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
March 31, 1998 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
MARCH 31, 1998 AND DECEMBER 31, 1997
(UNAUDITED)
ASSETS
------
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 22,014,635 21,051,953
Interest, rents and other receivables (net of allowance
for doubtful accounts of $28,070 and $27,963 at
March 31, 1998 and December 31, 1997, respectively) . . . . . . . 491,471 253,069
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 11,714 25,860
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . 439,783 292,110
------------ ------------
Total current assets. . . . . . . . . . . . . . . . . . . . . 22,957,603 21,622,992
------------ ------------
Investment property held for sale or disposition. . . . . . . . . . . 33,994,623 33,994,623
------------ ------------
Investment in unconsolidated ventures, at equity. . . . . . . . . . . 6,573,096 6,570,294
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 931,442 1,082,305
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . 561,392 559,255
------------ ------------
$ 65,018,156 63,829,469
============ ============
<PAGE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
MARCH 31, DECEMBER 31,
1998 1997
------------- -----------
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . $ 364,545 357,323
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . 1,176,619 1,242,625
Due to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . 1,390,596 1,345,828
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . 171,912 172,492
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . 743,054 593,054
Other current liabilities . . . . . . . . . . . . . . . . . . . . . 368,194 151,980
------------ ------------
Total current liabilities . . . . . . . . . . . . . . . . . . 4,214,920 3,863,302
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . 26,909 17,169
Investment in unconsolidated ventures, at equity. . . . . . . . . . . 5,976,256 5,650,592
Partnership's share of the maximum unfunded obligation
under the indemnification agreement . . . . . . . . . . . . . . . . 8,195,640 8,262,766
Long-term debt, less current portion. . . . . . . . . . . . . . . . . 52,609,217 51,768,623
------------ ------------
Commitments and contingencies
Total liabilities . . . . . . . . . . . . . . . . . . . . . . 71,022,942 69,562,452
Partners' capital accounts (deficits):
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . (15,032,729) (15,021,857)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . (1,316,336) (1,316,336)
------------ ------------
(16,348,065) (16,337,193)
------------ ------------
Limited partners:
Capital contributions, net of offering costs. . . . . . . . . . . 351,746,836 351,746,836
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . (297,227,529) (296,966,598)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . (44,176,028) (44,176,028)
------------ ------------
10,343,279 10,604,210
------------ ------------
Total partners' capital accounts (deficits) . . . . . . . . . (6,004,786) (5,732,983)
------------ ------------
$ 65,018,156 63,829,469
============ ============
<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 MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED)
<CAPTION>
1998 1997
------------ -----------
<S> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,458,273 2,246,849
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284,781 203,389
Other income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186,042 --
----------- ----------
2,929,096 2,450,238
----------- ----------
Expenses:
Mortgage and other interest . . . . . . . . . . . . . . . . . . . . . . . 1,471,191 1,474,716
Property operating expenses . . . . . . . . . . . . . . . . . . . . . . . 1,019,088 945,563
Professional services . . . . . . . . . . . . . . . . . . . . . . . . . . 285,476 144,248
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . . . 44,974 51,576
General and administrative. . . . . . . . . . . . . . . . . . . . . . . . 210,192 190,633
----------- ----------
3,030,921 2,806,736
----------- ----------
(101,825) (356,498)
Partnership's share of the reduction of the
maximum unfunded obligation under the
indemnification agreement . . . . . . . . . . . . . . . . . . . . . . . . 67,126 67,126
Partnership's share of operations
of unconsolidated ventures. . . . . . . . . . . . . . . . . . . . . . . . (237,104) (559,818)
----------- ----------
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . $ (271,803) (849,190)
=========== ==========
Net earnings (loss) per limited
partnership interest . . . . . . . . . . . . . . . . . . . . . . . $ (.65) (2.03)
=========== ==========
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
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED)
<CAPTION>
1998 1997
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (271,803) (849,190)
Items not requiring (providing) cash or cash equivalents:
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . . 44,974 51,576
Long-term debt - deferred accrued interest. . . . . . . . . . . . . . . 934,483 934,483
Partnership's share of the reduction of the maximum
unfunded obligation under the indemnification agreement . . . . . . . (67,126) (67,126)
Partnership's share of operations of unconsolidated ventures. . . . . . 237,104 559,818
Changes in:
Interest, rents and other receivables . . . . . . . . . . . . . . . . . (238,402) 25,780
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,146 --
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . (147,673) (140,974)
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . (2,137) (16,173)
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . (66,006) (423,258)
Due to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,768 17,282
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . 216,214 (151,916)
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . (580) --
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . . 150,000 135,686
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . 9,740 (250)
------------ -----------
Net cash provided by (used in) operating activities . . . . . . . 857,702 75,738
------------ -----------
<PAGE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1998 1997
------------ -----------
Cash flows from investing activities:
Additions to investment properties. . . . . . . . . . . . . . . . . . . . -- (160,698)
Partnership's distributions from unconsolidated ventures. . . . . . . . . 100,000 --
Partnership's contributions to unconsolidated ventures. . . . . . . . . . (14,242) (1,695)
Refund (payment) of deferred expenses, net. . . . . . . . . . . . . . . . 105,889 (56,150)
------------ -----------
Net cash provided by (used in) investing activities . . . . . . . 191,647 (218,543)
------------ -----------
Cash flows from financing activities:
Principal payments on long-term debt. . . . . . . . . . . . . . . . . . . (86,667) --
------------ -----------
Net cash provided by (used in) financing activities . . . . . . . . (86,667) --
------------ -----------
Net increase (decrease) in cash and cash equivalents. . . . . . . . 962,682 (142,805)
Cash and cash equivalents, beginning of year. . . . . . . . . . . . 21,051,953 18,069,904
------------ -----------
Cash and cash equivalents, end of period. . . . . . . . . . . . . . $ 22,014,635 17,927,099
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . . . . . . . . . . . . . $ 537,288 540,233
============ ===========
Non-cash investing and financing activities . . . . . . . . . . . . . . . $ -- --
============ ===========
<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
MARCH 31, 1998 AND 1997
(UNAUDITED)
GENERAL
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the year ended December 31, 1997 which are
included in the Partnership's 1997 Annual Report on Form 10-K 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 1997 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.
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 three months ended March 31, 1998 and 1997
for the consolidated property classified as held for sale or disposition
for the past two years were income of $929,908 and $712,697, respectively.
In addition, as of March 31, 1998, the Partnership has or had previously
committed to a plan to sell the Piper Jaffray Tower and the 1090 Vermont
investment properties. Accordingly, these properties have been classified
as held for sale or disposition. The accompanying consolidated financial
statements include losses of $235,155 and $645,720, as the Partnership's
share of total property losses of $3,789,772 and $4,398,506 for
unconsolidated properties for the three months ended March 31, 1998 and
1997, respectively, which are held for sale or disposition or have been
sold or disposed of during the past two years.
Certain amounts in the 1997 financial statements have been
reclassified to conform with the 1998 presentation.
<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 March 31, 1998 and for the three months
ended March 31, 1998 and 1997 were as follows:
Unpaid at
March 31,
1998 1997 1998
-------- ------- -------------
Property management
and leasing fees . . . . . . $ 75,575 74,225 --
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. . 29,914 29,993 28,380
-------- ------- ------
$105,489 104,218 28,380
======== ======= ======
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 March 31, 1998,
these obligations bore interest at 5.32% per annum and interest accrued on
these obligations was $562,216 after the Partnership made payments of
$4,000 in 1998.
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 March 31, 1998.
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"). Neither O&Y nor any of its affiliates has any direct
or indirect continuing interest in the Properties. The new ownership
structure gives control of the Properties to an unaffiliated real estate
investment trust ("REIT"), which is owned primarily by holders of the first
mortgage debt which encumbered the Properties prior to the bankruptcy.
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. In general, at any time on or after January 2, 2001, an
affiliate of the REIT has the right to purchase JMB/NYC's interest in the
Properties for certain amounts relating to the operations of the
Properties. There can be no assurance that such REIT affiliate will not
exercise such right on or after January 2, 2001. If such REIT affiliate
exercises such right to purchase, for the reasons discussed below, it is
unlikely that such purchase would result in any significant distributions
to the partners of the Partnership. Additionally, at any time, JMB/NYC has
the right to require such REIT affiliate to purchase the interest of
JMB/NYC in the Properties for the same price at which such REIT affiliate
can require JMB/NYC to sell such interest as described above.
<PAGE>
Pursuant to the indemnification agreement, the Affiliated Partners are
jointly and severally obligated 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 Partnership's share of the reduction of the maximum
unfunded obligation under the indemnification agreement recognized as
income, is a result of interest earned on amounts contributed by the
Partnership and held in escrow by JMB/NYC. Such income earned reduces the
Partnership's share of the maximum unfunded obligation under the
indemnification agreement, which is reflected as a liability in the
accompanying financial statements.
The provisions of the indemnification agreement generally prohibit the
Affiliated Partners from taking actions that could have an adverse effect
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 (including interest earned) at the termination of the
indemnification agreement.
The Partnership has discontinued the application of the equity method
of accounting for the indirect interests in the Properties and additional
losses from the investment in unconsolidated venture will not be
recognized. Should the unconsolidated venture subsequently report income,
the Partnership will resume applying the equity method on its share of such
income only after such income exceeds net losses not previously recognized.
JMB/PIPER
Occupancy of the building at the end of the first quarter of 1998 was
91%.
The property is subject to a mortgage loan in the original principal
amount of $100,000,000, of which approximately $96,127,000 is outstanding
as of March 31, 1998. The lender is essentially entitled to all operating
cash flow. Excess cash flow generated during 1997 of $385,523 was remitted
to the lender during the second quarter of 1998 from cash held by the
venture.
In addition, the mortgage loan provides that 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. Currently,
Piper generates enough operating cash flow to meet the required debt
service payments. However, Piper may not be able to pay the required debt
service over the next several years. JMB/Piper will not commit additional
capital to Piper unless, among other things, it believes that upon sale of
<PAGE>
the property it will receive a return of such funds and a reasonable rate
of return thereon. If a funding requirement arises and none of the Piper
partners contribute the required capital, the lender would likely take
title to the property. Such disposition of the property would result in
JMB/Piper, and therefore the Partnership, recognizing a significant amount
of gain for financial reporting and Federal income tax purposes with no
corresponding distributable proceeds.
During 1997, JMB/Piper, on behalf of Piper, explored refinancing
alternatives with the lender. The lender has indicated that it is not
willing to accept a discounted payoff of its loan, which would be necessary
to refinance it. However, JMB/Piper intends to pursue further discussions
with the lender concerning possible refinancing and/or loan modification
alternatives. Any refinancing or modification of the loan is expected to
require a payment by Piper to reduce the outstanding principal and/or
accrued interest on the loan. However, the Partnership will not contribute
its share of funds for such purpose unless, among other things, the
Partnership believes that upon sale of the property the Partnership will
receive a return of such funds and a reasonable rate of return thereon.
There is no assurance that any refinancing or modification of the loan will
be obtained.
JMB/900
Occupancy of this building at the end of the first quarter of 1998 was
97%.
Progress Partners is currently in negotiations with the building's
major tenant, Schulte, Roth & Zabel (120,991 square feet with a lease
expiration date of May 31, 2000), for an early renewal and expansion of its
lease. There are no assurances that an early renewal or expansion of this
tenant's lease 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 payment of property taxes and releasing costs associated with
leases which expire in 1999 and 2000 (approximately 50% of the building
including the Schulte, Roth & Zabel lease discussed above). 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 1998, approximately $2,192,000 has been
deposited into escrow from net cash flow from property operations.
JMB/900 is currently involved in litigation. In December, 1997, two
of the Venture Partners, JRA and PPI, filed for bankruptcy in order to
prevent the foreclosure of their interests by MDIFC. Since the bankruptcy
filing, an affiliate of PPI has effected a settlement with MDIFC by
purchasing its claims. JMB/900 has pursued its claims against the Venture
Partners in the bankruptcy forum and has sought to either foreclose on or
buy-out the interests of the Venture Partners in the venture, or to
otherwise dispose of those interests pursuant to a bankruptcy plan. The
Venture Partners have asserted claims against the venture and JMB/900
including claims for unpaid Guaranteed Payments in the purported amount of
$36 million. JMB/900 denies that such claims are due and owing and
contends that, in any event, such claims are offset by PPI's failure to pay
interest on the $20 million loan discussed above in the amount of
approximately $36 million. To the extent that JMB/900 is required to make
contributions to pay for any part of the purported claim for Guaranteed
Payments, a portion of the Guaranteed Payments actually paid may be
allocated to other unsecured creditors of PPI and JRA and, therefore,
JMB/900 may not be returned the full amount of the interest due on the $20
million loan. However, JMB/900's contributions would create a preferred
return level payable out of future net cash flow or net sale or refinancing
proceeds. Furthermore, JMB/900 has taken the position that to the extent
that is has not received annual distributions equal to the interest payable
on the $20,000,000 loan discussed above, JMB/900's preferred return
deficiency is increased by the amounts not received, but the Venture
Partners have disputed this characterization.
<PAGE>
JMB/900 has entered into a 30-day standstill agreement with its
Venture Partners in order to reach a settlement of their various claims
against each other in pending litigation. If a settlement is not completed
within the 30-day time period, JMB/900 expects to seek an extension of the
standstill period while the parties continue negotiation of a settlement.
However, there is no assurance that any settlement will ultimately be made.
JMB/900 also continues to pursue a settlement with the FDIC with respect to
the parties' respective claims in pending litigation. It currently appears
that a settlement with the FDIC would likely involve a purchase of the
FDIC's interest in PC-900 by Progress Partners, although there is no
assurance that any settlement with FDIC will be made.
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.
LOUIS JOLIET MALL
Occupancy of this mall at the end of the first quarter of 1998 was 84%
(excluding the effect of the move-out of General Cinema, Inc. in 1994).
The Partnership has negotiated a lease with a replacement operator for
General Cinema, Inc. (approximately 5% of the mall space) which continues
to pay rent on its vacated space in accordance with its lease that expires
in December 1998. In connection with the new lease, the Partnership will
contribute $700,000 to reconfigure the current four screen cinema to a six
screen cinema. A significant portion of the mall's vacant space is
contained in three large spaces which have been very difficult to lease due
to their size and location within the mall. The manager is exploring the
opportunity to lease some of this space to larger "big box" space users
which in the past have not occupied mall space. Given their size, these
types of tenants generally pay lower rents than typical regional and
national mall tenants. In addition, the Partnership would likely need to
commit substantial capital toward the build-out of this space for these
users. 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 termination 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's claim in the amount of $315,000 (reduced from a maximum
amount of approximately $415,000) had been accepted as an unsecured claim
by the bankruptcy estate. In May 1997, the Partnership, upon disposition
of its claim, received approximately $108,000 representing its share of
available proceeds from the bankruptcy estate.
As the Partnership had committed to a plan to sell or dispose of the
property, Louis Joliet Mall was classified as held for sale or disposition
as of December 31, 1996, and therefore has not been subject to continued
depreciation beyond such date. The Partnership has recently begun
marketing the property for sale. However, there can be no assurance that a
sale will be consummated.
WELLS FARGO CENTER (SOUTH TOWER)
The mortgage note secured by the property (with a balance of
approximately $176,347,000 as of March 31, 1998), 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.
<PAGE>
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 $5,295,000 at March 31,
1998 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 joint venture.
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 Partnership's ownership
interest in the property is therefore expected to 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 at the end of the first quarter of
1998 was 93%.
During the third quarter of 1997, the Partnership commenced marketing
the property for sale. The sale of the property is subject to the joint
venture partner's right of first refusal to purchase the Partnership's
interest in the venture for an amount which would be received by the
Partnership in connection with a third party sale of the property. In the
fourth quarter of 1997, the Partnership obtained a non-binding letter of
intent to sell the property to an unaffiliated third party. The
Partnership notified the venture partner and in January 1998 the venture
partner notified the Partnership that it was exercising its right of first
refusal. As a result, the venture partner is expected to purchase the
Partnership's interest for an amount equal to what the Partnership would
have received in the sale of the property to the unaffiliated third party.
The Partnership expects that the sale of its interest will close in the
second quarter of 1998. A sale at the proposed terms would result in a
gain for both financial reporting and Federal income tax purposes in 1998.
However, there can be no assurance that such sale will be finalized.
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 proceeds, if any, above certain specified
levels. In addition, the joint venture had 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 lender sold
the property to an unaffiliated third party 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>
UNCONSOLIDATED VENTURES - SUMMARY INFORMATION
Summary income statement information for JMB/Piper and JMB/Piper II,
for the three months ended March 31, 1998 and 1997 are as follows:
1998 1997
---------- ---------
Total income from properties
(unconsolidated). . . . . . . . . . . $4,111,899 4,151,512
========== =========
Operating loss of ventures. . . . . . . $4,071,649 4,362,505
========== =========
Partnership's share of
operating loss. . . . . . . . . . . . $ 376,093 627,719
========== =========
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 March 31,
1998 and for the three months ended March 31, 1998 and 1997.
<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. In addition, in July 1997 some of
the Holders of Interests received from another third party unaffiliated
with the Partnership an unsolicited offer to purchase up to 4.5% of the
Interests at $20 per Interest. Both of such offers have expired. 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. 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. As of the date of this report, the Partnership believes that
approximately 1.46% of the Interests have been purchased by such
unaffiliated third parties either pursuant to such tender offers or through
negotiated purchases. 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.
At March 31, 1998, the Partnership had cash and cash equivalents of
approximately $22,015,000. Such funds are available for working capital
requirements. The Partnership has currently budgeted in 1998 approximately
$1,827,000 for tenant improvements and other capital expenditures. Such
items and the Partnership's share of such similar items for its
unconsolidated ventures in 1998 is currently budgeted to be approximately
$2,770,000. Actual amounts expended in 1998 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 Partnership may also use a portion of its working
capital to pay a portion of the costs for a possible refinancing or
modification of the loan secured by the Piper Jaffray Tower as discussed in
the Notes. In addition, the Partnership may decide to commit a portion of
its working capital reserve for various purposes (discussed in the Notes)
at its 900 Third Avenue and Louis Joliet Mall investment properties. 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. 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 to be potential significant
sources of future cash generated from operations or sales. Accordingly,
the Partnership had suspended operating distributions beginning with the
fourth quarter 1991 distribution payable in February 1992.
<PAGE>
JMB/900 has entered into a 30-day standstill agreement with its
Venture Partners in order to reach a settlement of their various claims
against each other in pending litigation. If a settlement is not completed
within the 30-day time period, JMB/900 expects to seek an extension of the
standstill period while the parties continue negotiation of a settlement.
However, there is no assurance that any settlement will ultimately be made.
JMB/900 also continues to pursue a settlement with the FDIC with respect to
the parties' respective claims in pending litigation. It currently appears
that a settlement with the FDIC would likely involve a purchase of the
FDIC's interest in PC-900 by Progress Partners, although there is no
assurance that any settlement with FDIC will be made.
The Partnership has held certain of its investment properties longer
than originally anticipated in an effort to maximize the return of their
investment 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, will no longer be 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 investment properties and the Partnership's interest in the Wells
Fargo Center - South Tower and Piper Jaffray Tower, no later than the end
of 1999, barring unforeseen economic developments. In this regard, the
venture partner in the 1090 Vermont venture has exercised its right of
first refusal to purchase the Partnership's interest in that venture, and
such sale is expected to close in the second quarter of 1998.
Although the Partnership remains hopeful that it will be able 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 Interest 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, 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. In particular, the
Piper Jaffray Tower, 237 Park Avenue, 1290 Avenue of the Americas and the
Wells Fargo Center - South Tower investment properties continue to suffer
from the effects of the high levels of debt secured by each property and
provide no cash flow to the Partnership. While loan and joint venture
modifications have been obtained which enable the Partnership to retain an
ownership interest in these properties, it is currently unlikely under
existing arrangements that the Partnership will receive significant
proceeds from operations or sales of these properties. However, upon
disposition, the Partnership, and therefore the Holders of Interest will
recognize a significant amount of taxable income with no distributable
proceeds. For certain Holders of Interests, such taxable gain may be
offset by their suspended passive activity losses (if any). Each Holder's
tax consequences will depend on such Holder's own tax situation.
RESULTS OF OPERATIONS
The increase in interest, rents and other receivables at March 31,
1998 as compared to December 31, 1997 is primarily due to the timing of
payments for certain rents at the Louis Joliet Mall.
The increase in escrow deposits and related increase in accrued real
estate tax at March 31, 1998 as compared to December 31, 1997 is primarily
due to the timing of payment for real estate taxes at the Louis Joliet
Mall.
<PAGE>
The increase in other current liabilities at March 31, 1998 as
compared to December 31, 1997 is primarily due to a deposit paid in
February 1998 to the Partnership from the venture partner as earnest money
related to the sale of the Partnership's interest in the 1090 Vermont
venture.
The increase in rental income for the three months ended March 31,
1998 as compared to the same period in 1997 is primarily due to higher
income from percentage rents than was estimated in 1997.
The increase in other income for the three months ended March 31, 1998
as compared to the same period in 1997 is primarily due to the 1998 sale of
stock that was received in the settlement of claims against a tenant in
bankruptcy related to the Partnership's interest in the Old Orchard venture
(sold in August 1993).
The increase in professional services for the three months ended
March 31, 1998 as compared to the same period in 1997 is primarily due to a
refund of legal fees related to Wells Fargo - South Tower in 1997 and
additional legal fees incurred by the Partnership in 1998 for the
litigation related to the Yerba Buena Office Building.
The decrease in Partnership's share of operations of unconsolidated
venture for the three months ended March 31, 1998 as compared to the same
period in 1997 is primarily due to the classification of the Piper Jaffray
Tower as held for sale as of September 30, 1997, and therefore, not subject
to continued depreciation.
<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 1998.
<CAPTION>
1997 1998
------------------------------------- ------------------------------
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 . . . . . * * * * *
2. 1290 Avenue of the
Americas Building
New York, New York . . . . . * * * * *
3. 1090 Vermont Avenue
Building
Washington, D.C. . . . . . . 84% 84% 91% 93% 93%
4. Piper Jaffray Tower
Minneapolis, Minnesota . . . 98% 98% 93% 93% 91%
5. 900 Third Avenue Building
New York, New York . . . . . 98% 98% 97% 97% 97%
6. Wells Fargo Center
South Tower
Los Angeles, California. . . 93% 90% 90% 90% 90%
7. Louis Joliet Mall
Joliet, Illinois . . . . . . 82% 80% 82% 84% 83%
<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 1290 Avenue of the Americas Building in
New York, New York are hereby incorporated by reference to the
Partnership's Post-Effective Amendment #1 to the Partnership's Registration
Statement on Form S-11 (File No. 0-15962) dated June 4, 1984.
10-B. Acquisition documents relating to the purchase by the
Partnership of an interest in the 237 Park Avenue Building in New York, New
York are hereby incorporated by reference to the Partnership's Post-
Effective Amendment #1 to the Partnership's Registration Statement on Form
S-11 (File No. 0-15962) dated June 4, 1984.
<PAGE>
10-C. 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-D. 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-E. 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.
10-F. 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-G. $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-H. $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-I. Assumption Agreements dated October 14, 1994 made by
237 Park Avenue Associates and by 1290 Associates in favor and for the
benefit of O&Y Equity Company, L.P., O&Y NY Building Corp. and JMB/NYC
Office Building Associates, L.P., 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-J. 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-K. 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.
<PAGE>
10-L. 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-M. 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.
10-N. 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-O. 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-P. 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-Q. 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-R. 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-S. 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.
<PAGE>
10-T. 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-U. Indemnification agreement between Property Partners,
L.P., Carlyle-XIII Associates, L.P. and Carlyle-XIV 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-V. 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-W. 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.
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 last
quarter of the period 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: May 13, 1998
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: May 13, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 22,014,635
<SECURITIES> 0
<RECEIVABLES> 942,968
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 22,957,603
<PP&E> 33,994,623
<DEPRECIATION> 0
<TOTAL-ASSETS> 65,018,156
<CURRENT-LIABILITIES> 4,214,920
<BONDS> 52,609,217
<COMMON> 0
0
0
<OTHER-SE> (6,004,786)
<TOTAL-LIABILITY-AND-EQUITY>65,018,156
<SALES> 2,458,273
<TOTAL-REVENUES> 2,929,096
<CGS> 0
<TOTAL-COSTS> 1,064,062
<OTHER-EXPENSES> 495,668
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,471,191
<INCOME-PRETAX> (101,825)
<INCOME-TAX> 0
<INCOME-CONTINUING> (271,803)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (271,803)
<EPS-PRIMARY> (.65)
<EPS-DILUTED> (.65)
</TABLE>
