UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-13418
CENTURY PROPERTIES GROWTH FUND XXII
(Exact name of Registrant as specified in its charter)
CALIFORNIA 94-2939418
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
950 TOWER LANE
FOSTER CITY, CALIFORNIA 94404
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(415) 378-7000
(800) 366-6707 IN ALL STATES
Securities registered pursuant to Section 12(b) of the Act:None
Securities registered pursuant to Section 12(g) of the Act:Limited
Partnership Units
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
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ X ]
No market for the Limited Partnership Units exists and therefore a
<PAGE>
market value for such Units cannot be determined.
DOCUMENTS INCORPORATED HEREIN BY REFERENCE:
(1) Report on Form 8-K under the Securities Exchange Act of 1934
incorporated in Part IV.
<PAGE>
CENTURY PROPERTIES GROWTH FUND XXII
(A LIMITED PARTNERSHIP)
PART I
ITEM 1. BUSINESS.
Century Properties Growth Fund XXII (hereinafter referred to either as
"Fund", "Partnership" or "Registrant") was organized in January 1984, as a
California limited partnership under the Uniform Limited Partnership Act of
the California Corporations Code. Fox Partners IV, a California general
partnership, is the general partner of the Fund. The general partners of
Fox Partners IV are Fox Capital Management Corporation ("Fox"), Fox Realty
Investors ("FRI") and Fox Associates 84.
The Fund's Registration Statement, filed pursuant to the Securities Act
of 1933 (No. 2-89285), was declared effective by the Securities and
Exchange Commission ("Commission") on September 25, 1984. The Partnership
marketed its securities pursuant to its Prospectus dated September 25,
1984, and thereafter supplemented (hereinafter the "Prospectus"). This
Prospectus was filed with the Commission pursuant to Rule 424(b) of the
Securities Act of 1933.
The principal business of the Fund is and has been to acquire, hold for
investment and ultimately sell income-producing real property. The Fund is
a "closed" limited partnership real estate syndicate formed to acquire
multi-family residential properties. For a further description of the
business of Registrant, see the sections entitled "Risk Management" and
"Investment Objectives and Policies" of the Prospectus.
Beginning in September 1984 through June 1986, the Fund offered
$120,000,000 in Limited Partnership Units and sold $82,848,000. The net
proceeds of this offering were used to purchase eleven income-producing
real properties. The Fund's property portfolio is geographically
diversified with properties acquired in eight states. Leaseback agreements
which covered ten of the properties, whereby the seller assumed the risks
of operating each property in its initial operating phase, have now
expired. The Fund's acquisition activities were completed in September
1986 and since then the principal activity of the Fund has been managing
its portfolio. One property was acquired by the lender through foreclosure
in 1992. See Item 2 below for a description of the Fund's properties and
operating data regarding such properties.
The Fund is involved in only one industry segment, as described above.
The business of the Fund is not seasonal. The Fund does not engage in any
foreign operations or derive revenues from foreign sources. The Fund's
affairs have been managed by Metric Management, Inc. ("MMI") or a
predecessor since 1988. On December 16, 1993, the services agreement with
MMI was modified and, as a result thereof, the Fund's general partner
assumed responsibility for cash management of the Fund as of December 23,
<PAGE>
1993 and assumed responsibility for day-to-day management of Partnership's
affairs, including portfolio management, accounting and investor relations
services as of April 1, 1994.
On December 6, 1993, NPI Equity Investments II, Inc. ("NPI Equity II")
became the managing partner of FRI and acquired voting control and assumed
operational control over Fox. As a result, NPI Equity II became
responsible for the operation and management of the business and affairs of
the Fund and the other investment partnerships sponsored by FRI and/or Fox.
NPI Equity II is a wholly-owned subsidiary of National Property Investors,
Inc. ("NPI"), a diversified real estate management company headquartered in
Jericho, New York.
Both the income and the expenses of operating the properties owned by the
Fund are subject to factors outside the Fund's control, such as oversupply
of similar rental facilities resulting from overbuilding, increases in
unemployment or population shifts, changes in zoning laws or changes in
patterns of needs of the users. Expenses, such as local real estate taxes
and management expenses, are subject to change and cannot always be
reflected in rental increases due to market conditions or existing leases.
The profitability and marketability of developed real property may be
adversely affected by changes in general and local economic conditions and
in prevailing interest rates, and favorable changes in such factors will
not necessarily enhance the profitability or marketability of such
properties. Even under the most favorable market conditions, there is no
guarantee that any property owned by the Fund can be sold or, if sold, that
such sale can be made upon favorable terms.
It is possible that legislation on the state or local level may be
enacted in the states where the Fund's properties are located which may
include some form of rent control. There have been, and it is possible
there may be other Federal, state and local regulations enacted relating to
the protection of the environment. The general partner is unable to
predict the extent if any, to which such new legislation or regulations
might occur and the degree to which such existing or new legislation or
regulations might adversely affect the properties owned by the Fund.
The Fund monitor its properties for evidence of pollutions, toxins and
other dangerous substances including the presence of asbestos. In certain
cases environmental testing has been performed, which resulted in no
material adverse conditions or liabilities. In no case has the Partnership
received notice that it is a potentially responsible party with respect to
an environmental clean up site.
The Fund maintains property and liability insurance on the properties and
believes such coverage to be adequate.
The Fund is affected by and subject to the general competitive conditions
of the residential real estate industry. In addition, each of the Fund's
properties competes in an area which normally contains numerous other
residential properties which may be considered competitive. In 1993
markets in many areas remained depressed due in part to over-building which
continues to depress residential rental rates. An oversupply of
properties, including those held by banks, savings institutions, the
Federal Deposit Insurance Corporation and the Resolution Trust Corporation,
affects the ability of the Fund to sell such properties and their sales
prices. See Item 7 for a description of the markets in which the Fund's
properties are located.
At this time, it appears that the investment objective of capital growth
<PAGE>
will not be attained and that investors will not receive a return of all
their invested capital. The extent to which invested capital is returned
to investors is dependent upon the success of the general partner's
strategy as set forth herein as well as upon significant improvement in the
performance of the Fund's remaining properties and the markets in which
such properties are located and on the sales price of the remaining
properties. In this regard, some or all of the remaining properties will
be held longer than originally expected. The ability to hold and operate
these properties is dependent on the Fund's ability to obtain refinancing
or debt modification as required.
ITEM 2. PROPERTIES.
A description of the multi-family residential properties in which the
Fund has or had an ownership interest is as follows:
<TABLE>
<CAPTION> PORTFOLIO
DATE OF DATE OF PERCENTAGE
NAME AND LOCATION PURCHASE SALE SIZE <F1>
----------------- ------- ---- ---- -------
<S> <C> <C> <C> <C>
Wood Creek Apartments 05/84 - 432 units 10
1710 S. Gilbert Road
Mesa, Arizona
Plantation Creek Apartments <F2> 06/84 - 484 units 18
6925 Roswell Road
Atlanta, Georgia
Stoney Creek Apartments 06/85 - 364 units 9
11333 Amanda Lane
Dallas, Texas
Four Winds Apartments 09/85 - 350 units 11
SEC of 79th Street & Switzer Road
Overland Park, Kansas
Promontory Point Apartments 10/85 - 252 units 7
2250 Ridgepoint
Austin, Texas
Cooper's Pointe Apartments 11/85 - 192 units 5
2225 Greenridge Road
Charleston, South Carolina
Hampton Greens Apartments 12/85 - 309 units 8
10911 Woodmeadow Parkway
Dallas, Texas
Monterey Village Apartments 04/86 - 224 units 8
10244 Arrow Highway
Rancho Cucamonga, California
Autumn Run Apartments 06/86 - 320 units 9
1627 Country Lakes Drive
Naperville, Illinois
Copper Mill Apartments 09/86 - 192 units 8
3400 Copper Mill Trace
Richmond, Virginia
<PAGE>
Fox Hollow Apartments <F3> 01/85 7/92 208 units 7
1204 Brockett Road
Atlanta, Georgia
<FN>
<F1> Represents the percentage of original cash invested in the
individual property of the total original cash invested in all properties.
<F2> Formerly Post Creek Apartments.
<F3> Property acquired by lender through foreclosure in July 1992 (see
Note 7 to the Consolidated Financial Statements).
All Registrant's properties are or were owned in fee.
See the Consolidated Financial Statements in Item 8 for information
regarding any encumbrances to which properties of the Fund are subject. An
occupancy summary is set forth on the chart following:
CENTURY PROPERTIES GROWTH FUND XXII
OCCUPANCY SUMMARY
AVERAGE
OCCUPANCY RATE(%)
FOR THE YEAR ENDED
DECEMBER 31,
-----------------------------
1993 1992 1991
---- ---- ----
Wood Creek Apartments 93 93 88
Plantation Creek Apartments 92 89 89
Stoney Creek Apartments 91 91 93
Four Winds Apartments 96 96 94
Promontory Point Apartments 96 95 93
Cooper's Pointe Apartments 91 92 92
Hampton Greens Apartments 95 94 92
Monterey Village Apartments 93 95 94
Autumn Run Apartments 91 93 94
Copper Mill Apartments 95 94 92
Fox Hollow Apartments <F1> - 88 89
<F1> Property acquired by lender through foreclosure in July 1992. 1992
average occupancy rate represents average rate from January 1992 through
June
1992.
NET PROJECT OPERATIONS INTRODUCTION
The Net Project Operations tables reflect the components of net
project operations for each property in which the Fund had an ownership
interest that were included in the Fund's Consolidated Financial Statements
for the years then ended. Net project operations should not be considered
as an alternative to Net Loss (as presented in the financial statements) as
an indicator of the Fund's operating performance or to cash flows as a
measure of liquidity. The tables present:
Net project operations are the rental revenues less operating
expenses (subtotal) less the related debt service (principal and interest
on an accrual basis exclusive of refinancing and balloon payments).
<PAGE>
A reconciliation of Net Project Operations to Net Loss is included.
<PAGE>
</TABLE>
<TABLE>
CENTURY PROPERTIES GROWTH FUND XXII
NET PROJECT OPERATIONS<F1>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1993
LESS: LESS: NET
RENTAL OPERATING DEBT PROJECT
REVENUES EXPENSESSUBTOTAL SERVICE OPERATIONS
-------- -------- ------- ------- ---------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Wood Creek Apartments $ 2,281 $ 976 $1,305 $1,217 $ 88
Plantation Creek Apartments 3,222 1,596 1,626 1,347 279
Stoney Creek Apartments 1,697 924 773 476 297
Four Winds Apartments 2,094 971 1,123 960 163
Promontory Point Apartments 1,458 761 697 453 244
Cooper's Pointe Apartments 1,097 575 522 593 (71)
Hampton Greens Apartments 1,528 752 776 406 370
Monterey Village Apartments 1,600 787 813 947 (134)
Autumn Run Apartments 2,285 1,241 1,044 1,092 (48)
Copper Mill Apartments 1,260 599 661 374 287
------- ------ ------ ------ ------
Total $18,522 $9,182 $9,340 $7,865 $1,475
======= ====== ====== ====== ======
<F1> See preceding Net Project Operations Introduction.
</TABLE>
<TABLE>
CENTURY PROPERTIES GROWTH FUND XXII
NET PROJECT OPERATIONS<F1>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1992
LESS: LESS: NET
RENTAL OPERATING DEBT PROJECT
REVENUES EXPENSESSUBTOTAL SERVICE OPERATIONS
-------- -------- ------- ------- ---------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Wood Creek Apartments $ 2,098 $1,000 $1,098 $1,157 $ (59)
Plantation Creek Apartments 3,015 1,604 1,411 1,347 64
Fox Hollow Apartments <F2> 688 358 330 464<F3> (134)
Stoney Creek Apartments 1,676 908 768 525 243
Four Winds Apartments 2,024 807 1,217 1,112 105
Promontory Point Apartments 1,338 756 582 573 9
Cooper's Pointe Apartments 1,067 564 503 612 (109)
Hampton Greens Apartments 1,474 749 725 448 277
Monterey Village Apartments 1,687 788 899 947 (48)
Autumn Run Apartments 2,292 1,091 1,201 1,177 24
Copper Mill Apartments 1,164 568 596 374 222
------- ------ ------ ------ -----
<PAGE>
Total $18,523 $9,193 $9,330 $8,736 $ 594
======= ====== ====== ====== =====
<F1> See preceding Net Project Operations Introduction.
<F2> Property acquired by lender through foreclosure in July 1992 (see
Note 7 to the consolidated financial statements).
<F3> Includes payments due on an accrual basis. Debt service includes
payments totalling $368,000 not made by the Fund in 1992.
</TABLE>
<TABLE>
CENTURY PROPERTIES GROWTH FUND XXII
NET PROJECT OPERATIONS<F1>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1991
LESS: LESS: NET
RENTAL OPERATING DEBT PROJECT
REVENUES EXPENSESSUBTOTAL SERVICE OPERATIONS
-------- -------- ------- ------- ---------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Wood Creek Apartments $ 1,912 $1,024 $ 888 $1,095 $(207)
Plantation Creek Apartments 2,935 1,525 1,410 1,306 104
Fox Hollow Apartments 1,237 670 567 787<F2> (220)
Stoney Creek Apartments 1,674 895 779 876 (97)
Four Winds Apartments 1,962 833 1,129 1,148 (19)
Promontory Point Apartments 1,195 701 494 779 (285)
Cooper's Pointe Apartments 1,065 536 529 665 (136)
Hampton Greens Apartments 1,409 753 656 768 (112)
Monterey Village Apartments 1,664 730 934 947 (13)
Autumn Run Apartments 2,283 1,104 1,179 1,065 114
Copper Mill Apartments 1,150 584 566 353 213
------- ------ ------ ------ -----
Total $18,486 $9,355 $9,131 $9,789 $(658)
======= ====== ====== ====== =====
<F1> See preceding Net Project Operations Introduction.
<F2> Includes payments due on an accrual basis. Debt service includes
payments totaling $211,000 not made by the Fund in 1991.
</TABLE>
CENTURY PROPERTIES GROWTH FUND XXII
RECONCILIATION OF NET PROJECT OPERATIONS
TO NET LOSS
FOR THE YEAR ENDED
DECEMBER 31,
1993 1992 1991
(AMOUNTS IN THOUSANDS)
Net Project Operations $ 1,475 $ 594 $ (658)
Less:
Depreciation 4,171 4,594 5,348
General and administrative expenses 721 595 551
<PAGE>
Other interest expense 425 405 202
Plus:
Interest and other income 94 170 441
Principal payments in debt service 605 447 420
Gain on property disposition - 407 -
Gain on extinguishment of debt - 3,403 -
------- ------ -------
Net Loss $(3,143) $ (573) $(5,898)
======= ====== =======
ITEM 3. LEGAL PROCEEDINGS.
There are no material pending legal proceedings to which the Fund
is a party or to which any of its assets are subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of security holders during the
period covered by this Report.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S EQUITY AND RELATED SECURITY HOLDER
MATTERS.
The Limited Partnership Unit holders are entitled to certain
distributions as provided in the Partnership Agreement. Through December
1993 cash distributions from operations have been $15 for each $1,000 of
original investment. No market for Limited Partnership Units exists nor is
expected to develop.
As of December 31, 1993 the approximate number of holders of
Limited Partnership Units was as follows:
NUMBER OF
RECORD
TITLE OF CLASS HOLDERS*
Limited Partnership Units 7,711
*Number of Investments.
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA.
The following represents selected financial data for Century
Properties Growth Fund XXII for the years ended December 31, 1993, 1992,
1991, 1990 and 1989. The data should be read in conjunction with the
consolidated financial statements included elsewhere herein. This data is
not covered by the independent auditors' report.
<PAGE>
<TABLE><CAPTION> FOR THE FISCAL YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
(AMOUNTS IN THOUSANDS EXCEPT PER UNIT DATA)
<S> <C> <C> <C> <C> <C>
TOTAL REVENUES $18,616 $19,100 $18,927 $19,144 $18,422
======= ======= ======= ======= =======
LOSS BEFORE EXTRAORDINARY ITEM $(3,143) $(3,976) $(5,898) $(5,354) $(5,910)
EXTRAORDINARY ITEM - GAIN ON
EXTINGUISHMENT OF DEBT - 3,403 - - -
------- ------- ------- -------- -------
NET LOSS $(3,143) $ (573) $(5,898) $ (5,354) $(5,910)
======= ======= ======= ========= ========
NET LOSS PER LIMITED PARTNERSHIP
UNIT<F1>:
Loss before extraordinary item $(33) $(42) $(63) $(57) $(63)
Extraordinary item - gain on extinguishment
of debt - 36 - - -
---- ---- ---- ---- ----
NET LOSS $(33) $ (6) $(63) $(57) $(63)
==== ==== ==== ==== ====
TOTAL ASSETS $102,995 $106,673 $120,659 $126,602 $132,499
======== ======== ======== ======== ========
LONG-TERM OBLIGATIONS:
Notes payable $81,848 $82,453 $95,318 $95,738 $96,333
======= ======= ======= ======= =======
<F1> $1,000 original contribution per unit, based on units outstanding during the period after
giving effect to the allocation of net loss to the general partner.
</TABLE>
<PAGE>
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
This Item should be read in conjunction with Consolidated Financial
Statements and other Items contained elsewhere in this Report.
RESULTS OF OPERATIONS
The markets in which the Fund's properties are located are
described
below:
Mesa/
Phoenix
The industrial base is highly concentrated in aerospace and
high tech electronics which has been significantly affected by defense
cutbacks although relocation to Arizona by commercial aircraft companies
and catalog centers is having a slight positive effect. However, continued
corporate migration from Southern California is expected to be a source of
job growth. The apartment market is competitive but occupancy at Wood
Creek Apartments remains stable. However, net operating income increased,
in part, as a result of an increase in rental revenue due to an increase in
rental rates and decreases in utilities and repair and maintenance costs in
1993.
Atlanta
Atlanta's economy appears to be recovering. Relocating
corporations, 1996 Summer Olympic Games, health services and the F-22
Fighter contract awarded to Lockheed are expected to be major sources of
job growth. In addition, UPS Headquarters is planning to relocate to
Atlanta, enhancing its image as a regional and national business center.
The apartment market remains competitive due to oversupply of available
rental units. Plantation Creek Apartments operates in a competitive
submarket although occupancy and revenue increased as the economy
strengthened.
Dallas
The Dallas economy is relatively diversified; however, the
recession still lingers where continued defense cutbacks have slowed the
growth in employment. These job losses were partially offset by major
corporations relocating to the area near the Dallas/FortWorth International
Airport causing a recent increase in economic growth in certain submarkets.
The apartment market remains competitive due to affordability of new single
family homes and recent job losses as described above. Occupancy at Stoney
Creek Apartments remained stable while occupancy and rental rates have
increased slightly at Hampton Greens Apartments.
Overland Park/
Kansas City
The economy began to recover in late 1992. Agriculture and
manufacturing remain the dominant industries. A major pharmaceutical
corporation has started construction of its new headquarters and a
laboratory which is expected to increase job growth in the area. The
apartment market remains stable and construction remains virtually non-
existent although the availability of favorable home financing has placed
pressure on the rental tenant base. Occupancy at Four Winds Apartments
remains stable.
<PAGE>
Austin
Economic growth continues as several high tech companies are
expanding or relocating into the area. The apartment market is
competitive; however, apartment construction has been virtually non-
existent for several years. As a result, occupancy at Promontory Point
Apartments and rental rates have increased.
Charleston
The economy continues to expand due to employment gains in the
services industries. The single family housing market remains very weak,
allowing the apartment market to strengthen. Occupancy at Cooper's Pointe
Apartments has increased slightly with a slight increase in rental rates.
Rancho
Cucamonga
The Southern California economy including Rancho Cucamonga
remains recessionary due to continued cutbacks in the defense industry.
However, the Rancho Cucamonga economy has attracted relocating companies
from the City of Los Angeles and Orange County due to lower rents and cost
of living. In addition, Rancho Cucamonga remains a popular area in which
to live and commute to the City of Los Angeles. However, increased
competition and a declining tenant base resulted in lower occupancy and
rental rates at Monterey Village Apartments.
Naperville
The Chicago economy encompasses Naperville and began its
recovery only in the latter half of 1992. However, the economy remains
weak due to continued layoffs by some corporations in the area. The
apartment market is oversupplied and competition is strong whereby rental
concessions are common. The affordability and trend towards homeownership
has also adversely impacted the rental market. Occupancy and operations at
Autumn Run Apartments have decreased slightly.
Richmond
The economy began to recover in the second half of 1992,
although employment growth is expected to be slow. Construction in the
apartment market has virtually ceased allowing the market to somewhat
stabilize. Occupancy at Copper Mill Apartments has increased slightly and
rental concessions have declined.
1993 Compared to 1992
In 1993 some of the Fund's properties experienced an improvement in
operations as a result of increased occupancy and/or slight increases in
the rental rates due, in part, to improvements in the local economies in
which the properties operate. However, the operating results of certain of
the Fund's properties continue to be affected by highly competitive market
conditions combined with the continued sluggish economy. Markets in some
areas remained depressed due, in part, to overbuilding which continued to
depress rental rates at some of the Fund's properties. In addition, future
military base closures may adversely impact the South Carolina market and
consequently, Cooper's Pointe Apartments.
Loss before extraordinary item decreased $833,000 in 1993 compared
to the same period in 1992 primarily due to a decrease in operating,
interest and depreciation expenses due to the disposition of Fox Hollow
Apartments in July 1992. In addition, interest expense was further reduced
by the lower interest rate resulting from the refinancing of Promontory
Point in 1992, the reduced interest rate due to the extension on the Four
<PAGE>
Winds Apartments note payable in September 1992 and the reduced interest
rate due to the extension of Cooper's Pointe Apartments note payable in
1993. Rental revenue remained steady. Decreases due to the disposition of
Fox Hollow Apartments and decreased occupancy at Monterey Village and
Autumn Run Apartments offset the increases in rental revenue at Woodcreek
and Promontory Point Apartments, due to increased rental rates, and
Plantation Creek Apartments, due to increased occupancy. Operating
expenses decreased only slightly as operating expense increases at Four
Winds Apartments and Autumn Run Apartments substantially offset the
disposition of Fox Hollow Apartments. Interest and other income
decreased due to a decrease in interest rates and cash available for
investments. General and administrative expenses increased due to an
increase in amounts paid for portfolio management services as a result of
the new services agreement and bad debt expense related to revenue bonds
acquired when Fox Hollow was purchased. The gain on property disposition
recognized in 1992 relates to Fox Hollow Apartments.
The extraordinary item-gain on extinguishment of debt recognized in
1992 relates to the discounted prepayment on the Stoney Creek, Hampton
Greens and Promontory Point Apartments notes payable.
1992 Compared to 1991
Loss before extraordinary item decreased $1,922,000 in 1992
compared to 1991 primarily due to a decrease in interest expense as a
result of lower interest rates resulting from the refinancing of Stoney
Creek, Hampton Greens and Promontory Point apartments, and a decrease in
depreciation expense due to fully depreciated furnishings at certain of the
Fund's properties and the disposition of Fox Hollow Apartments. In
addition, a gain on property disposition of $407,000 relating to Fox Hollow
Apartments was recognized in 1992. These decreases in expenses were offset
in part, by a decrease in interest and other income due to a decrease in
interest rates and cash available for investment. Rental revenues
increased in 1992 compared to 1991 due to increased occupancy and rental
rates at certain of the Fund's properties. However, this increase was
offset, in part, by a decrease in revenue from the property disposition of
Fox Hollow Apartments.
General and administrative expenses increased due to an increase in
amounts paid for portfolio management services as a result of the new
services agreement.
The extraordinary item-gain on extinguishment of debt of $3,403,000
recognized in 1992 relates to the discounted prepayment on the Stoney
Creek, Hampton Greens and Promontory Point Apartments notes payable
discussed in Note 6.
FUND LIQUIDITY AND CAPITAL RESOURCES
Introduction
The results of net project operations are determined by rental
revenues less operating expenses (exclusive of capital improvements and
noncash items such as depreciation and amortization) and debt service (see
Item 2, Properties). During 1993, seven of the Fund's ten properties
generated positive net project operations, while Cooper's Pointe, Monterey
Village and Autumn Run Apartments experienced negative net project
operations. The Fund, after taking into account results of net project
operations, interest and other income and general and administrative
expenses, experienced positive operations for the year, as defined herein.
<PAGE>
However, to preserve working capital reserves required for necessary
capital improvements to properties and provide resources for potential
refinancing of properties, cash distributions from operations were
suspended beginning with the November 1988 scheduled distribution and
remained suspended in 1993. It is anticipated cash distributions will
remain suspended in 1994 and into the foreseeable future.
Net project operations should not be considered as an alternative
to Net Loss (as presented in the financial statements) as an indicator of
the Fund's operating performance or to cash flows as a measure of
liquidity. As presented in the Consolidated Statement of Cash Flows, cash
was provided by operating activities. Cash was used by investing
activities for the purchase of cash investments and additions to rental
properties and was provided primarily by proceeds from sale of cash
investments. Cash was used by financing activities for notes payable
principal payments and financing costs.
1991
The Fund obtained a summary judgement against the seller of
Promontory Point Apartments for non-payment of property taxes. As a result
of the summary judgement, a settlement agreement was reached in the amount
of $140,000. This amount represented the initial summary judgement of
approximately $100,000 plus legal and other fees incurred by the
Partnership in its efforts to collect the amount due. The $140,000 was to
be paid by an initial payment of $70,000 and 12 equal monthly payments of
approximately $6,000. The Fund received the $70,000 initial payment in the
second quarter of 1991 and monthly payments were received as scheduled
through 1991 and 1992.
1992
The Fund had been pursuing a discounted prepayment on the Stoney
Creek and Hampton Greens Apartments notes payable and, in July 1991,
received the lender's approval for such discounted prepayment. The
discounted prepayments were dependent upon the Fund obtaining replacement
financing on the properties which, as discussed in Note 6 to the
consolidated financial statements, was obtained in January 1992. The new
financing has a variable interest rate, requires monthly interest only
payments and matures in January 1995 with an option to extend the maturity
date an additional two years.
The Fund had approached the lender of Fox Hollow Apartments
requesting debt modification, including a discounted prepayment of the
loan. The discounted prepayment was contingent upon the Fund receiving
replacement financing on the property. In connection with these
negotiations, only partial debt service payments had been made beginning
with the August 1989 payment. In March 1992 a Notice of Default was
received by the Fund, and the Fund ceased making debt service payments. As
the Fund was unable to obtain replacement financing, the Fund allowed the
lender to foreclose on the property in July 1992. As discussed in Note 7
to the consolidated financial statements, the gain on property disposition
was $407,000. The total consideration for the property had been
$12,168,000, including mortgage financing of $7,984,000 when acquired in
January 1985. In the Fund's opinion, any return which the Fund might have
realized, through a reasonable period of continued ownership of this
property would not have been adequate to offset its anticipated deficits.
The Fund had been pursuing a discounted prepayment on Promontory
Point Apartments and, in January 1992, received the lender's approval for
<PAGE>
such discounted prepayment. The discounted prepayment was dependent upon
the Fund obtaining replacement financing on the property which, as
discussed in Note 6 to the consolidated financial statements, was obtained
in May 1992.
The new financing has a variable interest rate, requires monthly
interest only payments and matures in April 1997.
During 1992, Four Winds Apartments suffered significant damage due
to a severe hailstorm that struck the property. Property damage was
estimated to be $1 million of which approximately $800,000 related to
repairing the roof. The Fund submitted a claim for approximately $1
million under its insurance program and has received reimbursement for the
total amount. The repairs were substantially completed in 1992.
The note payable on Four Winds Apartments with a balloon payment of
$10,956,000 was due in September 1992. The Fund had an option to extend
this loan to September 1995 which it exercised when the loan matured, as
discussed in Note 5 to the consolidated financial statements.
1993
Erosion under one of the buildings and storm drain damage at
Plantation Creek Apartments were discovered during 1992. The cost to
repair the foundation and storm drain damage was approximately $180,000 and
was not covered by the Fund's insurance policy. Repairs were completed in
the first quarter of 1993. In addition, the property has sustained
significant termite/dry rot damage. The total cost to repair the
termite/dry rot damage was $270,000 of which $127,000 was covered by the
Fund's insurance program. Repairs were completed in the fourth quarter of
1993.
The Fund had a balloon payment on the Cooper's Pointe Apartments'
note payable of $5,554,000 due in December 1992. The Fund approached the
lender for an extension of the note; however, the initial request was
rejected by the lender. The lender issued a notice of default but had
agreed not to enforce it until May 14, 1993. The Fund continued to
negotiate with the lender for an extension of the due date and, as
discussed in Note 5 to the consolidated financial statements, in May 1993
an agreement was reached for an extension of the due date to December 1,
1995. The extension was finalized in July 1993. In addition, a cash
management agreement, which was required by the lender in order to complete
the modification, provides that the lender will receive any excess cash
flow for the property with such payments applied toward the reduction of
the outstanding loan balance. Finally, as part of the agreement, the Fund
was required to transfer Cooper's Pointe Apartments from a wholly owned
subsidiary back to the Fund.
The Fund had a balloon payment on the Monterey Village Apartments
note payable of $8,200,000 due in August 1994 due date. To meet this
obligation, the Fund approached the lender for debt modification, including
an extension of the August 1994. As discussed in Note 8 to the
consolidated financial statements, the Fund finalized modification of the
loan in January 1994. The terms of the modification include a seven year
extension with a reduction in the interest rate and a principal paydown.
The Fund has a balloon payment of $3,669,000 due in December 1994
on Copper Mill Apartments. The Fund is currently attempting to obtain
replacement financing with a new lender and anticipates that replacement
financing will be secured during the second quarter of 1994.
<PAGE>
During 1993, the Fund spent $1,305,000 on additions and
improvements to properties, the majority of which was spent at Plantation
Creek and Autumn Run Apartments. The Fund expects to spend approximately
$1,050,000 on additions and improvements to properties in 1994, the
majority of which is to be spent on Woodcreek, Plantation Creek, Hampton
Greens and Autumn Run Apartments. The Fund considers these expenditures
necessary in order for its properties to remain competitive in their
respective markets.
Conclusion
At this time, it appears that the investment objective of capital
growth will not be attained and that investors will not receive a return of
all their invested capital. The extent to which invested capital is
returned to investors is dependent upon the success of the Fund's strategy
as set forth herein as well as upon significant improvement in the
performance of the Fund's remaining properties and the markets in which
such properties are located and on the sales price of the remaining
properties. In this regard, some or all of the properties will be held
longer than originally expected. The ability to hold and operate these
properties is dependent on the Fund's ability to obtain refinancing or debt
modification as required.
The Fund anticipates that its resources should be sufficient to
meet capital and operating requirements into the foreseeable future
assuming that replacement financing can be arranged for Copper Mill
Apartments. In the event that additional resources are required, the Fund
could attempt to arrange further debt modification or refinancing for that
purpose.
__________________________
Although inflation impacts the Fund's expenses, the Fund has the
ability to attempt to offset expense increases through rent increases.
Certain expenses may not be impacted by inflation, such as the debt service
related to the mortgage financing encumbering the Fund's properties which
was generally obtained at fixed interest rates. It is impossible to
predict the future impact of inflation on the operations of the Fund's
properties, the Fund's ability to successfully pass increased costs through
to tenants, or the impact of inflation on the ultimate sales price of the
properties.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES.
CENTURY PROPERTIES GROWTH FUND XXII
(A LIMITED PARTNERSHIP)
TABLE OF CONTENTS
PAGE
Independent Auditors' Report 15
Consolidated Financial Statements:
Consolidated Balance Sheets at December 31, 1993 and 1992 16
Consolidated Statements of Operations for the Years
Ended December 31, 1993, 1992 and 1991 17
Consolidated Statements of Partners' Equity (Deficiency)
for the Years Ended December 31, 1993, 1992 and 1991 18
Consolidated Statements of Cash Flows for the Years
Ended December 31, 1993, 1992 and 1991 19
Notes to Consolidated Financial Statements 20
Financial Statement Schedules:
Schedule X- Consolidated Statements of Operations
Information for the Years Ended
December 31, 1993, 1992 and 1991 25
Schedule XI -Real Estate and Accumulated
Depreciation at December 31, 1993 26
Consolidated financial statements and financial statement schedules
not included have been omitted because of the absence of conditions under
which they are required or because the information is included elsewhere in
the consolidated financial statements.
<PAGE>
INDEPENDENT AUDITORS' REPORT
Century Properties Growth Fund XXII:
We have audited the consolidated financial statements of Century
Properties Growth Fund XXII (a limited partnership) ("Partnership"), and
its wholly-owned subsidiaries listed in the accompanying table of contents.
Our audits also included the financial statement schedules of the
Partnership and its wholly-owned subsidiaries listed in the accompanying
table of contents. These financial statements and financial statement
schedules are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present
fairly, in all material respects, the financial position of the Partnership
and its wholly-owned subsidiaries at December 31, 1993 and 1992, and the
results of their operations and their cash flows for each of the three
years in the period ended December 31, 1993 in conformity with generally
accepted accounting principles. Also, in our opinion, such financial
statement schedules, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly in all material
respects the information shown therein.
The accompanying consolidated financial statements have been
prepared assuming that the Partnership will continue as a going concern.
As discussed in Note 1 to the consolidated financial statements, the
Partnership has balloon payments totalling $11,868,000 and $26,511,000 due
in 1994 and 1995, respectively, which raises substantial doubt about the
Partnership's ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 1. The consolidated
financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
DELOITTE & TOUCHE
San Francisco, California
March 18, 1994
<PAGE>
<PAGE>
<TABLE>
CENTURY PROPERTIES GROWTH FUND XXII
(A LIMITED PARTNERSHIP)
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
<CAPTION>
1993 1992
ASSETS
<S> <C> <C>
CASH AND CASH EQUIVALENTS $ 341,000 $ 2,236,000
RESTRICTED CASH 775,000 786,000
CASH INVESTMENTS 1,187,000 -
INTEREST AND OTHER RECEIVABLES 318,000 145,000
PREPAID EXPENSES 202,000 172,000
RENTAL PROPERTIES:
Land 15,829,000 15,829,000
Buildings and improvements 111,785,000 111,125,000
Furnishings 11,626,000 10,981,000
------------ ------------
Total 139,240,000 137,935,000
Accumulated depreciation (39,860,000) (35,689,000)
----------- ------------
Rental properties - net 99,380,000 102,246,000
DEFERRED FINANCING COSTS - NET 792,000 1,088,000
------------ ------------
TOTAL ASSETS $102,995,000 $106,673,000
============ ============
LIABILITIES AND PARTNERS' EQUITY
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES $ 35,000 $ 41,000
ACCRUED INTEREST 354,000 310,000
ACCRUED PROPERTY TAXES 1,083,000 1,030,000
REFUNDABLE DEPOSITS 436,000 457,000
NOTES PAYABLE 81,848,000 82,453,000
------------ ------------
TOTAL LIABILITIES 83,756,000 84,291,000
------------ ------------
PARTNERS' EQUITY (DEFICIENCY):
GENERAL PARTNER (6,814,000) (6,443,000)
LIMITED PARTNERS (82,848 units outstanding at
December 31, 1993 and 1992) 26,053,000 28,825,000
------------ ------------
TOTAL PARTNERS' EQUITY 19,239,000 22,382,000
------------ ------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $102,995,000 $106,673,000
============ ============
See notes to consolidated financial statements.
<PAGE>
/TABLE
<PAGE><TABLE>
CENTURY PROPERTIES GROWTH FUND XXII
(A LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED SEPTEMBER 30, 1993, 1992 AND 1991
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
REVENUES:
Rental $18,522,000 $18,523,000 $18,486,000
Interest and other income 94,000 170,000 441,000
Gain on property disposition - 407,000 -
------------ ----------- -----------
Total revenues 18,616,000 19,100,000 18,927,000
------------ ----------- -----------
EXPENSES (including $1,249,000 and $1,244,000
paid to the general partner and affiliates in
1992 and 1991):
Operating 9,182,000 9,193,000 9,355,000
Interest 7,685,000 8,694,000 9,571,000
Depreciation 4,171,000 4,594,000 5,348,000
General and administrative 721,000 595,000 551,000
----------- ----------- -----------
Total expenses 21,759,000 23,076,000 24,825,000
----------- ----------- -----------
LOSS BEFORE EXTRAORDINARY ITEM (3,143,000) (3,976,000) (5,898,000)
EXTRAORDINARY ITEM - GAIN ON
EXTINGUISHMENT OF DEBT - 3,403,000 -
----------- ----------- ------------
NET LOSS $(3,143,000) $ (573,000) $(5,898,000)
=========== =========== ============
NET LOSS PER LIMITED PARTNERSHIP UNIT:
Loss before extraordinary item $(33) $(42) $(63)
Extraordinary Item - gain on extinguishment of debt - 36 -
----- ----- ----
Net loss $(33) $ (6) $(63)
==== ==== ====
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE><CAPTION> CENTURY PROPERTIES GROWTH FUND XXII(A LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
GENERAL LIMITED
PARTNER PARTNERS TOTAL
<S> <C> <C> <C>
BALANCE, JANUARY 1, 1991 $(5,679,000) $34,532,000 $28,853,000
NET LOSS (696,000) (5,202,000) (5,898,000)
----------- ----------- ----------
BALANCE, DECEMBER 31, 1991 (6,375,000) 29,330,000 22,955,000
LOSS BEFORE EXTRAORDINARY ITEM (469,000) (3,507,000) (3,976,000)
EXTRAORDINARY ITEM - GAIN ON
EXTINGUISHMENT OF DEBT 401,000 3,002,000 3,403,000
----------- ----------- -----------
BALANCE, DECEMBER 31, 1992 (6,443,000) 28,825,000 22,382,000
NET LOSS (371,000) (2,772,000) (3,143,000)
---------- ----------- ----------
BALANCE, DECEMBER 31, 1993 $(6,814,000) $26,053,000 $19,239,000
=========== =========== ===========
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<PAGE><TABLE><CAPTION> CENTURY PROPERTIES GROWTH FUND XXII
(A LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss $(3,143,000) $ (573,000) $(5,898,000)
Adjustments to reconcile net loss
to net cash provided by
operating activities:
Depreciation and amortization 4,528,000 4,942,000 5,550,000
Gain on property disposition - (407,000) -
Extraordinary item - gain on
extinguishment of debt - (3,403,000) -
Expenses paid on attempted
refinancing - 84,000 -
Changes in operating assets
and liabilities:
Interest and other receivables (173,000) 544,000 337,000
Prepaid expenses (30,000) (172,000) 78,000
Accounts payable
and accrued liabilities 91,000 516,000 438,000
Refundable deposits (21,000) (61,000) (63,000)
-------- --------- --------
Net cash provided by operating
activities 1,252,000 1,470,000 442,000
---------- ---------- ----------
INVESTING ACTIVITIES
Rental properties additions (1,305,000) (860,000) (883,000)
Purchase of cash investments (1,782,000) (3,848,000) (4,694,000)
Proceeds from sale of
cash investments 595,000 3,848,000 8,482,000
Restricted cash (increase) decrease 11,000 (139,000) (437,000)
Net cash provided (used) by ----------- ----------- -----------
investing activities (2,481,000) (999,000) 2,468,000
----------- ----------- -----------
FINANCING ACTIVITIES
Notes payable proceeds - 17,700,000 -
Prepayment penalties paid - (258,000) -
Extension fee paid - (55,000) -
Notes payable principal payments (605,000) (18,79
Financing costs refunded 33,000 - -
Financing costs paid (94,000) (509,000) (352,000)
----------- ------------ ------------
Net cash used by financing activities (666,000) (1,919,000) (772,000)
----------- ------------ ------------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (1,895,000) (1,448,000) 2,138,000
Cash and cash equivalents at
beginning of year 2,236,000 3,684,000 1,546,000
----------- ----------- -----------
CASH AND CASH EQUIVALENTS
AT END OF YEAR $ 341,000 $ 2,236,000 $ 3,684,000
=========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid in cash during the year $7,284,000 $8,006,000 $9,148,000
========== ========== ==========
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Disposition of rental property in 1992 - See Note 7.
Extinguishment of debt in 1992 - See Note 6.
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>
CENTURY PROPERTIES GROWTH FUND XXII
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Century Properties Growth Fund XXII ("Partnership") is a
limited partnership organized under the laws of the State of California to
acquire, hold for investment, and ultimately sell income-producing real
estate. The general partner of the Partnership is Fox Partners IV, a
California general partnership. The general partners of Fox Partners IV
are Fox Capital Management Corporation ("Fox", formerly known as Fox &
Carskadon Financial Corporation), a California corporation, Fox Realty
Investors ("FRI", formerly known as Century Partners), a California general
partnership, Fox Partners 85, a California general partnership and Fox
Associates 84, a California general partnership. The Partnership was
organized in January 1984, but did not commence operations until May 1984.
The capital contributions of $82,848,000 ($1,000 per unit) were made by the
limited partners.
On December 6, 1993, NPI Equity Investments II, Inc. ("NPI Equity II")
became the managing partner of FRI and acquired voting control and assumed
operational control over Fox. As a result, NPI Equity II became
responsible for the operation and management of the business and affairs of
the Partnership.
Consolidation - The consolidated financial statements include the
statements of the Partnership and its wholly owned subsidiaries, one of
which was formed in 1991 into which the Stoney Creek, Hampton Greens and
Promontory Point Apartments were transferred. The other subsidiary was
formed in December 1992 into which Cooper's Pointe Apartments was
transferred. In 1993, Cooper's Pointe Apartments was transferred back to
the Partnership (see Note 5). All significant intercompany transactions
and balances have been eliminated.
Basis of Presentation and Operating Strategy - The accompanying
consolidated financial statements have been prepared on a going concern
basis which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. As of December 31, 1993 the
Partnership had balloon payments totalling $11,869,000 due on two
properties, Monterey Village and Copper Mill in August and December of
1994, respectively. In addition, balloon payments totalling $26,511,000
are due in 1995 on Four Winds, Woodcreek and Cooper's Pointe. To meet
these obligations the Partnership is attempting or will attempt to obtain
debt modification or refinancing of the properties. As discussed in Note
8, in January 1994 the Partnership modified the note payable on Monterey
Village extending the note for seven years from the modification date and
reducing the interest rate to 8.25%. Discussions on a multi-property
financing arrangement involving Copper Mill are ongoing and the Partnership
expects to complete the transaction in the first half of 1994. If the
Partnership is unable to obtain debt modification or refinancing, it is
likely that dispositions of properties with significant balloon payments
will occur through sale, foreclosure or transfer to the lenders. The
Partnership believes that its current strategy, combined with cash
generated from the Partnership's properties with positive operations will
allow the Partnership to meet its capital and operating requirements. The
outcome of this uncertainty cannot presently be determined. The
consolidated financial statements do not include any adjustments that might
<PAGE>
result from the ultimate outcome of this uncertainty.
Distributions - Cash distributions from operations have been suspended
since 1988 and will continue to be suspended in the foreseeable future to
allow the Fund to implement repairs and improvements to the properties and
to provide resources for potential refinancing of properties.
New Accounting Pronouncements - In December 1991, the Financial
Accounting Standards Board (FASB) issued Statement No. 107, "Disclosures
About Fair Value of Financial Instruments". This Statement will not affect
the financial position or results of operations of the Partnership but will
require additional disclosure on the fair value of certain financial
instruments for which it is practicable to estimate fair value.
Disclosures under this statement will be required in the 1995 financial
statements.
Cash and Cash Equivalents - The Partnership considers cash investments,
primarily commercial paper, with an original maturity date of three months
or less at the time of purchase to be cash equivalents.
Rental Properties - Rental properties are stated at cost. A provision
for impairment of value is recorded when a decline in value of property is
determined to be other than temporary as a result of one or more of the
following: (1) a property is offered for sale at a price below its current
carrying value, (2) a property has significant balloon payments due within
the foreseeable future for which the Partnership does not have the
resources to meet, and anticipates it will be unable to obtain replacement
financing or debt modification sufficient to allow a continued hold of the
property over a reasonable period of time, (3) a property has been, and is
expected to continue, generating significant operating deficits and the
Partnership is unable or unwilling to sustain such deficit results of
operations, and has been unable to, or anticipates it will be unable to,
obtain debt modification, financing or refinancing sufficient to allow a
continued hold of the property for a reasonable period of time or, (4) a
property's value has declined based on management's expectations with
respect to projected future operational cash flows and prevailing economic
conditions. An impairment loss is indicated when the undiscounted sum of
estimated future cash flows from an asset, including estimated sales
proceeds, and assuming a reasonable period of ownership up to 5 years, is
less than the carrying amount of the asset. The impairment loss is
measured as the difference between the estimated fair value and the
carrying amount of the asset. In the absence of the above circumstances,
properties and improvements are stated at cost. Acquisition fees are
capitalized as a cost of rental property. Construction interest costs were
capitalized as a cost of rental property during the development and
construction phase and are expensed as incurred after construction is
completed. Lease revenues from the lessee and payments made by the seller
pursuant to performance guarantee agreements in excess of the rental
property's net operating income (rental revenues less operating expenses)
were applied as a reduction of the cost of the related rental property
during the construction period and for the first two years after completion
of construction, or until two years after acquisition if the property was
completed at the time of acquisition.
Depreciation - Depreciation is computed by the straight-line method
over estimated useful lives of 30 years for buildings and improvements and
six years for furnishings. Properties for which a provision for impairment
of value has been recorded and are expected to be disposed of within the
nex year are not depreciated.
<PAGE>
Deferred Financing Costs - Financing costs are deferred and amortized
as interest expense over the lives of the related loans, which range from
three to ten years, or expensed, if financing is not obtained.
Net Loss Per Limited Partnership Unit - The net loss per limited
partnership unit is computed by dividing the net loss allocated to the
limited partners by 82,848 units outstanding.
Income Taxes - No provision for Federal and state income taxes has been
made in the consolidated financial statements because income taxes are the
obligation of the general partner and the limited partners.
Reclassification - Certain amounts have been reclassified to conform
with 1993 presentation.
2. TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES
In accordance with the Partnership Agreement, the Partnership may be
charged by the general partner and affiliates for services provided to the
Partnership. From March 1988 to December 1992 such amounts were assigned
pursuant to a services agreement by the general partner and affiliates to
Metric Realty Services, L.P., which performed partnership management and
other services for the Partnership. On January 1, 1993, Metric Management,
Inc., a company which is not affiliated with the general partner, commenced
providing certain property and portfolio management services to the
Partnership under a new services agreement. As provided in the new
services agreement effective January 1, 1993, no reimbursements were made
to the general partner in 1993. Subsequent to December 31, 1992,
reimbursements were made to Metric Management, Inc. On December 16, 1993,
the services agreement with Metric Management, Inc. was modified and, as a
result thereof, the Partnership's general partner assumed responsibility
for cash management of the Partnership as of December 23, 1993 and assumed
responsibility for day-to-day management of the Fund's affairs, including
portfolio management, accounting and investor relations services as of
April 1, 1994. Related party expenses are as follows:
1993 1992 1991
Property management fees $ - $ 925,000 $ 924,000
Reimbursement of
operational expenses:
Accounting - 234,000 245,000
Investor services - 32,000 40,000
Professional services - 58,000 35,000
------- ----------- ----------
Total $ - $1,249,000 $1,244,000
======= ========== ==========
In accordance with the Partnership Agreement, the general partner
received a Partnership management incentive allocation equal to ten percent
of net and taxable income (losses) and cash distributions. The general
partner was also allocated its two percent continuing interest in the
Partnership's net and taxable income (losses) and cash distributions after
the above allocation of the Partnership management incentive.
3. RESTRICTED CASH
Restricted cash of $775,000 at December 31, 1993 consists of
$175,000 restricted tenant security deposits and $600,000 required to be
<PAGE>
maintained in accordance with the financing agreements on the Stoney Creek,
Hampton Greens and Promontory Point Apartments in order to meet future
capital requirements.
4. CASH INVESTMENTS
Cash investments include all cash not considered cash or cash
equivalents, as defined in Note 1 or restricted cash, as defined in Note 3.
Cash investments at December 31, 1993 mature in January and
February 1994 at effective interest rates ranging from 3.25 to 3.28 percent
per annum.
5. NOTES PAYABLE
Individual rental properties are pledged as collateral for the
related notes payable. The notes bear interest at rates from 7.4 to 10.5
percent. The notes are generally payable monthly with balloon payments
totalling $11,869,000 in 1994 and $68,633,000 between 1995 and 1997.
Two of the notes with balloon payments totalling $14,926,000 which
had been due in July 1995 and February 1996, respectively, were prepaid
when the Partnership obtained replacement financing in January 1992. The
new note of $12,500,000 is due in 1995 with the option to extend the due
date an additional two years. In addition, a note which had been due in
April 1995, with a balloon payment of $6,703,000 was prepaid when the
Partnership obtained replacement financing in May 1992. The new note of
$5,200,000 is due in April 1997 (see Note 6). Principal payments at
December 31, 1993 are required as follows before giving effect to the
refinancing discussed in Note 8:
1994 $12,539,000
1995 40,571,000
1996 23,661,000
1997 5,077,000
-----------
Total $81,848,000
===========
Amortization of deferred financing costs totalled $357,000,
$348,000 and $202,000 for the years ended December 31, 1993, 1992 and 1991,
respectively.
In July 1993 the Partnership finalized an agreement with the lender
for a three year extension of the December 1992 due date on the Cooper's
Pointe Apartments note payable of $5,554,000. The loan is due December 1,
1995. The interest rate has been reduced from 11.5 percent to 9 percent
through May 31, 1993 and to 8.25 percent through the maturity date. The
Partnership paid financing costs of $79,000, of which $53,000 was paid in
1992 in connection with the extension. In addition, a cash management
agreement, which was required by the lender in order to complete the
modification, provides that the lender will receive any excess cash flow
for the property with such payments applied toward the reduction of the
outstanding loan balance. Finally, as part of the agreement, the Fund was
required to transfer Cooper's Pointe Apartments from a wholly owned
subsidiary which held title to the property, back to the Fund.
The note payable on Four Winds Apartments with a balloon payment of
$10,956,000 was due in September 1992. The Partnership had an option to
extend the due date to September 1995 which it exercised when the loan
<PAGE>
matured. The interest rate on the loan has been reduced from 9.5 percent
to 7.4 percent.
6. EXTRAORDINARY ITEM - GAIN ON EXTINGUISHMENT OF DEBT
In January 1992 the Partnership obtained replacement financing on
the Stoney Creek and Hampton Greens Apartments. The initial advance under
the replacement financing totalled $12,500,000. Prior to January 7, 1994,
an additional $500,000 could have been drawn upon by the Partnership,
provided the properties achieve certain operating results as defined by the
terms of the replacement financing agreement. The Partnership did not draw
upon any of this amount. The existing notes of $8,135,000 and $7,085,000
with an interest rate of 10.5 percent at December 31, 1991, which had been
due in 1995 and 1996, respectively, were prepaid at a discounted amount
totalling $12,900,000. As of December 31, 1992, $446,000 had been paid in
financing costs. The difference of $400,000 between the initial advance
and the discounted prepayment amount and related costs incurred in the
close of escrow of $344,000 were paid by the Partnership in 1992. The new
financing agreement provides for interest only payments at 3.625 percent
over a 90 day LIBOR interest rate with the maximum interest rate not to
exceed 12 percent per annum. The note will mature in January 1995 with an
option to extend the maturity date an additional two years. The agreement
also required the Partnership to transfer the properties into a separate
wholly owned subsidiary and to cross-collateralize the properties as
security for the loan. The discount amount of $2,320,000, was forgiven by
the lender upon prepayment of the original financing and was recognized by
the Partnership as extraordinary item - gain on extinguishment of debt in
1992, net of prepayment penalties paid of $258,000 and the write-off of
unamortized deferred costs on the original financing of $132,000.
In May 1992 the Partnership obtained replacement financing of
$5,200,000 on Promontory Point Apartments. The existing note of $6,978,000
with an interest rate of 10 percent at March 31, 1992, which had been due
in 1995, was prepaid at a discounted amount totalling $5,450,000. In
addition, the Partnership paid an extension fee of $55,000 to the existing
lender in order to extend the period required to obtain replacement
financing. As of December 31, 1992, $283,000 had been paid in financing
costs. The difference of $250,000 between the refinancing proceeds and the
discounted prepayment was paid by the Partnership in 1992. The new
financing agreement provides for interest only payments at 3.75 percent
over a 90 day LIBOR interest rate with a 3 year interest rate cap of 11
percent and a pay rate of 8.75 percent.
The note will mature in April 1997. The agreement also required the
Partnership to transfer the property into the wholly owned subsidiary
created for Stoney Creek and Hampton Greens Apartments and to cross-
collateralize Promontory Point Apartments with these properties as security
for the loan. The discount amount of $1,528,000 was forgiven by the lender
upon prepayment of the original financing. The discount amount, net of the
extension fee paid of $55,000 was recognized by the Partnership as
extraordinary item - gain on extinguishment of debt in 1992.
7. DISPOSITION OF RENTAL PROPERTY
In July 1992, the Partnership allowed Fox Hollow Apartments,
located in Atlanta, Georgia, to be acquired through foreclosure by the
holder of the first loan. Accordingly, the Partnership was relieved of the
first note payable of $7,920,000 (which had been due in 1993), $72,000 in
accrued property taxes and $934,000 of accrued and unpaid interest. At
date of foreclosure, the carrying value of the property was $8,516,000 with
<PAGE>
closing costs of $3,000. The gain on disposition was $407,000 which was
recognized in 1992.
8. SUBSEQUENT EVENT
The Partnership had a balloon payment on the Monterey Village
Apartments note payable of $8,200,000 due in August 1994. To meet this
obligation the Partnership approached the lender for debt modification and,
in January 1994, the Partnership finalized a debt modification agreement
with the lender. The terms of the agreement include a seven year extension
with a reduction in the interest rate from 10.5 percent to 8.25 percent and
a 30 year amortization period in exchange for a principal paydown of
approximately $805,000. In connection with the modification, the
Partnership paid extension fees and costs of approximately $78,000.
9. RECONCILIATION TO INCOME TAX METHOD OF ACCOUNTING
The differences between the accrual method of accounting for income
tax reporting and the accrual method of accounting used in the consolidated
financial statements are as follows:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Net loss - financial statements $ (3,143,000) $ (573,000)$ (5,898,000)
Differences resulted from:
Gain on property disposition - 2,760,000 -
Depreciation (1,505,000) (1,576,000) (1,431,000)
Interest expense 131,000 66,000 (69,000)
Construction period interest
amortization (374,000) (374,000) (374,000)
Amortization of prepaid costs - - (15,000)
Gain on extinguishment of debt - 757,000 -
Other 5,000 (29,000) 19,000
------------ ----------- ------------
Net income (loss) -
income tax method $ (4,886,000) $ 1,031,000 $ (7,768,000)
============ =========== =============
Taxable income (loss) per
limited partnership unit
after giving effect
of the allocation to the
general partner $(52) $11 $(83)
==== === =====
Partners' equity
- financial statements $19,239,000 $22,382,000 $22,955,000
Differences resulted from:
Sales commissions and
organization expenses 12,427,000 12,427,000 12,427,000
Depreciation (26,273,000) (24,768,000) (26,024,000)
Payments credited to
rental properties 2,056,000 2,056,000 2,548,000
Interest expense 177,000 46,000 (630,000)
Construction period
interest amortization (3,252,000) (2,878,000) (2,504,000)
Amortization of prepaid costs - - (520,000)
Other (27,000) (32,000) (50,000)
----------- ----------- -----------
Partners' equity
<PAGE>
- income tax method $ 4,347,000 $ 9,233,000 $ 8,202,000
</TABLE>` =========== =========== ===========
<PAGE>
<PAGE>
<TABLE>
SCHEDULE X
CENTURY PROPERTIES GROWTH FUND XXII
(A LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF OPERATIONS INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
COLUMN A COLUMN B
CHARGED TO EXPENSES
ITEM 1993 1992 1991
<S> <C> <C> <C>
1. Depreciation $4,171,000 $4,594,000 $5,348,000
2. Property taxes $1,689,000 $1,624,000 $1,742,000
3. Maintenance and repairs $2,622,000 $2,547,000 $2,689,000
4. Advertising $609,000 $593,000 $564,000
5. Amortization of deferred
financing costs $357,000 $348,000 $202,000
As to items omitted, amounts did not exceed one percent of total
revenues.
</TABLE>
<PAGE>
<PAGE><TABLE> SCHEDULE XI
CENTURY PROPERTIES GROWTH FUND XXII
(A LIMITED PARTNERSHIP)
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
<CAPTION>
1 2 3 4 5 6 7 8 9 10 11 12
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Wood Creek Apartments Mesa, Arizona
$12,005 $ 2,130 $13,440 $ 458 $ (118)$ 2,117 $13,793 $15,910 $ 5,040 1985 5/84
Plantation Creek Apartments Atlanta, Georgia
13,271 2,653 20,827 1,375 2,655 22,200 24,855 7,647 1977/1978 6/84
Stoney Creek Apartments Dallas, Texas
6,750 1,803 12,509 482 (927) 1,689 12,178 13,867 4,229 1983 6/85
Four Winds Apartments Overland Park, Kansas
10,762 1,363 14,288 315 (92) 1,357 14,517 15,874 4,069 1987 9/85
Promontory Point Apartments Austin, Texas
5,077 1,690 10,129 252 (694) 1,595 9,782 11,377 3,325 1984 10/85
Cooper's Pointe Apartments Charleston, South Carolina
5,476 513 6,696 263 (111) 510 6,851 7,361 2,259 1986 11/85
Hampton Greens Apartments Dallas, Texas
5,750 2,086 9,474 446 2,086 9,920 12,006 3,420 1986 12/85
Monterey Village Apartments Rancho Cucamonga, California
8,255 1,438 10,403 97 (42) 1,433 10,463 11,896 3,114 1987 4/86
Autumn Run Apartments Naperville, Illinois
10,804 1,462 14,957 449 (27) 1,458 15,383 16,841 4,452 1987 6/86
<PAGE>
Copper Mill Apartments Richmond, Virginia
3,698 933 8,061 304 (45) 929 8,324 9,253 2,305 1987 9/86
------- ------- -------- ------ ------- ------- ------------------ -------
TOTAL$81,848$16,071$120,784 $4,441 $(2,056)$15,829 $123,411 $139,240 $39,860
======= ======= ======== ====== ======= ======= ================== =======
See accompanying notes.
</TABLE>
<PAGE>
1. COLUMN A - Description
2. COLUMN B - Encumbrances
3. COLUMN C - Initial cost to Partnership - Land
4. COLUMN C - Initial cost to Partnership - Buildings and
Improvements
5. COLUMN D - Cost Capitalized Subsequent to Acquisition -
Improvements
6. COLUMN D - Cost Capitalized Subsequent to Acquisition - Carrying
Costs
7. COLUMN E - Gross Amount at Which Carried at Close of Period<F1> -
Land
8. COLUMN E - Gross Amount at Which Carried at Close of Period<F1> -
Buildings and Improvements
9. COLUMN E - Gross Amount at Which Carried at Close of Period<F1> -
Total<F3>
10. COLUMN F - Accumulated Depreciation <F2><F4>
11. COLUMN G - Year of Construction
12. COLUMN H - Date of Acquisition
<PAGE>
SCHEDULE XI
CENTURY PROPERTIES GROWTH FUND XXII
(A LIMITED PARTNERSHIP)
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
NOTES:
<F1> The aggregate cost for Federal income tax purposes is $138,048,000.
<F2> Depreciation is computed on lives ranging from six to 30 years.
<F3> Balance, January 1, 1991 $147,881,000
Improvements capitalized subsequent
to acquisition 883,000
------------
Balance, December 31, 1991 148,764,000
Improvements capitalized subsequent
to acquisition 860,000
Cost of rental property foreclosed on (11,689,000)
------------
Balance, December 31, 1992 137,935,000
Improvements capitalized subsequent
to acquisition 1,305,000
------------
Balance, December 31, 1993 $139,240,000
============
<F4> Balance, January 1, 1991 $28,923,000
Additions charged to expense 5,348,000
-----------
Balance, December 31, 1991 34,271,000
Additions charged to expense 4,594,000
Accumulated depreciation on rental
property foreclosed on (3,176,000)
-----------
Balance, December 31, 1992 35,689,000
Additions charged to expense 4,171,000
-----------
Balance, December 31, 1993 $39,860,000
===========
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES.
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The Fund has no directors or executive officers. The following are
the names and additional information relating to the directors and
executive officers of NPI Equity Investments II. On December 6, 1993, NPI
Equity II became managing partner of FRI and acquired voting control and
assumed operational control over Fox, thereby obtaining management and
control of the general partner. By virtue of their positions with NPI
Equity II, the listed individuals control the business affairs of the Fund.
FRI, Fox and their affiliates, including NPI, serve directly or indirectly
as general partner of 30 public partnerships.
MICHAEL L. ASHNER (age 41) has been President and a Director of NPI
since 1984, President and a Director of NPI Equity II since 1993 and
President and a Director of Fox since December 6, 1993. Since 1991, Mr.
Ashner has also served as a Director and President of NPI Equity
Investments, Inc. ("NPI Equity I"), an affiliate of NPI Equity II, which
serves as the general partner of the seven publicly-held NPI real estate
limited partnerships. In addition, since 1981 Mr. Ashner has been
President and sole shareholder of Exeter Capital Corporation, a firm which
has organized and administered real estate limited partnerships. He
received his A.B. degree cum laude from Cornell University and received a
J.D. degree magna cum laude from the University of Miami School of Law,
where he was an editor of the law review. Mr. Ashner is a member of the
New Jersey, New York and Florida bar associations and is a member of the
Executive Council of the Board of Directors of the Multi Housing Council.
MARTIN LIFTON (age 61) has been the Chairman and a Director of NPI
since 1991 and NPI Equity II since 1993 and the Chairman and a Director of
Fox since December 6, 1993. In addition, since 1991, Mr. Lifton has served
as the Chairman and a Director of NPI Equity I. Mr. Lifton is also
Chairman and President of Lifton Company, a real estate investment firm.
Since entering the real estate business 35 years ago, Mr. Lifton has
engaged in a wide range of real estate activities, including the purchase
and construction of apartment complexes in the New York metropolitan area
and in the southeastern and midwestern United States. Mr. Lifton was also
one of the founders of the Bank of Great Neck of which he is Chairman and a
major stockholder. Mr. Lifton received his B.S. degree from the New York
University School of Commerce where he majored in real estate.
ARTHUR N. QUELER (age 47) was a co-founder of NPI, of which he has
been Executive Vice President and a Director since 1984. Mr. Queler has
also been Executive Vice President and a Director of NPI Equity II since
1993 and of Fox since December 6, 1993. Since 1991, Mr. Queler has been
Executive Vice President and a Director of NPI Equity I. In addition,
since 1983 Mr. Queler has been President of ANQ Securities, Inc., a NASD
registered broker-dealer firm which has been responsible for supervision of
licensed brokers and coordination with a nationwide broker-dealer network
for the marketing of NPI investment programs. Prior to 1983, Mr. Queler
was a managing general partner of Berg Harquel Associates, a real estate
<PAGE>
syndication firm, in which capacity he was involved in the acquisition,
syndication and management of 23 properties. Mr. Queler is a certified
public accountant. He received B.B.A. and M.B.A. degrees from the City
College of New York.
Messrs. Ashner, Lifton and Queler currently are the beneficial
owners of all of the outstanding stock of NPI.
ITEM 11. EXECUTIVE COMPENSATION
The Fund does not pay or employ any directors or officers.
Compensation to the directors and officers of Fox, the managing general
partner of the general partner, and to the partners of FRI, a general
partner of the general partner, is paid directly by Fox and FRI, as the
case may be.
The Fund has not established any plans pursuant to which plan or
non-plan compensation has been paid or distributed during the last fiscal
year or is proposed to be paid or distributed in the future, nor has the
Fund issued or established any options or rights relating to the
acquisition of its securities or any plans relating to such options or
rights. However, the general partner of the Fund has received and is
expected to receive certain allocations, distributions and other amounts
pursuant to the Fund's limited partnership agreement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
There is no person known to the Fund who owns beneficially or of
record more than five percent of the voting securities of the Fund.
However, the general partner has discretionary control over most of the
decisions made by or for the Fund pursuant to the terms of the Fund's
limited partnership agreement. The Fund has no directors or officers. The
directors and executive officers of the corporate managing partner of the
Fund's general partner and the partners of FRI, as a group, own less than
one percent of the Fund's voting securities.
There are no arrangements known to the Fund, the operation of which
may, at a subsequent date, result in a change in control of the Fund.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
8-K.
(a) 1., 2. and 3. See Item 8 of this Form 10-K for the Consolidated
Financial Statements of the Fund, Notes thereto, and Financial Statement
Schedules. (A table of contents to Consolidated Financial Statements and
Financial Statement Schedules is included in Item 8 and incorporated herein
by reference.)
(b) The following report on Form 8-K was required to be filed during
the
last quarter covered by this Report:
<PAGE>
DATE OF ITEM
MONTH SUCH NUMBERS
FILED REPORT REPORTED DESCRIPTION
December 12/6/93 1 Changes in Control
of Registrant
(c) Financial Statement Schedules, if required by Regulation S-K, are
included in Item 8.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this Report
to be signed on its behalf by the undersigned, thereunto duly authorized.
CENTURY PROPERTIES FUND XXII
By: FOX PARTNERS IV
Its General Partner
By: FOX CAPITAL MANAGEMENT CORPORATION
A General Partner ("FOX")
By: /s/ Michael L. Ashner
------------------------
Michael L. Ashner
President
Date: March 18, 1994
Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the date indicated.
By: /s/ Michael L. Ashner By: /s/ Arthur N. Queler
---------------------- ----------------------
Michael L. Ashner Arthur N. Queler
President and Director of Executive Vice President (Principal
FOX Financial and Accounting Officer)
and Director of
FOX
By: /s/ Martin Lifton
--------------------
Martin Lifton
Chairman and Director of
FOX
Date: March 18, 1994
<PAGE>
