SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-----------
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 30, 1995
New England Realty Associates Limited Partnership
------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Massachusetts 0-12138 04-2619298
------------------------------------------------------------------------
(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) File Number) Identification No.)
39 Brighton Avenue, Allston, Massachusetts 02134
------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (617) 783-0039
------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Statements.
This item is amended to include the following:
a) Combined Historical Summary of Revenues and Certain Expenses.
Combined historical summary of revenues and certain expenses for the
properties sold by Omnibus Realty Trust as of June 30, 1995 and report of
Independent Certified Public Accountants thereon.
b) Pro Forma Financial Information.
Pro forma combined statement of operations for the six months ended June
30, 1995.
Pro forma combined statement of operations for the year ended
December 31, 1994.
Pro forma combined balance sheet as of June 30, 1995.
Pro forma estimated taxable combined operating results for the twelve
months ended June 30, 1995.
Pro forma estimated combined cash made available by operations for the
twelve months ended June 30, 1995.
Notes to pro forma financial statements.
<PAGE>
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 hereunto duly authorized.
NEW ENGLAND REALTY ASSOCIATES LIMITED
PARTNERSHIP
(Registrant)
Date: September 13, 1995 By: NewReal, Inc., its General Partner
(functional equivalent of Chief Executive
Officer and Principal Financial Officer)
By: /s/ Ronald Brown
-----------------------
Ronald Brown, President
<PAGE>
New England Realty Associates Limited Partnership
Combined Historical Summary of Revenues
and Certain Expenses
for the Properties Sold by
Omnibus Realty Trust as of June 30, 1995
and Report of Independent Certified Public Accountants
<PAGE>
New England Realty Associates Limited Partnership
Index to Combined Historical Summary of Revenues
and Certain Expenses for the Properties Sold
by Omnibus Realty Trust as of June 30, 1995
==============================================================================
Page
Report of Independent Certified Public Accountants 1
Combined Historical Summary of Revenues and Certain Expenses 2
Notes to Combined Historical Summary of Revenues and Certain Expenses 3
<PAGE>
Report of Independent Certified Public Accountants
To the Partners
New England Realty Associates Limited Partnership
We have audited the accompanying combined historical summary of revenues and
certain expenses of the properties (historical summary) sold by Omnibus Realty
Trust, as of June 30, 1995, to New England Realty Associates Limited
Partnership, as described in Note 1, for each of the three years in the period
ended December 31, 1994. This historical summary is the representation of the
properties' management. Our responsibility is to express an opinion on the
historical summary based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the statement of revenues and expenses. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial presentation of the
historical summary. We believe that our audit provides a reasonable basis for
our opinion.
The accompanying historical summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission (for
inclusion in a filing on Form 8-K by New England Realty Associates Limited
Partnership) and excludes certain material expenses, described in Note 1, that
would not be comparable to those resulting from the proposed future operations
of the properties, and is not intended to be a complete presentation of the
properties' combined historical revenues and expenses.
In our opinion, the historical summary referred to above presents fairly, in
all material respects, the combined revenues and certain expenses, as described
in Note 1, of the properties for each of the three years in the period ended
December 31, 1994, in conformity with generally accepted accounting principles.
/s/ Miller, Wachman & Co.
Boston, Massachusetts
September 8, 1995
<PAGE>
New England Realty Associates Limited Partnership
Combined Historical Summary of Revenues and Certain Expenses
of the Properties Sold by Omnibus Realty Trust as of June 30, 1995
to New England Realty Associates Limited Partnership (as described in Note 1)
for the years ended December 31, 1994, 1993 and 1992
and (unaudited) for the six months ended June 30, 1995 and 1994
==============================================================================
<TABLE>
<CAPTION>
Unaudited Unaudited
1994 1993 1992 6/30/95 6/30/94
---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Revenues:
Rental income $6,117,949 $5,851,287 $5,547,457 $3,215,705 3,031,266
Laundry and sundry income 133,865 122,424 85,904 78,028 54,100
---------- ---------- ---------- ---------- ---------
6,251,814 5,973,711 5,633,361 3,293,733 3,085,366
---------- ---------- ---------- ---------- ---------
Certain expenses:
Administration 231,405 164,070 272,747 166,592 123,332
Operating 906,348 930,615 904,384 525,149 496,082
Renting 238,241 222,282 270,966 60,584 74,430
Repairs and maintenance 897,107 740,303 585,732 464,148 409,080
Taxes and insurance 550,008 507,899 468,820 298,620 283,900
---------- ---------- ---------- ---------- ---------
2,823,109 2,565,169 2,502,649 1,515,093 1,386,824
---------- ---------- ---------- ---------- ---------
Excess of revenues over
certain expenses $3,428,705 $3,408,542 $3,130,712 $1,778,640 $1,698,542
========== ========== ========== ========== ==========
</TABLE>
See Notes to the Combined Historical Summary
-2-
<PAGE>
New England Realty Associates Limited Partnership
Notes to Combined Historical Summary of Revenues and Certain Expenses
==============================================================================
Note 1 - Basis of Presentation
On June 30, 1995, New England Realty Associates Limited Partnership (NERA)
purchased from Omnibus Realty Trust five residential properties (Omni). The
historical summary is the combination of the financial statements of the five
properties acquired.
The accompanying combined historical summary was prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission (for inclusion in a filing on Form 8-K by NERA) and excludes certain
material expenses including interest expense, management fees, depreciation and
amortization, and non-operating items that would not be comparable to those
resulting from the proposed future operations of the Omni properties, and is
not intended to be a complete presentation of the Omni properties' historical
revenues and expenses.
Note 2 - Rental Income
Rental income of Omni is primarily from residential apartments with leases of
one year or less. Rental income from commercial properties which have future
rental income on noncancellable operating leases is as follows:
1995 $ 185,025
1996 179,017
1997 149,675
1998 113,300
1999 9,200
-----------
$ 636,217
===========
-3-
<PAGE>
New England Realty Associates Limited Partnership
Unaudited Pro Forma Combined Financial Statements
==============================================================================
The following unaudited pro forma combined statements of operations for the six
months ended June 30, 1995 and the year ended December 31, 1994, give effect to
the New England Realty Associates Limited Partnership (NERA) acquisition of
Linhart Limited Partnership (Linhart) as of January 25, 1995 and certain
properties acquired from Omnibus Realty Trust (Omni), as of June 30, 1995 as if
such acquisitions had been completed at January 1, 1994. The historical
information pertaining to Linhart is only for the period prior to its date of
acquisition whereas the information pertaining to Omni is for the entire
periods presented.
Since the acquisitions are reflected in NERA's historical June 30, 1995 balance
sheet, the unaudited pro forma combined balance sheet is only presented to give
effect to certain debt restructurings that occurred subsequent to that date.
The pro forma information is based on the historical financial statements of
NERA, Linhart and Omni, giving effect to the transactions under the purchase
method of accounting and the assumptions and adjustments described in the
accompanying notes to the unaudited pro forma combined financial statements.
The unaudited pro forma combined statements of estimated taxable operating
results and estimated cash made available by operations for the twelve months
ended June 30, 1995 have been based on similar assumptions and adjustments.
These pro forma statements are not necessarily indicative of the results that
actually would have been achieved if the acquisitions had occurred as assumed.
They should be read in conjunction with the historical financial statements of
NERA included in its Form 10-K for the year ended December 31, 1994 and its
Form 10-Q for the six months ended June 30, 1995, and the historical operating
summary of the Omni properties included elsewhere herein.
<PAGE>
New England Realty Associates Limited Partnership
Unaudited Pro Forma Combined Statement of Income
for the Six Months ended June 30, 1995
==============================================================================
<TABLE>
<CAPTION>
Historical Pro Forma
-------------------------------- -------------------------------
NERA Linhart Omni Adjustments Combined
---------- ------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C>
Revenues:
Rental income $4,519,007 $34,965 $3,215,705 $7,769,677
Laundry and sundry income 68,526 504 78,028 147,058
---------- ------- ---------- ----------
4,587,533 35,469 3,293,733 7,916,735
---------- ------- ---------- ----------
Expenses:
Administrative 314,689 8,769 166,592 490,050
Depreciation and
amortization 853,114 $587,672 (1) 1,462,689
34,398 (2)
(12,495)(2)
Interest 1,060,782 935,090 (1) 2,319,620
988,575 (2)
(664,827)(2)
Management fees 198,853 131,749 (1) 330,602
Operating 470,807 367 525,149 996,323
Renting 72,189 1,173 60,584 133,946
Repairs and maintenance 745,012 7,031 464,148 1,216,191
Taxes and insurance 540,319 238 298,620 839,177
---------- ------- ---------- ----------- ----------
4,255,765 17,578 1,515,093 2,000,162 7,788,598
---------- ------- ---------- ----------- ----------
Income (loss) from operations 331,768 17,891 1,778,640 (2,000,162) 128,137
---------- ------- ---------- ----------- ----------
Other income:
Interest income 25,023 25,023
Income from investments in
partnerships and joint
venture 8,852 8,852
---------- ----------
33,875 33,875
---------- ----------
Net income (loss) $365,643 $17,891 $1,778,640 ($2,000,162) $162,012
========== ======= ========== ============ ==========
Net income (loss) per unit $2.06 $0.91
========== ==========
Weighted average number
units outstanding 177,152 177,152
========== ==========
</TABLE>
See Notes to Unaudited Pro Forma Combined Financial Statements
<PAGE>
New England Realty Associates Limited Partnership
Unaudited Pro Forma Combined Statement of Income
for the Year ended December 31, 1994
==============================================================================
<TABLE>
<CAPTION>
Historical Pro Forma
------------------------------------ ------------------------------
NERA Linhart Omni Adjustments Combined
---------- -------- ---------- -------------- -----------
<S> <C> <C> <C> <C> <C>
Revenues:
Rental income $8,384,546 $391,864 $6,117,949 $14,894,359
Laundry and sundry income 121,649 17,698 133,865 273,212
---------- -------- ---------- -----------
8,506,195 409,562 6,251,814 15,167,571
---------- -------- ---------- -----------
Expenses:
Administrative 550,142 12,127 231,405 793,674
Depreciation and
amortization 1,636,390 $1,243,869 (3) 2,924,065
(24,989)(4)
68,795 (4)
Interest 1,672,035 1,997,482 (3) 4,656,829
(903,746)(4)
1,891,058 (4)
Management fees 339,668 267,825 (3) 607,493
Operating 890,885 65,608 906,348 1,862,841
Renting 149,310 2,941 238,241 390,492
Repairs and maintenance 1,359,490 60,039 897,107 2,316,636
Taxes and insurance 1,060,295 75,862 550,008 1,686,165
---------- -------- ---------- -------------- -----------
7,658,215 216,577 2,823,109 4,540,294 15,238,195
---------- -------- ---------- -------------- -----------
Income (loss) from operations 847,980 192,985 3,428,705 (4,540,294) (70,624)
---------- -------- ---------- -------------- -----------
Other income:
Interest income 51,826 51,826
Income from investments in
partnerships and joint
venture 42,745 42,745
Other 130,000 130,000
---------- -----------
224,571 224,571
---------- -----------
Net income (loss) $1,072,551 $192,985 $3,428,705 ($4,540,294) $153,947
========== ======== ========== =========== ===========
Net income per unit $6.05 $0.87
========== ===========
Weighted average number
units outstanding 177,344 177,344
========== ===========
</TABLE>
See Notes to Unaudited Pro Forma Combined Financial Statements
<PAGE>
New England Realty Associates Limited Partnership
Unaudited Pro Forma Combined Balance Sheet
June 30, 1995
==============================================================================
<TABLE>
<CAPTION>
Historical Pro Forma
----------- --------------------------
ASSETS NERA Adjustments Combined
----------- ------------ -----------
<S> <C> <C> <C>
Rental Properties $70,027,288 $70,027,288
Less Accumulated Depreciation (14,770,319) (14,770,319)
----------- -----------
Net Rental Properties 55,256,969 55,256,969
Cash and Cash Equivalents 800,860 $1,303,000 (5) 2,103,860
Short-term Investments 47,399 47,399
Rents Receivable 588,063 588,063
Real Estate Tax Escrows 153,268 153,268
Prepaid Expenses and Other
Assets 1,797,139 1,050,000 (5) 2,847,139
Investment in Joint Venture 141,419 141,419
Financing and Leasing Fees 739,932 250,000 (5) 888,761
(101,171)(6)
------- -------- -----------
$59,525,049 $2,501,829 $62,026,878
=========== ========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Mortgages Payable $50,388,784 ($7,517,000)(5) $52,991,784
10,120,000 (5)
Accounts Payable and Accrued
Expenses 381,100 381,100
Advance Rental Payments and
Security Deposits 586,909 586,909
------- -------
51,356,793 53,959,793
Partners' Capital:
177,152 units outstanding 8,168,256 (101,171)(6) 8,067,085
--------- -------- ---------
$59,525,049 $2,501,829 $62,026,878
=========== ========== ===========
</TABLE>
See Notes to Unaudited Pro Forma Combined Financial Statements
<PAGE>
New England Realty Associates Limited Partnership
Unaudited Pro Forma Combined Estimated Taxable Operating Results
for the Twelve Months ended June 30, 1995
==============================================================================
<TABLE>
<CAPTION>
Pro Forma
Combined
-----------
<S> <C>
Revenues:
Rental income $15,437,939
Laundry and sundry income 285,871
-------
15,723,810
----------
Expenses:
Administrative 881,143
Depreciation and amortization 2,690,231
Interest 4,635,796
Management fees 635,152
Operating 1,833,630
Renting 335,325
Repairs and maintenance 2,413,994
Taxes and insurance 1,679,153
---------
15,104,424
----------
Income from Operations 619,386
-------
Other Income:
Interest income 52,165
Loss from investments in
partnerships and joint venture (155,823)
--------
(103,658)
--------
Taxable Income $515,728
--------
</TABLE>
See Notes to Unaudited Pro Forma Combined Financial Statements
<PAGE>
New England Realty Associates Limited Partnership
Unaudited Pro Forma Combined Estimated Cash Made Available By Operations
for the Twelve Months ended June 30, 1995
==============================================================================
<TABLE>
<CAPTION>
Pro Forma
Combined
-----------
<S> <C>
Revenues:
Rental income $15,437,939
Laundry and sundry income 285,871
-------
15,723,810
----------
Expenses:
Administrative 881,143
Interest 4,635,796
Management fees 635,152
Operating 1,833,630
Renting 335,325
Repairs and maintenance 2,413,994
Taxes and insurance 1,679,153
---------
12,414,193
----------
Cash from Operations 3,309,617
---------
Other Income:
Interest income 52,165
Income from joint venture 28,177
------
80,342
------
Estimated Cash Made Available by Operations $3,389,959
==========
</TABLE>
See Notes to Unaudited Pro Forma Combined Financial Statements
<PAGE>
New England Realty Associates Limited Partnership
Notes to Unaudited Pro-Forma Combined Financial Statements
==============================================================================
Note A Acquired Properties and Mortgages
The acquired properties were purchased by Limited Partnerships which each are
99.67% owned by NERA. The acquisition was financed by mortgages on the acquired
properties and funds obtained from additional mortgages of existing NERA
properties. The properties were acquired from trusts owned nominally by the
majority shareholder of NERA's general partner. In substance, the properties
were owned by the trusts' secured lenders under a 1991 restructuring agreement
whereby the lender received all of the operating income from the properties as
well as the proceeds from the sale to NERA. The partnership has recorded the
purchase at the amount paid for the properties. Under this restructuring
agreement, an entity owned by the majority shareholder of NERA's general partner
will receive a $300,000 commission from the holder of the Omni debt.
The following is a summary of the transaction.
<TABLE>
<CAPTION>
Acquiring Commercial Mortg.
Limited Location Resed. Space on Acq.
Partnership of Property Units (Sq.Ft.) Cost Property
----------- ----------- ----- -------- ---- --------
<S> <C> <C> <C> <C> <C>
1. Boylston Downtown L.P. 62 Boylston St., Boston, MA 269 15,550 $ 10,560,000 $ 7,860,000
2. Commonwealth 1144 L.P. 1144-1160 Comm.Ave., Boston, MA 261 0 7,050,000 5,348,000
3. Redwood Hills L.P. 376-384 Sunderland Rd, Worcester,MA 180 0 6,000,000 4,627,000
4. North Beacon 140 L.P. 140-154 North Beacon St., Boston, MA 64 1,050 4,680,000 3,512,000
5. Commonwealth 1137 L.P. 1131-1137 Comm.Ave., Boston, MA 35 0 1,710,000 1,280,000
---- ------ -------- --------
Total Omni 809 16,600 $ 30,000,000 $22,627,000
6. Linhart L.P. 4-34 Lincoln St., Newton, MA 9 21,223 1,925,000 1,329,000
---- ------ --------- ---------
Total 818 37,823 $ 31,925,000 $23,956,000
=== ====== ============ ===========
</TABLE>
Additional funds were provided by 10 mortgages on refinanced or debt free
properties totaling approximately $22,000,000. Four of these mortgages totaling
approximately $10,120,000 were closed subsequent to June 30, 1995 and have been
reflected in the pro forma adjustments. Approximately $11,800,000 was used to
repay existing debt and $7,969,000 was used in the acquisition of the above
properties.
The total aggregate monthly payment on all of the above debt is approximately
$360,000 including interest at 8 3/8%, through September 2005 based upon a 27.5
year amortization period. The remaining unpaid principle of approximately
$39,000,000 is due in 2005.
<PAGE>
New England Realty Associates Limited Partnership
Notes to Unaudited Pro-Forma Combined Financial Statements
==============================================================================
Note A Acquired Properties and Mortgages (cont'd)
The mortgages are collateralized by the individual parcels of real estate. An
indemnity and guarantee agreement (Indemnity) exists between NERA and the Lender
whereby NERA guarantees payment of lender losses arising from waste committed on
the secured property, failure to pay valid taxes and assessments, violation of
environmental laws and non payment of security deposits and other operating
items as defined in the agreement.
The lender requires that an escrow account be established and funded monthly to
pay for major repairs and improvements. Approximately $28,000 was escrowed at
the mortgage closings and additional monthly payments of approximately $28,000
are required. Consistent with its capital improvement program, NERA anticipates
spending approximately $500,000 on major additional repairs and improvements on
all its properties during the remainder of 1995.
Note B Depreciation and Amortization
The purchase price of the acquired properties was allocated as follows:
Cost Depreciable Lives
---- -----------------
Land $ 6,385,000 -
Buildings and improvements 24,540,000 25 years
Kitchen appliances and carpets 1,000,000 5 years
-----------
$31,925,000
===========
Deferred financing fees are being amortized over the term of the related
mortgage.
Note C Income Taxes
At June 30, 1995, NERA has cumulatively deducted tax losses in excess of book
income of approximately $2,500,000. Approximately $2,000,000 of this amount
relates to losses on investments in partnerships. Upon the sale or disposition
of these investments, taxable income will be increased by the amount of the
excess prior years' tax losses.
<PAGE>
New England Realty Associates Limited Partnership
Notes to Unaudited Pro-Forma Combined Financial Statements
==============================================================================
Note D Pro Forma Adjustments
As a result of the foregoing, the following adjustments were made in the
preparation of the pro forma financial statements.
Dr. Cr.
--- ---
1. Depreciation and amortization $587,672
Interest 935,090
Management fees (4% of pro forma combined) 131,749
To record proforma expenses for 5 properties
acquired in 1995.
2. Interest 988,575
Amortization of deferred charge 34,398
Interest (historical) $664,827
Amortization of deferred charge (historical) 12,495
To record pro forma expenses related to total
mortgages outstanding after 1995 acquisitions and
refinancings, and to eliminate the historical amounts.
3. Depreciation & amortization 1,243,869
Interest 1,997,482
Management fees 267,825
To record proforma expenses for 6 properties
acquired in 1995.
4. Interest 1,891,058
Amortization of deferred charge 68,795
Interest (historical) 903,746
Amortization of deferred charge (historical) 24,989
To record pro forma expenses related to total
mortgages outstanding after 1995 acquisitions and
refinancings, and to eliminate the historical amounts.
5. Cash and cash equivalents (Refinancing cash due) 1,303,000
Prepaids & other assets (Cash heldback) 1,050,000
Financing and leasing fees (Deferred Financing Costs) 250,000
Mortgages payable (Existing) 7,517,000
Mortgages payable (Refinancing) 10,120,000
To record pro forma refinancing of 4 mortgages
subsequent to June 30, 1995.
6. Partners' capital 101,171
Financing and leasing fees 101,171
To eliminate the deferred charges on the
refinanced mortgages.
