SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year
ended December 31, 1993 Commission file no. 0-15966
JMB INCOME PROPERTIES, LTD. - XI
(Exact name of registrant as specified in its charter)
Illinois 36-3254043
(State of organization) (I.R.S. Employer Identification No.)
900 N. Michigan Ave., Chicago, Illinois 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312-915-1987
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ------------------- ------------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
LIMITED PARTNERSHIP INTERESTS
(Title of class)
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
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. Not applicable.
Certain pages of the prospectus of the registrant dated July 11, 1984, as
supplemented July 24, 1984 and November 26, 1984 and filed pursuant to Rules
424(b) and 424(c) under the Securities Act of 1933 are incorporated by
reference in Parts I and III of this Annual Report on Form 10-K.
TABLE OF CONTENTS
Page
----
PART I
Item 1. Business. . . . . . . . . . . . . . . . . . . . . . . 1
Item 2. Properties. . . . . . . . . . . . . . . . . . . . . . 5
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . 7
Item 4. Submission of Matters to a Vote
of Security Holders . . . . . . . . . . . . . . . . . 7
PART II
Item 5. Market for the Partnership's Limited Partnership
Interests and Related Security Holder Matters . . . . 7
Item 6. Selected Financial Data . . . . . . . . . . . . . . . 8
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . 14
Item 8. Financial Statements and Supplementary Data . . . . . 19
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure. . . . . . . . 61
PART III
Item 10. Directors and Executive Officers
of the Partnership. . . . . . . . . . . . . . . . . . 61
Item 11. Executive Compensation. . . . . . . . . . . . . . . . 64
Item 12. Security Ownership of Certain Beneficial Owners
and Management. . . . . . . . . . . . . . . . . . . . 65
Item 13. Certain Relationships and Related Transactions. . . . 66
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K . . . . . . . . . . . . . . . 66
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
i
PART I
ITEM 1. BUSINESS
All references to "Notes" are to Notes to Financial Statements contained
in this report.
The registrant, JMB Income Properties, Ltd. - XI (the "Partnership"), is
a limited partnership formed in 1983 and currently governed under the Revised
Uniform Limited Partnership Act of the State of Illinois to invest in improved
income-producing commercial and residential real property. The Partnership
sold $173,406,000 in limited partnership interests (the "Interests")
commencing on July 11, 1984, pursuant to a Registration Statement on Form S-11
under the Securities Act of 1933 (Registration No. 2-90503). A total of
173,406 Interests were sold to the public at $1,000 per Interest and the
holders of 173,406 Interests were admitted to the Partnership in fiscal 1985.
The offering closed on November 30, 1984. No Investor has made any additional
capital contribution after such date. The Investors in the Partnership share
in the benefits of ownership of the Partnership's real property investments
according to the number of Interests held.
The Partnership is engaged solely in the business of the acquisition,
operation and sale and disposition of equity real estate investments. Such
equity investments are held by fee title and/or through joint venture
partnership interests. The Partnership's real estate investments are located
throughout the nation and it has no real estate investments located outside
the United States. A presentation of information about industry segments,
geographic regions, raw materials or seasonality is not applicable and would
not be material to an understanding of the Partnership's business taken as a
whole. Pursuant to the Partnership agreement, the Partnership is required to
terminate on or before October 31, 2034. Accordingly, the Partnership intends
to hold the real properties it acquires for investment purposes until such
time as sale or other disposition appears to be advantageous. Unless
otherwise described, the Partnership expects to hold its properties for long-
term investment where, due to current market conditions, it is impossible to
forecast the expected holding period. At sale of a particular property, the
proceeds, if any, are generally distributed or reinvested in existing
properties rather than invested in acquiring additional properties.
The Partnership has made the real property investments set forth in the
following table:
<TABLE>
<CAPTION>
SALE OR DISPOSITION
DATE OR IF OWNED
AT DECEMBER 31, 1993,
NAME, TYPE OF PROPERTY DATE OF ORIGINAL INVESTED
AND LOCATION (e) SIZE PURCHASE CAPITAL PERCENTAGE (a) TYPE OF OWNERSHIP
- ---------------------- ---------- -------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
1. Riverside Square Mall
Hackensack, New Jersey . . . 234,000 sq.ft. 10-19-83 15% fee ownership of land
g.l.a. and improvements (b)(f)
2. Bank of Delaware Office
Building
Wilmington, Delaware . . . . 314,000 sq.ft. 12-14-84 13% fee ownership of land
n.r.a. and improvements (b)(f)
3. Genesee Valley Center
Flint, Michigan. . . . . . . 358,000 sq.ft. 12-21-84 6-29-90 fee ownership of land
g.l.a. and improvements (d)
4. Park Center Financial
Plaza
San Jose, California . . . . 422,000 sq.ft. 06-20-85 26% fee ownership of land
n.r.a. and improvements
(through a joint
venture partnership)
(b)(c)
5. Royal Executive Park-II
Rye Brook, New York. . . . . 270,000 sq.ft. 02-12-87 20% fee ownership of land
n.r.a. and improvements
(through a joint
venture partnership)
(c)
<PAGE>
<FN>
- -----------------------
(a) The computation of this percentage for properties held at December 31,
1993 does not include amounts invested from sources other than the original
net proceeds of the public offering as described above and in Item 7.
(b) Reference is made to Note 4, Note 3 of Notes to Financial Statements of
JMB/San Jose Associates and Schedule XI to such financial statements filed
with this annual report for the current outstanding principal balance and a
description of the long-term mortgage indebtedness secured by the Partner-
ship's real property investments.
(c) Reference is made to Note 3 for a description of the joint venture
partnership through which the Partnership has made this real property
investment.
(d) This property has been sold.
(e) Reference is made to Item 8 - Schedules X and XI filed with this annual
report for further information concerning real estate taxes and depreciation.
(f) Reference is made to Item 6 - Selected Financial Data for additional
operating and lease expiration data concerning this investment property.
</TABLE>
The Partnership's real property investments are subject to competition
from similar types of properties (including, in certain areas, properties
owned or advised by affiliates of the General Partners) in the respective
vicinities in which they are located. Such competition is generally for the
retention of existing tenants. Additionally, the Partnership is in
competition for new tenants in markets where significant vacancies are
present. Reference is made to Item 7 below for a discussion of competitive
conditions and future renovation and capital improvement plans of the
Partnership and certain of its significant investment properties. Approximate
occupancy levels for the properties are set forth in the table in Item 2 below
to which reference is hereby made. The Partnership maintains the suitability
and competitiveness of its properties in its markets primarily on the basis of
effective rents, tenant allowances and service provided to tenants. In the
opinion of the Managing General Partner of the Partnership, all of the
investment properties held at December 31, 1993 are adequately insured.
Although there is earthquake insurance coverage for a portion of the value of
the Partnership's investment properties, the Managing General Partner does not
believe that such coverage for the entire replacement cost of the investment
properties is available on economic terms.
Reference is made to Note 6 for a schedule of minimum lease payments to
be received in each of the next five years, and in the aggregate thereafter,
under leases in effect at the Partnership's properties as of December 31,
1993.
The Partnership has approximately 17 full-time personnel and 7 part-time
individuals performing on-site duties at three of the Partnership's
properties, none of whom are officers or directors of the Managing General
Partner of the Partnership.
The terms of transactions between the Partnership and the General
Partners and their affiliates of the Partnership are set forth in Item 11
below to which reference is hereby made for a description of such terms and
transactions.
<PAGE>
ITEM 2. PROPERTIES
The Partnership owns directly or through joint venture partnerships the
properties or interests in the properties referred to under Item 1 above to
which reference is hereby made for a description of said properties.
The following is a listing of principal businesses or occupations carried
on in and approximate occupancy levels by quarter during fiscal years 1993 and
1992 for the Partnership's investment properties owned during 1993:
<TABLE>
<CAPTION>
1992 1993
------------------------------- -----------------------
At At At At At At At
Principal Business 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> <C>
1. Park Center Financial Plaza
San Jose, California. . . . . . Accounting/
Legal 88% 89% 89% 89% 89% 88% 84% 84%
2. Riverside Square Mall
Hackensack, New Jersey. . . . . Retail 82% 84% 78% 84% 83% 83% 80% 81%
3. Bank of Delaware Office
Building
Wilmington, Delaware. . . . . . Banking 93% 93% 93% 93% 92% 90% 90% 61%
4. Royal Executive Park II
Rye Brook, New York . . . . . . Communications/
Industrial Consulting 57% 62% 92% 92% 92% 92% 93% 92%
<FN>
- --------------
Reference is made to Item 6, Item 7 and Note 6 for further information regarding property occupancy,
competitive conditions and tenant leases at the Partnership's investment properties.
/TABLE
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
The Partnership is not subject to any material pending legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during 1992
or 1993.
PART II
ITEM 5. MARKET FOR THE PARTNERSHIP'S LIMITED PARTNERSHIP INTERESTS
AND RELATED SECURITY HOLDER MATTERS
As of December 31, 1993, there were 14,978 record holders of Interests of
the Partnership. There is no public market for Interests and it is not
anticipated that a public market for Interests will develop. Upon request,
the Managing General Partner may provide information relating to a prospective
transfer of Interests to an investor desiring to transfer his Interests. The
price to be paid for the Interests, as well as any other economic aspects of
the transaction, will be subject to negotiation by the investor.
Reference is made to Item 6 below for a discussion of cash distributions
made to the Investors.
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
YEARS ENDED DECEMBER 31, 1993, 1992, 1991, 1990 AND 1989
(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)
<CAPTION>
1993 1992 1991 1990 1989
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Total income . . . . . . . . . . . . . . . . .$ 14,618,038 15,185,097 15,309,347 21,752,033 28,081,892
============= ============= ============= ============= =============
Operating earnings (loss). . . . . . . . . . .$ 1,677,866 (9,097,353) 2,122,059 215,576 2,507,068
Partnership's share of operations of
unconsolidated ventures. . . . . . . . . . . (4,262,005) (1,779,563) (9,667,835) (132,611) (1,759,497)
------------- ------------- ------------- ------------- -------------
Net operating earnings (loss) . . . . . . . . (2,584,139) (10,876,916) (7,545,776) 82,965 747,571
Gain on sale of investment property. . . . . . -- -- -- 43,328,288 --
------------- ------------- ------------- ------------- -------------
Earnings (loss) before extraordinary item. . . (2,584,139) (10,876,916) (7,545,776) 43,411,253 747,571
Extraordinary item . . . . . . . . . . . . . . -- -- -- -- (74,018)
------------- ------------- ------------- ------------- -------------
Net earnings (loss). . . . . . . . . . . . . .$ (2,584,139) (10,876,916) (7,545,776) 43,411,253 673,553
============= ============= ============= ============= =============
Net earnings (loss) per Interest (b):
Operating earnings (loss). . . . . . . . .$ (15.65) (62.90) (43.60) .46 4.14
Gain on sale of investment property. . . . -- -- -- 222.47 --
Extraordinary item . . . . . . . . . . . . -- -- -- -- (.41
------------- ------------- ------------- ------------- -------------
Net earnings (loss). . . . . . . . . . . . . .$ (15.65) (62.90) (43.60) 222.93 3.73
============= ============= ============= ============= =============
Total assets . . . . . . . . . . . . . . . . .$ 88,391,802 93,648,467 107,443,394 122,617,419 174,408,665
Long-term debt . . . . . . . . . . . . . . . .$ 11,297,315 21,104,127 21,403,495 21,699,712 68,159,718
Cash distributions per Interest (c). . . . . .$ 12.00 12.00 33.75 243.45 70.00
<FN> ============= ============= ============= ============= =============
- -------------
(a) The above selected financial data should be read in conjunction with
the financial statements and the related notes appearing elsewhere in this
annual report.
(b) The net earnings (loss) per Interest is based upon the number of
Interests outstanding at the end of the period (173,411).
(c) Cash distributions to the Limited Partners since the inception of
the Partnership have not resulted in taxable income to such Limited Partners
and have therefore represented a return of capital. Each Partner's taxable
income (or loss) from the Partnership in each year is equal to his allocable
share of the taxable income (loss) of the Partnership, without regard to the
cash generated or distributed by the Partnership.
</TABLE>
<TABLE>
SIGNIFICANT PROPERTY - SELECTED RENTAL AND OPERATING DATA AS OF DECEMBER 31, 1993
<CAPTION>
Property
- --------
Riverside Square
Mall a) The GLA historical occupancy rate and average base rent per square foot for the last five years were
as follows:
Year Ending GLA Avg. Base Rent Per
December 31, Occupancy Rate (1) Square Foot (2)
------------ ----------------- ------------------
<S> <C> <C> <C> <C>
1989 . . . . . . 93% $21.01
1990 . . . . . . 89% 24.66
1991 . . . . . . 89% 24.48
1992 . . . . . . 84% 26.90
1993 . . . . . . 81% 31.26
<FN>
(1) As of December 31 of each year.
(2) Average base rent per square foot is based on GLA occupied as of December 31 of each year.
</TABLE>
<TABLE>
<CAPTION>
Base Rent Scheduled Lease Lease
b) Significant Tenants Square Feet Per Annum Expiration Date Renewal Option
------------------- ----------- --------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Conran's (1) 28,092 $205,633 1/2000 N/A
(Department Store)
<FN>
(1) In January 1994, Conran's filed for protection pursuant to Chapter 11 bankruptcy petition.
</TABLE>
<TABLE>
<CAPTION>
c) The following table sets forth certain information with respect to the expiration of leases
for the next ten years at the Riverside Square Mall:
Annualized Percent of
Number of Approx. Total Base Rent Total 1993
Year Ending Expiring GLA of Expiring of Expiring Base Rent
December 31, Leases Leases (1) Leases Expiring
------------ --------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
1994 10 13,400 $344,200 7.2%
1995 7 10,800 306,000 6.4%
1996 3 4,900 124,300 2.6%
1997 5 10,600 351,600 7.3%
1998 4 6,700 241,900 5.0%
1999 5 13,500 458,700 9.6%
2000 4 11,800 395,600 8.2%
2001 5 16,400 459,200 9.6%
2002 5 23,500 743,300 15.5%
2003 5 17,100 536,800 11.2%
<FN>
(1) Excludes leases that expire in 1994 for which renewal leases or leases with replacement
tenants have been executed as of March 25, 1994.
</TABLE>
<TABLE>
<CAPTION>
Property
- --------
Bank of Delaware
Office Building a) The GLA historical occupancy rate and average base rent per square foot for the last five years were
as follows:
Year Ending GLA Avg. Base Rent Per
December 31, Occupancy Rate (1) Square Foot (2)
------------ ----------------- ------------------
<S> <C> <C> <C> <C>
1989 . . . . . . 93% $ 9.80
1990 . . . . . . 97% 9.03
1991 . . . . . . 93% 10.54
1992 . . . . . . 93% 10.65
1993 . . . . . . 61% 22.81
<FN>
(1) As of December 31 of each year.
(2) Average base rent per square foot is based on GLA occupied as of December 31 of each year.
</TABLE>
<TABLE>
<CAPTION>
Base Rent Scheduled Lease Lease
b) Significant Tenants Square Feet Per Annum Expiration Date Renewal Option
------------------- ----------- --------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Bank of Delaware 2,357 $ 41,200 4/1994 1-5 yr.
(Bank) 174 2,900 4/1994 N/A
3,389 16,900 12/1994 1-10 yr.
7,448 105,600 5/1996 N/A
1,717 28,300 4/1998 N/A
100,000 350,000 5/2005 3-15 yr.
</TABLE>
<TABLE>
<CAPTION>
c) The following table sets forth certain information with respect to the expiration of leases
for the next ten years at the Bank of Delaware Office Building:
Annualized Percent of
Number of Approx. Total Base Rent Total 1993
Year Ending Expiring GLA of Expiring of Expiring Base Rent
December 31, Leases Leases (1) Leases Expiring
------------ --------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
1994 7 9,300 $110,500 4.1%
1995 9 27,400 413,500 15.5%
1996 3 9,700 161,200 6.0%
1997 8 24,700 395,000 14.8%
1998 5 10,400 166,400 6.2%
1999 - -- -- --
2000 1 1,200 10,800 0.4%
2001 - -- -- --
2002 - -- -- --
2003 - -- -- --
<FN>
(1) Excludes leases that expire in 1994 for which renewal leases or leases with replacement tenants have
been executed as of March 25, 1994.
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
On July 11, 1984, the Partnership commenced an offering to the public of
$60,000,000, subject to increase up to $200,000,000, pursuant to a Registra-
tion Statement on Form S-11 under the Securities Act of 1933. On November 30,
1984, the initial and final closing of the offering was consummated with the
dealer manager of the public offering (an affiliate of which is a limited
partner of the Associate General Partner of the Partnership), and 173,406
Interests were issued by the Partnership.
After deducting selling expenses and other offering costs, the
Partnership had approximately $156,493,000 with which to make investments in
commercial real property, to pay legal fees and other costs (including
acquisition fees) related to such investments and for working capital. A
portion of such proceeds was utilized to acquire the properties described in
Item 1 above.
At December 31, 1993, the Partnership had cash and cash equivalents of
approximately $267,000. Such funds and short-term investments of
approximately $23,681,000 may be utilized for distributions to partners and
for working capital requirements including operating deficits, re-leasing
costs of vacant space, and certain capital improvements currently being
incurred at the Bank of Delaware Office Building and Riverside Square Mall.
Additionally, funds may be utilized to fund the Partnership's share of
releasing costs and capital improvements at Park Center Financial Plaza. As
discussed in Note 2(c), a major tenant at the Bank of Delaware investment
property, brought a lawsuit against the Partnership which was decided in the
tenants favor in 1990. The Partnership paid the tenant approximately $722,000
and $80,000 in 1991 and 1992, respectively, and may be obligated to fund
additional amounts. (See also the discussion of the loan on this property
below.) The Partnership and its consolidated ventures have currently budgeted
in 1994 approximately $3,943,000 for tenant improvements and other capital
expenditures. The Partnership's share of such items and its share of such
similar items for its unconsolidated ventures for 1994 is currently budgeted
to be $4,809,000. Actual amounts expended in 1994 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 General Partners have been deferring receipt of
distributions in accordance with the subordination requirement of the
Partnership Agreement as discussed in Notes 5 and 7. The source of capital
for such items and for both short-term and long-term future liquidity and
distributions is expected to be through net cash generated by the
Partnership's investment properties and through the sale of such investments.
The Partnership's and its ventures' mortgage obligations are all non-recourse.
Therefore, the Partnership and its ventures are not obligated to pay mortgage
indebtedness unless the related property produces sufficient net cash flow
from operations or sale.
In January 1992, the Partnership advanced $575,000 to the JMB/San Jose
joint venture for the payment of certain other operating expenses. These
monies were paid back to the Partnership by the end of 1992. The venture
partners notified the tenants in and invitees to the complex that some of the
buildings, particularly the 100-130 Park Center Plaza Buildings and the garage
below them, could pose a life safety hazard under certain unusually intense
earthquake conditions. While the buildings and the garage were designed to
comply with the applicable codes for the period in which they were
constructed, and there is no legal requirement to upgrade the buildings for
seismic purposes, the venture partners are working with consultants to analyze
ways in which such a potential life safety hazard could be eliminated.
However, since the costs of both re-leasing space and any seismic program
could be substantial, the Partnership has commenced discussions with the
appropriate lender for additional loan proceeds to pay for all or a portion of
these costs.
The Partnership is also continuing to discuss terms for a possible loan
extension with the mortgage lender on the 150 Almaden and 185 Park Avenue
buildings and certain parking areas as the mortgage loan secured by this
portion of the complex matured on October 1, 1993 and was extended to December
1, 1993. This mortgage loan is reflected as a current liability in the
accompanying JMB/San Jose financial statements. However, the Partnership and
the lender have not been able to agree upon mutually acceptable terms for a
loan extension and the lender has accelerated the loan. Should an agreement
not be reached and as the Partnership does not have its share of the
outstanding loan balance in its reserves in order to retire the loan, it is
possible that the lender would exercise its remedies and seek to acquire title
to this portion of the complex. Furthermore, should lender assistance be
required to fund significant costs at the 100-130 Park Center Plaza buildings
but not be obtained, the Partnership has decided not to commit any additional
amounts to this portion of the complex since the likelihood of recovering such
funds through increased capital appreciation is remote. The result would be
that the Partnership would no longer have an ownership interest in this
portion of the complex.
As a result, there is uncertainty about the ability to recover the net
carrying value of the property through future operations and sale and
accordingly, the JMB/San Jose joint venture has made a provision for value
impairment on the 150 Almaden and 185 Park Avenue buildings and certain
parking areas of $15,549,935. Such provision at December 31, 1993 is recorded
to reduce the net carrying value of these buildings to the then outstanding
balance of the related non-recourse financing. Due to the uncertainty of the
JMB/San Jose joint venture's ability to recover the net carrying value of
those buildings within the investment property through future operations or
sale, the JMB/San Jose joint venture had recorded a provision for value
impairment at December 31, 1991 of $21,175,127 to reduce the net book value of
the 100-130 Park Center Plaza buildings and a certain parking area to an
amount equal to the then outstanding balance of the related non-recourse
financing. Additionally, at December 31, 1992, the JMB/San Jose joint venture
recorded a provision for value impairment of $8,142,152 on certain other
portions of the complex to amounts equal to the then outstanding balances of
the related non-recourse financing. In the event the lender on any portion of
the complex exercised its remedies as discussed above, the result would likely
be that JMB/San Jose joint venture would no longer have an ownership interest
in such portion. See Note 3(b) for further discussion of this investment
property. Tenants occupying approximately 110,000 square feet (approximately
26% of the buildings) of the Park Center Plaza investment property have leases
that expire in 1995, for which there can be no assurance of renewals.
Riverside Square Mall has been experiencing decreasing sales levels as
well as increasing competition for new tenants since a competing regional
retail center expanded its operations in 1990. Additionally, approximately
19% of the tenant space at Riverside Square had leases which expired in 1992
and for which a portion did not renew. The remaining portion renewed on a
short-term basis pending the final remodeling and remerchandising plan. The
Partnership is proceeding with its plans to renovate and remerchandise the
center. In connection with the planned renovation, the Partnership, in early
1994, signed 15-year operating covenant extensions with both Saks and
Bloomingdales which own their own stores. In return for the additional 15-
year time commitment to the center, the Partnership reimbursed Saks for their
recent store renovation in the amount of $6,100,000 and is obligated to pay
Bloomingdales $5,000,000 toward their store renovation. The Partnership is
also required to complete a renovation of the mall, with an additional
estimated cost of approximately $12,000,000, pursuant to the terms of this
extension. The Partnership is pursuing financing for the planned mall
renovation; however, there can be no assurance that such financing will be
obtained or that the renovation will be completed as currently planned. The
Partnership is still considering possibly expanding the mall at some point in
the future as well. Furthermore, the Partnership, as of the date of this
report, has commenced the $7,500,000 restoration of the parking deck. The
Partnership is continuing to attempt to lease the vacant space in the mall,
but the competitive nature of the surrounding retail area and the fact that
the mall is in need of a renovation have extended the time period required to
re-lease space in the mall as tenant leases expire and are not renewed. On
January 7, 1994, Conran's filed for protection pursuant to Chapter 11
bankruptcy petition. The store at the center has commenced a going-out-of-
business sale. The Partnership is reviewing its possible alternatives with
respect to replacement tenants and its rights with respect to the Conran's
lease which is scheduled to expire in January 2000.
At the Bank of Delaware Building, a major tenant, E.I. duPont de Nemours
("duPont"), comprising approximately 27% of the building, vacated their space
upon expiration of their lease in December 1993. The property has
cumulatively operated at a cash deficit due to the significant costs incurred
in connection with the re-leasing of vacant space and certain capital
improvements. Due to the competitive nature of this marketplace, the
Partnership estimates the costs associated with re-leasing any vacant space
during the next few years, including those costs to remove the remaining
asbestos in tenant space, will be substantial. As a result of these leasing
concerns, the Partnership recorded a provision for value impairment on the
Bank of Delaware Building at June 30, 1992 of $11,476,030 to reduce the net
carrying value of the Bank of Delaware Building to the then outstanding
balance of the related non-recourse debt. Further, the Partnership has
commenced discussions with the building's first mortgage lender in order to
seek a loan modification. In connection with these discussions, effective
January 1994, the Partnership has suspended payment of debt service to the
lender. There can be no assurance the Partnership will be successful in these
discussions, and accordingly, the entire balance is reflected as a current
liability in the accompanying financial statements. If a suitable
modification of the existing loan cannot be arranged, the Partnership has
decided not to voluntarily commit any additional amounts to the property. It
is likely that the lender will seek to realize upon its collateral security
and the Partnership will no longer have an ownership interest in the Property.
Under the terms of a mortgage and security agreement, the Partnership, in its
capacity as mortgagor of the building, agreed to indemnify the mortgage
lender, under certain circumstances, against damages, claims, liabilities and
expenses incurred by or asserted against the mortgage lender in relation to
asbestos in the building. Asbestos has been abated or encapsulated in
approximately 62% of the building's space. The Partnership does not believe
that any remaining asbestos in the building presents a hazard and does not
believe that such asbestos currently is required to be removed. The
Partnership estimates that the current cost of asbestos abatement in a portion
of the building that could be incurred under certain circumstances in the
future is approximately $800,000. However, the Partnership currently does not
believe that it will likely be required to incur (or to indemnify the mortgage
lender against) any such cost, although there is no assurance that the
Partnership will not be required to pay such cost or indemnification.
JWP, Inc. began occupying approximately 72,000 square feet of space
(approximately 27% of the property) at Royal Executive Park II in August 1992.
As a result of the JWP, Inc. lease, the Partnership has received its preferred
level of return for 1993 and in addition, recovered a portion of the
cumulative shortfall in this return since 1989. The Partnership expects to
receive its preferred level of return for 1994 in addition to a partial
recovery of its cumulative shortfall in this return since 1989. However,
subsequent to the end of the quarter, JWP filed for protection pursuant to a
Chapter 11 bankruptcy petition. At this time, it is uncertain what effect
this will have on the operations of the complex. As previously reported, JWP
has been current in its rental obligations pursuant to its lease which is not
scheduled to expire until May 2002. However, JWP has subleased approximately
60,000 square feet of its space and is actively attempting to sublease a
significant portion of their remaining space. The manager continues an
aggressive marketing program to lease the remaining vacant space but the
competitive nature of the market continues to extend the time period required
to lease space to initial tenants.
There are certain risks associated with the Partnership's investments
made through joint ventures including the possibility that the Partnership's
joint venture partners in an investment might become unable or unwilling to
fulfill their financial or other obligations, or that such joint venture
partners may have economic or business interests or goals that are
inconsistent with those of the Partnership.
In response to the weakness of the economy and the limited amount of
available real estate financing in particular, the Partnership is taking steps
to preserve its working capital. Therefore, the Partnership is carefully
scrutinizing the appropriateness of any discretionary expenditures,
particularly in relation to the amount of working capital it has available.
By conserving working capital, the Partnership will be in a better position to
meet future needs of its properties without having to rely on external
financing sources.
RESULTS OF OPERATIONS
The increase in buildings and improvements at December 31, 1993 as
compared to December 31, 1992 is primarily due to improvements of
approximately $649,000 as a result of leasing a certain tenant's space and
approximately $908,000 as a result of the renovation of the parking garage at
the Hackensack, New Jersey investment property.
The decrease in investment in unconsolidated ventures at December 31,
1993 as compared to December 31, 1992 and the decrease in the Partnership's
share of operations of unconsolidated ventures for the twelve months ended
December 31, 1993 as compared to the twelve months ended December 31, 1992 is
primarily due to the JMB/San Jose joint venture recording at September 30,
1993 a provision for value impairment of $15,549,935 (of which the
Partnership's share is $7,774,967) to reduce the net carrying value of the 150
Almaden and 185 Park Avenue buildings and certain parking areas to the then
outstanding balance of the related non-recourse financing. The increase in
the Partnership's share of operations of unconsolidated ventures for the
twelve months ended December 31, 1992 as compared to the twelve months ended
December 31, 1991 was primarily due to the Partnership's share of the
provisions for value impairment recorded in 1991 at the San Jose, California
investment property, partially offset in 1992 by the effect of an additional
provision for value impairment recorded at December 31, 1992. See Note 3(b).
The increase in current portion of long-term debt and the decrease in
long-term debt as of December 31, 1993 as compared to December 31, 1992, are
primarily due to the Partnership's decision to suspend debt service payments
at the Wilmington, Delaware real estate property investment.
The decrease in accounts payable as of December 31, 1993 as compared to
December 31, 1992, is primarily due to the timing of the payment of certain
accrued expenses at the Hackensack, New Jersey real estate property
investment.
The decrease in accrued interest as of December 31, 1993 as compared to
December 31, 1992 is primarily due to the timing of interest payments at the
Wilmington, Delaware investment property.
The decrease in rental income as of December 31, 1993 as compared to
December 31, 1992 is primarily due to lower occupancy at the Wilmington,
Delaware investment property and tenant billing adjustments of approximately
$223,000 at the Hackensack, New Jersey investment property.
The decrease in interest income as of December 31, 1993 as compared to
December 31, 1992 and December 31, 1992 as compared to December 31, 1991 is
primarily due to lower effective yields being earned on U.S. Government
obligations held during 1993 and 1992.
The decrease in depreciation expense as of December 31, 1993 as compared
to December 31, 1992 and December 31, 1991 is primarily due to a reduction of
approximately $223,000 in depreciation expense at the Wilmington, Delaware
investment property due to the provision for value impairment recorded at
September 30, 1992. See Note 2(c).
The increase in property operating expenses as of December 31, 1993 as
compared to December 31, 1992 is partially due to an increase of approximately
$272,000 of snow removal costs primarily due to a blizzard in early 1993 at
the Hackensack, New Jersey investment property. The decrease in property
operating expenses for the twelve months ended December 31, 1992 as compared
to the twelve months ended 1991 was primarily due to lower operating expenses
including real estate taxes, repairs and maintenance and land debt expense at
the Hackensack, New Jersey investment property. Such costs are primarily
recoverable from tenants.
The decrease in professional services as of December 31, 1993 as compared
to December 31, 1992 and the increases for the twelve months ended December
31, 1992 as compared to the twelve months ended December 31, 1991 is primarily
due to legal fees incurred in 1992 by the Partnership in its successful
defense of a lawsuit and its subsequent appeal brought against the Hackensack,
New Jersey investment property concerning public access issues.
The decrease in provision for value impairment as of December 31, 1993 as
compared to December 31, 1992 and the increase for the twelve months ended
December 31, 1992 as compared to the twelve months ended December 31, 1991 is
primarily due to the Partnership recording a provision for value impairment of
$11,476,030 at the Wilmington, Delaware investment property at June 30, 1992
to reduce the net carrying value of the investment property to the then
outstanding balance of the related non-recourse debt. See Note 1.
INFLATION
Due to the decrease in the level of inflation in recent years, inflation
generally has not had a material effect on rental income or property operating
expenses.
To the extent that inflation in future periods does have an adverse
impact on property operating expenses, the effect will generally be offset by
amounts recovered from tenants as many of the long-term leases at the
Partnership's commercial properties have escalation clauses covering increases
in the cost of operating and maintaining the properties as well as real
estate taxes. Therefore, there should be little effect on operating earnings
if the properties remain substantially occupied. In addition, substantially
all of the leases at the Partnership's shopping center investments contain
provisions which entitle the Partnership to participate in gross receipts of
tenants above fixed minimum amounts.
Future inflation may also cause capital appreciation of the Partnership's
investment properties over a period of time to the extent that rental rates
and replacement costs of properties increase.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
INDEX
Independent Auditors' Report
Balance Sheets, December 31, 1993 and 1992
Statements of Operations, years ended December 31, 1993, 1992 and 1991
Statements of Partners' Capital Accounts (Deficit), years ended
December 31, 1993, 1992 and 1991
Statements of Cash Flows, years ended December 31, 1993, 1992
and 1991
Notes to Financial Statements
SCHEDULE
--------
Supplementary Income Statement Information X
Real Estate and Accumulated Depreciation XI
SCHEDULES NOT FILED:
All schedules other than those indicated in the index have been omitted
as the required information is inapplicable or the information is presented in
the financial statements or related notes.
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
INDEX
Independent Auditors' Report
Balance Sheets, December 31, 1993 and 1992
Statements of Operations, years ended December 31, 1993, 1992 and 1991
Statements of Partners' Capital Accounts, years ended December 31, 1993,
1992 and 1991
Statements of Cash Flows, years ended December 31, 1993, 1992 and 1991
Notes to Financial Statements
SCHEDULE
--------
Supplementary Income Statement Information X
Real Estate and Accumulated Depreciation XI
SCHEDULES NOT FILED:
All schedules other than those indicated in the index have been omitted
as the required information is inapplicable or the information is presented in
the financial statements or related notes.
INDEPENDENT AUDITORS' REPORT
The Partners
JMB INCOME PROPERTIES, LTD. - XI:
We have audited the financial statements of JMB Income Properties, Ltd. -
XI (a limited partnership) as listed in the accompanying index. In connection
with our audits of the financial statements, we also have audited the
financial statement schedules as listed in the accompanying index. These
financial statements and financial statement schedules are the responsibility
of the General Partners of the Partnership. 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 the General Partners of the Partnership, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of JMB Income
Properties, Ltd. - XI at December 31, 1993 and 1992, and the results of its
operations and its cash flows for each of the years in the three-year period
ended December 31, 1993, in conformity with generally accepted accounting
principles. Also in our opinion, the related financial statement schedules,
when considered in relation to the basic financial statements taken as a
whole, present fairly, in all material respects, the information set forth
therein.
KPMG PEAT MARWICK
Chicago, Illinois
March 25, 1994
<PAGE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
ASSETS
------
<CAPTION>
1993 1992
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 267,127 2,814,080
Short-term investments (note 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,681,340 17,426,768
Rents and other receivables, net of allowance for doubtful accounts
of $87,858 in 1993 and $133,781 in 1992. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,690,050 1,629,143
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317,552 288,664
------------ -----------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,956,069 22,158,655
------------ -----------
Investment properties, at cost (note 2, 4 and 6) - Schedule XI:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,563,638 4,563,638
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53,218,947 51,650,039
------------ -----------
57,782,585 56,213,677
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,673,020 16,098,395
------------ -----------
Investment properties, net of accumulated depreciation . . . . . . . . . . . . . . . . . . . 40,109,565 40,115,282
Investment in unconsolidated ventures, at equity (notes 1, 3 and 8). . . . . . . . . . . . . . . . . 22,127,541 31,087,867
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198,627 286,663
------------ -----------
$ 88,391,802 93,648,467
============ ===========
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICIT)
----------------------------------------------------
1993 1992
------------ -----------
Current liabilities:
Current portion of long-term debt (note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,837,354 299,368
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255,474 481,667
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105,239 190,779
------------ -----------
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,198,067 971,814
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61,304 72,339
Long-term debt, less current portion (note 4). . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,297,315 21,104,127
------------ -----------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,556,686 22,148,280
Partners' capital accounts (deficit) (notes 1 and 5):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,233,888 5,104,004
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,631,429) (6,631,429)
------------ -----------
(1,396,541) (1,526,425)
------------ -----------
Limited partners (173,411 interests):
Capital contributions, net of offering costs . . . . . . . . . . . . . . . . . . . . . . . . . 156,493,238 156,493,238
Cumulative net earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,783,808 27,497,831
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (113,045,389) (110,964,457)
------------ -----------
68,231,657 73,026,612
------------ -----------
Total partners' capital accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,835,116 71,500,187
------------ -----------
Commitments and contingencies (notes 2 and 3)
$ 88,391,802 93,648,467
============ ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
1993 1992 1991
------------ ------------ -----------
<S> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13,836,131 14,197,911 14,005,658
Interest income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 781,907 987,186 1,303,689
----------- ----------- -----------
14,618,038 15,185,097 15,309,347
----------- ----------- -----------
Expenses - (Schedule X):
Mortgage and other interest. . . . . . . . . . . . . . . . . . . . . . . . . . 2,428,737 2,431,951 2,432,080
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,574,625 1,816,616 2,003,942
Property operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 8,300,029 7,667,064 8,163,535
Professional services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285,158 485,943 238,019
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . 105,130 122,594 120,881
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . 246,493 282,252 228,831
Provision for value impairment (notes 1 and 2) . . . . . . . . . . . . . . . . -- 11,476,030 --
----------- ----------- -----------
12,940,172 24,282,450 13,187,288
----------- ----------- -----------
Operating earnings (loss). . . . . . . . . . . . . . . . . . . . . . . . 1,677,866 (9,097,353) 2,122,059
Partnership's share of operations of unconsolidated ventures (notes 1 and 3) . . (4,262,005) (1,779,563) (9,667,835)
----------- ----------- -----------
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,584,139 10,876,916 7,545,776
=========== =========== ===========
Net loss per limited partnership interest. . . . . . . . . . . . . . . . $ 15.65 62.90 43.60
=========== =========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICIT)
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
GENERAL PARTNERS LIMITED PARTNERS (NOTE 1)
------------------------------------------------------- ------------------------------------------------
CONTRI-
BUTIONS
NET OF NET
CONTRI- NET CASH OFFERING EARNINGS CASH
BUTIONS EARNINGS DISTRIBUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ---------- ------------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance (deficit)
at December 31,
1990. . . . . . . $1,000 5,056,872 (6,631,429) (1,573,557) 156,493,238 45,967,656 (103,030,903) 99,429,991
Cash distributions
($33.75 per limited
partnership
interest) . . . . . -- -- -- -- -- -- (5,852,622) (5,852,622)
Net earnings (loss)
(note 5). . . . . . -- 15,796 -- 15,796 -- (7,561,572) -- (7,561,572)
------ ---------- ---------- ---------- ----------- ---------- ------------ ----------
Balance (deficit)
at December 31,
1991. . . . . . . . 1,000 5,072,668 (6,631,429) (1,557,761) 156,493,238 38,406,084 (108,883,525) 86,015,797
Cash distributions
($12.00 per limited
partnership
interest) . . . . . -- -- -- -- (2,080,932) (2,080,932)
Net earnings (loss)
(note 5). . . . . . -- 31,336 -- 31,336 -- (10,908,253) -- (10,908,253)
------- ---------- ---------- ---------- ----------- ----------- -------------- ----------
Balance (deficit)
at December 31,
1992. . . . . . . . 1,000 5,104,004 (6,631,429) (1,526,425) 156,493,238 27,497,831 (110,964,457) 73,026,612
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICIT) - CONTINUED
<CAPTION>
GENERAL PARTNERS LIMITED PARTNERS (NOTE 1)
------------------------------------------------------- ----------------------------------------------
CONTRI-
BUTIONS
NET OF NET
CONTRI- NET CASH OFFERING EARNINGS CASH
BUTIONS EARNINGS DISTRIBUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ---------- ------------- ----------- ----------- ---------- ------------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Cash distributions
($12 per limited
partnership
interest) . . . . . $ -- -- -- -- --- (2,080,932) (2,080,932)
Net earnings (loss)
(note 5). . . . . . -- 129,884 -- 129,884 -- (2,714,023) -- (2,714,023)
------ ---------- ---------- ---------- ----------- ----------- ------------ ---------
Balance (deficit)
at December 31,
1993. . . . . . . . $1,000 5,233,888 (6,631,429) (1,396,541) 156,493,238 24,783,808 (113,045,389) 68,231,657
====== ========== ========== ========== =========== =========== ============ ==========
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
1993 1992 1991
----------- ----------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(2,584,139) (10,876,916) (7,545,776)
Items not requiring (providing) cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,574,625 1,816,616 2,003,942
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . 105,130 122,594 120,881
Amortization of discounts on long-term debt. . . . . . . . . . . . . . . . 161,195 125,521 89,561
Partnership's share of operations of unconsolidated ventures, net of
distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,609,901 4,442,528 11,302,383
Provision for value impairment (notes 1 and 2) . . . . . . . . . . . . . . -- 11,476,030 --
Changes in:
Rents and other receivables. . . . . . . . . . . . . . . . . . . . . . . . (60,907) (323,953) 403,985
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28,888) (14,203) (43,412)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (226,193) (280,948) (969,569)
Accrued interest payable . . . . . . . . . . . . . . . . . . . . . . . . . (85,540) (3,342) (2,573)
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . (11,035) (16,634) (28,465)
----------- ----------- -----------
Net cash provided by operating activities. . . . . . . . . . . . . . 6,454,149 6,467,293 5,330,957
----------- ----------- -----------
Cash flows from investing activities:
Net sales (purchases) of short-term investments. . . . . . . . . . . . . . . (6,254,572) 669,636 1,601,530
Additions to investment properties . . . . . . . . . . . . . . . . . . . . . (1,568,908) (1,780,027) (1,180,313)
Partnership's distributions from unconsolidated ventures . . . . . . . . . . 1,350,425 798,697 1,068,492
Partnership's contributions to unconsolidated ventures . . . . . . . . . . . -- (575,000) --
Payment of deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . (17,094) (37,749) (49,462)
----------- ----------- -----------
Net cash provided by (used in) investing activities. . . . . . . . . (6,490,149) (924,443) 1,440,247
----------- ----------- -----------
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS - CONTINUED
1993 1992 1991
----------- ----------- -----------
Cash flows from financing activities:
Bank overdrafts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (270,480) (562,705)
Principal payments on long-term debt . . . . . . . . . . . . . . . . . . . . (430,021) (391,195) (355,877)
Distributions to limited partners. . . . . . . . . . . . . . . . . . . . . . (2,080,932) (2,080,932) (5,852,622)
----------- ----------- -----------
Net cash used in financing activities. . . . . . . . . . . . . . . . (2,510,953) (2,742,607) (6,771,204)
----------- ----------- -----------
Net increase (decrease) in cash and cash equivalents . . . . . . . . $(2,546,953) 2,800,243 --
=========== =========== ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . . . . . . . . . . . . . . $ 2,353,082 2,309,772 2,434,653
=========== =========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(1) BASIS OF ACCOUNTING
The equity method of accounting has been applied in the accompanying
financial statements with respect to the Partnership's interest in Royal
Executive Park II ("Royal Executive") and JMB/San Jose Associates ("San Jose")
(note 3). Accordingly, the accompanying financial statements do not include
the accounts of Royal Executive and San Jose.
The Partnership's records are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying financial statements have been prepared from such records after
making appropriate adjustments to present the Partnership's accounts in
accordance with generally accepted accounting principles ("GAAP"). Such
adjustments are not recorded on the records of the Partnership. The net
effect of these items for the years ended December 31, 1993 and 1992 is
summarized as follows:
<TABLE> JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<CAPTION>
1993 1992
------------------------------ ------------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Total assets . . . . . . . . . . . . . . . . . . . . . . $88,391,802 109,230,160 93,648,467 110,379,745
Partners' capital accounts (deficit) (note 5):
General partners . . . . . . . . . . . . . . . . . . . (1,396,541) (1,479,706) (1,526,425) (1,536,401)
Limited partners . . . . . . . . . . . . . . . . . . . 68,231,657 97,141,280 73,026,612 97,861,529
Net earnings (loss) (note 5):
General partners . . . . . . . . . . . . . . . . . . . 129,844 56,695 31,336 61,699
Limited partners . . . . . . . . . . . . . . . . . . . (2,714,023) 1,360,682 (10,908,253) 1,480,780
Net earnings (loss) per limited partnership interest . . (15.65) 7.85 (62.90) 8.54
=========== ============ =========== ===========
</TABLE>
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
The net earnings (loss) per limited partnership interest is based upon
the number of limited partnership interests outstanding at the end of the
period (173,411). Deficit capital accounts will result, through the duration
of the Partnership, in net gain for financial reporting and income tax
purposes.
Certain amounts in the 1992 and 1991 financial statements have been
reclassified to conform to the 1993 presentation.
Statement of Financial Accounting Standards No. 95 requires the
Partnership to present a statement which classifies receipts and payments
according to whether they stem from operating, investing or financing
activities. The required information has been segregated and accumulated
according to the classifications specified in the pronouncement. Partnership
distributions from unconsolidated ventures are considered cash flow from
operating activities only to the extent of the Partnership's cumulative share
of net earnings. The Partnership records amounts held in U.S. Government
obligations at cost, which approximates market. For the purposes of these
statements, the Partnership's policy is to consider all such amounts held with
original maturities of three months or less ($0 and $848,678 at December 31,
1993 and 1992, respectively) as cash equivalents with any remaining amounts
reflected as short-term investments.
Deferred expenses consist primarily of loan fees and lease commissions
which are amortized over the terms stipulated in the related loan agreements
or over the terms of the related leases using the straight-line method.
Although certain leases of the Partnership provide for tenant occupancy
during periods for which no rent is due and/or increases in the minimum lease
payments over the term of the lease, rental income is accrued for the full
period of occupancy on a straight-line basis.
In response to the uncertainties relating to the future recovery of the
carrying value of the Wilmington, Delaware investment property through future
operations or sale, the Partnership recorded a provision for value impairment
on the Wilmington, Delaware investment property of $11,476,030. Such
provision made as of June 30, 1992 was recorded to reduce the net carrying
value of the investment property to the then outstanding balance of the
related non-recourse debt. Reference is made to note 2(c) for further
discussion of the current status of this investment property.
In response to the uncertainties relating to the JMB/San Jose joint
venture's ability to recover the net carrying value of certain buildings with
the Park Center Plaza investment property through future operations or sale,
the JMB/San Jose Joint Venture, at December 31, 1991, recorded a provision for
value impairment on certain parcels within the complex of $21,175,127. Such
provision was recorded to reduce the net basis of the 100-130 Park Center
Plaza Buildings and a certain parking area to the then outstanding balance of
the related non-recourse debt. Additionally, a provision for value impairment
of $8,142,152 was recorded at December 31, 1992 on certain other portions of
the complex to reduce the net basis of these portions to the outstanding
balance of the debt at December 31, 1992. Furthermore, a provision for value
impairment on the 150 Almaden and 185 Park Avenue buildings and certain
parking areas of $15,549,935 was recorded at September 30, 1993 to reduce the
net basis to the then outstanding balance of the related non-recourse debt.
Reference is made to note 3(b) for further discussion of the current status of
this investment property.
No provision for State or Federal income taxes has been made as the
liability for such taxes is that of the Partners rather than the Partnership.
However, in certain instances, the Partnership has been required under
applicable law to remit directly to the tax authorities amounts representing
withholding from distributions paid to partners.
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(2) INVESTMENT PROPERTIES
(a) General
The Partnership has acquired, either directly or through joint ventures,
two shopping centers and three office complexes. In June 1990, the
Partnership sold its interest in the Genesee Valley Shopping Center. All of
the remaining properties were in operation at December 31, 1993. The cost of
the investment properties represents the total cost to the Partnership plus
miscellaneous acquisition costs.
Depreciation on the properties has been provided over the estimated
useful lives of the various components as follows:
YEARS
-----
Building and Improvements -- straight-line. . . . . 30
Personal property -- straight-line. . . . . . . . . 5
==
The investment properties are pledged as security for the long-term debt,
for which there is no recourse to the Partnership.
Maintenance and repair expenses are charged to operations as incurred.
Significant betterments and improvements are capitalized and depreciated over
their estimated useful lives.
(b) Riverside Square Mall
During October 1983, the Partnership acquired an existing enclosed
regional shopping center in Hackensack, New Jersey. The Partnership's
purchase price for the mall was $36,236,282. The Partnership made a cash down
payment at closing of $20,000,000. The balance of the purchase price was
represented by a first mortgage loan which had a balance at closing of
$16,236,282 prior to unamortized discount, based upon an imputed interest rate
of 12% (note 4).
An affiliate of the General Partners of the Partnership manages the
shopping center for a fee equal to 4% of the fixed and percentage rents of the
shopping center plus leasing commissions, subject to an aggregate annual
maximum amount of 6% of the gross receipts of the property.
(c) Bank of Delaware - office building
In December 1984, the Partnership acquired the interests in a partnership
which owned an existing office building in Wilmington, Delaware. The
Partnership's purchase price for the building was $20,900,000, of which
approximately $4,955,000 was paid in cash at closing. The balance of the
purchase price was represented by an existing first mortgage loan, which, at
closing, had an outstanding balance of approximately $5,945,000, and five
purchase price notes totaling $10,000,000. The five purchase price notes were
due and paid as scheduled at various dates from July 1985 to December 1989.
In February 1989, the Partnership refinanced the existing first mortgage
loan secured by the office building in Wilmington, Delaware. The Partnership
received net refinancing proceeds of approximately $4,696,000 which were
utilized primarily to pay for the substantially completed renovation program
and other capital improvements.
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
A major tenant in the building brought a lawsuit against the Partnership
which sought reimbursement from the Partnership for certain improvements made
by the tenant to its space in the building. The lawsuit was sent to
arbitration and was decided in 1990 in the tenant's favor. The Partnership
reimbursed the tenant approximately $722,000 in 1991, and $80,000 in 1992.
The tenant may be entitled to reimbursement for further amounts depending upon
its future remodeling programs.
At the Bank of Delaware Building, a major tenant, E.I. duPont de Nemours
("duPont"), comprising approximately 27% of the building, vacated their space
upon expiration of their lease in December 1993. The property has
cumulatively operated at a cash deficit due to the significant costs incurred
in connection with the re-leasing of vacant space and certain capital
improvements. Due to the competitive nature of this marketplace, the
Partnership estimates the costs associated with re-leasing any vacant space
during the next few years, including those costs to remove the remaining
asbestos in tenant space, will be substantial. As a result of these leasing
concerns, the Partnership recorded a provision for value impairment on the
Bank of Delaware Building at June 30, 1992 of $11,476,202 to reduce the net
carrying value of the Bank of Delaware Building to the then outstanding
balance of the related non-recourse debt. Further, the Partnership has
commenced discussions with the building's first mortgage lender in order to
seek a loan modification. In connection with these discussions, effective
January 1994, the Partnership has suspended payment of debt service to the
lender. There can be no assurance the Partnership will be successful in these
discussions, and accordingly, the entire balance is reflected as a current
liability in the accompanying financial statements. If a suitable
modification of the existing loan cannot be arranged, the Partnership has
decided not to voluntarily commit any additional amounts to the property. It
is likely that the lender will seek to realize upon its collateral security
and the Partnership will no longer have an ownership interest in the Property.
Under the terms of a mortgage and security agreement, the Partnership, in its
capacity as mortgagor of the building, agreed to indemnify the mortgage
lender, under certain circumstances, against damages, claims, liabilities and
expenses incurred by or asserted against the mortgage lender in relation to
asbestos in the building. Asbestos has been abated or encapsulated in
approximately 62% of the building's space. The Partnership does not believe
that any remaining asbestos in the building presents a hazard and does not
believe that such asbestos currently is required to be removed. The
Partnership estimates that the current cost of asbestos abatement in a portion
of the building that could be incurred under certain circumstances in the
future is approximately $800,000. However, the Partnership currently does not
believe that it will likely be required to incur (or to indemnify the mortgage
lender against) any such cost, although there is no assurance that the
Partnership will not be required to pay such cost or indemnification.
An affiliate of the General Partner of the Partnership manages the office
building for a fee equal to 3% of the gross revenues of the building plus
leasing commissions, subject to an aggregate annual maximum amount of 6% of
the gross receipts of the property.
(3) VENTURE AGREEMENTS
(a) General
The Partnership at December 31, 1993 is a party to two operating venture
agreements (San Jose and Royal Executive) and has made capital contributions
to the respective ventures as discussed below. Under certain circumstances,
either pursuant to the venture agreements or due to the Partnership's
obligations as a General Partner, the Partnership may be required to make
additional cash contributions to the ventures.
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
There are certain risks associated with the Partnership's investments
made through joint ventures including the possibility that the Partnership's
joint venture partners in an investment might become unable or unwilling to
fulfill their financial or other obligations, or that such joint venture
partners may have economic or business interests or goals that are
inconsistent with those of the Partnership.
(b) San Jose
The Partnership has acquired, through San Jose, an interest in an
existing office building complex in San Jose, California (Park Center
Financial Plaza). San Jose acquired nine office buildings and two parking
garage structures in June 1985 for a purchase price of approximately
$32,472,000 subject to long-term indebtedness of approximately $6,347,000.
All of the properties were in operation when acquired.
In addition, in May 1986, San Jose purchased an additional office
building (150 Almaden) and a parking and retail building (185 Park Avenue) in
the Park Center Financial Plaza complex for a total purchase price of
approximately $47,476,000. In conjunction with the acquisitions, San Jose
reserved approximately $31,590,000 to fund debt service, leasing commissions,
and capital and tenant improvements.
In September 1986, San Jose obtained a mortgage loan in the amount of
$25,000,000 secured by the 150 Almaden and 185 Park Avenue buildings and
certain parking areas. The outstanding principal balance, which is non-
amortizable, bears interest at the rate of 9.5% per annum and had a scheduled
maturity in October 1993 and was extended to December 1, 1993.
The property is managed by an affiliate of the General Partners of the
Partnership for a fee calculated as 3% of gross receipts.
The partners of San Jose are the Partnership and JMB Income Properties,
Ltd.-XII, another partnership sponsored by the Managing General Partner of the
Partnership ("JMB-XII"). The terms of San Jose's partnership agreement
generally provide that contributions, distributions, cash flow, sale or
refinancing proceeds and profits and losses will be distributed or allocated
to the Partnership in their respective 50% ownership percentages.
In 1991, all remaining amounts originally set aside by the Partnership to
fund debt service, leasing commissions and capital and tenant improvement
costs at Park Center Financial Plaza were utilized. In January 1992, the
Partnership advanced $575,000 to the JMB/San Jose joint venture for the
payment of certain operating expenses. These monies were paid back to the
Partnership by the end of 1992. However, since the costs of both re-leasing
space and any seismic program could be substantial, the Partnership has
commenced discussions with the appropriate lender for additional loan proceeds
to pay for all or a portion of these costs. The venture is also continuing to
discuss terms for a possible loan extension with the mortgage lender on the
150 Almaden and 185 Park Avenue buildings and certain parking areas as the
mortgage loan secured by this portion of the complex matured October 1, 1993
and was extended to December 1, 1993. However, the venture and the lender
have not been able to agree upon mutually acceptable terms for a loan
extension and the lender has accelerated the loan. Should an agreement not be
reached and as the Partnership does not have its share of the outstanding loan
balance in its reserves in order to retire the loan, it is possible that the
lender would exercise its remedies and seek to acquire title to this portion
of the complex. Furthermore, should lender assistance be required to fund
significant costs at the 100-130 Park Center Plaza buildings but not be
obtained, the venture has decided not to commit any additional amounts to
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
this portion of the complex since the likelihood of recovering such funds
through increased capital appreciation is remote. The result would be that
the Partnership would no longer have an ownership interest in this portion of
the complex.
As a result, there is uncertainty about the ability to recover the net
carrying value of the property through future operations and sale and
accordingly, the JMB/San Jose joint venture has made a provision for value
impairment on the 150 Almaden and 185 Park Avenue buildings and certain
parking areas of $15,549,935. Such provision at September 30, 1993 was
recorded to reduce the net carrying value of these buildings to the then
outstanding balance of the related non-recourse financing. Due to the
uncertainty of the JMB/San Jose joint venture's ability to recover the net
carrying value of those buildings within the investment property through
future operations or sale, the JMB/San Jose joint venture recorded a provision
for value impairment at December 31, 1991 of $21,175,127 to reduce the net
book value of the 100-130 Park Center Plaza buildings and a certain parking
area to an amount equal to the then outstanding balance of the related non-
recourse financing. Additionally, at December 31, 1992, the JMB/San Jose
joint venture recorded a provision for value impairment of $8,142,152 on
certain other portions of the complex to amounts equal to the then outstanding
balances of the related non-recourse financing. In the event the lender on
any portion of the complex exercised its remedies as discussed above, the
result would likely be that JMB/San Jose joint venture would no longer have an
ownership interest in such portion.
(c) Royal Executive
In December 1985, the Partnership entered into a commitment to fund a
$27,000,000 convertible first mortgage note on a three building office park
then under construction in Rye Brook, New York (Royal Executive Park II). The
first mortgage note called for monthly installments of interest only at a rate
of 10% through the period of equity conversion.
During February 1987, the Partnership exercised its option of converting
the $27,000,000 mortgage into an ownership position. Upon the conversion of
the mortgage note, the Partnership entered into a joint venture (Royal
Executive) with the borrower (joint venture partners). Pursuant to the terms
of the venture agreement, until certain rental achievement levels are
attained, the Partnership is entitled to a cumulative preferred annual return
equal to $2,430,000 per year. The next $2,439,732 of annual cash flow is
distributable to the joint venture partners, on a non-cumulative basis, with
any remaining cash flow distributable 49.9% to the Partnership and 50.1% to
the joint venture partners. Therefore, the Partnership's receipt of cash
distributions is subject to the actual operations of the property. The
Partnership is entitled to any deficiency in its preferred annual return on a
cumulative basis as an annual priority distribution from future available cash
flow. The cumulative deficiency in the preferred annual return is
approximately $4,938,000 at December 31, 1993.
Operating profits of the joint venture, in general, will be allocated in
proportion to, and to the extent of, distributions and then based on relative
ownership percentages. Operating losses, in general, will be first allocated
to the joint venture partners to the extent of any additional contributions
made to fund operations or the Partnership's guaranteed return. Remaining
losses, if any, will be allocated based upon relative ownership interests.
Depreciation and amortization will be allocated based upon the relative
ownership interests.
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(4) LONG-TERM DEBT
Long-term debt consists of the following at December 31, 1993 and 1992:
1993 1992
---------- ----------
9-1/2% first mortgage note, secured by
Riverside Square Mall in Hackensack,
New Jersey; payable in monthly installments
of principal and interest of $142,945
through January 1, 2008; prepayable for
a fee equal to 8% of the then outstanding
loan balance, declining 1% per year to a
minimum of 1%. Balance is net of
unamortized discount of $1,658,738 and
$1,819,933 at December 31, 1993 and 1992,
respectively, based on an imputed interest
rate of 12%.. . . . . . . . . . . . . . . . . $11,634,669 11,903,495
10-3/8% mortgage note, secured by Bank of
Delaware Office Building in Wilmington,
Delaware; payable in monthly installments
of interest only of $82,135 through March 1,
1999 when the entire balance is due and
payable (see note 2(c)) . . . . . . . . . . . 9,500,000 9,500,000
----------- ----------
Total debt . . . . . . . . . . . . . 21,134,669 21,403,495
Less current portion of long-term debt . . . . 9,837,354 299,368
----------- ----------
Total long-term debt . . . . . . . . $11,297,315 21,104,127
=========== ==========
Five year maturities of long-term debt (net of unamortized discount) are
summarized as follows for the years ending:
1994. . . . . . . . . . . . $9,837,354
1995. . . . . . . . . . . . 380,119
1996. . . . . . . . . . . . 428,327
1997. . . . . . . . . . . . 482,649
1998. . . . . . . . . . . . 543,862
==========
<PAGE>
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(5) PARTNERSHIP AGREEMENT
Pursuant to the terms of the Partnership Agreement, net profits or losses
of the Partnership from operations are allocated 96% to the Limited Partners
and 4% to the General Partners. Profits from the sale or refinancing of
investment properties will be allocated to the General Partners: (i) to the
greater of 1% of such profits or the amount of cash distributable to the
General Partner from any such sale or refinancing (as described below); and
(ii) in order to reduce deficits, if any, in the General Partners' capital
accounts to a level consistent with the gain anticipated to be realized from
the sale of properties. Losses from the sale or refinancing of investment
properties will be allocated 1% to the General Partners. The remaining sale
or refinancing profits and losses will be allocated to the Limited Partners.
The General Partners are not required to make any additional capital
contributions except under certain limited circumstances upon termination of
the Partnership. In general, distributions of cash from operations will be
made 90% to the Limited Partners and 10% to the General Partners. However, a
portion of such distributions to the General Partners is subordinated to the
Limited Partners' receipt of a stipulated return on capital.
The Partnership Agreement provides that the General Partners shall
receive as a distribution from the sale of a real property by the Partnership
amounts equal to the cumulative deferrals of any portion of their 10% cash
distribution and 3% of the selling price, and that the remaining proceeds (net
after expenses and retained working capital) be distributed 85% to the Limited
Partners and 15% to the General Partners. However, the Limited Partners shall
receive 100% of such net sale proceeds until the Limited Partners (i) have
received cash distributions of sale or refinancing proceeds in an amount equal
to the Limited Partners' aggregate initial capital investment in the
Partnership, (ii) have received cumulative cash distributions from the
Partnership's operations which, when combined with sale or refinancing
proceeds previously distributed, equal a 7% annual return on the Limited
Partners' average capital investment for each year (their initial capital
investment as reduced by sale or refinancing proceeds previously distributed)
commencing with the first fiscal quarter of 1985 and (iii) have received cash
distributions of sale and refinancing proceeds and of the Partnership
operations, in an amount equal to the Limited Partners' initial capital
investment in the Partnership plus a 10% annual return on the Limited
Partners' average capital investment.
(6) LEASES
At December 31, 1993, the Partnership's principal assets are one shopping
center and one office building. The Partnership has determined that all
leases relating to these properties are properly classified as operating
leases; therefore, rental income is reported when earned and the cost of the
properties, excluding the cost of the land, is depreciated over the estimated
useful lives. Leases with tenants range in term from one to thirty-five years
and provide for fixed minimum rent and partial reimbursement of operating
costs. In addition, leases with shopping center tenants provide for
additional rent based upon percentages of tenants' sales volumes. With
respect to the Partnership's shopping center investment, a substantial portion
of the ability of retail tenants to honor their leases is dependant upon the
retail economic sector.
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
Cost and accumulated depreciation of the leased assets are summarized as
follows at December 31, 1993:
Office Building:
Cost. . . . . . . . . . . . . . . . . $15,401,683
Accumulated depreciation. . . . . . . (6,127,709)
-----------
9,273,974
-----------
Shopping Center:
Cost. . . . . . . . . . . . . . . . . 42,380,902
Accumulated depreciation. . . . . . . (11,545,311)
-----------
30,835,591
-----------
$40,109,565
===========
Minimum lease payments, including amounts representing executory costs
(e.g. taxes, maintenance, insurance) and any related profit, to be received in
the future under the operating leases are as follows:
1994 . . . . . . . . . . . $ 6,173,591
1995 . . . . . . . . . . . 5,477,756
1996 . . . . . . . . . . . 5,115,657
1997 . . . . . . . . . . . 4,565,852
1998 . . . . . . . . . . . 3,949,351
Thereafter . . . . . . . . 13,199,714
-----------
Total. . . . . . . . . $38,481,921
===========
Contingent rent (based on sales by property tenants) included in rental
income was as follows:
1991. . . . . . . . $317,554
1992. . . . . . . . 296,014
1993. . . . . . . . 302,809
=========
(7) TRANSACTIONS WITH AFFILIATES
Fees, commissions and other expenses required to be paid by the Partner-
ship to the General Partners and their affiliates as of December 31, 1993 and
for the years ended December 31, 1993, 1992 and 1991 were as follows:
<TABLE>
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<CAPTION>
UNPAID AT
DECEMBER 31,
1993 1992 1991 1993
-------- -------- -------- -------------
<S> <C> <C> <C> <C>
Property management and leasing fees . . . . . . . . . . . . . $325,429 354,525 362,544 --
Insurance commissions. . . . . . . . . . . . . . . . . . . . . 54,473 38,720 40,427 --
Disbursement agent fees. . . . . . . . . . . . . . . . . . . . -- -- 13,775 --
Reimbursement (at cost) for out-of-pocket expenses and salaries 110,665 114,341 107,366 87,093
-------- ------- ------- --------
$490,567 507,586 524,112 87,093
======== ======= ======= ========
</TABLE>
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONCLUDED
The General Partners have deferred receipt of certain of their
distributions (see note 5) of net cash flow of the Partnership. The amount of
such deferred distributions aggregated $1,092,490 as of December 31, 1993.
The amount is being deferred in accordance with the subordination requirements
of the Partnership Agreement. This amount or amounts currently payable do not
bear interest and may be paid in future periods.
(8) INVESTMENT IN UNCONSOLIDATED VENTURES
Summary of combined financial information for San Jose and Royal
Executive (note 3) as of and for the years ended December 31, 1993 and 1992
are as follows:
1993 1992
------------ -----------
Current assets . . . . . . . . . . . . $ 2,535,033 4,088,973
Current liabilities. . . . . . . . . . (26,399,404) (25,910,203)
------------ -----------
Working capital. . . . . . . . . . (23,864,371) (21,821,230)
------------ -----------
Investment property, net . . . . . . . 80,714,163 98,707,716
Other assets, net. . . . . . . . . . . 4,293,567 1,995,854
Long-term debt . . . . . . . . . . . . (3,784,508) (4,157,064)
Other liabilities. . . . . . . . . . . (190,834) (192,993)
Venture partners' equity . . . . . . . (35,040,476) (43,444,416)
------------ -----------
Partnership's capital. . . . . . . $ 22,127,541 31,087,867
============ ===========
Represented by:
Invested capital . . . . . . . . . . $ 74,947,712 74,947,712
Cumulative distributions . . . . . . (34,443,911) (29,745,590)
Cumulative losses. . . . . . . . . . (18,376,260) (14,114,255)
------------ -----------
$ 22,127,541 31,087,867
============ ===========
Total income . . . . . . . . . . . . . $ 16,499,948 15,934,326
============ ===========
Expenses applicable to operating loss. $ 28,375,860 21,658,285
============ ===========
Net loss . . . . . . . . . . . . . . . $ 11,875,912 5,723,959
============ ===========
Reference is made to note 3(b) regarding the provisions for value
impairments of $15,549,935 and $8,142,152 which were recorded in 1993 and
1992, respectively, by JMB/San Jose joint venture.
The total income, expenses related to operating loss and net loss for the
above-mentioned ventures for the year ended December 31, 1991 were
$13,923,263, $34,549,910 and $20,626,647, respectively.
(9) SUBSEQUENT EVENT - DISTRIBUTION TO PARTNERS
In February 1994, the Partnership paid a distribution of $520,233 ($3.00
per Interest) to the Limited Partners.
<PAGE>
SCHEDULE X
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
CHARGED TO COSTS AND EXPENSES
----------------------------------------------
1993 1992 1991
------------ ------------ ------------
Maintenance and repairs. . $1,652,823 1,557,306 1,612,979
Depreciation . . . . . . . 1,574,625 1,816,616 2,003,942
Real estate taxes. . . . . 1,805,617 1,538,392 1,605,061
Advertising. . . . . . . . 332,489 512,521 612,705
=========== ========== ===========
<PAGE>
<TABLE>
SCHEDULE XI
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
<CAPTION>
COSTS
CAPITALIZED
INITIAL COST TO SUBSEQUENT TO GROSS AMOUNT AT WHICH CARRIED
PARTNERSHIP (A) ACQUISITION(B) AT CLOSE OF PERIOD (C)
----------------------------- -------------- ----------------------------------------------
BUILDINGS BUILDINGS BUILDINGS
AND AND AND
ENCUMBRANCE LAND IMPROVEMENTS IMPROVEMENTS LAND IMPROVEMENTS TOTAL (D)
----------- ----------- ------------ -------------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
SHOPPING CENTER:
Hackensack,
New Jersey . . . . . $11,634,669 3,796,561 30,880,649 7,703,693 3,796,561 38,584,342 42,380,903
OFFICE BUILDING:
Wilmington, Delaware. 9,500,000 1,693,708 19,900,789 (5,266,184) 767,077 14,634,605 15,401,682
----------- ----------- ------------ ------------- ---------- ------------ ----------
Total . . . . . . . $21,134,669 5,490,269 50,781,438 2,437,509 4,563,638 53,218,947 57,782,585
=========== =========== ============ ============= ========== ============ ===========
</TABLE>
<TABLE>
SCHEDULE XI
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
STATEMENT OF 1993
ACCUMULATED DATE OF DATE OPERATION REAL ESTATE
DEPRECIATION(E) CONSTRUCTION ACQUIRED IS COMPUTED TAXES
---------------- ------------ ---------- --------------- -----------
<S> <C> <C> <C> <C> <C>
SHOPPING CENTER:
Hackensack,
New Jersey . . . . . . . . . . . . . $11,545,311 1977 10-19-83 5-30 years 1,407,800
OFFICE BUILDING:
Wilmington, Delaware. . . . . . . . . 6,127,709 1970 12-14-84 5-30 years 397,817
----------- -----------
Total . . . . . . . . . . . . . . . $17,673,020 1,805,617
=========== ===========
- -------------
<FN>
Notes:
(A) The initial cost to the Partnership represents the original purchase price of the properties (net of unamortized
discount based upon an imputed interest rate), including amounts incurred subsequent to acquisition which were contemplated at
the time the property was acquired.
(B) In 1992, the Partnership recorded a provision for value impairment totaling $11,476,030; see Note 1.
(C) The aggregate cost of real estate owned at December 31, 1993 for Federal income tax purposes was $71,208,096.
</TABLE>
<TABLE>
SCHEDULE XI - CONTINUED
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
(D) Reconciliation of real estate owned:
<CAPTION>
1993 1992 1991
------------ ------------ ------------
<S> <C> <C> <C>
Balance at beginning of period . . . . . . . . . . $56,213,677 65,909,680 64,729,367
Additions during period. . . . . . . . . . . . . . 1,568,908 1,780,027 1,180,313
Provision for value impairment . . . . . . . . . . -- (11,476,030) --
----------- ----------- ----------
Balance at end of period . . . . . . . . . . . . . $57,782,585 56,213,677 65,909,680
=========== =========== ==========
(E) Reconciliation of accumulated depreciation:
Balance at beginning of period . . . . . . . . . . $16,098,395 14,281,779 12,277,837
Depreciation expense . . . . . . . . . . . . . . . 1,574,625 1,816,616 2,003,942
----------- ----------- ----------
Balance at end of period . . . . . . . . . . . . . $17,673,020 16,098,395 14,281,779
=========== =========== ==========
</TABLE>
INDEPENDENT AUDITORS' REPORT
The Partners
JMB/SAN JOSE ASSOCIATES:
We have audited the financial statements of JMB/San Jose Associates (a
general partnership) as listed in the accompanying index. In connection with
our audits of the financial statements, we also have audited the financial
statement schedules as listed in the accompanying index. These financial
statements are the responsibility of the General Partners of the Partnership.
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 the General Partners of the Partnership, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of JMB/San Jose
Associates at December 31, 1993 and 1992, and the results of its operations
and its cash flows for each of the years in the three-year period ended
December 31, 1993, in conformity with generally accepted accounting
principles. Also in our opinion, the related financial statement schedules,
when considered in relation to the basic financial statements taken as a
whole, present fairly, in all material respects, the information set forth
therein.
As discussed in note 3(b) of Notes to Financial Statements of JMB Income
Properties, LTD - XI, the mortgage loan secured by the 150 Almaden and 185
Park Avenue buildings and certain related parking improvements matured
December 1, 1993. Should an agreement not be reached to extend the loan, it
is possible that the lender would exercise its remedies and seek to acquire
title to these properties. Also, the Venture has commenced discussions with
the lender on the 100-130 Park Center Plaza properties for additional loan
proceeds to cover re-leasing and seismic program costs. Should the lender
assistance required to fund these costs not be obtained, the Partnership has
decided not to commit additional funds to these properties. The result would
be that the Partnership would no longer have an ownership interest in these
properties. The Venture has recorded provisions for value impairment to
reduce the net book value of such properties to the outstanding balance of the
related non-recourse financing.
KPMG PEAT MARWICK
Chicago, Illinois
March 25, 1994
<TABLE>
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
ASSETS
------
<CAPTION>
1993 1992
----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 842,615 615,501
Short-term investments (note 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 148,184
Rents and other receivables, net of allowance for doubtful accounts of $62,806 in 1993 and $326,307
in 1992. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118,895 171,339
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,970 75,911
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,969 53,763
----------- -----------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,094,449 1,064,698
----------- -----------
Investment property, at cost (notes 1 and 2) - Schedule XI:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,377,052 8,826,721
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,201,861 55,981,306
----------- -----------
49,578,913 64,808,027
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,360,097 15,296,481
---------- -----------
Total investment property, net of accumulated depreciation . . . . . . . . . . . . . . . . . 33,218,816 49,511,546
---------- -----------
Long-term notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,836 5,836
Accrued rents receivable (note 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,354,129 1,719,253
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 821,020 731,574
----------- -----------
$37,494,250 53,032,907
=========== ===========
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
------------------------------------------
1993 1992
----------- -----------
Current liabilities:
Current portion of long-term debt (note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . $25,372,084 25,342,560
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229,837 199,379
Accrued interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239,452 241,021
----------- -----------
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,841,373 25,782,960
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,297 74,273
Long-term debt, less current portion (note 3). . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,784,508 4,157,064
----------- -----------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,696,178 30,014,297
Partners' capital accounts (notes 1 and 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,798,072 23,018,610
----------- -----------
Commitments and contingencies (note 2)
$37,494,250 53,032,907
=========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,340,098 10,793,058 9,715,878
Interest income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,237 57,841 102,541
----------- ----------- -----------
10,369,335 10,850,899 9,818,419
----------- ----------- -----------
Expenses (Schedule X):
Mortgage and other interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 2,779,264 2,802,805 2,818,302
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,063,616 1,898,286 2,369,699
Property operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 3,953,364 4,049,484 3,866,531
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . 243,694 243,229 193,526
Provision for value impairment (note 1). . . . . . . . . . . . . . . . . . . . . 15,549,935 8,142,152 21,175,127
----------- ----------- -----------
23,589,873 17,135,956 30,423,185
----------- ----------- -----------
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13,220,538 6,285,057 20,604,766
=========== =========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
AFFILIATED
PARTNER JMB-XI TOTAL
----------- ----------- -----------
<S> <C> <C> <C>
Balance at December 31, 1990 . . . . . . . . . . . . . . . . . . . . . . $26,500,476 26,857,957 53,358,433
Cash distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,000,000) (1,000,000) (2,000,000)
Net loss (note 2). . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,302,383) (10,302,383) (20,604,766)
----------- ----------- -----------
Balance at December 31, 1991 . . . . . . . . . . . . . . . . . . . . . . 15,198,093 15,555,574 30,753,667
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . . . 575,000 575,000 1,150,000
Cash distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,300,000) (1,300,000) (2,600,000)
Net loss (note 2). . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,142,528) (3,142,529) (6,285,057)
----------- ----------- -----------
Balance at December 31, 1992 . . . . . . . . . . . . . . . . . . . . . . 11,330,565 11,688,045 23,018,610
Cash distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,000,000) (1,000,000) (2,000,000)
Net loss (note 2). . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,610,269) (6,610,269) (13,220,538)
----------- ----------- -----------
Balance at December 31, 1993 . . . . . . . . . . . . . . . . . . . . . . $ 3,720,296 4,077,776 7,798,072
============ =========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
1993 1992 1991
------------ ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(13,220,538) (6,285,057) (20,604,766)
Items not requiring (providing) cash:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,063,616 1,898,286 2,369,699
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . 243,694 243,229 193,526
Write off of notes receivable. . . . . . . . . . . . . . . . . . . . . . . -- 114,169 --
Provision for value impairment . . . . . . . . . . . . . . . . . . . . . . 15,549,935 8,142,152 21,175,127
Changes in:
Rents and other receivables. . . . . . . . . . . . . . . . . . . . . . . . 52,444 210,856 432,646
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (59) 26,069 6,170
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,206) 813 (3,007)
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . (634,876) (640,998) (391,311)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,458 (209,343) (47,101)
Accrued interest payable . . . . . . . . . . . . . . . . . . . . . . . . . (1,569) (1,586) 4,057
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . (3,976) 3,277 (2,651)
----------- ----------- -----------
Net cash provided by operating activities. . . . . . . . . . . . . . . 3,075,923 3,501,867 3,132,389
Cash flows from investing activities:
Net sales of short-term investments. . . . . . . . . . . . . . . . . . . . . 148,184 364,288 29,971
Additions to investment property . . . . . . . . . . . . . . . . . . . . . . (320,821) (101,790) (2,053,084)
Payment of deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . (333,140) (36,559) (321,672)
Principal payments on notes receivable . . . . . . . . . . . . . . . . . . . -- 4,720 22,954
----------- ----------- -----------
Net cash provided by (used in) investing activities. . . . . . . . . . (505,777) 230,659 (2,321,831)
----------- ----------- -----------
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
STATEMENTS OF CASH FLOWS - CONTINUED
1993 1992 1991
----------- ----------- -----------
Cash flows from financing activities:
Bank overdrafts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (1,350,956) 1,236,845
Principal payments on long-term debt . . . . . . . . . . . . . . . . . . . . (343,032) (316,069) (291,169)
Capital contributed to venture . . . . . . . . . . . . . . . . . . . . . . . -- 1,150,000 --
Distributions to partners. . . . . . . . . . . . . . . . . . . . . . . . . . (2,000,000) (2,600,000) (2,000,000)
---------- ----------- -----------
Net cash used in financing activities. . . . . . . . . . . . . . . . . (2,343,032) (3,117,025) (1,054,324)
----------- ----------- -----------
Net increase (decrease) increase in cash and cash equivalents. . . . . $ 227,114 615,501 (243,766)
=========== =========== ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . . . . . . . $ 2,780,833 2,804,392 2,814,245
=========== =========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(1) BASIS OF ACCOUNTING
The accompanying financial statements have been prepared for the purpose
of complying with Rule 3.09 of Regulation S-X of the Securities and Exchange
Commission. They include the accounts of the unconsolidated joint venture,
JMB/San Jose joint venture ("Venture"), in which JMB Income Properties, Ltd.-
XI ("JMB Income-XI") and JMB Income Properties, Ltd.-XII are the partners.
The Venture's records are maintained on the accrual basis of accounting
as adjusted for Federal income tax reporting purposes. The accompanying
financial statements have been prepared from such records after making
appropriate adjustments to present the Venture's accounts in accordance with
generally accepted accounting principles ("GAAP"). Such adjustments are not
recorded on the records of the Venture. The net effect of these items for the
years ended December 31, 1993 and 1992 is summarized as follows:
<TABLE>
JMB/SAN JOSE ASSOCIATES
(a general partnership)
Notes to Financial Statements - Continued
<CAPTION>
1993 1992
--------------------------------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
------------ ----------- ------------ ----------
<S> <C> <C> <C> <C>
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . $37,494,250 66,870,908 53,032,907 70,216,593
Partners' capital accounts . . . . . . . . . . . . . . . . . . . 7,798,072 37,187,301 23,018,610 40,191,267
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,220,538) (1,003,966) (6,285,057) (176,627)
=========== =========== ========== =========
</TABLE>
JMB/SAN JOSE ASSOCIATES
(a general partnership)
Notes to Financial Statements - Continued
Statement of Financial Accounting Standards No. 95 requires the Venture
to present a statement which classifies receipts and payments according to
whether they stem from operating, investing or financing activities. The
required information has been segregated and accumulated according to the
classifications specified in the pronouncement. In addition, the Venture
records amounts held in U.S. Government obligations at cost, which
approximates market. For purposes of these statements, the Venture's policy
is to consider all such amounts held with original maturities of three months
or less cash equivalents with any remaining amounts reflected as short-term
investments. None of the Partnership's investments in U.S. Government
obligations were classified as cash equivalents at December 31, 1993 and
December 31, 1992.
Certain amounts in the 1992 and 1991 financial statements have been
reclassified to conform to the 1993 presentation.
Depreciation on buildings and improvements has been provided over the
estimated useful lives of the assets (5 to 30 years) using the straight-line
method.
Deferred expenses consist primarily of loan fees and lease commissions
which are amortized over the terms stipulated in the related loan agreements
or over the terms of the related leases using the straight-line method.
Although certain leases of the Venture provide for tenant occupancy
during periods for which no rent is due and/or increases in the minimum lease
payments over the term of the lease, rental income is accrued for the full
period of occupancy on a straight-line basis.
Maintenance and repair expenses are charged to operations as incurred.
Significant betterments and improvements are capitalized and depreciated over
their estimated useful lives.
The Venture recorded in 1993, as a matter of prudent accounting practice,
a provision for value impairment of $15,549,935 on the 150 Almaden and 185
Park Avenue building and certain parking areas. In 1992, the Venture recorded
a provision for value impairment of $8,142,152 on certain portions of the
complex. In 1991, the Venture recorded a provision for value impairment of
$21,175,127 to reduce the net basis of the 100-130 Park Center Plaza Buildings
and a certain parking area to the then outstanding balance of the related non-
recourse debt.
No provision for State or Federal income taxes has been made as the
liability for such taxes is that of the venture partners rather than the
Venture.
(2) VENTURE AGREEMENT
A description of the acquisition of the property is contained in Note
3(b) of JMB Income - XI. Such note is incorporated herein by reference.
<PAGE>
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(3) LONG-TERM DEBT
Long-term debt consists of the following at December 31, 1993 and 1992:
1993 1992
---------- ----------
7.75% mortgage note; secured by the
100 Park Center Plaza Buildings, and
certain related parking improvements
in San Jose, California; principal and
interest payments of $34,023 are due
monthly through September 2000;
additional interest payments of 2% per
annum of gross income (total interest
not to exceed 9.875%), which amounted
to $55,034 in 1993 and $53,936 in 1992. . . $ 2,377,511 2,592,398
10% mortgage note; secured by the
100 Park Center Plaza Buildings, and
certain related parking improvements
in San Jose, California; principal
and interest payments of $10,353 are
due monthly through September 2000. . . . . 608,178 667,948
7.85% mortgage note; secured by the
170 Almaden Building in San Jose,
California; principal and interest
payments of $13,537 are due monthly
through June 2003 . . . . . . . . . . . . . 1,170,903 1,239,278
9.5% mortgage note; secured by the
150 Almaden and 185 Park Avenue buildings,
and certain related parking improvements
in San Jose, California; interest only
payments of $197,917 are due monthly
through December 1993 when the entire
principal was due (currently in
default(l)) . . . . . . . . . . . . . . . . 25,000,000 25,000,000
----------- ----------
Total debt . . . . . . . . . . . . . 29,156,592 29,499,624
Less current portion of
long-term debt. . . . . . . . . . . 25,372,084 25,342,560
----------- ----------
Total long-term debt . . . . . . . . $ 3,784,508 4,157,064
============ ==========
Five year maturities of long-term debt are as follows:
1994. . . . . . . . . . . $25,372,084
1995. . . . . . . . . . . 403,174
1996. . . . . . . . . . . 437,407
1997. . . . . . . . . . . 474,656
1998. . . . . . . . . . . 515,062
===========
(1) A description of the discussions between JMB/San Jose and the
mortgage lender on the 150 Almaden and 185 Park Avenue buildings is contained
in Note 3(b) of Notes to Consolidated Financial Statements of JMB Income - XI.
Such note is hereby incorporated herein by reference.
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(4) LEASES
As Property Lessor
At December 31, 1993, the Venture's principal asset is an office building
complex. The Venture has determined that all leases relating to this property
are properly classified as operating leases; therefore, rental income is
reported when earned and the cost of the property, excluding the cost of the
land, is depreciated over the estimated useful life. Leases with tenants
range in term from one to twenty-five years and provide for fixed minimum rent
and partial reimbursement of operating costs.
Minimum lease payments, including amounts representing executory costs
(e.g. taxes, maintenance, insurance) and any related profit, to be received in
the future under the operating leases are as follows:
1994 . . . . . . . . . . . . . . $ 7,563,161
1995 . . . . . . . . . . . . . . 6,626,946
1996 . . . . . . . . . . . . . . 5,573,226
1997 . . . . . . . . . . . . . . 4,508,323
1998 . . . . . . . . . . . . . . 4,187,855
Thereafter . . . . . . . . . . . 15,736,333
-----------
$44,195,844
===========
(5) TRANSACTIONS WITH AFFILIATES
Fees, commissions and other expenses required to be paid by the Venture
to the General Partners and their affiliates as of December 31, 1993 and for
the years ended December 31, 1993, 1992 and 1991 were as follows:
<TABLE> JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONCLUDED
<CAPTION>
UNPAID
DECEMBER
1993 1992 1991 1993
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Property management and leasing fees . . . . . . . . . . . . . . . . . $291,126 330,574 607,154 41,689
Insurance commissions. . . . . . . . . . . . . . . . . . . . . . . . . 32,194 36,755 73,144 --
-------- ------- ------- ------
$323,320 367,329 680,298 41,689
======== ======= ======= ======
<FN>
All amounts currently payable to the General Partners and their affiliates do not bear interest and are expected
to be paid in future periods.
</TABLE>
SCHEDULE X
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
CHARGED TO COSTS AND EXPENSES
----------------------------------------------
1993 1992 1991
------------ ------------ ------------
Maintenance and repairs. . $ 973,276 1,029,913 965,927
Depreciation . . . . . . . 1,063,616 1,898,286 2,369,699
Amortization of deferred
expenses. . . . . . . . . 243,694 243,229 193,526
Taxes:
Real estate. . . . . . . 991,781 755,041 724,758
Other. . . . . . . . . . 4,792 5,375 5,410
Advertising. . . . . . . . 17,484 -- 57,048
========== ========= =========
<PAGE>
<TABLE>
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
<CAPTION>
INITIAL COST TO GROSS AMOUNT AT WHICH CARRIED
PARTNERSHIP (A) AT CLOSE OF PERIOD (B)
------------------------------ COSTS --------------------------------------
BUILDINGS CAPITALIZED BUILDINGS
AND SUBSEQUENT TO AND
ENCUMBRANCE LAND IMPROVEMENTS ACQUISITION(C) LAND IMPROVEMENTS TOTAL (D)
----------- ----------- ------------ -------------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
OFFICE BUILDINGS:
San Jose,
California. . . . . $29,156,592 21,078,745 62,309,815 (33,809,647) 7,377,052 42,201,861 49,578,913
=========== ========== ========== =========== ========== ========== ==========
</TABLE>
<TABLE>
SCHEDULE XI - CONTINUED
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
STATEMENT OF 1993
ACCUMULATED DATE OF DATE OPERATIONS REAL ESTATE
DEPRECIATION(E) CONSTRUCTION ACQUIRED IS COMPUTED TAXES
---------------- ------------ ---------- --------------- -----------
<S> <C> <C> <C> <C> <C>
OFFICE BUILDINGS:
San Jose, 6/20/85
California. . . . . . . . . . . . . . . . . . $16,360,097 1970 and 5/2/86 5-30 years 991,781
=========== =======
<FN>
- --------------
Notes:
(A) The initial cost to the Venture represents the original purchase price of the property, including amounts incurred
subsequent to acquisition which were contemplated at the time the property was acquired.
(B) The aggregate cost of real estate owned at December 31, 1993 for Federal income tax purposes was approximately
$91,785,290.
(C) In 1993, 1992 and 1991, the affiliated joint venture recorded provisions for value impairment totalling
$15,549,935, $8,142,152 and $21,175,125, respectively; see Note 1.
</TABLE>
<TABLE> SCHEDULE XI - CONTINUED
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
(D) Reconciliation of real estate owned:
<CAPTION>
1993 1992 1991
------------ ------------ ------------
<S> <C> <C> <C>
Balance at beginning of period . . . . . . . . . . $64,808,027 72,848,389 91,970,432
Additions during period. . . . . . . . . . . . . . 320,821 101,790 2,053,084
Provision for value impairment (C) . . . . . . . . (15,549,935) (8,142,152) (21,175,127)
----------- ----------- -----------
Balance at end of period . . . . . . . . . . . . . $49,578,913 64,808,027 72,848,389
=========== =========== ===========
(E) Reconciliation of accumulated depreciation:
Balance at beginning of period . . . . . . . . . . $15,296,481 13,398,195 11,028,496
Depreciation expense . . . . . . . . . . . . . . . 1,063,616 1,898,286 2,369,699
----------- ----------- -----------
Balance at end of period . . . . . . . . . . . . . $16,360,097 15,296,481 13,398,195
=========== =========== ===========
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
There were no changes of or disagreements with accountants during 1992
and 1993.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
The Managing General Partner of the Partnership is JMB Realty Corporation
("JMB"), a Delaware corporation. JMB has responsibility for all aspects of
the Partnership's operations, subject to the requirement that sales of real
property must be approved by the Associate General Partner of the Partnership,
Income Associates-XI, L.P., an Illinois limited partnership with JMB as the
sole general partner. The Associate General Partner shall be directed by a
majority in interest of its limited partners (who are generally officers,
directors and affiliates of JMB or its affiliates) as to whether to provide
its approval of any sale of real property (or any interest therein) of the
Partnership. Various relationships of the Partnership to the Managing General
Partner and its affiliates are described under the caption "Conflicts of
Interest" at pages 12-16 of the Prospectus, of which description is hereby
incorporated herein by reference to Exhibit 3-A to the Partnership's Report on
Form 10-K for December 31, 1992 (File No. 0-15966) dated March 19, 1993.
The names, positions held and length of service therein of each director
and executive officer and certain officers of the Managing General Partner of
the Partnership are as follows:
SERVED IN
NAME OFFICE OFFICE SINCE
- ---- ------ ------------
Judd D. Malkin Chairman 5/03/71
Director 5/03/71
Neil G. Bluhm President 5/03/71
Director 5/03/71
Jerome J. Claeys III Director 5/09/88
Burton E. Glazov Director 7/01/71
Stuart C. Nathan Executive Vice President 5/08/79
Director 3/14/73
A. Lee Sacks Director 5/09/88
John G. Schreiber Director 3/14/73
H. Rigel Barber Chief Executive Officer 8/01/93
Jeffrey R. Rosenthal Chief Financial Officer 8/01/93
Gary Nickele Executive Vice President 1/01/92
General Counsel 2/27/84
Ira J. Schulman Executive Vice President 6/01/88
Gailen J. Hull Senior Vice President 6/01/88
Howard Kogen Senior Vice President 1/02/86
Treasurer 1/01/91
There is no family relationship among any of the foregoing directors or
officers. The foregoing directors have been elected to serve one-year terms
until the annual meeting of the Managing General Partner to be held on June 7,
1994. All of the foregoing officers have been elected to serve one-year terms
until the first meeting of the Board of Directors held after the annual
meeting of the Managing General Partner to be held on June 7, 1994. There are
no arrangements or understandings between or among any of said directors or
officers and any other person pursuant to which any director or officer was
elected as such.
JMB is the corporate general partner of Carlyle Real Estate Limited
Partnership-VII ("Carlyle-VII"), Carlyle Real Estate Limited Partnership-IX
("Carlyle-IX"), Carlyle Real Estate Limited Partnership-X ("Carlyle-X"),
Carlyle Real Estate Limited Partnership-XI ("Carlyle-XI"), Carlyle Real Estate
Limited Partnership-XII ("Carlyle-XII"), Carlyle Real Estate Limited
Partnership-XIII ("Carlyle-XIII"), Carlyle Real Estate Limited Partnership-XIV
("Carlyle-XIV"), Carlyle Real Estate Limited Partnership-XV ("Carlyle-XV"),
Carlyle Real Estate Limited Partnership-XVI ("Carlyle-XVI"), Carlyle Real
Estate Limited Partnership-XVII ("Carlyle-XVII"), JMB Mortgage Partners, Ltd.
("Mortgage Partners"), JMB Mortgage Partners, Ltd.-II ("Mortgage
Partners-II"), JMB Mortgage Partners, Ltd.-III ("Mortgage Partners-III"), JMB
Mortgage Partners, Ltd.-IV ("Mortgage Partners-IV"), Carlyle Income Plus, Ltd.
("Carlyle Income Plus") and Carlyle Income Plus, Ltd.-II ("Carlyle Income
Plus-II") and the managing general partner of JMB Income Properties, Ltd.-IV
("JMB Income-IV"), JMB Income Properties, Ltd.-V ("JMB Income-V"), JMB Income
Properties, Ltd.-VI ("JMB Income-VI"), JMB Income Properties, Ltd.-VII ("JMB
Income-VII"), JMB Income Properties, Ltd.-VIII ("JMB Income-VIII"), JMB Income
Properties, Ltd.-IX ("JMB Income-IX"), JMB Income Properties, Ltd.-X ("JMB
Income-X"), JMB Income Properties, Ltd.-XI ("JMB Income-XI"), JMB Income
Properties, Ltd.-XII ("JMB Income-XII") and JMB Income Properties, Ltd.-XIII
("JMB Income-XIII"). Most of the foregoing directors and officers are also
officer and/or directors of various affiliated companies of JMB including
Arvida/JMB Managers, Inc. (the general partner of Arvida/JMB Partners, L.P.
("Arvida")), Arvida/JMB Managers-II, Inc. (the general partner of Arvida/JMB
Partners, L.P.-II ("Arvida-II")) and Income Growth Managers, Inc. (the
corporate general partner of IDS/JMB Balanced Income Growth, Ltd.
("IDS/BIG")). Most of such directors and officers are also partners of
certain partnerships which are associate general partners in the following
real estate limited partnerships: Carlyle-VII, Carlyle-IX, Carlyle-X,
Carlyle-XI, Carlyle-XII, Carlyle-XIII, Carlyle-XIV, Carlyle-XV, Carlyle-XVI,
Carlyle-XVII, JMB Income-VI, JMB Income-VII, JMB Income-VIII, JMB Income-IX,
JMB Income-X, JMB Income-XII, JMB Income-XIII, Mortgage Partners, Mortgage
Partners-II, Mortgage Partners-III, Mortgage Partners-IV, Carlyle Income Plus,
Carlyle Income Plus-II and IDS/BIG.
The business experience during the past five years of each such director
and officer of the Managing General Partner of the Partnership in addition to
that described above is as follows:
Judd D. Malkin (age 56) is an individual general partner of JMB Income-IV
and JMB Income-V. Mr. Malkin has been associated with JMB since October,
1969. He is a Certified Public Accountant.
Neil G. Bluhm (age 56) is an individual general partner of JMB Income-IV
and JMB Income-V. Mr. Bluhm has been associated with JMB since August, 1970.
He is a member of the Bar of the State of Illinois and a Certified Public
Accountant.
Jerome J. Claeys III (age 51) (Chairman and Director of JMB Institutional
Realty Corporation) has been associated with JMB since September, 1977. He
holds a Masters degree in Business Administration from the University of Notre
Dame.
Burton E. Glazov (age 55) has been associated with JMB since June, 1971
and served as an Executive Vice President of JMB until December 1990. He is a
member of the Bar of the State of Illinois and a Certified Public Accountant.
Stuart C. Nathan (age 52) has been associated with JMB since July, 1972.
He is a member of the Bar of the State of Illinois.
A. Lee Sacks (age 60) (President and Director of JMB Insurance Agency,
Inc.) has been associated with JMB since December, 1972.
John G. Schreiber (age 47) has been associated with JMB since December,
1970 and served as an Executive Vice President of JMB until December 1990. He
holds a Masters degree in Business Administration from Harvard University
Graduate School of Business.
H. Rigel Barber (age 44) has been associated with JMB since March, 1982.
He holds a J.D. degree from Northwestern Law School and is a member of the Bar
of the State of Illinois.
Jeffrey R. Rosenthal (age 42) has been associated with JMB since
December, 1987. He is a Certified Public Accountant.
Gary Nickele (age 41) has been associated with JMB since February, 1984.
He holds a J.D. degree from the University of Michigan Law School and is a
member of the Bar of the State of Illinois.
Ira J. Schulman (age 42) has been associated with JMB since February,
1983. He holds a Masters degree in Business Administration from the
University of Pittsburgh.
Gailen J. Hull (age 45) has been associated with JMB since March 1982.
He holds a Masters degree in Business Administration from Northern Illinois
University and is a Certified Public Accountant.
Howard Kogen (age 58) has been associated with JMB since March, 1973. He
is a Certified Public Accountant.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no officers or directors. The General Partners of
the Partnership are entitled to receive a share of cash distributions, when
and as cash distributions are made to the Investors, and a share of profits or
losses as described under the caption "Compensation and Fees" at pages 8-12,
"Cash Distributions" at pages 56-58, "Allocation of Profits or Losses for Tax
Purposes" at page 58 and "Cash Distributions; Allocations of Profits and
Losses" at pages A-8 to A-12 of the Partnership Agreement included as an
exhibit to the Prospectus, which descriptions are hereby incorporated herein
by reference to Exhibit 3-A to Partnership's Report on Form 10-K for December
31, 1992 (File No. 0-15966) dated March 19, 1993. Reference is also made to
Notes 5 and 7 for a description of such transactions, distributions and
allocations. In 1993, 1992 and 1991, no cash distributions were paid to the
General Partners.
Affiliates of the Managing General Partner provided property management
services to the Partnership for 1993 for the Riverside Square Mall in
Hackensack, New Jersey at a fee not to exceed 4% of the fixed and percentage
rent of property, plus leasing commissions and the Bank of Delaware Office
Building in Wilmington, Delaware at fees calculated at 3% of the gross
revenues of the property plus leasing commissions. In 1993, such affiliates
earned property management and leasing fees amounting to $325,429, all of
which was paid as of December 31, 1993. As set forth in the Prospectus of the
Partnership, the Managing General Partner must negotiate such agreements on
terms no less favorable to the Partnership than those customarily charged for
similar services in the relevant geographical area (but in no event at rates
greater than 6% of the gross receipts from a property), and such agreements
must be terminable by either party thereto, without penalty, upon 60 days'
notice.
JMB Insurance Agency, Inc., an affiliate of the Managing General Partner,
earned and received insurance brokerage commissions in 1993 aggregating
$54,478 in connection with the provision of insurance coverage for certain of
the real property investments of the Partnership and its venture. Such
commissions are at rates set by insurance companies for the classes of
coverage provided.
The General Partners of the Partnership may be reimbursed for their
direct salaries and expenses relating to the administration of the Partnership
and the operation of the Partnership's real property investments. In 1993, an
affiliate of the General Partners earned reimbursement for such expenses in
the amount of $110,665, of which $87,093 was unpaid at December 31, 1993.
The Partnership is permitted to engage in various transactions involving
affiliates of the Managing General Partner of the Partnership, as described
under the captions "Compensation and Fees" at pages 8-12, "Conflicts of
Interest" at pages 12-16 and "Rights, Powers and Duties of General Partners"
at pages A-12 to A-22 of the Partnership Agreement, included as an exhibit to
the Prospectus, which descriptions are hereby incorporated herein by reference
to Exhibit 3-A to Partnership's Report on Form 10-K for December 31, 1992
(File No. 0-15966) dated March 19, 1993. The relationship of the Managing
General Partner (and its directors and officers) to its affiliates is set
forth above in Item 10 above and Exhibit 21 hereto.
<TABLE>
<CAPTION>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) No person or group is known by the Partnership to own beneficially more than 5% of the outstanding Interests of the
Partnership.
(b) The Managing General Partner and its officers and directors own the following Interests of the Partnership:
NAME OF AMOUNT AND NATURE
BENEFICIAL OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
- -------------- ---------- ----------------- --------
<S> <C> <C> <C>
Limited Partnership JMB Realty Corporation 5 Interests (1) Less than 1%
Interests indirectly
Limited Partnership Managing General 5 Interests (1) Less than 1%
Interests Partner and its indirectly
officers and
directors as a
group
<FN>
- --------------
(1) Includes 5 Interests owned by the initial limited partner of the Partnership. The voting and investment power of
which is shared by JMB Realty Corporation and an affiliate.
No officer or director of the Managing General Partner of the Partnership possesses a right to acquire beneficial ownership
of Interests of the Partnership.
(c) There exists no arrangement, known to the Partnership, the operation of which may at a subsequent date result in a
change in control of the Partnership.
/TABLE
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no significant transactions or business relationships with the
Managing General Partner, affiliates or their management other than those
described in Items 10 and 11 above.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
1. Financial Statements (See Index to Financial Statements
filed with this annual report).
2. Exhibits.
3-A. The Prospectus of the Partnership dated July 11,
1984 as supplemented July 24, 1984 and November 26, 1984, as filed with the
Commission pursuant to Rules 424(b) and 424(c), is hereby incorporated herein
by reference. Copies of pages 8-12, 56-58 and A-8 to A-12 are hereby
incorporated herein by reference to Exhibit 3-A to the Partnership's Report
on Form 10-K for December 31, 1992 (File No. 0-15966) dated March 19, 1993.
3-B. Amended and Restated Agreement of Limited
Partnership set forth as Exhibit A to the Prospectus, which agreement is
hereby incorporated herein by reference to Exhibit 3-B to the Partnership's
Report on Form 10-K for December 31, 1992 (File No. 0-15966) dated March 19,
1993.
4-A. Mortgage loan agreement between the Partnership and
Teachers Insurance and Annuity Association dated October 19, 1983 relating to
Riverside Square are hereby incorporated by reference to the properties
prospectus on Form S-11 (File No. 2-90503) dated July 11, 1984.
4-B. Mortgage loan agreement between the Partnership and
Equitable Real Estate Investment Management, Inc. dated February 28, 1989
relating to the Bank of Delaware is hereby incorporated herein by reference to
Exhibit 4-B to the Partnership's Report on Form 10-K for December 31, 1992
(File No. 0-15966) dated March 19, 1993.
4-C. Mortgage loan agreement between San Jose and
Connecticut General Life Insurance Co. dated June 20, 1985 relating to Park
Center Plaza are hereby incorporated by reference to the Partnership's Report
on Form 8-K (File No. 0-15966) dated June 20, 1985.
10-A. Acquisition documents relating to the purchase by
the Partnership of Riverside Square in Hackensack, New Jersey are hereby
incorporated by reference to the Partnership's prospectus on Form S-11 (File
No. 2-90503) dated July 11, 1984.
10-B. Acquisition documents relating to the purchase by
the Partnership of the Bank of Delaware Office Building in Wilmington,
Delaware are hereby incorporated by reference to the Partnership's Report on
Form 8-K (File No. 0-15966) dated December
27, 1984.
10-C. Acquisition documents including the venture
agreement relating to the purchase by the Partnership of Park Center Plaza in
San Jose, California are hereby incorporated by reference to the Partnership's
Report on Form 8-K (File No. 0-15966) dated June 20, 1985.
10-D. Sale documents and exhibits thereto relating to the
Partnership's sale of the Genesee Valley Shopping Center in Flint, Michigan
are hereby incorporated by reference to the Partnership's Report on Form 8-K
(File No. 0-15966) dated June 29, 1990.
21. List of Subsidiaries
24. Powers of Attorney
--------------
Although certain additional long-term debt instruments of
the Registrant have been excluded from Exhibit 4 above, pursuant to Rule
601(b)(4)(iii), the Registrant commits to provide copies of such agreements
to the Securities and Exchange Commissions upon request.
(b) No Reports on Form 8-K were required or filed since the
beginning of the last quarter of the period covered by this report.
No annual report or proxy material for the year 1993 has been sent to the
Partners of the Partnership. An annual report will be sent to the Partners
subsequent to this filing.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act
of 1934, the Partnership has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
JMB INCOME PROPERTIES, LTD. - XI
By: JMB Realty Corporation
Managing General Partner
GAILEN J. HULL
By: Gailen J. Hull
Senior Vice President
Date:March 25, 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 dates indicated.
By: JMB Realty Corporation
Managing General Partner
JUDD D. MALKIN*
By: Judd D. Malkin, Chairman and Director
Date:March 25, 1994
NEIL G. BLUHM*
By: Neil G. Bluhm, President and Director
Date:March 25, 1994
H. RIGEL BARBER*
By: H. Rigel Barber, Chief Executive Officer
Date:March 25, 1994
JEFFREY R. ROSENTHAL*
By: Jeffrey R. Rosenthal, Chief Financial Officer
Principal Financial Officer
Date:March 25, 1994
By: Gailen J. Hull, Senior Vice President
Principal Accounting Officer
Date:March 25, 1994
A. LEE SACKS*
By: A. Lee Sacks, Director
Date:March 25, 1994
By: STUART C. NATHAN*
Stuart C. Nathan, Executive Vice President
and Director
Date:March 25, 1994
*By:GAILEN J. HULL, Pursuant to a Power of Attorney
GAILEN J. HULL
By: Gailen J. Hull, Attorney-in-Fact
Date:March 25, 1994
JMB INCOME PROPERTIES, LTD. - XI
EXHIBIT INDEX
DOCUMENT
INCORPORATED
BY REFERENCE Page
------------ ----
3-A. Pages 8-12, 56-58 and A-8 to
A-12 of the Prospectus dated
July 11, 1984 Yes
3-B. Amended and Restated Agreement
of Limited Partnership Yes
4-A. Mortgage loan agreement
related to Riverside Square Yes
4-B. Mortgage loan agreement
related to Bank of Delaware Yes
4-C. Mortgage loan agreement
related to Park Center
Financial Center Yes
10-A. Acquisition documents
related to Riverside Square Yes
10-B. Acquisition documents
related to Bank of Delaware Yes
10-C. Acquisition documents
related to Park Center Plaza Yes
10-D. Sale documents related
to Genesee Valley Yes
21. List of Subsidiaries No
24. Powers of Attorney
EXHIBIT 21
LIST OF SUBSIDIARIES
The Partnership is a general partner in JMB/San Jose Associates, an
Illinois general partnership which holds title to Park Center Financial Plaza.
The Partnership is a general partner in Royal Executive Park-II, a New York
general partnership which holds title to Royal Executive Park II. Reference
is made to Note 3 of the Notes to Financial Statements filed with this annual
report for a summary description of the terms of such partnership agreements.
The Partnership's interest in the foregoing joint venture partnerships, and
the results of their operations are included in the financial statements of
the Partnership filed with this annual report.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and
directors of JMB Realty Corporation, the managing general partner of JMB
Income Properties, Ltd. - XI, do hereby nominate, constitute and appoint GARY
NICKELE, GAILEN J. HULL, DENNIS M. QUINN or any of them, attorneys and agents
of the undersigned with full power of authority to sign in the name and on
behalf of the undersigned officer or directors a Report on Form 10-K of said
partnership for the fiscal year ended December 31, 1993, and any and all
amendments thereto, hereby ratifying and confirming all that said attorneys
and agents and any of them may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney
the 23rd day of March, 1994.
JUDD D. MALKIN
- -------------- Chairman and Director
Judd D. Malkin
NEIL G. BLUHM
- ------------- President and Director
Neil G. Bluhm
H. RIGEL BARBER
- --------------- Chief Executive Officer
H. Rigel Barber
JEFFREY R. ROSENTHAL
- -------------------- Chief Financial Officer
Jeffrey R. Rosenthal
The undersigned hereby acknowledge and accept such power of authority to
sign, in the name and on behalf of the above named officer and directors, a
Report on Form 10-K of said partnership for the fiscal year ended December 31,
1993, and any and all amendments thereto, the 23rd day of March, 1994.
GARY NICKELE
--------------
Gary Nickele
GAILEN J. HULL
--------------
Gailen J. Hull
DENNIS M. QUINN
----------------
Dennis M. Quinn
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and
directors of JMB Realty Corporation, the managing general partner of JMB
Income Properties, Ltd. - XI, do hereby nominate, constitute and appoint
GARY NICKELE, GAILEN J. HULL, DENNIS M. QUINN or any of them, attorneys and
agents of the undersigned with full power of authority to sign in the name and
on behalf of the undersigned officer or directors a Report on Form 10-K of
said partnership for the fiscal year ended December 31, 1993, and any and all
amendments thereto, hereby ratifying and confirming all that said attorneys
and agents and any of them may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 26th day of January, 1994.
STUART C. NATHAN
_________________________ Executive Vice President and Director of
Stuart C. Nathan General Partner
A. LEE SACKS
_________________________ Director of General Partner
A. Lee Sacks
The undersigned hereby acknowledge and accept such power of authority
to sign, in the name on behalf of the above named officer and directors, a
Report on Form 10-K of said partnership for the fiscal year ended December 31,
1993, and any and all amendments thereto, the 26th day of January, 1994.
GARY NICKELE
______________________
Gary Nickele
GAILEN J. HULL
______________________
Gailen J. Hull
DENNIS M. QUINN
___________________________
Dennis M. Quinn
