UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended March 31, 1995
--------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to_____________
Commission file number 0-13356
MCNEIL REAL ESTATE FUND XXI, L.P.
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 33-0030615
- -----------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
13760 Noel Road, Suite 700, LB70, Dallas, Texas, 75240
- -----------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (214) 448-5800
-------------------------
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 and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
<PAGE>
MCNEIL REAL ESTATE FUND XXI, L.P.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- ------ --------------------
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
---------- ----------
<S> <C> <C>
ASSETS Real estate investments:
Land..................................................... $ 3,607,307 $ 3,607,306
Buildings and improvements............................... 32,790,193 32,646,371
---------- ----------
36,397,500 36,253,677
Less: Accumulated depreciation and amortization......... (14,078,484) (13,696,125)
---------- ----------
22,319,016 22,557,552
Assets held for sale........................................ - 8,153,520
Cash and cash equivalents................................... 3,391,890 1,151,098
Cash segregated for security deposits....................... 212,202 205,581
Accounts receivable, net of allowance for doubtful
accounts of $17,302 and $51,086 at March 31,
1995 and December 31, 1994, respectively................. 169,582 663,548
Advances to affiliates - General Partner.................... 368,005 362,186
Escrow deposits............................................. 362,764 252,798
Deferred borrowing costs, net............................... 340,162 413,094
Prepaid expenses and other assets, net of accumulated
amortization of $137,470 and $186,603 at March 31,
1995 and December 31, 1994, respectively................. 85,729 225,680
---------- ----------
$27,249,350 $33,985,057
========== ==========
LIABILITIES AND PARTNERS' DEFICIT
Mortgage notes payable, net................................. $22,108,224 $28,914,573
Mortgage notes payable - affiliates......................... 733,900 2,064,900
Accounts payable and accrued expenses....................... 276,403 430,340
Accrued property taxes...................................... 397,632 480,166
Payable to affiliates - General Partner..................... 3,627,944 3,079,178
Advances from affiliates - General Partner.................. 1,947,603 1,910,982
Security deposits and deferred rental income................ 196,189 228,012
---------- ----------
29,287,895 37,108,151
---------- ----------
Partners' deficit:
Limited partners - 50,000 Units authorized; 47,382 Units
outstanding (24,960 Current Income Units and 22,366
Growth/Shelter Units).................................... (1,700,548) (2,774,251)
General Partner.......................................... (337,997) (348,843)
---------- ----------
(2,038,545) (3,123,094)
---------- ----------
$27,249,350 $33,985,057
========== ==========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXI, L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------
1995 1994
--------- ---------
<S> <C> <C>
Revenue:
Rental revenue.............................................. $2,007,881 $2,061,619
Interest.................................................... 25,323 14,865
Gain on disposition of real estate.......................... 1,615,811 29,440
Other income................................................ - 154,134
Total revenue............................................... 3,649,015 2,260,058
Expenses:
Interest.................................................... 749,303 710,588
Interest - affiliates....................................... 100,246 63,610
Depreciation and amortization............................... 525,239 506,979
Property taxes.............................................. 173,880 169,961
Personnel costs............................................. 229,970 227,717
Utilities................................................... 119,881 146,479
Repairs and maintenance..................................... 182,440 224,120
Property management fees -affiliates........................ 113,265 111,597
Other property operating expenses........................... 154,990 103,043
General and administrative.................................. 18,807 17,951
General and administrative - affiliates..................... 196,445 243,972
--------- ---------
Total expenses............................................ 2,564,466 2,526,017
--------- ---------
Net income (loss)............................................. $1,084,549 $ (265,959)
========= =========
Net income (loss) allocable to limited partners - Current
Current Income Unit......................................... $ 97,609 $ (23,936)
Net income (loss) allocable to limited partners - Growth
/Shelter Unit............................................... 976,094 (239,363)
Net income (loss) allocable to General Partner................. 10,846 (2,660)
--------- ---------
Net income (loss).............................................. $1,084,549 $ (265,959)
========= =========
Net income (loss) per limited partnership unit:
Current Income Units........................................... $ 3.91 $ (.96)
========= =========
Growth/Shelter Units........................................... $ 43.64 $ (10.69)
========= =========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXI, L.P.
STATEMENTS OF PARTNERS' DEFICIT
(Unaudited)
For the Three months Ended March 31, 1995 and 1994
<TABLE>
<CAPTION>
Total
Partners'
General Limited Equity
Partner Partners (Deficit)
---------- ---------- ----------
<S> <C> <C> <C>
Balance at December 31, 1993.............. $(329,927) $(901,571) $(1,231,498)
Net loss
General Partner........................ (2,660) - (2,660)
Current Income Units................... - (23,936) (23,936)
Growth/Shelter Units................... - (239,363) (239,363)
-------- -------- --------
Total net loss............................ (2,660) (263,299) (265,959)
-------- -------- --------
Balance at March 31, 1994................. $(332,587) $(1,164,870) $(1,497,457)
======== ========== ==========
Balance at December 31, 1994.............. $(348,843) $(2,774,251) $(3,123,094)
Net income
General Partner........................ 10,846 - 10,846
Current Income Units................... - 97,609 97,609
Growth/Shelter Units................... - 976,094 976,094
-------- --------- ---------
Total net loss............................ 10,846 1,073,703 1,084,549
-------- --------- ---------
Balance at March 31, 1995................. $(337,997) $(1,700,548) $(2,038,545)
======== ========= =========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXI, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
Increase (decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------------
1995 1994
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Cash received from tenants........................ $2,111,230 $ 2,182,750
Cash paid to suppliers............................ (530,130) (1,177,368)
Cash paid to affiliates........................... (106,994) (266,607)
Interest received................................. 19,504 7,774
Interest paid..................................... (810,916) (660,626)
Interest paid to affiliates....................... (123,887) (23,075)
Property taxes paid............................... (286,859) (293,169)
--------- ---------
Net cash provided by (used in) operating activities.. 271,948 (230,321)
--------- ---------
Cash flows from investing activities:
Additions to real estate investments.............. (150,440) (103,847)
Net proceeds from disposition of real estate...... 2,199,917 39,850
Repayment of advances to affiliates............... - 20,874
--------- ---------
Net cash provided by (used in) investing activities.. 2,049,477 (43,123)
--------- ---------
Cash flows from financing activities:
Principal payments on mortgage notes
payable......................................... (80,633) (78,503)
--------- ---------
Net increase (decrease) in cash and cash
equivalents....................................... 2,240,792 (351,947)
Cash and cash equivalents at beginning of
period............................................ 1,151,098 1,773,720
--------- ---------
Cash and cash equivalents at end of period........... $3,391,890 $1,421,773
========= =========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXI, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
Reconciliation of Net Income (Loss) to Net Cash Provided by (Used in)
Operating Activities
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------------
1995 1994
--------- ---------
<S> <C> <C>
Net income (loss).................................... $1,084,549 $ (265,959)
--------- ---------
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization..................... 525,239 506,979
Amortization of deferred borrowing costs.......... 22,543 25,150
Amortization of discounts on mortgage
notes payable................................... 6,912 46,002
Interest added to advances to affiliates -
General Partner................................. (5,819) (7,091)
Interest added to advances from affiliates -
General Partner................................. 36,621 26,156
Gain on disposition of real estate................ (1,615,811) (29,440)
Changes in assets and liabilities:
Cash segregated for security deposits........... (6,621) (14,100)
Accounts receivable............................. 96,238 (23,494)
Escrow deposits................................. (109,966) 204,533
Prepaid expenses and other assets............... 36,367 5,578
Accounts payable and accrued expenses........... (7,826) (511,092)
Accrued property taxes.......................... (6,277) (290,288)
Payable to affiliates - General Partner......... 202,716 88,962
Security deposits and deferred rental income.... 13,083 7,783
---------- ---------
Total adjustments............................. (812,601) 35,638
---------- ---------
Net cash provided by (used in) operating activities.. $ 271,948 $ (230,321)
========== ==========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXI, L.P.
Notes to Financial Statements
(Unaudited)
March 31, 1995
NOTE 1.
- ------
McNeil Real Estate Fund XXI, L.P., (the "Partnership"), formerly known as
Southmark Realty Partners, Ltd. was organized on November 23, 1983 as a limited
partnership under the provisions of the California Revised Limited Partnership
Act to acquire and operate commercial and residential properties. The general
partner of the Partnership is McNeil Partners, L.P. (the "General Partner"), a
Delaware limited partnership, an affiliate of Robert A. McNeil ("McNeil"). The
principal place of business for the Partnership and the General Partner is 13760
Noel Road, Suite 700, LB70, Dallas, Texas, 75240.
In the opinion of management, the financial statements reflect all adjustments
necessary for a fair presentation of the Partnership's financial position and
results of operations. All adjustments were of a normal recurring nature.
However, the results of operations for the three months ended March 31, 1995 are
not necessarily indicative of the results to be expected for the year ending
December 31, 1995.
NOTE 2.
- ------
The financial statements should be read in conjunction with the financial
statements contained in the Partnership's Annual Report on Form 10-K for the
year ended December 31, 1994, and the notes thereto, as filed with the
Securities and Exchange Commission, which is available upon request by writing
to McNeil Real Estate Fund XXI, L.P. c/o McNeil Real Estate Management, Inc.,
Investor Services, 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240.
NOTE 3.
- ------
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. The Partnership has suffered
recurring losses from operations and has relied on advances from affiliates to
meet its debt obligations and to fund capital improvements. There is no
guarantee that such advances will continue to be available. These conditions
raise substantial doubt about the Partnership's ability to continue as a going
concern. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
NOTE 4.
- ------
Certain reclassifications have been made to prior period amounts to conform to
the current presentation.
NOTE 5.
- ------
The Partnership pays property management fees equal to 5% of gross rental
receipts for its residential properties and 6% of gross rental receipts for its
commercial properties to McNeil Real Estate Management, Inc. ("McREMI"), an
affiliate of the General Partner, for providing property management services for
the Partnership's residential and commercial properties and leasing services for
its residential properties. McREMI may also choose to provide leasing services
for the Partnership's commercial properties, in which case McREMI will receive
property management fees from such commercial properties equal to 3% of the
property's gross rental receipts plus leasing commissions based on the
prevailing market rate for such services where the property is located.
<PAGE>
The Partnership reimburses McREMI for its costs, including overhead, of
administering the Partnership's affairs.
The Partnership is paying an asset management fee which is payable to the
General Partner. Through 1999, the Asset Management Fee is calculated as 1% of
the Partnership's tangible asset value. Tangible asset value is determined by
using the greater of (i) an amount calculated by applying a capitalization rate
of 9% to the annualized net operating income of each property or (ii) a value of
$10,000 per apartment unit for residential property and $50 per gross square
foot for commercial property to arrive at the property tangible asset value. The
property tangible asset value is then added to the book value of all other
assets excluding intangible items. The fee percentage decreases subsequent to
1999. Total accrued but unpaid asset management fees of $2,221,368 were
outstanding at March 31, 1995.
The Partnership pays a disposition fee to an affiliate of the General Partner
equal to 3% of the gross sales price for brokerage services performed in
connection with the sale of the Partnership's properties. The fee is due and
payable at the time the sale closes. The Partnership incurred $346,050 of such
fees for the period ended March 31, 1995 in connection with the sales of
Suburban Plaza and Wyoming Mall.
The General Partner has, in its discretion, advanced funds to the Partnership to
meet its working capital requirements. These advances, which are unsecured and
due on demand, accrue interest at a rate equal to the prime lending rate plus
1%.
The total advances from affiliates at March 31, 1995 and December 31, 1994
consist of the following:
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
--------- ---------
<S> <C> <C>
Advances from General Partner - revolver............. $ 92,371 $ 92,371
Advances from General Partner - other................ 380,060 380,060
Advances purchased by General Partner................ 1,131,143 1,131,143
Accrued interest payable............................. 344,029 307,408
--------- ---------
$1,947,603 $1,910,982
========= =========
</TABLE>
In April 1995, the Partnership utilized $1,320,745 of the proceeds from the
sales of Suburban Plaza and Wyoming Mall to repay affiliate advances and accrued
interest.
McNeil Real Estate Fund XXVII, L.P., ("McNeil XXVII") an affiliate of the
General Partner, is permitted to make nonrecourse mortgage loans to affiliates
under certain conditions and limitations and subject to availability of funds.
In 1992, the Partnership borrowed $972,000 from McNeil XXVII, which was secured
by a third lien mortgage on Suburban Plaza. This loan and the accrued interest
was repaid at the sale of Suburban Plaza on March 31, 1995.
Additionally, the Partnership had a $359,000 mortgage loan from an affiliate of
the General Partner that was secured by a second lien mortgage on Suburban
Plaza. This loan and the related accrued interest was also repaid at the sale of
Suburban Plaza on March 31, 1995.
During 1992, the Partnership made advances totaling $320,874 to McNeil Real
Estate Fund XXII, L.P. ("McNeil XXII"), the joint owner of Wyoming Mall, for
tenant improvements and operations at Wyoming Mall. The advances, which are
unsecured and due on demand, accrue interest at 9 1/2%. During the second period
of 1994, McNeil XXII was able to repay $20,874 of the advances, leaving $300,000
of advances still owed to the Partnership, plus accrued interest of $68,005 as
of March 31, 1995. In April 1995, McNeil XXII utilized the proceeds from the
sale of Wyoming Mall to repay the remaining balance of the advance plus the
accrued interest.
<PAGE>
Compensation and reimbursements paid to or accrued for the benefit of the
General Partner and its affiliates are as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------
1995 1994
------- -------
<S> <C> <C>
Property management fees............................. $113,265 $111,597
Charged to gain on disposition of real estate:
Disposition fee........................................ 346,050 -
Charged to interest -affiliates:
Interest on advances from affiliates - General
Partner......................................... 36,621 26,156
Interest on mortgage note payable - affiliates.... 63,625 37,454
Charged to general and administrative -affiliates:
Partnership administration........................ 100,641 104,678
Asset management fee.............................. 95,804 139,294
------- -------
$756,006 $419,179
======= =======
</TABLE>
The payable to affiliates - General Partner at March 31, 1995 and December 31,
1994 consisted primarily of unpaid asset management fees, property management
fees and partnership general and administrative expenses and are due and payable
from current operations.
NOTE 6.
- ------
On March 31, 1995, Suburban Plaza was sold to an unrelated third party for a
cash price of $6,910,000. Cash proceeds and the gain on the disposition is
detailed below:
<TABLE>
<CAPTION>
Gain on Sale Cash Proceeds
------------ -------------
<S> <C> <C>
Sales Price.......................................... $6,910,000 $6,910,000
Selling costs........................................ (293,754) (86,454)
Retirement of mortgage discount...................... (683,198)
Carrying value....................................... (3,691,594)
Accounts receivable.................................. (315,979)
Deferred borrowing costs............................. (479)
Prepaid expenses..................................... (63,548)
---------
Gain on disposition of real estate................... $1,861,448
=========
Retirement of mortgage note.......................... (3,963,489)
Retirement of mortgage notes - affiliates............ (1,331,000)
Accrued interest paid on retired notes............... (146,111)
Real estate tax proration............................ (38,368)
Credit for security deposit liability................ (22,325)
----------
Net cash proceeds.................................... $ 1,322,253
==========
</TABLE>
<PAGE>
On March 31, 1995, Wyoming Mall was sold to an unrelated third party for a cash
price of $9,250,000. The Partnership had a 50% undivided interest in the assets,
liabilities and operations of Wyoming Mall, owned jointly with McNeil Real
Estate Fund XXII, L.P. Cash proceeds and the gain on the disposition is detailed
below:
<TABLE>
<CAPTION>
Gain on Sale Cash Proceeds
------------ -------------
<S> <C> <C>
Sales Price.......................................... $4,625,000 $4,625,000
Selling costs........................................ (234,838) (96,088)
Mortgage note prepayment penalty..................... (138,441) (138,441)
Carrying value....................................... (4,325,663)
Accounts receivable.................................. (81,749)
Deferred borrowing costs............................. (49,910)
Prepaid expenses..................................... (40,036)
---------
Loss on disposition of real estate................... $ (245,637)
=========
Retirement of mortgage note.......................... (3,452,337)
Payment of 1994 taxes at closing..................... (23,735)
Real estate tax proration............................ (14,154)
Credit for security deposit liability................ (22,581)
----------
Net cash proceeds.................................... $ 877,664
==========
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------ ---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- -------------------
Net income for the first three months of 1995 was $1,084,549 as compared to a
net loss of $265,959 for the same period in 1994.
On March 31, 1995, Wyoming Mall was sold to an unrelated third party for a cash
price of $9,250,000. The Partnership had a 50% undivided interest in the assets,
liabilities and operations of Wyoming Mall, owned jointly with McNeil Real
Estate Fund XXI, L.P. The Partnership received net cash proceeds of $877,664
from the sale of the property and recorded a loss on disposition of real estate
of $245,637. The Partnership recorded $228,620 of revenue and $211,445 of
expense for the first three months of 1995 for Wyoming Mall.
On March 31, 1995, Suburban Plaza was sold to an unrelated third party for a
cash price of $6,910,000. The Partnership received net cash proceeds of
$1,322,253 and recorded a gain on disposition of real estate of $1,861,448. The
Partnership recorded $284,325 of revenue and $263,455 of expense for the first
three months of 1995 for Suburban Plaza.
The Partnership's working capital needs have been supported by net proceeds from
the December 1993 sale of Hickory Lake Apartments and the March 1995 sales of
Suburban Plaza and Wyoming Mall and by deferring certain affiliate payables. In
addition, the sale of Homestead Manor on February 22, 1994 provided net cash
proceeds of $39,850.
The Partnership has had little ready cash reserves since its inception. It has
been largely dependent on affiliates to support its operations. Although no
additional advances from affiliates were required during the first three months
of 1995, at March 31, 1995 the Partnership owed affiliate advances of $1,947,603
and payables to affiliates for property management fees, Partnership general and
administrative expenses and asset management fees totaling $3,627,944. In April
1995, the proceeds from the sales of Suburban Plaza and Wyoming Mall enabled the
Partnership to repay $1,320,745 of affiliate advances and accrued interest.
RESULTS OF OPERATIONS
- ---------------------
Revenue:
Rental revenue decreased by $53,738 for the three months ended March 31, 1995,
as compared to the same three month period in 1994. The decrease is primarily
due to the sale of Homestead Manor Apartments in February 1994.
Interest income increased by $10,458 for the three months ended March 31, 1995
as compared to the same period in 1994. The increase was due primarily to higher
average cash balances that resulted from the sale proceeds of Hickory Lake and
Homestead Manor Apartments.
During the first quarter of 1995, the partnership recognized a gain on
disposition of real estate on Suburban Plaza of $1,861,448 and a loss on the
sale of Wyoming Mall of $245,637. During the first quarter of 1994, the
partnership recognized a gain on disposition of real estate on Homestead Manor
Apartments of $29,440. Also related to the sale of Homestead Manor Apartments,
the partnership reduced previously accrued property taxes of $154,134, which was
recorded as other income during the first quarter of 1994.
Expenses:
Total expenses increased by $38,449 for the three months ended March 31, 1995,
as compared to the same period in 1994.
Interest expense-affiliates increased by $36,636 for the three months ended
March 31, 1995 as compared to the three month period ended March 31, 1994. The
increase was mainly due to an increase in the interest rate from 6% at March 31,
1994 to 9% at March 31, 1995.
Utilities expense decreased by $26,598 for the three months ended March 31, 1995
as compared to the same period in 1994. The first quarter of 1994 includes
approximately $24,000 of utility expense relating to Hickory Lake Apartments and
Homestead Manor Apartments, properties that were sold in December 1993 and
February 1994, respectively. No such expense was incurred in the first quarter
of 1995 relating to these properties.
Repairs and maintenance expense decreased by $41,680 for the three months ended
March 31, 1995, as compared to the three months ended March 31, 1994. Due to the
sale of Hickory Lake and Homestead Manor Apartments in December 1993 and
February 1994, respectively, the first quarter of 1994 includes approximately
$17,000 of repairs and maintenance expense relating to these properties. The
remaining decrease was mainly due to a slight decline in repairs and maintenance
at Suburban Plaza, Governour's Square, Evergreen and Bedford Green Apartments.
Other property operating expenses increased by $51,947 for the three months
ended March 31, 1995, as compared to the same period in 1994, mainly due to an
increase in property hazard insurance rates at Governour's Square, Breckenridge
and Evergreen Apartments. In addition, Suburban Plaza had an increase in legal
fees relating to the sale of the property in March 1995.
General and administrative expense-affiliates decreased by $47,527 for the three
months ended March 31, 1995, as compared to the same period in 1994. The
decrease was due mainly to a decline in the asset management fees, the result of
a decrease in tangible asset value of the partnership, on which the fee is
based, primarily because of the sale of Homestead Manor Apartments.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
At March 31, 1995, the Partnership held cash and cash equivalents of $3,391,890.
The Partnership was provided $271,948 of cash from operating activities during
the first three months of 1995 as compared to cash used by operating activities
of $230,321 for the same period of 1994. The change in cash flow from operations
is primarily due to a decrease in cash paid to suppliers. The 1994 cash paid to
suppliers includes a reduction of delinquent payables, due to the improved cash
position of the Partnership that resulted from the sale of Hickory Lake
Apartments. This decrease was partially offset by an increase in interest paid
and interest paid to affiliates due to the payment of previously accrued
interest.
Cash provided by investing activities totaled $2,049,477 for the first three
months of 1995 as compared to cash used in investing activities of $43,123 for
the same period of 1994. Cash used for additions to real estate totaled $150,440
for the three months ended March 31, 1995 as compared to $103,847 for the same
period of the prior year. The Partnership received $2,199,917 of proceeds from
the sales of Suburban Plaza and Wyoming Mall during the first three months of
1995. The Partnership received $39,850 from the sale of Homestead Manor
Apartments during the first three months of 1994. Additionally, the Partnership
received $20,874 from McNeil Real Estate Fund XXI, L.P. for repayment of
previous advances.
Short-term liquidity
- --------------------
On March 31, 1995, the Partnership sold two of its properties, Suburban Plaza
and Wyoming Mall, for net cash proceeds of $2,199,917. In April 1995, the
Partnership utilized $1,320,745 of the proceeds to repay advances from
affiliates and accrued interest.
During 1995, the mortgage notes payable on Bedford Green and Woodcreek
Apartments mature. Management is currently working on refinancing both of these
notes.
For the rest of 1995, present cash balances, operations of the properties and
proceeds from the sale of Suburban Plaza and Wyoming Mall are expected to
provide sufficient cash for normal operating expenses, debt service payments and
some budgeted capital improvements. However, a portion of the capital
improvements and any debt maturities that have not been extended will require
the use of other sources of cash. No such sources have been identified. The
Partnership has no established lines of credit from outside sources. Although
affiliates of the Partnership have previously funded such cash deficits, there
can be no assurance the Partnership will receive additional funds. Other
possible actions to resolve cash deficiencies include refinancing, deferring
major capital or repair expenditures on Partnership properties except where
improvements are expected to enhance the competitiveness and marketability of
the properties, deferring payables to or arranging financing from affiliates or
the ultimate sale of other properties.
The General Partner has established a revolving credit facility not to exceed
$5,000,000 in the aggregate which is available on a "first-come first-served"
basis to the Partnership and other affiliated partnerships, if certain
conditions are met. Borrowings under the facility may be used to fund deferred
maintenance, refinancing obligations and working capital needs. There is no
assurance that the Partnership will receive any additional funds under the
facility because no amounts have been reserved for any particular partnership.
As of March 31, 1995, $2,102,530 remained available for borrowing under the
facility; however, additional funds could be available as other partnerships
repay existing borrowings. Additionally, the General Partner has, in its
discretion, advanced funds to the Partnership in addition to the revolving
credit facility. The General Partner is not obligated to advance funds to the
Partnership and there is no assurance that the Partnership will receive
additional funds.
McNeil Real Estate Fund XXVII, L.P., ("McNeil XXVII") an affiliate of the
General Partner, is permitted to make nonrecourse mortgage loans to affiliates
under certain conditions and limitations and subject to availability of funds.
In 1992, the Partnership borrowed $972,000 from McNeil XXVII, which was secured
by a third lien mortgage on Suburban Plaza. This loan was repaid at the sale of
Suburban Plaza on March 31, 1995.
Additionally, the Partnership had a $359,000 mortgage loan from an affiliate of
the General Partner that was secured by a second lien mortgage on Suburban
Plaza. This loan and the related accrued interest was also repaid at the sale of
Suburban Plaza on March 31, 1995.
Long-term liquidity
- -------------------
Operations of the Partnership's properties are expected to provide sufficient
cash flow for operating expenses, debt service payments and capital improvements
in the foreseeable future. The proceeds from the sales of Wyoming Mall and
Suburban Plaza will enable the Partnership to reduce a significant portion of
its affiliate debt as well as affiliate payables. The Partnership has
significant mortgage maturities during 1995, 1997 and 1999, and management
expects to refinance these mortgage notes as they mature. If management is
unable to refinance the mortgage notes as they mature; the Partnership will
require other sources of cash. No such sources have been identified.
These conditions raise substantial doubt about the Partnership's ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Distributions
- -------------
To maintain adequate cash balances of the Partnership, distributions to Current
Income Unit holders were suspended in 1989. There have been no distribution to
Growth/Shelter Units holders. Distributions to Unit holders will remain
suspended for the foreseeable future. The General Partner will continue to
monitor the cash reserves and working capital needs of the Partnership to
determine when cash flows will support distributions to the Unit holders.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------ --------------------------------
(a) Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
4. Amended and Restated Limited Partnership Agreement dated March 26, 1992.
(Incorporated by reference to the Current Report of the Registrant on Form 8-K
dated March 26, 1992, as filed on April 9, 1992).
11. Statement regarding computation of Net Income (Loss) per Limited Partnership
Unit: Net income (loss) per limited partnership unit is computed by dividing
net income (loss) allocated to the limited partners by the weighted average
number of limited partnership units outstanding. Per unit information has
been computed based on 24,960 and 24,982 Current Income Units outstanding in
1994 and 1993, respectively, and 22,366 and 22,400 Growth/Shelter Units
outstanding in 1994 and 1993, respectively.
</TABLE>
(b) Reports on Form 8-K. A current report on Form 8-K dated March 31, 1995
was filed on April 11, 1995, reporting the sales of Suburban Plaza and
Wyoming Mall.
<PAGE>
MCNEIL REAL ESTATE FUND XXI, L.P.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized:
<TABLE>
<CAPTION>
<S> <C>
McNEIL REAL ESTATE FUND XXI, L.P.
By: McNeil Partners, L.P., General Partner
By: McNeil Investors, Inc., General Partner
May 15, 1995 By: /s/ Donald K. Reed
- ---------------------------- -------------------------------------------
Date Donald K. Reed
President and Chief Executive Officer
May 15, 1995 By: /s/ Robert C. Irvine
- ---------------------------- -------------------------------------------
Date Robert C. Irvine
Chief Financial Officer of McNeil Investors, Inc.
Principal Financial Officer
May 15, 1995 By: /s/ Carol A. Fahs
- ---------------------------- -------------------------------------------
Date Carol A. Fahs
Chief Accounting Officer of McNeil Real Estate
Management, Inc.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1995
<PERIOD-END> DEC-31-1994 MAR-31-1995
<CASH> 1,151,098 3,391,890
<SECURITIES> 0 0
<RECEIVABLES> 714,634 186,884
<ALLOWANCES> (51,086) (17,302)
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 22,557,552 22,319,016
<DEPRECIATION> (13,696,125) (14,078,484)
<TOTAL-ASSETS> 33,985,057 27,249,350
<CURRENT-LIABILITIES> 0 0
<BONDS> 30,979,473 22,842,124
<COMMON> 0 0
0 0
0 0
<OTHER-SE> (3,123,094) (2,038,545)
<TOTAL-LIABILITY-AND-EQUITY> 33,985,057 27,249,350
<SALES> 8,054,097 2,007,881
<TOTAL-REVENUES> 8,316,120 3,649,015
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 6,942,981 1,714,917
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 3,264,735 849,549
<INCOME-PRETAX> (1,891,596) 1,084,549
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (1,891,596) 1,084,549
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (1,891,596) 1,084,549
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
