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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from _________ to _________
--------------------------------
Commission file number: 0-14533
--------------------------------
OXFORD RESIDENTIAL PROPERTIES I LIMITED PARTNERSHIP
- ----------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 52-1322906
- ----------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7200 Wisconsin Avenue, 11th floor, Bethesda, Maryland 20814
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(Address of principal executive offices) (Zip Code)
301-654-3100
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Registrant's telephone number, including area code
Securities Registered Pursuant to Section 12(b) of the Act: NONE
Securities Registered Pursuant to Section 12(g) of the Act:
Assignee Units
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES /X/ NO / /.
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (Section 229.405) is not
contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10K
or any amendment to this Form 10K. [X].
The Assignee Units of limited partnership interest of the
Partnership are not currently being traded in any public market.
Therefore, the Assignee Units had neither a market selling price
nor an average bid or asked price within the 60 days prior to the
date of this filing.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents of the Registrant are
incorporated herein by reference as indicated:
Form 10-K Parts Document
- ----------------------------------------------------------------------
Parts I, II, III Portions of the 1998 Annual Report are
incorporated by reference into Parts I,
II and III.
Reference to Exhibits is on page 9.
<PAGE 2>
OXFORD RESIDENTIAL PROPERTIES I LIMITED PARTNERSHIP
FORM 10-K
PART I
Item 1. Business.
The Registrant, Oxford Residential Properties I Limited
Partnership ("ORP" or the "Partnership"), was formed on
January 19, 1984, under the Maryland Revised Uniform Limited
Partnership Act to acquire, own and operate residential
properties. The Partnership sold $25,714,000 of Assignee Units
in a public offering that concluded on October 18, 1985. The net
offering proceeds were used to acquire residential properties.
Item 2. Properties.
Information concerning the individual properties is discussed
in the 1998 Annual Report in the section entitled "Community
Descriptions," which section is incorporated herein by reference
(pages 13 through 14 hereof).
Item 3. Legal Proceedings.
The Registrant is engaged from time to time in litigation
incident to its business; however, there are no pending legal
proceedings whose potential effects are considered to be material
by the Managing General Partner.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5. Market for the Registrant's Partnership Interests and
Related Partnership Matters.
(a) Market Information.
The Partnership originally issued 25,714 Assignee Units and
through December 31, 1998, had redeemed a total of 1,623
Assignee Units, ranging in price from $332 to $505 per
Assignee Unit. As of December 31, 1998, there were 24,091
Assignee Units outstanding. There is currently no established
public market in which the Assignee Units are traded, and it
is not anticipated that a public market will develop.
(b) Number of Security Holders.
As of December 31, 1998 there were 1,483 Assignee Unit
Holders.
<PAGE 3>
OXFORD RESIDENTIAL PROPERTIES I LIMITED PARTNERSHIP
FORM 10-K
PART II (continued)
(c) Dividend History and Restrictions.
Information regarding the frequency and amount of cash
distributions is included in the section entitled "Selected
Consolidated Financial Data" of the 1998 Annual Report, which
section is incorporated herein by reference (page 12 hereof).
Information regarding management's future expectations as to
distributions is also included in the 1998 Annual Report in
the section entitled "Report of Management," which section is
incorporated herein by reference (on pages 15 through 21
hereof).
Item 6. Selected Financial Data.
Reference is made to the section of the 1998 Annual Report
entitled "Selected Consolidated Financial Data," which section is
incorporated herein by reference (page 12 hereof).
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
For a detailed discussion of the Partnership's financial
condition and results of operations for the years ended December
31, 1998, 1997, and 1996, see information set forth in the
section entitled "Report of Management" of the Partnership's 1998
Annual Report, which section is incorporated herein by reference
(pages 15 through 21 hereof).
Item 8. Financial Statements and Supplementary Data.
Reference is made to the 1998 Annual Report for the
consolidated financial statements of the Partnership, which
consolidated financial statements are incorporated herein by
reference (pages 23 through 26 hereof). See Item 14 of this
report for information concerning financial statements and
schedules filed with this report.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
(a), (b), (c) and (e).
The Partnership has no directors or officers. The Managing
General Partner of the Partnership, as designated in the
Partnership Agreement, is Oxford Residential Properties I
Corporation. The director and executive officers of the
Managing General Partner are as follows:
- -----------------------------------------------------------------
Name Age Position and Business Experience
- -----------------------------------------------------------------
Leo E. Zickler 62 Chairman of the Board of Directors and
Chief Executive Officer since inception.
Since March 1982 he has been Chairman of
the Board of Directors, and Chief
Executive Officer of Oxford Development
Corporation ("Oxford"), an affiliate of
the Partnership and a national real
estate firm which owns and operates
apartment and senior living communities.
Mr. Zickler served as President of
Oxford until February 28, 1994. Mr.
Zickler serves as a director and officer
of certain entities affiliated with
Oxford.
<PAGE 4>
OXFORD RESIDENTIAL PROPERTIES I LIMITED PARTNERSHIP
FORM 10-K
PART III (continued)
- -----------------------------------------------------------------
Name Age Position and Business Experience
- -----------------------------------------------------------------
Francis P. Lavin 47 President since March 1, 1994. From
October 1989 through January 1994, he
was a Director and President of ML
Oxford Finance Corporation, an affiliate
of Merrill Lynch & Company, Inc. From
1979 to October 1989, Mr. Lavin held
various positions at subsidiaries of
Merrill Lynch & Company including
Director of Merrill Lynch Capital
Markets and Vice President of Merrill
Lynch, Hubbard Inc. Since March 1,
1994, Mr. Lavin has served as President
of Oxford, as well as a director and
officer of certain entities affiliated
with Oxford.
Richard R. Singleton 51 Senior Vice President since inception
and Chief Financial Officer since 1995.
Previously, he was Vice President of
Oxford Mortgage & Investment Corporation
since 1979 and was promoted to Senior
Vice President in 1983, and he was Chief
Operating Officer of ORP's Managing
General Partner since 1990 and was
promoted to Chief Financial Officer in
1995. Mr. Singleton also serves as an
officer of certain entities affiliated
with Oxford.
The director and executive officers of the Managing General
Partner will serve in their respective positions until successors
are chosen.
(d) Family Relationships. None.
(f) Involvement in Certain Legal Proceedings. None.
(g) Promoter and Controlling Persons. Not applicable.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), requires that the directors,
executive officers, and persons who own more than 10% of a
registered class of the equity securities of ORP ("reporting
persons") file with the Securities and Exchange Commission
initial reports of ownership, and reports of changes in
ownership, of ORP Assignee Units. Reporting persons are required
by Securities and Exchange Commission rules to furnish ORP with
copies of all Section 16(a) reports they file.
Based solely upon a review of Section 16(a) reports furnished
to ORP for the fiscal year ended December 31, 1998 (the "1998
fiscal year"), or representations by reporting persons that no
other reports were required for the 1998 fiscal year, ORP
believes that all reporting persons timely filed all reports
required by Section 16(a) of the Exchange Act.
Item 11. Executive Compensation.
(a), (b), (c) and (d)
Neither the director nor the executive officers of the
Managing General Partner receives direct compensation for
services rendered to the Partnership.
(e) Termination of Employment and Change of Control
Arrangements. None.
<PAGE 5>
OXFORD RESIDENTIAL PROPERTIES I LIMITED PARTNERSHIP
FORM 10-K
PART III (continued)
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
(a) Security Ownership of Certain Beneficial Owners.
ORP Acquisition Partners Limited Partnership, located at 7200
Wisconsin Avenue, Suite 1100, Bethesda, MD 20814, owns 4,997
Assignee Units, representing approximately 20.7% of the
Assignee Units outstanding as of December 31, 1998. No other
person or group is known by the Partnership to own
beneficially more than 5% of the outstanding limited
partnership interests and Assignee Units.
(b) Security Ownership of Management.
The officers and directors of the General Partners of the
Partnership do not directly own any Assignee Units, however,
certain officers and directors own equity interests in ORP
Acquisition Partners Limited Partnership, which owns 4,997
Assignee Units, representing approximately 20.7% of the
Assignee Units outstanding as of December 31, 1998. An
affiliate of the General Partner is the Assignor Limited
Partner of the Partnership. The Assignor Limited Partner has
assigned the ownership of its limited partnership units
(including rights to a percentage of the income, gain, losses,
deductions, and distributions of the Partnership) to the
Assignee Unit Holders.
(c) Changes in Control. None.
Item 13. Certain Relationships and Related Transactions.
(a) Transactions with Management and Others.
The Partnership has no directors or officers. The Managing
General Partner and its affiliates do not receive any direct
compensation, but are reimbursed by ORP for any actual direct
costs and expenses incurred in connection with the operation
of the Partnership.
Expense reimbursements are for an affiliate's personnel
costs, travel expenses and interest on interim working
capital advances for activities directly related to the
Partnership which were not covered separately by fees.
Total reimbursements to this affiliate for the years ended
December 31, 1998, 1997 and 1996 were $116,000, $65,000, and
$56,000, respectively, for administrative and accounting
related costs.
An affiliate of NHP Management Company, the property manager,
has a separate services agreement with Oxford Realty
Financial Group, Inc. ("ORFG"), an affiliate of the Managing
General Partner, pursuant to which ORFG provides certain
services to NHP in exchange for service fees in an amount
equal to 25.41% of all fees collected by NHP from certain
properties, including those owned by the Partnership.
(b) Certain Business Relationships.
The Partnership's response to Item 13(a) is incorporated
herein by reference. The Partnership has no business
relationship with entities of which the officers or director
of the Managing General Partner of the Partnership are
officers, directors or equity owners, other than as set forth
in the Partnership's response to Item 13(a).
<PAGE 6>
OXFORD RESIDENTIAL PROPERTIES I LIMITED PARTNERSHIP
FORM 10-K
PART III (continued)
(c) Indebtedness of Management. None
(d) Transactions with Promoters. None
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K.
(a) List of documents filed as part of this Report:
1. Financial Statements.
The following financial statements are contained in the
Partnership's 1998 Annual Report and are incorporated
herein by reference into Part II, Item 8:
Page Numbers
Description Herein
---------------------------------------------------------
Report of Independent Accountants. 22
Consolidated Balance Sheets as of
December 31, 1998 and 1997. 23
Consolidated Statements of Operations
for the years ended December 31,
1998, 1997 and 1996. 24
Consolidated Statement of Partners'
Capital for the years ended
December 31, 1998, 1997 and 1996. 25
Consolidated Statements of Cash Flows
for the years ended December 31,
1998, 1997 and 1996. 26
Notes to Consolidated Financial
Statements. 27-34
2. Financial Statement Schedules.
All financial statement schedules have been omitted
since they are not applicable, not required, or because
the required information is included elsewhere in the
financial statements or notes thereto.
3. Exhibits (listed according to the number assigned in
the table in Item 601 of Regulations S-K).
Exhibit No. 4 - Items defining the rights of security
holders including indentures.
a. Amended and Restated Agreement and
Certificate of Limited Partnership (Incorporated by
reference from Exhibit A of the Prospectus of the
Partnership, dated May 24, 1985).
Exhibit No. 10 - Material contracts.
a. Permanent Mortgage Loan Documents in favor of
Lexington Mortgage Company, encumbering Fairlane East.
b. Permanent Mortgage Loan Documents in favor of
Lexington Mortgage Company, encumbering The Landings.
c. Permanent Mortgage Loan Documents in favor of
Lexington Mortgage Company, encumbering Raven Hill.
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OXFORD RESIDENTIAL PROPERTIES I LIMITED PARTNERSHIP
FORM 10-K
PART IV (continued)
d. Permanent Mortgage Loan Documents in favor of
Lexington Mortgage Company, encumbering Shadow Oaks.
Exhibit No. 13 - Annual report to security holders, etc.
a. Annual Report for the year ended December 31, 1998
("filed" only to the extent material therefrom is
specifically incorporated by reference).
Exhibit No. 25 - Power of Attorney.
a. Leo E. Zickler Power of Attorney
(Incorporated by reference from Exhibits to Post-
effective Amendment No. 1 to Form S-11 Registration
Statement, dated March 28, 1985).
Exhibit No. 28 - Additional Exhibits. None.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed by the registrant during
the year ended December 31, 1998.
(c) The list of Exhibits required by Item 601 of Regulation
S-K is included in Item 14(a)(3) above.
(d) Financial Statement Schedules.
See Item 14(a)(2) above.
<PAGE 8>
OXFORD RESIDENTIAL PROPERTIES I LIMITED PARTNERSHIP
FORM 10-K
CROSS REFERENCE SHEET
The item numbers and captions in Parts I, II, III, and IV
hereof and the page and/or pages in the referenced materials
where the corresponding information appears are as follows:
Sequentially
Numbered
Item Reference Materials Page(s)
- ------------------------------------------------------------------
1. Business Annual Report 1998 pps 13-21
2. Properties Annual Report 1998 pps 13-14
5. Market for Registrant's Annual Report 1998 pps 12, 16-21,
Registrant's Partnership 31-32 and 33-34
Interest and Related
Partnership Metters
6. Selected Financial Data Annual Report 1998 pp 12
7. Management's Discussion Annual Report 1998 pps 16-21
and Analysis of Financial
Condition and Results of
Operations
8. Financial Statements and Annual Report 1998 pps 22-34
Supplementary Data
11. Executive Compensation Annual Report 1998 pps 33-34
13. Certain Relationships and Annual Report 1998 pps 33-34
Related Transactions
14. Exhibits, Financial Annual Report 1998 pps 12-37
Statement Schedules, and
Reports on Form 8-K
<PAGE 9>
OXFORD RESIDENTIAL PROPERTIES I LIMITED PARTNERSHIP
FORM 10-K
EXHIBIT INDEX
(Listed according to the number assigned in the Exhibit Table in
Item 601 of Regulation S-K.)
(13) Annual Report 1998 to Security Holders.
Oxford Residential Properties I Limited Partnership's Report
dated December 31, 1998, follows on sequentially numbered pages
11 through 37 of this report.
(27) Financial Data Schedule.
<PAGE 10>
OXFORD RESIDENTIAL PROPERTIES I LIMITED PARTNERSHIP
FORM 10-K
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Oxford Residential Properties I Limited Partnership
By: Oxford Residential Properties I Corporation
Managing General Partner of the Registrant
Date: 3/31/99 By: /s/ Richard R. Singleton
------- -------------------------------------------
Richard R. Singleton
Senior Vice President and Chief
Financial Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the
dates indicated.
Date: 3/31/99 By: /s/ Leo E. Zickler
------- --------------------------------------------
Leo E. Zickler
Chairman of the Board of Directors and
Chief Executive Officer
Date: 3/31/99 By: /s/ Francis P. Lavin
------- --------------------------------------------
Francis P. Lavin
President
No proxy material has been sent to the Registrant's security
holders. The Partnership's Annual Report 1998 is expected to be
mailed to Assignee Unit Holders before April 30, 1999.
<PAGE 11>
OXFORD RESIDENTIAL PROPERTIES I LIMITED PARTNERSHIP
Annual Report 1998
CONTENTS
Selected Consolidated Financial Data
Community Descriptions
Average Occupancy
Summary of Project Data
Report of Management
Report of Independent Accountants
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statement of Partners' Capital
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Distribution Information
General Partnership Information
Instructions for Investors who wish to reregister or
transfer ORP Assignee Units
<PAGE 12>
<TABLE>
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<CAPTION>
Selected Consolidated Financial Data (in thousands, except Net Income (Loss) per Assignee Unit and weighted average
number of Assignee Units outstanding)
- ---------------------------------------------------------------------------------------------------------------------------
For the Years Ended December 31,
- ---------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Total Assets $26,926 $27,541 $27,860 $28,484 $29,215
Investment Properties $24,092 $24,423 $24,670 $25,063 $25,559
Mortgage Notes Payable $20,760 $21,145 $21,501 $21,828 $22,129
Total Revenues from Apartment Operations $ 7,718 $ 7,461 $ 7,187 $ 6,895 $ 6,619
Net Operating Income $ 4,091 $ 3,830 $ 3,623 $ 3,463 $ 3,249
Net Income (Loss) $ 414 $ 402 $ 194 $ (184) $ (62)
Net Income (Loss) Allocated to $ 406 $ 394 $ 190 $ (180) $ (61)
Assignee Unit Holders
Net Income (Loss) per Assignee Unit $ 16.71 $ 16.03 $ 7.63 $ (7.07) $ (2.37)
Net Loss (tax basis) per Assignee Unit $ (1.56)<F1> $ (4.62)<F3> $(12.29)<F5> $(26.65)<F7> $(25.50)<F9>
Cash Distributions per Assignee Unit $ 30.00<F2> $ 20.00<F4> $ 15.00<F6> $ 12.50<F8> $ 10.00<F10>
Assignee Units Outstanding 24,091 24,325 24,657 25,186 25,714
Weighted Average of Assignee
Units Outstanding 24,281 24,582 24,940 25,515 25,714
Number of Assignee Unit Holders 1,483<F11> 1,579 <F11> 1,712<F11> 1,642<F11> 2,163
Number of Investment Properties Owned 4 4 4 4 4
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<FN>
<F1> Net loss (tax basis) per Assignee Unit includes $(5.05) real estate rental loss per Assignee Unit, and $3.49 in
portfolio income per Assignee Unit.
<F2> Includes semiannual distributions of $15.00 per Assignee Unit paid in August 1998 and March 1999.
<F3> Net loss (tax basis) per Assignee Unit includes $(8.84) real estate rental loss per Assignee Unit, and $4.22 in
portfolio income per Assignee Unit.
<F4> Includes semiannual distributions of $10.00 per Assignee Unit paid in August 1997 and February 1998.
<F5> Net loss (tax basis) per Assignee Unit includes $(17.05) real estate rental loss per Assignee Unit, and $4.76 in
portfolio income per Assignee Unit.
<F6> Includes semiannual distributions of $7.50 per Assignee Unit paid in August 1996 and February 1997.
<F7> Net loss (tax basis) per Assignee Unit includes $(31.58) real estate rental loss per Assignee Unit, and $4.93 in
portfolio income per Assignee Unit.
<F8> Includes semiannual distributions of $5.00 per Assignee Unit paid in August 1995 and $7.50 per Assignee Unit paid
in February 1996.
<F9> Net loss (tax basis) per Assignee Unit includes $(36.10) real estate rental loss per Assignee Unit pre-act passive
loss, $6.39 in cancellation of indebtedness income per Assignee Unit, and $4.21 in portfolio income per Assignee Unit.
<F10> Includes semiannual distributions of $5.00 per Assignee Unit paid in August 1994 and February 1995.
<F11> ORP Acquisition Partners Limited Partnership, located at 7200 Wisconsin Avenue, Suite 1100, Bethesda, MD 20814, owns
4,997 Assignee Units, representing approximately 20.7% of the Assignee Units outstanding at December 31, 1998.
Also, from July 1995 through December 31, 1998, ORP has purchased, in the aggregate, 1,623 Assignee Units, ranging in
price from $332 to $505 per Assignee Unit.
</FN>
</TABLE>
<PAGE 13>
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Community Descriptions
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The following paragraphs contain descriptions of each of the
four properties comprising the Partnership's portfolio. Unless
otherwise indicated, information provided herein is as of
December 31, 1998.
Fairlane East, Dearborn, Michigan
Fairlane East is a 244-unit conventional property, located in
Dearborn, Michigan. Fairlane East was built in 1973 and consists
of 26 buildings, offering one to two bedroom apartments and two
to three bedroom townhomes. The buildings are of wood frame
construction with brick and wood trim. The property is located
on Rotunda Drive. To the north is single-family residential, to
the east is industrial, to the south is the Ford Land Development
Maintenance Center, and to the west is a retirement center and
the Ford World Headquarters. Fairlane East is convenient to
shopping, restaurants, churches, and public transportation.
Amenities include a washer and dryer in each unit, a swimming
pool and a clubhouse. Average occupancy was 95% in 1998 and 96% in
in 1997.
Property improvements completed for the year ended December 31,
1998 primarily include fence and deck replacements, carpet, vinyl
floor and appliance replacements, HVAC repairs and replacements,
structural repairs, roof replacements of the clubhouse building
and five carports, sidewalks and curb replacements, interior and
exterior painting, cabinet and counter replacements, and
landscaping improvements.
There are at least three competitive apartment communities
containing an aggregate of approximately 1,100 apartment units
located in the Dearborn area within a five-mile radius of the
site. Average occupancy at these communities was approximately
95% as of December 31, 1998. Additionally, a new rental
community is being built adjacent to Fairlane East, with lease of
the new units anticipated to begin in 1999.
The Landings, Indianapolis, Indiana
The Landings is a 150-unit property located in northeastern
Indianapolis, Indiana. The property is approximately 15 minutes
from the downtown business district. The Landings is located at
78th Street and Keystone Avenue between the popular areas of
Keystone at the Crossing and Broad Ripple, and is convenient to
shopping, entertainment, parks, major thoroughfares, and public
transportation. The property was built in 1974 and consists of
nine wood frame constructed buildings with brick and aluminum
siding and wood trim. The property is located on 27.3 acres
along the White River and surrounds a lake that opens to the
White River. Amenities include a clubhouse with party and
billiard room, boat launch ramp to the river, boat storage, a
sand volleyball court, two lighted tennis courts, a basketball
court area, and a swimming pool. Average occupancy was 95% in
1998 and 91% in 1997.
Project improvements completed for the year ended December 31,
1998 primarily include carpet, vinyl floor and appliance
replacements, balcony replacements, asphalt/concrete repairs,
HVAC repairs and replacements, and refurbishment of clubhouse.
Major competitors of The Landings include at least four
comparable apartment communities, containing an aggregate of
approximately 2000 units, located within five miles of the
property. Average occupancy at these communities was
approximately 94% as of December 31, 1998. An additional three
properties with an aggregate total of approximately 900 apartment
units are under construction in the Indianapolis area within a
six-mile radius of the site. The properties are scheduled to be
completed during 1999.
Raven Hill, Burnsville, Minnesota
Raven Hill is a 304-unit apartment community located in
Burnsville, Minnesota, a suburb south of Minneapolis. It is
convenient to the Minneapolis central business district, as well
as the suburban employment centers of the Twin Cities of
Minneapolis and St. Paul. The property was built in 1971 and
consists of four three-story buildings with underground and
surface parking. Amenities include two guest suites, indoor and
outdoor swimming pools, a spa, tennis courts, an indoor
racquetball court, and two entertainment centers. Average
occupancy was 97% in 1998 and 1997, respectively.
<PAGE 14>
- -------------------------------------------------------------------
Community Descriptions
- -------------------------------------------------------------------
Property improvements completed for the year ended December 31,
1998 primarily include patio and balcony improvements, carpet and
vinyl replacements, appliance replacements, interior painting,
boiler repairs, landscaping improvements, air conditioner
replacements, ventilator fans, and elevator improvements.
There are several comparable apartment communities located in
the Burnsville area within close proximity of Raven Hill, with
average occupancy of 96% at December 31, 1998. Built in the mid
to late 1980s, these communities are newer and offer more
contemporary features than Raven Hill. However, the exterior
vinyl siding, window, and patio and balcony improvements at Raven
Hill are now complete and will enhance the appearance and
competitiveness of the property. There are no known rental
communities under construction in this market area.
Shadow Oaks, Tampa, Florida
Shadow Oaks is a 200-unit apartment community built in 1984 and
is located in a neighborhood consisting of middle- and upper-
middle-class single-family homes close to various commercial
centers. Shadow Oaks is located in northeast Tampa, between the
University of South Florida and Carrollwood areas. Amenities
include playground, pool, whirlpool, tennis court, picnic area,
volleyball court, and laundry facilities. There has been
significant building of apartments in Tampa and the surrounding
area and, as a result, Shadow Oaks competes for residents with a
considerable number of newer apartment communities located in
nearby neighborhoods. Average occupancy was 97% in 1998 and 95%
in 1997.
Property improvements completed for the year ended December 31,
1998 primarily include cedar wood siding and picket replacement
performed in conjunction with a complete exterior paint job of
the property, completion of third and final year of roof
replacement, carpet, vinyl floor and appliance replacements,
clubhouse upgrades, and landscaping improvements.
There are three comparable apartment communities containing an
aggregate of approximately 1,200 apartment units located in the
Tampa area within a three-mile radius of the site. Average
occupancy at these communities was approximately 97% as of
December 31, 1998. Although new construction is planned in the
Tampa area, it should not materially affect Shadow Oaks due to
its competitive market position in the area.
<PAGE 15>
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
Average Occupancy
- ----------------------------------------------------------------------------------------------------------------------
The average occupancy for each of the four investment properties is shown in the following chart:
Average For the Quarter Ended Average
Property/ Acquisition Occupancy -------------------------------------- Occupancy
Location Date 1997 3/31/98 6/30/98 9/30/98 12/31/98 1998
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Fairlane East 12/23/85 96% 91% 94% 97% 97% 95%
Dearborn, Michigan
The Landings 10/31/84 91% 94% 96% 96% 94% 95%
Indianapolis, Indiana
Raven Hill 12/24/86 97% 98% 97% 97% 96% 97%
Burnsville, Minnesota
Shadow Oaks 02/07/85 95% 97% 96% 98% 95% 97%
Tampa, Florida
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
Summary of Project Data (in thousands)
- ----------------------------------------------------------------------------------------------------------------------
1998 Operating Results (in thousands)
Average NOI
Rent Collected<F1> Before NOI
----------------- Property Before
Property/ No. of December December Apartment Apartment Improvements Property Debt
Location Units 1998 1997 Revenues Expenses & Debt Service Improvements<F2> Service
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fairlane East 244 $1,010 $963 $2,803 $1,115 $1,688 $ 348 $1,340
Dearborn, Michigan
The Landings 150 616 599 1,088 552 536 213 323
Indianapolis, Indiana
Raven Hill 304 735 705 2,650 1,341 1,309 483 826
Burnsville, Minnesota
Shadow Oaks 200 488 466 1,177 619 558 278 280
Tampa, Florida
- ----------------------------------------------------------------------------------------------------------------------
Total 898 $7,718 $3,627 $4,091 $1,322 $2,769
- ----------------------------------------------------------------------------------------------------------------------
<F1> Represents net rental revenue collected for the month divided by the average number of units occupied during the
month.
<F2> Represents total property improvement costs incurred during 1998, consisting of $403,000 in refurbishment
expenses and $919,000 in capitalized costs.
</FN>
</TABLE>
<PAGE 16>
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Report of Management
- -------------------------------------------------------------------
The following report provides additional information about the
consolidated financial condition of Oxford Residential Properties
I Limited Partnership ("ORP" or the "Partnership") as of December
31, 1998, and its consolidated results of operations and cash
flows for the three years ended December 31, 1998, 1997 and 1996.
This report and analysis should be read together with the
consolidated financial statements and related notes thereto and
the selected consolidated financial data appearing elsewhere in
this Annual Report.
Recent Developments
On March 1, 1999, the Managing General Partner declared a
distribution of $15 per Assignee Unit to its Partners and
Assignee Unit Holders of record as of December 31, 1998. The
distribution was the same as the last semi-annual distribution
but represents a $5 increase over the amount paid for the
comparable period last year.
On behalf of the Partnership, Oxford Residential Properties I
Corporation ("Managing General Partner"), will consider offers
made by Assignee Unitholders who wish to sell their Assignee
Units at such prices as may be set by the Managing General
Partner from time to time. The prices that will be paid will be
established by reference to prevailing secondary market prices
that will be determined solely by the Managing General Partner.
This is neither an offer to purchase nor a solicitation of an
offer to sell by the Partnership. During the period from July
1995 through December 31, 1998, ORP purchased, in the
aggregate, 1,623 Assignee Units for approximately $573,000.
Since December 31, 1998, ORP has purchased an additional 53
Assignee Units.
Liquidity and Capital Resources
Current Position. At December 31, 1998, ORP held $1,351,000 in
cash and cash equivalents and the working capital reserve,
compared to $1,503,000 at December 31, 1997. The decrease of
$152,000 is primarily attributable to increases in property net
operating income offset by: (i) the distributions made on
February 27, 1998 and August 28, 1998 to Partners of record as of
December 31, 1997 and June 30, 1998 totaling $243,000 and
$365,000, respectively, (ii) the purchase of 234 Assignee Units
during the year ended December 31, 1998 totaling $112,000, and
(iii) the payment of administrative costs for the year ended
December 31, 1998 totaling $271,000.
Other Assets shown on the accompanying consolidated Balance
Sheet decreased by $47,000 to $981,000 at December 31, 1998 from
$1,028,000 at December 31, 1997. The decrease in Other Assets is
primarily a result of a decrease in escrow deposits offset by
increases in Accounts Receivable and Prepaid Expenses. Other
Assets include primarily a Liquidity Reserve Subaccount (for debt
service), a Recurring Replacement Reserve Subaccount (for
property improvements), a Property Insurance Escrow, and a
Property Tax Escrow for each of the Operating Partnerships
totaling $783,000. These Subaccounts are funded and maintained
monthly, as needed, from property income (except security
deposits), in accordance with the requirements pursuant to each
property's loan agreement and based on expenditures anticipated
in the following months. Accounts Receivable and Prepaid
Expenses, which are also included in Other Assets, totaled
$48,000 and $150,000, respectively, at December 31, 1998.
Unamortized deferred costs related to organization and
refinancing costs (discussed in prior reports) at December 31,
1998 were $326,000, compared to $424,000 at December 31, 1997.
These costs are being amortized over the term of the mortgages.
Property Operations. ORP's future liquidity and level of cash
distributions are dependent upon the net operating income after
debt service, refurbishment expenses, and capitalized
improvements generated by ORP's four investment properties and
proceeds from any sale or refinancing of those properties. To
the extent any individual property does not generate sufficient
cash to cover its operating needs, including debt service,
deficits would be funded by cash generated from the other
investment properties, if any, working capital reserves, if any,
or borrowings by ORP. Property improvements in the aggregate
amount of $1,322,000 were made for the year ended December 31,
1998, compared to $1,202,000 for the same period in 1997. Of the
$1,322,000 of property improvements, $919,000 was capitalized for
financial statement purposes for the year ended December 31,
1998, compared to $924,000 of the $1,202,000 of property
improvements for the same period in 1997.
<PAGE 17>
- -------------------------------------------------------------------
Report of Management
- -------------------------------------------------------------------
Other Sources. Since 1994, 40% of the property management fees
owed to NHP Management Company ("NHP") have been subordinated to
the receipt by the Assignee Unit Holders of certain returns. As
of December 31, 1998 and December 31, 1997, deferred property
management fees to NHP amounted to $712,000 and $560,000,
respectively.
Results of Operations
The net operating income, before debt service, refurbishment
expenses, and capitalized property improvements, reported by each
of the four investment properties for the year ended December 31,
1998, as compared to the years ended December 31, 1997 and 1996,
is as follows:
<TABLE>
- -------------------------------------------------------------------
<CAPTION>
(in thousands)
Property 1998 1997 1996
- -------------------------------------------------------------------
<S> <C> <C> <C>
Fairlane East, Dearborn, Michigan $1,688 $1,683 $1,590
The Landings, Indianapolis, Indiana 536 498 501
Raven Hill, Burnsville, Minnesota 1,309 1,110 1,045
Shadow Oaks, Tampa, Florida 558 539 487
- -------------------------------------------------------------------
Total Net Operating Income $4,091 $3,830 $3,623
===================================================================
</TABLE>
In the aggregate, the net operating income, before debt
service, refurbishment expenses, and capitalized property
improvements, reported by the Partnership in 1998 increased by
6.8% compared to 1997. Set forth below is a discussion of the
properties which compares their respective operations for the
years ended December 31, 1998, 1997 and 1996.
1998 versus 1997
Fairlane East
Fairlane East's net operating income for the year ended
December 31, 1998 increased by less than 1% from the same period
in 1997 due to a 2.4% increase in revenues offset by a 5.8%
increase in apartment expenses. The increase in revenues was
primarily attributable to the property's ability to change its
rent structure, adjusting rents on specific unit types, which
resulted in higher gross rental revenue throughout 1998. The
increase in apartment expenses is primarily attributable to
increases in marketing expenses in response to lower than
expected occupancy rates during the first half of 1998, and
maintenance expenses associated with higher than expected unit
turnover. Average occupancy in 1998 decreased to 95% from 96% in
1997. During 1998, the Partnership expended $348,000 on property
improvements, including $218,000 of capitalizable expenditures.
The Managing General Partner believes that apartment upgrades
will be the focus for 1999 property improvements, including
cabinetry replacements, to assist the property in competing in
the local marketplace.
The Landings
The Landings' net operating income for the year ended December
31, 1998 increased by 7.6% from the same period in 1997 due to a
4% increase in revenues and a less than 1% increase in apartment
expenses. Total apartment expenses were mostly lower throughout
1998 primarily because of reductions in property taxes. In March
1998, the Partnership received a refund of real estate taxes in
the amount of $38,000 due to tax overpayments in prior years.
The refund, in turn, reduced the amount of property tax expenses
and resulted in a significantly higher overall net operating
income for the year ended. Average occupancy in 1998 increased
to 95% from 91% in 1997. The increase in occupancy is primarily
due to a slight decline in new home purchases which, in turn, led
to an increase in overall occupancy levels. During 1998, the
Partnership expended $213,000 on property improvements, including
$113,000 of capitalizable expenditures. The Managing General
Partner anticipates slightly lower spending levels on property
improvements in 1999, as compared to the year ended December 31,
1998.
<PAGE 18>
- -------------------------------------------------------------------
Report of Management
- -------------------------------------------------------------------
Raven Hill
Raven Hill's net operating income for the year ended December
31, 1998 increased by 18% from the same period in 1997 due to a
4.2% increase in revenues and a 6.4% decrease in apartment
expenses. The increase in revenues is primarily attributable to
steady increases in per-unit rents along with lower than
forecasted vacancy levels. The decrease in apartment expenses is
primarily attributable to: (i) savings in utility costs due to
better than average weather conditions, (ii) decreases in
maintenance expenses due to payroll savings from having fewer
maintenance workers, and (iii) a decrease in property taxes due
to lower 1998 property tax assessments. Average occupancy for
1998 and for 1997 was 97%, respectively. The Partnership
expended $483,000 for property improvements during 1998,
including $372,000 of capitalizable expenditures. The Managing
General Partner anticipates higher spending levels on property
improvements in 1999, as compared to the year ended December 31,
1998.
Shadow Oaks
Shadow Oaks' net operating income for the year ended December
31, 1998 increased by 3.5% from the same period in 1997 due to a
3.7% increase in revenues and a 3.8% increase in apartment
expenses. The increase in revenue is due to increases in rent
levels of certain units coupled with increased traffic caused by
the completion of a road widening project near the property. The
increase in apartment expenses is attributable to increases in
administrative expenses and property taxes. The average
occupancy in 1998 increased to 97%, compared to 95% in 1997.
During 1998, the Partnership expended $278,000 on property
improvements, including $216,000 of capitalizable expenditures.
The Managing General Partner anticipates slightly lower spending
levels on property improvements in 1999, as compared to the year
ended December 31, 1998.
1997 versus 1996
Fairlane East
Fairlane East's net operating income for the year ended
December 31, 1997 increased by 5.9% from the same period in 1996
due to a 3.3% increase in revenues and a less than 1% decrease in
apartment expenses. The increase in revenues was attributed to a
stronger economy in the Dearborn, Michigan area due to new
commercial development. In the Detroit metropolitan area,
population growth and unemployment rates improved during 1997.
The competitive services and rental rates, along with impressive
curb appeal, were contributing factors to the improvement in
occupancy. Average occupancy in 1997 decreased to 96% from 98%
in 1996. During 1997, the Partnership expended $328,000 on
property improvements, including $248,000 capitalized for
accounting purposes.
The Landings
The Landings'net operating income for the year ended December
31, 1997 decreased by less than 1% from the same period in 1996
due to a 1% increase in revenues and a 2.5% increase in apartment
expenses. The increase in apartment expenses was primarily
attributable to an increase in maintenance and operating
expenses. Average occupancy in 1997 decreased to 91% from 94% in
1996. The Managing General Partner believes that this decrease
in occupancy is due to the decline in interest rates during 1997
which, in turn, led to an increase in the purchase of new homes
by tenants. During 1997, the Partnership expended $180,000 on
property improvements, including $114,000 capitalized for
accounting purposes.
Raven Hill
Raven Hill's net operating income for the year ended December
31, 1997 increased by 6.2% from the same period in 1996 due to a
4.6% increase in revenues and a 3.3% increase in apartment
expenses. The increase in apartment expenses was primarily
attributable to an increase in property taxes and operating and
administrative expenses. Occupancy in 1997 increased to 97% from
93% in 1996. The Partnership expended $506,000 for property
improvements during 1997, including $418,000 that was capitalized
for accounting purposes.
<PAGE 19>
- -------------------------------------------------------------------
Report of Management
- -------------------------------------------------------------------
Shadow Oaks
Shadow Oaks' net operating income for the year ended December
31, 1997 increased by 10.7% from the same period in 1996 due to a
6.2% increase in revenues and a 2.5% increase in apartment
expenses. The average occupancy in 1997 increased by 3
percentage points to 95%, compared to 92% in 1996. The increase
in apartment expenses is attributable to an increase in
maintenance and operating expenses, offset by decreases in
administrative and marketing expenses and property taxes. During
1997, the Partnership expended $188,000 on property improvements,
including $144,000 that was capitalized for accounting purposes.
1996 versus 1995
Fairlane East
Fairlane East's net operating income for the year ended
December 31, 1996 increased by 1.9% from the same period in 1995
due to a 3.1% increase in revenues and a 4.8% increase in
apartment expenses. The increase in apartment expenses was
primarily attributable to an increase in maintenance, operating,
administrative, and marketing expenses. Average occupancy for
the year ended December 31, 1996 decreased to 98% from 99% in
1995. During 1996, the Partnership expended $343,000 on property
improvements, including $270,000 capitalized for accounting
purposes.
The Landings
The Landings' net operating income for the year ended December
31, 1996 increased by 8.4% from the same period in 1995 due to a
4.1% increase in revenues and less than a 1% increase in
apartment expenses. The Indianapolis rental housing market
remained strong for most of 1996. By the end of 1996, the
outlook of the local economy continued to be generally favorable,
although the rental market had begun to show some softness.
Average occupancy in 1996 and 1995 was 94%. During 1996, the
Partnership expended $133,000 on property improvements, including
$87,000 capitalized for accounting purposes.
Raven Hill
Raven Hill's net operating income for the year ended December
31, 1996 increased by 5.6% from the same period in 1995 due to a
5% increase in revenues and a 4.6% increase in apartment
expenses. The increase in apartment expenses was primarily
attributable to an increase in maintenance and operating expenses
and property taxes, offset by a decrease in administrative
expenses. Average occupancy for the year ended December 31, 1996
decreased to 93% from 95% in 1995. The Partnership expended
$482,000 for property improvements during 1996, including
$338,000 capitalized for accounting purposes.
Shadow Oaks
Shadow Oaks' net operating income for the year ended December
31, 1996 increased by 8% from the same period in 1995 due to a
5.5% increase in revenues and a 3.6% increase in apartment
expenses. The increase in apartment expenses was primarily
attributable to an increase in maintenance and operating
expenses, offset by a decrease in administrative expenses and
property taxes. Average occupancy in 1996 and 1995 was 92%.
During 1996, the Partnership expended $88,000 on property
improvements, including $45,000 capitalized for accounting
purposes.
<PAGE 20>
- -------------------------------------------------------------------
Report of Management
- -------------------------------------------------------------------
Consolidated Statements of Operations-Other Income and Deductions
Other income was $283,000, $330,000, and $312,000,
respectively, for the years ended December 31, 1998, 1997 and
1996. The decrease was primarily due to decreases in interest
earned on certain escrow accounts.
The terms of the mortgage loans require the borrowers to make
equal installment payments over the term of the loans. Each
payment consists of interest on the unpaid balance of the loans
and a reduction of loan principal. The interest paid on these
loans decreases each period, while the portion applied to the
loan principal increases each period. As a result, interest
expense was $1,730,000, $1,758,000, and $1,786,000, respectively,
and mortgage principal paid was $385,000, $356,000, and $327,000,
respectively, for the years ended December 31, 1998, 1997 and
1996.
Depreciation expense for the years ended December 31, 1998,
1997 and 1996 was $1,250,000, $1,171,000, and $1,133,000,
respectively. Amortization expense for the years ended December
31, 1998, 1997 and 1996 was $98,000. Depreciation expense
increased due to the addition of capitalized property
improvements during the years ended December 31, 1998, 1997 and
1996.
For the years ended December 31, 1998, 1997 and 1996, of the
total property improvements in the aggregate amount of
$1,322,000, $1,202,000, and $1,046,000, respectively, $403,000,
$278,000, and $306,000, respectively, were classified as
refurbishment expenses for financial statement purposes. The
remaining balances of $919,000, $924,000, and $740,000,
respectively, were capitalized for financial statement purposes.
Interest income for the years ended December 31, 1998, 1997 and
1996 was $72,000, $76,000, and $78,000, respectively. The
decrease was primarily due to a decrease in cash and cash
equivalents during 1998, as compared to 1997 and 1996.
ORP's administrative expenses for the years ended December 31,
1998, 1997 and 1996 were $271,000, $199,000, and $184,000,
respectively. The increase in administrative expenses for 1998
compared to 1997 is due principally to ORP's securities filings
and responses to a tender offer for Assignee Units made during
1998 by unaffiliated entities.
In the aggregate, the net income, after debt service,
refurbishment expenses, and other deductions, reported by ORP for
the year ended December 31, 1998 increased by $12,000, or 3%,
from net income of $402,000 at December 31,1997, to a net income
of $414,000 for December 31, 1998. The increase is primarily
attributed to improvement in property operations.
<PAGE 21>
- -------------------------------------------------------------------
Report of Management
- -------------------------------------------------------------------
Year 2000 Compliance
In accordance with the SEC's interpretive release "Statement
of the Commission Regarding Disclosure of Year 2000 Issues and
Consequences by Public Companies...," the Managing General Partner
of ORP has upgraded and tested the principal systems on which ORP
relies and believes that they are Year 2000 compliant as of this
date. The Managing General Partner is currently contacting third
parties with whom ORP does business to evaluate their exposure to
year 2000 issues. In addition, the Managing General Partner is
in the process of determining the risks associated with a third
party service provider failure and is developing contingency
plans. The Managing General Partner believes that such analysis
will take until September 30, 1999 to complete.
THIS REPORT CONTAINS STATEMENTS THAT ARE FORWARD-LOOKING
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995, SECTION 21E OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, AND SECTION 27A OF THE
SECURITIES ACT OF 1933, AS AMENDED, AND IS SUBJECT TO THE SAFE
HARBORS CREATED BY THOSE SECTIONS. THESE FORWARD-LOOKING
STATEMENTS REFLECT MANAGEMENT'S CURRENT VIEWS WITH RESPECT TO
FUTURE EVENTS AND FINANCIAL PERFORMANCE. ACTUAL RESULTS MAY
DIFFER MATERIALLY FROM THOSE DESCRIBED IN THE FORWARD-LOOKING
STATEMENTS, AND WILL BE AFFECTED BY A VARIETY OF RISKS AND
FACTORS. THESE STATEMENTS ARE SUBJECT TO MANY UNCERTAINTIES AND
RISKS, AND SHOULD NOT BE CONSIDERED GUARANTEES OF FINANCIAL
PERFORMANCE. READERS SHOULD REVIEW CAREFULLY ORP's FINANCIAL
STATEMENTS AND THE NOTES THERETO, AS WELL AS RISK FACTORS
DESCRIBED IN THE SEC FILINGS. ORP DISCLAIMS ANY OBLIGATION TO
PUBLICLY RELEASE THE RESULTS OF ANY REVISIONS TO THESE FORWARD-
LOOKING STATEMENTS WHICH MAY BE MADE TO REFLECT EVENTS OR
CIRCUMSTANCES OCCURRING SUBSEQUENT TO THE FILING OF THE FORM 10 K
WITH THE SEC OR OTHERWISE TO REVISE OR UPDATE ANY ORAL OR WRITTEN
FORWARD-LOOKING STATEMENT THAT MAY BE MADE FROM TIME TO TIME BY
OR ON BEHALF OF ORP.
<PAGE 22>
- -------------------------------------------------------------------
Report of Independent Accountants
- -------------------------------------------------------------------
To the Partners and Assignee Unit Holders of Oxford Residential
Properties I Limited Partnership:
In our opinion, the accompanying consolidated balance sheets
and the related consolidated statements of operations, partners'
capital and cash flows present fairly, in all material respects,
the consolidated financial position of Oxford Residential
Properties I Limited Partnership and Subsidiaries as of December
31, 1998 and 1997, and the consolidated results of its operations
and its cash flows for each of the three years in the period
ended December 31, 1998, in conformity with generally accepted
accounting principles. These financial statements are the
responsibility of the Partnership's Managing General Partner;
our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of
these statements in accordance with generally accepted auditing
standards, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for the opinion
expressed above.
/s/ PricewaterhouseCoopers LLP
- -------------------------------
PricewaterhouseCoopers LLP
Washington, D.C.
March 1, 1999
<PAGE 23>
<TABLE>
Oxford Residential Properties I Limited Partnership and Subsidiaries
- ---------------------------------------------------------------------
Consolidated Balance Sheets (in thousands, except Assignee Unit data)
- ---------------------------------------------------------------------
<CAPTION>
December 31, 1998 1997
- ---------------------------------------------------------------------
<S> <C> <C>
Assets
Investment properties, at cost
Land $ 3,681 $ 3,681
Buildings and improvements, net
of accumulated depreciation
of $16,077 and $14,827,
respectively 20,411 20,742
- ---------------------------------------------------------------------
Total Investment Properties 24,092 24,423
- ---------------------------------------------------------------------
Cash and cash equivalents 1,288 1,068
Working capital reserve 63 435
Tenant security deposits 176 163
Deferred costs, net of amortization
of $2,591 and $2,493, respectively 326 424
Other assets 981 1,028
- ---------------------------------------------------------------------
2,834 3,118
- ---------------------------------------------------------------------
Total Assets $26,926 $27,541
=====================================================================
Liabilities and Partners' Capital
Liabilities
Mortgage notes payable $20,760 $21,145
Accounts payable and accrued
expenses 382 471
Distributions payable 361 243
Other liabilities 712 560
Tenant security deposits 176 163
- ---------------------------------------------------------------------
Total Liabilities 22,391 22,582
- ---------------------------------------------------------------------
Commitments and contingencies (Notes 10 and 11)
Partners' Capital
General Partners (1,024) (1,032)
Assignor Limited Partner 1 1
Assignee Unit Holders (25,714
Assignee Units issued and 24,091
outstanding for 1998; 24,325
outstanding for 1997) 5,558 5,990
- ---------------------------------------------------------------------
Total Partners' Capital 4,535 4,959
- ---------------------------------------------------------------------
Total Liabilities and
Partners' Capital $26,926 $27,541
=====================================================================
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
<PAGE 24>
Oxford Residential Properties I Limited Partnership and Subsidiaries
- ---------------------------------------------------------------------
Consolidated Statements of Operations (in thousands, except Net
Income per Assignee Unit and Weighted average number of Assignee
Units Outstanding)
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended December 31, 1998 1997 1996
- ---------------------------------------------------------------------
<S> <C> <C> <C>
Apartment Revenues
Rental income $ 7,435 $ 7,131 $ 6,875
Other income 283 330 312
- ---------------------------------------------------------------------
Total Apartment Revenues 7,718 7,461 7,187
- ---------------------------------------------------------------------
Apartment Expenses
Maintenance 1,199 1,187 1,183
Operating 603 639 633
Administrative 469 441 433
Property management fees 383 373 356
Property taxes 839 875 851
Marketing 134 116 108
- ---------------------------------------------------------------------
Total Apartment Expenses 3,627 3,631 3,564
- ---------------------------------------------------------------------
Net Operating Income 4,091 3,830 3,623
- ---------------------------------------------------------------------
Other Deductions
Interest expense 1,727 1,758 1,786
Depreciation and amortization 1,348 1,269 1,231
Refurbishment expenses 403 278 306
Partnership administrative expenses 271 199 184
Interest income (72) (76) (78)
- ---------------------------------------------------------------------
Total Other Deductions 3,677 3,428 3,429
- ---------------------------------------------------------------------
Net Income $ 414 $ 402 $ 194
=====================================================================
Net Income Allocated to Assignee
Unit Holders $ 406 $ 394 $ 190
=====================================================================
Net Income per Assignee Unit $ 16.71 $ 16.03 $ 7.63
=====================================================================
Weighted Average Number of Assignee
Units Outstanding 24,281 24,582 24,940
=====================================================================
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
<PAGE 25>
Oxford Residential Properties I Limited Partnership and Subsidiaries
- ---------------------------------------------------------------------
Consolidated Statement of Partners' Capital (in thousands)
<TABLE>
<CAPTION>
Limited Partners'
Interests
-------------------
Assignee Assignor
For the Years Ended December 31, Unit Limited General
1998, 1997 and 1996 Holders Partner Partners Total
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance, January 1, 1996 $6,553 $1 $(1,044) $5,510
- ---------------------------------------------------------------------
Net income 190 0 4 194
Distributions to Assignee Unit
Holders (372) 0 0 (372)
Purchase of Assignee Units (176) 0 0 (176)
- ---------------------------------------------------------------------
Balance, December 31, 1996 6,195 1 (1,040) 5,156
- ---------------------------------------------------------------------
Net income 394 0 8 402
Distributions to Assignee Unit
Holders (489) 0 0 (489)
Purchase of Assignee Units (110) 0 0 (110)
- ---------------------------------------------------------------------
Balance, December 31, 1997 5,990 1 (1,032) 4,959
- ---------------------------------------------------------------------
Net income 406 0 8 414
Distributions to Assignee Unit
Holders (726) 0 0 (726)
Purchase of Assignee Units (112) 0 0 (112)
- ---------------------------------------------------------------------
Balance, December 31, 1998 $5,558 $1 $(1,024) $4,535
=====================================================================
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
<PAGE 26>
Oxford Residential Properties I Limited Partnership and Subsidiaries
- ---------------------------------------------------------------------
Consolidated Statements of Cash Flows (in thousands)
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended December 31, 1998 1997 1996
- ---------------------------------------------------------------------
Operating activities
<S> <C> <C> <C>
Net income $ 414 $ 402 $ 194
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 1,348 1,269 1,231
Changes in assets and liabilities:
Tenant security deposits liability 13 28 14
Tenant security deposits (13) (28) (14)
Other assets 47 (55) (58)
Accounts payable and accrued expenses (89) (1) (96)
Other liabilities 152 149 143
- ---------------------------------------------------------------------
Net cash provided by operating activities 1,872 1,764 1,414
- ---------------------------------------------------------------------
Investing activities
Working capital reserve 372 19 380
Additions to investment properties (919) (924) (740)
- ---------------------------------------------------------------------
Net cash used in investing activities (547) (905) (360)
- ---------------------------------------------------------------------
Financing activities
Distributions paid (608) (431) (376)
Mortgage principal paid (385) (356) (327)
Purchase of Assignee Units (112) (110) (176)
- ---------------------------------------------------------------------
Net cash used in financing activities (1,105) (897) (879)
- ---------------------------------------------------------------------
Net (decrease) increase in cash and
cash equivalents 220 (38) 175
Cash and cash equivalents,
beginning of year 1,068 1,106 931
- ---------------------------------------------------------------------
Cash and cash equivalents, end of year $1,288 $1,068 $1,106
=====================================================================
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
<PAGE 27>
- -----------------------------------------------------------------
Notes to Consolidated Financial Statements
- -----------------------------------------------------------------
Note 1. Partnership Organization
Oxford Residential Properties I Limited Partnership ("ORP" or
the "Partnership") was formed under the Maryland Revised Uniform
Limited Partnership Act on January 19, 1984, to acquire, own and
operate residential properties. The Partnership began operations
in September 1984 and will continue until December 31, 2027,
unless terminated earlier under the provisions of the Partnership
Agreement.
The General Partners of the Partnership are Oxford Residential
Properties I Corporation and Oxford Fund I Limited Partnership.
Oxford Residential Properties I Corporation serves as the
Managing General Partner, and Oxford Fund I Limited Partnership
serves as Associate General Partner. ORP I Assignor Corporation,
the Assignor Limited Partner, has assigned the ownership of its
limited partnership interests (including ORP I Assignor
Corporation's rights to a percentage of the income, gains,
losses, deductions, and distributions of the Partnership) to the
purchasers of Assignee Units on the basis of one unit of limited
partnership interest for one Assignee Unit. The General Partners
and the Assignor Limited Partner are affiliated through common
ownership. The Partnership's net profit or loss is allocated to
the Assignee Unit Holders and partners in accordance with the
Partnership Agreement.
The Partnership sold $25,714,000 in Assignee Unit interests in
a public offering that concluded in October 1985. There is
currently no established public market in which the Assignee
Units are traded. During the period from July 1995 through
December 31, 1998, ORP purchased, in the aggregate, 1,623
Assignee Units.
Effective January 12, 1994, the Partnership completed the
refinancing of all debt collateralized by three of its
properties, as well as the placement of a new loan collateralized
by the fourth property. To use this financing program, the
Partnership was required to modify its ownership structure in
certain respects. Accordingly, the Partnership transferred its
ownership interests in the properties to four new entities: (i)
ORP One L.L.C. (Fairlane East), (ii) ORP Two L.L.C. (The
Landings), (iii) ORP Three L.L.C. (Raven Hill), and (iv) ORP Four
Limited Partnership (Shadow Oaks). In the case of Shadow Oaks, a
limited partnership was used because, under applicable Florida
law, limited liability companies are taxed as corporations rather
than partnerships. The Partnership effectively holds all of the
ownership interests of each of these entities. The Partnership
holds a direct 99% interest in each new entity, and the remaining
1% interest is held by one of four new corporations: (i) ORP
Corporation I; (ii) ORP Corporation II; (iii) ORP Corporation
III; and (iv) ORP Corporation IV. The Partnership owns all of
the stock of these new corporations.
Note 2. Significant Accounting Policies
Basis of presentation. The consolidated financial statements
include the accounts of the Partnership and its subsidiaries.
All significant intercompany balances and transactions have been
eliminated.
Method of accounting. The Partnership's consolidated financial
statements are prepared on the accrual basis, in accordance with
generally accepted accounting principles.
Investment Properties. Investment properties are carried at
cost, net of accumulated depreciation. Investment properties are
reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be
recoverable. For purposes of evaluating the recoverability, a
recoverability test is performed using undiscounted net cash
flows of the individual properties. If impairment is indicated,
the carrying value of the investment property is adjusted based
on the discounted future cash flows.
Revenue Recognition. Rental income is recognized as rentals
become due. Rental payments received in advance are deferred
until earned. All leases between the company and the tenants of
the property are operating leases.
Depreciation and amortization. For financial reporting
purposes, depreciation of buildings and improvements is
calculated based upon cost less the estimated salvage value on a
straight-line basis over the estimated useful life of the
property of 25 years. Personal property is depreciated on a
straight-line basis over five years. For income tax reporting
purposes, depreciation of buildings, improvements, and personal
property is calculated using the accelerated cost recovery
methods, as provided in Section 168 of the Internal Revenue Code.
<PAGE 28>
- -----------------------------------------------------------------
Notes to Consolidated Financial Statements
- -----------------------------------------------------------------
Deferred costs. Deferred costs reflect financing fees, which
are amortized on a straight-line basis over the life of the
respective loan agreements for both financial and income tax
reporting purposes.
Use of estimates. The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from
those estimates.
Income taxes. No provision has been made for federal, state,
or local income taxes in the financial statements of the
Partnership, since the partners and the Assignee Unit Holders are
required to report on their individual tax returns their
allocable share of income, gains, losses, deductions, and credits
of the Partnership. The Partnership's tax return is prepared on
the accrual basis.
Net income and distributions per Assignee Unit. Net income
and distributions per Assignee Unit are based on the weighted
average number of units outstanding during the year.
For financial reporting purposes, the net income per assignee
unit of limited partnership of ORP ("Assignee Unit") has been
calculated by dividing the portion of the Partnership's net
income allocable to Assignee Unit Holders (98%) by the weighted
average of Assignee Units outstanding. In all computations of
earnings per Assignee Unit, the weighted average of Assignee
Units outstanding during the period constitutes the basis for the
net income amounts per Assignee Unit on the Consolidated
Statements of Operations.
Statements of cash flows. Since the consolidated statements
of cash flows are intended to reflect only cash receipts and cash
payment activity, the statements do not reflect investing and
financing activity that affect recognized assets or liabilities
that do not result in cash receipts or cash payments. This
noncash activity consists of distributions payable of $361,000,
$243,000, and $185,000 at December 31, 1998, 1997 and 1996,
respectively.
Interest on mortgage loans paid in 1998, 1997 and 1996 was
$1,730,000, $1,758,000, and $1,789,000, respectively.
Cash and cash equivalents. Cash and cash equivalents consist
of all demand deposits and government money market funds stated
at cost, which approximates market value, with original
maturities of three months or less at the date of purchase.
Note 3. Working Capital Reserve
Working Capital Reserve. The Partnership established an
initial working capital reserve in the amount of $1,286,000 in
1985 from net offering proceeds received in excess of investment
properties acquired. Funds in the reserve, which are invested in
United States Treasury Bills, are stated at cost, which
approximates market value. The Partnership Agreement permits
additions to the reserve of such amounts derived from the
operations of residential properties as deemed advisable by the
Managing General Partner. All funds held in the working capital
reserve will be available to fund renovations and repairs,
operating deficits, and other contingencies of the residential
properties. Funds held in the working capital reserve also can
be used to supplement distributions to the Assignee Unit Holders.
The balance of the working capital reserve at December 31, 1998
was $63,000.
<PAGE 29>
- -------------------------------------------------------------------
Notes to Consolidated Financial Statements
- -------------------------------------------------------------------
Note 4. Investment Properties
Information regarding the four investment properties is listed
below.
<TABLE>
- -------------------------------------------------------------------
<CAPTION>
Schedule of Carrying Values (in thousands)
- -------------------------------------------------------------------
Date of Purchase Carrying No. of
Property Acquisition Price Values Units
<S> <C> <C> <C> <C>
Fairlane East
Dearborn, Michigan 12/23/85 $12,100 $ 8,906 244
The Landings
Indianapolis, Indiana 10/31/84 4,050 3,065 150
Raven Hill
Burnsville, Minnesota 12/24/86 12,159 7,148 304
Shadow Oaks
Tampa, Florida 02/07/85 7,138 4,973 200
-----------------------------
$35,447 $24,092 898
===================================================================
Reconciliation of Real Estate (in thousands)
- -------------------------------------------------------------------
For the Years Ended December 31, 1998 1997 1996
- -------------------------------------------------------------------
Balance, beginning of period $39,250 $38,326 $37,586
Capitalized Improvements 919 924 740
-----------------------------
Balance, end of period $40,169 $39,250 $38,326
===================================================================
Reconciliation of Accumulated Depreciation (in thousands)
- -------------------------------------------------------------------
For the Years Ended December 31, 1998 1997 1996
Balance, beginning of period $14,827 $13,656 $12,523
Depreciation expense for period 1,250 1,171 1,133
-----------------------------
Balance, end of period $16,077 $14,827 $13,656
===================================================================
</TABLE>
<PAGE 30>
- -------------------------------------------------------------------
Notes to Consolidated Financial Statements
- -------------------------------------------------------------------
Note 4. Investment Properties (continued)
For the Year Ended December 31, 1998 (in thousands)
<TABLE>
<CAPTION>
Life upon
which
Depr. in
Initial Costs Gross Amount Carried at Latest
to Partnership Costs Close of Period<F1> Income
------------------ Capitalized ---------------------------- Date Statement
Buildings & Subsequent to Buildings & Accum. of Date is Computed
Description Encumbrances Land Improvements Acquisition<F2> Land Improvements Total<F3> Depr. Const. Acq. (Yrs)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Fairlane East Apts. $ 9,539 $1,251 $11,159 $ 2,408 $1,251 $13,566 $14,817 $ 5,911 1973 12/23/85 5-25
Dearborn, Michigan
(244 units - garden
apartments)
The Landings 3,144 552 3,594 1,007 562 4,590 5,152 2,088 1974 10/31/84 5-25
Indianapolis, Indiana
(150 units - garden
apartments)
Raven Hill Apts. 4,804 909 11,603 (549)<F4> 909 11,056 11,965 4,816 1971 12/24/86 5-25
Burnsville, Minnesota
(304 units - garden
apartments)
Shadow Oaks Apts. 3,273 962 6,636 638 959 7,276 8,235 3,262 1984 02/07/85 5-25
Tampa, Florida
(200 units - garden
apartments)
--------------------------------------------------------------------------------------
TOTAL $20,760 $3,674 $32,992 $ 3,504 $3,681 $36,488 $40,169 $16,077
======================================================================================
<FN>
<F1> No material intercompany profits are included in the carrying value of real estate apartment properties.
<F2> Net of seller guarantee payments.
<F3> The aggregate cost for federal income tax purposes is $43,275,000.
<F4> Includes a reduction in carrying value of $2,840,000 recorded in 1991.
</FN>
</TABLE>
<PAGE 31>
- -----------------------------------------------------------------
Notes to Consolidated Financial Statements
- -----------------------------------------------------------------
Note 5. Net Profits, Losses and Cash Distributions
Cash flow, as defined in the Partnership Agreement, will be
distributed within 60 days after June 30 and December 31, 90% to
the Assignee Unit Holders and 10% to the General Partners and the
Assignor Limited Partner. The Assignee Unit Holders are entitled
to a noncumulative, preferred 6% return. To the extent that
these preferences are not achieved from current operations, 40%
of the property management fees and the General Partners' and the
Assignor Limited Partner's 10% share in cash flow will be
deferred. Deferred property management fees are to be paid
without interest in the next year in which excess cash flow is
available after distribution to the Assignee Unit Holders of
their preferred 6% return or out of sale or refinancing proceeds.
Profits and losses for financial statement and tax purposes
arising from Partnership operations are allocated 98% to the
Assignee Unit Holders and 2% to the General Partners and the
Assignor Limited Partner.
All sale or refinancing proceeds, as defined in the
Partnership Agreement, will be distributed as follows:
(1) to the Assignee Unit Holders to repay their adjusted
capital contributions;
(2) to the General Partners and Assignor Limited Partner
to repay their adjusted capital contributions;
(3) to the Assignee Unit Holders until payment of the
preferred return on disposition (that is, an amount
equal to 10% of the adjusted capital contributions
multiplied by the number of calendar years from and
including 1986) is achieved;
(4) to the General Partners and Assignor Limited Partner
in an amount equal to any portion of their cash flow
from operations which was previously deferred and not
paid in subsequent years;
(5) to pay property disposition fees to Oxford National
Properties Corporation; and
(6) to pay any remaining amount 85% to the Assignee Unit
Holders and 15% to the General Partners and Assignor
Limited Partner.
Sale or refinance proceeds have been defined to be all cash
receipts arising from such transaction less expenses of the
transaction, the repayment of all related debt, including the
mortgage loan, the payments of any previously subordinated
property management fees, and the payments to fund reserves.
All liquidation proceeds shall be first distributed to each
Assignee Unit Holder and Partner, in an amount equal to the
positive balance in his capital account and, thereafter, in the
amounts and order of priority established above for sale or
refinancing proceeds.
The profits for tax purposes resulting from the sale of an
investment property which does not constitute the sale of
substantially all of the Partnership's assets will be allocated
among the Assignee Unit Holders, General Partners, and the
Assignor Limited Partner in a proportion equal to the
distributions received from the proceeds of such sale. Any
profits in excess of the cash distribution will be allocated 98%
to the Assignee Unit Holders and 2% to the General Partners and
the Assignor Limited Partner. A loss from such a sale will be
allocated 98% to the Assignee Unit Holders and 2% to the General
Partners and Assignor Limited Partner.
The profits for tax purposes from the sale or liquidation of
all or substantially all of the Partnership's assets will be
allocated as follows:
(1) the portion of the profits attributable to the excess
of the indebtedness of the investment property prior to its
sale over the Partnership's adjusted basis in such property
will be allocated to each Assignee Unit Holder having a
negative capital account balance, to the extent of such
negative balance, in the
proportion that the negative balance of each Assignee Unit
Holder's capital account bears to the aggregate negative
balances of all the Assignee Unit Holders; and
<PAGE 32>
- -----------------------------------------------------------------
Notes to Consolidated Financial Statements
- -----------------------------------------------------------------
(2) the remainder will be allocated among the Partners and
Assignee Unit Holders in proportion to the amount of sale
or refinancing proceeds which was distributed to them in
connection with the sale of the investment property or
liquidation of the Partnership.
Losses for tax purposes from the sale of all or substantially
all of the assets of the Partnership or the liquidation of the
Partnership will be allocated as follows:
(1) losses equal to the amount by which the capital
accounts of the Assignee Unit Holders and Partners exceed
the total adjusted capital contributions will be allocated
based on the ratio of each Assignee Unit Holder's and
Partner's capital account excess balance to the total
excess balance;
(2) losses will be allocated among the Assignee Unit
Holders and Partners with positive capital accounts equal
to the ratio of each Assignee Unit Holder's and Partner's
positive capital account to the total positive capital
accounts; and
(3) any remaining losses will be allocated 98% to Assignee
Unit Holders and 2% to the General Partners and the
Assignor Limited Partner.
Note 6. Mortgage Notes Payable
Effective January 12, 1994, separate mortgage loans were made
to each of the four new ownership entities in the aggregate
original principal amount of $22,362,000. These mortgage loans
are not cross-collateralized, nor are they cross-defaulted. Each
note bears interest at a fixed rate of 8.25% per annum and
matures on February 11, 2004. The total monthly principal and
interest payment is $176,000. As of December 31, 1998, the total
outstanding balance of the four mortgage notes payable was
$20,760,000. The properties are in compliance with their
respective loan agreements as of December 31, 1998.
The individual outstanding mortgage notes payable as of December
31, 1998 and monthly debt service are as follows:
<TABLE>
- -----------------------------------------------------------------
<CAPTION>
Property Collateralizing Debt Outstanding Monthly
(in thousands) Mortgage Debt Service<F1>
- -----------------------------------------------------------------
<S> <C> <C>
Fairlane East, Dearborn, Michigan $ 9,539 $ 81
The Landings, Indianapolis, Indiana 3,144 26
Raven Hill, Burnsville, Minnesota 4,804 41
Shadow Oaks, Tampa, Florida 3,273 28
- -----------------------------------------------------------------
$20,760 $176
=================================================================
<FN>
<F1> Includes principal and interest.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Principal amortization (in thousands) over the next five years is
as follows:
Year Amortization
---- ------------
<C> <C>
1999 $419
2000 $455
2001 $493
2002 $536
2003 $582
</TABLE>
<PAGE 33>
- -----------------------------------------------------------------
Notes to Consolidated Financial Statements
- -----------------------------------------------------------------
The mortgage notes require the establishment and maintenance
of escrow subaccounts for each property. These subaccounts are
the Basic Carrying Costs Subaccount, the Debt Service Payment
Subaccount, the Recurring Replacement Reserve Subaccount, the
Operations and Maintenance Expense Subaccount, the Liquidity
Reserve Subaccount, and the Curtailment Reserve Subaccount. The
Basic Carrying Costs Subaccount and Liquidity Reserve Subaccount
were initially funded in full out of loan proceeds for all
properties at the mortgage closing. A temporary
Engineering/Capital Replacement Reserve Subaccount was also
established at closing for all properties, except Shadow Oaks, to
pay for necessary capital improvements identified during the
lender's due diligence review of the properties. The permanent
subaccounts, except the Operations and Maintenance Expense
Subaccount and the Curtailment Reserve Subaccount, will hereafter
be directly funded and maintained monthly, as needed, from
property income (except security deposits), in accordance with
formulas established in the loan agreement and based on
expenditures required in the following month. The Operations and
Maintenance Expense Subaccount and the Curtailment Reserve
Subaccount would be established if the borrowers have not
provided a written commitment for the refinancing of the existing
loans on or before six months prior to the maturity dates of the
existing loans. The subaccounts will be funded monthly in the
order listed above, except for certain changes that may occur in
the year prior to maturity of the respective loans. Excess
income from each property is distributed to the applicable
borrower after all subaccounts that must be funded at that time
have been fully funded in the given month, according to the terms
of the Loan Agreement. As of December 31, 1998, the escrow
subaccounts total $783,000 and are included in Other Assets in
the accompanying Consolidated Balance Sheets.
The mortgage notes prohibit secondary financing unless
specifically approved by the lender or specified in the loan
documents. In addition, the mortgage notes prohibit prepayment
before five years and impose a prepayment penalty equal to the
greater of 1% or the Yield Maintenance Premium (as defined in the
Loan Agreement) for prepayments during the sixth and seventh
years. After the seventh year, prepayment is allowed with no
prepayment penalty.
In general, the loans are nonrecourse. ORP One L.L.C. and ORP
Corporation I, ORP Two L.L.C. and ORP Corporation II, ORP Three
L.L.C. and ORP Corporation III, and ORP Four Limited Partnership
and ORP Corporation IV have guaranteed payment of all clean-up
costs if environmental contamination is subsequently discovered
on their respective properties.
Note 7. Transactions with Affiliates
The Partnership has no directors or officers. The Managing
General Partner and its affiliates do not receive any direct
compensation, but are reimbursed by ORP for any actual direct
costs and expenses incurred in connection with the operation of
the Partnership.
Expense reimbursements are for an affiliate's personnel costs,
travel expenses and interest on interim working capital advances
for activities directly related to the Partnership which were not
covered separately by fees. Total reimbursements to this
affiliate for the years ended December 31, 1998, 1997 and 1996
were $116,000, $65,000, and $56,000, respectively, for
administrative and accounting related costs.
An affiliate of NHP Management Company, the property manager,
has a separate services agreement with Oxford Realty Financial
Group, Inc. ("ORFG"), an affiliate of the Managing General
Partner, pursuant to which ORFG provides certain services to NHP
in exchange for service fees in an amount equal to 25.41% of all
fees collected by NHP from certain properties, including those
owned by the Partnership.
An affiliate of ORP and its managing general partner, Oxford
Residential Properties I Corporation ("Managing General Partner")
owns approximately 20.7% of the outstanding Assignee Units.
<PAGE 34>
- -----------------------------------------------------------------
Notes to Consolidated Financial Statements
- -----------------------------------------------------------------
Note 8. Other Liabilities
Other Liabilities. Under the Property Management Agreements
with NHP Management Company, the management fee is equal to 5% of
gross collections for all properties; however, 40% of this fee is
subordinated until certain distribution preference levels to the
Limited Partners or Assignee Unit Holders are achieved. Property
management fees of $153,000, $149,000, and $143,000 for the years
ended December 31, 1998, 1997 and 1996, respectively, have been
deferred and the total amount deferred at December 31, 1998 was
$712,000. The Managing General Partner has determined that the
property manager is not an affiliate of the Partnership.
Note 9. Taxable Loss
A reconciliation of the major differences between net income
for the consolidated financial statements and net loss
for tax purposes is as follows:
<TABLE>
- -----------------------------------------------------------------
<CAPTION>
(in thousands, except for Assignee Unit data)
December 31, 1998 1997 1996
- -----------------------------------------------------------------
<S> <C> <C> <C>
Net income per consolidated
financial statements $ 414 $ 402 $ 194
Excess tax depreciation (453) (518) (507)
- -----------------------------------------------------------------
Net loss for tax reporting purposes $ (39) $ (116) $ (313)
=================================================================
Per Assignee Unit:
Net income per consolidated
financial statements $ 16.71 $ 16.03 $ 7.63
Excess tax depreciation (18.27) (20.65) (19.92)
- -----------------------------------------------------------------
Net loss for tax reporting purposes $ (1.56) $ (4.62) $(12.29)
=================================================================
</TABLE>
Note 10. Commitments and Contingencies
The Partnership, through its subsidiaries, owns real estate
and, as such, is subject to various environmental laws of Federal
and local governments. Compliance by the Partnership with
existing laws has not had a material adverse effect on its
financial condition, results of operations, or liquidity, and
based on reports from independent third parties, management does
not believe it will have such an effect in the future. However,
the Partnership cannot predict the impact of new or changed laws
or regulations on its current properties.
Note 11. Subsequent Events
On March 1, 1999, ORP made a semi-annual cash distribution of
approximately $361,000 or $15.00 per Assignee Unit to Assignee
Unit Holders of record as of December 31, 1998.
<PAGE 35>
- -----------------------------------------------------------------
Distribution Information
- -----------------------------------------------------------------
The following table sets forth, on a semiannual basis, all
distributions declared since inception of the Partnership.
<TABLE>
<CAPTION>
Amount Distributed<F1>
- -----------------------------------------------------------------
Six months ended<F1> Assignee Per
Units Assignee
Outstanding Unit Investors<F2>
- -----------------------------------------------------------------
<S> <C> <C> <C>
1998
December 31, 1998 24,091 $ 15.00 $ 361,365
June 30, 1998 24,325 $ 15.00 $ 364,875
- -----------------------------------------------------------------
1997
December 31, 1997 24,325 $ 10.00 $ 243,250
June 30, 1997 24,657 $ 10.00 $ 246,570
- -----------------------------------------------------------------
1996
December 31, 1996 24,657 $ 7.50 $ 184,928
June 30, 1996 24,946 $ 7.50 $ 187,095
- -----------------------------------------------------------------
1995
For the year ended 25,450 $ 12.50 $ 317,465
- -----------------------------------------------------------------
1994
For the year ended 25,714 $ 10.00 $ 257,140
- -----------------------------------------------------------------
1993
For the year ended 25,714 $ 10.00 $ 257,140
- -----------------------------------------------------------------
1992
For the year ended 25,714 $ N/A $ N/A
- -----------------------------------------------------------------
1991
For the year ended 25,714 $ N/A $ N/A
- -----------------------------------------------------------------
1990
For the year ended 25,714 $ 10.00 $ 257,140
- -----------------------------------------------------------------
1989
For the year ended 25,714 $ 15.00 $ 385,710
- -----------------------------------------------------------------
1988
For the year ended 25,714 $ 25.00 $ 642,849
- -----------------------------------------------------------------
1987
For the year ended 25,714 $ 44.72 $1,150,012
- -----------------------------------------------------------------
1986
For the year ended 25,714 $ 45.76 $1,176,612
- -----------------------------------------------------------------
1985
December 31, 1985<F3> 25,714 $ 12.93 $ 332,381
- -----------------------------------------------------------------
Total $250.91 $6,364,532
=================================================================
<FN>
<F1> Distributions in all cases were paid in the second month
following the sixmonth period to which the distribution
relates.
<F2> The aggregate amount distributed to Investors since inception
is approximately $6,365,000, or approximately 25%, of their
original investment.
<F3> Assumes Investors were admitted in July 1985.
</FN>
</TABLE>
<PAGE 36>
- --------------------------------------------------------------------
General Partnership Information
- --------------------------------------------------------------------
Advisor
Merrill Lynch, Hubbard Inc.
New York, New York
Selling Agent
Merrill Lynch, Pierce, Fenner & Smith, Incorporated
New York, New York
Legal Counsel
Shaw, Pittman, Potts & Trowbridge
Washington, D.C.
Independent Accountants
PricewaterhouseCoopers, LLP
Washington, D.C.
Transfer Agent and Registrar
MMS Escrow & Transfer Agency, Inc.
P.O. Box 7090
Troy, Michigan 48007-9921
Managing General Partner
Oxford Residential Properties I Corporation
7200 Wisconsin Avenue, 11th Floor
Bethesda, Maryland 20814
The Annual Report on Form 10-K for theYear Ended December 31,
1998, filed withSecurities and Exchange Commission,
is available to Assignee Unit Holders and
may be obtained by writing:
Investor Services
Oxford Residential Properties I Limited Partnership
P.O. Box 7090
Troy, Michigan 48007-9921
(248) 614-4550
<PAGE 37>
Instructions for Investors who wish to reregister or transfer ORP
Assignee Units
Please follow the instructions below if you wish to reregister or
transfer ownership of your Oxford Residential Properties I
Limited Partnership ("ORP" or the "Partnership") Assignee Units.
No transfers or sales can be effected without the consent of the
Managing General Partner and the completion of the proper
documents.
To cover the costs associated with processing transfers, MMS
Escrow & Transfer Agency, Inc. ("MMS"), the transfer agent for
ORP, charges $25 for each transfer of ORP Assignee Units
between related parties, and $50 per seller for each transfer
for consideration (sale). The only exception is a transfer to
a surviving joint holder of Assignee Units when the other
joint holder dies, in which case no fee is charged. MMS
charges $150 for the conversion of Assignee Units into a
limited partner interest.
To transfer ownership of Assignee Units held in a Merrill
Lynch account, please have your Merrill Lynch financial
consultant contact Merrill Lynch Partnership Operations in New
Jersey at (201) 557-1619 to request the necessary transfer
documents. Merrill Lynch Partnership Operations will only
accept calls from your financial consultant. YOU MUST HAVE
THE PROPER TRANSFER DOCUMENTS FROM MERRILL LYNCH TO EFFECT A
TRANSFER. Your financial consultant must contact Partnership
Operations, as ORP Investor Services does not send out
transfer papers for Assignee Units held in a Merrill Lynch
account.
Investors who no longer hold their Assignee Units in a Merrill
Lynch account should contact ORP Investor Services at (248)
614-4550 or P.O. Box 7090, Troy, Michigan 48007-9921, to
obtain transfer documents. YOU MUST OBTAIN THE PROPER
TRANSFER DOCUMENTS FROM ORP INVESTOR SERVICES TO EFFECT A
TRANSFER OF ASSIGNEE UNITS WHICH YOU HOLD PERSONALLY.
To redeposit your ORP units into a Merrill Lynch account,
please notify ORP Investor Services in writing after the
Merrill Lynch account has been opened. ORP Investor Services
will then instruct Merrill Lynch to deposit the Assignee Units
into the account.
Please remember to notify ORP Investor Services in writing at
the address below or by calling (248) 614-4550 in the event
you change your mailing address or your financial consultant.
We can then continue to provide you and your representative
with timely information about your investment in Oxford
Residential Properties I Limited Partnership.
The Annual Report on Form 10-K for the year ended December 31,
1998, filed with the Securities and Exchange Commission, is
available to Assignee Unit Holders and may be obtained by
writing:
Investor Services
Oxford Residential Properties I Limited Partnership
P.O. Box 7090
Troy, Michigan 48007-9921
(248) 614-4550
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheets at December 31, 1998 and the Consolidated Statements
of Operations for the year ended December 31, 1998 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 1,351
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,483
<PP&E> 40,196
<DEPRECIATION> 16,077
<TOTAL-ASSETS> 26,926
<CURRENT-LIABILITIES> 1,631
<BONDS> 20,760
0
0
<COMMON> 0
<OTHER-SE> 4,535
<TOTAL-LIABILITY-AND-EQUITY> 26,926
<SALES> 0
<TOTAL-REVENUES> 7,718
<CGS> 0
<TOTAL-COSTS> 3,627
<OTHER-EXPENSES> 1,950
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,727
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 414
<EPS-PRIMARY> 16.71
<EPS-DILUTED> 16.71
</TABLE>
