SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Act of 1934
For the fiscal year
ended December 31, 1995 Commission File Number 0-13545
JMB/245 PARK AVENUE ASSOCIATES, LTD.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Illinois 36-3265541
(State of organization)(I.R.S. Employer Identification No.)
900 N. Michigan Ave., Chicago, Illinois60611
(Address of principal executive office)(Zip Code)
Registrant's telephone number, including area code 312-915-1960
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ------------------- -------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
LIMITED PARTNERSHIP INTERESTS
(Title of Class)
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 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 10-K or any
amendment to this Form 10-K X
State the aggregate market value of the voting stock held by non-affiliates
of the registrant. Not applicable.
Documents Incorporated by Reference: Portions of the Private Placement
Memorandum of the Registrant dated May 7, 1984 are incorporated by
reference in Parts I and III of this Annual Report on Form 10-K.
TABLE OF CONTENTS
Page
----
PART I
Item 1. Business. . . . . . . . . . . . . . . . 1
Item 2. Properties. . . . . . . . . . . . . . . 3
Item 3. Legal Proceedings . . . . . . . . . . . 5
Item 4. Submission of Matters to a
Vote of Security Holders. . . . . . . . 5
PART II
Item 5. Market for the Partnership's
Limited Partnership Interests and
Related Security Holder Matters . . . . 5
Item 6. Selected Financial Data . . . . . . . . 6
Item 7. Management's Discussion and
Analysis of Financial Condition and
Results of Operations . . . . . . . . . 9
Item 8. Financial Statements and
Supplementary Data. . . . . . . . . . . 14
Item 9. Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure. . . . . . . . . . 48
PART III
Item 10. Directors and Executive Officers
of the Partnership. . . . . . . . . . . 48
Item 11. Executive Compensation. . . . . . . . . 50
Item 12. Security Ownership of Certain
Beneficial Owners and Management. . . . 51
Item 13. Certain Relationships and
Related Transactions. . . . . . . . . . 52
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K . . . . . . . . 52
SIGNATURES . . . . . . . . . . . . . . . . . . . . 57
i
PART I
ITEM 1. BUSINESS
Unless the context indicates otherwise, all references to "Notes" are
to Notes to Financial Statements of JMB/245 Park Avenue Associates, Ltd.
contained in this report.
The registrant, JMB/245 Park Avenue Associates, Ltd. (the
"Partnership"), is a limited partnership formed in 1983 and currently
governed by the Revised Uniform Limited Partnership Act of the State of
Illinois for the purpose of acquiring and owning an approximate 48.25%
interest in 245 Park Avenue Company, a New York general partnership, ("245
Park" or the "Joint Venture") which owns and operates an office building
located at 245 Park Avenue, New York, New York. The Partnership was
admitted to the Joint Venture through the purchase of one of the existing
joint venture partner's interests. On May 7, 1984, the Partnership
commenced a private offering of $124,300,000 in Limited Partnership
Interests (the "Interests") pursuant to a Private Placement Memorandum (the
"Private Placement Memorandum") in accordance with Rules 501-503 and 506 of
Regulation D of the Securities Act of 1933. A total of 1,000 Interests
were sold at $124,300 per Interest (except for twenty interests which were
sold net of any selling commission) of which $10,500 per Interest was due
upon admission, with the remaining purchase price paid in annual
installments from 1985 through 1990. The offering closed on June 28, 1984.
The Limited Partners of the Partnership share in their portion of the
benefits of ownership of the Partnership's real property investment
according to the number of Interests held.
The Partnership is engaged solely in the business of the acquisition,
operation and sale and disposition of an equity real estate investment held
through a joint venture partnership interest. The Partnership's real
property investment is located in New York, New York and it has no real
estate investments located outside of the United States. A presentation of
information about industry segments, geographic regions, raw materials or
seasonality is not applicable and would not be material to an understanding
of the Partnership's business taken as a whole. Pursuant to the
Partnership Agreement, the Partnership is required to terminate not later
than December 31, 2034. The Partnership is self-liquidating in nature. At
sale of the property, the net cash proceeds, if any, are generally to be
distributed rather than invested in acquiring additional properties. As
discussed further in Item 7, the marketplace in which the portfolio
operates and real estate markets in general are in a recovery mode. In
view of among other things, the current office rental market in New York
City, continuing discussions and negotiations regarding a restructuring of
the ownership interests of the joint venture partners and the possible
reorganization of 245 Park the Partnership is not able to determine the
expected holding period for the property (or its interest therein).
Reference is made to Item 7 - Management's Discussion and Analysis and
Results of Operations and Note 2 for further information in this regard.
The Partnership has made the real property investment set forth in the
following table:
<TABLE>
<CAPTION>
NAME, TYPE OF PROPERTY DATE OF
AND LOCATION SIZE PURCHASE TYPE OF OWNERSHIP
- ---------------------- ---------- -------- ----------------------
<S> <C> <C> <C>
245 Park Avenue Building
New York, New York 1,622,000 12/29/83 fee ownership of land and
sq. ft. improvements (through joint
n.r.a. venture partnership)
(a)(b)(c)(d)
<FN>
- ---------------
(a) Reference is made to Note 3 and to Note 3 of Notes to Financial Statements of 245 Park and to Schedule
III to the Financial Statements of 245 Park filed with this report for the current outstanding principal balances
and descriptions of the long-term mortgage indebtedness secured by the Partnership's real property investment and
by the Partnership's interest in 245 Park.
(b) Reference is made to Note 2 for a description of the joint venture partnership (including the
Partnership's original invested capital) through which the Partnership made this real property investment.
(c) Reference is made to Item 8 - Schedule III to the Financial Statements of 245 Park filed with this
annual report for further information concerning real estate taxes and depreciation.
(d) Reference is made to Item 6 - Selected Financial Data for additional operating and lease expiration
data concerning the investment property.
</TABLE>
The Partnership's real property investment is subject to competition
from similar types of properties (including properties owned or advised by
affiliates of the General Partners and properties owned by the joint
venture partners and their affiliates) in the vicinity in which it is
located. Such competition is generally for the retention of existing
tenants. Reference is made to Item 7 below for a discussion of competitive
conditions and future renovation and capital improvement plans of the
investment property. The Partnership believes that its real property
investment maintains its suitability and competitiveness in its market on
the basis of the location of the property, quality of its facilities and
its size, which permits it to accommodate larger tenants. Approximate
occupancy levels for the property are in the table in Item 2 below to which
reference is hereby made. In the opinion of the Corporate General Partner
of the Partnership, the investment property is adequately insured.
Reference is made to Note 4 of Notes to Financial Statements of 245
Park filed with this report for a schedule of minimum lease payments to be
received in each of the next five years, and in the aggregate thereafter,
under leases in effect at the Partnership's investment property as of
December 31, 1995.
The Partnership has no employees.
The terms of transactions between the Partnership and the General
Partners and their affiliates are set forth in Item 11 below and Note 5, to
which reference is hereby made for a description of such transactions.
ITEM 2. PROPERTIES
The Partnership owns, through a joint venture partnership, an interest
in the property referred to under Item 1 above to which reference is hereby
made for a description of said property.
The following is a listing of principal businesses or occupations
carried on in, and approximate occupancy levels by quarter, during fiscal
years 1995 and 1994 for the Partnership's investment property:
<TABLE>
<CAPTION>
1994 1995
--------------------------------------------------
At At At At At At At At
Principal Business3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---------------------- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
245 Park Avenue Building
New York, New York . . Financial 95% 95% 95% 95% 95% 96% 96% 96%
Services and
Banking
<FN>
Reference is made to Item 6 and Item 7 and Note 4 of Notes to Financial Statements of 245 Park for further
information regarding property occupancy, competitive conditions and tenant leases at the Partnership's investment
property.
</TABLE>
ITEM 3. LEGAL PROCEEDINGS
The Partnership is not subject to any material pending legal
proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during
1994 and 1995.
PART II
ITEM 5. MARKET FOR THE PARTNERSHIP'S LIMITED PARTNERSHIP INTERESTS
AND RELATED SECURITY HOLDER MATTERS
As of December 31, 1995, there were 883 record holders of Interests of
the Partnership. There is no public market for Interests and it is not
anticipated that a public market for Interests will develop. The Interests
have not been registered under the Securities Act of 1933, as amended, or
(with certain exceptions) under state securities laws. Transfers of the
Interests must be made in compliance with applicable federal and state
securities laws and are subject to the restrictions on transfers set forth
in Article 14 (pages 15-17) of the Amended and Restated Agreement of
Limited Partnership of the Partnership, which is incorporated herein by
reference to Exhibit 99.1 to this annual report.
Reference is made to Item 6 below for a discussion of cash
distributions to Limited Partners.
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
DECEMBER 31, 1995, 1994, 1993, 1992 AND 1991
(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)
<CAPTION>
1995 1994 1993 1992 1991
-------------------------- ----------- ------------------------
<S> <C> <C> <C> <C> <C>
Total income . . . . .$ 100 200 76,233 401,534 514,072
============ ============ =========== =========== ===========
Operating loss . . . .$ (3,289,214) (2,921,538) (7,135,919) (7,889,312) (7,828,276)
Partnership's share of
income (loss) from
operations of uncon-
solidated venture . . (4,269,135) (2,919,865) 658,942 (5,487,591)(10,502,754)
------------ ------------ ----------- ----------- -----------
Net loss . . . . . . .$ (7,558,349) (5,841,403) (6,476,977) (13,376,903)(18,331,030)
============ ============ =========== =========== ===========
Net loss per Interest
(b) . . . . . . . . .$ (7,105) (5,490) (6,088) (12,574) (17,231)
============ ============ =========== =========== ===========
Total assets . . . . .$ 4,275 -- 420,811 6,357,370 12,043,009
============ ============ =========== =========== ===========
Bank obligations
and notes payable -
long-term . . . . . .$ 43,236,631 40,319,631 44,694,631 -- 50,000,000
============ ============ =========== =========== ===========
- ----------
<FN>
(a) The above financial information should be read in conjunction with the financial statements of the
Partnership and the related notes appearing elsewhere in this report.
(b) The net loss and cash distributions per Interest are based upon the number of Interests outstanding
at the end of each period (1,000).
(c) Cash distributions from the Partnership are generally not equal to Partnership income (loss) for
either financial reporting or Federal income tax purposes. Each Partner's taxable income (loss) in each year is
equal to his allocable share of the taxable income (loss) of the Partnership, without regard to the cash generated
or distributed by the Partnership. Accordingly, cash distributions to the Limited Partners since the inception of
the Partnership have represented a return of capital for financial reporting purposes.
(d) Such loans were classified as a current liability at December 31, 1992 due to their originally
scheduled maturity of October 1993. During 1993, these loans were extended through December 1998 and purchased by
an affiliate in 1995 (Note 3(b)).
</TABLE>
<TABLE>
SIGNIFICANT PROPERTY - SELECTED RENTAL AND OPERATING DATA AS OF DECEMBER 31, 1995
<CAPTION>
Property
- --------
245 Park Avenue a) The occupancy rate of net rentable area (NRA) and average
base rent per square foot as of December 31 for each of
the last five years were as follows:
NRF Avg. Base Rent Per
December 31, Occupancy Rate Square Foot (1)
------------ -------------- ------------------
<S> <C> <C> <C> <C>
1991 99% 31.16
1992 97% 40.18
1993 95% 49.04
1994 95% 49.32
1995 96% 47.38
<FN>
(1) Average base rent per square foot is based on NRA occupied
as of December 31 of each year.
</TABLE>
<TABLE>
<CAPTION>
Base RentScheduled LeaseLease
b) Significant Tenants Square FeetPer AnnumExpiration DateRenewal Option(s)
------------------- ----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bear Stearns
Companies, Inc. 68,749 $1,890,5989/1996 N/A
555,826 27,716,10612/2002 12/2007
12/2012
12/2017
12/2022
12/2027
Towers, Perrin,
Forster & Crosby 191,469 8,895,0529/1996 9/2001
9/2006
</TABLE>
<TABLE>
<CAPTION>
c) The following table sets forth certain
information with respect to the expiration
of leases for the next ten years at
245 Park Avenue:
Approx. Annualized Percent of Annualized Percent of
Number of Total NRF Base Rent Total 1995 Recoveries(2) Total 1995
Year Ending Expiring of Expiringof ExpiringBase Rent of ExpiringRecoveries
December 31, Leases Leases (1)Leases Expiring Leases Expiring
------------ --------- -----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1996 5 272,400 12,633,082 17% 5,701,301 25%
1997 7 171,950 9,573,609 13% 3,945,323 17%
1998 1 27,260 2,400,000 3% 234,654 1%
1999 6 31,670 1,430,970 2% 190,397 1%
2000 1 -- 8,000 -- -- --
2001 -- -- -- -- -- --
2002 1 555,830 27,722,857 37% 5,144,350 22%
2003 1 17,650 683,995 1% 10,070 --
2004 1 11,560 518,511 1% 114,499 --
2005 4 116,200 5,497,378 7% 365,230 2%
<FN>
(1) Excludes leases that expire in 1996 for which
renewal leases or leases with replacement tenants
have been executed as of March 25, 1996.
(2) Recoveries represent charges to tenants for their proportionate share of various
building operating expenses such as real estate taxes, utilities and repair and maintenance costs in excess of a
base amount as specified in the leases.
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
On May 7, 1984, the Partnership commenced a private offering of
$124,300,000 in Limited Partnership Interests pursuant to a Private
Placement Memorandum. A total of 1,000 Interests were sold at $124,300 per
Interest (except for twenty Interests which were sold net of any selling
commission) of which $10,500 per Interest was due upon admission, with the
remaining purchase price paid in annual installments from 1985 through 1990
(all of which have been received). The purchase price installments have
been utilized primarily for the payment of the Partnership's bank
borrowings and related interest.
At December 31, 1995, the Partnership had cash or cash equivalents of
$4,275. Commencing in June 1989 through the earlier of December 1993 or
the date on which the annual net cash flow (as defined) of 245 Park is at
least $16,500,000, the O&Y partners were obligated to loan certain amounts
(in the maximum amount of $72,500,000 at a prime rate of interest) to 245
Park sufficient to cover operating deficits, reserve requirements and
certain capital expenditures of 245 Park and to pay the Partnership and the
affiliates (the "O&Y partners") of Olympia & York Developments, Ltd.
("O&Y"), who are partners in 245 Park, their "minimum return" (as defined).
The loans from the O&Y partners currently exceed the maximum amount
required under the terms of the joint venture agreement. The O&Y partners
have loaned 245 Park amounts aggregating $81,783,000 (net of repayments) as
of December 31, 1995, which amount includes approximately $4,205,405 (net
of repayments) loaned for the twelve months ended December 31, 1995 for
interest accruing on the advances. Under the terms of the joint venture
agreement, the Partnership is obligated to contribute to 245 Park its
share (approximately 48.25%) of any operating expenses, reserve
requirements and capital expenditures, including interest on the O&Y
partners' loans, to the extent not covered by cash flow from the property
or additional loans from the O&Y partners. The principal and any unpaid
interest on the O&Y partner loans will be due and payable on June 1, 2004,
subject to earlier repayment out of available net cash flow or the net
proceeds of a refinancing, sale or other disposition of the property as
described in Note 2.
Since the Partnership has not been receiving operating cash flow
distributions from the property, the Partnership initially utilized its
cash reserves to make the payments on the Partnership's bank obligations.
Effective with the first quarter of 1990, the Partnership elected to
suspend cash distributions to the Partners and retain funds for the cash
requirements and capital expenditures for the property (if not funded by
O&Y partners' loans). These reserves have been exhausted, and
consequently, the Partnership was not able to pay the interest payment due
on the bank obligations for September 1993 in the approximate amount of
$223,000. In addition, the Partnership did not have adequate reserves to
pay a lump sum interest swap payment due February 1, 1994 in the amount of
$2,194,631. In this regard, the Partnership and its bank lender reached a
modification and extension agreement regarding the $50,000,000 term loans
that matured in October 1993. These term loans were secured by the
Partnership's interest in 245 Park, and a guaranty by JMB Realty
Corporation, an affiliate of the Corporate General Partner ("JMB") of
$25,000,000 of the term loans. The terms of the modification and extension
generally provided for (i) an extension period through December 1998; (ii)
interest payable currently on one-half of the principal amount of the term
loans at a rate related to the London Interbank Offer Rate (LIBOR) while
interest on the balance of the term loans accrues at an annual rate of 2%;
(iii) one-half of the original principal amount of the term loans bearing
interest at a rate related to LIBOR (the "LIBOR Note") was subject to
periodic amortization through payment of quarterly installments of
principal (principal in the amount of $2,500,000 per annum in 1994 and
$2,707,000 in 1995); and (iv) the past due lump sum interest swap payment
in the amount of $2,194,631 converted to a note payable due December 1998
with interest accruing at an annual rate of 2%. In December 1993,
approximately $5,647,000 was paid to the lenders under the term loans (all
of which was advanced on behalf of the Partnership by JMB), which included
a $5,000,000 principal paydown of the LIBOR Note and the interest payable
for the period September through December 1993. During the year ended
December 31, 1994, an additional amount of approximately $2,479,000 was
paid to the lenders under the term loans which included a $1,251,000
principal paydown of the LIBOR Note and the interest payable for the period
January through December 1994. An additional $1,249,000 and two payments
of $729,000 each were paid in January through June 1995, respectively. All
payments of principal and interest made by JMB under its guaranty of the
$25,000,000 portion of the Partnership's term loans have been treated as
advances to the Partnership. As of December 31, 1995, JMB has advanced
approximately $12,030,000, evidenced by a demand note which reflects the
principal and interest payments made related to the loan modification
discussed above, advances to pay operating costs of the Partnership and
accrued and deferred interest on the demand note. Interest accrues on
these advances (and accrued and deferred interest thereon) at the annual
rate of prime (8.5% at December 31, 1995) plus 1%. The demand note payable
to JMB, which allows a maximum principal sum of a specified amount, had
been subordinate to payment of the LIBOR Note but is no longer subordinated
and is now secured by the Partnership's interest in 245 Park. Reference is
made to Note 3 for further information concerning borrowings incurred by
the Partnership.
In July 1995, JMB purchased from the lenders the term loans and their
security interests in the related collateral, which included the
Partnership's interest in 245 Park and the JMB guarantee, which has been
terminated. JMB continues to hold the notes for these loans generally
under the same terms and conditions that were in effect prior to the
purchase. However, no scheduled principal payments are required prior to
maturity of the LIBOR Note. Interest on the LIBOR Note accrues and is
payable monthly at a floating rate which, at the option of the Partnership,
is related to either LIBOR or the prime rate of Bank of America, Illinois.
No payments of interest on the LIBOR Note have been made subsequent to July
31, 1995. However, JMB has not given a notice of default under the LIBOR
Note. These loans and the demand loan payable to JMB are secured by the
Partnership's interest in 245 Park and are subject to mandatory prepayment
of principal and interest out of any distributions received by the
Partnership from 245 Park.
There are certain risks and uncertainties associated with the
Partnership's investment made through 245 Park, including the possibility
that the O&Y partners might become unable or unwilling to fulfill their
financial or other obligations, or that the O&Y partners may have economic
or business interests or goals that are inconsistent with those of the
Partnership.
The O&Y partners have granted security interests in their interests in
245 Park to a syndicate of banks in order to secure certain loan
obligations of certain O&Y affiliates. In August 1992, the Partnership
received notice from the lead bank of the syndicate alleging that such O&Y
affiliates were in default under these loan obligations and directing that
all payments and distributions due to the O&Y partners from 245 Park be
delivered to the lead bank. According to published reports, an investor
group purchased participations in these obligations from the original
syndicate of banks. In September 1995, the holder of the loan obligations
issued a notice of sale for, among other things, the interests of the O&Y
partners in 245 Park in an effort to realize upon the collateral for the
loan obligations. In October, 1995, each of the O&Y partners, as well as
other O&Y affiliates, filed for protection from creditors under Chapter 11
of the United States Bankruptcy Code. As a result of these bankruptcy
filings, the attempted sale of the O&Y partner's interest in 245 Park has
been temporarily stayed.
The O&Y partners and certain other O&Y affiliates are preparing a plan
to restructure their ownership interests in various office buildings,
including the 245 Park Avenue office building, which could take the form of
one or more real estate investment trusts. Any such restructuring would be
subject to the approval of various creditors of the O&Y partners and other
O&Y affiliates as well as the bankruptcy court, and would likely result in
such creditors collectively obtaining control of such ownership interests.
In connection with such restructuring, it is possible that 245 Park will
seek reorganization under Chapter 11 of the United States Bankruptcy Code
pursuant to a plan agreed upon by its creditors and the partners of 245
Park, including the Partnership. Although the Partnership has had
discussions with the O&Y partners and certain creditors concerning
restructuring proposals and a reorganization of 245 Park, a proposal for
the restructuring of the O&Y partners' ownership interests and a plan for
the reorganization of 245 Park have not been agreed upon. Accordingly, the
terms of such restructuring and reorganization and their effect, if
consummated, on 245 Park and the O&Y partners and the partnerships
respective interest therein are subject to change.
245 Park continues to seek an extension and modification of the
mortgage loans secured by the property in the aggregate principal amount of
approximately $384,469,201 at December 31, 1995. The holder of the first
mortgage loan secured by 245 Park's property, which has a current
outstanding principal balance of approximately $191,969,201 at December 31,
1995, agreed to extend the originally scheduled maturity date of the loan
from October 1, 1993 until January 1, 1994. During 1994, 245 Park entered
into an agreement with the lender to further modify the loan for the amount
of the current outstanding principal balance plus accrued and unpaid
interest at a default rate of 18% per annum from October 1, 1993 through
the loan closing date, with a new interest rate from the loan closing date
for a five year term.
The agreement also provided for certain fees to be paid to the lender
and for certain escrows of funds to pay leasing, capital, and certain
operating costs. Accordingly, 245 Park paid $8 million to the lender to be
applied to accrued interest on the loan and has paid approximately $17.9
million into the real estate tax escrow ($9.4 million scheduled payment
made in 1995). In addition, 245 Park was to pay the lender an extension
fee of $2 million upon closing of the transaction. Completion of the
modification and extension of the first mortgage loan in accordance with
the agreement was subject to the satisfaction of various conditions,
certain of which were not satisfied, and the agreement has expired by its
terms. However, 245 Park and the lender continue to discuss a modification
and extension of the first mortgage loan. 245 Park has continued to make,
and the lender has continued to accept, monthly payments of principal and
interest in the same amount that were payable prior to October 1, 1993 and
the lender has refrained from taking any actions or exercising any of its
remedies as a result of the loan maturing on January 1, 1994.
The financial difficulties of the O&Y partners and their affiliates,
the need to restructure their ownership interests in various properties and
the pledge by the O&Y partners of their interests in 245 Park have delayed
obtaining a modification and extension of 245 Park's mortgage loans. It
currently appears that any modification and extension of the mortgage loans
will depend upon consummation of a plan for the reorganization of 245 Park
discussed above.
If 245 Park is successful in obtaining an extension of the first
mortgage loan modification, it also expects to seek a similar extension of
the maturity dates of the junior mortgage loans, which have a current
aggregate principal balance of $192,500,000 and matured on October 1, 1994.
As of the date of this Report, the holder of the junior mortgage loans has
not, to the knowledge of the Partnership, attempted to exercise its
remedies against 245 Park's property. Interest on the junior mortgage
loans is currently accruing at default rates ranging from 11.88% to 14% per
annum. 245 Park has continued to make, and the holder of the junior loans
has continued to accept, monthly payments of interest in the same amount
that were payable prior to October 1994, the maturity date for junior
mortgage loans. If 245 Park is able to obtain modifications and extensions
of each mortgage loan, it is expected the interest rates applicable to the
loans during the extension period would be no greater than that for the
modified first mortgage loan. However, there can be no assurance that 245
Park will be able to reach a final agreement for any such modifications and
extensions of any of its mortgage indebtedness.
If 245 Park's efforts to extend its mortgage loans are unsuccessful,
245 Park may not be able to maintain ownership of the property as the
lenders may seek to acquire title to the property. This would result in
the recognition of substantial net gain to the Limited Partners for
financial reporting and Federal income tax purposes without any
corresponding cash distribution. In such event, the Partnership would then
proceed to terminate its affairs.
Even if 245 Park is successful in obtaining extensions and
modifications of its mortgage loans, due to, among other things, the
competitive market conditions affecting the 245 Park Avenue building and
the substantial amount of indebtedness of 245 Park, the Partnership's goal
of capital appreciation will not be achieved. If the 245 Park Avenue
building is sold and a distribution of net proceeds is made to the
Partnership after repayment of the mortgage loans and amounts owed to the
O&Y partners and their affiliates, the notes payable to JMB plus all
related accrued interest (totalling $58,772,523 at December 31, 1995) must
be satisfied before remaining proceeds, if any, would be distributed to the
Limited Partners. Without a dramatic improvement in market conditions, the
Limited Partners will not receive a significant portion of their original
investment.
Although 245 Park has significant cash reserves at December 31, 1995,
due to escrow requirements, property cash needs and venture partner claims,
it is not expected that any cash would be distributable to the Partnership.
Assuming, among other things, an extension of the existing mortgage loans,
the investment property is expected to have positive cash flow during 1996
after mortgage debt service and estimated releasing and capital improvement
costs. The Partnership's short-term liquidity is dependent upon additional
advances from JMB under the demand note discussed above. The ultimate
source of the Partnership's liquidity is dependent upon the refinancing
and/or eventual sale of the Partnership's investment property.
The competitive market conditions in New York City have had a
significant adverse impact on the effective rental rates achieved on new
leases, which has in turn impacted the operating performance of 245 Park.
These conditions have resulted from new office building development since
the Partnership's acquisition of its interest in the building, as well as
from increased vacancy due to the severe downsizing of most of the major
financial services companies which dominate the New York office markets.
Although it appears that rental rates may have stabilized in the Midtown
market somewhat since 1994, no rental rate decreases are expected in the
near term. Despite re-leasing a substantial amount of space during the
past few years, the net operating income from the building reflects the
reduced effective rental rates on such new leases as well as reduced
recoveries of operating costs from tenants compared to the effective rental
rates for the leases that have expired or otherwise terminated. This
decrease, has partially offset the increase in annual base rent for a
majority of the Bear Stearns space. However, Bear Stearns has recently
announced plans to possibly relocate their headquarters and is actively
searching for different sites in the area. Accordingly, it cannot be
determined whether Bear Stearns will extend or renew its lease at 245 Park
for approximately 556,000 square feet at the lease expiration date of
December 2002. In addition, Towers, Perrin, Forster and Crosby will vacate
their space consisting of approximately 191,469 sq. feet at their lease
termination date in 1996.
An existing tenant, Rabobank Nederlander, has renewed its lease for
the 36th floor (scheduled to expire in September 1998) and has become a
direct tenant on the 37th floor (previously sublet from National Commerce
Bank) and the 38th floor leased to Bear Stearns (scheduled to expire in
1996) through its new lease (102,000 square feet) which expires in 2011.
After taking into account this new lease, there still remain tenant leases
of approximately 272,000 and 172,000 square feet in the building which are
scheduled to expire in 1996 and 1997, respectively. The Partnership
anticipates that several of these tenants will vacate their space upon
their lease expiration, and that the re-leasing costs for this space,
including the downtime to locate replacement tenants, will be significant.
During 1995, Creditanstalt-Bankverien terminated a portion of their
lease scheduled to expire on December 31, 2002, consisting of approximately
5,100 square feet vacated in December 1995 and during 1996 terminated an
additional 63,200 square feet to be vacated by November 1996. A division
of Creditanstalt-Bankverien has signed a new lease for approximately 23,700
square feet with a fifteen year term. As a result, 245 Park is scheduled
to receive termination fees of approximately $21,000,000 which will be used
to offset the reduction in operating cash flow related to such termination
and to pay re-leasing costs related to this as well as other available
space in the building. During 1995, 245 Park received approximately
$4,100,000 of termination fees with the remaining amount scheduled to be
received during 1996.
RESULTS OF OPERATIONS
The results of operations for the year ended December 31, 1995 as
compared to the years ended December 31, 1994 and 1993 are primarily
attributable to the operations of the real property investment owned by 245
Park as described in Note 2.
The increase in accrued and deferred interest payable to an affiliate
and demand note payable, and the decrease in bank obligations payable as of
December 31, 1995 as compared to December 31, 1994 are due to the interest
accruals on certain of the term loans discussed above, payment of principal
and interest due on the LIBOR Note through July 1995 out of advances under
the demand note payable to JMB and interest accruals on such advances as
discussed above.
The increase in the Partnership's share of loss from operations of
unconsolidated venture for the year ended December 31, 1995 as compared to
the year ended December 31, 1994 is primarily due to the adjustment for the
accrual of interest expense on 245 Park's mortgage loans at default rates
ranging from 11.88% to 18% per annum during 1994. The increase in the
Partnership's share of loss from operations of unconsolidated venture for
the year ended December 31, 1994 as compared to the year ended December 31,
1993 is also primarily due to the adjustment for the accrual of 1994
interest expense at default rates on the 245 Park's mortgage loans.
INFLATION
Due to the decrease in the levels of inflation in recent years,
inflation generally has not had a material effect on rental income or
property operating expenses.
However, to the extent that inflation in future periods would have an
adverse impact on property operating expenses, the effect would generally
be offset by amounts recovered from tenants as many of the long-term leases
at the Partnership's commercial properties have escalation clauses covering
increases in the cost of operating the properties as well as real estate
taxes. Therefore, there should be little effect on operating earnings if
the property remains substantially occupied.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
INDEX
Independent Auditors' Report
Balance Sheets, December 31, 1995 and 1994
Statements of Operations, years ended December 31, 1995, 1994 and 1993
Statements of Partners' Capital Accounts (Deficits), years ended
December 31, 1995, 1994 and 1993
Statements of Cash Flows, years ended December 31, 1995, 1994 and 1993
Notes to Financial Statements
Schedules not filed:
All schedules have been omitted as the required information is
inapplicable or the information is presented in the financial statements or
related notes.
245 PARK AVENUE COMPANY
INDEX
Independent Auditors' Report
Balance Sheets, December 31, 1995 and 1994
Statements of Operations, years ended December 31, 1995, 1994 and 1993
Statements of Partners' Capital Accounts (Deficits), years ended
December 31, 1995, 1994 and 1993
Statements of Cash Flows, years ended December 31, 1995, 1994 and 1993
Notes to Financial Statements
Schedule
--------
Real Estate and Accumulated Depreciation III
Schedules not filed:
All schedules other than the one indicated in the index have been omitted
as the required information is inapplicable or the information is presented
in the financial statements or related notes.
INDEPENDENT AUDITORS' REPORT
The Partners
JMB/245 Park Avenue Associates, Ltd.:
We have audited the financial statements of JMB/245 Park Avenue
Associates, Ltd. (a limited partnership) as listed in the accompanying
index. These financial statements are the responsibility of the General
Partners of the Partnership. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards 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. An audit also includes assessing the accounting principles
used and significant estimates made by the General Partners of the
Partnership, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of JMB/245 Park
Avenue Associates, Ltd. as of December 31, 1995 and 1994, and the results
of its operations and its cash flows for each of the years in the three-
year period ended December 31, 1995, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that
JMB/245 Park Avenue Associates, Ltd. will continue as a going concern. As
described in Note 2 to the accompanying financial statements, the long-term
debt secured by the investment property owned by the Partnership's joint
venture is in default for failure to repay amounts due at the scheduled
maturity dates. There can be no assurance that such debt will be able to
be extended, modified or refinanced. In addition, in connection with the
restructuring of the unaffiliated venture partner's interest in various
office buildings including the 245 Park Avenue office building, it is
possible that the Partnership's joint venture will seek reorganization
under Chapter 11 of the United States Bankruptcy Code. These circumstances
raise substantial doubt about JMB/245 Park Avenue Associates, Ltd.'s
ability to continue as a going concern. The General Partners' plans in
regard to these matters are also described in Note 2. The accompanying
financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
KPMG PEAT MARWICK LLP
Chicago, Illinois
March 25, 1996
<TABLE>
JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
ASSETS
------
<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . $ 4,275 --
------------ -----------
$ 4,275 --
============ ===========
JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
1995 1994
------------ -----------
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . $ 62,089 50,984
Accrued interest . . . . . . . . . . . . . . . . . . . . . -- 789,655
Accrued and deferred interest payable to an affiliate. . . 3,506,301 574,761
Demand note payable to affiliate (note 3). . . . . . . . . 12,029,591 8,182,092
Bank obligations payable - current (note 3). . . . . . . . -- 5,624,000
------------ -----------
Total current liabilities. . . . . . . . . . . . . 15,597,981 15,221,492
Bank obligations and notes payable - long-term (note 3). . . 43,236,631 40,319,631
------------ -----------
Commitments and contingencies (notes 2, 3 and 5)
Total liabilities. . . . . . . . . . . . . . . . . 58,834,612 55,541,123
Investment in unconsolidated venture, at equity (notes 2 and 6) 76,242,265 71,973,130
Partners' capital accounts (deficits) (note 4):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative cash distributions. . . . . . . . . . . . . (480,000) (480,000)
Cumulative net losses. . . . . . . . . . . . . . . . . (13,113,399) (12,659,898)
------------ -----------
(13,592,399) (13,138,898)
------------ -----------
Limited partners (1,000 Interests):
Capital contributions, net of offering costs . . . . . 113,057,394 113,057,394
Cumulative cash distributions. . . . . . . . . . . . . (7,520,000) (7,520,000)
Cumulative net losses. . . . . . . . . . . . . . . . . (227,017,597) (219,912,749)
------------ -----------
(121,480,203) (114,375,355)
------------ -----------
Total partners' capital accounts (deficits). . . . (135,072,602) (127,514,253)
------------ -----------
$ 4,275 --
============ ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<CAPTION>
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Income:
Interest and other income. . . . . . . . . $ 100 200 76,233
------------ ------------ ------------
Expenses:
Interest . . . . . . . . . . . . . . . . . 3,154,676 2,853,447 7,053,612
Professional services. . . . . . . . . . . 96,059 31,676 107,910
General and administrative . . . . . . . . 38,579 36,615 50,630
------------ ------------ ------------
3,289,314 2,921,738 7,212,152
------------ ------------ ------------
Operating loss . . . . . . . . . . . . . (3,289,214) (2,921,538) (7,135,919)
Partnership's share of income (loss)
from operations of unconsolidated
venture. . . . . . . . . . . . . . . . . . (4,269,135) (2,919,865) 658,942
------------ ------------ ------------
Net loss . . . . . . . . . . . . . . . . $ (7,558,349) (5,841,403) (6,476,977)
============ ============ ============
Net loss per limited partnership
interest (notes 1 and 4) . . . . . . . $ (7,105) (5,490) (6,088)
============ ============ ============
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
JMB/245 PARK AVENUE ASSOCIATES, LTD.
(a limited partnership)
Statements of Partners' Capital Accounts (Deficits)
Years Ended December 31, 1995, 1994 and 1993
<CAPTION>
GENERAL PARTNERS LIMITED PARTNERS (1,000 INTERESTS)
-------------------------------------------------- ---------------------------------------------------
CONTRI-
BUTIONS
NET OF
CONTRI- CASH OFFERING CASH
BUTIONS NET LOSS DISTRIBUTIONS TOTAL COSTS NET LOSS DISTRIBUTIONS TOTAL
------------------------------- ----------- -----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance
(deficits)
Decem-
ber 31,
1992. . .$1,000 (11,920,795) (480,000) (12,399,795)113,057,394(208,333,472)(7,520,000)(102,796,078)
Net loss . -- (388,619) -- (388,619) -- (6,088,358) -- (6,088,358)
------ ----------- --------- ----------- -----------------------------------------------
Balance
(deficits)
Decem-
ber 31,
1993. . . 1,000 (12,309,414) (480,000)(12,788,414)113,057,394(214,421,830)(7,520,000)(108,884,436)
Net loss . -- (350,484) -- (350,484) -- (5,490,919) -- (5,490,919)
------ ----------- --------- ----------- -----------------------------------------------
Balance
(deficits)
Decem-
ber 31,
1994. . . 1,000 (12,659,898) (480,000)(13,138,898)113,057,394(219,912,749)(7,520,000)(114,375,355)
Net loss . -- (453,501) -- (453,501) -- (7,104,848) -- (7,104,848)
------ ----------- --------- ----------- -----------------------------------------------
Balance
(deficits)
Decem-
ber 31,
1995. . .$1,000 (13,113,399) (480,000)(13,592,399)113,057,394(227,017,597)(7,520,000)(121,480,203)
====== =========== ========= =========== ===============================================
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . $(7,558,349) (5,841,403) (6,476,977)
Items not requiring cash or cash equivalents:
Partnership's share of (income) loss from
operations of unconsolidated venture. . 4,269,135 2,919,865 (658,942)
Changes in:
Interest receivable . . . . . . . . . . . -- -- 95,266
Prepaid expenses. . . . . . . . . . . . . -- 385,869 --
Accounts payable. . . . . . . . . . . . . 11,105 (22,559) 52,241
Accrued interest. . . . . . . . . . . . . 2,141,885 1,239,416 114,028
----------- ----------- -----------
Net cash used in operating activities (1,136,224) (1,318,812) (6,874,384)
----------- ----------- -----------
Cash flows from investing activities:
Net sales and maturities of short-term
investments. . . . . . . . . . . . . . . . -- -- 5,757,725
----------- ----------- -----------
Net cash provided by
investing activities . . . . . . . -- -- 5,757,725
----------- ----------- -----------
Cash flows from financing activities:
Principal payments on bank obligations
payable. . . . . . . . . . . . . . . . . . (2,707,000) (1,251,000) (5,000,000)
Fundings of demand note payable. . . . . . . 3,847,499 2,534,870 5,647,222
----------- ----------- -----------
Net cash provided by financing
activities . . . . . . . . . . . . 1,140,499 1,283,870 647,222
----------- ----------- -----------
Net increase (decrease) in cash and
cash equivalents . . . . . . . . . 4,275 (34,942) (469,437)
Cash and cash equivalents,
beginning of year. . . . . . . . . -- 34,942 504,379
----------- ----------- -----------
Cash and cash equivalents,
end of year. . . . . . . . . . . . $ 4,275 -- 34,942
=========== =========== ===========
JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS - CONTINUED
1995 1994 1993
----------- ----------- -----------
Supplemental disclosure of cash
flow information:
Cash paid for mortgage and
other interest . . . . . . . . . . . . . $ 1,065,109 1,228,162 6,939,583
Non-cash investing and
financing activities:
Interest converted to
note payable . . . . . . . . . . . $ -- -- 2,194,631
=========== =========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
(1) OPERATIONS AND BASIS OF ACCOUNTING
JMB/245 Park Avenue Associates, Ltd ("JMB/245") holds, through a joint
venture, an equity investment in a commercial office building located in
New York, New York. Business activities consists of rentals to a variety
of commercial companies and the ultimate sale or disposition of such real
estate.
The equity method of accounting has been applied in the accompanying
financial statements with respect to the Partnership's interest in 245 Park
Avenue Company ("245 Park"). Accordingly, the financial statements do not
include the accounts of the 245 Park.
The Partnership's records are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying financial statements have been prepared from such records
after making appropriate adjustments to reflect the Partnership's accounts
in accordance with generally accepted accounting principles ("GAAP"). Such
GAAP and consolidation adjustments are not recorded on the records of the
Partnership. The net effect of these items for the years ended December
31, 1995 and 1994 is summarized as follows:
<TABLE>
<CAPTION>
1995 1994
------------------------------------------------------------
TAX BASIS
GAAP BASIS (Unaudited) GAAP BASIS TAX BASIS
------------ ----------- ------------- ------------
<S> <C> <C> <C> <C>
Total assets . . . . . . . . . $ 4,275 (131,292,775) -- (128,319,423)
Partners' capital
accounts (deficits):
General partners . . . . . . (13,592,399) (28,561,617) (13,138,898) (27,460,842)
Limited partners . . . . . . (121,480,203) (159,605,006) (114,375,355) (156,353,965)
Net losses:
General partners . . . . . . (453,501) (1,100,774) (350,484) (2,138,863)
Limited partners . . . . . . (7,104,848) (3,251,042) (5,490,919) (3,371,120)
Net loss per limited
partnership interest . . . . (7,105) (3,251) (5,490) (3,371)
============= =========== ============= ============
</TABLE>
The net loss per limited partnership interest is based upon the number
of limited partnership interests outstanding at the end of the period
(1,000). The above-noted deficit capital accounts will result, through the
duration of the Partnership, in net gain for financial reporting and income
tax purposes.
The preparation of financial statements in accordance with GAAP
requires the Partnership to make estimates and assumptions that affect the
reported or disclosed amount of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Certain reclassifications have been made to the 1994 financial
statements in order to conform with the 1995 presentation.
Statement of Financial Accounting Standards No. 107 ("SFAS 107"),
"Disclosures about Fair Value of Financial Instruments", requires all
entities to disclose the SFAS 107 value of all financial assets and
liabilities for which it is practicable to estimate. Value is defined in
the Statement as the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in a forced or
liquidation sale. The Partnership believes the carrying amount of its
financial instruments including debt and related accrued interest, has been
deemed to be not practicable to value for SFAS 107 purposes as repayment is
dependent on distributions from the Partnership investment which is
currently subordinated to Venture partner loans and the Partnership would
be unable to obtain comparable financing due to market conditions and
investment property specific conditions. The Partnership has no other
significant financial instruments.
Under the current impairment policy, provisions for value impairment
are recorded with respect to the investment property pursuant to Statement
of Financial Accounting Standards 121 ("SFAS 121") "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of". Therefore, the Partnership does not anticipate any effect on its
financial statements upon full adoption of SFAS 121 as required in the
first quarter of 1996.
No provision for Federal or state income taxes has been made as the
liability for such taxes is that of the partners rather than the
Partnership.
(2) INVESTMENT IN UNCONSOLIDATED VENTURE - 245 PARK
The Partnership acquired an interest in 245 Park, which owns a
46-story office building located at 245 Park Avenue, New York, New York.
The Partnership acquired its approximate 48.25% ownership interest in 245
Park for approximately $63,927,000 from an affiliate of the joint venture
partners. In addition to the Partnership, the other partners (the "O&Y
partners") of 245 Park include Olympia and York 245 Park Ave. Holding
Company, L.P., Olympia and York Equity Company, L.P., and Olympia and York
245 Corp., all of which are affiliates of Olympia & York Developments, Ltd.
("O&Y"). There are certain risks and uncertainties associated with the
Partnership's investment made through the joint venture, including the
possibility that the O&Y partners might become unable or unwilling to
fulfill their financial or other obligations, or that the O&Y partners (or
their creditors) may have economic or business interests or goals that are
inconsistent with those of the Partnership.
There are certain risks and uncertainties associated with the
Partnership's investment made through the joint venture, including the
possibility that the O&Y partners might become unable or unwilling to
fulfill their financial or other obligations, or that the O&Y partners may
have economic or business interests or goals that are inconsistent with
those of the Partnership. O&Y and certain of its affiliates have been
involved in bankruptcy proceedings in the United States (New York City) and
Canada (Toronto) and similar proceedings in England. The O&Y partners have
not been directly involved in these proceedings. In addition, a
reorganization of the management of the company's United States operations
has been completed and certain O&Y affiliates are in the process of
renegotiating or restructuring various loans affecting properties in the
United States in which they have an interest. The Partnership has been
unable to assess and cannot presently determine to what extent these
matters may adversely affect the willingness or ability of the O&Y partners
to meet their financial and other obligations, including those to the
Partnership and the joint venture. However, the financial difficulties of
O&Y and its affiliates as well as the pledge by the O&Y partners of their
interests in 245 Park discussed below, appear to be adversely affecting 245
Park's efforts both to refinance its mortgage loans and to re-lease vacant
space in the building.
The O&Y partners granted security interests in their interests in 245
Park to a syndicate of banks in order to secure certain loan obligations of
certain O&Y affiliates. In August 1992, the Partnership received notice
from the lead bank of the syndicate alleging that such O&Y affiliates were
in default under these loan obligations and directing that all payments and
distributions due to the O&Y partners from 245 Park be delivered to the
lead bank. According to published reports, an investor group purchased
participations in these obligations from the original syndicate of banks.
In September 1995, the holder of the loan obligations issued a notice of
sale for, among other things, the interest of the O&Y partners in 245 Park
in an effort to realize upon the collateral for the loan obligations. In
October, 1995, each of the O&Y partners, as well as other O&Y affiliates,
filed for protection from creditors under Chapter 11 of the United States
Bankruptcy Code. As a result of these bankruptcy filings, the attempted
sale of the O&Y partners' interest in 245 Park has been temporarily stayed.
The O&Y partners and certain other O&Y affiliates are preparing a plan
to restructure their ownership interests in various office buildings,
including the 245 Park Avenue office building, which could take the form of
one or more real estate investment trusts. Any such restructuring would be
subject to the approval of various creditors of the O&Y partners and other
O&Y affiliates as well as the bankruptcy court, and would likely result in
such creditors collectively obtaining control of such ownership interests.
In connection with such restructuring, it is possible that 245 Park will
seek reorganization under Chapter 11 of the United States Bankruptcy Code
pursuant to a plan agreed upon by its creditors and the partners of 245
Park, including the Partnership. Although the Partnership has had
discussions with the O&Y partners and certain creditors concerning
restructuring proposals and a reorganization of 245 Park, a proposal for
the restructuring of the O&Y partners' ownership interests and a plan for
the reorganization of 245 Park have not been agreed upon. Accordingly, the
terms of such restructuring and reorganization and their effect, if
consummated, on 245 Park and the O&Y partners and the partnerships
respective interest therein are subject to change.
Pursuant to the 245 Park joint venture agreement, the Partnership has
made capital contributions aggregating $18,100,000. To the extent such
contributions were not sufficient to fund operating deficits, debt service,
reserve requirements and certain capital expenditures, the O&Y partners
were obligated and did contribute the amount of such deficiencies through
May 1989. Commencing in June 1989 through the earlier of December 1993 or
the date on which the annual net cash flow (as defined) of the joint
venture is at least $16,500,000, the O&Y partners were obligated to loan
certain amounts (in the maximum amount of $72,500,000 at a prime rate of
interest, 8.5% per annum at December 31, 1995) to 245 Park sufficient to
cover operating deficits, reserve requirements and certain capital
expenditures of the joint venture and to pay the Partnership and the O&Y
partners their "minimum return" (as defined). The O&Y partners have loaned
245 Park amounts aggregating $81,783,000 (net of repayments) on a
cumulative basis as of December 31, 1995, which amount includes
approximately $4,205,405 (net of repayments) loaned for the year ended
December 31, 1995 for interest accruing on these advances. The loans from
the O&Y partners currently exceed the maximum amount required under the
terms of the joint venture agreement. Under the terms of the joint venture
agreement, the Partnership is obligated to contribute to 245 Park its share
(approximately 48.25%) of any operating expenses, reserve requirements and
capital expenditures, including interest on the O&Y partners' loans, to the
extent not covered by cash flow from the property or any additional loans
from the O&Y partners. The principal and any unpaid interest on the O&Y
partner loans will be due and payable on June 1, 2004, subject to earlier
repayment out of available net cash flow or the net proceeds of a
refinancing, sale or other disposition of the property as described below.
Pursuant to the joint venture agreement, the first $16,500,000 of
annual net cash flow (after payment of the current year's interest on the
O&Y partners' loans and the current return on their priority distributions)
is distributable approximately 48.25% to the Partnership and 51.75% to the
O&Y partners (defined as "ownership ratios"). Additional annual net cash
flow (as defined) will be utilized to pay outstanding loans and accrued and
deferred interest to the O&Y partners. Any remaining annual net cash flow
is distributable approximately 48.25% to the Partnership and 51.75% to the
O&Y partners. Operating profits and losses generally are allocated
approximately 48.25% to the Partnership and 51.75% to the O&Y partners.
Net sale or refinancing proceeds (after repayment of any loans and
priority distribution and accrued interest to the O&Y partners as described
below) are generally distributable, to the Partnership and the O&Y partners
in their respective ownership ratios. In general, profits from the sale or
other disposition of the office property will be allocated first to the
venture partners with any negative balances in their capital accounts up to
the amount of such negative balances and then in accordance with the
respective ownership ratios of the venture partners. Losses from the sale
or other disposition of the office property will generally be allocated
first to the venture partners with any positive balances in their capital
accounts up to the amount of such positive balances and then in accordance
with the respective ownership ratios of the venture partners. Losses
attributable to the New York State Gains Tax payable as a result of sale or
other transfer of the office property are allocable among the venture
partners in the same proportion as their contributions for payment of the
tax. In general, the Partnership will only contribute for the payment of
such tax with respect to proceeds from the sale or other transfer of the
office property in excess of $500,000,000 plus the value of certain
improvements.
The office building is being managed by an affiliate of the O&Y
partners for a management fee equal to 1% of gross receipts. In addition,
certain repairs and maintenance and tenant improvement work is performed by
an affiliate of the O&Y partners.
On September 7, 1989, 245 Park refinanced the $20,000,000 second
mortgage note. The remaining first mortgage note continues in place. The
third mortgage note with an outstanding balance of $147,500,000 was also
refinanced by a financial institution. Also on September 7, 1989, 245 Park
obtained an additional loan in the maximum principal amount of $29,000,000.
$17,000,000 of this loan was advanced at closing with an additional
$4,000,000 advanced in June 1990 and June 1991 for a total of $25,000,000
outstanding as of December 31, 1995. The final potential $4,000,000
funding under the fourth mortgage loan due from the financial institution
on June 30, 1992 was not received. The lender refused to provide the final
funding under the fourth mortgage loan due to a failure by the O&Y partners
to satisfy certain reporting requirements of 245 Park under the second,
third and fourth mortgage loan agreements, which constitutes a non-monetary
default under such agreements. The proceeds of this loan have been used to
pay down a loan from an affiliate of the O&Y partners and to reimburse the
affiliate for annual advances made to 245 Park for the Partnership's share
of the economic benefits of the Bear Stearns lease as further discussed
below. In the fourth quarter of 1994, 245 Park began recording the accrual
of interest on these junior mortgage loans at default rates (ranging from
11.8% to 14% per annum) due to the maturity of these junior mortgage loans.
The Partnership was previously notified that the junior mortgage loans
secured by the investment property as described below, were in default due
to non-compliance with certain lender financial reporting requirements and
have matured as of October 1994. However, 245 Park has continued to make,
and the lender has continued to accept, the monthly payments of interest
that were payable prior to October 1994. As of the date of this Report,
the holder of the junior mortgage loans has not, to the knowledge of the
Partnership, attempted to exercise its remedies against the joint venture's
property.
In March 1987, 245 Park and 245 Lease Co. entered into a lease with a
new tenant, Bear Stearns Companies, Inc., for the 538,000 square feet of
space in the building which had been vacated in 1986. The new lease
commenced in May 1987 and has an initial term extending until December
2002, with five renewal options for up to a total of 25 additional years.
Annual base rent, which commenced in January 1988 concurrent with tenant
occupancy, is payable at the rates of $35 per square foot through 1992, $50
per square foot through 1997 and $56 per square foot through 2002. Annual
base rent payable for each of the option periods will be the greater of the
then existing annual base rent or 85% of the market rate then in effect.
During the entire lease term, the tenant is also obligated to pay certain
electricity charges and its proportionate share of increases in the
operating costs of the building (including real estate taxes) over those
generally incurred in 1987.
The Partnership participates in a portion of the costs of this lease
as the costs have been financed by 245 Park. Such costs were approximately
$60,000,000, consisting of estimated costs associated with re-leasing the
tenant space (including estimated tenant improvement costs), expenses
related to termination of the prior tenants' leases and the new tenant's
vacating its space in another building and accrued interest through
September 1993. A portion of these costs have been financed by capital
contributed by the O&Y partners, for which they are entitled to a priority
distribution estimated to be approximately $32,212,000 (including accrued
interest, at 9% per annum through December 1995, on the contributed and
deferred amounts) from net annual cash flow or sale or refinancing
proceeds, as described above. In addition, as of December 31, 1995,
approximately $9,900,000 of these costs had been financed by a non-recourse
loan from an affiliate of the O&Y partners at an interest rate not to
exceed 9% per annum and $25,000,000 of the costs had been financed by a
third party lender at an interest rate of 9% per annum pursuant to the
fourth mortgage loan described above. Through December 1995, interest on
such capital contributed by the O&Y partners and on the non-recourse loan
from their affiliate has accrued and has been added to principal. Payments
on the fourth mortgage loan were interest only until maturity in October
1994 when the entire principal balance was due and payable. However, the
lender has refrained from taking any actions or exercising any of its
remedies as a result of the loan maturing in October 1994. Payments on the
loan from an affiliate of the O&Y partners are interest only until the
earlier of a sale or refinancing of the property, if proceeds are available
for repayment of the loan, or December 31, 2002, at which time the
outstanding balance becomes payable.
In addition, the costs incurred in connection with the overall level
of re-leasing at the property on a cumulative basis have been higher than
anticipated primarily because 245 Park has incurred and is expected to
incur, costs (which are currently approximately $18 per square foot) to
remove asbestos-containing materials to comply with New York City code and
ordinance requirements adopted subsequent to the Partnership's acquisition
of its interest in the property. The asbestos removal work, a substantial
portion of which has been completed, is typically performed on portions of
the building as they are re-leased to new tenants.
The holder of the first mortgage loan secured by 245 Park's property
agreed to extend the originally scheduled maturity date of the loan from
October 1, 1993 until January 1, 1994. 245 Park entered into an agreement
with the lender to further modify the loan for the amount of the current
outstanding principal balance plus accrued and unpaid interest at a default
rate of 18% per annum from October 1, 1993 through the loan closing date,
with a new interest rate from the loan closing date for a five year term.
This agreement provided for a new interest rate based on the mortgage
equivalent of U.S. Treasury securities maturing on or about five years from
the date of closing plus 3% per annum. Monthly payments of principal and
interest were to be required based upon a 30-year amortization schedule
during the loan extension period.
The agreement also provided for certain fees to be paid to the lender
and for certain escrows of funds to pay real estate taxes and capital and
operating costs. Accordingly, 245 Park paid $8 million to the lender to be
applied to accrued interest on the loan and has paid approximately $17.9
million into the real estate tax escrow ($9.4 million scheduled payment
made in 1995). In addition, 245 Park was to pay the lender an extension
fee of $2 million upon closing of the transaction. Subject to certain
conditions, the lender had agreed to waive payment of a portion of the
interest that accrues on the loan at the default rate prior to closing the
transaction. Completion of the modification and extension of the first
mortgage loan in accordance with the agreement was subject to the
satisfaction of various conditions, certain of which were not satisfied,
and the agreement has expired by its terms. However, 245 Park and the
lender continue to discuss a modification and extension of the first
mortgage loan generally on terms similar to those discussed above. The
financial difficulties of the O&Y partners and their affiliates, the need
to restructure their ownership interests in various properties and the
pledge by the O&Y partners of their interests in 245 Park have delayed and
may continue to delay obtaining modification and extension of 245 Park's
mortgage loans.
245 Park has continued to make, and the lender has continued to
accept, monthly payments of principal and interest in the same amount that
were payable prior to October 1, 1993 and the lender has refrained from
taking any actions or exercising any of its remedies as a result of the
loan maturing on January 1, 1994. It currently appears that any
modification and extension of the mortgage loans may depend upon
consumption of a plan for reorganization of 245 Park discussed above. If
245 Park is successful in obtaining a new loan modification that includes
an extension of the maturity date beyond January 1, 1994, it also expects
to seek a similar extension of the October, 1994 maturity dates of the
junior mortgage loans. In the event 245 Park is able to obtain
modifications and extensions of each mortgage loan, it is expected that the
interest rates applicable to the loans during the extension period would be
no greater than that for the modified first mortgage loan. There can be no
assurance that 245 Park will be able to reach a final agreement for any
such modifications and extensions of any of its mortgage indebtedness.
Although the property has significant cash reserves at December 31, 1995,
due to property cash needs and venture partner priority claims, it is not
expected that any of these reserves would be distributable to the
Partnership.
If 245 Park's efforts to extend any of its existing mortgage loans,
with an aggregate principal balance of $384,469,201 at December 31, 1995,
are unsuccessful, there is the possibility that 245 Park would no longer be
able to maintain an ownership interest in the property, as the mortgage
lenders may seek to acquire title to the property. This would result in
the recognition of a substantial net gain to the Limited Partners for
Federal income tax purposes, without any corresponding cash distribution.
In such event, the Partnership would then proceed to terminate its affairs.
(3) BANK OBLIGATIONS AND DEMAND NOTES PAYABLE
(a) Bank obligations and notes payable consist of the following at
December 31, 1995 and 1994:
1995 1994
----------- -----------
Notes payable (term loans)
bearing interest at a variable
rate related to LIBOR (8.8125%
per annum at December 31, 1995);
secured by the Partnership's
interest in 245 Park; interest
payable monthly until December
1998 (principal in the amount
of $2,500,000 and $2,707,000
paid in 1994 and 1995) when
the remaining amount is due;
obtained in 1993 (see note 3(b)) $16,042,000 18,749,000
Notes payable (term loans)
bearing interest at 2% per
annum; secured by the Partnership's
interest in 245 Park; no payments
until December 1998 when the
entire principal amount and
accrued compounded interest
are due; obtained in 1993
(see note 3(b)) . . . . . . . . 25,000,000 25,000,000
Notes payable (term loans)
bearing interest at 2% per
annum; secured by the Partnership's
interest in 245 Park; no payments
until December 1998 when the
entire principal amount and
accrued compounded interest
are due; obtained in 1993
(see note 3(b)) . . . . . . . . 2,194,631 2,194,631
Demand note payable bearing
interest at prime plus 1%
(9.75% per annum at December 31,
1995); advanced by JMB; maximum
principal sum of a specified
secured by the Partner-
ship's interest in 245 Park
(see note 3(b)) . . . . . . . . 12,029,591 8,182,092
----------- -----------
$55,266,222 54,125,723
=========== ===========
(b) Debt Refinancing
The Partnership and its lender had reached a modification and
extension agreement regarding the former $50,000,000 term loans that
matured in October 1993. These term loans (note 3(a)) were secured by the
Partnership's interest in 245 Park, and $25,000,000 ($16,042,000 at
December 31, 1995) of the term loans required interest only payments. The
terms of the modification and extension generally provided for (i) an
extension period through December 1998; (ii) one-half of the principal
amount of the term loans requires interest to be paid currently at a rate
related to the London Interbank Offer Rate (LIBOR) while interest on the
balance of the term loans will accrue at an annual rate of 2%; (iii) one-
half of the principal amount of the term loans bearing interest at a rate
related to LIBOR (the "LIBOR Note") was subject to periodic amortization;
and (iv) the past due lump sum interest swap payment in the amount of
$2,194,631 has been converted to a note payable due December 1998 with
interest accruing at an annual rate of 2%. In December 1993, approximately
$5,647,000 was paid to the lenders under the term loans (all of which was
advanced on behalf of the Partnership by JMB) which included a $5,000,000
principal paydown of the LIBOR Note and the interest payable for the period
September through December 1993. Any payments of principal and interest
made by JMB under its guaranty of the $25,000,000 portion of the
Partnership's term loans were treated as advances to the Partnership.
Interest accrues on these advances (and accrued and deferred interest
thereon) at the annual rate of prime plus 1% (9.5% at December 31, 1995).
As of December 31, 1995, JMB has advanced approximately $12,030,000,
evidenced by a demand note, which includes the principal and interest
payments made related to the loan modification discussed above, advances to
pay operating costs of the Partnership and accrued and deferred interest on
the demand note as of December 31, 1995. The demand note payable to JMB,
which allows a maximum principal sum of a specified amount, had been
subordinate to payment of the LIBOR Note but is no longer subordinated and
is now secured by the Partnership's interest in 245 Park.
In July 1995, JMB purchased from the lenders the term loans and their
security interests in the related collateral, which included the
Partnership's interest in 245 Park and the JMB guarantee, which has been
terminated. JMB continues to hold the notes for these loans generally
under the same terms and conditions that were in effect prior to the
purchase. However, no scheduled principal and interest payments are
required prior to maturity of the LIBOR Note. Interest on the LIBOR Note
accrues and is payable monthly at a floating rate which, at the option of
the Partnership, is related to either LIBOR or the prime rate of Bank of
America, Illinois. No payments of interest on the LIBOR Note have been
made subsequent to July 31, 1995. These loans and the demand loan payable
to JMB are secured by the Partnership's interest in 245 Park and are
subject to mandatory prepayment of principal and interest out of any
distributions received by the Partnership from 245 Park.
(4) PARTNERSHIP AGREEMENT
Pursuant to the terms of the Partnership Agreement, net profits and
losses of the Partnership from operations are generally allocated 94% to
the Limited Partners and 6% to the General Partners. Profits from the sale
or other disposition of all or substantially all of the Partnership's
interest in 245 Park or of 245 Park's property will be allocated to the
General Partners in an amount equal to the greater of 1% of such profits or
any cash from the proceeds of such sale or other disposition distributed to
the General Partners, plus an additional amount of such profits to
eliminate deficits, if any, in the General Partners' capital accounts. The
remainder of such profits will be allocated to the Limited Partners. All
losses from the sale of all or substantially all of the Partnership's
interest in 245 Park or 245 Park's property will be allocated 99% to the
Limited Partners and 1% to the General Partners. All such profits or
losses will be allocated among the Limited Partners in proportion to the
number of Interests held.
The General Partners are not required to make any additional capital
contributions except under certain limited circumstances upon dissolution
and termination of the Partnership. Distributions of "Distributable Cash"
(as defined) of the Partnership generally will be made 94% to the Limited
Partners and 6% to the General Partners. Distributions of "sale proceeds"
or "financing proceeds" (as defined) will be made first to the Limited
Partners in an amount equal to their contributed capital, next to the
General Partners in an amount equal to their capital contributions, and the
balance 70% to the Limited Partners and 30% to the General Partners.
(5) TRANSACTIONS WITH AFFILIATES
The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Corporate General Partner
and its affiliates including the reimbursement for salaries and salary-
related expenses of its employees, certain of its officers, and other
direct expenses relating to the administration of the Partnership and the
operation of the Partnership's investments. Fees, commissions and other
expenses required to be paid by the Partnership to the General Partners and
their affiliates as of December 31, 1995, 1994 and 1993 are as follows:
<TABLE>
<CAPTION>
UNPAID AT
DECEMBER 31,
1995 1994 1993 1995
-------- -------- -------- --------------
<S> <C> <C> <C> <C>
Reimbursement (at cost) for
legal services. . . . . . . . . . $ 3,892 3,707 2,818 3,892
Reimbursement (at cost) for
accounting services . . . . . . . 8,423 7,836 12,867 8,423
Reimbursement (at cost) for
out-of-pocket expenses. . . . . . 1,817 -- 2,591 1,817
------- -------- -------- -------
$14,132 11,543 18,276 14,132
======= ======== ======== =======
</TABLE>
All above reimbursable amounts currently payable to the General
Partners and their affiliates do not bear interest.
The Corporate General Partner of the Partnership has determined to use
independent third parties to perform certain of these administrative
services beginning in the fourth quarter of 1995. Use of such third
parties, is not expected to have a material effect on the operations of the
Partnership.
Reference is made to Note 3 for a discussion of certain loans and
notes payable to the Partnership and related collateral held by JMB.
(6) INVESTMENT IN UNCONSOLIDATED VENTURE - 245 PARK
Summary financial information for 245 Park as of and for the years
ended December 31, 1995 and 1994 are as follows:
1995 1994
------------ ------------
Current assets . . . . . . . . .$ 65,820,474 48,387,467
Current liabilities. . . . . . .(420,430,107) (412,893,486)
------------ ------------
Working capital deficit(354,609,633) (364,506,019)
------------ ------------
Investment property, net . . . . 363,852,639 376,408,428
Deferred expenses. . . . . . . . 11,645,555 10,823,376
Accrued rents receivable . . . . 25,269,713 27,162,229
Loans from affiliates. . . . . . (91,679,580) (86,676,560)
Venture partners' equity . . . . (30,720,959) (35,184,584)
------------ ------------
Partnership's capital (deficit)$(76,242,265)(71,973,130)
============ ============
Represented by:
Invested capital . . . . . . .$ 86,054,290 86,054,290
Cumulative distributions . . . (38,561,363) (38,561,363)
Cumulative net losses. . . . .(123,735,192) (119,466,057)
------------ ------------
$(76,242,265) (71,973,130)
============ ============
Total income . . . . . . . . . .$100,360,354 99,637,775
Expenses applicable to operating loss109,093,114105,900,547
------------ ------------
Net income (loss). . . . . . . .$ (8,732,760) (6,262,772)
============ ============
The total income, expenses and net earnings for the year ended
December 31, 1993 were $97,830,163, $95,478,523 and $2,351,640,
respectively.
INDEPENDENT AUDITORS' REPORT
The Partners
245 Park Avenue Company:
We have audited the financial statements of 245 Park Avenue Company as
listed in the accompanying index. In connection with our audits of the
financial statements, we also have audited the financial statement schedule
as listed in the accompanying index. These financial statements and
financial statement schedule are the responsibility of the General Partners
of JMB/245 Park Avenue Associates, Ltd. Our responsibility is to express
an opinion on these financial statements and financial statement schedule
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards 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. An audit also includes assessing the accounting principles
used and significant estimates made by the General Partners of JMB/245 Park
Avenue Associates, Ltd., as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of 245 Park Avenue
Company as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for each of the years in the three-year period ended
December 31, 1995, in conformity with generally accepted accounting
principles. Also in our opinion, the related financial statement schedule,
when considered in relation to the basic financial statements taken as a
whole, presents fairly, in all material respects, the information set forth
therein.
The accompanying financial statements and financial statement schedule
have been prepared assuming that 245 Park Avenue Company will continue as a
going concern. As described in Note 3 to the accompanying financial
statements, the long-term debt secured by the investment property is in
default for failure to repay amounts due at scheduled maturity dates. There
can be no assurance that such debt will be able to be extended, modified or
refinanced. In addition, in connection with the restructuring of the O&Y
Partner's interest in various office buildings including the 245 Park
Avenue office building, it is possible that 245 Park Avenue Company will
seek reorganization under Chapter 11 of the United States Bankruptcy Code.
These circumstances raise substantial doubt about 245 Park Avenue Company's
ability to continue as a going concern. The General Partners' plans in
regard to these matters are described in Note 2. The accompanying
financial statements and financial statement schedule do not include any
adjustments that might result from the outcome of this uncertainty.
KPMG PEAT MARWICK LLP
Chicago, Illinois
March 25, 1996
<TABLE>
245 PARK AVENUE COMPANY
BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
ASSETS
------
<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
Current assets:
Cash, including amounts held by property manager (note 1). $ 44,413,236 46,523,510
Rents and other receivables (net of allowance for
doubtful accounts of $296,053 and $257,186 at
December 31, 1995 and 1994, respectively). . . . . . . . 3,114,283 1,332,991
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . 17,910,229 --
Other current assets . . . . . . . . . . . . . . . . . . . 382,726 530,966
------------ -----------
Total current assets . . . . . . . . . . . . . . . 65,820,474 48,387,467
Investment property, at cost (notes 1, 2 and 3)
- Schedule III:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . 100,805,480 100,805,480
Building and improvements. . . . . . . . . . . . . . . . 432,341,768 430,067,563
------------ -----------
533,147,248 530,873,043
Less accumulated depreciation. . . . . . . . . . . . . . 169,294,609 154,464,615
------------ -----------
Total investment property, net of
accumulated depreciation . . . . . . . . . . . . 363,852,639 376,408,428
------------ -----------
Deferred expenses (note 1) . . . . . . . . . . . . . . . . . 11,645,555 10,823,376
Accrued rents receivable (note 1). . . . . . . . . . . . . . 25,269,713 27,162,229
------------ -----------
$466,588,381 462,781,500
============ ===========
245 PARK AVENUE COMPANY
BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
1995 1994
------------ -----------
Current liabilities:
Current portion of long-term debt (note 3) . . . . . . . . $384,469,201 386,017,148
Accounts payable . . . . . . . . . . . . . . . . . . . . . 3,123,946 2,195,729
Tenant allowances payable. . . . . . . . . . . . . . . . . 404,635 424,635
Accrued interest . . . . . . . . . . . . . . . . . . . . . 26,209,445 17,157,140
Unearned rents . . . . . . . . . . . . . . . . . . . . . . 6,192,237 7,086,168
Due to affiliates. . . . . . . . . . . . . . . . . . . . . 30,643 12,666
------------ -----------
Total current liabilities. . . . . . . . . . . . . 420,430,107 412,893,486
Loans from affiliates (note 2) . . . . . . . . . . . . . . . 91,679,580 86,676,560
------------ -----------
Commitments and contingencies (notes 2, 3 and 4)
Total liabilities. . . . . . . . . . . . . . . . . 512,109,687 499,570,046
Partners' capital accounts (deficits) (note 2):
JMB/245 Park Avenue Associates, Ltd.:
Capital contributions. . . . . . . . . . . . . . . . . . 86,054,290 86,054,290
Cumulative cash distributions. . . . . . . . . . . . . . (38,561,363) (38,561,363)
Cumulative net losses. . . . . . . . . . . . . . . . . . (123,735,192) (119,466,057)
------------ -----------
(76,242,265) (71,973,130)
------------ -----------
Venture partners:
Capital contributions. . . . . . . . . . . . . . . . . . 135,517,588 135,517,588
Cumulative cash distributions. . . . . . . . . . . . . . (21,906,568) (21,906,568)
Cumulative net losses. . . . . . . . . . . . . . . . . . (82,890,061) (78,426,436)
------------ -----------
30,720,959 35,184,584
------------ -----------
Total partners' capital accounts (deficits). . . . (45,521,306) (36,788,546)
------------ -----------
$466,588,381 462,781,500
============ ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
245 PARK AVENUE COMPANY
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<CAPTION>
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . $ 99,032,571 98,849,957 97,564,349
Interest income. . . . . . . . . . . . . . 1,327,783 787,818 265,814
------------ ------------ ------------
100,360,354 99,637,775 97,830,163
------------ ------------ ------------
Expenses:
Mortgage and other interest. . . . . . . . 61,525,869 58,009,422 48,762,902
Depreciation . . . . . . . . . . . . . . . 14,886,901 14,759,222 14,536,763
Property operating expenses. . . . . . . . 31,488,964 31,622,331 30,648,617
Amortization of deferred expenses. . . . . 1,191,380 1,509,572 1,530,241
------------ ------------ ------------
109,093,114 105,900,547 95,478,523
------------ ------------ ------------
Net earnings (loss). . . . . . . . $ (8,732,760) (6,262,772) 2,351,640
============ ============ ============
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
245 PARK AVENUE COMPANY
STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<CAPTION>
JMB/245 PARK AVENUE ASSOCIATES, LTD. VENTURE PARTNERS
-------------------------------------------------- ---------------------------------------------------
CONTRI-
BUTIONS
NET NET OF NET
CONTRI- EARNINGS CASH OFFERING EARNINGS CASH
BUTIONS (LOSS) DISTRIBUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
--------------------------------------------- ---------- -----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance
(deficit)
at Decem-
ber 31,
1992. . . .$86,054,290(117,205,134)(38,561,363)(69,712,207)135,517,588(76,776,227)(21,906,568)36,834,793
Net earn-
ings. . . . -- 658,942 -- 658,942 -- 1,692,698 -- 1,692,698
--------------------------------------------- ---------- -----------------------------------
Balance
(deficit)
at Decem-
ber 31,
1993. . . .86,054,290(116,546,192)(38,561,363)(69,053,265)135,517,588(75,083,529)(21,906,568) 38,527,491
Net loss . . -- (2,919,865) -- (2,919,865) -- (3,342,907) -- (3,342,907)
--------------------------------------------- ---------- -----------------------------------
Balance
(deficit)
at Decem-
ber 31,
1994. . . .86,054,290(119,466,057)(38,561,363)(71,973,130)135,517,588(78,426,436)(21,906,568)35,184,584
Net loss . . -- (4,269,135) -- (4,269,135) -- (4,463,625) -- (4,463,625)
--------------------------------------------- ---------- -----------------------------------
Balance
(deficit)
at Decem-
ber 31,
1995. . . .$86,054,290(123,735,192)(38,561,363)(76,242,265)135,517,588(82,890,061)(21,906,568)30,720,959
============================================= ========== ===================================
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
245 PARK AVENUE COMPANY
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss). . . . . . . . . . . . . $(8,732,760) (6,262,772) 2,351,640
Items not requiring (providing) cash or
cash equivalents:
Depreciation. . . . . . . . . . . . . . . 14,886,901 14,759,222 14,536,763
Amortization of deferred expenses . . . . 1,191,380 1,509,572 1,530,241
Changes in:
Rents and other receivables . . . . . . . (1,781,292) (829,133) 2,344,976
Other current assets. . . . . . . . . . . 148,240 (482,244) 6,566
Accounts payable. . . . . . . . . . . . . 908,217 981,574 (83,912)
Accrued interest. . . . . . . . . . . . . 9,052,305 15,208,231 (12,191)
Accrued interest on loans from affiliates 5,003,020 816,623 4,587,027
Unearned rents. . . . . . . . . . . . . . (893,931) 1,042,887 2,731,519
Due to affiliates . . . . . . . . . . . . 17,977 (37,140) 41,516
Accrued rents receivable. . . . . . . . . 1,892,516 (1,130,504) (575,488)
----------- ----------- -----------
Net cash provided by
operating activities . . . . . . . 21,692,573 25,576,316 27,458,657
----------- ----------- -----------
Cash flows from investing activities:
Additions to investment property,
net of related payable . . . . . . . . . . (2,331,112) (3,086,216) (2,145,355)
Payment of deferred expenses . . . . . . . . (2,013,559) (2,350,295) (410,033)
Escrow deposits (net). . . . . . . . . . . . (17,910,229) -- --
----------- ----------- -----------
Net cash used in investing
activities . . . . . . . . . . . . (22,254,900) (5,436,511) (2,555,388)
----------- ----------- -----------
Cash flows from financing activities:
Payment of deferred financing costs. . . . . -- (105,828) (111,000)
Proceeds from loan from affiliate . . . . . -- -- 549,720
Principal payments on debt . . . . . . . . . (1,547,947) (1,373,724) (1,219,110)
----------- ----------- -----------
245 PARK AVENUE COMPANY
STATEMENTS OF CASH FLOWS - CONTINUED
1995 1994 1993
----------- ----------- -----------
Net cash used in financing
activities . . . . . . . . . . . . (1,547,947) (1,479,552) (780,390)
----------- ----------- -----------
Net (decrease) increase in cash. . . (2,110,274) 18,660,253 24,122,879
Cash, beginning of year. . . . . . . 46,523,510 27,863,257 3,740,378
----------- ----------- -----------
Cash, end of year. . . . . . . . . . $44,413,236 46,523,510 27,863,257
=========== =========== ===========
Supplemental disclosure of cash
flow information:
Cash paid for mortgage and
other interest . . . . . . . . . . . . . $47,470,543 41,984,568 44,188,066
=========== =========== ===========
Non cash investing and financing
activities: -- -- --
=========== =========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
245 PARK AVENUE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
(1) BASIS OF ACCOUNTING
The accompanying financial statements have been prepared for the
purpose of complying with Rule 3.09 of Regulation S-X of the Securities and
Exchange Commission.
245 Park Avenue Company ("245 Park") holds, through a joint venture an
investment in a commercial office building located in New York, New York.
Business activities consist of rentals to a variety of commercial companies
and the ultimate sale or disposition of such real estate.
The records of 245 Park are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying financial statements have been prepared from such records
after making appropriate adjustments to reflect 245 Park's accounts in
accordance with generally accepted accounting principles ("GAAP"). Such
adjustments are not recorded on the records of 245 Park.
The preparation of financial statements in accordance with GAAP
requires the Partnership to make estimates and assumptions that affect the
reported or disclosed amount of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reported period. Actual results could differ from those
estimates.
Deferred expenses are comprised of financing costs which are amortized
over the term of the related debt, leasing and renting costs which are
amortized over the terms of the related leases and lease takeover costs
which are also amortized over the term of the related lease.
No provision for State or Federal income taxes has been made as the
liability for such taxes is that of the joint venture partners rather than
245 Park.
Depreciation on the investment property has been provided over the
estimated useful lives of 5-30 years using the straight-line method.
Although certain leases provide for tenant occupancy during periods
for which no rent is due, prorated rental income is accrued for the full
period of occupancy. In addition, although certain leases provide for step
increases in rent during the lease term, 245 Park recognizes the total rent
due on a straight-line basis over the entire lease. Such amounts are
primarily reflected in accrued rents receivable in the accompanying balance
sheets. Straight-line rental income in excess of contract rental income
was $938,095, $1,130,504 and $575,488 for the years ended December 31,
1995, 1994 and 1993, respectively.
Statement of Financial Accounting Standards No. 95 requires 245 Park
to present a statement which classifies receipts and payments according to
whether they stem from operating, investing or financing activities. The
required information has been segregated and accumulated according to the
classification specified in the pronouncement.
Statement of Financial Accounting Standards No. 107 ("SFAS 107"),
"Disclosures about Fair Value of Financial Statements", requires all
entities to disclose the SFAS 107 value of all financial assets and
liabilities for which it is practicable to estimate. Value is defined in
the Statement as the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than a forced or
liquidation sale. 245 Park believes the carrying amount of its debt has
been deemed to be not practicable to value for SFAS 107 purposes as 245
Park would be unable to obtain comparable financing due to market
conditions and investment property specific conditions. 245 Park has no
other significant financial instruments.
Maintenance and repair expenses are charged to operations as incurred.
Significant betterments and improvements and asbestos removal costs are
capitalized and depreciated over their estimated useful lives.
Under the current impairment policy, provisions for value impairment
are recorded with respect to the investment property pursuant to Statement
of Financial Accounting Standards 121 ("SFAS 121") "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of". Therefore, 245 Park does not anticipate any effect on its financial
statements upon full adoption of SFAS 121 as required in the first quarter
of 1996.
(2) VENTURE AGREEMENT
A description of the joint venture agreement and certain financing
arrangements with the joint venture partners and their affiliates is
contained in Note 2 of Notes to Financial Statements of JMB/245 Park Avenue
Associates, Ltd. filed with this Report. Such description is incorporated
herein by reference.
(3) LONG-TERM DEBT
(a) Long-term debt consists of the following at December 31, 1995 and
1994:
1995 1994
----------- -----------
12% first mortgage note; secured
by 245 Park Avenue in New York,
New York; payable in monthly
installments of principal and
interest of approximately
$2,057,225 through January
1994 when remaining principal
balance of approximately
$194,890,900 was due (18% at
December 31, 1995) (b). . . . $191,969,201 193,517,148
9.275% second mortgage note;
secured by 245 Park Avenue
in New York, New York; interest
only payments monthly through
October 1994 when the entire
principal amount was due (14%
at December 31, 1995) (c) . . 20,000,000 20,000,000
Third mortgage note; under a
line of credit with a maximum
commitment of $147,500,000,
secured by 245 Park Avenue
in New York, New York and
subordinated to the first
and second mortgage notes
described above; interest
only payable monthly at the
rate of 13% through September
1993; and at one of two variable
rates (at the option of 245
Park) offered by the lender
from October 1993 through
maturity in October 1994
when the entire principal
amount was due (11.88% at
December 31, 1995)(c) . . . . 147,500,000 147,500,000
9% fourth mortgage note,
secured by 245 Park Avenue
in New York, New York;
$25,000,000 principal
amount (see Note 2
of Notes to Financial
Statements of JMB/245
Park Avenue Associates,
Ltd.); interest only
payments through October
1994 when the entire
principal amount was
due (14% at December 31,
1995) (c) . . . . . . . . . . 25,000,000 25,000,000
----------- -----------
Total debt. . . . . . . . 384,469,201 386,017,148
Less current portion
of long-term debt . . . 384,469,201 386,017,148
----------- -----------
Total long-term debt. . . $ -- --
=========== ===========
(b) The holder of the first mortgage loan secured by 245 Park's
property agreed to extend the originally scheduled maturity date of the
loan from October 1, 1993 until January 1, 1994. 245 Park and this lender
are continuing discussions concerning an extension and modification of the
loan under certain conditions as more fully described in Note 2 to Notes to
Financial Statements at JMB/245 Park Avenue Associates, Ltd.
(c) The junior mortgage loans are in default as they matured in
October 1994 and also due to non-compliance with certain lender reporting
requirements. See Note 2 of Notes to Financial Statements of JMB/245 Park
Avenue Associates, Ltd.
(4) LEASES
245 Park has determined that all leases relating to the property are
properly classified as operating leases; therefore, rental income is
reported when earned and the cost of the property, excluding cost of land,
is depreciated over its estimated useful life. Leases with commercial
tenants range in term from one to 25 years and provide for fixed minimum
rent and partial to full reimbursement of operating costs.
Minimum lease payments, including amounts representing executory costs
(e.g., taxes, maintenance, insurance), and any related profit in excess of
specific reimbursements to be received in the future under the above
operating commercial lease agreements are as follows:
1996 . . . . . . . . . . $ 70,628,393
1997 . . . . . . . . . . 56,155,994
1998 . . . . . . . . . . 53,217,286
1999 . . . . . . . . . . 52,899,014
2000 . . . . . . . . . . 51,911,643
Thereafter . . . . . . . 220,019,707
------------
Total. . . . . . . . . $504,832,037
============
<TABLE>
SCHEDULE III
245 PARK AVENUE COMPANY
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
<CAPTION>
COSTS CAPITALIZED GROSS AMOUNT AT WHICH
INITIAL COST SUBSEQUENT TO CARRIED AT CLOSE
TO PARTNERSHIP (A) ACQUISITION OF PERIOD (B)(C)
--------------------- ----------------------------------------------
BUILDINGS BUILDINGS BUILDINGS
AND AND AND
ENCUMBRANCE LAND IMPROVEMENTS LAND IMPROVEMENTS LAND IMPROVEMENTS
---------------------------------- --------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OFFICE
BUILDING
New York,
New York
(C) . . . .$386,017,148100,000,000400,000,000 805,480 32,341,768 100,805,480432,341,768
=================================== ======= ========== ======================
</TABLE>
<TABLE>
SCHEDULE III
245 PARK AVENUE COMPANY
REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
STATEMENT OF 1995
ACCUMULATED DATE OF DATE OPERATIONS REAL ESTATE
TOTAL (D) DEPRECIATION(E) CONSTRUCTION ACQUIRED IS COMPUTED TAXES
------------ ---------------- ------------------------------------- ----------
<S> <C> <C> <C> <C> <C> <C>
OFFICE
BUILDING
New York,
New York
(C) . . . . .$533,147,248 169,294,609 1967 12/29/83 5-30 years 18,712,847
============ =========== ==========
<FN>
_______________
Notes:
(A) The initial cost reflects the original purchase price of the property,
including amounts incurred subsequent to acquisition which were contemplated at the
time the property was acquired.
(B) The aggregate cost of real estate owned at December 31, 1995 for Federal
income tax purposes was $662,237,928.
(C) Property owned and operated by 245 Park; see Note 2 of Notes to Financial
Statements of JMB/245 Park Avenue Associates, Ltd.
</TABLE>
<TABLE>
SCHEDULE III
245 PARK AVENUE COMPANY
REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
(D) Reconciliation of real estate owned:
<CAPTION>
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Balance at beginning of period. . . . . . $530,873,043 527,797,683 525,670,845
Additions during period . . . . . . . . . 2,331,112 3,086,216 2,145,355
Sales and disposals during period . . . . (56,907) (10,856) (18,517)
------------ ------------ ------------
Balance at end of period. . . . . . . . . $533,147,248 530,873,043 527,797,683
============ ============ ============
(E) Reconciliation of accumulated depreciation:
Balance at beginning of period. . . . . . $154,464,615 139,716,249 125,198,003
Depreciation expense. . . . . . . . . . . 14,886,901 14,759,222 14,536,763
Sales and disposals during period . . . . (56,907) (10,856) (18,517)
------------ ------------ ------------
Balance at end of period. . . . . . . . . $169,294,609 154,464,615 139,716,249
============ ============ ============
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
There were no changes in, or disagreements with, accountants during
1994 and 1995.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
The Corporate General Partner of the Partnership, JMB Park Avenue,
Inc., an Illinois corporation, is a wholly-owned subsidiary of Northbrook
Corporation, a Delaware corporation, substantially all of the outstanding
shares of stock are owned by JMB Realty Corporation ("JMB"), a Delaware
corporation, and certain of its officers, directors, members of their
families and affiliates. Substantially all of the shares of JMB are owned
by its officers, directors, members of their families and affiliates. The
Corporate General Partner has responsibility for all aspects of the
Partnership's operations, subject to the requirement that the sale of the
Partnership's real property investment must be approved by the Associate
General Partner of the Partnership, Park Associates, L.P., an Illinois
limited partnership with JMB Park Avenue, Inc. as the sole general partner.
The Associate General Partner shall be directed by a majority in interest
of its limited partners (who are generally officers, directors and
affiliates of JMB or its affiliates) as to whether to provide its approval
of any sale of real property (or any interest therein) of the Partnership.
Various relationships of the Partnership to the Corporate General Partner
and its affiliates are described under the caption "Conflicts of Interest"
at pages 35-36 of the Private Placement Memorandum, which description is
incorporated herein by reference to Exhibit 99.1 to this annual report.
The director and the executive and certain other officers of the
Corporate General Partner of the Partnership are as follows:
NAME OFFICE
- ---- ------
Judd D. Malkin Chairman
Neil G. Bluhm Vice President
Gary Nickele Vice President and General Counsel
Stuart C. Nathan President and Director
H. Rigel Barber Vice President
Gailen J. Hull Vice President
There is no family relationship among any of the foregoing director or
officers. The foregoing director has been elected to serve a one-year term
until the annual meeting of the Corporate General Partner to be held on
June 5, 1996. All of the foregoing officers have been elected to serve
one-year terms until the first meeting of the Board of Directors held after
the annual meeting of the Corporate General Partner to be held on June 5,
1996. All of the foregoing officers have served in the capacities
indicated since the date of incorporation of the Corporate General Partner
on March 26, 1984 with the exception that Stuart C. Nathan, who was a Vice
President, was elected Director on December 18, 1990 and President on
August 8, 1993, and Gary Nickele was elected Vice President and General
Counsel on December 18, 1990. There are no arrangements or understandings
between or among any of said director or officers and any other person
pursuant to which any director or officer was elected as such.
The Corporate General Partner is an affiliate of JMB. JMB is the
corporate general partner of Carlyle Real Estate Limited Partnership-VII
("Carlyle-VII"), Carlyle Real Estate Limited Partnership-IX ("Carlyle-IX"),
Carlyle Real Estate Limited Partnership-X ("Carlyle-X"), Carlyle Real
Estate Limited Partnership-XI ("Carlyle-XI"), Carlyle Real Estate Limited
Partnership-XII ("Carlyle-XII"), Carlyle Real Estate Limited
Partnership-XIII ("Carlyle-XIII"), Carlyle Real Estate Limited
Partnership-XIV ("Carlyle-XIV"), Carlyle Real Estate Limited Partnership-XV
("Carlyle-XV"), Carlyle Real Estate Limited Partnership-XVI ("Carlyle-
XVI"), Carlyle Real Estate Limited Partnership-XVII ("Carlyle-XVII"), JMB
Mortgage Partners, Ltd. ("Mortgage Partners"), JMB Mortgage Partners,
Ltd.-II ("Mortgage Partners-II"), JMB Mortgage Partners, Ltd.-III
("Mortgage Partners-III"), JMB Mortgage Partners, Ltd.-IV ("Mortgage
Partners IV"), Carlyle Income Plus, Ltd ("Carlyle Income Plus") and Carlyle
Income Plus, Ltd.-II ("Carlyle Income Plus-II") and managing general
partner of JMB Income Properties, Ltd.-IV ("JMB Income-IV"), JMB Income
Properties, Ltd.-V ("JMB Income-V"), JMB Income Properties, Ltd.-VI ("JMB
Income-VI"), JMB Income Properties, Ltd.-VII ("JMB Income-VII"), JMB Income
Properties, Ltd.-IX ("JMB Income-IX"), JMB Income Properties, Ltd.-X ("JMB
Income-X"), JMB Income Properties, Ltd.-XI ("JMB Income-XI"), JMB Income
Properties, Ltd.-XII ("JMB Income-XII"), and JMB Income Properties, Ltd.-
XIII ("JMB Income-XIII"). JMB is also the sole general partner of the
associate general partner of most of the foregoing partnerships.
The foregoing director and officers are also officers and/or directors
of various affiliated companies of JMB including Arvida/JMB Managers, Inc.
(the general partner of Arvida/JMB Partners, L.P. ("Arvida")), Arvida/JMB
Managers-II, Inc. (the general partner of Arvida/JMB Partners, L.P.-II
("Arvida-II")) and Income Growth Managers, Inc. (the corporate general
partner of IDS/JMB Balanced Income Growth, Ltd. ("IDS/BIG")). Most of such
officers and the director are also partners, directly or indirectly, of
certain partnerships which are associate general partners in the following
real estate limited partnerships: the Partnership, Carlyle-VII,
Carlyle-IX, Carlyle-X, Carlyle-XI, Carlyle-XII, Carlyle-XIII, Carlyle-XIV,
Carlyle XV, Carlyle-XVI, Carlyle-XVII,JMB Income-VI, JMB Income-VII, JMB
Income-IX, JMB Income-X, JMB Income-XI, JMB Income-XII, JMB Income-XIII,
Mortgage Partners, Mortgage Partners-II, Mortgage Partners-III, Mortgage
Partners-IV, Carlyle Income Plus, Carlyle Income Plus-II and IDS/BIG.
The business experience during the past five years of each such
director and officer of the Corporate General Partner of the Partnership in
addition to that described above is as follows:
Judd D. Malkin (age 58) is Chairman and a director of JMB. He is also
an individual general partner of JMB Income-IV and JMB Income-V. Mr.
Malkin has been associated with JMB since October, 1969. Mr. Malkin is a
director of Urban Shopping Centers, Inc., an affiliate of JMB that is a
real estate investment trust in the business of owning, managing and
developing shopping centers. He is a Certified Public Accountant.
Neil G. Bluhm (age 58) is President and a director of JMB. He is also
an individual general partner of JMB Income-IV and JMB Income-V. Mr. Bluhm
has been associated with JMB since August, 1970. Mr. Bluhm is a director
of Urban Shopping Centers, Inc., an affiliate of JMB that is a real estate
investment trust in the business of owning, managing and developing
shopping centers. He is a member of the Bar of the State of Illinois and a
Certified Public Accountant.
Gary Nickele (age 43) is Executive Vice President and General Counsel
of JMB. Mr. Nickele has been associated with JMB since February 1984. He
is a member of the Bar of the State of Illinois.
Stuart C. Nathan (age 54) is Executive Vice President and a director
of JMB. Mr. Nathan has been associated with JMB since July, 1972. Mr.
Nathan is also a director of Sportmart Inc., a retailer of sporting goods.
He is a member of the Bar of the State of Illinois.
H. Rigel Barber (age 46) is Chief Executive Officer of JMB. Mr.
Barber has been associated with JMB since March, 1982. He is a member of
the Bar of the State of Illinois.
Gailen J. Hull (age 47) is Senior Vice President of JMB. Mr. Hull has
been associated with JMB since March, 1982. He holds a Masters degree in
Business Administration from Northern Illinois University and is a
Certified Public Accountant.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no officers or directors. The General Partners
are entitled to receive a share of cash distributions, when and as cash
distributions are made to the Limited Partners, and a share of profits or
losses as described in Note 4. No such cash distributions were paid to the
General Partners in 1995, 1994 or 1993. The General Partners were
allocated aggregate losses for tax purposes of $1,100,774 from the
Partnership in 1995. Such losses may benefit the General Partners (or the
partners thereof) to the extent that such losses may be offset against
taxable income from the Partnership or other sources.
The Partnership is permitted to engage in various transactions
involving affiliates of the Corporate General Partner of the Partnership,
as described under the captions "Compensation, Fees and Other Payments" at
pages 19-21, and "Management" at pages 31-38 of the Private Placement
Memorandum, which descriptions are hereby incorporated herein by reference
to Exhibit 99.1 to this annual report. Various relationships of the
Partnership to the Corporate General Partner (and its director and
officers) and its affiliates are also set forth above in Item 10.
The General Partners of the Partnership or their affiliates may be
reimbursed for their direct expenses and out-of-pocket expenses relating to
the administration of the Partnership and operation of the Partnership's
real property investment. For 1995, an affiliate of the General Partners
was entitled to reimbursements for such expenses in the amount of $1,817,
all of which was unpaid at December 31, 1995.
The General Partners and their affiliates are entitled to
reimbursements of salary and salary related expenses for legal, accounting
and certain other services. Such reimbursements will not exceed the lesser
of the actual cost of such services or the amount which the Partnership
would be required to pay independent parties for comparable services. For
1995, an affiliate of the General Partners was entitled to reimbursements
for such expense in the amount of $14,132, all of which was unpaid at
December 31, 1995.
As of December 31, 1995, JMB has advanced $12,030,000, evidenced by a
demand note, which reflects the principal and interest payments made on the
LIBOR Note since the closing of the term loan modification (see Note 3).
The demand note payable to JMB allows a maximum principal sum of a
specified amount, bears interest at prime plus 1% per annum, which accrues
and is deferred. The demand note is currently secured by the Partnership's
interest in 245 Park. The amount of interest accrued and deferred on the
demand note for 1995 and in the aggregate through December 31, 1995 is
$1,107,970 and $1,682,731, respectively. In July 1995, JMB purchased from
the lenders the term loans to the Partnership and their security interest
in the related collateral, which included the Partnership's interest in 245
Park Co. and the JMB guarantee, which has been terminated. JMB continues
to hold these notes generally under the same terms and conditions that were
in effect prior to the purchase. However, no scheduled principal payments
are required on any of these notes prior to maturity. No payments of
interest have been made on any of the notes since July 1995. The amount of
interest accrued on these notes from August through December 1995 is
$697,460. Reference is made to Note 3 for a further discussion of these
notes.
<TABLE>
<CAPTION>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) No person or group is known by the Partnership to own beneficially more than 5% of the outstanding
Interests of the Partnership.
(b) The Corporate General Partner, its officers and director and the Associate General Partner own the
following Interests of the Partnership.
NAME OF AMOUNT AND NATURE
BENEFICIAL OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
- -------------- ---------- ----------------- --------
<S> <C> <C> <C>
Limited Partnership Neil G. Bluhm 22 Interests (1) 2.2%
Interests indirectly
Limited Partnership Judd D. Malkin 24 Interests (1)(2) 2.4%
Interests indirectly
Limited Partnership Corporate General 25 Interests 2.5%
Interests Partner, its (1)(2)
officers and director
and the Associate
General Partner
as a group
<FN>
(1) Includes 22 Interests owned by investment partnerships of which Messrs. Bluhm and Malkin are the
managing general partners and have shared investment and voting power with respect to said Interests.
(2) Includes two Interests owned by investment partnerships of which Mr. Malkin is the managing general
partner and has sole investment and voting power with respect to said Interests.
No officer or director of the Corporate General Partner of the Partnership possesses a right to acquire
beneficial ownership of Interests of the Partnership.
Reference is made to Item 10 for information concerning ownership of the Corporate General Partner.
(c) There exists no arrangement, known to the Partnership, the operation of which may at a subsequent date
result in a change in control of the Partnership.
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no significant transactions or business relationships with
the Corporate General Partner, affiliates or their management other than
those described in Items 10, 11 and 12 above.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report.
(1) Financial Statements (See Index to Financial Statements and
Supplementary Data filed with this report).
(2) Exhibits.
3-A. Amended and Restated Agreement of Limited Partnership
of the Partnership is hereby incorporated by reference to Exhibit 3 to the
Partnership's Form 10-K Report for December 31, 1992 (File No. 0-13545)
filed on March 19, 1993.
3-B. Amendment to the Amended and Restated Agreement of
Limited Partnership of JMB/245 Park Avenue Associates, Ltd. by and between
JMB Park Avenue, Inc. and Park Associates, L.P. dated January 1, 1994 is
hereby incorporated by reference to Exhibit 3-B to the Partnership's Form
10-Q Report for March 31, 1995 (File No. 0-13545) filed May 11, 1995.
4-A. Second Mortgage Note and related agreements between
Canadian Imperial Bank of Commerce and 245 Park Avenue Company is hereby
incorporated by reference to Exhibit 4-A to the Partnership's Registration
Statement on Form 10 (as amended) of the Securities Exchange Act of 1934
(File No. 0-13545) filed on April 29, 1985.
4-B. Loan agreement dated June 27, 1984 between JMB/245
Park Avenue Associates and Continental Illinois National Bank and Trust
Company of Chicago is hereby incorporated by reference to Exhibit 4-B to
the Partnership's Registration Statement on Form 10 (as amended) of the
Securities Exchange Act of 1934 (File No. 0-13545) filed on April 29, 1985.
4-C. Promissory Notes dated December 30, 1983 between
JMB/245 Park Avenue Associates and Continental Illinois National Bank and
Trust Company of Chicago is hereby incorporated by reference to Exhibit 4-
C to the Partnership's Registration Statement on Form 10 (as amended) of
the Securities Exchange Act of 1934 (File No. 0-13545) filed on April 29,
1985.
4-D. $173,196,124.20 Mortgage Note dated September 28,
1983 between Aetna Life Insurance Company and O&Y Equity Corporation is
hereby incorporated by reference to Exhibit 4-D to the Partnership's
Registration Statement on Form 10 (as amended) of the Securities Exchange
Act of 1934 (File No. 0-13545) filed on April 29, 1985.
4-E. $20,000,000 Mortgage Note dated September 28, 1983
between Aetna Life Insurance Company and O&Y Equity Corporation is hereby
incorporated by reference to Exhibit 4-E to the Partnership's Registration
Statement on Form 10 (as amended) of the Securities Exchange Act of 1934
(File No. 0-13545) filed on April 29, 1985.
4-F. Consolidation and Extension Agreement dated September
28, 1983 between Olympia and York Estates Company, O&Y Equity Corporation
and Aetna Life Insurance Company is hereby incorporated by reference to
Exhibit 4-F to the Partnership's Registration Statement on Form 10 (as
amended) of the Securities Exchange Act of 1934 (File No. 0-13545) filed on
April 29, 1985.
4-G. $20,000,000 refinanced Mortgage Note and Agreement
dated September 7, 1989 between Dai-Ichi Kangyo Bank and 245 Park Avenue
Company is hereby incorporated by reference to Exhibit 4-G to the
Partnership's Form 10-K Report for December 31, 1989 (File No. 0-13545)
filed on March 28, 1990.
4-H. $17,000,000 Mortgage Note dated September 7, 1989
between Dai-Ichi Kangyo Bank and 245 Park Avenue Company is hereby
incorporated by reference to Exhibit 4-H to the Partnership's Form 10-K
Report for December 31, 1989 (File No. 0-13545) filed on March 28, 1990.
4-I. $4,000,000 Mortgage Note representing the $4,000,000
draw made in June 1990 is hereby incorporated by reference to Exhibit 4-I
to the Partnership's Form 10-K Report for December 31, 1989 (File No. 0-
13545) filed on March 28, 1990.
4-J. $4,000,000 Mortgage Note representing the $4,000,000
draw made in June 1991 is hereby incorporated by reference to Exhibit 4-J
to the Partnership's Form 10-K Report for December 31, 1991 (File No. 0-
13545) filed on March 27, 1992.
4-K. $17,000,000 Loan Agreement dated September 7, 1989
between 245 Park Avenue Company and Dai-Ichi Kangyo Bank is hereby
incorporated by reference to Exhibit 4-K to the Partnership's Form 10-K
Report for December 31, 1992 (File No. 0-13545) filed on March 19, 1993.
4-L. $4,000,000 Loan Agreement dated July 3, 1990 between
245 Park Avenue Company and Dai-Ichi Kangyo Bank is hereby incorporated by
reference to Exhibit 4-L to the Partnership's Form 10-K Report for December
31, 1992 (File No. 0-13545) filed on March 19, 1993.
4-M. Assignment of $147,500,000 mortgage dated September
7, 1989 between Canadian Imperial Bank of Commerce and Dai-Ichi Kangyo
Bank, Ltd. is hereby incorporated by reference to Exhibit 4-M to the
Partnership's Form 10-K Report for December 31, 1992 (File No. 0-13545)
filed on March 19, 1993.
4-N. Amended guaranty agreement dated April 15, 1991
between JMB/245 Park Avenue Associates and Continental Bank N.A. (formerly,
Continental Illinois National Bank and Trust Company of Chicago) is hereby
incorporated by reference to Exhibit 4-N to the Partnership's Form 10-K
Report for December 31, 1992 (File No. 0-13545) filed on March 19, 1993.
4-O. $25,000,000 Guaranteed Promissory Note and related
documents dated December 31, 1993 between JMB/245 Park Avenue Associates
and Continental Bank are hereby incorporated herein by reference to Exhibit
4-O to the Partnership's Form 10-K Report for December 31, 1993 (File No.
0-13545) filed on March 25, 1994.
4-P. $25,000,000 Fixed Rate Promissory Note and related
documents dated December 31, 1993 between JMB/245 Park Avenue Associates
and Continental Bank are hereby incorporated herein by reference to Exhibit
4-P to the Partnership's Form 10-K Report for December 31, 1993 (File No.
0-13545) filed on March 25, 1994.
4-Q. $2,194,631.25 Interest Exchange Agreement Promissory
Note and related documents dated December 31, 1993 between JMB/245 Park
Avenue Associates and Continental Bank are hereby incorporated herein by
reference to Exhibit 4-Q to the Partnership's Form 10-K Report for December
31, 1993 (File No. 0-13545) filed on March 25, 1994.
4-R. Subordinated Demand Note dated December 31, 1993
between JMB/245 Park Avenue and JMB Realty Corporation is hereby
incorporated herein by reference to Exhibit 4-R to the Partnership is Form
10-K Report for December 31, 1993 (File No. 0-13543) filed on March 25,
1994.
4-S. Letter of Commitment dated August 3, 1994 from Aetna
and 245 Park Company detailing proposed terms to refinance the first
mortgage loan is hereby incorporated by reference to Exhibit 4-S to the
Partnership's Form 10-K report for December 31, 1994 (File No. 0-13545)
filed on March 25, 1995.
4-T. Letter Agreement dated April 6, 1995 from Aetna to
245 Park Avenue Company detailing proposed terms to refinance the first
mortgage loan is hereby incorporated by reference to the Partnership's 10-Q
Report for March 31, 1995 (File No. 0-13545) filed on May 11, 1995.
4-U. $16,042,000 Second Amended and Restated Promissory
Note and related documents dated August 1, 1995 between JMB/245 Park Avenue
Associates and JMB Realty Corporation are hereby incorporated herein by
reference to Exhibit 4-U to the Partnership's Form 10-Q Report for
September 30, 1995, (File No. 0-13545) filed on November 9, 1995.
4-V. $25,000,000 Second Amended and Restated Promissory
Note and related documents dated August 1, 1995
between JMB/245 Park Avenue Associates and JMB Realty Corporation, are
hereby incorporated herein by reference to Exhibit 4-V to the Partnership's
Form 10-Q Report for September 30, 1995, (File No. 0-13545) filed on
November 9, 1995.
4-W. $2,194,631.25 Amended and Restated Promissory Note
and related documents dated August 1, 1995 between JMB/245 Park Avenue
Associates and JMB Realty Corporation, are hereby incorporated herein by
reference to Exhibit 4-W to the Partnership's Form 10-Q Report for
September 30, 1995, (File No. 0-13545) filed on November 9, 1995.
4-X. Amended and Restated Demand Note dated August 1, 1995
between JMB/245 Park Avenue Associates and JMB Realty Corporation, are
hereby incorporated herein by reference to Exhibit 4-X to the Partnership's
Form 10-Q Report for September 30, 1995, (File No. 0-13545) filed on
November 9, 1995.
4-Y. Fourth Amendment to Loan Documents dated August 1,
1995 between JMB/245 Park Avenue Associates, Ltd. and JMB Realty
Corporation detailing amendments to the term loans, are hereby incorporated
herein by reference to Exhibit 4-Y to the Partnership's Form 10-Q Report
for September 30, 1995, (File No. 0-13545) filed on November 9, 1995.
4-Z. Consent Agreement dated December 29, 1983 from
JMB/245 Park Avenue Associates to Continental Illinois Bank of Chicago
(Continental) detailing the transactions for which the Partnership would
obtain Continental's consent, are hereby incorporated herein by reference
to Exhibit 4-Z to the Partnership's Form 10-Q Report for September 30,
1995, (File No. 0-13545) filed on November 9, 1995.
4-AA. Third Amended and Restated Security Agreement dated
August 1, 1995 between JMB/245 Park Avenue Associates, Ltd. and JMB Realty
Corporation, are hereby incorporated herein by reference to Exhibit 4-AA to
the Partnership's Form 10-Q Report for September 30, 1995, (File No. 0-
13545) filed on November 9, 1995.
10-A. Acquisition documents dated December 29, 1983
relating to the purchase by the Partnership of an interest in the American
Brands Building in New York, New York is hereby incorporated by reference
to Exhibit 10-A to the Partnership's Registration Statement on Form 10 (as
amended) of the Securities Exchange Act of 1934 (File No. 0-13545) filed on
April 29, 1985.
10-B. Agreement dated December 29, 1983 between 245 Park
Avenue Company and O&Y Management Corporation relating to the management of
the American Brands Building in New York, New York is hereby incorporated
by reference to Exhibit 10-B to the Partnership's Registration Statement on
Form 10 (as amended) of the Securities Exchange Act of 1934 (File No. 0-
13545) filed on April 29, 1985.
10-C. Lease Agreement between Olympia and York 245 Lease
Company and 245 Park Avenue Company and Bear Stearns Companies, Inc. dated
March 6, 1987 is hereby incorporated by reference to Exhibit 10-E to the
Partnership's Form 10-K Report for December 31, 1988 (File No. 0-13545)
filed on March 25, 1989.
10-D. Side letter agreement dated March 6, 1987 between
Olympia & York 245 Lease Company, 245 Park Avenue Company and JMB/245 Park
Avenue Associates, Ltd. relating to the division of economic benefits and
costs of the Bear Stearns Companies, Inc. lease is hereby incorporated by
reference to Exhibit 10-F to the Partnership's Form 10-K Report for
December 31, 1992 (File No. 0-13545) filed on March 19, 1993.
10-E. Amendment to Partnership Agreement, 245 Park Avenue
Company dated August 11, 1995 between JMB/245 Park
Avenue Associates, Ltd., O&Y Equity Company, L.P., O&Y 245 Corp., Olympia &
York 245 Park Avenue Holding Company, L.P. and 245 Corp., are hereby
incorporated herein by reference to Exhibit 10-E to the Partnership's Form
10-Q Report for September 30, 1995, (File No. 0-13545) filed on November 9,
1995.
21. List of Subsidiaries of the Partnership.
27. Financial Data Schedule
99.1. Pages 19-21; and 31-38 from the Partnership's Private
Place Memorandum dated May 7, 1984 and Article 14 (pages 15-17) of the
Partnership's Amended and Restated Agreement of Limited Partnership are
hereby incorporated herein by reference to Exhibit 99.1 to the Partnerships
10-K Report for December 31, 1994, (File No. 0-13545) filed on March 27,
1995.
(b) No Reports on Form 8-K were required or filed since the beginning
of the last quarter of the period covered by this report.
No annual report or proxy material for the fiscal year 1995 has been
sent to the Partners of the Partnership. An annual report will be sent to
the Partners subsequent to this filing.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Partnership has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
JMB/245 PARK AVENUE ASSOCIATES, LTD.
By: JMB Park Avenue, Inc.
Corporate General Partner
GAILEN J. HULL
By: Gailen J. Hull
Vice President
Date: March 25, 1996
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.
By: JMB Park Avenue, Inc.
Corporate General Partner
STUART C. NATHAN
By: Stuart C. Nathan, President and Director
Principal Executive Officer
Date: March 25, 1996
JUDD D. MALKIN
By: Judd D. Malkin, Chairman
Principal Financial Officer
Date: March 25, 1996
GAILEN J. HULL
By: Gailen J. Hull, Vice President
Principal Accounting Officer
Date: March 25, 1996
JMB/245 PARK AVENUE ASSOCIATES, LTD.
EXHIBIT INDEX
DOCUMENT
INCORPORATED
BY REFERENCE PAGE
------------- ----
3-A. Amended and Restated Agreement of
Limited Partnership of the
Partnership. Yes
3-B. Amendment to the Amended Limited
Partnership Agreement of Partnership
of JMB/245 Park Avenue Associates, Ltd. Yes
4-A. Second Mortgage Note and related
agreements between Canadian
Imperial Bank of Commerce
and 245 Park Avenue Company. Yes
4-B. Loan agreement dated June 27,
1984 between JMB/245 Park Avenue
Associates and Continental Illinois
National Bank and Trust Company of
Chicago. Yes
4-C. Promissory Notes dated December 30,
1983 between JMB/245 Park Avenue
Associates and Continental Illinois
National Bank and Trust Company of
Chicago. Yes
4-D. $173,196,124.20 Mortgage Note dated
September 28, 1983 between Aetna Life
Insurance Company and O&Y Equity
Corporation. Yes
4-E. $20,000,000 Mortgage Note dated
September 28, 1983 between Aetna Life
Insurance Company and O&Y Equity
Corporation. Yes
4-F. Consolidation and Extension Agreement
dated September 28, 1983 between
Olympia & York Estates Company,
O&Y Equity Corporation and Aetna Life
Insurance Company. Yes
4-G. $20,000,000 refinanced Mortgage Note
and Agreement dated September 7, 1989
between Dai-Ichi Kangyo Bank and
245 Park Avenue Company. Yes
4-H. $17,000,000 Mortgage Note dated
September 7, 1989 between Dai-Ichi
Kangyo Bank and 245 Park Avenue Company.Yes
4-I. $4,000,000 Mortgage Note representing
the $4,000,000 draw made in June 1990. Yes
4-J. $4,000,000 Mortgage Note representing
the $4,000,000 draw made in June 1991. Yes
4-K. $17,000,000 Agreement dated September 7,
1989 between 245 Park Avenue Company
and Dai-Ichi Kangyo Bank. Yes
4-L. $4,000,000 Loan Agreement dated July 3,
1990 between 245 Park Avenue Company
and Dai-Ichi Kangyo Bank. Yes
4-M. Assignment of $147,500,000 mortgage
dated September 7, 1989 between
Canadian Imperial Bank of Commerce
and Dai-Ichi Kangyo Bank. Ltd. Yes
4-N. Amended guaranty agreement dated
April 15, 1991 between JMB/245 Park
Avenue Associates and Continental
Bank N.A. (formerly, Continental
Illinois National
Bank and Trust Company of Chicago). Yes
4-O. $25,000,000 Guaranteed Promissory
Note and related documents dated
December 31, 1993 between JMB/245
Park Avenue Associates and
Continental Bank. Yes
4-P. $25,000,000 Fixed Rate Promissory
Note and related documents dated
December 31, 1993 between JMB/245
Park Avenue Associates and
Continental Bank. Yes
4-Q. $2,194,631.25 Interest Exchange
Agreement Promissory Note and
related documents dated December 31,
1993 between JMB/245 Park Avenue
Associates and Continental
Bank. Yes
4-R. Subordinated Demand Note dated
December 31, 1993 between JMB/245
Park Avenue and JMB Realty Corporation. Yes
4-S. Letter of Commitment dated August 3,
1994 between Aetna to 245 Park Company
detailing proposed terms to refinance
the first mortgage loan. Yes
4-T. Letter Agreement dated April 6,
1995 from Aetna to 245 Park Avenue
Company Yes
4-U. $16,042,000 Second Amended and
Restated Promissory Note and
related documents dated August 1,
1995 between JMB/245 Park Avenue
Associates and JMB Realty Corporation Yes
4-V. $25,000,000 Second Amended and
Restated Promissory Note and
related documents dated August 1,
1995 between JMB/245 Park Avenue
Associates and JMB Realty Corporation Yes
4-W. $2,194,631.25 Amended and Restated
Promissory Note and related documents
dated August 1, 1995 between
JMB/245 Park Avenue Associates and
JMB Realty Corporation Yes
4-X. Amended and Restated Demand Note
dated August 1, 1995 between JMB/245
Park Avenue Associates and JMB Realty
Corporation Yes
4-Y. Fourth Amendment to Loan Documents
dated August 1, 1995 between JMB/245
Park Avenue Associates, Ltd. and
JMB Realty Corporation Yes
4-Z. Consent Agreement dated December 29,
1983 from JMB/245 Park Avenue Associates
to Continental Illinois Bank of
Chicago (Continental) Yes
4-AA. Third Amended and Restated Security
Agreement dated August 1, 1995 between
JMB/245 Park Avenue Associates, Ltd.
and JMB Realty Corporation Yes
10-A. Acquisition documents dated December 29,
1983 relating to the purchase by the
Partnership of an interest in the
American Brands Building
in New York, New York. Yes
10-B. Agreement dated December 29, 1983
between 245 Park Avenue Company and
O&Y Management Corporation relating
to the management of the American
Brands Building in New York, New York. Yes
10-C. Lease Agreement between Olympia and
York 245 Lease Company and 245 Park
Avenue Company and Bear Stearns
Companies, Inc. dated March 6, 1987. Yes
10-D. Side letter agreement dated March 6,
1987 between Olympia & York 245 Lease
Company, 245 Park Avenue Company and
JMB/245 Park Avenue Associates, Ltd.
relating to the division of economic
benefits and costs of the Bear Stearns
Companies, Inc. lease. Yes
10-E. Amendment to Partnership Agreement,
245 Park Avenue Company dated August 11,
1995 between JMB/245 Park Avenue
Associates, Ltd., O&Y Equity Company,
L.P., O&Y 245 Corp., Olympia & York
245 Park Avenue Holding Company, L.P.
and 245 Corp. Yes
99.1. Pages 19-21; 31-38; and 55-57 from the
Partnership's Private Place Memorandum
dated May 7, 1984 and Article 14
(pages 15-17) of the Partnership's
Amended and Restated Agreement of
Limited Partnership Yes
21. List of Subsidiaries of the Partnership. No
27. Financial Data Schedule No
EXHIBIT 21
LIST OF SUBSIDIARIES
The Partnership is a partner in 245 Park Avenue Company, a New York
general partnership which holds title to a building known as the 245 Park
Avenue Building located at 245 Park Avenue, New York, New York. Affiliates
of the seller of the Partnership's interest in the venture are partners in
the joint venture.
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
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<NAME> JMB/245 PARK AVENUE ASSOCIATES, LTD.
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