SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10Q/A
AMENDMENT NO. 1
Filed pursuant to Section 12, 13, or 15(d) of the
Securities Exchange Act of 1934
JMB INCOME PROPERTIES, LTD. - XI
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(Exact name of registrant as specified in its charter)
IRS Employer Identification
Commission File No. 0-15966 No. 36-3254043
The undersigned registrant hereby amends the following section of its
Report for the quarter ended September 30, 1997 on Form 10-Q as set forth
in the pages attached hereto:
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Pages 12 and 13
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
JMB INCOME PROPERTIES, LTD. - XI
BY: JMB Realty Corporation
Managing General Partner
By: GAILEN J. HULL
Gailen J. Hull, Senior Vice President
and Principal Accounting Officer
Dated: November 19, 1997
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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. The
Partnership has been notified that an unaffiliated third party intends to
commence an offer for approximately 7,162 Interests (approximately 4.13% of
the outstanding Interests) at $300 per Interest, and it is possible that
other offers for Interests may be made by unaffiliated third parties in the
future. However, 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.
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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.
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