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, 1997 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 [ ]
<PAGE>
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . 3
Item 2. Management's Discussion and
Analysis of Financial Condition and
Results of Operations. . . . . . . . . . . . . . . 12
PART II OTHER INFORMATION
Item 5. Other Information. . . . . . . . . . . . . . . . . 14
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . 15
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(UNAUDITED)
ASSETS
------
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . $ 13,762,937 11,548,195
Rents and other receivables . . . . . . . . . . . . . . . . . . . . . 2,107,749 2,010,246
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 144,388 91,506
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,120,808 786,706
------------ ------------
Total current assets. . . . . . . . . . . . . . . . . . . . . . 17,135,882 14,436,653
------------ ------------
Investment property:
Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 3,796,561
Building and improvements . . . . . . . . . . . . . . . . . . . . . . -- 75,476,781
------------ ------------
-- 79,273,342
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . -- 17,321,842
------------ ------------
Property held for investment, net of
accumulated depreciation. . . . . . . . . . . . . . . . . . . -- 61,951,500
Property held for sale or disposition . . . . . . . . . . . . . . . . 60,388,358 --
Investment in unconsolidated ventures, at equity. . . . . . . . . . . . 21,640,355 20,367,302
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,004,847 5,350,705
------------ ------------
$104,169,442 102,106,160
============ ============
<PAGE>
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- -----------
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . . $ 572,244 537,623
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . 421,682 774,790
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 236,381 243,139
------------ ------------
Total current liabilities . . . . . . . . . . . . . . . . . . . 1,230,307 1,555,552
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . 78,742 101,539
Long-term debt, less current portion. . . . . . . . . . . . . . . . . . 33,970,862 34,404,477
------------ ------------
Commitments and contingencies
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . 35,279,911 36,061,568
Partners' capital accounts (deficits):
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . . 5,586,562 5,431,146
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (6,631,429) (6,631,429)
------------ ------------
(1,043,867) (1,199,283)
------------ ------------
Limited partners (173,411 interests):
Capital contributions, net of offering costs. . . . . . . . . . . . 156,493,238 156,493,238
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . . 34,289,044 30,559,055
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (120,848,884) (119,808,418)
------------ ------------
69,933,398 67,243,875
------------ ------------
Total partners' capital accounts (deficits) . . . . . . . . . . 68,889,531 66,044,592
------------ ------------
$104,169,442 102,106,160
============ ============
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------- --------------------------
1997 1996 1997 1996
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . . . $ 3,069,812 3,165,367 9,758,302 8,754,101
Interest income . . . . . . . . . . . . . . . . 164,522 174,978 489,378 558,143
----------- ---------- ---------- ----------
3,234,334 3,340,345 10,247,680 9,312,244
----------- ---------- ---------- ----------
Expenses:
Mortgage and other interest . . . . . . . . . . 718,055 732,952 2,170,151 2,206,574
Depreciation. . . . . . . . . . . . . . . . . . 631,681 623,342 1,892,003 1,773,510
Property operating expenses . . . . . . . . . . 1,909,720 1,948,644 5,684,203 6,121,399
Professional services . . . . . . . . . . . . . 3,401 47,261 116,229 196,750
Amortization of deferred expenses . . . . . . . 115,286 114,527 345,858 343,155
General and administrative. . . . . . . . . . . 89,035 82,982 344,884 296,587
----------- ---------- ---------- ----------
3,467,178 3,549,708 10,553,328 10,937,975
----------- ---------- ---------- ----------
Operating earnings (loss) . . . . . . . . (232,844) (209,363) (305,648) (1,625,731)
Partnership's share of operations of
unconsolidated ventures . . . . . . . . . . . . 1,333,024 870,306 4,191,053 2,805,923
----------- ---------- ---------- ----------
Net operating earnings (loss) . . . . . . 1,100,180 660,943 3,885,405 1,180,192
Partnership's share of gain on sale
of investment properties
from unconsolidated venture . . . . . . . . . . -- -- -- 1,412,610
----------- ---------- ---------- ----------
Net earnings (loss) . . . . . . . . . . . $ 1,100,180 660,943 3,885,405 2,592,802
=========== ========== ========== ==========
<PAGE>
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS - CONTINUED
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------- --------------------------
1997 1996 1997 1996
----------- ---------- ----------- ----------
Net earnings (loss) per limited
partnership interest:
Net operating earnings. . . . . . . . . $ 6.09 3.66 21.51 6.53
Partnership's share of gain
on sale of investment properties
from unconsolidated venture . . . . . -- -- -- 8.06
----------- ---------- ---------- ----------
Net earnings (loss) . . . . . . . . $ 6.09 3.66 21.51 14.59
=========== ========== ========== ==========
Cash distributions per
limited partnership
interest. . . . . . . . . . . . . . . . $ -- -- 6.00 9.00
=========== ========== ========== ==========
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
1997 1996
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,885,405 2,592,802
Items not requiring (providing) cash or cash equivalents:
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,892,003 1,773,510
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . . 345,858 343,155
Partnership's share of operations of unconsolidated ventures,
net of distributions. . . . . . . . . . . . . . . . . . . . . . . . . (1,273,053) 431,197
Partnership's share of gain on sale of investment properties
from unconsolidated venture . . . . . . . . . . . . . . . . . . . . . -- (1,412,610)
Changes in:
Rents and other receivables . . . . . . . . . . . . . . . . . . . . . . (97,503) 8,857
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . (52,882) (66,639)
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . (334,102) (676,249)
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . (353,108) 248,136
Accrued interest payable. . . . . . . . . . . . . . . . . . . . . . . . (6,758) (2,555)
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . (22,797) 14,356
------------ -----------
Net cash provided by (used in) operating activities . . . . . . . . 3,983,063 3,253,960
------------ -----------
Cash flows from investing activities:
Net escrow draws (payments) for construction related costs. . . . . . . . -- 1,438,657
Additions to investment properties, including related
construction payables . . . . . . . . . . . . . . . . . . . . . . . . . (328,861) (4,659,461)
Partnership's distributions from unconsolidated ventures. . . . . . . . . -- 3,588,000
Payment of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . -- (15,814)
------------ -----------
Net cash provided by (used in) investing activities . . . . . . . . (328,861) 351,382
------------ -----------
<PAGE>
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS - CONTINUED
1997 1996
------------ -----------
Cash flows from financing activities:
Principal payments on long-term debt. . . . . . . . . . . . . . . . . . . (398,994) (367,138)
Distributions to limited partners . . . . . . . . . . . . . . . . . . . . (1,040,466) (1,560,699)
------------ -----------
Net cash provided by (used in) financing activities . . . . . . . . (1,439,460) (1,927,837)
------------ -----------
Net increase (decrease) in cash and
cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . 2,214,742 1,677,505
Cash and cash equivalents, beginning of year. . . . . . . . . . . . 11,548,195 5,523,514
------------ -----------
Cash and cash equivalents, end of period. . . . . . . . . . . . . . $ 13,762,937 7,201,019
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . . . . . . . . . . . . . $ 2,176,909 2,209,129
============ ===========
Non-cash investing and financing activities . . . . . . . . . . . . . . . $ -- --
============ ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
JMB INCOME PROPERTIES, LTD. - XI
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
GENERAL
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1996
which are included in the Partnership's 1996 Annual Report, as certain
footnote disclosures which would substantially duplicate those contained in
such audited financial statements have been omitted from this report.
The preparation of financial statements in accordance with GAAP
requires the Partnership to make estimates and assumptions that affect the
reported or disclosed amount of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
The Partnership adopted Statement of Financial Accounting Standards
No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed of" ("SFAS 121") as required in the first
quarter of 1996. The Partnership's policy is to consider a property to be
held for sale or disposition when the Partnership has committed to a plan
to sell such property and active marketing activity has commenced or is
expected to commence in the near term. In accordance with SFAS 121, any
properties identified as "held for sale or disposition" are no longer
depreciated. As of September 30, 1997, the Partnership has committed to a
plan to sell or dispose of Riverside Square Mall, its last remaining
investment property. Accordingly, the property has been classified as held
for sale or disposition in the accompanying financial statements as of
September 30, 1997. The results of operations for this property and for
properties sold or disposed of in the past two years were $(246,959) and
$(1,369,321), respectively, for the nine months ended September 30, 1997
and 1996. In addition, as of December 31, 1996, the Partnership has or had
previously committed to a plan to sell all of the investment properties in
the San Jose office complex and the Royal Executive Park II office complex.
Accordingly, these properties have been classified as held for sale or
disposition. The accompanying financial statements include $4,191,053 and
$2,805,923, respectively of the Partnership's share of total property
operations of $5,316,948 and $3,124,987 for the nine months ended September
30, 1997 and 1996 of unconsolidated properties held for sale or disposition
or sold or disposed of during the past two years.
During the second quarter of 1997, Statements of Financial Accounting
Standards No. 128 ("Earnings per Share") and No. 129 ("Disclosure of
Information about Capital Structure") were issued. As the Partnership's
capital structure only has general and limited partnership interests, the
Partnership does not expect any significant impact on its financial
statements upon adoption of these standards when required at the end of
1997.
TRANSACTIONS WITH AFFILIATES
The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Managing General Partner
and its affiliates, including the reimbursement for salaries and salary-
related expenses of its employees, certain of its officers, and other
direct expenses relating to the administration of the Partnership and the
operation of the Partnership's investments. Fees, commissions and other
expenses required to be paid by the Partnership to the General Partners and
their affiliates as of September 30, 1997 and for the nine months ended
September 30, 1997 and 1996 were as follows:
<PAGE>
Unpaid at
September 30,
1997 1996 1997
-------- ------- -------------
Property management
and leasing fees . . . . . . $179,175 180,506 --
Insurance commissions . . . . 44,080 41,167 --
Reimbursement (at cost)
for out-of-pocket salary
and salary-related expenses
related to the on-site
and other costs for the
Partnership and its
investment properties. . . . 37,389 74,559 27,989
-------- ------- ------
$260,644 296,232 27,989
======== ======= ======
During 1994, certain officers and directors of the Managing General
Partners acquired interests in a company which provides certain property
management services to a property owned by the Partnership. The fees
earned by such company from the Partnership for the nine months ended
September 30, 1997 and 1996 were approximately $23,474 and $29,071,
respectively, all of which has been paid at September 30, 1997.
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 $1,960,000 as of September 30,
1997. The amount is being deferred in accordance with the subordination
requirements of the Partnership Agreement. The Partnership does not expect
that the subordination requirements of the Partnership Agreement will be
satisfied to permit payment of the majority of these amounts.
An affiliate of the General Partners of the Partnership manages the
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. Such fees and commissions are subject to deferral to the
extent they are 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 the Riverside
Square Mall pursuant to the management agreement, of which the final
$33,000 was paid in February 1997.
SAN JOSE
Occupancy of the office complex remained at 87% during the quarter.
The joint venture entered into several new leases in the third quarter,
bringing the property's leased occupancy to 95%.
In February 1997, the venture entered into a simultaneous lease
termination agreement with Hopkins & Carley in the 150 Almaden building and
a lease expansion agreement with Price Waterhouse, an existing tenant in
the building, to take approximately 27,500 square feet occupied by Hopkins
& Carley which was scheduled to expire on December 31, 1998. The terms of
the Price Waterhouse expansion call for increased rent over that in the
Hopkins & Carley lease and an extended lease term until February 2005.
Full occupancy by Price Waterhouse took place during the third quarter.
The venture incurred approximately $700,000 in tenant improvement costs for
the Price Waterhouse expansion, which are expected to be paid during the
fourth quarter, and incurred approximately $207,000 in lease commission
costs associated with this transaction, offset partially by a lease
termination fee of approximately $168,000 paid by Hopkins & Carley.
The venture is actively marketing the office complex for sale. There
are no assurances that a sale will be finalized.
<PAGE>
RIVERSIDE SQUARE MALL
The renovation of the mall and the restoration of the parking deck
were fully completed in 1996. While several new tenants have already
opened stores in the center as a result of the mall renovation, the
Partnership is proceeding with its plans to re-merchandise the center.
However, the local retail market space remains extremely competitive which
has resulted in a longer period of time to release vacant space in the
center. In addition, increased tenant allowances are being offered for
certain tenants considered critical to the overall re-merchandising plan.
The Partnership intends to fund such increased allowances from its
available cash. In such regard, the Partnership has currently budgeted in
1997 approximately $2,400,000 for tenant improvements and capital
expenditures, of which approximately $829,000 has been expended as of
September 30, 1997. Based on recently executed leases, the center is 95%
leased.
In 1996, the Partnership completed its funding from the $5,000,000
escrow established for the Bloomingdale's store renovation, which was fully
completed in September 1997.
ROYAL EXECUTIVE PARK II
Occupancy of the office complex remained at 99% during the third
quarter. The Partnership is budgeted to receive its preferred level of
return for 1997 in addition to a partial recovery of its cumulative
shortfall in this return since 1989.
During the quarter, the joint venture commenced marketing the property
for sale. The joint venture is currently negotiating a non-binding letter
of intent with an unaffiliated third party to sell the property. While no
formal letter agreement has been signed, the intent of the parties is that
the sale would occur prior to the end of the year. If a non-binding letter
of intent is signed, the finalization of the sale would be subject to
numerous conditions including due diligence review by the prospective
purchaser and final documentation acceptable to both parties. Therefore,
there are no assurances that this or any sale of the property will be
finalized.
The joint venture has determined that one of the property's
underground storage tanks had discharged an amount of fuel oil into the
ground in the past that now requires remediation. The joint venture
believes that such discharge had been the result of normal operations of
the property and not the result of actions of tenants or other third
parties. The joint venture has received a cost estimate of approximately
$200,000, which has been accrued, for remediation of the contaminated soil.
As part of the sale negotiations discussed above, the prospective
purchaser, if the sale is finalized, will be required to hold the joint
venture harmless for any future clean-up costs or claims resulting from the
contaminated soil whether or not they perform the remediation. If the
property is not sold, the joint venture will commence remediation work in
the Spring of 1998.
UNCONSOLIDATED VENTURES - SUMMARY INFORMATION
The summary income statement information for JMB/San Jose Associates
and Royal Executive Park II for the nine months ended September 30, 1997
and 1996 is as follows:
1997 1996
----------- ----------
Total income . . . . . . . . . . . $12,143,846 12,118,224
=========== ==========
Operating income . . . . . . . . . $ 5,316,948 3,124,987
=========== ==========
Net earnings to the Partnership. . $ 4,191,053 2,805,923
=========== ==========
Partnership's share of
gain on sale . . . . . . . . . . $ -- 1,412,610
=========== ==========
<PAGE>
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,
1997 and for the three and nine months ended September 30, 1997 and 1996.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the notes to the accompanying financial
statements for additional information concerning certain of the
Partnership's investments.
During 1996 and 1997, some of the Limited Partners in the Partnership
received from unaffiliated third parties unsolicited tender offers to
purchase up to 4.9% of the Interests in the Partnership at prices ranging
from between $130 and $240 per Interest. The Partnership recommended
against acceptance of these offers on the basis that, among other things,
the offer prices were inadequate. As of the date of this report, all of
such offers have expired except for one which is scheduled to expire in
November 1997. The Partnership is aware that 4.68% of the Interests in the
Partnership have been purchased by such unaffiliated third parties either
pursuant to such tender offers or through negotiated purchases. In
addition, it is possible that other offers for Interests may be made by
unaffiliated third parties in the future, although there is no assurance
that any other third party will commence an offer for Interests, the terms
of any such offer or whether any such offer, if made, will be consummated,
amended or withdrawn. The board of directors of JMB Realty Corporation
("JMB") the managing general partner of the Partnership, has established a
special committee (the "Special Committee") consisting of certain directors
of JMB to deal with all matters relating to tender offers for Interests in
the Partnership, including any and all responses to such tender offers.
The Special Committee has retained independent counsel to advise it in
connection with any potential tender offers for Interests and has retained
Lehman Brothers Inc. as financial advisor to assist the Special Committee
in evaluating and responding to these and any additional potential tender
offers for Interests.
At September 30, 1997, the Partnership had cash and cash equivalents
of approximately $13,763,000. These funds include retained cash proceeds
of approximately $1,800,000 from the 1996 sale of the 190 San Fernando
Building and one of the parking structures at San Jose. In addition,
approximately $340,000 remains in the tenant improvement escrow related to
certain tenant leases at the Riverside Square Mall. Such funds are
available for distributions to partners and for working capital
requirements including potential operating deficits, costs of re-leasing
vacant space, and certain capital improvements.
After reviewing the remaining properties and the marketplaces in which
they operate, the General Partners of the Partnership expect to be able to
conduct an orderly liquidation of its remaining investment portfolio as
quickly as practicable. Therefore, the affairs of the Partnership are
expected to be wound up no later than December 31, 1999 (sooner if the
properties are sold in the near-term), barring unforeseen economic
developments.
RESULTS OF OPERATIONS
The increase in cash and cash equivalents at September 30, 1997 as
compared to December 31, 1996 is primarily due to the 1997 receipt of
approximately $2,918,000 in distributions from the Partnership's
unconsolidated ventures, partially offset by the payment by the Partnership
of approximately $1,040,000 ($6 per Interest) of distributions to the
Holders of Interests.
<PAGE>
The increase in prepaid expenses at September 30, 1997 as compared to
December 31, 1996 is primarily due to the timing of payment of insurance
premiums at the Riverside Square Mall investment property.
The increase in escrow deposits at September 30, 1997 as compared to
December 31, 1996 is primarily due to an overfunding of the real estate tax
escrow based on the Lender's funding requirements, at the Riverside Square
Mall investment property. It is anticipated that such overfunded balance
on the escrow will be reduced by future reduced monthly escrow
contributions.
The increase in the Partnership's investment in unconsolidated
ventures at September 30, 1997 as compared to December 31, 1996 is
primarily due to earnings, as described below, by the unconsolidated
ventures, of which the Partnership's share was approximately $4,191,000,
partially offset by distributions received from such unconsolidated
ventures of approximately $2,918,000.
The decrease in accounts payable as of September 30, 1997 as compared
to December 31, 1996 is primarily due to the timing of payment for tenant
improvements of approximately $500,000 completed in 1996 at the Riverside
Square Mall property. The decrease is partially offset by an increase in
accounts payable in 1997 due to the timing of payment of certain property
operating expenses.
The increase in rental income for the nine months ended September 30,
1997 as compared to the nine months ended September 30, 1996 is primarily
due to higher tenant occupancies in 1997 at the Riverside Square Mall.
The decrease in interest income for the three and nine months ended
September 30, 1997 as compared to the three and nine months ended September
30, 1996 is primarily due to the utilization of cash, previously invested
in interest bearing instruments, for the renovation and remerchandising at
Riverside Square Mall which was completed in late 1996.
The decrease in property operating expenses for the three and nine
months ended September 30, 1997 as compared to the three and nine months
ended September 30, 1996 is primarily due to the decrease in snow removal
and other administrative expenses and certain maintenance and repair
projects (partially recoverable from tenants) at the Riverside Square Mall.
However, the decrease is partially offset by an increase in certain other
property operating expenses as a result of higher tenant occupancies in
1997 at the Riverside Square Mall.
The decrease in professional services for the three and nine months
ended September 30, 1997 as compared to the three and nine months ended
September 30, 1996 is primarily due to expenses incurred in 1996 in
connection with tender offer matters as discussed above.
The increase in the Partnership's share of operations of
unconsolidated ventures for the three and nine months ended September 30,
1997 as compared to the three and nine months ended September 30, 1996 is
primarily due to such unconsolidated ventures being identified as held for
sale or disposition as of December 31, 1996 and therefore no longer subject
to depreciation beyond such date. The increase for the nine months ended
September 30, 1997 as compared to the nine months ended September 30, 1996
is partially offset by the receipt of a lease termination fee in May 1996
of approximately $212,000 at the Royal Executive Park II investment
property. In addition, the increase is partially offset by the accrual of
$200,000 in 1997 relating to the joint venture's cost estimate of any
remediation at the Royal Executive Park II investment property, as more
fully discussed in the Notes.
The Partnership's share of gain on sale of investment properties from
unconsolidated venture of $1,412,610 in 1996, is due to the gain recognized
on the sale of the 190 San Fernando Building and one of the parking
structures at the Park Center Financial Plaza investment property.
<PAGE>
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
OCCUPANCY
The following is a listing of approximate occupancy levels by quarter for the Partnership's investment
properties.
<CAPTION>
1996 1997
------------------------------------- ------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Park Center Financial Plaza
San Jose, California. . . . . 85% 85% 87% 85% 86% 87% 87%
2. Riverside Square Mall
Hackensack, New Jersey. . . . 77% 88% 88% 91% 92% 92% 93%
3. Royal Executive Park II
Rye Brook, New York . . . . . 97% 97% 98% 98% 98% 99% 99%
</TABLE>
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. 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 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, 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 San Jose and
Connecticut General Life Insurance Co. dated June 20, 1985 relating to Park
Center Plaza are hereby incorporated herein by reference to the
Partnership's Report on Form 8-K (File No. 0-15966) dated June 20, 1985.
4-C. 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 herein 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 herein by reference to the Partnership's Prospectus on Form S-
11 (File No. 2-90503) dated July 11, 1984.
10-B. Acquisition documents including the venture
agreement relating to the purchase by the Partnership of Park Center Plaza
in San Jose, California are hereby incorporated herein by reference to the
Partnership's Report on Form 8-K (File No. 0-15966) dated June 20, 1985.
27. Financial Data Schedule
--------------
(b) No reports on Form 8-K have been filed during the last
quarter of the period covered by this report.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JMB INCOME PROPERTIES, LTD. - XI
BY: JMB Realty Corporation
(Managing General Partner)
By: GAILEN J. HULL
Gailen J. Hull, Senior Vice President
Date: November 12, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.
By: GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date: November 12, 1997
<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, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDED
IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 13,762,937
<SECURITIES> 0
<RECEIVABLES> 3,372,945
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 17,135,882
<PP&E> 60,388,358
<DEPRECIATION> 0
<TOTAL-ASSETS> 104,169,442
<CURRENT-LIABILITIES> 1,230,307
<BONDS> 33,970,862
<COMMON> 0
0
0
<OTHER-SE> 68,889,531
<TOTAL-LIABILITY-AND-EQUITY>104,169,442
<SALES> 9,758,302
<TOTAL-REVENUES> 10,247,680
<CGS> 0
<TOTAL-COSTS> 7,922,064
<OTHER-EXPENSES> 461,113
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,170,151
<INCOME-PRETAX> (305,648)
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,885,405
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,885,405
<EPS-PRIMARY> 21.51
<EPS-DILUTED> 21.51
</TABLE>
