SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended September 30, 1995 Commission file #0-15966
JMB INCOME PROPERTIES, LTD. - XI
(Exact name of registrant as specified in its charter)
Illinois 36-3254043
(State of organization) (IRS Employer Identification No.)
900 N. Michigan Ave., Chicago, IL 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312/915-1987
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements. . . . . . . . . . . . . . 3
Item 2. Management's Discussion and
Analysis of Financial Condition and
Results of Operations . . . . . . . . . . . . . 16
PART II OTHER INFORMATION
Item 5. Other Information . . . . . . . . . . . . . . . 21
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . 22
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
SEPTEMBER 30, 1995 AND DECEMBER 31, 1994
(UNAUDITED)
ASSETS
------
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . . $ 6,332,673 7,200,333
Short-term investments (note 1). . . . . . . . . . . . . . . . . . -- 7,530,660
Rents and other receivables. . . . . . . . . . . . . . . . . . . . 1,796,577 1,984,395
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . 130,077 79,621
Escrow deposits (note 2(c)). . . . . . . . . . . . . . . . . . . . 13,532,645 11,508,793
------------ ------------
Total current assets . . . . . . . . . . . . . . . . . . . . 21,791,972 28,303,802
------------ ------------
Investment properties, at cost (notes 2 and 3):
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,796,561 3,796,561
Building and improvements. . . . . . . . . . . . . . . . . . . . . 68,547,732 61,610,179
------------ ------------
72,344,293 65,406,740
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . 14,112,925 12,951,168
------------ ------------
Total investment properties, net of
accumulated depreciation . . . . . . . . . . . . . . . . . 58,231,368 52,455,572
Investment in unconsolidated ventures,
at equity (notes 1, 3 and 5) . . . . . . . . . . . . . . . . . . . 23,395,052 24,512,608
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 877,800 929,683
------------ ------------
$104,296,192 106,201,665
============ ============
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- -----------
Current liabilities:
Bank overdrafts. . . . . . . . . . . . . . . . . . . . . . . . . . $ 524,371 415,003
Current portion of long-term debt. . . . . . . . . . . . . . . . . 484,513 455,199
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . 442,918 485,464
Construction costs payable . . . . . . . . . . . . . . . . . . . . 1,361,979 3,431,926
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . 247,398 249,748
------------ ------------
Total current liabilities. . . . . . . . . . . . . . . . . . 3,061,179 5,037,340
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . 80,171 79,882
Long-term debt, less current portion . . . . . . . . . . . . . . . . 35,069,660 35,436,797
------------ ------------
Commitments and contingencies (notes 1, 2, 3 and 4)
Total liabilities. . . . . . . . . . . . . . . . . . . . . . 38,211,010 40,554,019
Partners' capital accounts (deficits):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net earnings. . . . . . . . . . . . . . . . . . . . . 5,350,291 5,270,362
Cumulative cash distributions. . . . . . . . . . . . . . . . . . (6,631,429) (6,631,429)
------------ ------------
(1,280,138) (1,360,067)
------------ ------------
Limited partners (173,411 interests):
Capital contributions, net of offering costs . . . . . . . . . . 156,493,238 156,493,238
Cumulative net earnings. . . . . . . . . . . . . . . . . . . . . 27,559,102 25,640,796
Cumulative cash distributions. . . . . . . . . . . . . . . . . . (116,687,020) (115,126,321)
------------ ------------
67,365,320 67,007,713
------------ ------------
Total partners' capital accounts (deficits). . . . . . . . . 66,085,182 65,647,646
------------ ------------
$104,296,192 106,201,665
============ ============
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------- --------------------------
1995 1994 1995 1994
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . $ 2,673,035 3,321,514 8,599,987 9,856,633
Interest income. . . . . . . . . . . . . . . 289,890 265,282 940,083 628,064
----------- ---------- ----------- ----------
2,962,925 3,586,796 9,540,070 10,484,697
----------- ---------- ----------- ----------
Expenses:
Mortgage and other interest. . . . . . . . . 742,997 745,126 2,236,091 1,930,148
Depreciation . . . . . . . . . . . . . . . . 389,334 453,947 1,161,757 1,361,840
Property operating expenses. . . . . . . . . 1,788,441 1,949,373 5,811,070 6,570,312
Professional services. . . . . . . . . . . . 7,164 26,551 196,382 282,210
Amortization of deferred expenses. . . . . . 21,172 17,229 63,511 47,195
General and administrative . . . . . . . . . 105,191 49,328 298,476 186,924
----------- ---------- ----------- ----------
3,054,299 3,241,554 9,767,287 10,378,629
----------- ---------- ----------- ----------
Operating earnings (loss). . . . . . . (91,374) 345,242 (227,217) 106,068
Partnership's share of operations of
unconsolidated ventures (note 1) . . . . . . 664,522 663,633 2,225,452 1,955,330
----------- ---------- ----------- ----------
Net operating earnings before
extraordinary item . . . . . . . . . 573,148 1,008,875 1,998,235 2,061,398
Extraordinary items (note 2(c)). . . . . . . . -- (2,206,791) -- (2,206,791)
----------- ---------- ----------- ----------
Net earnings (loss). . . . . . . . . . $ 573,148 (1,197,916) 1,998,235 (145,393)
=========== ========== =========== ==========
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS - CONTINUED
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------- --------------------------
1995 1994 1995 1994
----------- ---------- ----------- ----------
Net earnings per limited
partnership interest
(note 1):
Net operating earnings . . . . . . $ 3.17 5.50 11.06 11.33
Extraordinary items. . . . . . . . -- (12.22) -- (12.22)
----------- ---------- ----------- ----------
Net earnings (loss). . . . . . . $ 3.17 (6.72) 11.06 (.89)
=========== ========== =========== ==========
Cash distributions per
limited partnership
interest . . . . . . . . . . . . . . $ 3.00 3.00 9.00 9.00
=========== ========== =========== ==========
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss). . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,998,235 (145,393)
Items not requiring (providing) cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,161,757 1,361,840
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . 63,511 47,195
Amortization of discounts on long-term debt. . . . . . . . . . . . . -- 101,110
Partnership's share of operations of unconsolidated ventures,
net of distributions . . . . . . . . . . . . . . . . . . . . . . . (132,444) (165,717)
Extraordinary items (note 2(c)). . . . . . . . . . . . . . . . . . . -- 2,206,791
Changes in:
Rents and other receivables. . . . . . . . . . . . . . . . . . . . . 187,818 (204,411)
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . (50,456) 16,865
Escrow deposits (note 2(c)). . . . . . . . . . . . . . . . . . . . . (642,079) (464,302)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . (42,546) (88,597)
Accrued interest payable . . . . . . . . . . . . . . . . . . . . . . (2,350) 633,980
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . 289 12,463
------------ -----------
Net cash provided by operating activities. . . . . . . . . . . . 2,541,735 3,311,824
------------ -----------
Cash flows from investing activities:
Net sales and maturities (purchases)
of short-term investments. . . . . . . . . . . . . . . . . . . . . . 7,530,660 (235,560)
Net escrow for construction related costs (Note 2(c)). . . . . . . . . (1,381,773) --
Additions to investment properties,
including related construction payables. . . . . . . . . . . . . . . (9,007,500) (11,784,806)
Partnership's distributions from
unconsolidated ventures. . . . . . . . . . . . . . . . . . . . . . . 1,250,000 --
Payment of deferred expenses . . . . . . . . . . . . . . . . . . . . . (11,628) (258,170)
------------ -----------
Net cash used in investing activities. . . . . . . . . . . . . . (1,620,241) (12,278,536)
------------ -----------
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS - CONTINUED
1995 1994
------------ -----------
Cash flows from financing activities:
Bank overdrafts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 109,368 --
Cash proceeds from refinancing of long-term
debt (note 2(c)) . . . . . . . . . . . . . . . . . . . . . . . . . . -- 11,102,785
Principal payments on long-term debt . . . . . . . . . . . . . . . . . (337,823) (345,890)
Distributions to limited partners. . . . . . . . . . . . . . . . . . . (1,560,699) (1,560,699)
------------ -----------
Net cash provided by (used in)
financing activities . . . . . . . . . . . . . . . . . . . . . (1,789,154) 9,196,196
------------ -----------
Net increase (decrease) in cash and
cash equivalents . . . . . . . . . . . . . . . . . . . . . . . (867,660) 229,484
Cash and cash equivalents, beginning of year . . . . . . . . . . 7,200,333 267,127
------------ -----------
Cash and cash equivalents, end of period . . . . . . . . . . . . $ 6,332,673 496,611
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . . . . $ 2,238,441 1,190,929
============ ===========
Non-cash investing and financing activities:
Refinancing of long-term debt, note 2(c):
Proceeds from refinancing, net of
refinancing costs. . . . . . . . . . . . . . . . . . . . . . . . $ -- 35,913,859
Retirement of debt, net of discount. . . . . . . . . . . . . . . . -- (12,983,269)
Proceeds escrowed. . . . . . . . . . . . . . . . . . . . . . . . . -- (11,178,642)
Prepayment penalty . . . . . . . . . . . . . . . . . . . . . . . . -- (649,163)
------------ -----------
Cash proceeds from refinancing
of long-term debt. . . . . . . . . . . . . . . . . . . . . . $ -- 11,102,785
============ ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1994
which are included in the Partnership's 1994 Annual Report, as certain
footnote disclosures which would substantially duplicate those contained in
such audited financial statements have been omitted from this report.
(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"). 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 is summarized as follows for the nine months ended
September 30:
1995 1994
----------------------- ----------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
---------- --------- ---------- ---------
Net earnings
(loss). . . . . . $1,998,235 1,116,333 (145,393) (38,015)
Net earnings
(loss)
per limited
partnership
interest. . . . . $ 11.06 6.18 (.89) (.21)
========== ========= ======== =======
The net earnings (loss) per limited partnership interest is based upon
the number of limited partnership interests outstanding at the end of each
period (173,411). Deficit capital accounts will result, through the
duration of the Partnership, in net gain for financial reporting and income
tax purposes.
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
($6,332,673 and $7,200,333 at September 30, 1995 and December 31, 1994,
respectively) as cash equivalents with any remaining amounts (generally
with original maturities of one year or less) reflected as short-term
investments being held to maturity.
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
In response to the uncertainties relating to the San Jose joint
venture's ability to recover the net carrying value of certain buildings
within the Park Center Plaza investment property through future operations
or sale, San Jose, recorded a provision for value impairment at September
30, 1994 on the 100-130 Park Center Plaza buildings and certain parking
areas, and the 170 Almaden building of $944,335, in the aggregate, to
reduce the net carrying values to the then outstanding balances of related
non-recourse debt. Reference is made to note 3(b) for further discussion
of the current status of this investment property.
Due to uncertainty about the ability to recover the net carrying value
of the property through future operations and sale, Royal Executive has
made a provision for value impairment of $25,378,893. Such provision at
September 30, 1994 was recorded to reduce the net carrying value of the
property to the then estimated valuation. The provision for value
impairment has been allocated fully to the venture partner to reflect their
subordination to the Partnership in venture distributions with regard to
future operation and sale or financing proceeds as discussed in note 3(c).
During March 1995, Statement of Financial Accounting Standards No. 121
("SFAS 121") "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of" was issued. SFAS 121, when effective,
will require that the Partnership record an impairment loss on its long-
lived assets to be held and used (primarily its consolidated investments in
land, buildings and improvements) whenever their carrying value cannot be
fully recovered through estimated undiscounted future cash flows from
operations and sale. The amount of the impairment loss to be recognized
would be the difference between the long-lived asset's carrying value and
the asset's estimated fair value. Any long-lived assets identified "to be
disposed of" would no longer be depreciated but adjustments for impairment
loss would be made in each period as necessary to report those assets at
the lower of historical cost and fair value less costs to sell. In certain
situations, such estimated fair value could be less than the existing non-
recourse debt which is secured by the property.
The amount of any impairment loss recognized by the Partnership under
its current accounting policy has been limited to the excess, if any, of
the property's carrying value over the outstanding balance of the
property's non-recourse indebtedness. An impairment loss under SFAS 121
would be determined without regard to the nature or the balance of such
non-recourse indebtedness. Upon the disposition of a property for which an
impairment loss has been recognized under SFAS 121, the Partnership would
recognize, at a minimum, a net gain for financial reporting purposes to the
extent of any excess of the then outstanding balance of the property's non-
recourse indebtedness over the then carrying value of the property,
including the effect of any reduction for impairment loss under SFAS 121.
The Partnership expects to adopt SFAS 121 no later than the first
quarter of 1996. Although the Partnership has not fully completed its
assessment of the full impact of adopting SFAS 121, it is not anticipated
that any significant additional provisions for value impairment would be
required for the property owned by the Partnership or by the Partnership's
unconsolidated ventures, in the first period of implementation of SFAS 121.
In addition, upon the disposition of an impaired property, the Partnership
would generally recognize more net gain for financial reporting purposes
under SFAS 121 than it would have under the Partnership's current
impairment policy, without regard to the amount, if any, of cash proceeds
received by the Partnership in connection with the disposition. Although
implementation of this new accounting statement could significantly impact
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
the Partnership's reported earnings in a period in which an impairment is
recorded, there would be no impact on cash flows. Further, any such
impairment loss would not be recognized for Federal income tax purposes.
No provision for State or Federal income taxes has been made as the
liability for such taxes is that of the investors rather than the
Partnership. However, in certain circumstances, the Partnership has been
required under applicable law to remit directly to the tax authorities
amounts representing withholding from distributions paid to partners.
(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.
In November 1994, the lender realized upon its security interest and took
title to the Bank of Delaware building via a deed in lieu of foreclosure
(note 2(b)). All of the remaining properties were in operation at
September 30, 1995.
(b) Bank of Delaware - office building
The Partnership assigned title to the property in November 1994 to the
mortgage lender as described below.
Due to the competitive nature of this marketplace, the property had
been operating at a cash deficit and as a result, the Partnership had
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 had suspended payment of debt service to the
lender. 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 had
been abated or encapsulated in approximately 62% of the building's space.
The Partnership did not believe that any remaining asbestos in the building
presented a hazard and did not believe that such asbestos would have been
required to be removed. The Partnership estimated that the cost of
asbestos abatement in a portion of the building that could be incurred
under certain circumstances in the future would have been approximately
$800,000. In November 1994, due to the Partnership's default in payment of
debt service, the mortgage lender concluded proceedings to realize upon its
mortgage security interest represented by the land, building, and related
improvements of the property via a deed in lieu of foreclosure. As a
result of the disposition of the property, the Partnership recognized a
gain in 1994 for financial reporting purposes of $447,650 and a loss for
federal income tax purposes of $4,756,937 with no corresponding
distributable proceeds. In conjunction with the transfer of title, the
Partnership paid the mortgage lender a sum of approximately $681,000 which
included the net cash flow of the property since the suspension of debt
service and an indemnification release fee for which the mortgage lender
released the Partnership from all liabilities respecting the property,
including those related to asbestos.
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(c) Riverside Square Mall
During the third quarter of 1994, the Partnership finalized a
refinancing of the first mortgage loan with a new loan in the amount of
$36,000,000 which resulted in net proceeds of approximately $22,300,000.
Of such proceeds, approximately $11,200,000 was escrowed by the lender
pursuant to the loan agreement and is being released as required, including
interest, to fund certain costs of the renovation and restoration as
discussed below. Approximately $3,618,000 has been released as of
September 30 1995 and approximately $826,000 has been released subsequent
to September 30, 1995. The remaining $11,100,000 of loan proceeds were
used to replenish the Partnership's working capital for amounts paid to or
escrowed on behalf of Saks and Bloomingdale's for their store renovations
as discussed below. Such letter of credit was released and the funds were
refunded to the Partnership in September 1994 in connection with the loan
funding. Additionally, the Partnership recorded, in 1994, an extraordinary
loss on refinancing of $2,206,791 representing the write-off of unamortized
discount on the original mortgage loan of $1,557,628 and a $649,163
prepayment penalty.
The Partnership has substantially completed its renovation of
Riverside Square Mall and is continuing to remerchandise the center. The
Partnership expects the renovation to be fully complete by the end of 1995.
In connection with the renovation, the Partnership, in early 1994, signed
15-year operating covenant extensions with both Saks and Bloomingdale's,
the latter of which owns its own store. In return for the additional 15-
year commitment to the center, the Partnership reimbursed Saks for its
store renovation in the amount of $6,100,000; and in August 1995, the
Partnership escrowed $5,000,000 (none of which has been released as of
September 30, 1995) for Bloomingdale's store renovation, which has
commenced and will be substantially underway in early 1996. Interest
earned on the escrowed funds will be remitted to the Partnership upon
termination of the escrow account. In connection with the payment to Saks,
the Partnership also acquired title to the Saks building which had
previously been owned by Saks. The Partnership is also required to
complete the renovation of the mall, with an additional estimated cost of
approximately $12,000,000. The Partnership continues to consider expanding
the mall at some point in the future as well. Furthermore, the Partnership
has commenced a $7,500,000 restoration of the parking deck. This
restoration should be completed by the end of 1995.
(3) VENTURE AGREEMENTS
(a) General
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. 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) consisting of ten office buildings, a parking and retail
building (185 Park Avenue) and two parking garage structures.
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
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 and JMB-XII in their respective
50% ownership percentages.
During August 1994, San Jose received notification from the
Redevelopment Agency of the City of San Jose of its offer to purchase one
of the parking garage structures in the office building complex, for an
approved Agency project, for $4,090,000. The price offered is deemed by
the Agency to be just compensation in compliance with applicable State and
Federal laws. During 1995, the Agency filed a condemnation action in court
to secure their position in obtaining the garage pursuant to the laws of
eminent domain. San Jose and the Agency have been able to agree, in
principle, upon mutually acceptable terms for the transfer of the garage.
Under the agreement, San Jose anticipates receiving replacement parking
spaces for its tenants in a near-by city-owned parking structure for an
extended period of time in addition to the aforementioned purchase price of
$4,090,000. However, San Jose still must negotiate terms to an acceptable
contract and there can be no assurance that such a contract will ultimately
be finalized. If such a contract is executed on the proposed terms, San
Jose anticipates the transfer of the garage to occur in March 1996. Upon
such a transfer, San Jose would recognize a gain for financial reporting
and Federal income tax purposes.
In October 1995, San Jose elected to repay the mortgage obligations
(originally scheduled to mature in September 2000) securing the portion of
the complex on which the 100-130 Buildings are located as well as a portion
of the garage. The outstanding principal balances, at the time of
repayment, were $2,418,722 of which the Partnership's share was $1,209,361.
After reviewing and analyzing San Jose's potential options with regard to
its investment in the 100-130 Park Center Plaza portion of the complex, San
Jose determined that it was in the best interest of the venture to repay
the mortgage obligations secured by this portion of the complex. Tenants
occupying approximately 88,000 square feet (approximately 20% of the
buildings) of the Park Center Plaza investment property have leases that
expire in 1996, for which there can be no assurance of renewals. New
leases will likely require expenditures for lease commissions and tenant
improvements prior to tenant occupancy which would result in a decrease in
cash flow from operations over the near-term. San Jose notified the
tenants in and invitees to the Park Center Plaza 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, San Jose has worked with consultants to
analyze ways in which such a potential life safety hazard could be reduced.
In order to reduce any potential life safety hazard that may occur during
unusually intense earthquake conditions, San Jose is undergoing a voluntary
upgrade to the 130 Park Center Plaza building and the parking garage below
the 100-130 buildings for seismic purposes. San Jose estimates the cost of
the structural upgrade to be $1,200,000 of which the Partnership's share is
$600,000. Such work is scheduled to begin in November 1995 and should be
completed by mid 1996.
San Jose made provisions for value impairment on the 100-130 Park
Center Plaza buildings, certain parking areas and the 170 Almaden building
of $944,335 in the aggregate. Such provisions at September 30, 1994 were
recorded to reduce the net carrying values of these buildings to the then
outstanding balances of the related non-recourse financing.
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(c) Royal Executive
Commencing January 1, 1989 and 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. The Partnership is entitled to
any deficiency in its preferred annual return plus interest at 9% on a
cumulative basis as an annual priority distribution from future available
operating cash flow before any cash flow distributions are made to the
venture partner. The cumulative deficiency in the preferred annual return
was approximately $5,000,000 and $4,700,000 at September 30, 1995 and
December 31, 1994, respectively. The Royal Executive venture agreement
further provides that distributions of net sale or financing proceeds shall
be allocated first to the Partnership to the extent of the cumulative
deficiency in the preferred annual return plus its initial capital
investment in the venture.
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.
Due to uncertainty about the ability to recover the net carrying value
of the property through future operations and sale, Royal Executive has
made a provision for value impairment of $25,378,893. Such provision at
September 30, 1994 was recorded to reduce the net carrying value of the
property to its then estimated valuation. The provision for value
impairment has been allocated fully to the venture partner to reflect its
subordination to the Partnership in venture distributions with regard to
future operation and sale or financing proceeds as discussed above.
(4) TRANSACTIONS WITH AFFILIATES
Fees, commissions and other expenses required to be paid by the
Partnership to the General Partners and their affiliates as of September
30, 1995 and for the nine months ended September 30, 1995 and 1994 are as
follows:
Unpaid at
September 30,
1995 1994 1995
-------- ------- -------------
Property management
and leasing fees. . . . . . $186,986 207,543 --
Insurance commissions. . . . 44,276 34,130 --
Reimbursement (at cost)
for out-of-pocket
expenses. . . . . . . . . . 6,061 4,393 --
-------- ------- -----
$237,323 246,066 --
======== ======= =====
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONCLUDED
The Managing General Partner and its affiliates are entitled to
reimbursement for salaries and direct expenses of officers and employees of
the Managing General Partner and its affiliates relating to the
administration of the Partnership and the operation of the Partnership's
investment properties. The amount of such salaries and direct expenses
aggregated $141,303 and $138,231 for the nine months ended September 30,
1995 and the twelve months ended December 31, 1994, respectively, all of
which has been paid as of September 30, 1995.
The General Partners have deferred receipt of certain of their
distributions of net cash flow of the Partnership. The amount of such
deferred distributions was approximately $1,497,000 as of September 30,
1995. The amount is being deferred in accordance with the subordination
requirements of the Partnership Agreement.
An affiliate of the General Partners of the Partnership manages
Riverside Square Mall for a fee equal to 4% of the fixed and percentage
rents of the shopping center plus leasing and operating covenant
commissions, subject to deferral if in excess of an aggregate annual
maximum amount of 6% of the gross receipts of the property. In this
regard, an affiliate of the General Partner deferred $300,000 in 1994 of
leasing fees at Riverside Square Mall pursuant to the management agreement.
As of September 30, 1995, $67,000 has been paid. These amounts currently
payable do not bear interest and may be paid in future periods.
The Managing General Partner of the Partnership has determined to use
independent third parties to perform certain of these administrative
services beginning in the fourth quarter of 1995. Use of such third
parties is not expected to have a material effect on the operations of the
Partnership.
(5) UNCONSOLIDATED VENTURES - SUMMARY INFORMATION
The summary income statement information for the JMB/San Jose
Associates and Royal Executive Park II for the nine months ended September
30, 1995 and 1994 is as follows:
1995 1994
----------- -----------
Total income. . . . . . . . . $11,742,992 8,567,245
=========== ===========
Operating income (loss) . . . $ 2,467,681 (23,100,564)
=========== ===========
Net earnings to the
Partnership . . . . . . . . $ 2,225,452 1,955,330
=========== ===========
(6) ADJUSTMENTS
In the opinion of the Managing General Partner, all adjustments (con-
sisting solely of normal recurring adjustments) necessary for a fair
presentation have been made to the accompanying figures as of September 30,
1995 and for the three and nine months ended September 30, 1995 and 1994.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
All references to "Notes" are to Notes to Financial Statements
contained in this report.
At September 30, 1995, the Partnership had cash and cash equivalents
of approximately $6,333,000. Such funds may be utilized for distributions
to partners and for working capital requirements including operating
deficits, re-leasing costs of vacant space, certain capital improvements
currently being incurred at the Riverside Square Mall and repayment of debt
at Park Center Plaza of which the Partnership's share was $1,209,361 (as
discussed below and in note 3(b)). Bank overdrafts of approximately
$524,000 as of September 30, 1995 have been subsequently repaid as of
October 1995. Additionally, funds may be utilized for the Partnership's
share of re-leasing costs and capital improvements at certain portions of
the Park Center Financial Plaza. The Partnership and its consolidated
ventures have currently budgeted in 1995 approximately $1,333,000 for
tenant improvements and other capital expenditures excluding amounts
budgeted for the renovation at Riverside Square Mall as discussed below.
The Partnership's share of such items and its share of such similar items
for its unconsolidated ventures for 1995 is currently budgeted to be
approximately $2,035,000. Actual amounts expended in 1995 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 Note 4. 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 and/or
refinancing of such investments. In such regard, reference is made to the
Partnership's property specific discussions below. The Partnership's and
its ventures' mortgage obligations are all non-recourse. 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.
During August 1994, San Jose received notification from the
Redevelopment Agency of the City of San Jose of its offer to purchase one
of the parking garage structures in the office building complex, for an
approved Agency project for $4,090,000. The price offered is deemed by the
Agency to be just compensation in compliance with applicable State and
Federal laws. During 1995, the Agency filed a condemnation action in court
to secure their position in obtaining the garage pursuant to the laws of
eminent domain. San Jose and the Agency have been able to agree, in
principle, upon mutually acceptable terms for the transfer of the garage.
Under the agreement, San Jose anticipates receiving replacement parking
spaces for its tenants in a near-by city-owned parking structure for an
extended period of time in addition to the aforementioned purchase price of
$4,090,000. However, San Jose still must negotiate terms to an acceptable
contract and there can be no assurance that such a contract will ultimately
be finalized. If such a contract is executed on the proposed terms, San
Jose anticipates the transfer of the garage to occur in March 1996. Upon
such a transfer, San Jose would recognize a gain for financial reporting
and Federal income tax purposes.
In October 1995, San Jose elected to repay its mortgage obligations
(originally scheduled to mature in September 2000) securing the portion of
the complex on which the 100-130 Buildings are located as well as a portion
of the garage. The outstanding principal balances, at the time of
repayment, were $2,418,722 of which the Partnership's share was $1,209,361.
Reference is made to Notes 3(b). After reviewing and analyzing San Jose's
potential options with regard to its investment in the 100-130 Park Center
Plaza portion of the complex, San Jose determined that it was in the best
interest of the venture to repay the mortgage obligations secured by this
portion of the complex. Tenants occupying approximately 88,000 square feet
(approximately 20% of the buildings) of the Park Center Plaza investment
property have leases that expire in 1996, for which there can be no
assurance of renewals. In addition, new leases will likely require
expenditures for lease commissions and tenant improvements prior to tenant
occupancy. These anticipated costs upon re-leasing will result in a
decrease in cash flow from operations over the near term. San Jose
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, San Jose has worked with consultants to
analyze ways in which such a potential life safety hazard could be reduced.
In order to reduce any potential life safety hazard that may occur during
unusually intense earthquake conditions, San Jose is undergoing a voluntary
upgrade to the 130 Park Center Plaza building and the parking garage below
the 100-130 buildings for seismic purposes. San Jose estimates the cost of
the structural upgrade to be $1,200,000 of which the Partnership's share is
$600,000. Such work is scheduled to begin in November 1995 and should be
completed by mid 1996.
San Jose made provisions for value impairment on the 100-130 Park
Center Plaza buildings, certain parking areas and the 170 Almaden building
of $944,335 in the aggregate. Such provisions at September 30, 1994 were
recorded to reduce the net carrying values of these buildings to the then
outstanding balances of the related non-recourse financing.
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. In an effort to improve the
property's competitive position, the Partnership is completing a renovation
of the mall, with an estimated cost of approximately $12,000,000 which has
been substantially completed as of September 30, 1995. The Partnership
also continues to consider expanding the mall at some point in the future
as well. Furthermore, the Partnership has commenced a $7,500,000
restoration of the parking deck. The renovation of the mall and the
restoration of the parking deck should be fully completed by the end of
1995. In addition, the Partnership is continuing to remerchandise the
center. In connection with the renovation, the Partnership, in early 1994,
signed 15-year operating covenant extensions with both Saks and
Bloomingdale's, the latter of which owns its own store. In return for the
additional 15-year commitment to the center, the Partnership reimbursed
Saks in 1994 for its recent store renovation in the amount of $6,100,000;
and in August 1995, the Partnership escrowed $5,000,000 (none of which has
been released as of September 30, 1995) for Bloomingdale's store
renovation, which has commenced and will be substantially underway in early
1996. Interest earned on the escrowed funds will be remitted to the
Partnership upon termination of the escrow account. In connection with the
payment to Saks, the Partnership also acquired title to the Saks building
which had previously been owned by Saks. During the third quarter of 1994,
the Partnership finalized a refinancing of the existing mortgage loan with
a new loan in the amount of $36,000,000. The new loan has an initial
interest rate of 8.35% per annum, requires monthly principal and interest
payments of $286,252 beginning September 1, 1994, and matures December 1,
2006, when the unpaid principal and interest balance is due. The
refinancing resulted in net proceeds of approximately $22,300,000 (after
retirement of the previous mortgage loan with an outstanding balance of
approximately $13,000,000, and payment of a prepayment penalty of
approximately $650,000 as discussed in Note 2(c)). Of such proceeds,
approximately $11,200,000 was escrowed by the lender pursuant to the loan
agreement and is being released as required (approximately $3,618,000
released as of September 30, 1995), including interest earned, to fund
certain costs of the renovation and restoration as discussed above. The
remaining $11,100,000 of loan proceeds were used to replenish the
Partnership's working capital for amounts paid to or escrowed on behalf of
Saks and Bloomingdale's for their store renovations as discussed above.
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 was in need of a renovation has 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, a tenant occupying
approximately 28,000 square feet or 12% of the building, filed for
protection pursuant to a Chapter 11 bankruptcy petition. The Partnership
bought the rights to the Conran's lease for $475,000 through the bankruptcy
auction and is in negotiations with a potential replacement tenant,
however, there can be no assurance that these negotiations will lead to an
executed lease agreement.
In November 1994, due to the Partnership's default in payment of debt
service, the mortgage lender concluded proceedings to realize upon its
mortgage security interest represented by the land, building, and related
improvements of the Bank of Delaware investment property via a deed in lieu
of foreclosure. As a result of the disposition of the property, the
Partnership recognized a gain in 1994 for financial reporting purposes of
$447,650 and a loss for Federal income tax purposes of $4,756,937 with no
corresponding distributable proceeds. The property had been operating 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 estimated 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,
would have been substantial. The Partnership had 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 had suspended payment of debt service to the lender.
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 had been abated or
encapsulated in approximately 62% of the building's space. The Partnership
did not believe that any remaining asbestos in the building presented a
hazard and did not believe that such asbestos was required to be removed.
The Partnership estimated that the cost of asbestos abatement in a portion
of the building that could be incurred under certain circumstances in the
future would have been approximately $800,000. In conjunction with the
transfer of title, the Partnership paid the mortgage lender a sum of
approximately $681,000 which included the net cash flow of the property
since the suspension of debt service and an indemnification release fee for
which the mortgage lender released the Partnership from all liabilities
respecting the property, including those related to asbestos.
The Royal Executive Park II property produced sufficient cash flow to
fund the Partnership's preferred level of return for 1994 and in addition,
recovered a portion of the cumulative shortfall in this return since 1989.
In early 1994, JWP (a tenant who had leased 78,000 square feet) filed for
protection pursuant to a Chapter 11 bankruptcy petition and formally
rejected its lease and vacated the remainder of its space in January 1995.
However, all of this space has been re-leased to JWP's subtenants who have
become direct tenants. As a result, the Partnership expects to receive its
preferred level of return for 1995 in addition to a partial recovery of its
cumulative shortfall in this return since 1989.
Due to uncertainty about the ability to recover the net carrying value
of the property through future operations and sale, Royal Executive has
made a provision for value impairment of $25,378,893. Such provision at
September 30, 1994 was recorded to reduce the net carrying value of the
property to the then estimated valuation. The provision for value
impairment has been allocated fully to the venture partner to reflect their
subordination to the Partnership in distributions with regard to future
operation and sale or financing proceeds as discussed in Note 3(c).
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.
While the real estate markets are recuperating, highly competitive
market conditions continue to exist in most locations. The Partnership's
approach has been to aggressively and creatively manage the Partnership's
real estate assets to attract and retain tenants. Net effective rents to
the landlord from renewal tenants are much more favorable than lease terms
which can be negotiated with new tenants. However, the Partnership's
capital resources must also be preserved and allocated in such a manner as
to maximize the total value of the portfolio. As a result of the real
estate market conditions discussed above, the Partnership continues to
conserve its working capital. All expenditures are carefully analyzed and
certain capital projects are deferred when appropriate. In an effort to
reduce Partnership operating expenses, the Partnership has elected to make
semi-annual rather than quarterly distributions of operating cash flow
beginning in November 1995. The Partnership has also sought or is seeking
additional loan modifications where appropriate. By conserving working
capital, the Partnership will be in a better position to meet the future
needs of its properties since outside sources of capital may be limited.
Due to these factors, the Partnership has held certain of its investment
properties longer than originally anticipated in an effort to maximize the
return to the Limited Partners. After reviewing the remaining properties
and their competitive marketplace, the General Partners of the Partnership
expect to be able to liquidate the remaining assets as quickly as
practicable. Therefore, the affairs of the Partnership are expected to be
wound up no later than 1999 (sooner if the properties are sold in the
nearer term), barring unforeseen economic developments.
RESULTS OF OPERATIONS
The aggregate decrease in cash and cash equivalents (net of bank
overdrafts) and short-term investments at September 30, 1995 as compared to
December 31, 1994 is primarily due to approximately $3,300,000 (net of the
related lender escrows) utilized for renovation work and $5,000,000
escrowed for Bloomingdale's tenant improvements at Riverside Square Mall as
described above and in Note 2(c). The decrease in short-term investments
at September 30, 1995 as compared to December 31, 1994 is primarily due to
all of the Partnership's investments in U.S. Government obligations being
classified as cash equivalents at September 30, 1995. Reference is made to
Note 1.
The decrease in rents and other receivables as of September 30, 1995
as compared to December 31, 1994 is primarily due to a decrease in interest
receivable due primarily to the lower average balance in short-term
investments. Reference is made to Note 1.
The increase in prepaid expenses as of September 30, 1995 as compared
to December 31, 1994 is primarily due to the timing of the payment of
insurance premiums at Riverside Square Mall.
The increase in escrow deposits as of September 30, 1995 as compared
to December 31, 1994 is primarily due to $5,000,000 being escrowed for
Bloomingdales tenant improvements related to its renovation and interest
earned on escrowed funds, partially offset by approximately $3,618,000 of
previously escrowed deposits utilized in 1995 to fund renovation costs at
Riverside Square Mall. Reference is made to Note 2(c).
The increase in building and improvements as of September 30, 1995 as
compared to December 31, 1994 is primarily due to renovation work and
tenant improvement work of approximately $6,900,000 incurred in 1995 at
Riverside Square Mall as discussed above and in Note 2(c).
The decrease in construction costs payable as of September 30, 1995 as
compared to December 31, 1994 is primarily due to the timing of payments of
renovation costs at Riverside Square Mall, as discussed above and in Note
2(c).
The decrease in rental income, property operating expenses and
depreciation for the three and nine months ended September 30, 1995 as
compared to the three and nine months ended September 30, 1994 is primarily
due to the lender taking title to the Bank of Delaware building via a deed
in lieu of foreclosure in November 1994. See Note 2(b). The decrease in
rental income for the nine months ended September 30, 1995 as compared to
the nine months ended September 30, 1994 is partially offset by the receipt
of a lease termination fee of approximately $300,000 in April 1995 at
Riverside Square Mall.
The increase in interest income for the three and nine months ended
September 30, 1995 as compared to the three and nine months ended September
30, 1994 is primarily due to investments in U.S. Government obligations
earning a higher effective yield in 1995, and due to interest earned of
approximately $450,000 on escrowed funds and the net loan proceeds related
to the refinancing at Riverside Square Mall received September 1, 1994 as
more fully discussed in Note 2(c).
The increase in mortgage and other interest for the nine months ended
September 30, 1995 as compared to the nine months ended September 30, 1994
is primarily due to the third quarter 1994 refinancing of the debt at
Riverside Square Mall. Reference is made to Note 2(c).
The increase in amortization of deferred expenses for the three and
nine months ended September 30, 1995 as compared to the three and nine
months ended September 30, 1994 is primarily due to the amortization of
certain capitalized expenses relating to the third quarter 1994 refinancing
of the debt at Riverside Square Mall as more fully discussed in Note 2(c).
The increase in general and administrative expenses for the three and
nine months ended September 30, 1995 as compared to the three and nine
months ended September 30, 1994 is primarily due to an increase in
reimbursable costs to affiliates of the General Partners in 1995 and the
recognition of certain additional prior year reimbursable costs to such
affiliates. Reference is made to Note 4.
The Partnership's share of operations of unconsolidated ventures
increased for the nine months ended September 30, 1995 as compared to the
nine months ended September 30, 1994 primarily due to an increase in rental
income at the Royal Executive investment property due to higher occupancy
levels and a decrease of real estate tax expenses (partially recoverable
from tenants) at the San Jose investment properties.
The $2,206,791 extraordinary item for the three and nine months ended
September 30, 1994 was due to the refinancing of long-term debt at
Riverside Square Mall. See Note 2(c).
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
OCCUPANCY
The following is a listing of approximate occupancy levels by quarter for the Partnership's investment
properties.
<CAPTION>
1994 1995
------------------------------------- ------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Park Center Financial Plaza
San Jose, California . . . . 83% 83% 83% 84% 74% 77% 76%
2. Riverside Square Mall
Hackensack, New Jersey . . . 86% 76% 73% 81% 81% 80% 80%
3. Bank of Delaware Building
Wilmington, Delaware . . . . 61% 61% 61% N/A N/A N/A N/A
4. Royal Executive Park II
Rye Brook, New York. . . . . 92% 93% 89% 97% 97% 97% 97%
<FN>
An "N/A" indicates that the property was not owned by the Partnership at the end of the quarter. Reference
is made to Note 2(b) for a description of the disposition of this investment property.
</TABLE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits.
4-A. Mortgage loan agreement, Mortgage and Security
Agreement, Secured Promissory Note B, Secured Promissory Note A and
Assignment of Leases and Rents between the Partnership and Principal Mutual
Life Insurance Company dated August 30, 1994 are hereby incorporated herein
by reference to the Partnership's Report on Form 10-K for December 31, 1994
(File No. 0-15966) dated March 27, 1995.
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 for December 31, 1992
on Form 10-K (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.
4-D. Mortgage loan agreement, Amended and Restated
Deed of Trust, Security Agreement with assignment of Rents and Fixture
Filing and Real Estate tax escrow and Security Agreement between San Jose
and Connecticut General Life Insurance Co. dated November 30, 1994 are
hereby incorporated by reference to the Partnership's Report on Form 8-K
(File No. 0-15966) dated November 15, 1994.
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. Deed in Lieu of Foreclosure Agreement and
Memorandum of Mutual Releases dated November 15, 1994 between Three Hundred
Delaware Avenue Associates, L.P. and EML Associates are hereby incorporated
by reference to the Partnership's Report on Form 8-K (File No. 0-15966)
dated November 15, 1994.
27. Financial Data Schedule
--------------
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) The following reports on Form 8-K were filed since the
beginning of the last quarter of the period covered by this report
(i) None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JMB INCOME PROPERTIES, LTD. - XI
BY: JMB Realty Corporation
(Managing General Partner)
By: GAILEN J. HULL
Gailen J. Hull, Senior Vice President
Date: November 9, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.
GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date: November 9, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<CIK> 0000744437
<NAME> JMB INCOME PROPERTIES, LTD. - XI
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 6,332,673
<SECURITIES> 0
<RECEIVABLES> 15,459,299
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 21,791,972
<PP&E> 72,344,293
<DEPRECIATION> 14,112,925
<TOTAL-ASSETS> 104,296,192
<CURRENT-LIABILITIES> 3,061,179
<BONDS> 35,069,660
<COMMON> 0
0
0
<OTHER-SE> 66,085,182
<TOTAL-LIABILITY-AND-EQUITY> 104,296,192
<SALES> 8,599,987
<TOTAL-REVENUES> 9,540,070
<CGS> 0
<TOTAL-COSTS> 7,036,338
<OTHER-EXPENSES> 494,858
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,236,091
<INCOME-PRETAX> 227,217
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,998,235
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,998,235
<EPS-PRIMARY> 11.06
<EPS-DILUTED> 11.06
</TABLE>
