<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1996
--------------------------------------------------------------
Commission file number 0-13563
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DAMSON/BIRTCHER REALTY INCOME FUND - I
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 13-3264491
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
27611 La Paz Road, P.O. Box A-1, Laguna Niguel, California 92677-0100
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(714) 643-7700
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(Registrant's telephone number, including area code)
N/A
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 12(g), 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding twelve 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
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<PAGE> 2
DAMSON/BIRTCHER REALTY INCOME FUND-I
QUARTERLY REPORT ON FORM 10-Q
FOR THE THREE MONTHS ENDED MARCH 31, 1996
INDEX
<TABLE>
<CAPTION>
Page
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets -
March 31, 1996 (Unaudited) and December 31, 1995 . . . . . . . . . . 3
Statements of Operations (Unaudited) -
Three Months Ended March 31, 1996 and 1995 . . . . . . . . . . . . . 4
Statements of Cash Flows (Unaudited) -
Three Months Ended March 31, 1996 and 1995 . . . . . . . . . . . . . 5
Notes to Financial Statements (Unaudited) . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . . . . 9
PART II. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DAMSON/BIRTCHER REALTY INCOME FUND-I
BALANCE SHEETS
------------------------------------
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
----------- ------------
(Unaudited) (Note)
<S> <C> <C>
ASSETS
- ------
Properties held for sale (net of valuation $37,062,000 $36,996,000
allowance of $5,919,000 in 1996 and
$4,770,000 in 1995)
Cash and cash equivalents 109,000 301,000
Accounts receivable (net of allowance for
doubtful accounts of $42,000 in 1996 and
$63,000 in 1995) 26,000 43,000
Accrued rent receivable 441,000 443,000
Prepaid expenses and other assets 727,000 710,000
----------- -----------
$38,365,000 $38,493,000
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
Accounts payable and accrued liabilities $ 1,000,000 $ 1,153,000
Secured loan(s) payable 3,772,000 3,116,000
----------- -----------
Total liabilities 4,772,000 4,269,000
----------- -----------
Partners' capital (deficit):
Limited Partners 34,089,000 34,714,000
General Partner (496,000) (490,000)
----------- -----------
33,593,000 34,224,000
Commitments and contingencies - -
----------- -----------
$38,365,000 $38,493,000
=========== ===========
</TABLE>
Note: The balance sheet at December 31, 1995 has been prepared from the
audited financial statements as of that date.
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 4
DAMSON/BIRTCHER REALTY INCOME FUND-I
STATEMENTS OF OPERATIONS
(UNAUDITED)
------------------------------------
<TABLE>
<CAPTION>
Three Months Ended March 31,
-------------------------------
1996 1995
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<S> <C> <C>
REVENUES
- --------
Rental income $1,548,000 $1,479,000
Interest income 1,000 11,000
---------- ----------
Total revenues 1,549,000 1,490,000
---------- ----------
EXPENSES
- --------
Operating expenses 437,000 465,000
Real estate taxes 250,000 235,000
Depreciation and amortization 40,000 509,000
General and administrative 234,000 237,000
Interest 70,000 74,000
Adjustment to carrying value of
real estate 1,149,000 -
---------- ----------
Total expenses 2,180,000 1,520,000
---------- ----------
NET LOSS $ (631,000) $ (30,000)
========== ==========
NET LOSS ALLOWABLE TO:
General Partner $ (6,000) $ -
========== ==========
Limited Partners $ (625,000) $ (30,000)
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
DAMSON/BIRTCHER REALTY INCOME FUND-I
STATEMENTS OF CASH FLOWS
(UNAUDITED)
------------------------------------
<TABLE>
<CAPTION>
Three Months Ended March 31,
------------------------------
1996 1995
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) $ (631,000) $ (30,000)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation and amortization 40,000 509,000
Adjustment to carrying value of real estate 1,149,000 -
Changes in:
Additions to properties held for sale (1,215,000) -
Accounts receivable 17,000 21,000
Prepaid expenses and other assets (57,000) (18,000)
Accrued rent receivable 2,000 (33,000)
Accounts payable and accrued liabilities (153,000) (149,000)
---------- ----------
Net cash (used in) provided by operating
activities (848,000) 300,000
Cash flows from investing activities:
Investments in real estate - (73,000)
---------- ----------
Net cash used in investing activities - (73,000)
Cash flows from financing activities:
Secured loan payable 656,000 (41,000)
Distributions - (256,000)
---------- ----------
Net cash provided by (used in) financing
activities 656,000 (297,000)
Net decrease in cash and cash equivalents (192,000) (70,000)
Cash and cash equivalents, beginning of
period 301,000 648,000
---------- ----------
Cash and cash equivalents, end of period $ 109,000 $ 578,000
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
DAMSON/BIRTCHER REALTY INCOME FUND-I
NOTES TO FINANCIAL STATEMENTS - UNAUDITED
(1) Accounting Policies
The financial statements of Damson/Birtcher Realty Income Fund-I (the
"Partnership") included herein have been prepared by the General
Partner, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. These financial statements
include all adjustments which are of a normal recurring nature and, in
the opinion of the General Partner, are necessary for a fair
presentation. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted,
pursuant to the rules and regulations of the Securities and Exchange
Commission. These financial statements should be read in conjunction
with the financial statements and notes thereto included in the
Partnership's annual report on Form 10-K for the year ended December
31, 1995.
Earnings Per Unit
The Partnership Agreement does not designate investment interests in
units. All investment interests are calculated on a "percent of
Partnership" basis, in part to accommodate original reduced rates on
sales commissions for subscriptions in excess of certain specified
amounts.
A Limited Partner who was charged a reduced sales commission or no
sales commission was credited with proportionately larger Invested
Capital and therefore had a disproportionately greater interest in the
capital and revenues of the Partnership than a Limited Partner who
paid commissions at a higher rate. As a result, the Partnership has
no set unit value as all accounting, investor reporting and tax
information is based upon each investor's relative percentage of
Invested Capital. Accordingly, earnings or loss per unit is not
presented in the accompanying financial statements.
Carrying Value of Real Estate
In March 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121 "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of," ("FAS 121"). This Statement requires that if the
General Partner believes factors are present that may indicate
long-lived assets are impaired, the undiscounted cash flows, before
debt service, related to the assets should be estimated. If these
estimated cash flows are less than the carrying value of the asset,
then impairment is deemed to exist. If impairment exists, the asset
should be written down to the estimated fair value.
6
<PAGE> 7
DAMSON/BIRTCHER REALTY INCOME FUND-I
NOTES TO FINANCIAL STATEMENTS - UNAUDITED (Cont'd.)
(1) Accounting Policies (Cont'd.)
Further, assets held for sale, including any unrecoverable accrued
rent receivable or capitalized leasing commissions, should be carried
at the lower of carrying value or fair value less estimated selling
costs. Any adjustment to carrying value is recorded as a valuation
allowance against property held for sale. Each reporting period, the
General Partner will review its estimates of fair value, which may be
decreased or increased up to the original carrying value. Finally,
assets held for sale are no longer depreciated. The General Partner
adopted FAS 121 at December 31, 1995 and the adoption did not have a
material impact on the Partnership's operations or financial position,
as prior to December 31, 1995, the Partnership had not had any
properties held for sale.
As noted above, as of December 31, 1995 the General Partner decided to
account for the Partnership's properties as assets held for sale,
instead of for investment. Assuming an average 12 month holding
period, the General Partner compared the carrying value of each
property to its appraised value as of January 1, 1996. If the
carrying value of a property and certain related assets was greater
than its appraised value, less selling costs, the General Partner
reduced the carrying value of the property by the difference. Using
this methodology, the General Partner determined that The Cornerstone,
Ladera I Shopping Center, Terracentre, Arlington Executive Plaza and
Washington Technical Center had carrying values greater than they had
appraised values, and therefore reduced their carrying values by
$1,600,000, $560,000, $590,000, $1,250,000 and $770,000 to $9,032,000,
$6,234,000, $2,397,000, $2,740,000 and $2,612,000, respectively.
During the first quarter of 1996, the Partnership spent $1,192,000 on
building and tenant improvements at Arlington Executive Plaza
($38,000), the Cornerstone ($798,000), Terracentre ($23,000) and
Oakpointe (333,000). Since these expenditures had already been
anticipated by the Partnership in 1995 and taken into account in the
third-party appraisals that form the basis of the General Partner's
estimate of the fair market value of the Partnership's portfolio as of
December 31, 1995, the General Partner did not change its estimate of
the fair market value of the portfolio as of March 31, 1996.
(2) Transactions with Affiliates
The Partnership has no employees and, accordingly, the General Partner
and its affiliates perform services on behalf of the Partnership in
connection with administering the affairs of the Partnership. The
General Partner and affiliates are reimbursed for their general and
administrative costs actually incurred and associated with services
performed on behalf of the Partnership. For the three months ended
March 31, 1996 and 1995, the Partnership incurred approximately
$47,000 and $55,000, respectively, of such expenses.
7
<PAGE> 8
DAMSON/BIRTCHER REALTY INCOME FUND-I
NOTES TO FINANCIAL STATEMENT - UNAUDITED (Cont'd.)
(2) Transactions with Affiliates (Cont'd.)
An affiliate of the General Partner provides property management
services with respect to the Partnership's properties and receives a
fee for such services not to exceed 3% of the gross receipts from the
properties under management. Such fees amounted to approximately
$44,000 and $44,000 for the three months ended March 31, 1996 and
1995, respectively. In addition, an affiliate of the General Partner
received $89,000 and $83,000 for the three months ended March 31, 1996
and March 31, 1995, respectively, as reimbursement of costs of on-site
property management personnel and other reimbursable costs.
As previously reported, on June 24, 1993, the Partnership completed
its solicitation of written consent from its Limited Partners. A
majority in interest of the Partnership's Limited Partners approved
each of the proposals contained in the Information Statement dated May
5, 1993. Those proposals have been implemented by the Partnership as
contemplated by the Information Statement as amendments to the
Partnership Agreement, and are reflected in these financial statements
as such.
The amended Partnership Agreement provides for the Partnership's
payment to the General Partner of an annual asset management fee equal
to .75% of the aggregate appraised value of the Partnership's
properties as determined by independent appraisal undertaken in
January of each year. Such fees for the three months ended March 31,
1996 and March 31, 1995, amounted to $76,000 and $76,000,
respectively.
In addition, the amended Partnership Agreement provides for payment to
the General Partner of a leasing fee for services rendered in
connection with leasing space in a Partnership property after the
expiration or termination of leases. Fees for leasing services for
the three months ended March 31, 1996 and March 31, 1995, amounted to
$6,000 and $1,000, respectively.
(3) Commitments and Contingencies
Litigation
The Partnership is not a party to any material pending legal
proceedings other than ordinary routine litigation incidental to its
business. It is the General Partner's belief that the outcome of
these proceedings will not be material to the business or financial
condition of the Partnership.
8
<PAGE> 9
DAMSON/BIRTCHER REALTY INCOME FUND-I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resource
Since completion of its acquisition program in September 1985, the
Partnership has been engaged primarily in the operation of its
properties. The Partnership's objective has been to hold its
properties as long-term investments, although properties may be sold
at any time depending upon the General Partner's judgment of the
anticipated remaining economic benefits of continued ownership.
Working capital is and will be provided principally from the operation
of the Partnership's properties and the working capital reserve
established for the properties. The Partnership may incur mortgage
indebtedness relating to such properties by borrowing funds primarily
to fund capital improvements or to obtain financing proceeds for
distribution to the partners.
On July 30, 1993, the Partnership obtained a loan secured by a First
Deed of Trust on the Certified Distribution Center in Salt Lake City,
Utah. The loan, in the amount of $3,500,000, carries a fixed interest
rate of 9% per annum over a 13-year fully amortizing term. The
Partnership's first payment of $38,138.82 was paid on September 1,
1993, with monthly installments due thereafter. Proceeds from that
loan, along with $500,000 of Partnership cash reserves, were used to
retire the Partnership's then existing debt of $4,000,000.
In March 1996, the Partnership entered into a loan agreement pursuant
to which it may borrow up to $1,500,000, evidenced by a note secured
by a first deed of trust and financing statement on the Ladera I
Shopping Center in Albuquerque, New Mexico. Pursuant to the note and
loan agreement, until March 3, 1997 the Partnership is to pay interest
only at the rate of 1% over prime (currently, the loan rate is 9.25%)
on the amounts it borrows. Thereafter, the outstanding balance of all
advances made under the note is to be converted to a fully amortizing
loan payable in 24 equal monthly payments of principal plus accrued
interest, commencing April 3, 1997. The Partnership has agreed to
repay the loan from the first sale of the Partnership's property. The
net proceeds of the foregoing loan are to be used to fund a portion of
the renovation and tenant improvements at The Cornerstone and tenant
improvements at Oakpointe, with any remainder added to the
Partnership's working capital reserves. As of March 31, 1996, the
Partnership had borrowed $700,000 pursuant to the aforementioned loan
agreement to fund a portion of the renovation at the Cornerstone
Shopping Center, which is substantially complete. There will be
additional costs for tenant improvements as the vacant space in the
center is leased.
9
<PAGE> 10
DAMSON/BIRTCHER REALTY INCOME FUND-I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Cont'd.)
Liquidity and Capital Resources(Cont'd.)
Certain of the Partnership's properties are not fully leased. The
Partnership is actively marketing the vacant space in these
properties, subject to the competitive environment in each of the
market areas. To the extent the Partnership is not successful in
maintaining or increasing occupancy levels at these properties, the
Partnership's future cash flow may be reduced.
The Partnership made no distribution in the first quarter of 1996.
Distributions from inception through March 31, 1996 represent cash
flow generated from operations of the Partnership's properties and
interest earned on the temporary investment of working capital net of
capital reserve requirements. Future cash distributions will be made
principally to the extent of cash flow attributable to operations and
sales of the Partnership's properties and interest earned on the
investment of capital reserves, after loan repayments, payment for
capital improvements to the Partnership's properties and providing for
capital reserves.
In accordance with the terms of the Partnership Agreement, each year
the Partnership secures an independent appraisal of each of the
Partnership's properties as of January 1. Prior to the January 1,
1995 appraisals, the independent appraiser had estimated each
property's "Investment Value," utilizing a seven to ten-year cash flow
model to estimate value based upon an income approach.
The amendment to the Partnership Agreement consented to by the Limited
Partners in June 1993 mandated, among other things, that the General
Partner seek a vote of (and provide an analysis and recommendation to)
the Limited Partners no later than December 31, 1996 regarding the
prompt liquidation of the Partnership in the event that properties
with (then) current appraised values (constituting at least one-half
of the total (then) current appraised values) of all of the
Partnership's properties are not sold or under contract for sale by
the end of 1996.
Given that mandate, the General Partner requested that the appraiser
provide an assessment of value that reflects a shorter investment
holding term. Although the General Partner does not currently have a
specific liquidation plan for the Partnership's properties, it
requested that the appraiser assume that the entire portfolio would
be sold over four years, in connection with the January 1995
appraisals and over three years in connection with the January 1996
appraisals.
Using the shorter-term investment methodology that is consistent with
the mandate of the 1993 amendment to the Partnership Agreement, the
appraiser estimated the value of the Partnership's properties at
January 1, 1996 to be
10
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DAMSON/BIRTCHER REALTY INCOME FUND-I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Cont'd.)
Liquidity and Capital Resources(Cont'd.)
$40,390,000, or $4,155 per $10,000 original investor subscription.
Over the past year, the General Partner has examined several
alternative methods to achieve the Partnership's goal of selling the
Partnership's properties and liquidating the Partnership at the
earliest practicable time consistent with achieving reasonable value
for the Limited Partners' investment. As explained in the
Partnership's May 5, 1993 Information Statement, "achieving
reasonable value" has meant for the Partnership to balance receiving
higher sales prices per property than their 1993 values while at the
same time not waiting forever to sell at a theoretical "top of the
market." Alternatives under consideration by the General Partner may
include a property-by-property liquidation or selling all of the
properties as a single portfolio. The General Partner has had
preliminary discussions regarding disposition, in whole or in part, of
the Partnership's properties with various potential purchasers of some
or all of the Partnership's portfolio.
In connection with its consideration of these alternatives, the
General Partner has decided to treat its properties as held for sale,
instead of for investment, for financial statement purposes. In
accordance with Statement of Financial Accounting Standards No. 121
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of," the carrying value of these properties was
evaluated to ensure that each property was carried on the
Partnership's balance sheet at the lower of cost or fair value less
estimated selling costs. The General Partner estimated fair value for
this purpose based on appraisals performed as of January 1, 1996.
However, fair value can only be determined based upon sales to third
parties and sales proceeds could differ substantially.
Based upon the General Partner's survey of the current marketplace,
the General Partner believes, in fact, that in the relatively short
term the Partnership's properties could generate sales prices that, in
the aggregate, could be materially less than their aggregate appraised
values based upon an "Investment Value" appraisal model. The amount
of the possible variance between the aggregate appraised values and
potential sales prices cannot be reliably estimated at this time,
because of the numerous variables that could affect the sales prices,
including but not limited to the time frame in which the properties
must be sold, method of sale (property-by-property or single
transaction), prevailing capitalization rates at which comparable
properties are being sold at the time of the Partnership's sales,
constantly changing local market conditions and the state of leasing
negotiations and capital expenditures for the properties at the time
of sale.
11
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DAMSON/BIRTCHER REALTY INCOME FUND-I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Cont'd.)
Results of Operations for the Three Months Ended March 31, 1996
Compared With the Three Months Ended March 31, 1995
The increase in rental income for the three months ended March 31,
1996, as compared to the corresponding period in 1995, was primarily
attributable to an increase in revenue at Oakpointe which was a result
of the successful negotiation of a five year lease with Symbol
Technologies effective February 1, 1996. The signing of this lease
brings the occupancy at Oakpointe up to 100%. In addition, operating
expense recoveries at Oakpointe increased during 1996.
The decrease in interest income from 1995 to 1996 was attributable to
a decrease in the average level of working capital available for short
term investments.
The decrease in operating expenses for the three months ended March
31, 1996, as compared to the corresponding period in 1995, was
primarily attributable to a decrease in legal and professional fees at
The Cornerstone. In addition, space planning costs were lower at
Oakpointe in 1996.
The increase in real estate taxes for the three months ended March 31,
1996, as compared to the corresponding period in 1995, was
attributable to higher tax assessments at The Cornerstone and
Oakpointe.
The decrease in depreciation and amortization expense for the three
months ended March 31, 1996 as compared to the corresponding period in
1995 was attributable to the adoption of Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed of,"
pursuant to which assets held for sale are no longer depreciated.
The Partnership adjusted the carrying value of the portfolio by
$1,149,000, which is the amount spent on the building improvements,
tenant improvements, leasing commissions and other related assets for
the Cornerstone, Terracentre, Arlington Executive Plaza and Oakpointe.
12
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DAMSON/BIRTCHER REALTY INCOME FUND-I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Cont'd.)
Results of Operations for the Three Months Ended March 31, 1996
Compared With the Three Months Ended March 31, 1995(Cont'd.)
General and administrative expenses for the three months ended March
31, 1996 and 1995, include charges of $128,000 and $132,000,
respectively, from the General Partner and its affiliates for services
rendered in connection with administering the affairs of the
Partnership and operating the Partnership's properties. Also included
in general and administrative expenses for the three months ended
March 31, 1996 and 1995, are direct charges of $106,000 and $105,000,
respectively, relating to audit fees, tax preparation fees, legal fees
and professional services, liability insurance expenses, costs
incurred in providing information to the Limited Partners and other
miscellaneous costs.
The decrease in general and administrative expenses for the three
months ended March 31, 1996, as compared to the corresponding period
in 1995, was primarily attributable to the decreased asset management
and leasing fees charged by the General Partner during 1996. In
addition, general and administrative wages were lower in 1996.
13
<PAGE> 14
DAMSON/BIRTCHER REALTY INCOME FUND-I
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
So far as is known to the General Partner, neither the Partnership nor
its properties are subject to any material pending legal proceedings.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
27 - Financial Data Schedule
b) Reports on Form 8-K:
None filed in quarter ended March 31, 1996.
14
<PAGE> 15
DAMSON/BIRTCHER REALTY INCOME FUND-I
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<S> <C>
DAMSON/BIRTCHER REALTY INCOME FUND-I
By: DAMSON/BIRTCHER PARTNERS By: BIRTCHER PARTNERS,
(General Partner) a California general partnership
By: BIRTCHER INVESTMENTS,
a California general partnership,
General Partner of Birtcher Partners
By: BIRTCHER LIMITED,
a California limited partnership,
General Partner of Birtcher Investments
By: BREICORP,
a California corporation,
formerly known as Birtcher
Real Estate Inc., General
Partner of Birtcher Limited
Date: May 13, 1996 By: /s/ ROBERT M. ANDERSON
-----------------------------
Robert M. Anderson
Executive Director
BREICORP
By: LF Special Fund II, L.P.,
a California limited partnership
By: Liquidity Fund Asset Management, Inc.,
a California corporation, General
Partner of LF Special Fund II, L.P.
Date: May 13, 1996 By: /s/ BRENT R. DONALDSON
-------------------------------------
Brent R. Donaldson
President
Liquidity Fund Asset Management, Inc.
</TABLE>
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BALANCE
SHEET AND STATEMENT OF OPERATION OF DAMSON BIRTCHER REALTY INCOME FUND-I AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 109,000
<SECURITIES> 0
<RECEIVABLES> 68,000
<ALLOWANCES> 42,000
<INVENTORY> 0
<CURRENT-ASSETS> 1,303,000
<PP&E> 37,062,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 38,365,000
<CURRENT-LIABILITIES> 1,189,000
<BONDS> 3,583,000
0
0
<COMMON> 0
<OTHER-SE> 33,593,000
<TOTAL-LIABILITY-AND-EQUITY> 38,365,000
<SALES> 0
<TOTAL-REVENUES> 1,549,000
<CGS> 0
<TOTAL-COSTS> 961,000
<OTHER-EXPENSES> 1,149,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 70,000
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (631,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (631,000)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
