UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 25, 1999
OR
____ TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-13782
CAMBRIDGE ADVANTAGED
PROPERTIES LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Delaware 13-3228969
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 Madison Avenue, New York, New York 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212)421-5333
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securi-
ties 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 ____
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CAMBRIDGE ADVANTAGED PROPERTIES
LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
<CAPTION>
September 25, March 25,
1999 1999
<S> <C> <C>
ASSETS
Property and equipment - net,
less accumulated depreciation
of $62,073,303 and $71,906,694,
respectively $ 63,471,198 $ 76,007,692
Property and equipment -
held for sale - net, less
accumulated depreciation of
$7,345,208 and $14,328,726,
respectively 12,514,771 20,352,011
Cash and cash equivalents 6,058,033 2,658,449
Cash - restricted for tenants'
security deposits 870,180 1,213,550
Mortgage escrow deposits 9,161,584 10,549,951
Prepaid expenses and other assets 1,284,392 1,655,056
Total assets $ 93,360,158 $112,436,709
LIABILITIES AND PARTNERS' DEFICIT
Liabilities
Mortgage notes payable $ 48,838,543 $ 68,827,382
Purchase money notes payable
(Note 2) 48,186,722 62,215,705
Due to selling partners (Note 2) 74,075,442 81,667,934
Accounts payable, accrued
expenses and other liabilities 3,015,464 3,538,143
Tenants' security deposits payable 823,913 1,152,240
Due to general partners of
subsidiaries and their affiliates 683,362 1,606,773
Due to general partners and
affiliates 2,203,805 2,435,696
Total liabilities 177,827,251 221,443,873
Minority interest 591,582 593,370
Commitments and contingencies
(Note 5)
Partners' deficit:
Limited partners (83,670,564) (107,967,004)
General partners (1,388,111) (1,633,530)
Total partners' deficit (85,058,675) (109,600,534)
Total liabilities and
partners' deficit $ 93,360,158 $112,436,709
See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CAMBRIDGE ADVANTAGED PROPERTIES
LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
September 25, September 25,
1999 1998* 1999 1998*
<S> <C> <C> <C> <C>
Revenues:
Rentals, net $ 6,139,317 $ 7,030,714 $12,934,724 $14,130,443
Other 372,883 307,981 640,190 555,162
Gain on sale of
property (Note 4) 3,161,101 155,600 12,139,822 7,553,720
Total revenues 9,673,301 7,494,295 25,714,736 22,239,325
Expenses
Administrative and
management 1,177,587 1,238,533 2,563,427 2,554,664
Administrative and
management-
related parties
(Note 3) 621,912 711,604 1,338,544 1,425,683
Operating 1,101,602 1,309,500 2,617,298 2,920,009
Repairs and
maintenance 1,803,204 1,891,524 3,585,794 3,656,963
Taxes and
insurance 750,576 901,606 1,622,783 1,854,119
Interest 1,702,780 2,283,597 3,829,785 4,612,802
Depreciation 1,277,420 1,471,460 2,666,950 2,973,289
Total expenses 8,435,081 9,807,824 18,224,581 19,997,529
Net income (loss) before
minority interest 1,238,220 (2,313,529) 7,490,155 2,241,796
Minority interest in
income of
subsidiaries (2,715,400) (2,265) (2,740,668) (2,873)
Income (loss) before
extra-ordinary
item (1,477,180) (2,315,794) 4,749,487 2,238,923
Extraordinary item-
forgiveness of
indebtedness
income (Note 4) 5,313,987 0 19,792,372 0
Net income (loss) $ 3,836,807 $(2,315,794) $24,541,859 $ 2,238,923
Limited Partners
Share:
Income (loss) before
extraordinary
item $(1,462,408) $(2,292,636) $ 4,701,992 $ 2,216,534
Extraordinary
item 5,260,847 0 19,594,448 0
Net income (loss) $ 3,798,439 $(2,292,636) $24,296,440 $ 2,216,534
Number of units
outstanding 12,074 12,074 12,074 12,074
Income (loss) before
extraordinary
item per limited
partner unit $ (121) $ (190) $ 389 $ 184
Extraordinary item
per limited
partner unit 436 0 1,623 0
Net income (loss)
per limited
partner unit $ 315 $ (190) $ 2,012 $ 184
*Reclassified for comparative purposes.
See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CAMBRIDGE ADVANTAGED PROPERTIES
LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Statement of Changes In Partners' Deficit
(Unaudited)
<CAPTION>
Limited General
Total Partners Partners
<S> <C> <C> <C>
Balance -
March 26, 1999 $(109,600,534) $(107,967,004) $(1,633,530)
Net income 24,541,859 24,296,440 245,419
Balance -
September 25,
1999 $ (85,058,675) $ (83,670,564) $(1,388,111)
See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CAMBRIDGE ADVANTAGED PROPERTIES
LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
<CAPTION>
Six Months Ended
September 25,
1999 1998*
<S> <C> <C>
Cash flows from operating activities:
Net income $24,541,859 $ 2,238,923
Adjustments to reconcile net income
to net cash provided
by operating activities:
Gain on sale of property (Note 4) (12,139,822) (7,553,720)
Extraordinary item-forgiveness of
indebtedness income (Note 4) (19,792,372) 0
Depreciation 2,666,950 2,973,289
Minority interest in income
of subsidiaries 2,740,668 2,873
(Increase) decrease in cash-restricted
for tenants' security deposits (6,276) 23,028
Increase in mortgage
escrow deposits (92,542) (271,184)
Increase in prepaid
expenses and other assets (306,021) (128,094)
Increase in due to selling partners 3,150,114 3,802,801
Payments of interest to selling
partners (346,416) (119,446)
Increase (decrease) in accounts payable,
accrued expenses and other liabilities 825,523 (865,703)
(Decrease) increase in tenants' security
deposits payable (29,795) 44,051
Increase in due to general partners
of subsidiaries and their affiliates 672,940 203,453
Decrease in due to general partners
of subsidiaries and their affiliates (27,695) (236,154)
(Decrease) increase in due to
general partners and affiliates (231,891) 525,602
Total adjustments (22,916,635) (1,599,204)
Net cash provided by
operating activities 1,625,224 639,719
Cash flows from investing activities:
Proceeds from sale of properties 14,871,897 600,000
Acquisitions of property and
equipment (529,343) (756,615)
Decrease (increase) in mortgage
escrow deposits (428,300) 10,654
Net cash provided by (used in)
investing activities 13,914,254 (145,961)
Cash flows from financing activities:
Decrease in purchase
money notes payable (323,783) 0
Principal payment of mortgage
notes payable (9,073,655) (414,338)
Decrease in capitalization of
minority interest (2,742,456) (1,833)
Net cash used in financing activities (12,139,894) (416,171)
Net increase in cash and cash
equivalents 3,399,584 77,587
Cash and cash equivalents -
beginning of period 2,658,449 1,976,935
Cash and cash equivalents -
end of period $ 6,058,033 $ 2,054,522
Supplemental disclosures of noncash
activities:
Increase in purchase money
notes payable due to capitalization
of prepaid expenses and
other assets $ 0 $ 5,132
Increase in property and equipment -
held for sale reclassified from
property and equipment 7,837,240 12,728,910
Forgiveness of indebtedness
(Note 4):
Decrease in purchase money
note payable (9,060,168) 0
Decrease in due to selling
partners 10,396,190 0
Increase in prepaid expenses and
other assets 2,801 0
Decrease in due to general partners
of subsidiaries and their affiliates (186,209) 0
Decrease in accounts payable,
accrued expenses and other liabilities (152,606) 0
Summarized below are the components
of the gain on sale of property:
Decrease in property and equipment,
net of accumulated depreciation 18,236,127 3,687,171
Decrease in cash - restricted for tenants'
security deposits 349,646 73,664
Decrease in mortgage escrow deposits 1,909,209 0
Decrease in prepaid expenses and
other assets 673,884 460,947
Decrease in purchase money
notes payable (4,645,032) (2,545,263)
Decrease in due to selling partners 0 (4,257,845)
(Decrease) increase in accounts payable,
accrued expenses and other liabilities (1,195,596) 790,759
Decrease in tenant's security
deposits payable (298,532) (67,472)
(Decrease) increase in due to
general partners of subsidiaries
and their affiliates (1,382,447) 4,319
Decrease in mortgage notes payable (10,915,184) (5,100,000)
*Reclassified for comparative purposes.
See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES
LIMITED PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 25, 1999
(Unaudited)
Note 1 - General
The consolidated financial statements for the six months ended
September 25, 1999 include the accounts of Cambridge Advan-
taged Properties Limited Partnership (the "Partnership") and fifty-
one subsidiary partnerships ("subsidiaries," "subsidiary partner-
ships" or "Local Partnerships") five of which only have activity
through the date of sale of the Partnership's Local Partnership
interest and two of which only have activity through the date of
sale of their property and the related assets and liabilities. The
consolidated financial statements for the six months ended Sep-
tember 25, 1998 include the account of the Partnership and fifty-
two subsidiary partnerships, one of which only has activity
through the date of sale of the Partnership's Local Partnership
interest. The Partnership is a limited partner, with an ownership
interest of 98.99% in each of the subsidiary partnerships. Through
the rights of the Partnership and/or an affiliate of one of its Gen-
eral Partners (a "General Partner"), which affiliate has a contrac-
tual obligation to act on behalf of the Partnership, to remove the
general partner of the subsidiary partnerships (the "Local General
Partner") and to approve certain major operating and financial
decisions, the Partnership has a controlling financial interest in the
subsidiary partnerships.
For financial reporting purposes, the Partnership's fiscal quarter
ends September 25. All subsidiaries have fiscal quarters ending
June 30. Accounts of the subsidiary partnerships have been ad-
justed for intercompany transactions from July 1 through Septem-
ber 25. The Partnership's fiscal quarter ends on September 25 in
order to allow adequate time for the subsidiaries' financial state-
ments to be prepared and consolidated. The books and records of
the Partnership are maintained on the accrual basis of accounting,
in accordance with generally accepted accounting principles
("GAAP").
All intercompany accounts and transactions have been eliminated
in consolidation.
Increases (decreases) in the capitalization of consolidated subsidi-
aries attributable to minority interest arise from cash contributions
from and cash distributions to the minority interest partners.
Losses attributable to minority interests which exceed the minority
interests' investment in a subsidiary have been charged to the
Partnership. There were approximately $500 and $0 and $1,600
and $0 such losses for the three and six months ended September
25, 1999 and 1998, respectively. The Partnership's investment in
each subsidiary is equal to the respective subsidiary's partners'
equity less minority interest capital, if any. In consolidation, all
subsidiary partnership losses are included in the Partnership's
capital account except for losses allocated to minority interest
capital.
The unaudited financial statements have been prepared on the
same basis as the audited financial statements included in the
Partnership's Form 10-K for the year ended March 25, 1999. In the
opinion of the General Partners, the accompanying unaudited
financial statements contain all adjustments (consisting only of
normal recurring adjustments) necessary to present fairly the fi-
nancial position of the Partnership as of September 25, 1999, the
results of operations for the three and six months ended Septem-
ber 25, 1999 and 1998 and cash flows for the six months ended
September 25, 1999 and 1998. However, the operating results for
the six months ended September 25, 1999 may not be indicative of
the results for the year.
Certain information and note disclosures normally included in
financial statements prepared in accordance with GAAP have
been omitted. It is suggested that these consolidated financial
statements should be read in conjunction with the financial state-
ments and notes thereto included in the Partnership's March 25,
1999 Annual Report on Form 10-K.
Note 2 - Purchase Money Notes Payable
Purchase money notes in the original amount of $85,458,825 were
issued to the selling partners of the subsidiary partnerships as part
of the purchase price and are secured only by the interest in the
subsidiary partnership to which the note relates (the "Purchase
Money Notes"). A portion of these notes, in the original amount
of $31,932,568 are obligations at the subsidiary partnership level,
whereas the remaining $53,526,257 is recorded at the Partnership
level. The Purchase Money Notes generally provided for com-
pound interest at rates which, in general, ranged from 9% to 10%
per annum through August 31, 1989. Thereafter, simple interest
has accrued, without further interest thereon, through maturity as
extended (see below). Purchase Money Notes at September 25,
1999 and March 25 1999 include $4,336,417 of interest accrued
through August 31, 1989.
The Purchase Money Notes, which now provide for simple inter-
est, will not be in default if not less than 60% of the cash flow ac-
tually distributed to the Partnership by the corresponding subsidi-
ary partnership (generated by the operations, as defined) is ap-
plied first to accrued interest and then to current interest thereon.
Any interest not paid currently accrues, without further interest
thereon, through the extended due date of the note. Continued
accrual of such interest beyond the initial term, without payment,
reduces the effective interest rate of 9%. The exact effect is not
determinable inasmuch as it is dependent on the actual future
interest payments and ultimate repayment dates of the notes.
Unpaid interest of approximately $74,000,000 and $81,000,000 as
of September 25, 1999 and March 25 1999, respectively, has been
accrued and is included in due to selling partners in the consoli-
dated balance sheets. In general, the interest on and the principal
of each Purchase Money Note is also payable to the extent of the
Partnership's actual receipt of proceeds of the sale or refinancing
of the apartment complex.
The Partnership extended the terms of the Purchase Money Notes
for up to three additional years (four years with respect to one
subsidiary partnership and six years with respect to three subsidi-
ary partnerships). In connection with such extensions, the Part-
nership incurred an extension fee of 1 1/2 % per annum of the
outstanding principal balance of the Purchase Money Notes.
Through September 25, 1999, the maturity dates of the Purchase
Money Notes associated with the remaining properties owned by
the subsidiary partnerships (ranging from August to December
1996) were extended for three years (five years with respect to two
subsidiary partnerships) and extension fees in the amount of
$589,426 were incurred by the Partnership. Such Purchase Money
Notes are now extended with maturity dates ranging from Sep-
tember 1999 to October 2003. Of such fees incurred, $442,372 was
accrued and added to the Purchase Money Notes balance. The
extension fees are being amortized over the term of the extension.
The Partnership expects that upon maturity of the Purchase
Money Notes, it will be required to refinance or sell its invest-
ments in the Local Partnerships in order to pay the Purchase
Money Notes. The Partnership cannot sell or otherwise liquidate
its investments in those Local Partnerships which have subsidy
agreements with the United States Department of Housing and
Urban Development ("HUD") during the period that such agree-
ments are in existence without HUD's approval. Based on the
historical operating results of the Local Partnerships and the cur-
rent economic conditions, including changes in tax laws, it is un-
certain as to whether the proceeds from such sales will be suffi-
cient to meet the outstanding balances of principal, accrued inter-
est and extension fees. Management of the Partnership is working
with the selling partners to restructure and/or refinance the Pur-
chase Money Notes. No assurance can be given that manage-
ment's efforts will be successful. The Purchase Money Notes are
without personal recourse to either the Partnership or any of its
partners and the selling partners' recourse, in the event of non-
payment, would be to foreclose on the Partnership's interests in
the respective subsidiary partnerships.
Although some Purchase Money Notes have matured, the Part-
nership continues to work to restructure and/or refinance the
Purchase Money Notes and management of the Partnership is
planning to propose a number of settlement approaches. The
Partnership will vigorously assert any defenses available to it if the
holders of Purchase Money Notes attempt to perfect their security
interest in the Purchase Money Notes. We cannot predict the out-
come of these events at this time.
The Purchase Money Notes for Carlton Terrace Apartments Lim-
ited Partnership, Villa Apollo Associates Limited Partnership and
Villa Apollo #2 Associates Limited Partnership were amended on
March 10, 1999. The Purchase Money Notes aggregating
$4,329,400 were reduced to a total principal balance of $1,529,166.
As a result of these transactions, forgiveness of indebtedness in-
come of $10,180,000 for accrued interest was recognized. The
Partnership sold its interest in the above named properties on June
18, 1999 (see Note 4).
Cash flow distributions aggregating approximately $2,842,000 and
$188,000 were made to the Partnership for the six months ended
September 25, 1999 and 1998, respectively, of which approxi-
mately $68,000 and $112,000, respectively, was used to pay inter-
est on the Purchase Money Notes. Distributions of proceeds from
sales of properties aggregating approximately $2,729,000 and $0
were made to the Partnership during the six months ended Sep-
tember 25, 1999 and 1998, none of which were used to pay princi-
pal and interest on the Purchase Money Notes.
Note 3 - Related Party Transactions
<TABLE>
The costs incurred to related parties for the three and six months
ended September 25, 1999 and 1998 were as follows:
<CAPTION>
Three Months Ended Six Months Ended
September 25, September 25,
1999 1998* 1999 1998*
<S> <C> <C> <C> <C>
Partnership manage-
ment fees (a) $ 283,000 $ 285,500 $ 566,000 $ 571,000
Expense reimburse-
ment (b) 21,000 41,390 67,173 73,890
Local administra-
tive fee (c) 17,000 21,000 35,000 42,000
Total general and
administrative-
General Partners 321,000 347,890 668,173 686,890
Property manage-
ment fees incurred
to affiliates of the
subsidiary
partnerships'
general
partners (d) 300,912 363,714 670,371 738,793
Total general and
administrative-
related parties $ 621,912 $ 711,604 $1,338,544 $1,425,683
</TABLE>
*Reclassified for comparative purposes.
(a) After all other expenses of the Partnership are paid, an annual
partnership management fee of up to .5% of invested assets is
payable to the Partnership's General Partners and affiliates. Part-
nership management fees owed to the General Partners amount-
ing to approximately $1,388,000 and $1,572,000 were accrued and
unpaid as of September 25, 1999 and March 25, 1999, respectively.
Without the General Partner's continued allowance of accrual
without payment of certain fees and expense reimbursements, the
Partnership will not be in a position to meet its obligations. The
General Partner has continued allowing the accrual without pay-
ment of these amounts but is under no obligation to continue do
so.
(b) The Partnership reimburses the General Partners and their
affiliates for actual Partnership operating expenses incurred by the
General Partners and their affiliates on the Partnership's behalf.
The amount of reimbursement from the Partnership is limited by
the provisions of the partnership agreement. Another affiliate of
the General Partners performs asset monitoring for the Partner-
ship. These services include site visits and evaluations of the sub-
sidiary partnerships' performance. Expense reimbursements and
asset monitoring fees owed to the General Partners amounting to
approximately $41,000 and $45,000 were accrued and unpaid as of
September 25, 1999 and March 25, 1999, respectively.
(c) H/R Special Partnership, the special limited partner, owning a
.01% interest, is entitled to receive a local administrative fee of up
to $2,500 per year from each subsidiary partnership.
(d) Property management fees incurred to affiliates of the subsidi-
ary partnerships amounted to $300,912 and $363,714 and $670,371
and $738,793 for the three and six months ended September 25,
1999 and 1998, respectively.
Note 4 - Sale of Properties
General
The Partnership is currently in the process of disposing of its in-
vestments. It is anticipated that this process will take a number of
years. As of September 25, 1999, the Partnership has disposed of
seventeen of its sixty-one original investments. Four additional
investments are listed for sale and the Partnership anticipates that
the forty remaining investments will be listed for sale by Decem-
ber 31, 2000. There is no assurance as to when the Partnership will
dispose of its last remaining investments or the amount of pro-
ceeds which may be received. However, based on the historical
operating results of the Local Partnerships and the current eco-
nomic conditions including changes in tax laws, it is unlikely that
the proceeds from such sales received by the Partnership will be
sufficient to return their original investment.
In order to facilitate an orderly disposition of the Partnership's
assets, the Partnership formed one new entity: Cambridge Advan-
taged Liquidating L.L.C. (the "Trust"), a Delaware limited liability
company which is completely owned by the Partnership.
On July 21, 1999, the Partnership contributed its limited partner-
ship interest in Decatur Apartments, Ltd., Florence Apartments,
Ltd., Saraland Apartments, Ltd., Dickens Perry Apartments, Ltd.,
Boonie Doone Apartments, Ltd., University Gardens Apartments,
Ltd., and Southside Village Apartments, Ltd., to the Trust. In each
case, the interests were contributed subject to each respective Pur-
chase Money Note. The contribution did not involve any consid-
eration being paid to the Partnership, therefore, there should not
be any tax effect to the limited partners of the Partnership.
Information Regarding Dispositions.
On May 22, 1998, the Partnership's Local Partnership interest in
Rockdale West at New Bedford ("Rockdale") was sold back to
Rockdale for $600,000, resulting in a gain in the amount of
$7,553,720.
On February 26, 1999, the Partnership's limited partnership inter-
ests in Park of Pecan I, Ltd. and Park of Pecan II, Ltd. were sold to
an unaffiliated third party for $130,000 each resulting in a loss in
the amount of approximately $52,000 and $46,000, respectively.
No proceeds were used to settle the associated Purchase Money
Notes, accrued interest and certain accrued expenses which re-
sulted in forgiveness of indebtedness income of $3,785,000 and
$3,314,000 for tax purposes, respectively. The entire gain to be
realized by the Partnership is anticipated to be approximately
$8,145,000 and $7,367,000, respectively.
On March 12, 1999, the property and related assets and liabilities
of Lancaster Manor Associates, Ltd. were sold to an unaffiliated
third party for $13,500,000 resulting in a gain of approximately
$8,436,000. For tax purposes, the entire gain to be realized by the
Partnership is anticipated to be approximately $9,000,000.
On April 12, 1999, the property and related assets and liabilities of
Valley Arms were sold to an unaffiliated third party for $1,600,000
resulting in a gain in the amount of approximately $46,000 and
forgiveness of indebtedness income of approximately $2,514,000.
For tax purposes, the entire gain to be realized by the Partnership
is anticipated to be approximately $3,700,000.
On June 18, 1999, the Partnership's limited partnership interest in
Carlton Terrace Apartments, Limited Partnership was sold to the
general partners for $589,623 resulting in a gain in the amount of
approximately $1,675,000. The Purchase Money Notes were as-
sumed by the Local Partnership. For tax purposes, the entire gain
to be realized by the Partnership is anticipated to be approxi-
mately $4,949,000.
On June 18, 1999, the Partnership's limited partnership interest in
Villa Apollo Associates Limited Partnership was sold to the gen-
eral partners for $220,138, resulting in a gain in the amount of
approximately $371,000. The Purchase Money Notes were as-
sumed by the Local Partnership. For tax purposes, the entire gain
to be realized by the Partnership is anticipated to be approxi-
mately $1,454,000.
On June 18, 1999, the Partnership's limited partnership interest in
Villa Apollo #2 Associates Limited Partnership was sold to the
general partners for $562,136, resulting in a gain in the amount of
approximately $1,709,000. The Purchase Money Notes were as-
sumed by the Local Partnership. For tax purposes, the entire gain
to be realized by the Partnership is anticipated to be approxi-
mately $4,118,000.
On June 6, 1999, Casa Ramon Apartments entered into a purchase
sale agreement with a third party for a purchase price of
$4,500,000. The closing is expected to occur in January 2000.
However, no assurance can be given that the closing will occur.
Note 5 - Commitments and Contingencies
There were no material changes and/or additions to disclosures
regarding the subsidiary partnerships which were included in the
Partnership's Annual Report on Form 10-K for the period ended
March 25, 1999.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Con-
dition and Results of Operations
Liquidity and Capital Resources
The Partnership's primary sources of funds are the cash distribu-
tions from operations of the Local Partnerships in which the Part-
nership has invested and net proceeds from pending and future
sales. These sources are available to meet the obligations of the
Partnership. During the six months ended September 25, 1999, the
Partnership received approximately $2,842,000 of cash flow distri-
butions, of which approximately $68,000, was used to pay interest
on the Purchase Money Notes. Distributions of proceeds from
sales of properties aggregating approximately $2,729,000 were
made to the Partnership during the six months ended September
25, 1999, none of which were used to pay principal and interest on
the Purchase Money Notes. Certain fees and expense reimburse-
ments owed to the General Partners amounting to approximately
$1,704,000 were accrued and unpaid as of September 25, 1999.
The General Partners believe that the Partnership's reserves, net
proceeds from pending and future sales and future cash flow dis-
tributions will be adequate for its operating needs.
During the six months ended September 25, 1999, cash and cash
equivalents of the Partnership and its fifty-one consolidated Local
Partnerships increased approximately $3,400,000. This increase
was due to cash provided by operating activities ($1,625,000) and
proceeds from the sale of properties ($14,872,000) which exceeded
acquisitions of property and equipment ($529,000), repayments of
mortgage notes payable ($9,074,000), a decrease in purchase
money notes payable ($324,000), an increase in mortgage escrow
deposits ($428,000) and a decrease in capitalization of minority
interest ($2,742,000). Included in the adjustments to reconcile the
net income to cash provided by operating activities are gain on
sale of property ($12,140,000), forgiveness of indebtedness income
($19,792,000) and depreciation ($2,667,000).
For a discussion of Purchase Money Notes Payable, see Note 2 to
the financial statements.
For a discussion of the sale of properties in which the Partnership
owns direct and indirect interest, see Note 4 to the financial state-
ments.
For a discussion of contingencies affecting certain Local Partner-
ships, see Note 5 to the financial statements. Since the maximum
loss for which the Partnership would be liable is its net investment
in the respective Local Partnerships, the resolution of the existing
contingencies is not anticipated to impact future results of opera-
tions, liquidity or financial condition in a material way except that
the Partnership would lose its investment in the properties and
any potential proceeds from the sale or refinancing of the proper-
ties.
Management is not aware of any trends or events, commitments
or uncertainties, which have not been otherwise disclosed, that
will or are likely to impact liquidity in a material way. Manage-
ment believes the only impact would be from laws that have not
yet been adopted. The portfolio is diversified by the location of
the properties around the United States so that if one area of the
United States is experiencing downturns in the economy, the re-
maining properties in the portfolio may be experiencing upswings.
However, the geographic diversification of the portfolio may not
protect against a general downturn in the national economy.
Results of Operations
The results of operations of the Partnership, as well as the Local
Partnerships, remained fairly consistent during the six months
ended September 25, 1999 and 1998, excluding Lancaster Manor
Associates Ltd. and Valley Arms which sold their property and
the related assets and liabilities and Rockdale, Park of Pecan I,
Ltd., Park of Pecan II, Ltd., Carlton Terrace Apartments, Villa
Apollo Associates and Villa Apollo # 2. in which the Partnership
sold its Local Partnership interests (collectively the "Sold Assets"),
gain on sale of properties, forgiveness of indebtedness income and
other income. The majority of Local Partnership income continues
to be in the form of rental income with the corresponding ex-
penses being divided among operations, depreciation and mort-
gage interest. In addition, the Partnership incurred interest ex-
pense relating to the Purchase Money Notes which were issued
when the Local Partnerships were acquired.
Rental income decreased approximately 13% and 8% for the three
and six months ended September 25, 1999 as compared to 1998.
Excluding the Sold Assets, rental income increased approximately
3% for both the three and six months ended September 25, 1999 as
compared to 1998 primarily due to rental rate increases.
Other income increased approximately 21% and 15% for the three
and six months September 25, 1999 as compared to 1998. Exclud-
ing the Sold Assets, such income increased approximately 17% for
both the three and six months ended September 30, 1999 as com-
pared to 1998 primarily due to increases in late charges, miscella-
neous fees and interest income at four Local Partnerships and an
increase in interest income at the Partnership level due to higher
cash and cash equivalent balances in 1999.
Total expenses, excluding the Sold Assets, remained fairly consis-
tent with a decrease of less than 1% and an increase of less than
1% for the three and six months ended September 25, 1999 as
compared to 1998.
Administrative and management-related parties, operating, taxes
and insurance, interest and depreciation decreased approximately
$90,000 and $87,000, $208,000 and $303,000, $151,000 and
$231,000, $581,000 and $783,000, $194,000 and $306,000, respec-
tively, for the three and six months ended September 30, 1999 as
compared to 1998 primarily due to decreases relating to the Sold
Assets. Excluding the Sold Assets and Oakbrook Villa, Cranbrook
Manor, Conifer 307 (Fircrest) and Casa Ramon for depreciation
only, such expenses remained fairly consistent with increases (de-
creases) of approximately ($20,000) and $5,000, $39,000 and
$13,000, ($36,000) and ($66,000), ($32,000) and ($62,000), ($10,000)
and $5,000, respectively, for the three and six months ended Sep-
tember 30, 1999 as compared to 1998. Oakbrook Villa, Cranbrook
Manor, Conifer 307 (Fircrest) and Casa Ramon are not being de-
preciated during the quarter because they are classified as assets
held for sale.
A gain on sale of property in the amount of approximately
$3,161,000 and $12,140,000, $156,000 and $7,554,000 was recorded
for the three and six months ended September 25, 1999 and 1998,
respectively, and forgiveness of indebtedness income in the
amount of approximately $5,314,000 and $19,792,000 was re-
corded for the three and six months ended September 25, 1999.
See Note 4 to the financial statements.
Year 2000 Compliance
The Partnership utilizes the computer services of an affiliate of the
General Partners. The affiliate of the General Partners has up-
graded its computer information systems to be year 2000 compli-
ant. The most likely worst case scenario that the General Partners
face is that computer operations will be suspended for a few days
to a week commencing on January 1, 2000. The Partnership's con-
tingency plan is to have (i) a complete backup done on December
31, 1999 and (ii) both electronic and printed reports generated for
all critical data up to and including December 31, 1999.
In regard to third parties, the General Partners are in the process
of evaluating the potential adverse impact that could result from
the failure of material service providers to be year 2000 compliant.
A detailed survey and assessment was sent to material third par-
ties in the fourth quarter of 1998. The Partnership has received
assurances from a majority of the material service providers with
which it interacts that they have addressed the year 2000 issues
and is evaluating these assurances for their adequacy and accu-
racy. In cases where the Partnership has not received assurances
from third parties, it is initiating further mail and/or phone corre-
spondence. The Partnership relies heavily on third parties and is
vulnerable to the failures of third parties to address their year 2000
issues. There can be no assurance given that the third parties will
adequately address their year 2000 issues.
Item 3. Quantitative and Qualitative Disclosures about Market
Risk
None
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities and Use of Proceeds - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5. Other information - None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27 Financial Data Schedule (filed herewith).
(b) Reports on Form 8-K - No reports on Form 8-K were
filed during the quarter.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
CAMBRIDGE ADVANTAGED
PROPERTIES LIMITED PARTNERSHIP
(Registrant)
By: Related Beta Corporation,
a General Partner
Date: October 27, 1999
By: /s/ Alan P. Hirmes
Alan P. Hirmes,
Vice President
(principal financial officer)
Date: October 27, 1999
By: /s/ Glenn F. Hopps
Glenn F. Hopps,
Treasurer
(principal accounting officer)
By: ASSISTED HOUSING ASSOCIATES,
INC., a General Partner
Date: October 27, 1999
By: /s/ Alan P. Hirmes
Alan P. Hirmes,
Vice President
(principal financial officer)
Date: October 27, 1999
By: /s/ Glenn F. Hopps
Glenn F. Hopps,
Treasurer
(principal accounting officer)
By: CAMBRIDGE AND RELATED ASSOCIATES
LIMITED PARTNERSHIP
By: Related Beta Corporation,
Date: October 27, 1999
By: /s/ Alan P. Hirmes
Alan P. Hirmes,
Vice President
(principal financial officer)
Date: October 27, 1999
By: /s/ Glenn F. Hopps
Glenn F. Hopps,
Treasurer
(principal accounting officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial information extracted
from the financial statements for Cambridge Advantaged Proper-
ties Limited Partnership and is qualified in its entirety by reference
to such financial statements
</LEGEND>
<CIK> 0000748847
<NAME> Cambridge Advantaged Properties Limited Partnership
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-25-2000
<PERIOD-START> MAR-26-1999
<PERIOD-END> SEP-25-1999
<CASH> 16,089,797
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,284,392
<PP&E> 145,404,480
<DEPRECIATION> 69,418,511
<TOTAL-ASSETS> 93,360,158
<CURRENT-LIABILITIES> 6,726,544
<BONDS> 171,100,707
0
0
<COMMON> 0
<OTHER-SE> (84,467,093)
<TOTAL-LIABILITY-AND-EQUITY> 93,360,158
<SALES> 0
<TOTAL-REVENUES> 25,714,736
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 14,394,796
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,829,785
<INCOME-PRETAX> 27,282,527
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 19,792,372
<CHANGES> 0
<NET-INCOME> 24,541,859
<EPS-BASIC> 2,012
<EPS-DILUTED> 0
</TABLE>
