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 September 30, 1996
-----------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to_____________
Commission file 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 (972) 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>
September 30, December 31,
1996 1995
--------------- --------------
ASSETS
- ------
Real estate investments:
<S> <C> <C>
Land..................................................... $ 3,240,113 $ 3,607,306
Buildings and improvements............................... 29,317,722 33,341,911
-------------- -------------
32,557,835 36,949,217
Less: Accumulated depreciation and amortization......... (14,333,588) (15,278,026)
-------------- -------------
18,224,247 21,671,191
Asset held for sale......................................... 2,711,429 -
Cash and cash equivalents................................... 1,629,136 1,998,301
Cash segregated for security deposits....................... 183,072 167,007
Accounts receivable, net of allowance for doubtful
accounts of $1,800 at December 31, 1995.................. 220,045 176,462
Escrow deposits............................................. 618,555 611,639
Deferred borrowing costs, net of accumulated
amortization of $137,892 and $90,135 at
September 30, 1996 and December 31, 1995,
respectively............................................. 448,509 495,631
Prepaid expenses and other assets........................... 66,763 58,418
-------------- -------------
$ 24,101,756 $ 25,178,649
============== =============
LIABILITIES AND PARTNERS' DEFICIT
- ---------------------------------
Mortgage notes payable, net................................. $ 21,839,375 $ 22,008,628
Mortgage note payable - affiliates.......................... 733,900 733,900
Accounts payable and accrued expenses....................... 256,565 300,985
Accrued property taxes...................................... 395,429 338,135
Payable to affiliates....................................... 4,083,881 4,217,978
Advances from affiliates.................................... 720,544 676,601
Security deposits and deferred rental revenue............... 213,605 196,320
-------------- -------------
28,243,299 28,472,547
-------------- -------------
Partners' deficit:
Limited partners - 50,000 Units authorized; 47,288
and 47,308 Units outstanding at September 30, 1996
and December 31, 1995, respectively, (24,949
Current Income Units outstanding at September 30, 1996
and December 31, 1995 and 22,339 and 22,359
Growth/Shelter Units outstanding at September
30, 1996 and December 31,1995, respectively)........... (3,782,516) (2,943,347)
General Partner.......................................... (359,027) (350,551)
-------------- -------------
(4,141,543) (3,293,898)
-------------- -------------
$ 24,101,756 $ 25,178,649
============== =============
</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 Nine Months Ended
September 30, September 30,
--------------------------------- ---------------------------------
1996 1995 1996 1995
-------------- --------------- -------------- --------------
Revenue:
<S> <C> <C> <C> <C>
Rental revenue................ $ 1,608,613 $ 1,525,062 $ 4,807,997 $ 5,061,839
Interest...................... 26,292 27,334 80,167 86,576
Gain on disposition of real
estate...................... - - - 1,615,811
------------- ------------- ------------- -------------
Total revenue............... 1,634,905 1,552,396 4,888,164 6,764,226
------------- ------------- ------------- -------------
Expenses:
Interest...................... 514,231 541,237 1,499,211 1,844,910
Interest - affiliates......... 30,182 31,277 90,027 165,581
Depreciation and
amortization................ 410,925 418,203 1,219,510 1,325,801
Property taxes................ 125,608 144,023 370,744 442,160
Personnel costs............... 187,992 199,148 563,345 613,232
Utilities..................... 110,422 114,335 320,912 335,573
Repair and maintenance........ 187,333 199,156 538,871 547,099
Property management
fees - affiliates........... 82,623 78,324 249,970 271,870
Other property operating
expenses.................... 89,602 152,716 302,162 428,311
General and administrative.... 15,856 4,537 49,429 41,715
General and administrative -
affiliates.................. 163,274 193,735 531,628 601,222
------------- ------------- ------------- -------------
Total expenses.............. 1,918,048 2,076,691 5,735,809 6,617,474
------------- ------------- ------------- -------------
Net income (loss)................ $ (283,143) $ (524,295) $ (847,645) $ 146,752
============= ============= ============= =============
Net income (loss) allocable
to limited partners - Current
Income Unit................... $ (25,483) $ (47,186) $ (76,288) $ 13,208
Net income (loss) allocable to
to limited partners - Growth/
Shelter Unit.................. (254,829) (471,865) (762,881) 132,077
Net income (loss) allocable
to General Partner............ (2,831) (5,244) (8,476) 1,467
------------- ------------- ------------- -------------
Net income (loss)................ $ (283,143) $ (524,295) $ (847,645) $ 146,752
============= ============= ============= =============
Net income (loss) per limited
partnership unit:
Current Income Units.......... $ (1.02) $ (1.89) $ (3.06) $ .53
============= ============= ============= =============
Growth/Shelter Units.......... $ (11.41) $ (21.10) $ (34.15) $ 5.91
============= ============= ============= =============
</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 Nine Months Ended September 30, 1996 and 1995
<TABLE>
<CAPTION>
Total
General Limited Partners'
Partner Partners Deficit
--------------- ---------------- ---------------
<S> <C> <C> <C>
Balance at December 31, 1994.............. $ (348,843) $ (2,774,251) $ (3,123,094)
Net income
General Partner........................ 1,467 - 1,467
Current Income Units................... - 13,208 13,208
Growth/Shelter Units................... - 132,077 132,077
------------- ------------- -------------
Total net income.......................... 1,467 145,285 146,752
------------- ------------- -------------
Balance at September 30, 1995............. $ (347,376) $ (2,628,966) $ (2,976,342)
============= ============= =============
Balance at December 31, 1995.............. $ (350,551) $ (2,943,347) $ (3,293,898)
Net loss
General Partner........................ (8,476) (8,476)
Current Income Units................... (76,288) (76,288)
Growth/Shelter Units................... (762,881) (762,881)
------------- ------------- -------------
Total net loss............................ (8,476) (839,169) (847,645)
------------- ------------- -------------
Balance at September 30, 1996............. $ (359,027) $ (3,782,516) $ (4,141,543)
============= ============= =============
</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>
Nine Months Ended
September 30,
-------------------------------------------
1996 1995
------------------- -----------------
Cash flows from operating activities:
<S> <C> <C>
Cash received from tenants........................ $ 4,770,881 $ 5,224,781
Cash paid to suppliers............................ (1,797,377) (1,904,727)
Cash paid to affiliates........................... (915,695) (278,977)
Interest received................................. 80,167 77,148
Interest received from affiliates................. - 71,614
Interest paid..................................... (1,438,669) (1,882,234)
Interest paid to affiliates....................... (36,666) (496,075)
Property taxes paid............................... (363,815) (673,395)
----------------- --------------
Net cash provided by operating activities............ 298,826 138,135
----------------- --------------
Cash flows from investing activities:
Additions to real estate investments.............. (483,995) (484,174)
Net proceeds from disposition of real estate...... - 2,199,917
Repayment of advances to affiliates............... - 300,000
----------------- --------------
Net cash provided by (used in)
investing activities.............................. (483,995) 2,015,743
----------------- --------------
Cash flows from financing activities:
Deferred borrowing costs paid..................... (635) (169,146)
Proceeds from refinancings........................ - 60,103
Principal payments on mortgage notes
payable......................................... (183,361) (195,165)
Repayment of advances from affiliates............. - (973,000)
----------------- --------------
Net cash used in financing activities................ (183,996) (1,277,208)
----------------- --------------
Net increase (decrease) in cash and
cash equivalents.................................. (369,165) 876,670
Cash and cash equivalents at beginning of
period............................................ 1,998,301 1,151,098
----------------- --------------
Cash and cash equivalents at end of period........... $ 1,629,136 $ 2,027,768
================= ==============
</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
Operating Activities
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------------------------
1996 1995
----------------- ---------------
<S> <C> <C>
Net income (loss).................................... $ (847,645) $ 146,752
--------------- --------------
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization..................... 1,219,510 1,325,801
Amortization of deferred borrowing costs.......... 47,757 45,270
Amortization of discounts on mortgage
notes payable................................... 14,108 15,823
Interest added to advances to affiliates,
net of payments................................. - 62,186
Interest added to advances from affiliates,
net of payments................................. 43,943 (276,837)
Gain on disposition of real estate................ - (1,615,811)
Changes in assets and liabilities:
Cash segregated for security deposits........... (16,065) 23,343
Accounts receivable............................. (43,583) 141,264
Escrow deposits................................. (6,916) (395,659)
Prepaid expenses and other assets............... (8,345) 48,408
Accounts payable and accrued expenses........... (44,420) 50,100
Accrued property taxes.......................... 57,294 (36,594)
Payable to affiliates........................... (134,097) 594,115
Security deposits and deferred rental
revenue....................................... 17,285 9,974
--------------- --------------
Total adjustments............................. 1,146,471 (8,617)
--------------- --------------
Net cash provided by operating activities............ $ 298,826 $ 138,135
=============== ==============
</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)
September 30, 1996
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 nine months ended September 30, 1996
are not necessarily indicative of the results to be expected for the year ending
December 31, 1996.
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, 1995, 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 previously
relied on advances from affiliates to meet its debt obligations and to fund
capital improvements. Additionally, the Partnership has had to defer payment of
payables to affiliates in order to meet its working capital needs. Additionally,
the Partnership is faced with mortgage note maturities of approximately $9.2
million in 1997 for which no extensions, modifications or refinancings have yet
been negotiated. There is no guarantee that such negotiations can be completed.
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 these uncertainties.
NOTE 4.
- -------
Certain reclassifications have been made to prior period amounts to conform to
the current period presentation.
<PAGE>
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.
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 $2,831,399 were
outstanding at September 30, 1996.
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. In connection with the sales of Suburban
Plaza and Wyoming Mall, total accrued but unpaid disposition fees of $346,050
were outstanding at September 30, 1996 and December 31, 1995.
Prior to the restructuring of the Partnership, affiliates of the Original
General Partner advanced funds to enable the Partnership to meet its working
capital requirements. These advances were purchased by, and are now payable to,
the General Partner.
The total advances from affiliates at September 30, 1996 and December 31, 1995
consisted of the following:
September 30, December 31,
1996 1995
------------- ------------
Advances purchased by General Partner....... $ 630,574 $ 630,574
Accrued interest payable.................... 89,970 46,027
--------- ---------
$ 720,544 $ 676,601
========= =========
<PAGE>
Compensation and reimbursements paid to or accrued for the benefit of the
General Partner and its affiliates are as follows:
Nine Months Ended
September 30,
------------------------
1996 1995
---------- -----------
Property management fees........................... $ 249,970 $ 271,870
Charged to gain on disposition of real estate:
Disposition fee................................. - 346,050
Charged to interest -affiliates:
Interest on advances from affiliates............ 43,943 70,908
Interest on mortgage note payable - affiliates.. 46,084 94,673
Charged to general and administrative -affiliates:
Partnership administration...................... 230,765 301,077
Asset management fee............................ 300,863 300,145
---------- ----------
$ 871,625 $ 1,384,723
========== ==========
Payable to affiliates at September 30, 1996 and December 31, 1995 consisted
primarily of unpaid asset management fees, property management fees, disposition
fees and partnership general and administrative expenses and are due and payable
from current operations.
NOTE 6.
- -------
On July 12 and September 9, 1996, Governour's Square Apartments suffered damage
from two separate hurricanes. Repairs are estimated to cost approximately
$131,000, $81,000 of which is expected to be covered by the insurance carrier.
The basis of the damaged property approximated the expected proceeds to be
received from the insurance carrier.
NOTE 7.
- -------
In 1996, the Partnership adopted the Financial Accounting Standards Board's
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of."
This statement requires the cessation of depreciation on assets held for sale.
Since Fort Meigs Plaza is currently classified as an asset held for sale, no
depreciation will be taken effective October 1, 1996.
<PAGE>
NOTE 8.
- -------
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 are
detailed below:
Gain on Sale Cash Proceeds
------------ -------------
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
===========
<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 loss on the disposition are
detailed below:
Gain on Sale Cash Proceeds
------------ -------------
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
===========
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------- ---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- -------------------
Net loss for the first nine months of 1996 was $847,645 as compared to net
income of $146,752 for the same period in 1995.
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. 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 $256,873 of revenue and $268,760 of
expense for the first nine months of 1995 for Wyoming Mall.
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 $306,747 of revenue and $328,237 of expense for the first nine months
of 1995 for Suburban Plaza.
<PAGE>
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.
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 nine months
of 1996, at September 30, 1996 the Partnership owed affiliate advances of
$720,544 and payables to affiliates for property management fees, Partnership
general and administrative expenses, asset management fees and disposition fees
totaling $4,083,881.
RESULTS OF OPERATIONS
- ---------------------
Revenue:
Rental revenue increased by $83,551 for the three months and decreased by
$253,842 for the nine months ended September 30, 1996, as compared to the same
periods in 1995. The overall decrease was primarily due to the sales of Suburban
Plaza and Wyoming Mall, which contributed rental revenue of approximately
$306,000 and $255,000, respectively, in the first nine months of 1995. Increased
occupancy at Bedford Green Apartments and Wise County Plaza, and increased
rental rates at Governour's Square partially offset the loss in rental revenue
from the sold properties.
During the first nine months 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.
Expenses:
Total expenses decreased by $158,643 and $881,665 for the three and nine months
ended September 30, 1996, respectively, as compared to the same periods in 1995.
The decreases in interest expense, depreciation and amortization expense,
property taxes, personnel costs and property management fees are primarily due
to the sales of Suburban Plaza and Wyoming Mall in March 1995.
Interest - affiliates decreased by $1,095 and $75,554 for the three and nine
months ended September 30, 1996, respectively, as compared to the same periods
in 1995. The decrease was mainly due to the repayment of $973,000 of advances
and $1,331,000 of mortgage notes payable from affiliates in the first half of
1995.
Other property operating expenses decreased by $63,114 and $126,149 for the
three and nine months ended September 30, 1996, respectively, as compared to the
same periods in 1995. The decreases were mainly due to the sales of Suburban
Plaza and Wyoming Mall, which incurred approximately $46,000 of other property
operating expenses in the first nine months of 1995. In addition, Wise County
Plaza incurred $18,000 to settle litigation with a tenant in 1995. All of the
properties experienced a decrease in employee training and marketing costs in
1996.
General and administrative - affiliates decreased by $30,461 and $69,594 for the
three and nine months ended September 30, 1996, respectively, as compared to the
same periods in 1995. The decrease was mainly due to a lower amount of overhead
expenses being allocated to the Partnership by McREMI.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
At September 30, 1996, the Partnership held cash and cash equivalents of
$1,629,136.
Cash of $298,826 was provided by operating activities during the first nine
months of 1996 as compared to $138,135 provided during the same period in 1995.
Cash received from tenants, cash paid to suppliers, interest paid, and property
taxes paid decreased due to the sales of Suburban Plaza and Wyoming Mall. No
interest was received from affiliates during the first nine months of 1996 since
the previous advances of $300,000 to McNeil Real Estate Fund XXII, L.P. ("McNeil
XXII") for Wyoming Mall were paid off in 1995. With the proceeds from the sales
of Suburban Plaza and Wyoming Mall, the Partnership was able to repay $973,000
of advances and $1,331,000 of mortgage notes payable from affiliates in the
first half of 1995, thereby reducing the interest paid to affiliates during the
first half of 1996.
The Partnership received $2,199,917 of proceeds from the sales of Suburban Plaza
and Wyoming Mall during the first nine months of 1995. Additionally, the
Partnership received $300,000 in 1995 from McNeil XXII for repayment of previous
advances for Wyoming Mall.
Short-term liquidity
For the remainder of 1996, present cash balances and operations of the
properties are expected to provide sufficient cash for normal operating
expenses, debt service payments and budgeted capital improvements. The
Partnership has no established lines of credit from outside sources. Although
affiliates of the Partnership have previously funded 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 September 30, 1996, $4,082,159 remained available for borrowing under the
facility; however, additional funds could be available as other partnerships
repay existing borrowings. This commitment will terminate on March 26, 1997.
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.
<PAGE>
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 Partnership has significant mortgage maturities
during 1997, 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 these uncertainties.
Distributions
To maintain adequate cash balances of the Partnership, distributions to Current
Income Unit holders were suspended in 1989. There have been no distributions 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.
Exhibit
Number Description
------- -----------
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
24,949 Current Income Units outstanding in
1996 and 1995 and 22,339 and 22,359
Growth/Shelter Units outstanding in 1996 and
1995, respectively.
27. Financial Data Schedule for the quarter
ended September 30, 1996.
(b) Reports on Form 8-K. There were no reports on Form 8-K filed during
the quarter ended September 30, 1996.
<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:
McNEIL REAL ESTATE FUND XXI, L.P.
By: McNeil Partners, L.P., General Partner
By: McNeil Investors, Inc., General Partner
November 14, 1996 By: /s/ Donald K. Reed
- ----------------- ------------------------------------
Date Donald K. Reed
President and Chief Executive Officer
November 14, 1996 By: /s/ Ron K. Taylor
- ----------------- ------------------------------------
Date Ron K. Taylor
Acting Chief Financial Officer of
McNeil Investors, Inc.
November 14, 1996 By: /s/ Carol A. Fahs
- ----------------- -------------------------------------
Date Carol A. Fahs
Chief Accounting Officer of McNeil
Real Estate Management, Inc.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,629,136
<SECURITIES> 0
<RECEIVABLES> 220,045
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 32,557,835
<DEPRECIATION> (14,333,588)
<TOTAL-ASSETS> 24,101,756
<CURRENT-LIABILITIES> 0
<BONDS> 22,573,275
<COMMON> 0
0
0
<OTHER-SE> (4,141,543)
<TOTAL-LIABILITY-AND-EQUITY> 24,101,756
<SALES> 4,807,997
<TOTAL-REVENUES> 4,888,164
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,146,571
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,589,238
<INCOME-PRETAX> (847,645)
<INCOME-TAX> 0
<INCOME-CONTINUING> (847,645)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (847,645)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
