SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended June 30, 1997 Commission file number 0-15962
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(Exact name of registrant as specified in its charter)
Illinois 36-3256340
(State of organization) (IRS Employer Identification No.)
900 N. Michigan Ave., Chicago, IL 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312/915-1987
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
<PAGE>
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . 15
PART II OTHER INFORMATION
Item 5. Other Information. . . . . . . . . . . . . . . . 18
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . 19
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1997 AND DECEMBER 31, 1996
(UNAUDITED)
ASSETS
------
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 18,581,157 18,069,904
Interest, rents and other receivables (net of allowance
for doubtful accounts of $25,047 and $22,675 at
June 30, 1997 and December 31, 1996, respectively). . . . . . . . 116,117 162,300
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . -- 25,860
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . 257,969 250,603
------------ ------------
Total current assets. . . . . . . . . . . . . . . . . . . . . 18,955,243 18,508,667
------------ ------------
Investment property held for sale or disposition. . . . . . . . . . . 33,835,009 33,602,388
------------ ------------
Investment in unconsolidated ventures, at equity. . . . . . . . . . . 6,355,805 6,279,874
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 1,162,761 1,158,543
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . 500,932 453,494
------------ ------------
$ 60,809,750 60,002,966
============ ============
<PAGE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
JUNE 30, DECEMBER 31,
1997 1996
------------- -----------
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . $ 373,175 251,510
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . 562,140 1,018,641
Due to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . 1,309,632 1,273,858
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . 173,618 173,983
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . 605,492 600,100
Unearned rents. . . . . . . . . . . . . . . . . . . . . . . . . . . 368,064 435,718
------------ ------------
Total current liabilities . . . . . . . . . . . . . . . . . . 3,392,121 3,753,810
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . 15,419 15,168
Investment in unconsolidated ventures, at equity. . . . . . . . . . . 22,071,017 21,687,689
Long-term debt, less current portion. . . . . . . . . . . . . . . . . 50,052,024 48,359,317
------------ ------------
Commitments and contingencies
Total liabilities . . . . . . . . . . . . . . . . . . . . . . 75,530,581 73,815,984
Partners' capital accounts (deficits):
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . (15,381,371) (15,345,058)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . (1,316,336) (1,316,336)
------------ ------------
(16,696,707) (16,660,394)
------------ ------------
Limited partners:
Capital contributions, net of offering costs. . . . . . . . . . . 351,746,836 351,746,836
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . (305,594,932) (304,723,432)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . (44,176,028) (44,176,028)
------------ ------------
1,975,876 2,847,376
------------ ------------
Total partners' capital accounts (deficits) . . . . . . . . . (14,720,831) (13,813,018)
------------ ------------
$ 60,809,750 60,002,966
============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------- ---------------------------
1997 1996 1997 1996
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . . $ 2,064,511 2,349,043 4,311,360 6,083,978
Interest income . . . . . . . . . . . . . . . 262,921 256,586 466,310 384,399
Other income. . . . . . . . . . . . . . . . . 377,802 400,382 377,802 400,382
----------- ---------- ---------- -----------
2,705,234 3,006,011 5,155,472 6,868,759
----------- ---------- ---------- -----------
Expenses:
Mortgage and other interest . . . . . . . . . 1,474,377 983,764 2,949,093 3,142,714
Depreciation. . . . . . . . . . . . . . . . . -- 364,716 -- 729,059
Property operating expenses . . . . . . . . . 946,638 1,373,142 1,892,201 3,172,376
Professional services . . . . . . . . . . . . 184,550 104,027 328,798 311,106
Amortization of deferred expenses . . . . . . 52,899 98,515 104,475 258,321
General and administrative. . . . . . . . . . 276,116 179,881 466,749 482,770
----------- ---------- ---------- -----------
2,934,580 3,104,045 5,741,316 8,096,346
----------- ---------- ---------- -----------
Operating earnings (loss) . . . . . . . (229,346) (98,034) (585,844) (1,227,587)
Partnership's share of operations
of unconsolidated ventures. . . . . . . . . . 170,723 (3,300,321) (321,969) (6,873,702)
----------- ---------- ---------- -----------
Net operating earnings (loss) . . . . . (58,623) (3,398,355) (907,813) (8,101,289)
----------- ---------- ---------- -----------
Net earnings (loss) before
extraordinary items and
cumulative effect of
accounting change . . . . . . . . . . -- -- -- (8,101,289)
<PAGE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------- ---------------------------
1997 1996 1997 1996
----------- ---------- ----------- -----------
Extraordinary items:
Gain on forgiveness of indebtedness . . . . . -- -- -- 23,622,011
Cumulative effect of an accounting change . . . -- -- -- (16,000,000)
----------- ---------- ---------- -----------
Net earnings (loss) . . . . . . . . . . $ (58,623) (3,398,355) (907,813) (479,278)
=========== ========== ========== ===========
Net earnings (loss) per limited
partnership interest:
Net operating earnings (loss) . . . . $ (.14) (8.13) (2.17) (19.39)
Extraordinary items . . . . . . . . . -- -- -- 58.33
Cumulative effect of an
accounting change . . . . . . . . . -- -- -- (38.31)
----------- ---------- ---------- -----------
Net earnings (loss) . . . . . . . . $ (.14) (8.13) (2.17) (.63)
=========== ========== ========== ===========
Cash distributions per
limited partnership
interest. . . . . . . . . . . . . . . $ -- -- -- --
=========== ========== ========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
1997 1996
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (907,813) (479,278)
Items not requiring (providing) cash or cash equivalents:
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 729,059
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . . 104,475 258,321
Long-term debt - deferred accrued interest. . . . . . . . . . . . . . . 1,868,966 --
Partnership's share of operations of unconsolidated ventures. . . . . . 321,969 6,873,702
Extraordinary items . . . . . . . . . . . . . . . . . . . . . . . . . . -- (23,622,011)
Cumulative effect of an accounting change . . . . . . . . . . . . . . . -- 16,000,000
Changes in:
Restricted funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (861,169)
Interest, rents and other receivables . . . . . . . . . . . . . . . . . 46,183 39,069
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,860 81,602
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,366) (80,820)
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . (47,438) 171,054
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . (456,501) (177,281)
Due to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,774 156,224
Unearned rents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (67,654) (68,186)
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . (365) 1,907,540
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . . 5,392 158,415
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . 251 (10,103)
------------ -----------
Net cash provided by (used in) operating activities . . . . . . . 921,733 1,076,138
------------ -----------
<PAGE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1997 1996
------------ -----------
Cash flows from investing activities:
Additions to investment properties. . . . . . . . . . . . . . . . . . . . (245,498) (176,516)
Partnership's distributions from unconsolidated ventures. . . . . . . . . -- 1,233,034
Partnership's contributions to unconsolidated ventures. . . . . . . . . . (1,695) --
Payment of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . (108,693) (139,981)
------------ -----------
Net cash provided by (used in) investing activities . . . . . . . (355,886) 916,537
------------ -----------
Cash flows from financing activities:
Principal payments on long-term debt. . . . . . . . . . . . . . . . . . . (54,594) --
------------ -----------
Net cash provided by (used in) financing activities . . . . . . . . (54,594) --
------------ -----------
Net increase (decrease) in cash and cash equivalents. . . . . . . . 511,253 1,992,675
Cash and cash equivalents, beginning of year. . . . . . . . . . . . 18,069,904 16,210,170
------------ -----------
Cash and cash equivalents, end of period. . . . . . . . . . . . . . $ 18,581,157 18,202,845
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . . . . . . . . . . . . . $ 1,080,492 1,235,174
============ ===========
Extraordinary item due to forgiveness of indebtedness
secured by Wilshire Bundy Plaza. . . . . . . . . . . . . . . . . . . . . $ -- 23,622,011
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1997 AND 1996
(UNAUDITED)
GENERAL
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the year ended December 31, 1996 which are
included in the Partnership's 1996 Annual Report on Form 10-K (File No. 0-
15962) dated on March 21, 1997, as certain footnote disclosures which would
substantially duplicate those contained in such audited financial
statements have been omitted from this report. Capitalized terms used but
not defined in this quarterly report have the same meanings as in the
Partnership's 1996 Annual Report on Form 10-K.
The preparation of financial statements in accordance with GAAP
requires the Partnership to make estimates and assumptions that affect the
reported or disclosed amount of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Certain amounts in the 1996 financial statements have been
reclassified to conform with the 1997 presentation.
The Partnership adopted Statement of Financial Accounting Standards
No. 121 ("SFAS 121") "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of" ("SFAS 121") as required in
the first quarter of 1996. The Partnership's policy is to consider a
property to be held for sale or disposition when the Partnership has
committed to a plan to sell or dispose of such property and active
marketing activity has commenced or is expected to commence in the near
term or the Partnership has concluded that it may dispose of the property
by no longer funding operating deficits or debt service requirements of the
property thus allowing the lender to realize upon its security. In
accordance with SFAS 121, any properties identified as "held for sale or
disposition" are no longer depreciated.
As of December 31, 1996, the Partnership has committed to a plan to
sell the Louis Joliet Mall investment property, its last remaining
consolidated property. The net results of operations for the six months
ended June 30, 1997 and 1996 for consolidated properties classified as held
for sale or disposition or sold or disposed of during the past two years
were income (losses) of $1,271,579 and $(721,735), respectively. In
addition, the accompanying consolidated financial statements include losses
of $(56,095) and $(7,304), respectively, of the Partnership's share of
total property operations of $(112,190) and $(14,608) for unconsolidated
properties for the six months ended June 30, 1997 and 1996, respectively,
which are held for sale or disposition or have been sold or disposed of
during the past two years.
During the second quarter of 1997, Statements of Financial Accounting
Standards No. 128 ("Earnings per Share") and No. 129 ("Disclosure of
Information about Capital Structure") were issued. As the Partnership's
capital structure only has general and limited partnership interests, the
Partnership does not expect any significant impact on its consolidated
financial statements upon adoption of these standards when required at the
end of 1997.
<PAGE>
TRANSACTIONS WITH AFFILIATES
The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Corporate General Partner
and its affiliates including the reimbursement for salaries and salary-
related expenses of its employees and certain of its officers, and for
other direct expenses relating to the administration of the Partnership and
the operation of the Partnership's investments. Fees, commissions and
other expenses required to be paid by the Partnership to the General
Partners and their affiliates as of June 30, 1997 and for the six months
ended June 30, 1997 and 1996 were as follows:
Unpaid at
June 30,
1997 1996 1997
-------- ------- ---------
Property management
and leasing fees . . . . . . $143,951 132,606 --
Insurance commissions . . . . 34,107 21,612 --
Reimbursement (at cost)
for out-of-pocket salary
and salary-related
expenses related to the
on-site and other costs
for the Partnership and
its investment properties. . 65,340 91,956 57,682
-------- ------- ------
$243,398 246,174 57,682
======== ======= ======
The Partnership is obligated to fund, on demand, $400,000 and $400,000
to Carlyle Managers, Inc. and Carlyle Investors, Inc., respectively, for
additional paid-in capital (reflected in amounts due to affiliates in the
accompanying consolidated financial statements). As of June 30, 1997,
these obligations bore interest at 5.75% per annum and interest accrued on
these obligations was $510,632.
The manager of Piper Jaffray Tower (which was an affiliate of the
Corporate General Partner through November 1994) had agreed to defer
receipt of its property management fees. Such fees deferred by the
affiliate were approximately $1,839,000 (of which approximately $919,500 is
the Partnership's share) at June 30, 1997.
JMB/NYC
As a result of the 1996 restructuring, JMB/NYC has an indirect limited
partnership interest which, before taking into account significant
preferences to other partners, equals approximately 4.9% of the reorganized
and restructured ventures owning 237 Park and 1290 Avenue of the Americas
(the "Properties"). The new ownership structure gives control of the
Properties to a real estate investment trust ("REIT"). JMB/NYC has, under
certain limited circumstances, through January 1, 2001 rights of consent
regarding sale of the Properties or the consummation of certain other
transactions that significantly reduce indebtedness of the Properties.
The Affiliated Partners entered into a joint and several obligation to
indemnify, through a date no later than January 2, 2001, the REIT to the
extent of $25 million to ensure their compliance with the terms and
conditions relating to JMB/NYC's indirect limited partnership interest in
the restructured and reorganized joint ventures that own the Properties.
The Affiliated Partners contributed approximately $7.8 million (of which
the Partnership's share was approximately $3.9 million) to JMB/NYC which
was deposited into an escrow account as collateral for such
indemnification. These funds have been invested in stripped U.S.
Government obligations with a maturity date of February 15, 2001. The
provisions of the indemnification agreement generally prohibit the
Affiliated Partners from taking actions that could have an adverse effect
<PAGE>
on the operations of the REIT. Compliance, therefore, is within the
control of the Affiliated Partners and non-compliance with such provisions
by either the Partnership or the other Affiliated Partners is highly
unlikely. Therefore, the Partnership expects its share of the collateral
to be returned at the termination of the indemnification agreement
including interest earned on the government obligations.
The Partnership's share of income from JMB/NYC for the period ending
June 30, 1997, consists of interest income earned on amounts contributed by
the Partnership which are held in escrow by JMB/NYC and reduces the
Partnership's proportionate share of its unfunded maximum obligation under
the Indemnification Agreement. The Partnership does not recognize its
share of interest expense accruing on the JMB/NYC purchase note due to the
non-recourse nature of the note and that repayment of the outstanding
balance of the note (including accrued interest) is dependent on cash flow
from the Properties.
JMB/PIPER
The property is subject to a mortgage loan in the original principal
amount of $100,000,000, of which approximately $96,126,673 is outstanding
as of June 30, 1997. The lender is essentially entitled to all operating
cash flow. Excess cash flow generated during 1996 of $741,627 was remitted
to the lender in April 1997 from cash held by the venture.
In addition, upon sale or refinancing, the lender is entitled to
prepayment fees as well as a significant level of proceeds in excess of the
then unpaid principal balance prior to JMB/Piper's receipt of proceeds.
While the loan modification provides JMB/Piper with an opportunity to
retain an ownership position in the property, under the current terms of
the modified debt, there must be significant additional improvement in
current market and property operating conditions resulting in a substantial
increase in the value of the property before JMB/Piper can share in sale or
refinancing proceeds. JMB/Piper anticipates exploring refinancing
alternatives during the remainder of 1997. Such refinancing would only be
possible if the underlying lender would accept a discounted payoff and
would also likely require additional capital contributions from the
Partnership and its affiliated partner. There are no assurances that a
refinancing can be achieved. The Partnership will not commit additional
capital to this property unless, among other things, it believes that upon
sale of the property, the Partnership will receive a return of such funds
and a reasonable rate of return thereon.
On a monthly basis, JMB/Piper deposits the property management fee
into an escrow account to be used (including interest earned thereon) for
future leasing costs to the extent cash flow is not sufficient to cover
such items. To date, no escrow funds have been required to be used for
leasing costs. At June 30, 1997, the balance of such escrow account
totaled approximately $4,332,000. The manager of the property (which was
an affiliate of the Corporate General Partner through November 1994) has
agreed to defer receipt of its management fee until a later date. As of
June 30, 1997, the manager has deferred approximately $3,553,381
($1,839,000 of which represents deferred fees due to affiliates through
November 1994, of which $919,500 is the Partnership's share) of management
fees.
During the second quarter, JMB/Piper executed an amendment to the
existing lease agreement with Popham Haik ("Popham"). Under the terms of
the agreement, Popham immediately surrendered approximately 57,000 square
feet of leased space leaving approximately 47,000 square feet occupied.
Popham continued to pay rent and all charges in accordance with its
original lease on the remaining and give-back space through July 31, 1997.
Popham's rent on the remaining square footage increased to a market rate
effective on August 1, 1997. There will be no adjustment to the lease
expiration date on the remaining space. The underlying lender has approved
the terms of this agreement. Concurrently with the execution of the
agreement with Popham, JMB/Piper finalized a lease with a law firm to
occupy 12,691 square feet of the Popham give-back space during the third
quarter of 1997.
<PAGE>
Piper Jaffray Inc. ("Piper Jaffray") occupying 310,111 square feet or
approximately 43% of the building's rentable square feet, has leased an
additional 22,712 square feet of space currently under lease to another
tenant with a lease expiration date of December 31, 1997. Piper Jaffray's
lease start date will be January 1, 1998 with a lease expiration date
coterminous with the remainder of its space on March 31, 2000. JMB/Piper
continues to work on an early renewal of Piper Jaffray's lease. Such
renewal, if it occurs, will likely require JMB/Piper to commit a
substantial amount of funds in order to rehabilitate Piper Jaffray's space
or otherwise to provide incentive for Piper Jaffray to remain in the
building in lieu of moving to one of several proposed new office building
developments in Minneapolis. Any modification or renewal of this lease
would require the approval of the lender. There are no assurances that an
early renewal of the Piper Jaffray lease will be achieved.
JMB/900
Occupancy of this building at the end of the quarter remained at 98%.
The building's major tenant, Schulte, Roth & Zabel (120,991 square
feet with a lease expiration date of May 31, 2000), has requested, and
JMB/900 has submitted, a proposal for early renewal. As of the date of
this report, no formal response to JMB/900's proposal has been received
from the tenant. There are no assurances that an early renewal of this
tenant will be achieved.
Pursuant to the extension on the mortgage loan, net cash flow (as
defined) is paid into an escrow account controlled by the lender. The
escrow account, including interest earned thereon, will be used by Progress
Partners for releasing costs associated with leases which expire in 1999
and 2000 (approximately 50% of the building). The remaining proceeds in
this escrow plus interest earned thereon, if any, will be released to
Progress Partners once 90% of such leased space has been renewed or
released. During 1997, approximately $4,703,000 has been deposited into
escrow from net cash flow from property operations.
JMB/900 is currently involved in litigation. Current discussions
involve a settlement whereby JMB/900 would purchase all the unaffiliated
venture partner interests in the property. There are no assurances that a
settlement will be finalized on this or any other terms. The Partnership
will not commit additional capital to the purchase of the unaffiliated
venture partner interests unless, among other things, it believes that upon
sale of the property, the Partnership will receive a return of such funds
and a reasonable rate of return thereon.
LOUIS JOLIET MALL
Occupancy at this mall decreased to 80% (excluding the effect of the
move-out of General Cinema, Inc. in 1994) from 82% at the end of the first
quarter of 1997. The Partnership will not commit additional capital to
this property for build out or other leasing costs unless, among other
things, it believes that upon sale of the property, the Partnership will
receive a return of such funds and a reasonable rate of return thereon.
During 1997, the Partnership agreed to dismiss the litigation
regarding the lease expiration date for a former tenant, Al Baskin Co.,
with the resolution as to the amount of the Partnership's claim against the
former tenant, and the acceptance of such claim by the bankruptcy estate.
The Partnership agreed to dismiss the litigation and to a reduction in its
claim, along with certain other unsecured creditors, in order to minimize
the expense related to continued litigation and to expedite the resolution
of this matter. The Partnership's claim in the amount of $315,000 (reduced
from a maximum amount of approximately $415,000) has been accepted as an
unsecured claim by the bankruptcy estate. In May 1997, the Partnership,
upon disposition of the claims, received approximately $108,000
representing its share of available proceeds from the bankruptcy estate.
<PAGE>
WELLS FARGO CENTER (SOUTH TOWER)
The mortgage note secured by the property (with a balance of
approximately $183,066,000 as of June 30, 1997), as extended, matures
September, 2003. All excess cash flow is being escrowed for future tenant
improvements and principal payments. In addition, upon sale or refinancing
of the property subsequent to September 1, 1999, the mortgage loan requires
payment of participation interest (as defined) of any excess proceeds.
A promissory note secured by the Partnership's interest in the joint
venture, which has an adjusted principal balance of approximately
$21,988,000, and accrued interest of approximately $2,492,000 at June 30,
1997 is due September 2003. The note accrues interest at 17% per annum.
The loan requires payments of cash flow distributed by the venture from
either property operations or sales proceeds as well as a portion of the
property management fee paid to the venture partner. The loan is secured
solely by the Partnership's interest in the property.
Due to the significant level of indebtedness, it is unlikely that the
Partnership will receive any significant future proceeds from operations,
sale or refinancing. The disposition of the ownership interest in the
property would likely result in a gain for Federal income tax purposes with
no corresponding distributable proceeds. The Partnership has decided not
to commit any significant additional amounts to the property.
1090 VERMONT
Occupancy at this office building remained at 84%. The manager, on
behalf of the joint venture, finalized leases with the National Institute
of Building Services Corporation (12,392 square feet) and Steelcase, Inc.
(5,176 square feet). These tenants are expected to move-in during the
third quarter of 1997, which will bring occupancy in the building to
approximately 96%. Leasing costs associated with these leases will be
funded from the joint venture's working capital funds.
YERBA BUENA OFFICE BUILDING
In June 1992, title to the Yerba Buena Office Building in San
Francisco, California was transferred to the lender by the joint venture (a
partnership comprised of the Partnership, two other limited partnerships
sponsored by the Partnership's Corporate General Partner and four
unaffiliated limited partners). In return for a smooth transition of title
and management of the property, the joint venture was able to negotiate the
right to share in future sale or refinancing proceeds, if any, above
certain specified levels. In addition, the joint venture has a right of
first opportunity to purchase the property during the time frame of June
1995 through May 1998 should the lender wish to market the property for
sale. The joint venture learned that the lender sold the property during
1996. The sale price did not generate a level of distributable proceeds
where the joint venture would have been entitled to a share. However, the
joint venture was not given an opportunity to purchase the property on the
same terms it was sold for. The joint venture has filed a suit against the
lender for breach of its obligation. There are no assurances that the
joint venture will recover any amounts as a result of this action.
<PAGE>
TURTLE CREEK
In March 1989, the lender on the Turtle Creek Centre in Dallas, Texas
realized upon its security by taking title to the property because the
Partnership's venture partner defaulted upon its obligation to make the
required debt service payments. In April 1992, the Partnership signed a
settlement agreement with the venture partner and its principals. Under
the terms of the settlement, the Partnership was to receive total principal
payments of $4,075,000 over a six year period ending April 1998. The
Partnership has received $2,650,000 of this amount as of the date of this
report. The final payment of $1,425,000 is due in April 1998. The venture
partner recently contacted the Partnership to discuss payment of this
amount at the end of 1997 with a 5% discount on the total amount due. The
Partnership has responded with a counter proposal for early payment. There
are no assurances that an early or scheduled final payment will be made.
UNCONSOLIDATED VENTURES - SUMMARY INFORMATION
Summary income statement information for JMB/Piper and JMB/Piper II,
for the six months ended June 30, 1997 and 1996 are as follows:
1997 1996
-------- -------
Total income from properties
(unconsolidated). . . . . . . . . . . . . $813,443 752,807
======== =======
Operating loss of ventures. . . . . . . . . $821,835 761,662
======== =======
Partnership's share of
operating loss. . . . . . . . . . . . . . $410,917 380,831
======== =======
ADJUSTMENTS
In the opinion of the Corporate General Partner, all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation have been made to the accompanying figures as of June 30, 1997
and for the three and six months ended June 30, 1997 and 1996.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the notes to the accompanying consolidated
financial statements for additional information concerning certain of the
Partnership's investments.
In March 1997 some of the Holders of Interests received from a third
party unaffiliated with the Partnership an unsolicited offer to purchase up
to 18,000 Interests at $10 per Interest. Such offer expired on April 10,
1997. In addition, in July 1997 some of the Holders of Interests received
from a third party unaffiliated with the Partnership an unsolicited offer
to purchase up to 4.5% of the Interests at $20 per Interest. The board of
directors of JMB Realty Corporation ("JMB"), the Corporate General Partner,
has established a special committee (the "Special Committee") consisting of
certain directors of JMB to deal with all matters relating to tender offers
for Interests, including any and all responses to such tender offers. The
Special Committee has retained independent counsel to advise it in
connection with any tender offers for Interests and has retained Lehman
Brothers Inc. as financial advisor to assist the Special Committee in
evaluating and responding to such tender offers. With respect to these
offers for Interests at $10 and $20 per Interest, respectively, the Special
Committee, on behalf of the Partnership, recommended against acceptance of
these offers on the basis that, among other things, the offer prices were
inadequate. It is possible that other offers for Interests may be made by
unaffiliated third parties in the future, although there is no assurance
that any third party will commence an offer for Interests, the terms of any
such offer or whether any such offer, if made, will be consummated, amended
or withdrawn. As of the date of this report, the Partnership believes that
approximately .52% of the Interests have been purchased by such
unaffiliated third parties either pursuant to such tender offers or through
negotiated purchases.
At June 30, 1997, the Partnership had cash and cash equivalents of
approximately $18,581,000. Such funds are available for working capital
requirements. The Partnership has currently budgeted in 1997 approximately
$1,021,000 for tenant improvements and other capital expenditures. The
decrease in tenant improvements budgeted for 1997 is due to the deferral of
certain tenant improvements at the Louis Joliet Mall until 1998. The
Partnership's share of such items and its share of such similar items for
its unconsolidated ventures (other than JMB/NYC and Wells Fargo) in 1997 is
currently budgeted to be approximately $2,075,000. Actual amounts expended
in 1997 may vary depending on a number of factors including actual leasing
activity, results of property operations, liquidity considerations and
other market conditions over the course of the year. The source of capital
for such items and for both short-term and long-term future liquidity and
distributions to partners is dependent upon existing working capital, net
cash generated by the Partnership's investment properties and the sale or
refinancing of such investments. However, due to property specific
concerns discussed in the notes to the consolidated financial statements,
the Partnership currently considers only Louis Joliet Mall, 1090 Vermont
Avenue and 900 Third Avenue and possibly the final Turtle Creek Centre
settlement payment to be potential significant sources of future cash
generated from operations, sales or refinancings. Accordingly, the
Partnership had suspended operating distributions beginning with the fourth
quarter 1991 distribution payable in February 1992.
The Partnership is maintaining funds for working capital purposes.
The Partnership may decide to commit a portion of these funds for various
purposes (discussed in the notes to accompanying consolidated financial
statements) at its 900 Third Avenue and Louis Joliet Mall investment
properties beyond the amounts budgeted above. The Partnership may also use
<PAGE>
a portion of these funds to aid in refinancing at a discount the loan
secured by the Piper Jaffray Tower. The Partnership will not commit
additional working capital funds for these purposes unless, among other
things, the Partnership believes that upon sale of the particular property,
the Partnership will receive a return of the incremental funds and a
reasonable rate of return thereon.
While loan and joint venture modifications have been obtained which
enable the Partnership to retain ownership interests in the 237 Park
Avenue, 1290 Avenue of the Americas and Wells Fargo (South Tower)
investment properties, it is unlikely that the Partnership will receive
significant proceeds from any source (other than return of certain amounts
contributed and currently held in escrow) for these properties.
The Partnership has held certain of its investment properties longer
than originally anticipated in an effort to maximize the return to the
Holders of Interests. After reviewing the remaining properties and the
competitive marketplaces in which they operate, the General Partners of the
Partnership expect to be able to conduct an orderly liquidation of most of
its remaining investment portfolio as quickly as practicable. In such
regard, certain of the properties have been classified by the Partnership
or its ventures as held for sale or disposition, and therefore, are no
longer subject to continued depreciation. The Partnership currently
expects that it will sell or dispose of its remaining investment
properties, with the possible exception of its indirect interests in the
237 Park Avenue and the 1290 Avenue of the Americas properties, no later
than the end of 1999 barring unforeseen economic developments. Although
the Partnership currently expects to distribute sale proceeds from the
disposition of the 900 Third Avenue, 1090 Vermont Avenue Building and Louis
Joliet Mall investment properties, aggregate distributions of sale and
refinancing proceeds received by Holders of Interests over the entire term
of the Partnership will be substantially less than one-fourth of their
original investment. However, in connection with sales or other
dispositions (including transfers to lenders) of properties (or interests
therein) owned by the Partnership or its joint ventures, the Holders of
Interests may be allocated substantial gain for Federal income tax
purposes, regardless of whether any proceeds are distributable from such
sales or other dispositions.
RESULTS OF OPERATIONS
The increase in long-term debt, less current portion at June 30, 1997
as compared to December 31, 1996 is primarily due to interest accruing on
the promissory note secured by the Partnership's interest in Wells Fargo.
The note accrues interest at 17% per annum and is payable from cash
distributions received from Wells Fargo. No such distributions have been
received during 1997.
The decrease in accounts payable at June 30, 1997 as compared to
December 31, 1996 is primarily due to the timing of payments related to
gift certificates at Louis Joliet Mall and an accrual for recurring
professional fees that was paid by the Partnership during 1997.
The decrease in unearned rents at June 30, 1997 as compared to
December 31, 1996 is due to the timing of the collection of rental income
and other amounts charged to tenants at Louis Joliet Mall.
The decrease in rental income, property operating expenses and
amortization of deferred expenses for the three and six months ended June
30, 1997 as compared to the three and six months ended June 30, 1996 is due
primarily to the disposition of Wilshire Bundy Plaza and the sale of
Mariners Pointe Apartments during 1996. The decrease in mortgage and other
interest expense for the six months ended June 30, 1997 as compared to the
<PAGE>
six months ended June 30, 1996 was also due to the Wilshire Bundy and
Mariners Pointe sale and disposition, partially offset by interest accrued
on the restructured promissory note secured by the Partnership's interest
in Wells Fargo. Subsequent to such restructuring, such note accrues
interest at 17% per annum.
The increase in mortgage and other interest expense for the three
months ended June 30, 1997 as compared to the three months ended June 30,
1996 is primarily due to interest accrued on the restructured promissory
note secured by the Partnership's interest in Wells Fargo.
Interest income increased for the three and six months ended June 30,
1997 as compared to the three and six months ended June 30, 1996 primarily
due to higher average investments in 1997.
The decrease in depreciation expense for the three and six months
ended June 30, 1997 as compared to the three and six months ended June 30,
1996 is primarily due to the classification of Louis Joliet Mall as held
for sale or disposition as of December 31, 1996, and therefore, the
property is no longer subject to continuing depreciation.
The increase in general and administrative expenses for the three
months ended June 30, 1997 as compared to the three months ended June 30,
1996 is primarily due to the timing of recognition of certain
administrative costs.
The decrease in the Partnership's share of loss from operations of
unconsolidated ventures for the three and six months ended June 30, 1997 as
compared to the three and six months ended June 30, 1996 is primarily due
to the restructurings of the Partnership's interests in JMB/NYC and Wells
Fargo during 1996. JMB/NYC adopted the cost method of accounting for its
indirect investment in the unconsolidated ventures owning the Properties.
The conversion of the Partnership's interest in Wells Fargo to an interest
in a limited liability company eliminates any potential additional
obligations in the future to provide additional funds under its previous
joint venture agreement. Accordingly, the Partnership and JMB/NYC have
suspended loss recognition relative to these real estate investments and
have reversed those previously recognized losses that they are no longer
potentially obligated to fund.
The extraordinary gain on forgiveness of indebtedness for the six
months ended June 30, 1996 is due to the disposition of the Wilshire Bundy
Plaza in March 1996 as discussed above.
The cumulative effect of an accounting change in the amount of
$16,000,000 for the six months ended June 30, 1996 was recorded January 1,
1996 related to the Wilshire Bundy investment property due to the
requirements of SFAS 121.
<PAGE>
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
OCCUPANCY
The following is a listing of approximate occupancy levels by quarter for the Partnership's investment
properties owned during 1997.
<CAPTION>
1996 1997
------------------------------------- ------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 237 Park Avenue Building
New York, New York . . . . . 98% 98% 98% * * *
2. 1290 Avenue of the
Americas Building
New York, New York . . . . . 78% 71% 81% * * *
3. 1090 Vermont Avenue
Building
Washington, D.C. . . . . . . 91% 88% 88% 84% 84% 84%
4. Piper Jaffray Tower
Minneapolis, Minnesota . . . 98% 98% 98% 98% 98% 98%
5. 900 Third Avenue Building
New York, New York . . . . . 97% 98% 98% 98% 98% 98%
6. Wells Fargo Center
South Tower
Los Angeles, California. . . 95% 97% 92% 92% 93% 90%
7. Louis Joliet Mall
Joliet, Illinois . . . . . . 77% 80% 79% 82% 82% 80%
<FN>
- ----------------
An "*" indicates that the joint venture which owns the property was restructured, and therefore, such
information is not meaningful for the Partnership. Reference is made to the Notes for further information
regarding the reorganized and restructured ventures.
</TABLE>
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3-A.* Amended and Restated Agreement of Limited
Partnership.
3-B.* Assignment Agreement by and among the Partnership,
the General Partners and the Initial Limited Partner.
3-C. Acknowledgement of rights and duties of the General
Partners of the Partnership between ABPP Associates, L.P. (a successor
Associated General Partner of the Partnership) and JMB Realty Corporation
as of December 31, 1995 is incorporated herein by reference to the
Partnership's Report for September 30, 1996 on Form 10-Q (File No. 0-15962)
dated November 8, 1996.
4-A. Long-term debt documents relating to the refinancing
of the first mortgage loan secured by the 1090 Vermont office building in
Washington, D.C. are hereby incorporated by reference to the Partnership's
Report on Form 10-K (File No. 0-15962) dated March 27, 1995.
4-B. Long-term debt documents relating to the September
1995 refinancing of the first and second mortgage loans secured by the
Louis Joliet Mall are hereby incorporated by reference to the Partnership's
Report on Form 10-Q (File No. 0-15962) dated November 9, 1995.
4-C. Documents relating to the modification and extension
of the mortgage loan secured by Wells Fargo-South Tower is hereby
incorporated by reference to the Partnership's Report for December 31, 1996
on Form 10-K (File No. 0-15962) dated March 21, 1997.
4-D. Amended and restated promissory note between Wells
Fargo Bank and the Partnership is hereby incorporated by reference to the
Partnership's Report for December 31, 1996 on Form 10-K (File No. 0-15962)
dated March 21, 1997.
4-E. Loan modification agreement of Wells Fargo Bank is
hereby incorporated by reference to the Partnership's Report for December
31, 1996 on Form 10-K (File No. 0-15962) dated March 21, 1997.
10-A. Acquisition documents relating to the purchase by the
Partnership of an interest in the Wells Fargo Center -IBM Tower in Los
Angeles, California are hereby incorporated by reference to the
Partnership's Post-Effective Amendment #5 to the Partnership's Registration
Statement on Form S-11 (File No. 0-15962) dated June 4, 1984.
10-B. Agreement of Limited Partnership of Carlyle-XIV
Associates, L.P. is hereby incorporated by reference to the Partnership's
Report on Form 10-Q (File No. 0-15962) dated May 14, 1993.
10-C. Second Amended and Restated Articles of Partnership
of JMB/NYC Office Building Associates, L.P. is hereby incorporated by
reference to the Partnership's Report for December 31, 1993 on Form 10-K
(File No. 0-15962) dated March 28, 1994.
<PAGE>
10-D. Amended and Restated Certificate of Incorporation of
Carlyle-XIV Managers, Inc., (known as Carlyle Managers, Inc.) is hereby
incorporated by reference to the Partnership's report for December 31, 1993
on Form 10-K (File No 0-15962) dated March 28, 1994.
10-E. Amended and Restated Certificate of Incorporation of
Carlyle-XIII Managers, Inc., (known as Carlyle Investors, Inc.), is hereby
incorporated by reference to the Partnership's report for December 31, 1993
on Form 10-K (File No. 0-15962) dated March 28, 1994.
10-F. $1,200,000 demand note between Carlyle-XIV
Associates, L.P. and Carlyle Managers, Inc., is hereby incorporated by
reference to the Partnership's report for December 31, 1993 on Form 10-K
(File No. 0-15962) dated March 28, 1994.
10-G. $1,200,000 demand note between Carlyle-XIV
Associates, L.P. and Carlyle Investors, Inc., is hereby incorporated by
reference to the Partnership's report for December 31, 1993 on Form 10-K
(File No. 0-15962) dated March 28, 1994.
10-H. Lockbox and forbearance agreements related to the
mortgage note secured by the Wells Fargo Building, are hereby incorporated
by reference to the Partnership's Report for December 31, 1994 on Form 10-K
(File No. 0-15962) dated March 27, 1995.
10-I. Amendment No. 1 to the Agreement of Limited
Partnership of Carlyle-XIV Associates, L.P. dated January 1, 1994 by and
between Carlyle Investors, Inc. a Delaware corporation, as general partner,
and Carlyle Real Estate Limited Partnership-XIV, an Illinois limited
partnership, as limited partner, is hereby incorporated by reference to the
Partnership's Report for March 31, 1995 on Form 10-Q (File No. 0-15962)
dated May 11, 1995.
10-J. Amendment No. 1 to the Second Amended and Restated
Articles of Partnership of JMB/NYC Office Building Associates, L.P. dated
January 1, 1994 by and between Carlyle Managers, Inc. a Delaware
corporation, as general partner, and Carlyle-XIII Associates, L.P. a
Delaware limited partnership, Carlyle-XIV Associates, L.P. a Delaware
limited partnership and Property Partners, L.P. a Delaware limited
partnership, as the limited partners, is hereby incorporated by reference
to the Partnership's Report for March 31, 1995 on Form 10-Q (File No. 0-
15962) dated May 11, 1995.
10-K. Agreement of Conversion of 1290 Associates into 1290
Associates, L.L.C. dated October 10, 1995 among JMB/NYC Office Building
Associates, L.P., an Illinois limited partnership, O&Y Equity Company,
L.P., a Delaware limited partnership and O&Y NY Building Corp., a Delaware
corporation, is hereby incorporated by reference to the Partnership's
Report for December 31, 1995 on Form 10-K (File No. 0-15962) dated March
25, 1996.
<PAGE>
10-L. Agreement of Conversion of 237 Park Avenue Associates
into 237 Park Avenue Associates, L.L.C., dated October 10, 1995 among
JMB/NYC Office Building Associates, L.P., an Illinois limited partnership,
O&Y Equity Company, L.P., a Delaware limited partnership and O&Y NY
Building Corp., a Delaware corporation, is hereby incorporated by reference
to the Partnership's Report for December 31, 1995 on Form 10-K (File No. 0-
15962) dated March 25, 1996.
10-M. Disclosure Statement for the Second Amended Joint
Plan of Reorganization of 237 Park Avenue Associates, L.L.C. and 1290
Associates, L.L.C. dated August 9, 1996, is hereby incorporated by
reference to the Partnership's Report for September 30, 1996 on Form 10-Q
(File No. 0-15962) dated November 8, 1996.
10-N. Documents relating to the operating agreement of
Maguire Thomas Partners-South Tower, L.L.C. are incorporated herein by
reference to the Partnership's Report for December 31, 1996 on Form 10-K
(File No. 0-15962) dated March 21, 1997.
10-O. Consent of Director of Carlyle-XIV Managers, Inc.
(known as Carlyle Managers, Inc.) dated October 31, 1996, is hereby
incorporated by reference to the Partnership's Report for December 31, 1996
on Form 10-K (File No. 0-15962) dated March 21, 1997.
10-P. Consent of Director of Carlyle-XIII, Managers, Inc.
(known as Carlyle Investors, Inc.) dated October 31, 1996, is hereby
incorporated by reference to the Partnership's Report for December 31, 1996
on Form 10-K (File No. 0-15962) dated March 21, 1997.
10-Q. Allonge to demand note between Carlyle Real Estate
Limited Partnership-XIV and Carlyle Managers, Inc. dated October 31, 1996,
is hereby incorporated by reference to the Partnership's Report for
December 31, 1996 on Form 10-K (File No. 0-15962) dated March 21, 1997.
10-R. Allonge to demand note between Carlyle Real Estate
Limited Partnership-XIV and Carlyle Investors, Inc., dated October 31,
1996, is hereby incorporated by reference to the Partnership's Report for
December 31, 1996 on Form 10-K (File No. 0-15962) dated March 21, 1997.
10-S. Indemnification agreement between Property Partners,
L.P., Carlyle-XIII Associates, L.P. and Carlyle-XIV Associates, L.P. to
Metropolis Realty Trust, Inc. dated as of October 10, 1996, is hereby
incorporated by reference to the Partnership's Report for December 31, 1996
on Form 10-K (File No. 0-15962) dated March 21, 1997.
10-T. Agreement of Limited Partnership of 237/1290 Lower
Tier Associates, L.P. dated as of October 10, 1996, is hereby incorporated
by reference to the Partnership's Report for December 31, 1996 on Form 10-K
(File No. 0-15962) dated March 21, 1997.
10-U. Amended and Restated Limited Partnership Agreement of
237/1290 Upper Tier Associates, L.P. dated as of October 10, 1996, is
hereby incorporated by reference to the Partnership's Report for December
31, 1996 on Form 10-K (File No. 0-15962) dated March 21, 1997.
<PAGE>
27. Financial Data Schedule.
- --------------
* Previously filed as Exhibits 3-B, 3-C and 10-H to the
Partnership's Report for December 31, 1992 on Form 10-K of the Securities
Exchange Act (File No. 0-15962) filed on March 30, 1993 and hereby
incorporated herein by reference.
(b) No reports on Form 8-K have been filed during the quarter
covered by this report.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
BY: JMB Realty Corporation
(Corporate General Partner)
By: GAILEN J. HULL
Gailen J. Hull, Senior Vice President
Date: August 8, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.
GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date: August 8, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 18,581,157
<SECURITIES> 0
<RECEIVABLES> 374,086
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 18,955,243
<PP&E> 33,835,009
<DEPRECIATION> 0
<TOTAL-ASSETS> 60,809,750
<CURRENT-LIABILITIES> 3,392,121
<BONDS> 50,052,024
<COMMON> 0
0
0
<OTHER-SE> (14,720,831)
<TOTAL-LIABILITY-AND-EQUITY>60,809,750
<SALES> 4,311,360
<TOTAL-REVENUES> 5,155,472
<CGS> 0
<TOTAL-COSTS> 1,996,676
<OTHER-EXPENSES> 795,547
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,949,093
<INCOME-PRETAX> (585,844)
<INCOME-TAX> 0
<INCOME-CONTINUING> (907,813)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (907,813)
<EPS-PRIMARY> (2.17)
<EPS-DILUTED> (2.17)
</TABLE>
