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 quarterly period ended March 31, 1998
-------------------------------------------
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 600, 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>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MCNEIL REAL ESTATE FUND XXI, L.P.
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
-------------- ---------------
ASSETS
- ------
Real estate investments:
<S> <C> <C>
Land..................................................... $ 3,192,923 $ 3,192,923
Buildings and improvements............................... 30,089,877 30,048,514
-------------- -------------
33,282,800 33,241,437
Less: Accumulated depreciation and amortization......... (16,565,029) (16,177,771)
-------------- -------------
16,717,771 17,063,666
Asset held for sale......................................... 2,795,988 2,795,988
Cash and cash equivalents................................... 1,856,155 1,817,585
Cash segregated for security deposits....................... 191,911 176,258
Accounts receivable......................................... 229,888 229,435
Escrow deposits............................................. 466,862 558,752
Deferred borrowing costs, net of accumulated amortiz-
ation of $233,696 and $218,067 at March 31, 1998
and December 31, 1997, respectively...................... 352,705 368,334
Prepaid expenses and other assets........................... 59,585 53,944
-------------- -------------
$ 22,670,865 $ 23,063,962
============== =============
LIABILITIES AND PARTNERS' DEFICIT
- ---------------------------------
Mortgage notes payable, net................................. $ 18,472,746 $ 18,534,503
Mortgage notes payable - affiliate.......................... 3,725,986 3,730,076
Accounts payable and accrued expenses....................... 354,720 398,815
Accrued property taxes...................................... 317,773 447,269
Payable to affiliates....................................... 5,036,561 4,862,973
Advances from affiliates.................................... 809,758 794,981
Security deposits and deferred rental revenue............... 190,556 194,927
-------------- -------------
28,908,100 28,963,544
-------------- -------------
Partners' deficit:
Limited partners - 50,000 Units authorized; 46,948 and
47,086 Units outstanding at March 31, 1998 and
December 31, 1997, respectively (24,863 Current
Income Units and 22,085 Growth/Shelter Units out-
standing at March 31, 1998 and 24,906 Current Income
Units and 22,180 Growth/Shelter Units outstanding
at December 31,1997)................................... (5,857,251) (5,522,974)
General Partner.......................................... (379,984) (376,608)
-------------- -------------
(6,237,235) (5,899,582)
-------------- -------------
$ 22,670,865 $ 23,063,962
============== =============
</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,
---------------------------------
1998 1997
-------------- --------------
Revenue:
<S> <C> <C>
Rental revenue ............................................ $ 1,654,081 $ 1,607,301
Interest ................................................... 16,801 18,501
------------- ------------
Total revenue............................................. 1,670,882 1,625,802
------------- ------------
Expenses:
Interest.................................................... 420,825 513,851
Interest - affiliates....................................... 125,780 29,547
Depreciation and amortization............................... 387,258 366,223
Property taxes.............................................. 137,585 135,339
Personnel costs............................................. 202,934 209,193
Utilities................................................... 116,969 115,312
Repairs and maintenance..................................... 163,906 178,765
Property management fees -affiliates........................ 86,281 83,527
Other property operating expenses........................... 103,910 94,650
General and administrative.................................. 92,496 33,435
General and administrative - affiliates..................... 170,591 157,599
------------- -------------
Total expenses............................................ 2,008,535 1,917,441
------------- -------------
Net loss....................................................... $ (337,653) $ (291,639)
============= =============
Net loss allocable to limited partners -
Current Income Unit......................................... $ (30,389) $ (26,248)
Net loss allocable to limited partners -
Growth/Shelter Unit......................................... (303,888) (262,475)
Net loss allocable to General Partner.......................... (3,376) (2,916)
------------- --------------
Net loss....................................................... $ (337,653) $ (291,639)
============= =============
Net loss per limited partnership unit:
Current Income Units........................................... $ (1.22) $ (1.05)
============= =============
Growth/Shelter Units........................................... $ (13.76) $ (11.83)
============= =============
</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, 1998 and 1997
<TABLE>
<CAPTION>
Total
General Limited Partners'
Partner Partners Deficit
--------------- --------------- ---------------
<S> <C> <C> <C>
Balance at December 31, 1996.............. $ (361,822) $ (4,059,156) $ (4,420,978)
Net loss
General Partner........................ (2,916) - (2,916)
Current Income Units................... - (26,248) (26,248)
Growth/Shelter Units................... - (262,475) (262,475)
------------- ------------- -------------
Total net loss............................ (2,916) (288,723) (291,639)
------------- ------------- -------------
Balance at March 31, 1997................. $ (364,738) $ (4,347,879) $ (4,712,617)
============= ============= =============
Balance at December 31, 1997.............. $ (376,608) $ (5,522,974) $ (5,899,582)
Net loss
General Partner........................ (3,376) - (3,376)
Current Income Units................... - (30,389) (30,389)
Growth/Shelter Units................... - (303,888) (303,888)
------------- ------------- -------------
Total net loss............................ (3,376) (334,277) (337,653)
------------- ------------- -------------
Balance at March 31, 1998................. $ (379,984) $ (5,857,251) $ (6,237,235)
============= ============= =============
</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,
-------------------------------------------
1998 1997
------------------- ----------------
Cash flows from operating activities:
<S> <C> <C>
Cash received from tenants........................ $ 1,631,609 $ 1,586,353
Cash paid to suppliers............................ (787,618) (676,100)
Cash paid to affiliates........................... (83,284) (83,764)
Interest received................................. 16,801 18,501
Interest paid..................................... (365,004) (492,145)
Interest paid to affiliates....................... (108,131) (12,221)
Property taxes paid............................... (153,371) (164,733)
----------------- --------------
Net cash provided by operating activities............ 151,002 175,891
----------------- --------------
Cash flows from investing activities:
Additions to real estate investments.............. (41,363) (72,444)
----------------- --------------
Cash flows from financing activities:
Principal payments on mortgage notes
payable......................................... (66,979) (65,193)
Principal payments on mortgage notes
payable - affiliate............................. (4,090) -
----------------- --------------
Net cash used in financing activities................ (71,069) (65,193)
----------------- --------------
Net increase in cash and cash equivalents............ 38,570 38,254
Cash and cash equivalents at beginning of
period............................................ 1,817,585 1,670,843
----------------- --------------
Cash and cash equivalents at end of period........... $ 1,856,155 $ 1,709,097
================= ===============
</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 Loss to Net Cash Provided by
Operating Activities
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------------------
1998 1997
------------------ ------------------
<S> <C> <C>
Net loss............................................. $ (337,653) $ (291,639)
---------------- ----------------
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization..................... 387,258 366,223
Amortization of deferred borrowing costs.......... 15,629 17,218
Amortization of discounts on mortgage
notes payable................................... 5,222 4,958
Accrued interest on advances from affiliates...... 14,777 14,410
Changes in assets and liabilities:
Cash segregated for security deposits........... (15,653) (11,412)
Accounts receivable............................. (453) (10,805)
Escrow deposits................................. 91,890 (19,584)
Prepaid expenses and other assets............... (5,641) (23,074)
Accounts payable and accrued expenses........... (44,095) (15,908)
Accrued property taxes.......................... (129,496) (20,918)
Payable to affiliates........................... 173,588 157,362
Security deposits and deferred rental
revenue....................................... (4,371) 9,060
---------------- --------------
Total adjustments............................. 488,655 467,530
--------------- --------------
Net cash provided by operating activities............ $ 151,002 $ 175,891
=============== ==============
</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, 1998
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 600, 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, 1998 are
not necessarily indicative of the results to be expected for the year ending
December 31, 1998.
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, 1997, 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 600, LB70, Dallas, Texas 75240.
NOTE 3.
- -------
Certain reclassifications have been made to prior period amounts to conform with
the current period presentation.
NOTE 4.
- -------
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. The Partnership has had to defer
payment of payables to affiliates in order to meet its working capital needs.
Additionally, the Partnership is currently in default on the mortgage notes
payable secured by Wise County Plaza and the lender intends to foreclose on the
property. Foreclosure by the lender is not anticipated to have a significant
effect of the Partnership since all excess cash flow of the property is payable
to the lender as additional interest on the loans.
On April 20, 1998, the Partnership sold Fort Meigs Plaza to a non-affiliate for
$3.8 million. There were no net cash proceeds arising from the sale as all cash
proceeds were used to pay off the first and second lien mortgage notes secured
by the property.
<PAGE>
The Partnership has no established lines of credit from outside sources. Other
possible actions to resolve cash deficiencies include refinancings, deferral of
capital expenditures on Partnership properties except where improvements are
expected to increase the competitiveness and marketability of the properties,
deferral of payables to or arranging financing from affiliates, or the ultimate
sale of Partnership properties.
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. Total accrued but unpaid Partnership
general and administration fees of $1,240,780 and $1,171,406 were outstanding at
March 31, 1998 and December 31, 1997, respectively.
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 $3,419,623 and
$3,318,406 were outstanding at March 31, 1998 and December 31, 1997,
respectively.
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 March 31, 1998 and December 31, 1997.
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. These advances and accrued interest, which totaled $809,758
at March 31, 1998, were repaid in full in April 1998.
<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,
----------------------------------------
1998 1997
---------------- ---------------
<S> <C> <C>
Property management fees............................. $ 86,281 $ 83,527
Charged to interest - affiliates:
Interest on advances from affiliates.............. 14,777 14,410
Interest on mortgage note payable - affiliate..... 111,003 15,137
Charged to general and administrative -affiliates:
Partnership administration........................ 69,374 60,595
Asset management fee.............................. 101,217 97,004
--------------- --------------
$ 382,652 $ 270,673
=============== ==============
</TABLE>
Payable to affiliates at March 31, 1998 and December 31, 1997 consisted
primarily of unpaid asset management fees, property management fees, disposition
fees and partnership general and administrative expenses and is due and payable
from current operations.
NOTE 6.
- -------
The mortgage notes payable secured by Wise County Plaza matured on August 1,
1997. The Partnership was unable to negotiate a modification and extension of
the loans. The Partnership continued to make regularly scheduled debt service
payments on the loans throughout the first quarter of 1998; however, the
Partnership did not make any excess cash flow payments on the loans in 1998. All
payments on the loans were ceased in April 1998 and the lender intends to
foreclose on the property.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------- ---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- -------------------
There has been no significant change in the operations of the Partnership's
properties since December 31, 1997. The Partnership reported a net loss for the
first three months of 1998 of $337,653 as compared to a net loss $291,639 for
the first three months of 1997. Revenues increased to $1,670,882 in 1998 from
$1,625,802 in 1997. Expenses were $2,008,535 in 1998 as compared to $1,917,441
in 1997.
Net cash provided by operating activities was $151,002 for the first three
months of 1998. The Partnership expended $41,363 for capital improvements and
$71,069 for principal payments on its mortgage notes payable and mortgage notes
payable - affiliate. Cash and cash equivalents increased by $38,570 for the
first three months of 1998, leaving a balance of $1,856,155 at March 31, 1998.
<PAGE>
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 1998, at March 31, 1998 the Partnership owed payables to affiliates for
property management fees, Partnership general and administrative expenses, asset
management fees and disposition fees totaling $5,036,561. Affiliate advances of
$809,758 at March 31, 1998 were repaid in full in April 1998.
RESULTS OF OPERATIONS
- ---------------------
Revenue:
Total revenue increased by $45,080 for the three months ended March 31, 1998 as
compared to the same period in 1997, mainly due to an increase in rental
revenue, as discussed below.
Rental revenue for the first three months of 1998 increased by $46,780 as
compared to the same period in 1997. Rental revenue increased by approximately
$19,000 at Governour's Square Apartments due to an increase in rental rates.
Rental revenue at Evergreen Square Apartments increased by approximately $13,000
due to an increase in occupancy from 83% at March 31, 1997 to 96% at March 31,
1998.
Expenses:
Total expenses increased by $91,094 for the three months ended March 31, 1998 as
compared to the same period in 1997. The increase was mainly due to increases in
interest - affiliates and general and administrative expenses, partially offset
by a decrease in interest expense, as discussed below.
Interest expense for the first three months of 1998 decreased by $93,026 as
compared to the first three months of 1997. The decrease was mainly due to the
first lien loan on Fort Meigs Plaza being purchased by an affiliate in December
1997. Interest on this loan was recorded as interest expense for the first
eleven months of 1997; it was recorded as interest - affiliates in 1998.
Interest - affiliates increased by $96,233 for the first quarter of 1998 as
compared to the first quarter of the prior year. The increase was due to
interest on the first lien loan secured by Fort Meigs Plaza being payable to an
affiliate in 1998, as discussed above.
General and administrative expenses for the three months ended March 31, 1998
increased by $59,061 as compared to the same period in 1997. The increase was
primarily due to costs incurred in 1998 to explore alternatives to maximize the
value of the Partnership (see Liquidity and Capital Resources).
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
At March 31, 1998, the Partnership held cash and cash equivalents of $1,856,155.
Cash of $151,002 was provided by operating activities during the first three
months of 1998 as compared to $175,891 provided during the same period in 1997.
The decrease in cash provided by operations in the first three months of 1998
was mainly the result of an increase in cash paid to suppliers due to the timing
of the payment of invoices as well as an increase in general and administrative
expenses in 1998. This increase was partially offset by an increase in cash
received from tenants in 1998 (see discussion of increase in rental revenue,
above). There was a decrease in interest paid and an increase in interest paid
to affiliates in 1998 due to the first lien loan on Fort Meigs Plaza being held
by an affiliate in 1998, as previously discussed. The overall net decrease in
interest paid was the result of the Partnership ceasing excess cash flow
payments on the Wise County Plaza loans in 1998, which is recorded as additional
interest on the loans.
Cash used for additions to real estate investments totaled $41,363 for the first
three months of 1998 as compared to $72,444 for the same period in 1997. A
greater amount was spent in 1997 for replacing appliances at Evergreen Square
and Woodcreek Apartments and for tenant improvements at Fort Meigs Plaza
Shopping Center.
Short-term liquidity
For the remainder of 1998, 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 mortgage
notes payable secured by Wise County Plaza matured on August 1, 1997 and the
lender plans to foreclose on the property. Fort Meigs Plaza was sold to a
non-affiliate for $3.8 million in April 1998. There were no net cash proceeds
arising from the sale as all cash proceeds were used to pay off the first and
second lien mortgage notes secured by the property.
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 Partnership properties.
<PAGE>
Long-term liquidity
Pursuant to the Partnership's previously announced liquidation plans, the
Partnership has recently retained PaineWebber, Incorporated as its exclusive
financial advisor to explore alternatives to maximize the value of the
Partnership. The alternatives being considered by the Partnership include,
without limitation, a transaction in which limited partnership interests in the
Partnership are converted into cash. The General Partner of the Partnership or
entities or persons affiliated with the General Partner will not be involved as
a purchaser in any of the transactions contemplated above. Any transaction will
be subject to certain conditions including (i) approval by the limited partners
of the Partnership, and (ii) receipt of an opinion from an independent financial
advisory firm as to the fairness of the consideration received by the
Partnership pursuant to such transaction. Finally, there can be no assurance
that any transaction will be consummated, or as to the terms thereof.
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 reported net losses for the three months ended March 31,
1998 and 1997. In addition, the Partnership has had to defer payment of payables
to affiliates in order to meet its working capital needs. 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
Loss per Limited Partnership Unit: Net loss
per limited partnership unit is computed by
dividing net loss allocated to the limited
partners by the weighted average number of
limited partnership units outstanding. Per
unit information has been computed based on
24,863 and 24,906 Current Income Units
outstanding in 1998 and 1997, respectively,
and 22,085 and 22,180 Growth/Shelter Units
outstanding in 1998 and 1997, respectively.
27. Financial Data Schedule for the quarter
ended March 31, 1998.
(b) Reports on Form 8-K. A Form 8-K with respect to Item 2 dated April 20,
1998 was filed on April 29, 1998 regarding the sale of Fort Meigs Plaza
Shopping Center.
<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
May 14, 1998 By: /s/ Ron K. Taylor
- ------------ -----------------------------------------
Date Ron K. Taylor
President and Director of McNeil
Investors, Inc.
(Principal Financial Officer)
May 14, 1998 By: /s/ Carol A. Fahs
- ------------ -----------------------------------------
Date Carol A. Fahs
Vice President of McNeil Investors, Inc.
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,224,363
<SECURITIES> 0
<RECEIVABLES> 315,194
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 27,864,279
<DEPRECIATION> (9,138,940)
<TOTAL-ASSETS> 32,175,134
<CURRENT-LIABILITIES> 0
<BONDS> 3,437,648
0
0
<COMMON> 0
<OTHER-SE> 27,377,388
<TOTAL-LIABILITY-AND-EQUITY> 32,175,134
<SALES> 2,203,177
<TOTAL-REVENUES> 2,432,553
<CGS> 1,023,238
<TOTAL-COSTS> 1,355,446
<OTHER-EXPENSES> 355,801
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 96,035
<INCOME-PRETAX> 625,271
<INCOME-TAX> 0
<INCOME-CONTINUING> 625,271
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 625,271
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
