<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended September 30, 1996
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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 Number 0-12538
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First Capital Institutional Real Estate, Ltd. - 1
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(Exact name of registrant as specified in its charter)
Florida 59-2197264
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Two North Riverside Plaza, Suite 950, Chicago, Illinois 60606-2607
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(Address of principal executive offices) (Zip Code)
(312) 207-0020
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(Registrant's telephone number, including area code)
Not applicable
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(Former name, former address and former fiscal year, if changed since
last report)
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
--- ---
DOCUMENTS INCORPORATED BY REFERENCE:
The First Amended and Restated Certificate and Agreement of Limited Partnership
filed as Exhibit A to the definitive Prospectus dated October 25, 1982, included
in the Registrant's Registration Statement on Form S-11 (Registration No. 2-
79092), is incorporated herein by reference in Part I of this report.
<PAGE>
BALANCE SHEETS
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
September 30,
1996 December 31,
(Unaudited) 1995
- -----------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investment in commercial rental properties:
Land $ 5,501,700 $ 5,501,700
Buildings and improvements 31,270,300 30,584,800
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36,772,000 36,086,500
Accumulated depreciation and amortization (12,790,100) (11,937,500)
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Total investment properties, net of accumulated
depreciation and amortization 23,981,900 24,149,000
Cash and cash equivalents 1,209,300 4,254,900
Investments in debt securities 2,860,500
Rents receivable 38,600 149,800
Other assets 14,800 200
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$ 28,105,100 $ 28,553,900
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LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued expenses $ 252,700 $ 432,500
Due to Affiliates 28,100 21,900
Real estate commissions due to Managing General
Partner 403,000 403,000
Distributions payable 420,000 385,200
Security deposits 143,300 145,800
Other liabilities 65,900 109,000
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1,313,000 1,497,400
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Partners' capital:
General Partners (deficit) (426,100) (359,300)
Limited Partners (60,000 Units issued and
outstanding) 27,218,200 27,415,800
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26,792,100 27,056,500
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$ 28,105,100 $ 28,553,900
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</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the nine months ended September 30, 1996 (Unaudited) and the year ended
December 31, 1995
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Partners' (deficit) capital,
January 1, 1995 $(255,700) $28,679,700 $28,424,000
Net (loss) income for the year ended
December 31, 1995 (103,600) 276,900 173,300
Distributions for the year ended
December 31, 1995 (1,540,800) (1,540,800)
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Partners' (deficit) capital,
December 31, 1995 (359,300) 27,415,800 27,056,500
Net (loss) income
for the
nine months ended September 30, 1996 (66,800) 1,062,400 995,600
Distributions for the nine months ended
September 30, 1996 (1,260,000) (1,260,000)
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Partners' (deficit) capital,
September 30, 1996 $(426,100) $27,218,200 $26,792,100
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</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
STATEMENTS OF INCOME AND EXPENSES
For the quarters ended September 30, 1996 and 1995
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
1996 1995
- --------------------------------------------------------------------------
<S> <C> <C>
Income:
Rental $1,254,300 $1,145,500
Interest 51,300 55,800
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1,305,600 1,201,300
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Expenses:
Depreciation and amortization 290,500 300,900
Property operating:
Affiliates 55,200 49,400
Nonaffiliates 273,100 281,300
Real estate taxes 94,700 66,000
Insurance--Affiliate 15,100 11,500
Repairs and maintenance 178,700 178,400
General and administrative:
Affiliates 11,200 21,100
Nonaffiliates 25,600 31,600
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944,100 940,200
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Net income $ 361,500 $ 261,100
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Net (loss) allocated to General Partners $ (22,600) $ (24,400)
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Net income allocated to Limited Partners $ 384,100 $ 285,500
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Net income allocated to Limited Partners per Unit
(60,000 Units outstanding) $ 6.40 $ 4.76
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</TABLE>
STATEMENTS OF INCOME AND EXPENSES
For the nine months ended September 30, 1996 and 1995
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
1996 1995
- --------------------------------------------------------------------------
<S> <C> <C>
Income:
Rental $3,642,100 $3,505,700
Interest 159,100 172,300
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3,801,200 3,678,000
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Expenses:
Depreciation and amortization 852,600 881,900
Property operating:
Affiliates 168,300 186,000
Nonaffiliates 783,700 764,000
Real estate taxes 283,700 262,500
Insurance--Affiliate 45,300 34,700
Repairs and maintenance 517,100 491,300
General and administrative:
Affiliates 32,700 37,200
Nonaffiliates 122,200 135,300
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2,805,600 2,792,900
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Net income $ 995,600 $ 885,100
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Net (loss) allocated to General Partners $ (66,800) $ (70,500)
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Net income allocated to Limited Partners $1,062,400 $ 955,600
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Net income allocated to Limited Partners per Unit
(60,000 Units outstanding) $ 17.71 $ 15.93
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</TABLE>
STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 1996 and 1995
(Unaudited)
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 995,600 $ 885,100
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 852,600 881,900
Changes in assets and liabilities:
Decrease in rents receivable 111,200 14,100
(Increase) decrease in other assets (14,600) 149,400
(Decrease) in accounts payable and accrued expenses (179,800) (78,000)
Increase in due to Affiliates 6,200 15,800
(Decrease) in other liabilities (43,100) (1,200)
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Net cash provided by operating activities 1,728,100 1,867,100
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Cash flows from investing activities:
Payments for capital and tenant improvements (685,500) (797,200)
(Increase) in investments in debt securities (2,860,500)
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Net cash (used for) investing activities (3,546,000) (797,200)
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Cash flows from financing activities:
Distributions paid to Partners (1,225,200) (1,120,200)
(Decrease) increase in security deposits (2,500) 9,600
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Net cash (used for) financing activities (1,227,700) (1,110,600)
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Net (decrease) in cash and cash equivalents (3,045,600) (40,700)
Cash and cash equivalents at the beginning of the
period 4,254,900 4,238,600
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Cash and cash equivalents at the end of the period $ 1,209,300 $ 4,197,900
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</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
September 30, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
DEFINITION OF SPECIAL TERMS:
Capitalized terms used in this report have the same meaning as those terms have
in the Partnership's Registration Statement filed with the Securities and
Exchange Commission on Form S-11. Definitions of these terms are contained in
Article III of the First Amended and Restated Certificate and Agreement of
Limited Partnership, which is incorporated herein by reference.
ACCOUNTING POLICIES:
The financial statements have been prepared in accordance with generally
accepted accounting principles ("GAAP"). Under this method of accounting,
revenues are recorded when earned and expenses are recorded when incurred.
Preparation of the Partnership's financial statements in conformity with GAAP
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.
The financial information included in these financial statements is unaudited;
however, in management's opinion, all adjustments (consisting of only normal,
recurring accruals) necessary for a fair presentation of the results of
operations for the periods included have been made. Results of operations for
the quarter and nine months ended September 30, 1996 are not necessarily
indicative of the operating results for the year ending December 31, 1996.
The financial statements include the Partnership's 50% interest in three joint
ventures with Affiliated partnerships. These joint ventures were formed for the
purpose of each acquiring a 100% interest in certain real properties and are
operated under the common control of the Managing General Partner. Accordingly,
the Partnership's pro rata share of the ventures' revenues, expenses, assets,
liabilities and Partners' capital is included in the financial statements.
Commercial rental properties held for investment are recorded at cost, net of
any provisions for value impairment, and depreciated (exclusive of amounts, if
any, allocated to land and value impairments) on the straight-line method over
their estimated useful lives. Upon classifying a commercial rental property as
held for disposition, no depreciation or amortization of such property is
provided for in the financial statements. Lease acquisition fees are recorded
at cost and amortized on the straight-line method over the life of each
respective lease. Maintenance and repair costs are expensed against operations
as incurred; expenditures for improvements are capitalized to the appropriate
property accounts and depreciated on the straight-line method over the
estimated life of such improvements.
During the first quarter of 1996, the Partnership adopted Financial Accounting
Standards Board Statement No. 121 "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of" (the "Standard"). The
Standard established guidance for determining if the value of defined assets is
impaired, and if so, how impairment losses should be measured and reported in
the financial statements. The Standard also addressed the accounting for long-
lived assets that are expected to be disposed of. The adoption of the Standard
did not have a material effect on the Partnership's financial statements.
Evaluation of the potential impairment of the value of the Partnership's assets
is performed on an individual property basis.
Cash equivalents are considered all highly liquid investments with maturity of
three months or less when purchased.
Investments in debt securities are comprised of corporate debt securities and
are classified as held-to-maturity. These investments are carried at their
amortized cost basis in the financial statements. As of September 30, 1996,
these securities had a fair market value of $2,859,600 and unrealized (losses)
of $(900). Substantially all of these securities had maturities of less than
one year when purchased.
Certain reclassifications have been made to the previously reported 1995
statements in order to provide comparability with the 1996 statements. These
reclassifications have no effect on the net income (loss) or Partners'
(deficit) capital.
Reference is made to the Partnership's annual report for the year ended
December 31, 1995, for a description of other accounting policies and
additional details of the Partnership's financial condition, results of
operations, changes in Partners' capital and changes in cash balances for the
year then ended. The details provided in the notes thereto have not changed
except as a result of normal transactions in the interim or as otherwise
disclosed herein.
2. RELATED PARTY TRANSACTIONS:
In accordance with the Partnership Agreement, subsequent to March 31, 1983, the
Termination of the Offering, the General Partners are entitled to 10% of
distributable Cash Flow (as defined in the Partnership Agreement) as their
Subordinated Partnership Management Fee, provided that Limited Partners first
receive specified non-cumulative annual rates of return on their Capital
Investment.
In accordance with the Partnership Agreement, Net Profits (exclusive of
depreciation and Net Profits from the sale or disposition of Partnership
properties) are allocated: first, to the General Partners, in an amount equal
to the greater of the General Partners' Subordinated Partnership Management Fee
or 1% of such Net Profits; and second, the balance, if any, to the Limited
Partners. Net Profits from the sale or disposition of a Partnership property
are allocated: first, to the General Partners, in an amount equal to the
aggregate amount of depreciation previously allocated to them; second, to the
General Partners and the Limited Partners with negative balances in their
capital accounts pro rata in proportion to such respective negative balances,
to the extent of the total of such negative balances; third, to the General
Partners, in an amount necessary to make the aggregate amount of their capital
accounts equal to the greater of the Sale Proceeds to be distributed to the
General Partners with respect to the sale or disposition of such property or 1%
of such Net Profits; and fourth, the balance, if any, to the Limited Partners.
Net Losses (exclusive of depreciation and Net Losses from the sale, disposition
or provision for value impairment of Partnership properties) are allocated 1%
to the General Partners and 99% to the Limited Partners. All depreciation is
allocated 10% to the General Partners and 90% to the Limited Partners. Net
Losses from the sale, disposition or provision for value impairment of
Partnership
4
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
properties are allocated: first, to the extent that the balance in the General
Partners' capital accounts exceeds their Capital Investment or the balance in
the capital accounts of the Limited Partners exceeds the amount of their
Capital Investment (collectively, the "Excess Balances"), to the General
Partners and the Limited Partners pro rata in proportion to such Excess
Balances until such Excess not Balances are reduced to zero; second, to the
General Partners and the Limited Partners and among them (in the ratio which
their respective capital account balances bear to the aggregate of all capital
account balances) until the balance in their capital accounts shall be reduced
to zero; third, the balance, if any, 99% to the Limited Partners and 1% to the
General Partners. In all events there shall be allocated to the General
Partners less than 1% of Net Profits and Net Losses from the sale, disposition
or provision for value impairment of a Partnership property. The General
Partners were not entitled to cash distributions for the quarter and nine
months ended September 30, 1996. For the quarter and nine months ended
September 30, 1996, the General Partners were allocated Net (Losses) of
$(22,600) and $(66,800), respectively.
Fees and reimbursements paid and payable by the Partnership to Affiliates
during the quarter and nine months ended September 30, 1996 were as follows:
<TABLE>
<CAPTION>
Paid
--------------------
Quarter Nine Months Payable
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Property management and leasing fees $47,400 $138,300 $18,200
Reimbursement of property insurance premiums, at
cost 15,200 45,300
Reimbursement of expenses, at costs
--Accounting 4,700 19,100 6,100
--Investor communications 2,300 11,500 3,800
--Legal 9,400 23,800
--Other 4,100 5,000
- ------------------------------------------------------------------------------
$83,100 $243,000 $28,100
- ------------------------------------------------------------------------------
</TABLE>
As of September 30, 1996, the Partnership owed $403,000 to the Managing
General Partner for real estate commissions earned in connection with the
sales of Partnership properties. These commissions have been accrued but not
paid. Under the terms of the Partnership Agreement, these commissions will
not be paid until the Limited Partners have received cumulative distributions
of Sale or Refinancing Proceeds equal to 100% of their Original Capital
Contribution plus a cumulative return (including all Cash Flow which has been
distributed to the Limited Partners from the initial date of investment) of
6% simple interest per annum on their Capital Investment.
On-site management for the Lakewood Square Shopping Center is provided by an
independent real estate management company for fees calculated as a percentage
of gross rents received from property.
Except as disclosed above, an Affiliate of the Managing General Partner
provides property and supervisory management as well as leasing services for
the Partnership's properties for fees ranging from 3% to 6% of gross rents
received from the properties.
5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the Partnership's annual report for the year ended
December 31, 1995 for a discussion of the Partnership's business.
OPERATIONS
The table below is a recap of certain operating results of each of the
Partnership's properties for the quarters and nine months ended September 30,
1996 and 1995. The discussion following the table should be read in conjunction
with the financial statements and notes thereto appearing in this report.
<TABLE>
<CAPTION>
Comparative Operating Results (a)
For the Quarters For the Nine Months
Ended Ended
9/30/96 9/30/95 9/30/96 9/30/95
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<S> <C> <C> <C> <C>
FOXHALL SQUARE BUILDING (50%)
Rental revenues $397,600 $386,500 $1,183,200 $1,223,200
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Property net income $ 82,900 $ 96,900 $ 334,400 $ 338,100
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Average occupancy 85% 86% 84% 86%
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PEACHTREE PALISADES OFFICE BUILDING
Rental revenues $394,800 $350,900 $1,073,100 $1,024,700
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Property net income (loss) $ 43,700 $ 32,200 $ 13,300 $ (1,500)
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Average occupancy 90% 89% 91% 82%
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LAKEWOOD SQUARE SHOPPING CENTER (50%)
Rental revenues $332,300 $280,800 $ 986,700 $ 875,900
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Property net income $170,100 $ 97,800 $ 479,500 $ 435,600
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Average occupancy 97% 90% 96% 87%
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12621 FEATHERWOOD BUILDING (50%)
Rental revenues $129,600 $127,300 $ 399,100 $ 381,900
- --------------------------------------------------------------------
Property net income $ 49,700 $ 30,700 $ 162,700 $ 113,500
- --------------------------------------------------------------------
Average occupancy 100% 100% 100% 100%
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</TABLE>
(a) The above table excludes certain income and expense items which are either
not directly related to individual property operating results such as
interest income and general and administrative expenses or are related to
properties previously owned by the Partnership.
Unless otherwise disclosed, discussions of fluctuations between 1996 and 1995
refer to both the quarterly and nine-month periods ended September 30, 1996 and
1995.
Net income increased $100,400 and $110,500 for the quarter and nine months
ended September 30, 1996, respectively, when compared to the quarter and nine
months ended September 30, 1995. The increases in net income were primarily due
to improved operating results at Peachtree Palisades Office Building
("Peachtree"), 12621 Featherwood Building ("Featherwood") and Lakewood Square
Shopping Center ("Lakewood") as well as decreased general and administrative
expenses due to reduced printing and mailing costs. Partially offsetting the
increases in net income were
diminished operating results at Foxhall Square Building ("Foxhall").
Rental revenues increased by $108,800 or 9.5% and $136,400 or 3.9% for the
quarter and nine months ended September 30, 1996, respectively, when compared
to the quarter and nine months ended September 30, 1995. The primary factors
which caused the increases in rental revenues for the comparable periods were:
1) increases in base rental income at Peachtree as a result of increases in
occupancy, rental rates charged to new and renewing tenants and revenues
generated by the parking facility, partially offset by a decrease in real
estate tax escalations for the quarterly periods under comparison; 2) increases
in base rents and tenant expense reimbursements for common area maintenance at
Lakewood primarily due to an increase in the average occupancy rate; and 3)
increases in real estate tax escalation income at Featherwood. Partially
offsetting the increase in rental revenues for the nine-month periods under
comparison was a decrease in rental revenues at Foxhall due to decreased base
rental income as a result of a decrease in the average occupancy rate in rental
revenues generated by the parking facility.
Real estate tax expense increased $28,700 and $21,200 for the quarter and nine
months ended September 30, 1996, respectively, when compared to the quarter and
nine months ended September 30, 1995 primarily due to the 1995 receipts of
refunds for 1993/1994 real estate taxes at Lakewood and 1992 real estate taxes
at Peachtree. Real estate tax expense, exclusive of the refunds, decreased for
the quarterly and nine-month periods under comparison as a result of decreases
in the assessed valuations of Foxhall and Featherwood.
Repairs and maintenance expenses increased $25,800 for the nine months ended
September 30, 1996 when compared to the nine months ended September 30, 1995.
The increase was primarily due to: 1) increased repairs to the HVAC system and
increased janitorial services at Peachtree and 2) increased architectural costs
at Lakewood. Partially offsetting the increase was decreased repairs and
maintenance expenses at Featherwood as a result of fewer repairs to the HVAC
system in 1996 as compared to 1995. For the quarterly periods under comparison,
repairs and maintenance expenses remained relatively stable.
To increase and/or maintain occupancy levels at the Partnership's properties,
the Managing General Partner, through its Affiliated asset and property
management groups, continues to take the following actions: 1) implementation
of marketing programs, including hiring of third-party leasing agents or
providing on-site leasing personnel, advertising, direct mail campaigns and
development of building brochures; 2) early renewal of existing tenants and
addressing any expansion needs these tenants may have; 3) promotion of local
broker events and networking with local brokers; 4) networking with national
level retailers; 5) cold-calling other businesses and tenants in the market
area; and 6) providing rental concessions or competitively pricing rental rates
depending on market conditions.
LIQUIDITY AND CAPITAL RESOURCES
One of the Partnership's objectives is to dispose of its properties when market
conditions allow for the achievement of the maximum possible sales price. In
the interim, the Partnership continues to manage and maintain its remaining
properties. Notwithstanding the Partnership's intention relative to property
sales, another primary objective of the
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Partnership is to provide cash distributions to Limited Partners from
Partnership operations. To the extent cumulative cash distributions exceed net
income, such excess distributions will be treated as a return of capital. Cash
Flow (as defined in the Partnership Agreement) is generally not equal to net
income or cash flows as defined by generally accepted accounting principles
("GAAP"), since certain items are treated differently under the Partnership
Agreement than under GAAP. Management believes that to facilitate a clear
understanding of the Partnership's operations, an analysis of Cash Flow (as
defined in the Partnership Agreement) should be examined in conjunction with an
analysis of net income or cash flows (as defined by GAAP). The following table
includes a reconciliation of Cash Flow (as defined in the Partnership
Agreement) to cash flow provided by operating activities as determined by GAAP.
Such amounts are not indicative of actual distributions to Partners and should
not necessarily be considered as an alternative to the results disclosed in the
Statements of Income and Expenses and Statements of Cash Flows.
<TABLE>
<CAPTION>
Comparative Cash Flow
Results For the Nine
Months Ended
9/30/96 9/30/95
- ------------------------------------------------------------------------------
<S> <C> <C>
Cash Flow (as defined in the Partnership Agreement) $ 1,848,200 $ 1,767,000
Items of reconciliation:
Decrease in current assets 96,600 163,500
(Decrease) in current liabilities (216,700) (63,400)
- ------------------------------------------------------------------------------
Net cash provided by operating activities $ 1,728,100 $ 1,867,100
- ------------------------------------------------------------------------------
Net cash (used for) investing activities $(3,546,000) $ (797,200)
- ------------------------------------------------------------------------------
Net cash (used for) financing activities $(1,227,700) $(1,110,600)
- ------------------------------------------------------------------------------
</TABLE>
The increase in Cash Flow (as defined in the Partnership Agreement) of $81,200
for the nine months ended September 30, 1996 when compared to nine months ended
September 30, 1995 was primarily due to improved operating results, exclusive
of depreciation and amortization, at Featherwood and Foxhall as well as
decreased general and administrative expenses.
The decrease in the Partnership's cash position of $3,045,600 as of September
30, 1996 when compared to December 31, 1995 was primarily the result of
investments in debt securities, payments made for capital and tenant
improvements and leasing costs and distributions paid to Partners exceeding net
cash provided by operating activities. Liquid assets, including cash, cash
equivalents and investments in debt securities, as of September 30, 1996 were
comprised of amounts held for working capital purposes.
Net cash provided by operating activities continues to be the Partnership's
primary source of funds. Net cash provided by operating activities decreased by
$139,000 for the nine months ended September 30, 1996 when compared to the nine
months ended September 30, 1995. This decrease was primarily due to the 1995
receipt of a rebate for the replacement of the air conditioner and the timing
of the
payment of expenses at Foxhall. Partially offsetting the decrease was the
timing of the receipt of rental payments at Peachtree and Featherwood.
The increase in net cash used for investing activities of $2,748,800 for the
nine months ended September 30, 1996 when compared to the nine months ended
September 30, 1995 was primarily due to the increase in investments in
debt securities, partially offset by a decrease in expenditures for capital and
tenant improvements and leasing costs. The increase in investments in debt
securities is a result of the extension of the maturities of certain of the
Partnership's short-term investments in an effort to maximize the return on
these amounts while they are held for working capital purposes. These
investments are of investment-grade and generally mature less than one year
from their date of purchase. The Partnership maintains working capital reserves
to pay for capital expenditures. During the nine months ended September 30,
1996, the Partnership spent $685,500 for capital and tenant improvements and
leasing costs and has projected to spend approximately $150,000 during the
remainder of 1996. Of the projected amount, approximately $100,000 and $35,000
relates to anticipated improvement and leasing costs expected to be incurred at
Foxhall and Peachtree, respectively. Actual amounts expended may vary depending
on a number of factors including actual leasing activity, results of operations
and other market conditions during the remainder of the year. The Managing
General Partner believes that these expenditures are necessary to increase
and/or maintain occupancy levels in very competitive markets, maximize rental
rates charged to new and renewing tenants and prepare the remaining properties
for eventual disposition.
The increase in net cash used for financing activities of $117,100 for the nine
months ended September 30, 1996 when compared to the nine months ended
September 30, 1995 was due primarily to an increase in distributions paid to
Limited Partners.
The Managing General Partner continues to take a conservative approach to
projections of future rental income and to maintain higher levels of cash
reserves due to the anticipated capital and tenant improvements and leasing
costs necessary to be made at the Partnership's properties during the next
several years. As a result of this, cash continues to be retained to supplement
working capital reserves. For the nine months ended September 30, 1996, Cash
Flow (as defined in the Partnership Agreement) retained to supplement working
capital reserves approximated $588,200.
Distributions to Limited Partners for the quarter ended September 30, 1996 were
declared in the amount of $420,000, or $7.00 per Unit. Cash distributions are
made 60 days after the last day of each fiscal quarter. The amount of future
distributions to Limited Partners will ultimately be dependent upon the
performance of the Partnership's investments as well as the Managing General
Partner's determination of the amount of cash necessary to supplement working
capital reserves to meet future liquidity requirements of the Partnership.
Accordingly, there can be no assurance as to the amounts of cash for future
distributions to Limited Partners.
7
<PAGE>
PART II. OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K
- ------ --------------------------------
(a) Exhibits: None
(b) Reports on Form 8-K:
There were no reports filed on Form 8-K during the quarter ended
September 30, 1996.
<PAGE>
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.
FIRST CAPITAL INSTITUTIONAL REAL ESTATE, LTD. - 1
By: FIRST CAPITAL FINANCIAL CORPORATION
MANAGING GENERAL PARTNER
Date: November 13, 1996 By: /s/ DOUGLAS CROCKER II
----------------- --------------------------------
DOUGLAS CROCKER II
President and Chief Executive Officer
Date: November 13, 1996 By: /s/ NORMAN M. FIELD
----------------- --------------------------------
NORMAN M. FIELD
Vice President - Finance and Treasurer
<TABLE> <S> <C>
<PAGE>
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<NAME> First Capital Institutional Real Estate - 1
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<S> <C>
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0
0
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