UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994
Commission file number 0-13458
CONNECTICUT GENERAL EQUITY PROPERTIES-I LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Connecticut 06-1094176
(State of Organization) (I.R.S. Employer Identification No.)
900 Cottage Grove Road, South Building
Bloomfield, Connecticut 06002
(Address of principal executive offices)
Registrant's telephone number, including area code: (203) 726-6000
Securities registered pursuant to Section 12(b) of the Act:
None
(Title of Each Class)
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
(Title of Class)
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
State the aggregate market value of the voting stock held by non-affiliates
of the registrant. Not applicable.
<PAGE>
TABLE OF CONTENTS
PART I Page
Item 1. Business 3
Item 2. Properties 6
Item 3. Legal Proceedings 10
Item 4. Submission of Matters to a Vote of Security Holders 10
PART II
Item 5. Market for Registrant's Common Equity and Related Security Holder
Matters 10
Item 6. Selected Financial Data 11
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
Item 8. Financial Statements and Supplementary Data 17
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 38
PART III
Item 10. Directors and Executive Officers of the Registrant 38
Item 11. Executive Compensation 40
Item 12. Security Ownership of Certain Beneficial Owners
and Management 40
Item 13. Certain Relationships and Related Transactions 41
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K 42
SIGNATURES 44
<PAGE>
PART I
Item 1. Business
The registrant, Connecticut General Equity Properties-I Limited
Partnership (the "Partnership") was formed on November 14, 1983, under the
Uniform Limited Partnership Act of the State of Connecticut for the purpose
of acquiring, operating, holding for investment and disposing of industrial
and office buildings and service center space and, to a lesser extent,
residential properties. On January 31, 1984, the Partnership commenced an
offering of $50,000,000 (subject to increase up to $65,000,000) of Limited
Partnership Interests (the "Units") at $1,000 per Unit, pursuant to a
Registration Statement on Form S-11 under the Securities Act of 1933
(Registration No. 2-87976).
A total of 39,236.25 Units were sold to the public prior to the
offering's termination on December 31, 1985. The holders of 12,314 Units
were admitted to the Partnership in 1984; the holders of 23,381.75 Units
were admitted in 1985; and on January 2, 1986, the holders of the 3,540.5
remaining Units were admitted to the Partnership. From the 39,236.25 Units
sold, the Partnership received net proceeds of $35,602,279. The Limited
Partners of the Partnership share in the ownership of the Partnership's
real property investments according to the number of Units held. The
Partnership is engaged solely in the business of real estate investment. A
presentation of information about industry segments is not applicable.
The General Partner of the Partnership is Connecticut General
Realty Resources, Inc.-Third (the "General Partner"), which is a wholly
owned subsidiary of CIGNA Financial Partners, Inc. ("CFP", formerly
Connecticut General Management Resources, Inc.), which is in turn a wholly
owned subsidiary of Connecticut General Corporation, which is in turn a
wholly owned subsidiary of CIGNA Holdings, Inc., which is a wholly owned
subsidiary of CIGNA Corporation, a publicly held corporation whose stock is
traded on the New York Stock Exchange.
The Partnership acquired five commercial properties (including one
owned through a joint venture) located in Missouri, Arizona, Illinois,
Florida and Massachusetts. In order to acquire the properties, the
Partnership, which purchased its properties for all cash, invested a total
of $30,803,712, paid $2,418,158 in acquisition fees and closing costs,
established reserves for improvements of $1,203,321 and established working
capital reserves of $1,177,088.
The Partnership sold Courtyard Shopping Center, located near
Chicago in Villa Park, Illinois, on January 11, 1990. On April 15, 1994,
the Partnership sold two of the six buildings, representing 42,480 of the
105,560 square feet, at Westside Industrials. Reference is made to Item 7.
<PAGE>
The Partnership has made the real property investments set forth
in the following table:
<TABLE>
<CAPTION>
Name, Type of Property Purchase Acquisition Size (d) Date of Type of
and Location Price Fees and sq. ft. Purchase Ownership
(a)(b)(c) Expenses
<S> <C> <C> <C> <C> <C>
1.Woodlands Plaza II $7,902,880 $498,052 72,465 10-15-84 100% fee
Office Building simple
St. Louis, Missouri interest
2.Westside Industrials 2,976,000 350,266 105,560 02-01-85 100% fee
(formerly Interpark) simple
Phoenix, Arizona (e) interest
3.Lake Point, I, II, 9,603,000 803,929 135,008 07-31-86 100% fee
III simple
Service Center interest
Orlando, Florida
4.Westford Corporate 4,321,832 372,000 162,765 09-11-86 26.08% fee
Center simple
Westford, Massachusetts interest
(f)
5.Courtyard Shopping 6,000,000 393,911 57,332 05-10-85 100% fee
Center (sold) simple
Villa Park, Illinois(g) interest
<FN>
(a) The Partnership did not incur any debt in connection with the
acquisition of these investment properties.
<FN>
(b) Excludes all broker fees paid at closing.
<FN>
(c) This table does not reflect purchase price adjustments resulting
from master lease provisions.
<FN>
(d) Represents net leasable area at acquisition date; net leasable area
may change due to expansion or tenant improvements.
<FN>
(e) The Partnership sold two of the six buildings, representing 42,480
of the 105,560 square feet on April 15, 1994.
<FN>
(f) The Partnership owns a 26.08% interest in the joint venture
partnership which owns the Westford Corporate Center. CIGNA Income
Realty-I Limited Partnership, an affiliated partnership, is the
co-venturer. The information shown represents the Partnership's
share of the total investment.
<FN>
(g) The Partnership sold the Courtyard Shopping Center on January 11,
1990.
</TABLE>
<PAGE>
The West County office market of Greater St. Louis, where Woodlands
Plaza II is located, continued to see improvement in rents and occupancy
levels throughout 1994. An easing in defense cutbacks, strong sales in the
auto industry, and high levels of new business investment have helped
stabilize the manufacturing sector in Missouri. Office absorption in St.
Louis, as well as the West County, showed significant improvement over 1993
as several major corporations moved offices into the market counting for
over 500,000 square feet of newly leased space. Of particular note, May
Department Stores and TWA moved into Greater St. Louis. Eagle Snacks, a
subsidiary of Anheuser-Busch, and Prudential Home Mortgage, the nation's
second largest home mortgage lender, moved into West County, all resulting
in positive absorption. At the same time, some corporate downsizing has
added additional available space to the market. The largest contributor is
McDonnel Douglas adding 755,000 square feet to the North County market. In
1994, the suburban market contained approximately 16,000,000 square feet,
nearly a 5% increase due to additional space being put on the market. This
represents almost 39% of the available office space in the metropolitan St.
Louis area. The West County submarket is made up of nine separate
submarkets containing a total of approximately 11,875,000 square feet.
West County has experienced positive absorption for five continuous
quarters. The occupancy rate for West County was 93.5% with large blocks
of space still scarce. The Woodlands submarket of West County, where
Woodlands Plaza II is located, is comprised of nine buildings containing
just under 400,000 square feet. This market had an occupancy average of
82% during 1994 with rental rates ranging from $14.00 - $14.75 per square
foot. Woodlands Plaza II saw occupancy rise to 92% at the close of 1994,
up from 81% at the close of 1993, with rental rates at $14.50 per square
foot.
Phoenix, Arizona continues as one of the fastest growing markets in
the country. The Black Canyon submarket of Phoenix, where Westside
Industrials is located, saw its vacancy rate decline to 11% as of the close
of 1994. Westside ended the year 80% occupied, up from the prior year.
During 1994, two of the property's six buildings were sold at above market
sales values and a third building may be sold during the second quarter of
1995. Rents in the remaining buildings may increase from $.32 per square
foot to $.33 during 1995 in response to a slight tightening in the
industrial market. Black Canyon had an inventory of 3.3 million square
feet with 380,000 square feet available, an 11.5% vacancy. Absorption was
positive in 1994 as vacancy dropped from 16% at December 31, 1993.
The Orlando metropolitan area is expected to sustain its steady
growth through the end of the decade. The Southern Orlando service center
market, where Lake Point I, II and III is located, contains approximately
3.7 million square feet of service center/warehouse space. Through 1994
construction levels remained low and vacancy rates declined. Absorption
has been positive over the last three years, totalling 130,000 square feet
for 1994. At the close of 1994 the vacancy rate in this market was 16%,
down from 21% at the close of 1993. The market is still overbuilt with a
four year supply of space at current absorption rates. The Lake Point
property ended the year 89% occupied, down from 1993's result but still
ahead of the local market average. During 1995, leases representing 27% of
the property are set to expire. Since rental rates at Lake Point are
currently over the market average, rents at the property may continue to
drop and concessions may increase in order to maintain the property's
market position. Rental rates currently range from $5.00 to $9.50 per
square foot for showroom space to $10.50 to $11.50 per square foot for
class B and C office space.
The outlook for metropolitan Boston is generally positive with job
growth resulting from diversification in the area's employment base. While
the manufacturing industry continues to downsize, the service sector-
related industry has seen modest gains. The Boston submarket where
Westford Corporate Center is located lies between Routes 128 and I-495 in
an area known as the Northwest Corridor. During 1994, the property
increased occupancy to 100%, up from 75% at the close of 1993. This was an
excellent achievement given the market still suffers from the effects of
downsizing in the high tech industry. The Northwest Corridor submarket in
which Westford directly competes currently has 10.3 million square feet of
space with an 11% vacancy rate. Absorption through the end of 1994
totalled 541,000 square feet; however, with 5.6 million square feet of
vacant space still available, the market remains soft. Rents and occupancy
levels in the market are expected to remain stagnant or see very negligible
upward movement as the market works through an estimated two to three year
supply of available R&D space.
Approximate occupancy levels for the properties on a quarterly
basis are set forth in the table in Item 2.
<PAGE>
The Partnership itself has no employees; however, the unaffiliated
property managers engaged by CIGNA Investments, Inc. ("CII", formerly CIGNA
Capital Advisers, Inc.) on behalf of the Partnership maintain on-site
staff. For a description of asset management services provided by CII and
the terms of transactions between the Partnership and affiliates of the
General Partner, see Item 13 and the Notes to Financial Statements.
The following list details gross revenues from operations for each
of the Partnership's investment properties as a percentage of the
Partnership's total gross revenues during 1992, 1993 and 1994. Included
in this calculation is the Partnership's interest in the gross revenues of
the Westford joint venture. In each year, interest income accounted for
the balance of gross revenues.
<TABLE>
<CAPTION>
1992 1993 1994
<S> <C> <C> <C>
1. Woodlands Plaza II 33% 31% 29%
Office Building
St. Louis, MO
2. Westside Industrials 14% 15% 12%
Phoenix, AZ
3. Lake Point I, II, III 42% 42% 42%
Service Center
Orlando, FL
4. Westford Corporate Center 9% 11% 15%
Westford, MA
</TABLE>
Losses from "passive activities" (which include any rental
activity) may only offset income from "passive activities". The
Partnership is engaged in passive activities and therefore investors are
subject to these rules. Investors' passive losses in excess of passive
income from all sources are suspended and are carried over to future years
when they may be deducted against passive income generated by the
Partnership in such year (including gain recognized on the sale of the
Partnership's assets) or against passive income derived by investors from
other sources. Any suspended losses remaining subsequent to Partnership
dissolution may be used by investors to offset ordinary income.
Item 2. Properties
The Partnership owns directly and through a joint venture
partnership the properties described in Item 1 herein. The lease terms on
the properties range from less than one year to ten years, with the
majority being three to five years. Most of the leases contain provisions
for one or more of the following: percentage rent, escalation and common
area maintenance recapture. Reference is made to the Notes to Financial
Statements for information regarding minimum annual future rentals under
existing leases and operating expense reimbursements. In the opinion of
the General Partner, the Partnership's properties continue to be adequately
insured.
On January 11, 1990, the Partnership sold the Courtyard Shopping
Center. Reference is made to Item 7 and the Notes to Financial Statements
for information on the sale.
Woodlands Plaza II is a three-story suburban office structure
situated on Lots 1, 2 and 3 of The Woodlands Business Park located in St.
Louis, Missouri. The building was completed in July 1983 and sold to the
Partnership in October 1984. The building design features exterior masonry
construction and is divided into two separate buildings that overlook the
Woodlands Lake. The building has approximately 71,927 square feet of net
leasable area.
<PAGE>
The following table provides information on tenants that occupy ten
percent or more of Woodland Plaza II's net leasable area.
<TABLE>
<CAPTION>
Tenant Square Principal Base Rent Lease Renewal Other
Footage Business Per Annum Dates Option Information
<S> <C> <C> <C> <C> <C> <C>
1. Doane Agricultural 11,301 Agriculture $169,512 08/01/91 1, 5 Step up
Services Co. - year rent
07/31/96 ext.
option
2. Magnum Mortgage 10,319 Financial $137,760 11/08/93 1, 3 Step up
Co. Services - year rent
11/30/98 ext.
option
</TABLE>
The following table provides lease expiration information relative to
Woodlands Plaza II.
<TABLE>
<CAPTION>
Year Number of Square Annualized Percentage of
Leases Footage Base Total
Expiring Rent Annualized
Base Rent
<S> <C> <C> <C> <C>
1995 6 13,849 $166,308 18%
1996 2 16,590 $250,428 28%
1997 5 11,011 $163,963 18%
1998 3 15,300 $204,759 22%
1999 2 8,531 $127,296 14%
</TABLE>
Lake Point I, II, III is within Lee Vista Center, a planned
business park, located in the southeast sector of the Orlando, Florida,
metropolitan area. Lee Vista Center is located approximately 10 miles
southeast of Orlando's central business district and approximately 1 mile
north of the Orlando International Airport. The property consists of four
single-story office/service buildings and two single-story office/warehouse
buildings containing a total of 135,008 square feet of gross leasable area.
The following table provides information on tenants that occupy ten
percent or more of Lake Point I, II, III's net leasable area.
<TABLE>
<CAPTION>
Tenant Square Principal Base Rent Lease Renewal Option Other
Footage Business Per Annum Dates Information
<S> <C> <C> <C> <C> <C> <C>
1. Attorney's Title 27,360 Insurance $369,267 07/31/87- 2, 5 year ext. Step up
Insurance Fund 11/30/97 options rent
2. Jerry's Inc. (a) 32,400 Catering $174,629 02/01/89- 1, 5 year ext. --
01/31/99 options
3. Krogel Air Freight 14,824 Air $54,816 07/01/89- -- --
Freight 06/30/95
<FN>
(a) In March 1995, Jerry's Inc. was purchased by Alpha Flight Services.
The terms of the lease remain unchanged.
</TABLE>
<PAGE>
The following table provides lease expiration information relative to
Lake Point I, II, III.
<TABLE>
<CAPTION>
Year Number of Square Annualized Percentage of
Leases Footage Base Rent Total
Expiring Annualized
Base Rent
<S> <C> <C> <C> <C>
1995 3 24,280 $137,692 14%
1996 4 27,404 $223,140 22%
1997 2 29,196 $397,767 39%
1998 1 6,740 $76,460 8%
1999 1 32,400 $174,629 17%
</TABLE>
On April 15, 1994, the Partnership sold two of the six buildings at
Westside Industrials, representing 42,480 of the 105,560 square feet.
Westside Industrials consists of four one-story industrial warehouse
buildings comprising a total of 63,080 square feet. Construction is of
tilt panel with varying bay sizes, truck doors and restroom facilities.
The property is located in Phoenix, Arizona, at 34th Drive and Flower Road
which is just east of 35th Avenue and north of Thomas Road. Thomas Road is
a major four-lane east/west artery and 35th Avenue is a major four-lane
north/south artery. Interstate access is provided by the Black Canyon
Freeway (I-17) within one-half mile of the property to the southeast.
The following table provides information on tenants that occupy ten
percent or more of Westside Industrials' net leasable area.
<TABLE>
<CAPTION>
Tenant Square Principal Base Rent Lease Renewal Other
Footage Business Per Annum Dates Option Information
<S> <C> <C> <C> <C> <C> <C>
1. Milco 14,000 Vending $56,880 02/01/92- -- --
Services 01/31/95
2. Sylvania 8,000 Industrial $29,760 01/01/93- -- --
12/31/95
</TABLE>
The following table provides lease expiration information relative to
Westside Industrials.
<TABLE>
<CAPTION>
Year Number of Square Annualized Percentage of
Leases Footage Base Rent Total
Expiring Annualized
Base Rent
<S> <C> <C> <C> <C>
1995 7 35,120 $178,980 74%
1996 1 3,120 $11,232 5%
1997 1 6,000 $23,760 10%
1998 1 6,240 $27,000 11%
1999 -- -- -- --
</TABLE>
<PAGE>
The following list compares approximate occupancy levels by quarter
for the Partnership's investment properties during 1990, 1991, 1992,
1993 and 1994:
<TABLE>
<CAPTION>
Woodlands Westside Ind. Lake Point Westford
Plaza II Park I, II, III Corporate
Office Bldg. Phoenix, AZ (a) Service Center
St. Louis, Center Westford, MA
MO Orlando, FL (b)
<S> <C> <C> <C> <C>
1990
At 84% 86% 97% 100%
03/31
At 88% 86% 95% 100%
06/30
At 89% 80% 97% 100%
09/30
At 82% 93% 100% 60%
12/31
1991
At 75% 93% 96% 10%
03/31
At 75% 96% 96% 10%
06/30
At 82% 93% 91% 10%
09/30
At 82% 93% 91% 10%
12/31
1992
At 77% 97% 86% 60%
03/31
At 73% 97% 86% 60%
06/30
At 84% 97% 85% 60%
09/30
At 84% 97% 85% 60%
12/31
1993
At 87% 97% 88% 60%
03/31
At 80% 74% 88% 60%
06/30
At 90% 67% 94% 60%
09/30
At 81% 67% 93% 75%
12/31
1994
At 81% 67% 90% 75%
03/31
At 78% 100% 83% 85%
06/30
At 9/30 84% 85% 89% 100%
At 92% 80% 89% 100%
12/31
<FN>
(a) Two of six buildings at Westside Industrials were sold on April 15, 1994,
representing 42,480 of the 105,560 square feet.
<FN>
(b) See the Notes to Financial Statements for a description of the joint venture
partnership through which the Partnership has made this real property
investment. The Partnership owns a 26.08% interest in the joint venture
which owns the property.
</TABLE>
<PAGE>
Item 3. Legal Proceedings
Neither the Partnership nor its properties are party to, or the
subject of, any material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year covered by this report.
PART II
Item 5. Market for Registrant's Common Equity and Related Security Holder
Matters
As of December 31, 1994, there were approximately 3,934 record
holders of Units. There is no established public trading market for Units.
The General Partner will not redeem or repurchase Units.
The Revenue Act of 1987 adopted provisions which have an adverse
impact on investors in a "publicly traded partnership" ("PTP"). A PTP is a
partnership whose interests are traded on an established securities market
or readily tradable on a secondary market (or the substantial equivalent
thereof). If Registrant were classified as a PTP, (i) Registrant may be
taxed as a corporation, or (ii) income derived from an investment in
Registrant would be treated as non-passive income. In Notice 88-75, the
IRS established alternative safe harbors that allow interests in a
partnership to be transferred or redeemed in certain circumstances without
causing the partnership to be characterized as a PTP. Units of Registrant
are not listed or quoted for trading on an established securities exchange.
However, CFP will, upon request, provide a Limited Partner desiring to sell
or transfer Units with a list of secondary market firms which may provide a
means for matching potential sellers with potential buyers of Units, if
available. Frequent sales of Units utilizing these services could cause
the Registrant to be deemed a PTP. The Registrant has adopted a policy
prohibiting transfers of Units in secondary market transactions unless,
notwithstanding such transfers, Registrant will satisfy at least one of the
safe harbors. Although such a restriction could impair the ability of
investors to liquidate their investment, the service provided by CFP
described above should allow a certain number of transfers to be made in
compliance with the safe harbor. It is anticipated that such policy will
remain in effect until such time, if ever, as further clarification of the
Revenue Act of 1987 permits Registrant to lessen the scope of these
restrictions.
The Partnership declared quarterly cash distributions to limited
partners for 1994 and 1993 as set forth in the following table:
Cash Distribution per Unit
Quarter Date Paid (a) 1994 1993
1st May 15 $7.50 $ 8.10
2nd August 15 32.01 7.50
3rd November 15 5.01 6.99
4th February 15 3.12 3.66
$47.64 $26.25
[FN]
(a) Quarterly distributions are paid 45 days following the end of the
calendar quarter.
Reference is made to Item 6 for information on cash distributions
paid to limited partners during 1994, 1993, 1992, 1991, and 1990.
<PAGE>
There are no material legal restrictions upon the Partnership's
ability to make distributions in accordance with the provisions of the
Partnership Agreement. The Partnership intends to continue its policy of
making quarterly distributions of distributable cash from operations.
Reference is made to Notes to Financial Statements for a description of
payments to the State of Connecticut on behalf of limited partners and
charged to limited partner capital accounts.
Item 6. Selected Financial Data (a)
CONNECTICUT GENERAL EQUITY PROPERTIES - I LIMITED PARTNERSHIP
(a Connecticut limited partnership)
December 31, 1994, 1993, 1992, 1991, 1990
(not covered by Report of Independent Accountants)
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Total assets(b) $15,886,403 $18,116,233 $18,841,802 $23,231,572 $24,020,451
Total income 2,338,050 2,600,369 2,649,750 2,736,543 3,235,829
Net income (loss) (c) (232,492) 406,434 (2,651,499) 230,926 1,700,567
Net income (loss)
per Unit (c) (7.08) 10.26 (66.90) 5.83 41.16
Cash distributions to
limited partners (d) 1,890,411 1,174,738 1,727,963 1,040,549 7,540,417
Cash distributions
per Unit (d) 48.18 29.94 44.04 26.52 192.18
<FN>
(a)The above selected financial data should be read in conjunction with the financial
statements and the related notes appearing herein. Reference is made to Notes to
Financial Statements for a description of payments to the State of Connecticut on
behalf of limited partners. These payments are charged to limited partner capital
accounts and have not been included as part of the above presentation.
<FN>
(b)Total assets includes Partnership's equity investment in joint venture. See the
Notes to Financial Statements for a description of the joint venture.
<FN>
(c)Included in 1994 and 1992 are losses due to permanent impairment of assets of
$835,000 ($21.07 per Unit) and $2,791,040 ($70.42 per Unit), respectively. Included
in 1994 and 1990 are gains on sale of property of $245,873 ($195,721 to limited
partners or $4.99 per Unit) and $544,681 ($470,641 to limited partners or $12.00 per
Unit), respectively.
<FN>
(d)Quarterly distributions are paid 45 days following the end of the calendar
quarter. Cash distributions to limited partners for 1994 and 1990 include proceeds
from the sale of Buildings #1 and #2 of Westside Industrials and the Courtyard
Shopping Center, respectively.
</TABLE>
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
From the $39,236,250 of gross proceeds of the
offering, after deduction of selling expenses and other offering costs, the
Partnership had $35,602,279 with which to make investments in real
properties, to pay legal fees and other costs (including acquisition fees
related to such investments), for working capital reserves and to fund
extra lease-up costs. At December 31, 1986, the Partnership had completed
its investment of funds in real estate at an aggregate cost of $30,803,712
excluding acquisition fees and expenses. The $1,203,321 reserve to fund
extra lease-up costs and capital improvements set aside from gross proceeds
was exhausted during 1989.
On January 11, 1990, Courtyard Shopping Center was
sold for an all cash sales price of $6,445,000. The Partnership had
purchased Courtyard in 1985 for $6,000,000, excluding acquisition fees and
expenses. The excess proceeds from the sale, totalling approximately
$5,900,000, were distributed to the limited partners in August 1990.
At December 31, 1994, the Partnership's cash and
cash equivalents and the Partnership's share of cash and cash equivalents
from the Westford Office Venture totalled $368,015 and $495,786,
respectively, which will be used to fund liabilities, Partnership reserves
and a distribution to partners. The Partnership paid the first quarter
1994 cash distribution of $294,275 or $7.50 per Unit on May 15, 1994,
representative of the quarter's adjusted cash from operations. The
Partnership paid the second quarter 1994 distribution of $1,255,953 or
$32.01 per Unit on August 15, 1994, consisting of $1,059,379 or $27.00 per
Unit from the sale of two buildings at the Westside property and $196,574
or $5.01 per Unit, representative of the second quarter's adjusted cash
from operations. The Partnership paid the third quarter 1994 cash
distribution of $196,574 or $5.01 per Unit on November 15, 1994,
representative of the third quarter's adjusted cash from operations. The
fourth quarter distribution of $122,417 or $3.12 per unit was paid on
February 15, 1995 from the Partnership's reserves. The Partnership's
distributions for 1995 are expected to reflect actual operating results
subject to changes in reserves for liabilities or leasing risk.
During the second quarter of 1993, a major tenant,
representing 26% of net rentable space, ceased rental payments and vacated
Westside Industrials (formerly Interpark). In July 1993, the Partnership's
property manager collected the tenant's past due rents and negotiated and
collected a lease buy-out equivalent to one year's worth of base rent. The
tenant also leased an additional 7% of space which was subleased to a third
party and the Partnership's property manager was unable to obtain an
assignment of the sublease.
On April 15, 1994, the Partnership sold two of the
six buildings, representing 42,480 of the 105,560 square feet, at Westside
Industrials. The buildings were sold to Solman Brothers Leasing, Inc. for
a gross sales price of $1,115,100. After closing costs, the Partnership
netted $1,062,000 which was distributed to limited partners on August 15,
1994. For book purposes, the property had a carrying value of
approximately $816,000 and the Partnership recorded a gain of approximately
$246,000 ($195,721 allocated to limited partners or $4.99 per Unit). For
tax purposes, the property had a carrying value of approximately $1,142,000
and the Partnership recorded a loss of approximately $80,000 or $2.00 per
Unit as a result of the sale. At the time of sale, the two buildings were
only twenty-five percent occupied as a result of a premature lease
termination by the major tenant in 1993. After the major tenant vacated
in 1993, the Partnership marketed space to prospective tenants with little
response. A potential tenant, however, did express interest in purchasing
the two buildings. After a review of the recent sales in the market and
the offer, the offer was successfully countered and the sale was closed
expeditiously. The only recent comparable sales were closer to the
airport, a more desirable location, which involved either 100% office
build-out or were to user/owner buyers who tend to pay a premium over
market, at approximately $24 per square foot.
Early in 1995, a user/owner approached the manager
for the Westside property and offered to buy vacant building #6 (12,600
square feet, representing 100% of the vacant space at December 31, 1994) at
a gross price of $29 per square foot or a total gross sales price of
$366,400. The Partnership has allowed the buyer to perform due diligence
on the property. If no problems are encountered and the potential
purchaser obtains financing, a sale could take place during the second
quarter of 1995. The sale, reflecting an above market sales price, would
allow the Partnership to convert a current vacancy and potential leasing
problem into distributable cash to the partners.
<PAGE>
Operations at Westside for 1994 produced $136,000 of
adjusted cash from operations after payment of tenant improvements and
leasing commissions, compared with $205,000 for 1993. Results are down
from 1993 as the sale of a portion of the property has reduced potential
revenues. Leasing exposure, exclusive of building #6, stands at 35,120
square feet of which 21,120 is expected to be renewed. A lease for a
tenant currently occupying 14,000 square feet (not included in the renewal
numbers) expired on January 31, 1995. The tenant, currently held over as a
month to month, has requested to stay provided additional parking is
provided. Although a lot is available from an adjacent property owner, the
cost of purchasing a lot may not be recoverable by increases in rent.
Plans for 1995 include tenant improvements, leasing commissions and capital
expenditures of approximately $55,000 to accommodate the leasing activity
and some HVAC repairs.
Lake Point's adjusted cash from operations for the
year totalled approximately $505,000 in 1994 compared with $826,000 in
1993. A significant portion of the decrease, $133,000, is attributable to
the parking area repair project estimated at the beginning of 1994 at
$75,000. Tenant improvements and leasing commissions of $90,000 for 1994
were lower than the estimate at the beginning of the year. To complete an
aggressive leasing plan for 1995, the property is to sign renewals
representing 27,102 square feet and new leasing representing 22,644 square
feet. Based on this level of leasing activity, tenant improvements and
leasing commissions would approximate $380,000. Additionally, building
improvements are budgeted at $55,000.
Woodlands Plaza generated a $9,000 adjusted cash
from operations deficit after $305,000 of leasing commissions, tenant
improvements and capital expenditures, versus a positive $161,000 for 1993.
An extensive amount of leasing during 1994 (16,608 square feet of space was
leased) increased the occupancy percentage at Woodlands to 92% at December
31, 1994. Exposure for 1995 is 24,168 square feet, or 34% of net rentable
area, including an early termination of a 10,319 square foot tenant.
Tenant finish and leasing costs for leasing planned in 1995 is estimated to
be in the $13 to $15 per square foot range. The total for the year will be
dependant on the amount of leasing completed in 1995.
Westford Corporate Center is owned by a joint
venture partnership in which the Partnership owns a 26.08% equity
investment. Adjusted cash from operations at Westford Corporate Center for
1994 was $734,000 ($191,000 attributable to the Partnership's interest)
after tenant improvements and leasing commissions of $256,000. During the
second quarter, an existing tenant expanded by an additional 10% of total
space. During the third quarter, the tenant expanded further, leasing the
remaining 15% of vacant space. The third quarter expansion had brought the
property to 100% occupancy by September 30, 1994.
The Partnership's strategy includes property sales
in two to three years for each of the Partnership's wholly owned
properties. A sale of the Westford property, 26.08% owned through a joint
venture, may have to be held until the existing tenants' leases reach
expiration and are renewed or the space is leased to new tenants in 1998 or
1999.
Results of Operations
Partnership net operating income, (total revenue
less property operating expenses, general and administrative expenses and
fees and reimbursements to affiliates and exclusive of the Partnership's
share of the joint venture), decreased in 1994 to approximately $1,024,000
versus approximately $1,246,000 in 1993.
At Lake Point, net operating income decreased
approximately $109,000 in 1994. The decrease was primarily the result of
decreased occupancy at the service center as two tenants renewed but
downsized by 8,704 square feet or 6%. Other leasing efforts at Lake Point
resulted in a net loss in the number of tenants but a net gain in terms of
leased area of 3,206 square feet or 2%.
<PAGE>
Net operating income at Woodlands Plaza decreased
1994 by approximately $52,000 from 1993, due to decreased average occupancy
and lower recoveries of operating expenses and taxes in 1994.
At Westside Industrials net operating income
decreased approximately $89,000 in 1994 as compared with 1993. The
decrease was due primarily to decreased rental income resulting from the
loss of income from a lease buy out negotiated in 1993, the loss of 7,560
occupied square feet from the sale of buildings #1 and #2 in April 1994,
and the loss of three tenants occupying 12,600 square feet in the second
half of 1994.
The majority of the balance of the net operating
income change represents decreased Partnership level out-of-pocket
expenditures coupled with increased interest income in 1994.
Results - 1994 Compared with 1993
Rental income decreased by approximately $203,000
for the year ended December 31, 1994, as compared with 1993, as a result of
the tenant changes which have decreased rental income at each of the
Partnership's properties. Rental income at Woodlands Plaza decreased
approximately $37,000 due to decreased average occupancy at the property.
In addition, during the second quarter of 1993, a tenant at Woodlands paid
a premium to extend their occupancy beyond the lease expiration date. At
Westside Industrials, rental income decreased approximately $118,000, due
to the loss of income from a lease buy-out negotiated as part of an early
termination in 1993, the loss of 7,560 occupied square feet from the sale
of buildings #1 and #2 in April 1994, and the loss of tenants occupying
12,600 square feet in the latter half of 1994. Rental income at Lake Point
decreased approximately $48,000 due to decreased average occupancy and
renewal of several tenants at lower rates in the second quarter of 1994.
Other income decreased approximately $75,000 for the
year ended December 31, 1994, as compared with the 1993. The decrease was
due primarily to lower recoveries of operating expenses and taxes at
Woodlands and Lake Point. The decrease was expected at Woodlands as base
years have taken the place of expense stops on new and renewed leases in
addition to an overall drop in expenses at the property. The decrease at
Lake Point was due to decreased average occupancy. In addition, 1993
includes a $10,000 forfeited security deposit from the buy-out agreement at
Westside.
The increase in interest income for the year ended
December 31, 1994, as compared with 1993, was the result of an increase in
the Partnership's average cash balance attributable to the net proceeds from
the sale of buildings #1 and #2 of the Westside property and an increase in
rates during the year.
Property operating expenses decreased overall as a
result of decreases at Westside and Woodlands for the year ended December
31, 1994, as compared with 1993. The total decrease at Westside was due to
lower repairs and maintenance and property tax costs resultant from the
sale of buildings #1 and #2. In addition, Westside's 1993 results included
plumbing expenses and parking lot lighting. The decrease was partially
offset by exterior painting expenditures at Westside incurred in 1994. The
decrease at Woodlands was attributable to nonrecurring parking lot repairs
made during 1993 and decreased utility usage as a result of occupancy
changes in 1994. At Lake Point, real estate taxes increased in 1994 as a
result of an increase in the assessment value and millage rate.
Depreciation and amortization decreased for the year
ended December 31, 1994, as compared with 1993, due to the expiration of
the useful lives of certain assets.
In 1994 the Partnership recorded permanent
impairment losses relative to Woodlands Plaza and Westside due to estimated
future cash flow declines reflecting a change in the estimated holding
period of the Woodlands property and increased capital expenditures and
leasing costs at Westside.
The improvement in operating results by the joint
venture property for the year ended December 31, 1994, as compared with
1993, was due to the new tenant which took occupancy in October 1993 and
its subsequent expansions in April and September 1994.
<PAGE>
The gain on sale was the result of the sale of
buildings #1 and #2 of the Westside property in April 1994.
Results - 1993 Compared with 1992
Rental income increased by approximately $32,000,
net, for the year ended December 31, 1993, as compared with 1992, as a
result of the tenant changes at each of the Partnership's properties. Lake
Point and Westside increases were offset by a decrease at Woodlands.
Other income decreased for the year ended December
31, 1993, as compared to 1992, due to lower recoveries of operating
expenses and taxes at Woodlands Plaza of approximately $78,000. The
decrease was expected as base years have taken the place of expense stops
on new and renewed leases in addition to an overall drop in expenses at the
property. Increased occupancy at Lake Point and Westside resulted in an
approximately $8,000 and $12,000 increase in other income, respectively.
Included in other income is a $10,000 security deposit forfeiture from a
vacating tenant at Westside.
The decrease in property operating expenses for the
year ended December 31, 1993, as compared with 1992, was due to lower tax
expense, common area maintenance, repairs and tenant leasing costs at
Woodlands Plaza. During the first quarter, Woodlands received a refund as
a result of a 1990-1991 property tax appeal. Maintenance costs paid to the
business park are down as 1992's results included parking lot resurfacing.
The cleaning contract cost was also lower and some incidental lease
signing costs were expensed during 1992.
The decrease in the general and administrative
expense for the year ended December 31, 1993, as compared with 1992, was
due to decreased Partnership level allocated expenses.
Partnership management fees were higher for the year
ended December 31, 1993, as compared with the prior year, as 1992 adjusted
cash was affected by leasing commissions relative to the major tenant
taking occupancy at Westford during the year and higher capital
improvements at Woodlands Plaza.
Depreciation decreased for the year ended December
31, 1993, as compared with 1992, due to the permanent impairment losses
recorded in the fourth quarter of 1992, effectively lowering the
depreciable asset base. In addition, the expiration of the useful lives of
certain assets further affected depreciation.
The improvement in operating results by the joint
venture property for the year ended December 31, 1993, as compared with
1992, was due to the move in of a major tenant at the end of the first
quarter of 1992.
Inflation
With inflation at a low rate during 1994, 1993, and
1992, the effect of inflation and changing prices on current revenue and
income from operations has been minimal.
Any significant inflation in future periods may
increase rental rates (from leases to new tenants or renewals of leases to
existing tenants) assuming no major changes in market conditions. At the
same time, it is anticipated that property operating expenses will be
similarly affected. Assuming no major changes in occupancy levels,
increases in rental income are expected to cover inflation driven increases
in the cost of operating the properties and in property taxes.
Inflation may also contribute to capital
appreciation of the Partnership's investment properties over a period of
time as rental rates and replacement costs of properties increase.
The recapture and escalation clauses that exist on
certain of the leases at each of the Partnership's remaining four
properties offer the Partnership some protection against inflation.
Escalation clauses offset the increases in operating expenses under
inflation. As operating expenses increase due to inflation so will the
escalation revenues due to the Partnership, offsetting, at least in part,
the increase in total expenses. The recapture provisions protect the
Partnership from rising costs of common area maintenance as well as taxes
and other operating expenses by passing these increases through, at least
partially, to the lessees.
<PAGE>
Item 8. Financial Statements and Supplementary Data
CONNECTICUT GENERAL EQUITY PROPERTIES - I LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Index
Page
Report of Independent Accountants 18
Financial Statements:
Balance Sheets, December 31, 1994 and 1993 19
Statements of Operations, For the Years Ended
December 31, 1994, 1993 and 1992 20
Statements of Partners' Capital (Deficit),
For the Years Ended December 31, 1994, 1993 and 1992 21
Statements of Cash Flows, For the Years Ended
December 31, 1994, 1993 and 1992 22
Notes to Financial Statements 23
Schedules:
III - Real Estate and Accumulated Depreciation, December 31, 1994 28
Schedules not filed:
All schedules other than those indicated in the index have been
omitted as the required information is inapplicable or the information is
presented in the financial statements or related notes.
CONNECTICUT GENERAL EQUITY PROPERTIES - I LIMITED PARTNERSHIP
Unconsolidated Venture
Westford Office Venture
Index
Page
Report of Independent Accountants 29
Financial Statements:
Balance Sheets, December 31, 1994 and 1993 30
Statements of Operations, For the Years Ended
December 31, 1994, 1993 and 1992 31
Statements of Partners' Capital, For the Years Ended
December 31, 1994, 1993 and 1992 32
Statements of Cash Flows, For the Years Ended
December 31, 1994, 1993 and 1992 33
Notes to Financial Statements 34
Schedules:
III - Real Estate and Accumulated Depreciation, December 31, 1994 37
Schedules not filed:
All schedules other than those indicated in the index have been
omitted as the required information is inapplicable or the information is
presented in the financial statements or related notes.
<PAGE>
Report of Independent Accountants
To the Partners of
Connecticut General Equity Properties I
Limited Partnership
In our opinion, the financial statements listed in the accompanying index
present fairly, in all material respects, the financial position of
Connecticut General Equity Properties I Limited Partnership at December 31,
1994 and 1993, and the results of its operations and its cash flows for
each of the three years in the period ended December 31, 1994, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Partnership's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Hartford, Connecticut
February 22, 1995
<PAGE>
CONNECTICUT GENERAL EQUITY PROPERTIES - I LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Balance Sheets
December 31, 1994 and 1993
<TABLE>
<CAPTION>
Assets 1994 1993
<S> <C> <C>
Property and improvements, at cost:
Land and improvements $2,810,237 $3,321,033
Buildings 13,002,842 14,209,754
Tenant improvements 2,879,677 2,691,085
18,692,756 20,221,872
Less accumulated depreciation 6,686,953 6,296,738
Net property and improvements 12,005,803 13,925,134
Equity investment in unconsolidated joint venture 3,043,024 2,940,597
Cash and cash equivalents 368,015 693,863
Accounts receivable (net of allowance of $1,684 in
1994 and $5,318 in 1993) 97,349 135,621
Prepaid expenses and other assets 76,872 83,714
Deferred charges, net 295,340 337,304
Total $15,886,403 $18,116,233
</TABLE>
<TABLE>
<CAPTION>
Liabilities and Partners' Capital (Deficit)
<S> <C> <C>
Liabilities:
Accounts payable (including $9,324 in
1994 and $59,926 in 1993 due to affiliates) $220,449 $275,700
Tenant security deposits 102,076 102,720
Unearned income 6,269 48,403
Total liabilities 328,794 426,823
Partners' capital (deficit):
General Partner:
Capital contributions 1,000 1,000
Cumulative net income 143,212 97,844
Cumulative cash distributions (156,705) (148,368)
(12,493) (49,524)
Limited partners (39,236.25 Units):
Capital contributions, net
of offering costs 35,602,279 35,602,279
Cumulative net income 2,549,406 2,827,266
Cumulative cash distributions (22,581,583) (20,690,611)
15,570,102 17,738,934
Total partners' capital 15,557,609 17,689,410
Total $15,886,403 $18,116,233
<FN>
The Notes to Financial Statements are an integral part of these statements.
</TABLE>
<PAGE>
CONNECTICUT GENERAL EQUITY PROPERTIES - I LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Statements of Operations
For the Years Ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Income:
Base rental income $2,075,169 $2,278,062 $2,246,143
Other operating income 209,731 284,251 342,708
Interest income 53,150 38,056 60,899
2,338,050 2,600,369 2,649,750
Expenses:
Property operating expenses 981,864 1,024,209 1,035,596
General and administrative 151,281 143,965 152,335
Fees and reimbursements to
affiliates 181,076 186,304 191,122
Depreciation and amortization 769,621 859,774 1,092,320
Loss due to permanent impairment
of assets 835,000 -- 1,800,000
2,918,842 2,214,252 4,271,373
Net partnership operating
income (loss) (580,792) 386,117 (1,621,623)
Other income (loss):
Gain on sale of property 245,873 -- --
Equity interest in joint venture
net income (loss) 102,427 20,317 (1,029,876)
Net income (loss) $(232,492) $406,434 $(2,651,499)
Net income (loss):
General Partner 45,368 $4,064 $ (26,515)
Limited partners (277,860) 402,370 (2,624,984)
$(232,492) $406,434 $(2,651,499)
Net income (loss) per Unit $(7.08) $10.26 $ (66.90)
Cash distributions per Unit $48.19 $ 29.95 $ 44.06
<FN>
The Notes to Financial Statements are an integral part of the statements.
</TABLE>
<PAGE>
CONNECTICUT GENERAL EQUITY PROPERTIES - I LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Statements of Partners' Capital (Deficit)
For the Years Ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
General Limited
Partner partners Total
<S> <C> <C> <C>
Balance (deficit) at December 31, 1991 $(7,278) $22,865,264 $22,857,986
Cash distributions (6,222) (1,728,654) (1,734,876)
Net loss (26,515) (2,624,984) (2,651,499)
Balance (deficit) at December 31, 1992 (40,015) 18,511,626 18,471,611
Cash distributions (13,573) (1,175,062) (1,188,635)
Net income 4,064 402,370 406,434
Balance (deficit) at December 31, 1993 (49,524) 17,738,934 17,689,410
Cash distributions (8,337) (1,890,972) (1,899,309)
Net income 45,368 (277,860) (232,492)
Balance (deficit) at December 31, 1994 $(12,493) $15,570,102 $15,557,609
<FN>
The Notes to Financial Statements are an integral part of these statements.
</TABLE>
<PAGE>
CONNECTICUT GENERAL EQUITY PROPERTIES - I LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Statements of Cash Flows
For the Years Ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $(232,492) $406,434 $(2,651,499)
Adjustments to reconcile net
income (loss) to net cash
provided by operating activities:
Loss due to permanent impairment
of assets 835,000 -- 1,800,000
Gain on sale of property (245,873) -- --
Deferred rent credits 43,252 63,085 59,312
Depreciation and amortization 769,621 859,774 1,092,320
Equity interest in joint venture
net (income) loss (102,427) (20,317) 1,029,876
Accounts receivable 38,272 (69,517) 14,264
Accounts payable (66,507) 21,423 46,786
Other, net (35,936) 28,531 23,176
Net cash provided by operating
activities 1,002,910 1,289,413 1,414,235
Cash flows from investing activities:
Purchases of property and
improvements (412,099) (170,503) (280,047)
Payment of leasing commissions (79,587) (62,376) (41,245)
Proceeds from sale of property 1,115,100 -- --
Payment of closing costs related
to sale of property (53,100) -- --
Net cash provided by (used in)
investing activities 570,314 (232,879) (321,292)
Cash flows from financing activities:
Cash distributions to limited
partners (1,890,735) (1,175,156) (1,728,236)
Cash distributions to General
Partner (8,337) (4,604) (6,222)
Net cash used in financing
activities (1,899,072) (1,179,760) (1,734,458)
Net decrease in cash and cash equivalents (325,848) (123,226) (641,515)
Cash and cash equivalents, beginning
of year 693,863 817,089 1,458,604
Cash and cash equivalents, end of year $368,015 $693,863 $817,089
Supplemental disclosure of non-cash information:
Accrued purchase of property
and improvements $43,019 $32,000 $ --
<FN>
The Notes to Financial Statements are an integral part of the statements.
</TABLE>
<PAGE>
CONNECTICUT GENERAL EQUITY PROPERTIES - I LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Notes to Financial Statements
1. Organization and Basis of Accounting
The General Partner of Connecticut General Equity Properties - I
Limited Partnership (the "Partnership") is Connecticut General Realty
Resources, Inc. - Third (the "General Partner"), an indirect, wholly owned
subsidiary of CIGNA Corporation.
The Partnership's records are maintained on the accrual basis of
accounting for financial reporting purposes and are adjusted for federal
income tax reporting. The net effect of the adjustments as of December 31,
1994, 1993 and 1992, principally relating to the classification of
syndication costs, differences in depreciation methods and permanent
impairment losses, are summarized as follows:
<TABLE>
<CAPTION>
1994 1993 1992
Financial Tax Financial Tax Financial Tax
Reporting Reporting Reporting Reporting Reporting Reporting
<S> <C> <C> <C> <C> <C> <C>
Total assets $15,886,403 $24,728,396 $18,116,233 $26,239,834 $18,841,802 $26,716,285
Partners' capital
(deficit):
General Partner (12,493) (24,632) (49,524) (20,733) (40,015) (13,664)
Limited partners 15,570,102 24,430,553 17,738,934 25,882,197 18,511,626 26,413,400
Net income (loss) (a):
General Partner 45,368 4,438 4,064 6,503 (26,515) 6,580
Limited partners (277,860) 439,328 402,370 643,807 (2,624,984) 651,482
Net income (loss)
per Unit(a): (7.08) 11.20 10.26 16.41 (66.90) 16.60
<FN>
(a) Included in 1994 is $835,000 of loss due to permanent impairment of assets
for financial reporting only ($21.07 per Unit) and a gain on sale of property
of $245,873 ($195,721 or $4.99 per Unit to limited partners) for financial
reporting purposes and a loss of $80,448 ($2.03 per Unit) for tax reporting.
Included in 1992 is a $2,791,040 ($70.42 per Unit) of loss due to permanent
impairment of assets for financial reporting only.
</TABLE>
2. Summary of Significant Accounting Policies
a) Property and Improvements: Property and improvements are carried
at cost less accumulated depreciation. The cost represents the
initial purchase price, subsequent capitalized costs and
adjustments, including certain acquisition expenses and permanent
impairment losses. Amounts received under master lease agreements
have been treated as a reduction of the related property's purchase
price. Depreciation on the property and improvements is calculated
on the straight-line method based on the estimated useful lives of
buildings and land improvements (15 to 31.5 years) and tenant
improvements (the respective lease terms). Maintenance and repair
expenses are charged to operations as incurred.
As a result of inherent changes in market values of real estate
property and improvements, the Partnership reviews potential
impairment annually. The undiscounted future cash flows for each
property, as estimated by the Partnership, is compared to the
carrying value. If the carrying value is greater than the sum of
the estimated future undiscounted cash flows, and deemed permanent,
an impairment loss is recorded.
In November 1993, the Financial Accounting Standards Board issued a
Proposed Statement of Financial Accounting Standards, "Accounting
for the Impairment of Long-Lived Assets". Under the Proposed
Statement, entities should continue to compare the sum of the
expected undiscounted future net cash flows to the carrying amount
of the asset. If an impairment exists, the loss shall be measured
as the amount by which the carrying value of the asset exceeds the
fair value of the asset. Fair value of the asset shall be measured
by its market value if an active market for that asset exists. If
no market price is available, a forecast of expected discounted
future net cash flows should be used. The discount rate applied
should be commensurate with the risk involved. The effective date
of a final statement is fiscal years beginning after June 15, 1995.
The effect of the Proposed Statement on the financial position and
results of operations of the Partnership in the year of adoption
can not be reasonably estimated.
<PAGE>
b) Equity Investment in Unconsolidated Joint Venture: The Partnership
uses the equity method of accounting with respect to it's interest
in the Westford Office Venture, a joint venture partnership with an
affiliated limited partnership.
c) Cash and Cash Equivalents: Short-term investments with a maturity
of three months or less at the time of purchase are generally
reported as cash equivalents.
d) Prepaid Expenses and Other Assets: Prepaid expenses at December
31, 1994, consist of prepaid insurance costs at each property.
Other assets at December 31, 1994, include a receivable of $56,480
from a tenant at Lake Point for reimbursement of tenant improvement
costs.
e) Deferred Charges: Deferred charges consist of leasing commissions
and rental concessions, which are being amortized using the
straight-line method over the respective lease terms.
f) Partner's Capital: Offering costs comprised of sales commissions
and other issuance expenses have been charged to the partners'
capital accounts as incurred.
g) Income Taxes: No provision for income taxes has been made as the
liability for such taxes is that of the partners rather than the
Partnership.
h) Basis of Presentation: Certain amounts in the 1992 and 1993
Financial Statements have been reclassified to conform to the 1994
presentation.
3. Investment Properties
At December 31, 1994, the Partnership owned three commercial
properties directly and a 26.08% interest in another through a joint
venture with an affiliated partnership. The properties are located in
Missouri, Arizona, Florida and Massachusetts. At December 31, 1994, the
properties were operating with leases in effect generally for a term of
three to ten years. No mortgage debt was incurred in the purchase of the
Partnership's properties.
On January 11, 1990, the Partnership sold the Courtyard Shopping
Center for $6,445,363. The carrying value of the center at the time of
sale was $5,666,874. After deducting closing costs of $233,808, the
Partnership recorded a gain on the sale of $544,681.
With respect to the Partnership's accounting policy for impairment
of assets, the Partnership recognized permanent impairment of asset losses
in 1994 and 1992. In 1994, the Partnership recorded impairments of
$600,000 and $235,000 relative to Woodlands Plaza and Westside,
respectively. In 1994, the impairment loss for Westside was the result of
an anticipated decline in estimated future cash flow resulting from
budgeted increases in capital expenditures and leasing costs to cure
current and future vacancies. For Woodlands Plaza, the estimated holding
period of the property was shortened. In 1992, the Partnership recorded
impairments of $1,100,000 and $700,000 relative to Woodlands Plaza and
Westside, respectively. Additionally, in 1992, the Partnership recorded a
permanent impairment of asset loss relative to its joint venture interest
in Westford Corporate Center of $991,040. In 1992, estimated future cash flows
declined at Woodlands and Westside reflecting changes in estimated potential
revenue from future leasing. As a result of the oversupply of space and the
continued downward pressure on rental rates in the markets in which these
properties operate, expected future rental rates would be renewed and/or
negotiated to lower rates. At Westford, the estimated holding period was
reduced.
<PAGE>
4. Venture Agreement
The Partnership has a 26.08% interest in the Westford Office
Venture, which owns the Westford Corporate Center, an office and
research/development facility. Westford Office Venture is a joint venture
between the Partnership and CIGNA Income Realty-I Limited Partnership, an
affiliated limited partnership.
Summary financial information for the Westford Office Venture as of
and for the years ended December 31, 1994, 1993 and 1992 follows:
1994 1993 1992
Total assets $12,671,892 $12,343,992 $12,236,605
Total liabilities 749,320 814,161 784,678
Total income 1,686,829 1,280,650 978,140
Net income (loss)(a) 392,741 77,904 (3,948,912)
[FN]
(a) Included in 1992 is a $3,800,000 loss due to permanent impairment of
assets.
Pursuant to the Joint Venture Agreement, net income or loss, cash
distributions from operations, net income and distributable cash from the
sale or disposition of the property are generally allocated to the
venturers in accordance with their percentage capital contributions.
Percentage interests are subject to change in the future if any additional
contributions made by the venturers to the Venture are disproportionate to
their present percentage interests.
No distributions were made by the Venture in 1994, 1993 or 1992.
5. Deferred Charges
Deferred charges at December 31, 1994 and 1993 consist of the
following:
1994 1993
Deferred leasing commissions $880,435 $804,311
Accumulated amortization (660,477) (585,641)
219,958 218,670
Deferred rent credits 75,382 118,634
$295,340 $337,304
<PAGE>
6. Leases
All of the properties have leases currently in effect which are
accounted for as operating leases. The majority have terms which range
from three to five years. Following is a schedule of minimum annual future
rentals based upon non-cancelable leases currently in effect, assuming no
exercise of tenant renewal options (does not include leases relative to the
Partnership's interest in the Westford Office Venture).
Year ending December 31:
1995 $1,920,498
1996 1,487,033
1997 1,052,065
1998 527,765
1999 116,830
Certain of the leases contain provisions whereby tenants pay their
pro rata share of any increases in common area maintenance, taxes and
operating expenses over base period amounts. Pursuant to such provisions,
the Partnership earned $202,036 in 1994, $248,679 in 1993 and $261,195 in
1992. These amounts are included in other income on the Statement of
Operations.
7. Transactions with Affiliates
Fees and other expenses incurred by the Partnership related to the
General Partner or its affiliates during the periods ended December 31,
1994, 1993 and 1992 are:
1994 1993 1992
Partnership
management fee(a) $80,512 $88,709 $82,084
Property management
fees(b)(c) 140,082 158,489 153,475
Printing 11,407 13,036 13,263
Reimbursement (at cost) for
out of pocket expenses 44,138 31,362 42,067
[FN]
(a) Includes management fees attributable to the Partnership's 26.08%
interest in the Westford Office Venture.
[FN]
(b) In 1994, 1993 and 1992, $95,063, $105,292 and $99,767, respectively,
of these fees were for services contracted by CIGNA Investments, Inc.,
an affiliate of the General Partner, on behalf of the Partnership but
paid directly by the Partnership to independent third party management
companies.
[FN]
(c) Does not include management fees of $26,418, $18,727 and $14,958
attributable to the Partnership's 26.08% interest in the Westford
Office Venture for the years ended December 31, 1994, 1993 and 1992,
respectively.
8. Partners' Capital
During 1991, the State of Connecticut enacted new income tax
legislation, a part of which affects partnerships. The portfolio income
allocations made by the Partnership to the limited partners are considered
Connecticut based income and subject to Connecticut tax. On April 13,
1994, the Partnership paid the tax due on its 1993 Form CT-G State of
<PAGE>
CONNECTICUT GENERAL EQUITY PROPERTIES - I LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Notes to Financial Statements - Continued
Connecticut Group Income Tax Return. The Partnership has elected to pay
the tax due on the limited partners' share of portfolio income and,
therefore, paid tax due of $324 directly to the State of Connecticut. The
Partnership also accrued the 1994 estimated payment of $561 as of December
31, 1994. These amounts were treated as reductions of partners' capital
and reported as distributions in the accompanying financial statements.
9. Sale of Investment Property
Westside Industrials consisted of six one-story industrial warehouse
buildings with total square footage of 105,560. On April 15, 1994, the
Partnership sold buildings #1 and #2 (totalling 42,480 square feet) of
Westside Industrials for $1,115,100. The net proceeds to the Partnership
were $1,062,000 after deducting closing costs. The two buildings had a
carrying value of $816,127 and the Partnership recorded a gain of $245,873.
10. Partnership Agreement
Pursuant to the terms of the Partnership Agreement, net income or
loss and cash distributions from operations, as well as any net losses
arising from the sale or disposition of investment properties are to be
allocated 1% to the General Partner and 99% to the Limited Partners. Cash
distributions are allocated to the Partners following the receipt by an
affiliate of the General Partner of a partnership management fee of 9% of
"Adjusted Cash From Operations", as defined in the Partnership Agreement.
Distributable cash from the sale or disposition of investment
properties is to be generally allocated in the following order:
- To the Limited Partners up to the amount of their Original
Invested Capital.
- To the Limited Partners in an amount which, when added to
prior distributions from operations, equals a 10% cumulative
non-compounded return on their Adjusted Invested Capital.
- To an affiliate of the General Partner as a Subordinated
Disposition Fee.
- With respect to the remainder, 85% to the Limited Partners and
15% to the General Partner.
Net income from the sale or disposition of investment properties
is to be generally allocated as follows:
- To each Partner having a deficit balance in his capital
account in the same ratio as such deficit balance bears to the
aggregate of deficit balances of all Partners.
- To the Partners in an amount equal to that distributed to them
in respect of such sale or disposition.
- With respect to the remainder, 99% to the Limited Partners and
1% to the General partner.
11. Subsequent Events
On February 15, 1995, the Partnership paid a cash distribution of
$122,417 to the limited partners.
<PAGE>
CONNECTICUT GENERAL EQUITY PROPERTIES-I LIMITED PARTNERSHIP SCHEDULE III
(a Connecticut limited partnership)
Real Estate and Accumulated Depreciation
December 31, 1994
<TABLE>
<CAPTION>
Costs
Initial Cost to Partnership (A)(B) Capitalized
Subsequent to Life on Which
Acquisition (C)(D) Depreciation
in Latest
Statement of
Land and Land Land, Building and Date of Date Operations is
Description Improvements Buildings Improvements Construction Acquired Computed
<S> <C> <C> <C> <C> <C> <C>
Woodlands Plaza II $1,252,294 $6,436,730 $(232,504) 1983 10/15/84 2-31.5 years
Office Building
St. Louis, MO
Westside Industrials 1,056,000 2,117,074 (1,570,353) 1977 02/01/85 2-31.5 years
Phoenix, AZ
Lake Point I, II, III 1,413,971 6,615,761 1,603,783 1985 07/31/86 2-31.5 years
Service Center
Orlando, FL
Totals $3,722,265 $15,169,565 $(199,074)
</TABLE>
<TABLE>
<CAPTION>
Gross Amount at Which Carried at Close of Period (E)(F)
Land and Land Building and Tenant Accumulated
Description Improvements Improvements Improvements Total Depreciation (G)
<S> <C> <C> <C> <C> <C>
Woodlands Plaza II $980,294 $ 5,442,877 $1,033,349 $ 7,456,520 $2,896,655
Office Building
St. Louis, MO
Westside Industrials 428,318 970,839 203,564 1,602,721 601,229
Phoenix, AZ
Lake Point I, II, III 1,401,625 6,589,126 1,642,764 9,633,515 3,189,069
Service Center
Orlando, FL
Totals $2,810,237 $13,002,842 $2,879,677 $18,692,756 $6,686,953
<FN>
(A) The cost to the Partnership represents the initial purchase price of the properties
including certain acquisition fees and expenses. In accordance with the Partnership
Agreement, all properties were acquired without incurring any mortgage debt.
<FN>
(B) The Partnership received $475,617 and $1,294,910 from the sellers of Woodlands Plaza II
and Lake Point I, II, III, respectively, under master lease agreements, which were
treated as a reduction of initial cost to the Partnership.
<FN>
(C) Included in Costs Capitalized Subsequent to Acquisition are losses on permanent
impairment of assets for Woodlands Plaza II and Westside Industrials in the
amounts of $600,000 and $235,000, respectively, for 1994 and $1,100,000 and $700,000,
respectively, for 1992.
<FN>
(D) Includes the sale of two of the six buildings at Westside Industrials during 1994
<FN>
(E) The aggregate cost of the real estate owned at December 31, 1994 for federal income
tax purposes is $ 22,038,928.
<FN>
(F) Reconciliation of real estate owned:
</TABLE>
<TABLE>
<CAPTION>
Description 1994 1993 1992
<S> <C> <C> <C>
Balance at beginning of period 20,221,872 $20,019,369 $21,578,722
Additions during period 423,118 202,503 240,647
Reductions during period(C)(D) (1,952,234) -- (1,800,000)
Balance at end of period $18,692,756 $20,221,872 $20,019,369
</TABLE>
[FN]
(G) Reconciliation of accumulated depreciation.
<TABLE>
<CAPTION>
Description 1994 1993 1992
<S> <C> <C> <C>
Balance at beginning of period 6,296,738 $5,532,115 $4,560,223
Additions during period 692,861 764,623 971,892
Reductions during period (D) (302,646) -- --
Balance at end of period $6,686,953 $6,296,738 $5,532,115
</TABLE>
<PAGE>
Report of Independent Accountants
To the Partners of
Connecticut General Equity Properties - I
Limited Partnership
In our opinion, the financial statements listed in the accompanying
index (see page 17) present fairly, in all material respects, the financial
position of Westford Office Venture at December 31, 1994 and 1993, and the
results of its operations and its cash flows for each of the three years
ended December 31, 1994, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the
Partnership's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of
these statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion
expressed above.
PRICE WATERHOUSE LLP
Hartford, Connecticut
February 22, 1995
<PAGE>
CONNECTICUT GENERAL EQUITY PROPERTIES - I LIMITED PARTNERSHIP
Unconsolidated Venture
Westford Office Venture
Balance Sheets
December 31, 1994 and 1993
<TABLE>
<CAPTION>
Assets 1994 1993
<S> <C> <C>
Property and improvements, at cost:
Land and improvements $2,501,875 $2,501,875
Buildings 10,716,382 10,716,382
Tenant improvements 1,492,102 1,275,322
14,710,359 14,493,579
Less accumulated depreciation 4,209,052 3,712,142
Net property and improvements 10,501,307 10,781,437
Cash and cash equivalents 1,901,019 1,172,985
Accounts receivable 885 118,382
Prepaid expenses and other assets 16,401 2,938
Deferred charges, net 252,280 268,250
Total $12,671,892 $12,343,992
</TABLE>
<TABLE>
<CAPTION>
Liabilities and Partners' Capital
<S> <C> <C>
Liabilities:
Accounts payable (including $9,317 in 1994
and $28,972 in 1993 due to affiliates) $24,648 $89,489
Deferred acquisition fees payable to
affiliate 724,672 724,672
Total liabilities 749,320 814,161
Partners' capital:
CGEP:
Capital contributions 4,718,527 4,718,527
Cumulative cash distributions (1,825,600) (1,825,600)
Cumulative net income 150,097 47,670
3,043,024 2,940,597
CIR:
Capital contributions 13,439,197 13,439,197
Cumulative cash distributions (5,174,400) (5,174,400)
Cumulative net income 614,751 324,437
8,879,548 8,589,234
Total partners' capital 11,922,572 11,529,831
Total $12,671,892 $12,343,992
<FN>
The Notes to Financial Statements are an integral part of these statements.
</TABLE>
<PAGE>
CONNECTICUT GENERAL EQUITY PROPERTIES - I LIMITED PARTNERSHIP
Unconsolidated Venture
Westford Office Venture
Statements of Operations
For the Years Ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Income:
Base rental income $1,342,969 $1,121,765 $895,841
Other income 288,888 130,370 63,173
Interest income 54,972 28,515 19,126
1,686,829 1,280,650 978,140
Expenses:
Property operating expenses 633,601 608,323 437,582
General and administrative 57,198 54,125 60,800
Fees and reimbursements to
affiliates 50,651 35,855 28,948
Depreciation and amortization 552,638 504,443 599,722
Loss due to permanent impairment
of assets -- -- 3,800,000
1,294,088 1,202,746 4,927,052
Net income (loss) $392,741 $77,904 $(3,948,912)
Net income (loss):
CGEP $102,427 $20,317 $(1,029,876)
CIR 290,314 57,587 (2,919,036)
$392,741 $77,904 $(3,948,912)
<FN>
The Notes to Financial Statements are an integral part of these statements.
</TABLE>
<PAGE>
CONNECTICUT GENERAL EQUITY PROPERTIES - I LIMITED PARTNERSHIP
Unconsolidated Venture
Westford Office Venture
Statements of Partners' Capital
For the Years Ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
CGEP CIR Total
<S> <C> <C> <C>
Balance at December 31, 1991 $3,950,156 $10,726,011 $14,676,167
Capital contributions -- 724,672 724,672
Net loss (1,029,876) (2,919,036) (3,948,912)
Balance at December 31, 1992 2,920,280 8,531,647 11,451,927
Net income 20,317 57,587 77,904
Balance at December 31, 1993 2,940,597 8,589,234 11,529,831
Net income 102,427 290,314 392,741
Balance at December 31, 1994 $3,043,024 $8,879,548 $11,922,572
<FN>
The Notes to Financial Statements are an integral part of these statements.
</TABLE>
<PAGE>
CONNECTICUT GENERAL EQUITY PROPERTIES - I LIMITED PARTNERSHIP
Unconsolidated Venture
Westford Office Venture
Statements of Cash Flows
For the Years Ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $392,741 $77,904 $(3,948,912)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Loss due to permanent
impairment of assets -- -- 3,800,000
Depreciation and amortization 552,638 504,443 599,722
Accounts receivable 117,497 (118,382) 22,116
Accounts payable (33,616) (1,742) 43,937
Other, net (13,463) 10,017 (1)
Net cash provided by
operating activities 1,015,797 472,240 516,862
Cash flows from investing activities:
Purchases of property and
improvements (248,005) (119,429) (797,758)
Payment of leasing commissions (39,758) (41,715) (308,038)
Net cash used in investing
activities (287,763) (161,144) (1,105,796)
Cash flows from financing activities:
Capital contributions -- -- 724,672
Net cash provided by
financing activities -- -- 724,672
Net increase in cash and cash equivalents 728,034 311,096 135,738
Cash and cash equivalents,
beginning of year 1,172,985 861,889 726,151
Cash and cash equivalents, end of year $1,901,019 $1,172,985 $861,889
Supplemental disclosure of non-cash information:
Accrued purchase of property and
improvements $-- $31,225 $--
<FN>
The Notes to Financial Statements are an integral part of these statements.
</TABLE>
<PAGE>
CONNECTICUT GENERAL EQUITY PROPERTIES - I LIMITED PARTNERSHIP
Unconsolidated Venture
Westford Office Venture
Notes to Financial Statements
1. Organization
Westford Office Venture (the "Venture") is a joint venture
partnership in which Connecticut General Equity Properties - I Limited
Partnership ("CGEP") owns a 26.08 percent direct interest. The remaining
73.92 percent interest is held by CIGNA Income Realty - I Limited
Partnership ("CIR"), an affiliated limited partnership.
2. Summary of Significant Accounting Policies
a) Property and Improvements: Property and improvements is carried at
cost less accumulated depreciation. The cost represents the
initial purchase price, subsequent capitalized costs and
adjustments, including certain acquisition expenses and permanent
impairment loss. Amounts received under the master lease agreement
from the seller of the Westford Corporate Center were treated as a
reduction of the property purchase price. Depreciation on property
and improvements is calculated on the straight-line method based on
the estimated useful lives of buildings and improvements (15 to
31.5 years) and tenant improvements (the respective lease terms).
Maintenance and repair expenses are charged to operations as
incurred.
As a result of inherent changes in market values of real property,
the Partnership reviews potential impairment annually. The
undiscounted future cash flows for each property, as estimated by
the Partnership, is compared to the carrying value. If the
carrying value is greater than the sum of the estimated future
undiscounted cash flows, and deemed permanent, an impairment loss
is recognized currently.
In November 1993, the Financial Accounting Standards Board issued a
Proposed Statement of Financial Accounting Standards, "Accounting
for the Impairment of Long-Lived Assets". Under the Proposed
Statement, entities should continue to compare the sum of the
expected undiscounted future net cash flows to the carrying amount
of the asset. If an impairment exists, the loss shall be measured
as the amount by which the carrying value of the asset exceeds the
fair value of the asset. Fair value of the asset shall be measured
by its market value if an active market for that asset exists. If
no market price is available, a forecast of expected discounted
future net cash flows should be used. The discount rate applied
should be commensurate with the risk involved. The effective date
of a final statement is fiscal years beginning after June 15, 1995.
b) Cash and Cash Equivalents: Short-term investments with a maturity
of three months or less at the time of purchase are generally
reported as cash equivalents.
c) Deferred Charges: Deferred charges consist of leasing costs which
are amortized using the straight-line method over the respective
lease terms.
d) Income Taxes: No provision for income taxes has been made as the
liability for such taxes is that of the limited partners of the
partnership involved in the venture.
e) Basis of Presentation: Certain amounts in the 1992 and 1993
Financial Statements have been reclassified to conform to the 1994
presentation.
<PAGE>
3. Investment Property
The Venture purchased Westford Corporate Center located in
Westford, Massachusetts, without incurring any long-term debt.
The Venture recognized a permanent impairment of asset loss in 1992
of $3,800,000 principally due to a reduction in the estimated holding
period.
4. Deferred Charges
Deferred charges at December 31, 1994 and 1993 consist of the
following:
1994 1993
Deferred leasing costs $441,543 $401,785
Accumulated amortization (189,263) (133,535)
$252,280 $268,250
5. Leases
The property is leased under leases which are accounted for as
operating leases, having remaining lease terms which range from three to
seven years. Following is a schedule of minimum annual future rentals based
upon non-cancelable commercial leases currently in effect, assuming no exercise
of tenant renewal options:
Year ending December 31:
1995 $1,481,811
1996 1,326,387
1997 1,326,387
1998 1,326,387
1999 331,597
Thereafter --
In 1994 and 1993, leases representing 50% and 25%, respectively, of
the space provided for the tenant to pay its pro rata share of increases in
operating expenses over base period amounts. The remaining tenant,
representing 50% of the space, is operating under a gross lease. During
1994, 1993 and 1992 the Venture earned $288,888, $130,370, and $63,173,
respectively, under such provisions.
6. Transactions with Affiliates
An affiliate of the venturers provided investment property
acquisition services in 1986. Fees for such services totalled
approximately $1,000,000 in 1986 of which $724,672 will be payable from
adjusted cash from operations after priority distributions to the partners,
or if necessary, from sales proceeds.
During 1994, 1993 and 1992 CIGNA Investments, Inc. provided
property management services at Westford Corporate Center for fees
calculated at 6% of gross property revenues totalling $101,297, $71,804,
and $57,356, respectively. For the years ended 1994, 1993 and 1992 $50,646,
$35,949, and $28,408 of such fees were paid to the unaffiliated on-site
property manager.
<PAGE>
7. Joint Venture Agreement
Pursuant to the Joint Venture Agreement, results of operations,
including net income or loss and cash distributions, shall generally be
allocated to the venturers in proportion to their percentage capital
contributions. However, certain acquisition-related expenses incurred by
each venture partner in acquiring its interest in the Venture have been
recorded in the Venture's books. The related expense or depreciation of
such amounts has been allocated to the respective venture partner who
incurred the expense.
Net income and distributable cash from the sale or disposition of
property shall be allocated in the following order:
- To the venturers having negative capital account balances pro
rata in proportion to their negative capital accounts;
- To the venturers in an amount necessary so that the capital
account balances of the venturers shall be in proportion to their
respective percentage interests.
<PAGE>
CONNECTICUT GENERAL EQUITY PROPERTIES-I LIMITED PARTNERSHIP SCHEDULE III
(Unconsolidated Venture)
Westford Office Venture
Real Estate and Accumulated Depreciation
December 31, 1994
<TABLE>
<CAPTION>
Costs
Initial Cost to venture (A)(B) Capitalized
Subsequent to Life on Which
Acquisition (C) Depreciation
in Latest
Statement of
Land and Land Land, Building and Date of Date Operations is
Description Improvements Buildings Improvements Construction Acquired Computed
<S> <C> <C> <C> <C> <C> <C>
Westford $3,223,875 $13,759,689 $(2,273,205) 1986 09/11/86 2-31.5 years
Corporate Center
Westford, MA
</TABLE>
<TABLE>
<CAPTION>
Gross Amount at Which Carried at Close of Period (D)(E)
Land and Land Building and Tenant Accumulated
Description Improvements Improvements Improvements Total Depreciation (F)
<S> <C> <C> <C> <C> <C>
Westford $2,501,875 $10,716,382 $1,492,102 $ 14,710,359 $4,209,052
Corporate Center
<FN>
(A) The cost to the Venture represents the initial purchase price of the properties including
certain acquisition fees and expenses. In accordance with the Joint Venture Agreement,
the property was acquired without incurring any mortgage debt.
<FN>
(B) The Venture received $245,531 under a Master Lease Agreement, which was treated as
a reduction of initial cost to Venture.
<FN>
(C) Included in Costs Capitalized Subsequent to Acquisition is a loss due to permanent
impairment of assets in the amount of $3,800,000.
<FN>
(D) The aggregate cost of the real estate owned at December 31, 1994 for federal income
tax purposes is $17,519,187.
</TABLE>
[FN]
(E) Reconciliation of real estate owned:
<TABLE>
<CAPTION>
Description 1994 1993 1992
<S> <C> <C> <C>
Balance at beginning of period $14,493,579 $14,342,925 $17,587,956
Additions during period 216,780 150,654 554,969
Reductions during period(C) -- -- (3,800,000)
Balance at end of period $14,710,359 $14,493,579 $14,342,925
</TABLE>
[FN]
(F) Reconciliation of accumulated depreciation:
<TABLE>
<CAPTION>
Description 1994 1993 1992
<S> <C> <C> <C>
Balance at beginning of period $3,712,142 $3,254,267 $2,689,480
Additions during period 496,910 457,875 564,787
Balance at end of period $4,209,052 $3,712,142 $3,254,267
</TABLE>
<PAGE>
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not Applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant
The General Partner of the Partnership, CIGNA Realty Resources,
Inc.-Third, a Delaware corporation, is an indirectly, wholly owned
subsidiary of CIGNA Corporation, a publicly held corporation whose stock
is traded on the New York Stock Exchange. The General Partner has
responsibility for and control over the affairs of the Partnership.
The directors and executive officers of the General Partner as of
February 28, 1995 are as follows:
Name Office Served Since
J. Robert Andrews Director April 2, 1990
R. Bruce Albro Director May 2, 1988
John Wilkinson Director September 7, 1993
John D. Carey President, Controller September 7, 1993
September 4, 1990
Verne E. Blodgett Vice President, Counsel April 2, 1990
Joseph W. Springman Vice President,
Assistant Secretary September 7, 1993
David C. Kopp Secretary September 29, 1989
Marcy F. Blender Treasurer August 1, 1994
There is no family relationship among any of the foregoing
directors or officers. There are no arrangements or understandings between
or among said officers or directors and any other person pursuant to which
any officer or director was selected as such.
The foregoing directors and officers are also officers and/or
directors of various affiliated companies of CIGNA Realty Resources, Inc. -
Third, including CIGNA Financial Partners, Inc. (the parent of CIGNA Realty
Resources, Inc. - Third), CIGNA Investments, Inc., CIGNA Corporation (the
parent of CIGNA Investments, Inc.), Connecticut General Corporation (the
parent of CIGNA Financial Partners, Inc.).
<PAGE>
The business experience of each of the directors and executive
officers of the General Partner of the Partnership is as follows:
J. ROBERT ANDREWS - DIRECTOR
Mr. Andrews, age 50, is a Managing Director of CIGNA Investment
Management and is one of seven senior managers in the Real Estate
Investment Division, heading the Real Estate Acquisition and Dispositions
Department. He joined CIGNA's Real Estate Division in 1983. Prior to his
current assignment, he was the Head of the Tax Advantaged Investment
Department; a Vice President - Real Estate Portfolio Manager for Pension
Accounts; one of six Vice President - Territorial Managers in the Mortgage
and Real Estate Acquisition unit and an Assistant Vice President in the Real
Estate Asset Management unit. Prior to coming to CIGNA, he was the
principal of a real estate consulting firm specializing in domestic and
international multi-family residential construction and development. Prior
to forming his own business, Mr. Andrews was an Acquisition Director and
Regional Director of Operations for a publicly owned (NYSE) real estate
development company. He received a Bachelor of Arts degree in Architecture
and a Master of Business Administration degree in Finance and Real Estate
from The Pennsylvania State University.
R. BRUCE ALBRO - DIRECTOR
Mr. Albro, age 52, a Senior Managing Director of CIM, joined
Connecticut General's Investment Operations in 1971 as a Securities Analyst
in Paper, Forest Products, Building and Machinery. Subsequently, he served
as a Research Department Unit Head, as an Assistant Portfolio Manager, then
as Director of Equity Research and a member of the senior staff of CIGNA
Investment Management Company and as a Portfolio Manager in the Fixed Income
area. He then headed the Marketing and Merchant Banking area for
CII. Prior to his current assignment of Division Head, Portfolio
Management Division, he was an insurance portfolio manager, and prior to
that, he was responsible for Individual Investment Product Marketing. In
addition, Mr. Albro currently serves as President of the CIGNA Funds Group
and other CIGNA affiliated mutual funds. Mr. Albro received a Master of
Arts degree in Economics from the University of California at Berkeley and
a Bachelor of Arts degree in Economics from the University of Massachusetts
at Amherst.
JOHN WILKINSON - DIRECTOR
Mr. Wilkinson, age 51, is Senior Vice President and Chief Financial
Officer of the CIGNA Individual Insurance Division. He was appointed to
that position in January 1992. Mr. Wilkinson joined the company in 1970
and became an officer in 1978. In 1981 he joined CIGNA Individual
Financial Services Division (now CIGNA Individual Insurance) and was appointed
Vice President in 1988 in that Division. Mr. Wilkinson continued
to work in the Insurance Marketing area as Vice President until he was
appointed to his current position. Mr. Wilkinson is a 1965 graduate of the
U.S. Naval Academy. He is a Registered Principal of CIGNA Financial
Advisors, Inc., a Fellow of the Society of Actuaries, a member of the
American Academy of Actuaries, a Chartered Life Underwriter and Chartered
Financial Counsellor.
JOHN D. CAREY - PRESIDENT, CONTROLLER
Mr. Carey, age 31, joined CIGNA in 1990. Prior to joining CIGNA,
he held the position of manager at KPMG Peat Marwick in the audit
department and was a member of the Real Estate Focus Group. His experience
includes accounting and financial reporting for public and private real
estate limited partnership syndications. Mr. Carey is a graduate of
Central Connecticut State University with a Bachelor of Science Degree and
is a Certified Public Accountant.
<PAGE>
VERNE E. BLODGETT - VICE PRESIDENT, COUNSEL
Mr. Blodgett, age 57, is an Assistant General Counsel of CIGNA
Corporation. He joined Connecticut General Life Insurance Company in 1975
as an investment attorney and has held various positions in the Legal
Division of Connecticut General Life Insurance Company prior to his
appointment as Assistant General Counsel in 1981. Mr. Blodgett received a
Bachelor of Arts degree from Yale University and graduated with honors from
the University of Connecticut School of Law. He is a member of the
Connecticut and the American Bar Associations.
JOSEPH W. SPRINGMAN - VICE PRESIDENT, ASSISTANT SECRETARY
Mr. Springman, age 53, is Managing Director and department head
responsible for asset management. He joined CIGNA's Real Estate operations
in 1970. He has held positions as an officer or director of several real
estate affiliates of CIGNA. His past real estate assignments have included
Development and Engineering, Property Management, Director, Real Estate
Operations, Portfolio Management and Vice President, Real Estate
Production. Prior to assuming his asset management post, Mr. Springman was
responsible for production of real estate and mortgage investments. He
received a Bachelor of Science degree from the U.S. Naval Academy.
DAVID C. KOPP - SECRETARY
Mr. Kopp, age 49, is Secretary of CII, Corporate Secretary of
Connecticut General Life Insurance Company and Assistant Corporate
Secretary and Assistant General Counsel, Insurance and Investment Law of
CIGNA Corporation. He also serves as an officer of various other CIGNA
Companies. He joined Connecticut General Life Insurance Company in 1974 as
a commercial real estate attorney and held various positions in the Legal
Department of Connecticut General Life Insurance Company prior to his
appointment as Corporate Secretary in 1977. Mr. Kopp is an honors graduate
of Northern Illinois University and served on the law review at the
University of Illinois College of Law. He is a member of the Connecticut
Bar Association and is Past President of the Hartford Chapter, American
Society of Corporate Secretaries.
MARCY F. BLENDER - TREASURER
Marcy F. Blender, age 38, is Assistant Vice President, Bank
Resources of CIGNA Corporation. In this capacity she is responsible for
bank relationship management, bank products and services, bank compensation
and control, and bank exposure management. Marcy joined Insurance Company
of North America (INA) in 1979. She has held a variety of financial and
investment positions with INA and later with the merged CIGNA Corporation
before assuming her current responsibilities in 1992. She received a B.A.
degree from Rutgers University and an M.B.A. from Drexel University. She
is a Certified Public Accountant.
Item 11. Executive Compensation
Officers and directors of the General Partner receive no current or
proposed direct compensation from the Partnership in such capacities.
However, certain officers and directors of the General Partner received
compensation from the General Partner and/or its affiliates (but not from
the Partnership) for services performed for various affiliated entities,
which may include services performed for the Partnership, but such
compensation was not material in the aggregate.
Item 12. Security Ownership of Certain Beneficial Owners and Management
No person or group is known by the Partnership to own beneficially
more than 5% of the outstanding Units of interest of the Partnership.
<PAGE>
As of February 28, 1994, the individual directors and the directors
and officers, as a group, of the General Partner beneficially owned
Partnership Units and shares of the common stock of CIGNA, parent of the
General Partner, as set forth in the following table:
Units Shares
Beneficially Beneficially Percent of
Name Owned(a) Owned(b) Class
J. Robert Andrews (c) 0 1,535 *
R. Bruce Albro (d) 0 6,076 *
John Wilkinson (e) 0 13,753 *
All directors and officers
Group (8) (f) 0 27,924 *
* Less than 1% of class
[FN]
(a) No officer or director of the General Partner possesses a right to
acquire beneficial ownership of additional Units of interest of the
Partnership.
[FN]
(b) The directors and officers have sole voting and investment power
over all the shares of CIGNA common stock they own beneficially.
[FN]
(c) Shares beneficially owned includes 1,535 shares which are
restricted as to disposition.
[FN]
(d) Shares beneficially owned includes options to acquire 3,920 shares
and 2,156 shares which are restricted as to disposition.
[FN]
(e) Shares beneficially owned includes options to acquire 11,251 shares
and 2,027 shares which are restricted as to disposition.
[FN]
(f) Shares beneficially owned by directors and officers include 17,526
shares of CIGNA common stock which may be acquired upon exercise of
stock options and 9,372 shares which are restricted as to
disposition.
Item 13. Certain Relationships and Related Transactions
The General Partner of the Partnership is generally entitled to
receive 1% of cash distributions, when and as cash distributions are made
to the limited partners, and is generally allocated 1% of profits or
losses. The General Partner was entitled to receive distributable cash
from 1994 operations of $8,337. The General Partner was allocated a share
of the Partnership income in the amount of $45,368 for 1994. Reference is
also made to the Notes to Financial Statements included in this annual
report for a description of such distributions and allocations. The
relationship of the General Partner (and its directors and officers) to its
affiliates is set forth in Item 10 above.
CII provided asset management services to the Partnership during
1994 for the Woodlands Plaza II Office Building, Westside Industrials and
Lake Point Service Center for fees calculated at 6% of gross revenues
collected from the properties less amounts earned by independent thirdparty
property management companies contracted by CII on behalf of the
Partnership. In 1994, CII earned asset management fees amounting to
$45,019 for such services, of which $7,574 was unpaid as of December 31,
1994. Independent third party property managers earned $95,063 of
management fees, of which $2,672 was unpaid as of December 31, 1994. In
1994, CII provided asset management services for the Partnership's
investment in the Westford venture for fees of 6% of gross revenues
collected. CII earned $26,418 for such services. Independent third party
property managers earned $13,209 of fees relating to Westford.
CFP provided partnership management services for the Partnership at
fees calculated at 9% of adjusted cash from operations in any one year. In
1994, CFP earned partnership management fees amounting to $80,512 for such
services; there was no unpaid balance as of December 31, 1994.
<PAGE>
The General Partner and its affiliates may be reimbursed for their
direct expenses incurred in the administration of the Partnership. In
1994, the General Partner and its affiliates were entitled to reimbursement
for such out of pocket administrative expenses in the amount of $55,545 of
which $1,750 was unpaid as of December 31, 1994.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) 1. Financial Statements. See Index to Financial Statements in
Item 8.
2. Financial Statement Schedules
(a) Real Estate and Accumulated Depreciation. See Index to
Financial Statements in Item 8.
3. Exhibits
3(a) Partnership Agreement, incorporated by reference to
Exhibit A to the Prospectus of Registrant, dated January
31, 1984, File No. 2-87976.
3(b) First Amendment to Partnership Agreement, dated March 1,
1985, incorporated by reference to Exhibit 3(b) to
Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1985.
4 Certificate of Limited Partnership dated November 9,
1983, incorporated by reference to Exhibit 4 to Form S-11
Registration Statement under the Securities Act of 1933,
File No. 2-87976.
10(a) Acquisition and Disposition Services Agreement, dated as of
January 31, 1984, between Connecticut General Equity
Properties-I Limited Partnership and CIGNA Capital Advisers,
Inc., incorporated by reference to Exhibit 10(a) to
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1987.
(b) Supervisory Property Management Agreement, dated as of
January 31, 1984, between Connecticut General Equity
Properties-I Limited Partnership and CIGNA Capital
Advisors, Inc., incorporated by reference to Exhibit
10(b) to Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1987.
(c) Agreement concerning Certain Capital Contributions, dated
as of December 30, 1983, between Connecticut General
Management Resources, Inc. and Connecticut General Realty
Resources, Inc.-Third, incorporated by reference to
Exhibit 10(c) to Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1987.
(d) Real Estate Purchase Agreement, dated as of July 25,
1984, relating to the acquisition of Woodlands Plaza II
Office Building, incorporated by reference to Exhibit
10(d) to Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1985.
(e) Bill of Sale and Assignment, dated October 15, 1984,
relating to the acquisition of Woodlands Plaza II Office
Building, incorporated by reference to Exhibit 10(e) to
Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1985.
(f) Assignment and Assumption Agreement, dated as of January
17, 1985, relating to the acquisition of Interpark
Industrial Park, incorporated by reference to Exhibit
10(f) to Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1985.
<PAGE>
(g) Real Estate Purchase Agreement between LaSalle National
Bank and Connecticut General Resources, Inc.-Third dated
May 8, 1985, relating to the acquisition of the Courtyard
Shopping Center, incorporated by reference to Exhibit
10(g) to Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1985.
(h) Real Estate Purchase Agreement between Crow-Vista #2 and
Connecticut General Equity Properties-I Limited
Partnership dated as of July 31, 1986, relating to the
acquisition of Lake Point I, II, III, incorporated by
reference to Exhibit 10(b) to Current Report on Form 8-K
dated July 31, 1986.
(i) Management and Leasing Agreement between Trammel Crow
Realty Associates, Inc. and Connecticut General Equity
Properties-I Limited Partnership dated as of July 31,
1986, relating to Lake Point I, II, III, incorporated by
reference to Exhibit 10(d) to Current Report on Form 8-K
dated July 31, 1986.
(j) Joint Venture Agreement between CIGNA Income Realty-I
Limited Partnership and Connecticut General Equity
Properties-I Limited Partnership dated as of November 1,
1986, relating to the acquisition of the Westford
Corporate Center, incorporated by reference to Exhibit
10(k) to Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1986.
(k) Real Estate Purchase Agreement between Robert M. Doyle
and Ian S. Gillespie, as trustees of Westford Office
Center Trust, and Westford Office Venture, dated as of
September 10, 1986, relating to the acquisition of the
Westford Corporate Center, incorporated by reference to
Exhibit 10(l) to Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1986.
(l) Management Agreement between the Westford Office Venture
and Codman Management Co., dated as of September 10,
1986, relating to the Westford Corporate Center,
incorporated by reference to Exhibit 10(n) to
Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1986.
(m) Real Estate Purchase Contract between Solman Brothers
Leasing and Connecticut General Equity Properties-I
Limited Partnership dated as of February 22, 1994,
relating to the sale of Westside Industrial Buildings 1
and 2.
27 Financial Data Schedules
(b) No reports on Form 8-K were filed during the last quarter of
the fiscal year.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
CONNECTICUT GENERAL EQUITY PROPERTIES-I
LIMITED PARTNERSHIP
By: Connecticut General Realty
Resources, Inc.- Third,
General Partner
Date: March 30, 1995 By: /s/ John D. Carey
John D. Carey, President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed by the following persons on behalf of the
Registrant and in the capacities (with respect to the General Partner) and
on the date indicated.
/s/ R. Bruce Albro Date:March 30, 1995
R. Bruce Albro, Director
/s/ J. Robert Andrews Date:March 30, 1995
J. Robert Andrews, Director
/s/ John Wilkinson Date:March 30, 1995
John Wilkinson, Director
/s/ John D. Carey Date:March 30, 1995
John D. Carey, President, Controller
(Principal Executive Officer)
(Principal Accounting Officer)
/s/ Marcy F. Blender Date:March 30, 1995
Marcy F. Blender, Treasurer
(Principal Financial Officer)
<PAGE>
Connecticut General Equity Properties - I Limited Partnership Exhibit 10(m)
DEPOSIT RECEIPT AND REAL ESTATE PURCHASE CONTRACT
Phoenix , Arizona February 22 , 19 94
Received from Solman Brothers Leasing, an Arizona Corporation
("Purchaser"), the sum of Twenty Five Thousand and no/100-------
Dollars ($ 25,000.00 ) in the form of a check to be deposited in Escrow
upon acceptance from Seller , as an earnest money deposit on account of
the purchase price of One Million One Hundred Fifteen Thousand One
Hundred and no/100------- Dollars ($ 1,115,100.00 ) for that certain property
situated in the City of Phoenix , County of Maricopa , State
of Arizona, and described as follows(the "Property"):
3148-3154 North 34th Drive
Westside Industrial Building 1 & 2
Parcel Numbers: 108-03-063,064,065
Flood Zone: No X Yes (Attach Form 5230)
TERMS OF SALE:
1. The deposit shall be immediately deposited into escrow with the below-
named Escrow Holder. The remainder of the purchase price shall be
paid as follows:
$25,000.00 Earnest Money Deposit
$1,090,100.00 Cash Payable at Close of Escrow
$1,115,100.00 Total Sales Price
2. Upon mutual execution of this Contract, the parties shall execute
instructions to First American Title Insurance Company (the
"Escrow Holder"), to consummate the purchase in accordance with the
terms and provisions hereof. The provisions hereof shall constitute
joint instructions to the Escrow Holder; provided, however, that the
parties shall execute such additional instructions as they may agree
upon or as requested by the Escrow Holder not inconsistent with the
provisions hereof. Said escrow shall provide for a closing of on or
before May 2 , 19 94 . Escrow fees shall be paid by Purchaser.
3. As soon as reasonably possible following opening of escrow, Purchaser
shall pay and furnish to Seller a Preliminary Title Report on the
Property, together with full copies of all exceptions of record set
forth therein ("Exceptions"), including but not limited to covenants,
conditions, restrictions, reservations, easements, rights and rights
of way of record, assessments, liens and other matters of record.
Purchaser shall have ten (10) days after receipt of said Preliminary
Title Report, together with full copies of said Exceptions, within
which to notify the Seller and the Escrow Holder, in writing, of
Purchaser's reasonable disapproval of any Exceptions shown in said
Title Report. Failure of Purchaser reasonably to disapprove any
Exception(s) within the aforementioned time limit shall be deemed an
approval of said Preliminary Title Report*. The Policy of Title
Insurance shall be a standard coverage policy in the amount of the
total purchase price and shall be paid for by Purchaser. *See Addendum A,
Paragraph #1
4. In the event that the foregoing contingency or any contingency to this
Contract has not been eliminated or satisfied within the time limits
and pursuant to the provisions herein, unless Purchaser elects to
waive the specific contingency by written notice to the Seller and to
the Escrow Holder, the Contract resulting from Seller's acceptance
hereof shall be deemed null and void, the deposit shall be returned to
Purchaser and the escrow shall be cancelled.
<PAGE>
5. Seller warrants that Seller has not received nor is Seller aware of
any notification from any governmental authority having jurisdiction,
requiring any work to be done on the Property. Seller further
warrants that in the event any such notice or notices are received by
Seller prior to the close of escrow and Seller is unable to or does
not elect to perform the work required in said notice at Seller's sole
cost and expense on or before the close of escrow, said notices shall
be submitted to Purchaser for his examination and written approval.
Should Purchaser fail to approve said notice and thereby elect not to
acquire the Property subject to the effect of same, within five (5)
days from the date Seller submits said notice to Purchaser, then this
Contract shall be cancelled without further liability to either party,
and all deposits returned to Purchaser.
6. Property taxes, rentals, premiums on fire insurance acceptable to
Purchaser, interest on encumbrances, and operating or other expenses,
if any, shall be prorated as of the date of close of escrow, and
Seller shall pay the cost of any stamps to be attached to the deed or
other similar fees or taxes in accordance with the requirements of any
lawful authority. Any advance Tenant deposits or payments shall be
prorated and credited accordingly to Purchaser. As to assessments,
the information pertaining thereto shall be set forth in the
aforementioned Preliminary Title Report and, if approved, Purchaser,
at Purchaser's option, may either take title subject to the unpaid
principal balance thereof with this sum to be credited towards the
total purchase price and to apply towards the cash sum required to be
paid through escrow or require Seller to remove said lien for
assessments at the time of closing.
7. Purchaser reserves the right to take title to the subject property in
a name or assignee other than shown above; provided, however, that
such right shall not relieve Purchaser of his liabilities hereunder as
a principal obligor.
8. Purchaser shall have 30 days from February 28, 1994 within which
to investigate the Property, its value, zoning, Property survey, Phase
I Environmental report, environmental and building matters, its
condition -- including, but not limited to the presence of asbestos,
hazardous materials and underground storage tanks-and its suitability
for Purchaser's intended use. Seller hereby warrants that to the best
of its knowledge the premises described herein and the
improvements thereon do not violate the applicable building or zoning
regulations and that Seller is unaware of any material defect in the
Property or improvements thereon with the exception of the following,
to wit: None . (If none -- so indicate.) If Purchaser gives written
notice to Seller by 5:00 P.M. of the final date of the above-referenced
period, of dissatisfaction with any of the referenced matters, and
Seller and Purchaser have not entered into a mutually agreeable
resolution of the matter by 5:00 P.M. 7 days thereafter, this
Contract shall be deemed cancelled and Purchaser shall be entitled to
return of deposit. If Purchaser fails to give written notice of
dissatisfaction by 5:00 P.M. of the first-referenced period, then
Purchaser's right to object to such matters shall be deemed waived and
earnest money will not be refundable.
9. If there is any loss or damage to the Property between the date hereof
and the date of closing of escrow, by reason of fire, vandalism, flood,
earthquake or act of God, the risk of loss shall be on the Seller,
provided, however, that if the cost of repairing such loss or damage
would exceed 10 percent of the purchase price, (a) Purchaser may elect
to cancel this Contract unless Seller agrees in writing to pay the
cost of repairing all such loss or damage, and (b) Seller may elect to
cancel this Agreement unless Purchaser agrees in writing either to
accept the Property without offset or additional consideration or to
pay the cost of repairing such loss or damage to the extent such cost
would exceed 10 percent of the purchase price.
10. NA
<PAGE>
11. Any addendum or exhibit attached hereto and either signed or initialed
by the parties shall be deemed a part hereof.
12. Time is of the essence of this Contract.
13. The following shall apply in the event of default by either party
under this Contract:
(a) IF PURCHASER IS IN DEFAULT (check one):
X Specific Performance/Damages
Seller may elect to treat this Contract as cancelled, in which
case all payments and things of value received hereunder shall be
forfeited and retained by Seller, and Seller may recover such
damages as may be proper, or Seller may elect to treat this
Contract as being in full force and effect and Seller shall have
the right to specific performance, or damages, or both.
Liquidated Damages
All payments and things of value received hereunder shall be
forfeited by Purchaser and retained by Seller and both parties
shall thereafter be released from all obligations hereunder. It
is agreed that such payments and things of value are LIQUIDATED
DAMAGES and (except as provided in subsection (c)) are SELLER'S
SOLE AND ONLY REMEDY for Purchaser's failure to perform the
obligations of this Contract. Seller expressly waives the
remedies of specific performance and additional damages.
(b) IF SELLER IS IN DEFAULT:
Purchaser may elect to treat this Contract as cancelled in which
case all payments and things of value received hereunder shall be
returned and Purchaser may recover such damages as may be proper,
or Purchaser may elect to treat this Contract as being in full
force and effect and Purchaser shall have the right to specific
performance or damages, or both.
(c) COSTS AND EXPENSES:
Anything to the contrary herein notwithstanding, in the event of
any litigation or arbitration arising out of this Contract, the
prevailing party shall be awarded all reasonable costs and
expenses, including attorneys' fees and expert witness fees.
14. Agency Disclosure
Seller and Purchaser each warrant that they have dealt with no other
real estate brokers in connection with this transaction except: Lee
& Associates Arizona (Matt Hobaica) , who represents Seller , and
Arizona Industrial Properties (Greg Hoyt) , who represents Buyer .
<PAGE>
15. Seller agrees to pay Broker a real estate brokerage commission for
services rendered in effecting this sale, in the amount called for in
Seller's contract with Broker for the sale of the Property, if any,
and otherwise in the amount of 53,100.00 of the accepted sales
price. This commission is earned as of the close of escrow. Sale
proceeds sufficient to pay the commission are hereby assigned to
Broker, and Escrow Holder is hereby instructed to pay said commission
to Broker out of Seller's proceeds at the close of escrow. This
instruction shall not be withdrawn or modified without Broker's
written consent. Nothing contained herein shall negate any additional
rights Broker may have under any other contract between Seller and
Broker for the sale of the Property. The commission amount stated
above shall be divided 50% to Lee & Associates Arizona and 50% to
Arizona Industrial Properties.
16. In the event that Broker deems it necessary to file an interpleader
action in court to resolve a dispute over the earnest money deposit
referenced herein, Purchaser and Seller authorize Broker to draw
the earnest money deposit an amount necessary to advance the legal
fees and costs of bringing the interpleader action. The amount of
deposit remaining after advancing those costs shall be interpleaded
into court in accordance with state law. Purchaser and Seller further
agree that the defaulting party shall pay any further court costs and
reasonable attorney's fees incurred by Broker in bringing or being
involved in such action.
17. The Foreign Investment in Real Property Tax Action ("FIRPTA"), IRC
1445, requires that every purchaser of U.S. real property must, unless
an exemption applies, deduct and withhold from Seller's proceeds ten
percent (10%) of the gross sales price. The primary exemptions which
might be applicable are: (a) seller provides purchaser with an
affidavit under penalty of perjury, that seller is not a "foreign
person", as defined in FIRPTA, or (b) Seller provides purchaser with a
"qualifying statement", as defined in FIRPTA, issued by the Internal
Revenue Service. Seller and Purchaser agree to execute and deliver as
appropriate, any instrument, affidavit and statement, and to perform
any acts reasonably necessary to carry out the provisions of FIRPTA and
regulations promulgated thereunder.
18. In the event that this offer is not accepted by Seller on or before
5 o'clock p.m., February 28, , 19 94 , this offer shall become
null and void, and the deposit made herewith shall be returned to
Purchaser. Purchaser hereby agrees to purchase the above-described
property for the price and upon the terms and conditions herein
expressed. All tenders and notices required hereunder shall be made
and given to either of the parties hereto at their respective
addresses herein set forth. Purchaser hereby acknowledges receipt of
a copy of this Contract.
<PAGE>
19. The parties hereto agree to comply with all applicable federal, state
and local laws, regulations, codes, ordinances and administrative
orders having jurisdiction over the parties, property or the subject
matter of this Agreement, including, but not limited to the 1964 Civil
Rights Act and all amendments thereto, the Foreign Investment in Real
Property Tax Act, the Comprehensive Environmental Response
Compensation and Liability Act, and The Americans With Disabilities
Act.
Date: February 1994
Accepted: Purchaser: Solman Brothers Leasing,Inc.
an Arizona Corporation
a(n)
By: Jeff Solman
By: Title: Secretary/Treasurer
By:
Title:
Address:
The undersigned Seller hereby accepts this Contract and agrees to sell the
Property to Purchaser for the price and on the terms and conditions set
forth herein. Seller hereby acknowledges receipt of a copy of this
Contract.
Date:
Seller: Connecticut General Equity
Properties I Limited Partnership
a(n)
By: Stephen J. Olstein
Title: Authorized Agent
By:
Title:
Address: 900 Cottage Grove Road
Bloomfield, CT 06002
CONSULT YOUR ADVISORS - This document has been prepared for
approval by your attorney and financial advisor. No
representation or recommendation is made by Broker as to the
legal sufficiency or tax consequences of this document or the
transaction to which it relates. These are questions for your
attorney and financial advisor.
In any real estate transaction, it is recommended that you
consult with a professional, such as a civil engineer,
industrial hygienist or other person with experience in
evaluating the condition of property, including the possible
presence of asbestos, hazardous materials and underground
storage tanks.
<PAGE>
ADDENDUM A
1. Conveyance of Property - The property shall be conveyed to Purchaser at
the Closing, with no exception shown on the title policy except as
approved by Purchaser. However, delivery of a title insurance policy
fully acceptable to Purchaser shall be only a condition of Closing and
shall not be a covenant of Seller. Seller shall be under no obligation
to clear any encumbrances from the title (except for monetary liens
other than liens for current taxes not yet due) or to create any
encumbrance on, or for the benefit of, the Property. If Seller does
not deliver title in a form fully acceptable to Purchaser, then
Purchaser's sole and exclusive remedy shall be to terminate the
Purchase Agreement and have the Deposit returned. If Purchaser chooses
not to terminate the Purchase Agreement, then Purchaser shall accept
such title as Seller delivers without deduction of the Purchase Price.
2. Expenses - Each party shall bear its own legal expenses in connection
with this transaction. Purchaser shall pay all standard coverage title
insurance costs, Purchaser shall pay the costs for a property survey
and a Phase I Environmental Report.
3. Physical Condition of the Property - Purchaser will acquire the
Property "as is", with no repairs or improvements required of Seller.
4. Contingency - This Purchase Contract is contingent upon Seller's
Investment Committee approval. Such approval shall be in writing and
furnished to Escrow Agent within fifteen (15) days after the Purchaser
has waived all their contingencies stated herein in writing to Seller.
If Seller's Investment Committee does not approve of this transaction
within the fifteen (15) day period then Seller shall reimburse
Purchaser for the actual costs of the Preliminary Title Report, Phase I
Environmental Report and the Property Survey and this purchase contract
will become null and void.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1994
<PERIOD-END> DEC-31-1994
<PERIOD-TYPE> YEAR
<CASH> 368015
<SECURITIES> 0
<RECEIVABLES> 97349
<ALLOWANCES> 1684
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 18692756
<DEPRECIATION> 6686953
<TOTAL-ASSETS> 15886403
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 15886403
<SALES> 0
<TOTAL-REVENUES> 2338050
<CGS> 0
<TOTAL-COSTS> 1314892
<OTHER-EXPENSES> 1256321
<LOSS-PROVISION> (671)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (232492)
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<CHANGES> 0
<NET-INCOME> (232492)
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</TABLE>
