SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to ________________
Commission File No. 0-13556
Cluster Housing Properties
(A California Limited Partnership)
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 04-2817478
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5110 Langdale Way, Colorado Springs CO 80906
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(Address of principal executive offices) (Zip Code)
(719) 527-0544
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 and 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 ___
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
<PAGE>
<TABLE>
CLUSTER HOUSING PROPERTIES
(a California Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
---------------
ASSETS
June 30,
1996 December 31,
(Unaudited) 1995
Property, at cost (Notes 2, 4, and 5):
<S> <C> <C>
Land ............................. $3,677,028 $3,677,028
Buildings and improvements ................... 14,067,756 14,067,756
Equipment, furnishings and ................... 1,352,242 1,295,545
fixtures
------------ ------------
19,097,026 19,040,329
Less accumulated depreciation ................ (4,607,352) (4,418,093)
------------ ------------
14,489,674 14,622,236
Cash and cash equivalents (Notes 2 and 3) ...... 501,476 480,389
Short-term investments (Note 2) ................ 885,595 1,067,446
Real estate tax escrows ........................ 110,362 44,055
Deposits and prepaid expenses .................. 3,818 1,693
Accounts receivable ............................ 2,900 631
Deferred expenses, net of
accumulated
amortization of $155,588 and $136,140 (Note2). 38,903 58,351
------------ ------------
Total assets .......................... $ 16,032,728 $ 16,274,801
============ ============
LIABILITIES AND PARTNERS' EQUITY
Mortgage notes payable (Note 5) ................ 8,629,142 8,695,278
Accounts payable ............................... 34,703 42,245
Accrued expenses ............................... 213,776 164,298
Due to affiliates .............................. (4,250) 23,173
(Note 7)
Rents received in advance ...................... (772) 10,495
Tenant security ................................ 57,557 57,306
deposits
------------ ------------
Total ................................. 8,930,156 8,992,795
liabilities
Commitments and contingencies (Note 9)
Minority interest (Note 4) ..................... (8,895) (8,895)
Partners' equity (Note 6)....................... 7,111,467 7,290,901
------------ ------------
Total liabilities and partners' equity . $ 16,032,728 $ 16,274,801
============ ============
<PAGE>
CLUSTER HOUSING PROPERTIES
(a California Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
-------------
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Rental income ................. $ 675,625 $ 686,618 $ 1,368,048 $ 1,343,908
Rental operating expenses ..... 303,735 301,475 573,582 557,407
----------- ----------- -----------
Net rental operating income
(exclusive of items
shown separately below) .... 371,890 385,143 794,466 786,501
Interest expense .............. 197,363 200,152 395,476 400,993
Depreciation and amortization . 108,078 100,630 208,707 201,259
Other (income) and expenses:
Interest income ............. (16,131) (22,145) (32,934) (43,837)
General and administrative .. 135,263 50,028 208,125 95,625
(Note 7)
----------- ----------- ----------- -----------
424,573 328,665 779,374 654,040
----------- ----------- ----------- -----------
Net income (loss) ............. ($ 52,683) $ 56,478 $ 15,092 $ 132,461
=========== =========== =========== ===========
Net income (loss) allocated to:
General Partners ............ ($ 527) $ 2,824 $ 755 $ 6,623
Per unit of Investor Limited
Partner interest:
32,421 units ........... (1.61) 1.65 0.44 3.88
issued
<PAGE>
CLUSTER HOUSING PROPERTIES
(a California Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
(Unaudited)
-------------
Investor Total
General Limited Partners'
Partners Partners Equity
<S> <C> <C> <C>
Balance at December 31, 1994 (159,147) 7,669,907 7,510,760
Cash distributions ......... (26,449) (502,525) (528,974)
Net income ................. 15,456 293,659 309,115
----------- ----------- -----------
Balance at December 31, 1995 (170,140) 7,461,041 7,290,901
Cash distributions ......... (194,526) (194,526)
----------- -----------
Net income ................. 2,824 12,268 15,092
----------- ----------- -----------
Balance at June 30,1996..... ($ 167,316) $ 7,278,783 $ 7,111,467
=========== =========== ===========
<PAGE>
CLUSTER HOUSING PROPERTIES
(a California Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Increase (decrease) in cash and cash equivalents
Six Months Ended
June 30,
1996 1995
----------- -----------
Cash flows from operating activities:
<S> <C> <C>
Interest received .................................. $ 53,657 $ 25,314
Cash received from rental income ................... 1,357,008 1,327,607
Administrative expenses ............................ (246,610) (120,909)
Rental operations expenses ......................... (589,136) (547,209)
Interest paid ...................................... (395,476) (401,223)
----------- -----------
Net cash provided by operating activities ............ 179,443 283,580
Cash flows from investing activities:
Purchase of fixed assets ........................... (56,697) (6,140)
Cash (paid for) received from short-term investments 161,128 168,085
----------- -----------
Net cash provided (used) by investing ................ 104,431 161,945
activities
Cash flows from financing activities:
Distributions to partners .......................... (194,526) (273,019)
Deposits ........................................... (2,125) 2,033
Principal payments on mortgage notes payable ....... (66,136) (60,416)
----------- -----------
Net cash used by financing ........................... (262,787) (331,402)
activities
----------- -----------
Net increase (decrease) in cash and cash ............. 21,087 114,123
equivalents
Cash and cash equivalents at beginning of the period 480,389 195,407
----------- -----------
Cash and cash equivalents at end of the period ....... $ 501,476 $ 309,530
=========== ===========
<PAGE>
CLUSTER HOUSING PROPERTIES
(a California Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Increase (decrease) in cash and cash equivalents
-------------
Reconciliation of net income to net cash provided by operating activities:
Six Months Ended
June 30,
1996 1995
---- ----
<S> <C> <C>
Net income .................................... $ 15,092 $ 132,461
Adjustments to reconcile net income to net cash
provided by operating
activities:
Depreciation and amortization ............... 208,707 201,259
Change in assets and liabilities net of effects
from investing and financing activities:
Decrease in real estate tax ............... (66,307) 21,506
escrows
Increase in accounts and interest ......... 18,454 (18,523)
receivable
Increase (decrease) in
accounts
payable and accrued expenses ............ 42,401 (27,990)
Increase (decrease) in due to affiliates .. (27,864) (8,832)
Increase (decrease) in rent received in ... (11,267) (13,916)
advance
Increase (decrease) in tenant security .... 227 (2,385)
deposits
--------- ---------
Net cash provided by operating activities ..... $ 179,443 $ 283,580
========= =========
</TABLE>
<PAGE>
CLUSTER HOUSING PROPERTIES
(A California Limited Partnership)
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------
1. Organization of Partnership:
Cluster Housing Properties (a California Limited Partnership) (the
"Partnership"), formerly Berry and Boyle Cluster Housing Properties, was formed
on August 8, 1983. The Partnership issued all of the General Partnership
Interests to three General Partners in exchange for capital contributions
aggregating $2,000. Stephen B. Boyle and GP L'Auberge Communities, L.P., (a
California Limited Partnership), formerly Berry and Boyle Management, are the
General Partners. In September, 1995, with the consent of Limited Partners
holding a majority of the outstanding Units, as well as the consent of the
mortgage lenders for the Partnership's three properties, Richard G. Berry
resigned as a general partner of the Partnership.
A total of 2,000 individual Limited Partners owning 32,421 units have
contributed $16,210,500 of capital to the Partnership. At December 31, 1995, the
total number of Limited Partners was 2,013. Except under certain limited
circumstances, as defined in the Partnership Agreement, the General Partners are
not required to make any additional capital contributions. The General Partners
or their affiliates will receive various fees for services and reimbursement for
various organizational and selling costs incurred on behalf of the Partnership.
The accompanying consolidated financial statements present the activity of the
Partnership for the six months ended June 30, 1996 and 1995.
The Partnership will continue until December 31, 2010, unless terminated earlier
by the sale of all, or substantially all, of the assets of the Partnership, or
otherwise in accordance with the provisions of Section 16 of the Partnership
Agreement.
2. Significant Accounting Policies:
A. Basis of Presentation
The consolidated financial statements include the accounts of the
Partnership and its subsidiaries: Sin Vacas Joint Venture (Sin Vacas),
Autumn Ridge Joint Venture (Autumn Ridge) and Villa Antigua Joint
Venture (Villa Antigua). All intercompany accounts and transactions
have been eliminated in consolidation. The Partnership follows the
accrual basis of accounting.
B. Cash and Cash Equivalents
The Partnership considers all highly liquid debt instruments purchased
with a maturity of three months or less to be cash equivalents. The
carrying value of cash and cash equivalents approximates fair value. It
is the Partnership's policy to invest cash in income-producing
temporary cash investments. The Partnership mitigates any potential
risk from such concentration of credit by placing investments with high
quality financial institutions.
C. Short-term Investments
At June 30, 1996, short term investments consist solely of various
forms of U. S. Government backed securities, with an aggregate par
value of $885,595 which mature in September 1996. In 1994, the
Partnership adopted Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity
Securities". The Partnership has the intent and ability to hold its
short term investments to maturity. Accordingly, these securities have
been recorded at amortized cost, which approximates market value. There
was no cumulative effect recorded as a result of this accounting
change.
<PAGE>
D. Significant Risks and Uncertainties
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
E. Depreciation
Depreciation is provided for by the use of the straight-line method
over estimated useful lives as follows:
Buildings and improvements 39-40 years
Equipment, furnishings and fixtures 5-15 years
F. Deferred Expenses
Costs of obtaining the mortgages on the properties are being amortized
over the term of the related mortgage notes payable using the
straight-line method. Fees paid to certain of the property developers
were amortized over the term of the services provided using the
straight-line method. Any unamortized costs remaining at the date of a
refinancing are expensed in the year of refinancing.
G. Income Taxes
The Partnership is not liable for Federal or state income taxes because
Partnership income or loss is allocated to the Partners for income tax
purposes. If the Partnership's tax returns are examined by the Internal
Revenue Service or state taxing authority and such an examination
results in a change in Partnership taxable income (loss), such change
will be reported to the Partners.
H. Rental Income
Leases require the payment of rent in advance, however, rental income
is recorded as earned.
I. Long-Lived Assets
The Partnership's long-lived assets include property and equipment and
deferred expenses. The Partnership will evaluate the possible
impairment of long-lived assets whenever events or circumstances
indicate that the carrying value of the assets may not be recoverable.
<PAGE>
3. Cash and Cash Equivalents:
Cash and cash equivalents at June 30, 1996 and December 31, 1995 consisted of
the following:
1996 1995
---- ----
Cash on hand $ 95,466 $ 30,848
Certificate of deposit 202,763 100,000
Money market accounts 203,247 349,541
------- --------
$501,476 $480,389
4. Joint Venture and Property Acquisitions:
The Partnership has invested in three properties located in Scottsdale and
Tucson, Arizona and Colorado Springs, Colorado. The success of the Partnership
will depend upon factors which are difficult to predict including general
economic and real estate market conditions, both on a national basis and in the
areas where the Partnership's investments are located.
Sin Vacas
On October 25, 1985, the Partnership acquired a majority interest in the Sin
Vacas Joint Venture, which owns and operates the Villas at Sin Vacas, a 72-unit
residential property located in Tucson, Arizona. Since the Partnership owns a
majority interest in the Sin Vacas Joint Venture, the accounts and operations of
the Sin Vacas Joint Venture have been consolidated into those of the
Partnership.
The Partnership made initial cash payments in the form of capital contributions
totaling $2,458,507 and funded $398,949 of property acquisition costs which were
treated as a capital contribution to the joint venture. Since completion of
construction, the Partnership has made additional contributions totaling
$153,757. At June 30, 1996, the total capital contributions and acquisition
costs incurred were $2,592,527 and $418,686, respectively.
For the six months ended June 30, 1996 and 1995 the Sin Vacas Joint Venture had
net loss of $17,584, and net income of $10,038, respectively. June 30, 1996
Net cash from operations (as defined in the joint venture agreement) is to be
distributed as available to each joint venture partner quarterly as follows:
First, to the Partnership, an amount equal to 8.75% per annum,
noncumulative (computed daily on a simple noncompounded basis from the
date of completion funding) of the Partnership's capital investment, as
defined in the joint venture agreement;
Second, the balance 70% to the Partnership and 30% to the co-venturer.
All losses from operations and depreciation for the Sin Vacas Joint Venture are
allocated 99% to the Partnership and 1% to the co-venturer.
All profits from operations, to the extent of cash distributions, shall first be
allocated to the Partnership and co-venturer in the same proportion as the cash
distribution. Any remaining profits are allocated 70% to the Partnership and 30%
to the co-venturer.
In the case of certain capital transactions and distributions as defined in the
joint venture agreement, the allocation of related profits, losses and cash
distributions, if any, would be different than as described above and would be
effected by the relative balances in the individual partners' capital accounts.
Pinecliff
On July 16, 1986, the Partnership acquired Pinecliff (formerly Autumn Ridge), a
96-unit residential property located in Colorado Springs, Colorado and
simultaneously contributed the property to the Autumn Ridge Joint Venture
comprised of the Partnership and an affiliate of the property developer. Since
the Partnership owns a majority interest in the Autumn Ridge Joint Venture, the
accounts and operations of the Autumn Ridge Joint Venture have been consolidated
into those of the Partnership.
The Partnership made initial cash payments in the form of capital contributions
totaling $3,819,397 and funded $546,576 of property acquisition costs which were
treated as a capital contribution to the Autumn Ridge Joint Venture.. At June
30, 1996 the total capital contributions and acquisition costs incurred were
$4,187,310 and $497,475, respectively.
For the six months ended June 30, 1996 and 1995 the Autumn Ridge Joint Venture
had net income of $88,700 and $19,916, respectively.
Net cash from operations (as defined in the joint venture agreement) is to be
distributed as available to each joint venture partner quarterly as follows:
First, to the Partnership, an amount equal to 8% per annum,
noncumulative (computed daily on a simple noncompounded basis from the
date of completion funding) of the Partnership's capital investment, as
defined in the joint venture agreement;
Second, the balance 82% to the Partnership and 18% to the co-venturer.
All losses from operations and depreciation for the Autumn Ridge Joint Venture
are allocated 100% to the Partnership.
All profits from operations, to the extent of cash distributions, shall first be
allocated to the Partnership and co-venturer in the same proportion as the cash
distribution. Any remaining profits are allocated 82% to the Partnership and 18%
to the co-venturer.
In the case of certain capital transactions and distributions as defined in the
joint venture agreement, the allocation of related profits, losses and cash
distributions, if any, would be different than as described above and would be
effected by the relative balances in the individual partners' capital accounts.
Villa Antigua
On June 11, 1987, the Partnership acquired a majority interest in the Villa
Antigua Joint Venture, which owns and operates Villa Antigua, an 88-unit
residential property located in Scottsdale, Arizona. Since the Partnership owns
a majority interest in the Villa Antigua Joint Venture, the accounts and
operations of the Villa Antigua Joint Venture have been consolidated into those
of the Partnership.
The Partnership made initial cash payments in the form of capital contributions
totaling $2,494,677 and funded $381,729 of property acquisition costs which were
treated as a capital contribution to the Villa Antigua Joint Venture. Since
completion of construction, the Partnership has made additional contributions
totaling $60,963. At June 30, 1996, the total capital contributions and
acquisition costs were $2,555,640 and $381,729, respectively.
The Villa Antigua Joint Venture had net income of $122,461 and $49,678 for the
six months ended June 30,1996 and 1995. June 30, 1996
Net cash from operations (as defined in the joint venture agreement) is to be
distributed as available to each joint venture partner quarterly as follows:
First, to the Partnership, an amount equal to 10% per annum,
noncumulative (computed daily on a simple noncompounded basis from the
date of completion funding) of the Partnership's adjusted capital
investment, as defined in the joint venture agreement;
Second, the balance 70% to the Partnership and 30% to the co-venturer.
All losses from operations and depreciation for the Villa Antigua Joint Venture
are allocated 99% to the Partnership and 1% to the co-venturer.
All profits from operations, to the extent of cash distributions, shall first be
allocated to the Partnership and co-venturer in the same proportion as the cash
distributions; however, if for any taxable year there are no cash distributions,
profits are allocated 99% to the Partnership and 1% to the co-venturer.
In the case of certain capital transactions and distributions as defined in the
joint venture agreement, the allocation of related profits, losses and cash
distributions, if any, would be different than as described above and would be
effected by the relative balances in the individual partners' capital accounts.
The Sin Vacas Joint Venture, the Autumn Ridge Joint Venture and the Villa
Antigua Joint Venture are sometimes collectively referred to as the "Joint
Ventures".
5. Mortgage Notes Payable:
All of the property owned by the Partnership is pledged as collateral for the
nonrecourse mortgage notes payable outstanding at June 30, 1996 and December 31,
1995 which consisted of the following:
1996 1995
---- ----
Villas at Sin Vacas $2,448,489 $2,467,255
Pinecliff 3,137,870 3,161,919
Villa Antigua 3,042,783 3,066,104
--------- ---------
$8,629,142 $8,695,278
========= =========
Sin Vacas
On June 30, 1992, Villas at Sin Vacas refinanced its permanent loan using the
proceeds of a new first mortgage loan in the amount of $2,575,000. Under the
terms of the note, monthly principal and interest payments of $21,830, based on
a fixed interest rate of 9.125%, are required over the term of the loan. The
balance of the note will be due on July 15, 1997.
Pinecliff
On June 30, 1992, Pinecliff refinanced its permanent loan using the proceeds of
a new first mortgage loan in the amount of $3,300,000. Under the terms of the
note, monthly principal and interest payments of $27,976 are required over the
term of the loan, based on a fixed interest rate of 9.125%. The balance of the
note will be due on July 15, 1997.
Villa Antigua
On June 30, 1992, Villa Antigua refinanced its permanent loan using the proceeds
of a new first mortgage loan in the amount of $3,200,000. Under the terms of the
note, monthly principal and interest payments of $27,128, based on a fixed
interest rate of 9.125%, are required over the term of the loan. The balance of
the note will be due on July 15, 1997.
Interest accrued at June 30, 1996 and December 31, 1995 consisted of the
following:
1996 1995
---- ----
Villas at Sin Vacas $ 9,381 $ 9,381
Pinecliff 12,022 12,022
Villa Antigua 11,658 11,658
---------- ---------
$ 33,061 $ 33,061
======== ========
The aggregate principal amounts of long term borrowings due during the calendar
years 1996 and 1997, respectively, are $135,348, and $8,559,930.
The principal balance of the mortgage notes payable appearing on the
consolidated balance sheet approximates the fair value of such notes.
6. Partners' Equity:
Under the terms of the Partnership Agreement profits are allocated 95% to the
Limited Partners and 5% to the General Partners; losses are allocated 99% to the
Limited Partners and 1% to the General Partners.
Cash distributions to the partners are governed by the Partnership Agreement and
are made, to the extent available, 95% to the Limited Partners and 5% to the
General Partners.
The allocation of the related profits, losses, and distributions, if any, would
be different than described above in the case of certain events as defined in
the Partnership Agreement, such as the sale of an investment property or an
interest in a joint venture partnership.
7. Related-Party Transactions:
Due to affiliates at June 30, 1996 and December 31, 1995 consisted of
reimbursable costs payable to L'Auberge Communities, Inc., an affiliate of the
General Partners, in the amounts of $4,250, and $14,278, respectively and
distributions payable to the Villa Antigua co-venturer of $0 and $8,895,
respectively.
For the six months June 30, 1996 and 1995, general and administrative expenses
included $46,683 and $36,006, respectively, of salary reimbursements paid to the
General Partners for certain administrative and accounting personnel who
performed services for the Partnership. A termination fee of $71,680 was paid to
Evans Withycombe, Inc.
The officers and principal shareholders of Evans Withycombe, Inc., the developer
and property manager of the Villas at Sin Vacas and Villa Antigua properties and
an affiliate of the co-venturers of those joint ventures, together hold a two
and one half percent cumulative profit or partnership voting interest in LP
L'Auberge Communities, a California Limited Partnership, formerly Berry and
Boyle, which is the principal limited partner of GP L'Auberge Communities, L.P.
During the six months ended June 30, 1996 and 1995, $39,440 and $42,660,
respectively, of property management fees were paid or accrued to Evans
Withycombe, Inc until the termination of the Management Agreement on May 15,
1996
Residential Services - L'Auberge, formerly Berry and Boyle Residential Services,
the property manager of Pinecliff, is an affiliate of the General Partners of
the Partnership. For the six months ended June 30, 1996 and 1995 $24,880 and
$24,507, respectively, of property management fees were paid or accrued to
Residential Services - L'Auberge.
8. Significant Event:
On May 14, 1996, the Partnership and certain affiliates consummated an agreement
with Evans Withycombe Management, Inc. and certain of its affiliates ("EWI")
which separated the interests of EWI and the Partnership, thus affording the
Partnership greater flexibility in the operation and disposition of the
properties...In consideration of a payment by the Partnership to EWI of $73,775
and delivery of certain mutual releases, EWI (i) relinquished its contract to
manage Sin Vacas and Villa Antigua and its option to exercise its rights of
first refusal with regard to the sale of those properties and (ii) assigned all
of its interest in the Sin Vacas Joint Venture and the Villa Antigua Joint
Venture to the Partnership (while preserving the economic interests of the
venturer in these Joint Ventures), resulted in the dissolution of the Sin Vacas
Joint Venture and the Villa Antigua Joint Venture.
<PAGE>
-16-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
In connection with its capitalization, the Partnership admitted investors who
purchased a total of 32,421 Units aggregating $16,210,500. These offering
proceeds, net of organizational and offering costs of $2,431,575, provided
$13,778,925 of net proceeds to be used for the purchase of income-producing
residential properties, including related fees and expenses, and working capital
reserves. The Partnership expended $10,410,263 to (i) acquire its joint venture
interests in the Sin Vacas Joint Venture, the Villa Antigua Joint Venture, and
the Autumn Ridge Joint Venture, (ii) to pay acquisition expenses, including
acquisition fees to one of the General Partners, and (iii) to pay certain costs
associated with the refinancing of the Autumn Ridge permanent loan. The
Partnership distributed $1,731,681 to the Limited Partners as a return of
capital resulting from construction cost savings with respect to the Sin Vacas,
Autumn Ridge and Villa Antigua projects and other excess offering proceeds. The
remaining net proceeds of $1,636,981 were used to establish initial working
capital reserves. These reserves may be used periodically to enable the
Partnership to meet its various financial obligations including contributions to
the various joint ventures that may be required. Through June 30, 1996, $218,258
cumulatively was contributed to the joint ventures for this purpose.
The working capital reserves of the Partnership consist of cash and cash
equivalents and short-term investments. Together these amounts provide the
Partnership with the necessary liquidity to carry on its day-to-day operations
and to make necessary contributions to the various joint ventures. Thus far in
1996, the aggregate net increase in working capital reserves was $21,087. This
increase resulted primarily from cash provided by operations of $179,443 offset
by distributions to partners of $194,526, purchase of fixed assets of $56,697
and $66,136 of principal payments on mortgage notes payable.
Property Status
Villas at Sin Vacas
As of June 30, 1996, the property was 80% occupied, compared to 86%
approximately one year ago. At June 30, 1996 and 1995, the market rents for the
various unit types were as follows:
Unit Type 1996 1995
--------- ---- ----
One bedroom one bath $ 835 $ 835
Two bedroom two bath 1,050 1,050
Three bedroom two bath 1,200 1,200
Autumn Ridge
As of June 30, 1996, the property was 90% occupied, compared to 86%
approximately one year ago. At June 30, 1996 and 1995, the market rents for the
various unit types were as follows:
Unit Type 1996 1995
-------- ---- ----
One bedroom one bath $ 910 $ 885
Two bedroom two bath 1,120 1,088
Villa Antigua
As of June 30, 1996, the property was 87% occupied, compared to 94%
approximately one year ago. At June 30, 1996 and 1995, the market rents for the
various unit types were as follows:
Unit Type 1996 1995
--------- ---- ----
One bedroom one bath $ 775 $720
Two bedroom two bath 925 935
Three bedroom two bat 1,080 1,050
Results of Operations
For the three months ended June 30, 1996, the Partnership recognized interest
income earned on short term investments of $15,004 and administrative expenses
of $133,318, as well as its share of the income or losses allocated from the
Joint Ventures as follows:
<TABLE>
Sin Autumn Villa
Vacas Ridge Antigua
<S> <C> <C> <C>
Revenue ....................... $ 169,042 $ 279,976 $ 227,734
Expenses:
General and administrative .. 1,686 -- 259
Operations .................. 114,214 106,934 81,837
Depreciation and amortization 33,229 44,057 30,792
Interest .................... 56,001 71,768 69,594
--------- --------- ---------
205,130 222,759 182,482
--------- --------- ---------
Net income (loss) ............. $ (36,088) $ 57,217 $ 45,252
========= ========= =========
</TABLE>
For the three months ended June 30, 1995 the
Partnership recognized interest income earned on short term investments of
$21,546 and administrative expenses of $44,700, as well as its share of the
income or losses allocated from the Joint Ventures as follows:
<TABLE>
Sin Autumn Villa
Vacas Ridge Antigua
<S> <C> <C> <C>
Revenue ....................... $200,503 $250,031 $236,683
Expenses:
General and administrative .. 1,800 1,728 1,800
Operations .................. 102,915 113,074 85,486
Depreciation and amortization 28,958 42,530 29,142
Interest .................... 56,792 72,783 70,577
-------- -------- --------
190,465 230,115 187,005
-------- -------- --------
Net income (loss) ............. $ 10,038 $ 19,916 $ 49,678
======== ======== ========
</TABLE>
For the six months ended June 30, 1996, the Partnership recognized interest
income earned on short term investments of $30,695 and administrative expenses
of $206,180, as well as its share of the income or losses allocated from the
Joint Ventures as follows:
<TABLE>
Sin Autumn Villa
Vacas Ridge Antigua
<S> <C> <C> <C>
Total revenue ................. $ 357,910 $ 528,120 $ 484,257
Expenses:
General and administrative .. 1,686 -- 259
Operations .................. 199,406 209,024 162,152
Depreciation and amortization 62,187 86,587 59,933
Interest .................... 112,215 143,809 139,452
--------- --------- ---------
375,494 439,420 361,796
--------- --------- ---------
Net income (loss) ............. ($ 17,584) $ 88,700 $ 122,461
========= ========= =========
</TABLE>
For the six months ended June 30, 1995, the Partnership recognized interest
income earned on short term investments of $42,703 and administrative expenses
of $84,929, as well as its share of the income or losses allocated from the
Joint Ventures as follows:
<TABLE>
Sin Autumn Villa
Vacas Ridge Antigua
<S> <C> <C> <C>
Total revenue ................. $394,077 $483,495 $467,470
Expenses:
General and administrative .. 3,600 3,496 3,600
Operations .................. 182,416 210,119 164,872
Depreciation and amortization 57,916 85,060 58,283
Interest .................... 113,780 145,816 141,397
-------- -------- --------
357,712 444,491 368,152
-------- -------- --------
Net income (loss) ............. $ 36,365 $ 39,004 $ 99,318
======== ======== ========
</TABLE>
Comparison of Operating Results for the Six months ended June 30, 1996 and 1995:
Interest income decreased 14% over the prior period as a result of lower amount
of working capital invested in the on the Partnership's short term investments.
Transition costs associated with the outsourcing of much of the Partnership's
administration work to an administration agent and the relocation of the
remaining administration, financial and investor services functions to a more
cost efficient location in Colorado Springs, Colorado has temporarily increased
first half 1996 operating expenses. In addition, the one-time cost of the Evans
Withycombe termination ($71,680) and its related legal cost were incurred in May
and June of 1996. In aggregate, total operating expenses of the
Partnership increased 25% in the first six months of 1996 as compared with the
same period in 1995, and are expected to decline in the second half
of 1996 as compared with the first half of 1996.
Thus far in 1996, the Partnership has made the following cash distributions to
its Partners:
Total
Limited Partners $194,526
General Partners -
$194,526
PART II-OTHER INFORMATION
ITEM 1. Legal Proceedings
Response: None
ITEM 2. Changes in Securities
Response: None
ITEM 3. Defaults Upon Senior Securities
Response: None
ITEM 4. Submission of Matters to a Vote of Security Holders
Response: None
ITEM 5. Other Information
Response: None
ITEM 6. Exhibits and Reports on Form 8-K
Response: None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CLUSTER HOUSING PROPERTIES
By: GP L'Auberge Communities, L.P., a California
Limited Partnership, General Partner
By: L'Auberge Communities, Inc., its General Partner
By: __/s/ Stephen B. Boyle_________________________________
Stephen B. Boyle, President
Date: August 05, 1996
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-END> Jun-30-1996
<CASH> 501,476
<SECURITIES> 885,595
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 19,097,026
<DEPRECIATION> (4,607,352)
<TOTAL-ASSETS> 16,032,728
<CURRENT-LIABILITIES> 301,014
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 8,629,142
<TOTAL-LIABILITY-AND-EQUITY> 16,032,728
<SALES> 0
<TOTAL-REVENUES> 1,400,982
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 990,414
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 395,476
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,092
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
