' capital (deficit) at
September 30, 2000 37,273 $ 34 $(1,911) $(1,877)
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
d)
DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
2000 1999
Cash flows from operating activities:
<S> <C> <C>
Net income $ 2,729 $ 1,769
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation 240 208
Amortization of lease commissions and loan costs 13 16
Equity in net income of joint venture (50) (35)
Bad debt expense, net 34 53
Gain on sale of investment in joint venture (2,667) --
Gain on sale of discontinued operations -- (1,837)
Extraordinary loss on early extinguishment of debt
of discontinued operations -- 45
Change in accounts:
Receivables and deposits (2) (16)
Other assets (15) (25)
Investment in discontinued operations -- (1,129)
Accounts payable (33) 43
Tenant security deposit liabilities 3 (8)
Accrued property taxes 118 (30)
Other liabilities (16) 30
Net cash provided by (used in)
operating activities 354 (916)
Cash flows from investing activities:
Distribution received from joint venture 117 275
Proceeds from sale of investment in joint venture 3,000 --
Proceeds from sale of discontinued operations -- 3,575
Property improvements and replacements (220) (263)
Net cash provided by investing activities 2,897 3,587
Cash flows from financing activities:
Payments on mortgage notes payable (78) (90)
Repayment of mortgage note payable (3,058) --
Proceeds from mortgage note payable 4,200 --
Loan costs paid (166) --
Distributions to limited partners (4,614) --
Net cash used in financing activities (3,716) (90)
Net (decrease) increase in cash and cash equivalents (465) 2,581
Cash and cash equivalents at beginning of period 691 564
Cash and cash equivalents at end of period $ 226 $ 3,145
Supplemental disclosure of cash flow information:
Cash paid for interest $ 200 $ 264
At December 31, 1999, approximately $33,000 of property improvements and
replacements were in accounts payable.
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
e)
DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited financial statements of Drexel Burnham Lambert Real
Estate Associates II (the "Partnership" or "Registrant") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of the DBL Properties Corporation ("DBL" or
the "General Partner"), all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three and nine month periods ended September 30, 2000,
are not necessarily indicative of the results that may be expected for the
fiscal year ending December 31, 2000. For further information, refer to the
financial statements and footnotes thereto included in the Partnership's Annual
Report on Form 10-KSB for the fiscal year ended December 31, 1999.
Certain reclassifications have been made to the 1999 balances to conform to the
2000 presentation.
Note B - Transactions with Related Parties
The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all Partnership activities.
The Partnership Agreement provides for certain payments to affiliates for
services and reimbursements of certain expenses incurred by affiliates on behalf
of the Partnership. The following transactions with affiliates of the General
Partner were incurred during the nine months ended September 30, 2000 and 1999:
2000 1999
(in thousands)
Property management fees (included in
operating expense) $ 57 $ 54
Reimbursement for services of affiliates
(included in investment property and
operating and general and administrative
expense) 50 35
During the nine months ended September 30, 2000 and 1999, affiliates of the
General Partner were entitled to receive 5% of gross receipts from the
Partnership's residential property for providing property management services.
The Partnership paid to such affiliates approximately $57,000 and $54,000 for
the nine month periods ended September 30, 2000 and 1999, respectively.
An affiliate of the General Partner received reimbursement of accountable
administrative expenses amounting to approximately $50,000 and $35,000 for the
nine months ended September 30, 2000 and 1999, respectively.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates currently own 6,900 limited partnership
units in the Partnership representing 18.512% of the outstanding units. A number
of these units were acquired pursuant to tender offers made by AIMCO or its
affiliates. It is possible that AIMCO or its affiliates will make one or more
additional offers to acquire additional limited partnership interests in the
Partnership for cash or in exchange for units in the operating partnership of
AIMCO. Under the Partnership Agreement, unitholders holding a majority of the
Units are entitled to take action with respect to a variety of matters, which
would include without limitation, voting on certain amendments to the
Partnership Agreement and voting to remove the General Partner. When voting on
matters, AIMCO would in all likelihood vote the Units it acquired in a manner
favorable to the interest of the General Partner because of their affiliation
with the General Partner.
Note C - Investment in Joint Venture and Sale of Investment in Joint Venture
Table Mesa
Table Mesa Shopping Center Partnership was formed in 1985, as a joint venture to
own and operate a shopping center in Boulder, Colorado. The Partnership owned a
50% interest in this joint venture. The Partnership's equity in the operations
of Table Mesa, after an adjustment for allocation of depreciation based on its
basis in the property, amounted to income of approximately $50,000 and $35,000
for the nine months ended September 30, 2000 and 1999, respectively. The
Partnership's equity in the operations of Table Mesa amounted to a loss of
approximately $62,000 for the three months ended September 30, 1999. On March
17, 2000, the Partnership sold its investment in joint venture, Table Mesa
Shopping Center ("Table Mesa") for approximately $3,000,000. The Partnership
realized a gain of approximately $2,667,000 on the sale during the first quarter
of 2000.
The Table Mesa joint venture agreement provides, among other things, that the
Partnership shall be entitled to receive a cash flow preference, as defined, of
$252,000 per year, which is equivalent to a 9% return on the Partnership's
initial cash investment. The annual preference is not cumulative. During the
nine months ended September 30, 2000 and 1999, the Partnership received
distributions from the Table Mesa joint venture of approximately $117,000 and
$275,000, respectively.
Summarized results of operations for Table Mesa for the three months ended March
31, 2000 and the nine months ended September 30, 1999, are as follows (in
thousands):
Nine Months Ended Nine Months Ended
September 30, 2000 September 30, 1999
Total revenues $ 451 $ 1,800
Total expenses (346) (1,549)
Net income $ 105 $ 251
Note D - Refinancing
On June 30, 2000, the Partnership refinanced the mortgage encumbering
Presidential House. Interest on the new mortgage is 7.96%. Interest on the old
mortgage was 8.00%. The refinancing replaced indebtedness of approximately
$3,058,000, including accrued interest of approximately $20,000 with a new
mortgage in the amount of $4,200,000. Payments of approximately $35,000 are due
on the first day of each month until the loan matures on July 1, 2020. The prior
note matured in September 1999.
Note E - Distributions
The Partnership distributed approximately $4,614,000 to the limited partners
($123.79 per limited partnership unit) during the nine month period ended
September 30, 2000. These distributions consisted of approximately $2,970,000
($79.68 per limited partnership unit) of proceeds from the sale of the
Partnership's investment in the Table Mesa joint venture, approximately $981,000
($26.32 per limited partnership unit) of proceeds from the refinancing of
Presidential House and approximately $663,000 ($17.79 per limited partnership
unit) of cash from operations. No distributions were made during the nine month
period ended September 30, 1999.
Note F - Discontinued Operations
On September 9, 1999, the Partnership sold Wendover Business Park II ("Wendover
II") to an unaffiliated third party. Wendover II was the only commercial
property owned by the Partnership and represented one segment of the
Partnership's operations. Due to the sale of this property, the results of the
commercial segment have been shown as loss from discontinued operations. The
revenues of this property were approximately $64,000 and $271,000 and the
restated loss from operations was approximately $35,000 and $29,000 for the
three and nine months ended September 30, 1999, respectively.
Note G - Segment Reporting
Description of the types of products and services from which each reportable
segment derives its revenues:
The Partnership had two reportable segments: residential property and commercial
property. The Partnership's residential property segment consists of an
apartment complex in North Miami Beach, Florida. The Partnership rents apartment
units to tenants for terms that are typically twelve months or less. On
September 9, 1999, the commercial property was sold to an unrelated party.
Therefore, the commercial segment is reflected as discontinued operations (see
"Note F" for further discussion).
Measurement of segment profit or loss:
The Partnership evaluates performance based on segment profit (loss) before
depreciation. The accounting policies of the reportable segments are the same as
those of the Partnership as described in the Partnership's Annual Report on Form
10-KSB for the fiscal year ended December 31, 1999.
Factors management used to identify the enterprise's reportable segments:
The Partnership's reportable segments are investment properties that offer
different products and services. The reportable segments are managed separately
because they provide distinct services with different types of products and
customers.
Segment information for the three and nine month periods ended September 30,
2000 and 1999, is shown in the tables below (in thousands). The "Other" column
includes Partnership administration related items and income and expense not
allocated to the reportable segment.
<TABLE>
<CAPTION>
Three Months Ended
September 30, 2000 Residential Other Totals
<S> <C> <C> <C>
Rental income $ 389 $ -- $ 389
Other income 24 10 34
Interest expense 86 -- 86
Depreciation 80 -- 80
General and administrative expense -- 47 47
Loss on sale of investment in joint venture -- (7) (7)
Segment profit (loss) 42 (44) (2)
Nine Months Ended
September 30, 2000 Residential Other Totals
Rental income $ 1,103 $ -- $ 1,103
Other income 51 45 96
Interest expense 220 -- 220
Depreciation 240 -- 240
General and administrative expense -- 129 129
Equity in income of joint venture -- 50 50
Gain on sale of investment in joint venture -- 2,667 2,667
Segment profit 96 2,633 2,729
Total assets 2,520 98 2,618
Capital expenditures for investment property 187 -- 187
Three Months Ended
September 30, 1999 Residential Commercial Other Totals
(discontinued)
Rental income $ 348 $ -- $ -- $ 348
Other income 15 -- 4 19
Interest expense 69 -- -- 69
Depreciation 71 -- -- 71
General and administrative
expense -- -- 28 28
Equity in loss of joint
venture -- -- (62) (62)
Loss from discontinued
operations -- (35) -- (35)
Gain on sale of discontinued
operations -- 1,837 -- 1,837
Extraordinary loss on early
extinguishment of debt of
discontinued operations -- (45) -- (45)
Segment profit (loss) 16 1,757 (86) 1,687
Nine Months Ended
September 30, 1999 Residential Commercial Other Totals
(discontinued)
Rental income $ 1,002 $ -- $ -- $ 1,002
Other income 45 -- 12 57
Interest expense 208 -- -- 208
Depreciation 208 -- -- 208
General and administrative
expense -- -- 105 105
Equity in income of joint
venture -- -- 35 35
Loss from discontinued
operations -- (29) -- (29)
Gain on sale of discontinued
operations -- 1,837 -- 1,837
Extraordinary loss on early
extinguishment of debt of
discontinued operations -- (45) -- (45)
Segment profit (loss) 64 1,763 (58) 1,769
Total assets 2,389 144 3,509 6,042
Capital expenditures for
investment properties 263 -- -- 263
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATION
The matters discussed in this Form 10-QSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosures contained in this Form 10-QSB and other filings with the Securities
and Exchange Commission made by the Partnership from time to time. The
discussion of the Partnership's business and results of operations, including
forward-looking statements pertaining to such matters, does not take into
account the effects of any changes to the Partnership's business and results of
operations. Accordingly, actual results could differ materially from those
projected in the forward-looking statements as a result of a number of factors,
including those identified herein.
The Partnership owns and operates one investment property: Presidential House at
Sky Lake ("Presidential"), a residential apartment complex located in North
Miami Beach, Florida. The average occupancy for Presidential was 96% and 93% for
the nine months ended September 30, 2000 and 1999, respectively. The Partnership
attributes the increase in occupancy to improved marketing efforts.
Results of Operations
The Partnership realized net income of approximately $2,729,000 and $1,769,000
for the nine months ended September 30, 2000 and 1999, respectively. The
Partnership realized a net loss of approximately $2,000 and net income of
approximately $1,687,000 for the three month periods ended September 30, 2000
and 1999, respectively. The increase in net income for the nine months ended
September 30, 2000 is primarily attributable to the gain on the sale of the
investment in joint venture on March 17, 2000. The Partnership realized income
before (loss) gain on the sale of investment in joint venture, discontinued
operations, gain on sale of discontinued operations and extraordinary loss of
approximately $62,000 and $6,000 for the nine month periods ended September 30,
2000 and 1999, respectively. This increase is primarily due to a increase in
equity in net income of the joint venture and an increase in total revenues
partially offset by an increase in total expenses. The Partnership realized
income before gain on sale of investment in joint venture, discontinued
operations, gain on sale of discontinued operations and extraordinary loss for
the three month period ended September 30, 2000 and 1999 of approximately $5,000
and net loss of approximately $70,000, respectively. This increase is primarily
a result of a decrease in the equity in net loss of the joint venture and an
increase in total revenues partially offset by an increase in total expenses.
Total revenues for the three and nine month periods ended September 30, 2000,
increased primarily as a result of an increase in rental and other income.
Rental income increased primarily as a result of an increase in average
occupancy, as noted above, and an increase in the average rental rates. Other
income increased primarily as a result of an increase in interest income due to
higher average cash balances held in interest bearing accounts. The increase in
other income is also due to the decrease in bad debt expense as a result of less
delinquent accounts in 2000.
Total expenses for the nine months ended September 30, 2000 increased primarily
as a result of increases in operating, general and administrative, interest and
depreciation expenses. Total expenses for the three months ended September 30,
2000, increased primarily as a result of increases in general and
administrative, interest and depreciation expenses. The increase in operating
expenses for the nine month period is primarily due to an increase in salaries
at Presidential House and an increase in insurance expense as a result of an
insurance premium refund received in 1999, which was offset against the expense
in 1999. The increase in interest expense is primarily due to the refinancing of
the mortgage encumbering Presidential House, resulting in a larger portion of
the debt service payment being allocated to interest. The increase in
depreciation expense for both periods is primarily due to depreciable assets
placed into service during the past twelve months.
The increase in general and administrative expense for both periods is primarily
due to an increase in professional fees and an increase in the cost of services
included in the management reimbursements to the General Partner as allowed
under the Partnership Agreement. Also included in general and administrative
expense are costs associated with the quarterly and annual communications with
investors and regulatory agencies and the annual audit required by the
Partnership Agreement.
On March 17, 2000, the Partnership sold its investment in the joint venture,
Table Mesa Shopping Center ("Table Mesa") for approximately $3,000,000. The
Partnership realized a gain of approximately $2,667,000 on the sale.
On September 9, 1999, the Partnership sold Wendover Business Park II ("Wendover
II") to an unaffiliated third party. Wendover II was the only commercial
property owned by the Partnership and represented one segment of the
Partnership's operations. Due to the sale of this property, the results of the
commercial segment have been shown as loss from discontinued operation. The
revenues of this property were approximately $64,000 and $271,000 and the
restated income from operations was approximately $35,000 and $29,000 for the
three and nine months ended September 30, 1999, respectively.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of its investment property to assess the
feasibility of increasing rents, maintaining or increasing occupancy levels and
protecting the Partnership from increases in expense. As part of this plan, the
General Partner attempts to protect the Partnership from the burden of
inflation-related increases in expenses by increasing rents and maintaining a
high overall occupancy level. However, due to changing market conditions, which
can result in the use of rental concessions and rental reductions to offset
softening market conditions, there is no guarantee that the General Partner will
be able to sustain such a plan.
Capital Resources and Liquidity
At September 30, 2000, the Partnership had cash and cash equivalents of
approximately $226,000 as compared to approximately $3,145,000 at September 30,
1999. For the nine months ended September 30, 2000, cash and cash equivalents
decreased approximately $465,000 from the Partnership's year ended December 31,
1999. The decrease in cash and cash equivalents is due to approximately
$3,716,000 of cash used in financing activities partially offset by
approximately $2,897,000 of cash provided by investing activities and
approximately $354,000 of cash provided by operating activities. Cash used in
financing activities consists of repayment of the existing loan balance at
Presidential House, loan costs in relation to the refinancing, distributions to
the limited partners, and payments on the mortgage encumbering the Partnership's
investment property partially offset by proceeds from the refinancing of the
loan encumbering Presidential House. Cash provided by investing activities
consists of proceeds from the sale of the investment in joint venture and
distributions received from the joint venture partially offset by property
improvements and replacements. The Partnership invests its working capital
reserves in a money market account.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the property to adequately maintain the physical asset
and other operating needs of the Partnership and to comply with Federal, state,
and local legal and regulatory requirements. Capital improvements planned for
the Partnership's remaining investment property are detailed below.
Presidential House
Approximately $149,000 has been budgeted for 2000 for capital improvements at
Presidential House consisting primarily of floor covering replacements,
appliance replacements, structural improvements, plumbing improvements, and
swimming pool enhancements. During the nine months ended September 30, 2000, the
Partnership completed approximately $187,000 of budgeted and unbudgeted capital
improvements consisting primarily of exterior painting, floor covering
replacements, structural and plumbing improvements. These improvements were
funded from operating cash flow. Additional improvements may be considered and
will depend on the physical condition of the property as well as operating cash
flow and anticipated cash flow generated by the property.
The Partnership's current assets are thought to be sufficient for any near term
needs (exclusive of capital improvements) of the Partnership. On June 30, 2000,
the Partnership refinanced the mortgage encumbering Presidential House. The
interest rate on the new mortgage is 7.96%. The interest rate on the old
mortgage was 8.00%. The refinancing replaced indebtedness of approximately
$3,058,000, including accrued interest of approximately $20,000 with a new
mortgage in the amount of $4,200,000. Payments of approximately $35,000 are due
on the first day of each month until the loan matures on July 1, 2020. The prior
note matured in September 1999.
The Partnership distributed approximately $4,614,000 to the limited partners
($123.79 per limited partnership unit) during the nine month period ended
September 30, 2000. These distributions consisted of approximately $2,970,000
($79.68 per limited partnership unit) of proceeds from the sale of the
Partnership's investment in the Table Mesa joint venture, approximately $981,000
($26.32 per limited partnership unit) of proceeds from the refinancing of
Presidential House and approximately $663,000 ($17.79 per limited partnership
unit) of cash from operations. No distributions were made during the nine month
period ended September 30, 1999. The Partnership's distribution policy is
reviewed on an annual basis. Future cash distributions will depend on the levels
of net cash generated from operations, the availability of cash reserves, and
the timing of the debt maturity, refinancing, and/or property sale. There can be
no assurance, however, that the Partnership will generate sufficient funds from
operations after required capital improvements to permit further distributions
to its partners in the remainder of 2000 or subsequent periods.
<PAGE>
PART II - OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
Exhibit 27, Financial Data Schedule, is filed as an exhibit to
this report.
b) Reports on Form 8-K:
None filed during the quarter ended September 30, 2000.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II
By: DBL Properties Corporation
Its General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
and Controller
Date:
