ANNUAL REPORT
FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1995
FELLOW PARTNERS:
Rental income from properties owned during all of fiscal 1995 was up $317,000
over 1994, and expenses, excluding the effect of the Corporate Square sale and
valuation adjustments, were down $62,000. Without the adjustments, net income
from these properties' operations would have increased by $379,000 over last
year to $555,000. Corporate Square, which was sold in January 1994,
contributed $264,000 to rental income and $234,000 to net income in fiscal
1994 and nothing this year. In addition, the carrying values of three
properties still owned declined a total of $547,000. At Airport Perimeter, an
initial permanent value impairment of $189,000 was recorded, while at the
Business Park there was an additional permanent impairment of $165,000. Spring
Creek, which we are trying to sell, incurred a net downward valuation
adjustment of $193,000. The table on page 6 will help you put these
adjustments in the context of the total investment in the properties.
The biggest gain in rental income from the current portfolio of
properties was experienced by Royal Biltmore, whose average leased status was
up from 91% in fiscal 1994 to 98% this year. The Business Park, Springdale,
and Newport Center also enjoyed higher leased levels, while rental rates being
paid by new tenants at the first two properties are also up over those in
prior leases.
In what we hope is the start of a trend, bad debt expense was down or
flat for all properties relative to 1994, with Montgomery and Newport Center
showing the greatest improvement in tenant credit quality. Savings in this
property operating expense category totaled $71,000, and repairs and
maintenance costs at Montgomery declined by $44,000 relative to last year.
Increased tax assessments at The Business Park and Royal Biltmore more than
offset the absence of taxes for Corporate Square, pushing real estate taxes
higher.
The Fund's cash position increased slightly more in fiscal 1995 than it
did in 1994. Cash from operations was up $457,000 over last year. The Fund did
not sell a property or pay as large a cash distribution - $1,705,000 versus
$4,726,000 - in 1995 as it did in 1994.
Unit Valuation
As you know, at the end of each fiscal year we employ a third-party appraiser
to review and assess the analysis and assumptions we used to prepare an
estimated current unit value. These interim valuations are not necessarily
representative of the value of your units when the Fund ultimately liquidates
its holdings. Nor is there any assurance that you could sell your units today
at a price equal to the current estimated value.
At September 30, 1995, the estimated value of a Fund I unit was $424.
The comparable number for 1994 was $413. Both the $424 and $413 include $9 of
cash proceeds from previous sales which, based on lower projected cash balance
requirements, will be distributed to you in November. In addition, we
determined that the Fund could declare in the fourth fiscal quarter a $9 per-
unit distribution from 1995 operations. For the first three quarters of the
year, $12 per unit was declared from operations, so the $9 for the fourth
quarter brings the total for 1995 to $21. Because of the improved cash flow
from operations, we are raising the planned quarterly cash distribution for
fiscal 1996 to $4.75 per unit. This rate will be evaluated periodically to
determine if a further change is warranted based on the cash position.
After the November distribution, the 1995 unit value will be $411, a
2.0% increase over the prior year's comparable $403 level. Higher valuations
on a majority of your properties produced the estimated gain. At this time
last year, we also reported modestly higher values and said we believed even
the slight rise indicated that the sharp declines in property values were
behind us. While two back-to-back annual increases cannot be considered a
long-term trend, we are encouraged by the change in direction.
Sincerely,
James S. Riepe
Chairman
November 10, 1995
INVESTMENT ADVISOR'S REPORT
As discussed in recent reports, the real estate market is slowly improving,
with some segments such as industrial recovering more rapidly than others such
as office properties. The absence of meaningful new construction combined with
continued net positive absorption in all segments has begun to attract not
only opportunistic capital but also some institutional capital into the real
estate sector, which is a favorable development.
The results of the Russell-NCREIF Index, which measures income returns
and changes in values for real estate investments, reflect the general state
of the market. From 1991 through 1993 property values experienced average
annual declines of approximately 10%. This rate slowed as values decreased by
5% and 1% for the 12 months ended June 30, 1994 and 1995, respectively. Income
returns of 9% during each of those two years more than offset the value
declines, resulting in positive total returns for the index for the first time
since June 1990.
The index also identifies returns by product type and by geographical
region. As anticipated, because of the weak operating environment, office
buildings have not performed as well as other product types, with value
declines of approximately 4% for the 12 months ended June 30, 1995. This is an
improvement, however, over the average 14% per year drop in each of the last
four years. Industrial properties, on the other hand, appreciated in value by
2% for the 12 months ended June 30, 1995. In that same period, other real
estate product types such as retail and multi-family, performed better than
they had in prior years.
Property values in geographic regions depend significantly on the local
economy. The South, where values in general depreciated less than 1% for the
12 months ended June 30, 1995, continues to outperform other regions, but even
its recovery has been prolonged due to the depressed energy business. Value
declines in the East and Midwest have moderated, and the Western region has
experienced a dramatic improvement recently. In 1994, property values in the
West were down significantly but, for the 12 months ended June 30, 1995,
declined only around 1%. In analyzing this information, it is clear that the
multi-family and industrial segments are heavily influencing the results,
since the office segment in the West declined approximately 5%. Nevertheless,
we anticipate this market will recover in the near term, because we continue
to see increased leasing activity and improved economics for owners.
We are encouraged by the positive annual returns of the Russell-NCREIF
Index for the past two years. We are even more heartened, however, by the
performance of Realty Income Fund I's Portfolio, which experienced an increase
in value in excess of that of the Russell-NCREIF Index. Further, we believe
this trend will continue.
Property Highlights
All but two properties maintained or increased their leased status during the
past year. New and renewal leases totaling 235,620 square feet of space, or
26% of the total leasable area, were signed.
Spring Creek: One tenant continues to occupy the building. Its lease,
which expires in 1999, provides for gradual increases in rental payments
through 1996. The occupancy rate in the Richardson, Texas, submarket improved
over the prior year's level and is now at 90%. Rental rates for this type of
property continue to increase at a pace well above inflation and are expected
to rise even further in the coming months as alternatives for flex space users
remain limited. Based on these and other considerations, we are actively
marketing the Spring Creek property.
Real Estate Investments
_____________________________________________________________________________
Gross % Leased
Leasable ___________________
Area Prior Current 1996 Lease
Property (Sq. Ft.) Year-End Year-End Expirations
________ ________ ________ ________ __________
Spring Creek 51,400 100% 100% 0%
Airport Perimeter 121,000 69 80 47%
Montgomery 116,300 88 67 7%
Royal Biltmore 71,300 100 98 1%
Springdale 144,000 100 100 31%
The Business Park 157,200 86 92 47%
Van Buren 173,900 92 92 4%
Newport Center 62,400 89 93 29%
Fund Total 897,500 89% 89% 23%
Airport Perimeter: During the last year, new and renewal leases covering
nearly 45,000 square feet were completed at the property, more than offsetting
the expiration of leases covering 29,000 square feet. As a result, the leased
status rose by nearly 11 percentage points to 80%. The possibility that the
Fund may be forced to sell this property to the local government to
accommodate an airport expansion still exists. The potential sale makes the
increased leased status of the property even more noteworthy, as prospects who
are willing to accept short lease terms are usually limited.
Montgomery: Expirations and downsizings severely affected occupancy
during the year. Over 42,000 square feet was vacated due to these factors,
bringing the total unleased space up to more than 38,000 square feet. Our
marketing objective is to raise occupancy above the market level, which,
although improved over the prior year, remains low at 82%. Significant
increases in asking rates for competitive space indicate that the market may
be gaining momentum which should positively affect this building in the coming
months.
Royal Biltmore: Only 5,000 square feet were leased during the year,
reflecting the property's high occupancy level and minimal rollover. The small
decline in leased status reflects our intent to hold out for the highest
possible rent on the property's last vacant space as the Camelback corridor
market continues to tighten. Investment activity remains strong in the
Camelback area as well. Many investors believe that the rising rents and
falling vacancy levels achieved in the market during the last 12 months will
continue over the near term. The property's operating upside is limited
because of its fully leased status and the potential for new office
development in the Camelback corridor. As a result of these factors and the
increasing investor optimism in the market, we are currently reviewing
possible sale of Royal Biltmore.
Springdale: One renewal lease representing 10% of the property was
completed during the year, keeping Springdale fully leased. Leasing activity
in the Mid-Counties submarket, where the Springdale property competes, remains
strong with vacancy levels down to just above 6%. Therefore, we are optimistic
about our renewal campaign over the coming 12 months. Should demand for space
persist, rental rates should continue to improve.
The Business Park: New and renewal leases totalling 62,000 square feet,
or 39% of the property, were signed during the year, raising the leased status
by over five percentage points. The Northeast I-85 Atlanta service submarket's
vacancy declined from 8% last year to 5.5% currently, and rental rates have
remained attractive versus historical levels.
Van Buren: Despite 64,000 square feet of lease expirations during the
year, there was virtually no change in leased status from the prior year. New
leases were entered into with good quality tenants at rates which reflect the
strength of the Southwest Phoenix industrial submarket. With only 4% of space
expiring in the upcoming year, little additional near-term value can be
created by holding Van Buren. That factor, combined with continued investor
demand for industrial properties, has prompted us to review this property as a
disposition candidate.
Newport Center: Activity at the property was high, as leases totaling
nearly 23,000 square feet and 37% of the total were completed during the year.
Leases expired on 19,000 square feet, and one tenant with 2,000 feet vacated
due to credit problems. The Deerfield Beach/Boca Raton submarket's vacancy
rate fell one percentage point to 12% during the year, while rental rate
growth enjoyed a double digit increase during the period.
Outlook
All portfolio properties are in submarkets with higher occupancy rates than a
year ago. Additionally, rents appear to have stabilized or to be rising in
virtually all of these areas. We feel the Fund's properties are poised to take
advantage of these improving conditions, and we look forward to reporting on
this progress in future reports.
LaSalle Advisors
November 10, 1995
REAL ESTATE HOLDINGS
September 30, 1995
(In thousands)
Current
Type and Date Total AccumulatedValuationCarrying
Property Name Location Acquired Cost*DepreciationAllowancesAmount
_______________ _____________________________________________________________
Airport
Perimeter Industrial 12/85 $5,830 $(2,352) - $3,478
College Park, Georgia
Montgomery Office 12/85 17,380 (6,701) - 10,679
Gaithersburg, Maryland
Royal
Biltmore Office 1/86 9,099 (3,991) - 5,108
Phoenix, Arizona
Springdale Industrial 6/86 7,390 (2,359) - 5,031
Santa Fe Springs, California
Van Buren Industrial 7/86 6,217 (1,879) - 4,338
Phoenix, Arizona
The Business
Park Office/Service 8/86 14,017 (5,629) - 8,388
Gwinnett Co., Georgia
Newport
Center Office/Service 5/87 5,318 (1,181) - 4,137
Deerfield Beach, Florida
_______ _______ _______
$65,251 $(24,092) - 41,159
_______ _______ _______
_______ _______ _______
Held for Sale
Spring Creek Industrial 6/85 $4,184 $(1,521) (1,437) 1,226
Richardson, Texas
_______ _______ _______ _______
_______ _______ _______
$42,385
_______
_______
*Includes original purchase price, subsequent improvements, and, in the case
of Airport Perimeter, Royal Biltmore, The Business Park, and Spring Creek,
reductions for permanent impairments.
BALANCE SHEETS
(In thousands)
September 30,September 30,
1995 1994
____________ ____________
Assets
Real Estate Property Investments
Land. . . . . . . . . . . . . . . . . . . . . . . $ 11,014 $11,070
Buildings and Improvements. . . . . . . . . . . . 54,237 54,341
________ ________
65,251 65,411
Less: Accumulated Depreciation and Amortization (24,092) (22,422)
________ ________
41,159 42,989
Held for Sale . . . . . . . . . . . . . . . . . . 1,226 1,532
________ ________
42,385 44,521
Cash and Cash Equivalents. . . . . . . . . . . . . 2,832 2,603
Accounts Receivable (less allowances of $85
and $97) . . . . . . . . . . . . . . . . . . . . 292 133
Other Assets . . . . . . . . . . . . . . . . . . . 624 587
________ ________
$ 46,133 $47,844
________ ________
________ ________
Liabilities and Partners' Capital
Security Deposits and Prepaid Rents. . . . . . . . $ 364 $ 357
Accrued Real Estate Taxes. . . . . . . . . . . . . 202 258
Accounts Payable and Other Accrued Expenses. . . . 281 246
________ ________
Total Liabilities. . . . . . . . . . . . . . . . . 847 861
Partners' Capital. . . . . . . . . . . . . . . . . 45,286 46,983
________ ________
$ 46,133 $47,844
________ ________
________ ________
The accompanying notes are an integral part of the financial statements.
STATEMENTS OF OPERATIONS
(In thousands except per-unit amounts)
Years Ended September 30,
1995 1994 1993
_______ _______ _______
Revenues
Rental Income. . . . . . . . . . . . . . . $ 5,927 $ 5,874 $ 6,302
Interest Income. . . . . . . . . . . . . . 116 119 37
_______ _______ _______
6,043 5,993 6,339
_______ _______ _______
Expenses
Property Operating Expenses. . . . . . . . 1,681 1,933 1,966
Real Estate Taxes. . . . . . . . . . . . . 632 592 718
Depreciation and Amortization. . . . . . . 2,681 2,779 2,678
Decline (Recovery) of Property Values. . . 547 (2) 7,039
Partnership Management Expenses. . . . . . 494 526 548
_______ _______ _______
6,035 5,828 12,949
_______ _______ _______
Net Income (Loss). . . . . . . . . . . . . $ 8 $ 165 $(6,610)
_______ _______ _______
_______ _______ _______
Activity per Limited Partnership Unit
Net Income (Loss). . . . . . . . . . . . . $ 0.08 $ 1.64 $(65.65)
_______ _______ _______
_______ _______ _______
Cash Distributions Declared
from Operations. . . . . . . . . . . . . $ 21.00 $ 16.00 $ 16.00
from Sale Proceeds . . . . . . . . . . . 9.00 34.00 -
_______ _______ _______
Total Distributions Declared . . . . . . . $ 30.00 $ 50.00 $ 16.00
_______ _______ _______
_______ _______ _______
Units Outstanding. . . . . . . . . . . . . 90,622 90,622 90,622
_______ _______ _______
_______ _______ _______
The accompanying notes are an integral part of the financial statements.
STATEMENTS OF PARTNERS' CAPITAL
(In thousands)
General Limited
Partner Partners Total
________ ________ ________
Balance, September 30, 1992. . . . . . . . $ (2,481) $ 62,347 $ 59,866
Net Loss . . . . . . . . . . . . . . . . . (661) (5,949) (6,610)
Cash Distributions . . . . . . . . . . . . (171) (1,541) (1,712)
_______ _______ _______
Balance, September 30, 1993. . . . . . . . (3,313) 54,857 51,544
Net Income . . . . . . . . . . . . . . . . 16 149 165
Cash Distributions . . . . . . . . . . . . (286) (4,440) (4,726)
_______ _______ _______
Balance, September 30, 1994. . . . . . . . (3,583) 50,566 46,983
Net Income . . . . . . . . . . . . . . . . 1 7 8
Cash Distributions . . . . . . . . . . . . (165) (1,540) (1,705)
_______ _______ _______
Balance, September 30, 1995. . . . . . . . $ (3,747) $ 49,033 $ 45,286
_______ _______ _______
_______ _______ _______
The accompanying notes are an integral part of the financial statements.
STATEMENTS OF CASH FLOWS
(In thousands)
Years Ended September 30,
1995 1994 1993
_______ _______ _______
Cash Flows from Operating Activities
Net Income (Loss). . . . . . . . . . . . . $ 8 $ 165 $(6,610)
Adjustments to Reconcile Net Income
(Loss) to Net Cash
Provided by Operating Activities
Depreciation and Amortization. . . . . . 2,681 2,779 2,678
Decline (Recovery) of Property
Values . . . . . . . . . . . . . . . . 547 (2) 7,039
Change in Accounts Receivable, Net
of Allowances. . . . . . . . . . . . . (159) 53 21
Increase in Other Assets . . . . . . . . (37) (121) (83)
Change in Security Deposits and
Prepaid Rents. . . . . . . . . . . . . 7 (74) (13)
Decrease in Accrued Real
Estate Taxes . . . . . . . . . . . . . (56) (229) (87)
Change in Accounts Payable and Other
Accrued Expenses . . . . . . . . . . . . 35 (2) (128)
_______ _______ _______
Net Cash Provided by Operating
Activities . . . . . . . . . . . . . . . 3,026 2,569 2,817
_______ _______ _______
Cash Flows from Investing Activities
Proceeds from Property Disposition . . . . - 3,379 -
Investments in Real Estate . . . . . . . . (1,092) (1,048) (1,000)
_______ _______ _______
Net Cash Provided by (Used in) Investing
Activities . . . . . . . . . . . . . . . (1,092) 2,331 (1,000)
_______ _______ _______
Cash Flows Used in Financing Activities
Cash Distributions . . . . . . . . . . . . (1,705) (4,726) (1,712)
_______ _______ _______
Cash and Cash Equivalents
Net Increase during Year . . . . . . . . . 229 174 105
At Beginning of Year . . . . . . . . . . . 2,603 2,429 2,324
_______ _______ _______
At End of Year . . . . . . . . . . . . . . $ 2,832 $ 2,603 $ 2,429
_______ _______ _______
_______ _______ _______
The accompanying notes are an integral part of the financial statements.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION
T. Rowe Price Realty Income Fund I, A No-Load Limited Partnership (the
"Partnership"), was formed on August 31, 1984, under the Maryland Revised
Uniform Limited Partnership Act for the purpose of acquiring, operating, and
disposing of existing income-producing commercial and industrial real estate
properties. T. Rowe Price Realty Income Fund I Management, Inc., is the sole
General Partner. A total of 90,622 limited partnership units were issued at
$1,000 per unit and remain outstanding as of September 30, 1995.
In accordance with provisions of the partnership agreement, income from
operations is allocated and related cash distributions are generally paid to
the General and Limited Partners at the rates of 10% and 90%, respectively.
Sale or refinancing proceeds are generally allocated, first 4% to the General
Partner, next to the Limited Partners in an amount equal to their Adjusted
Capital Contributions (as defined), next to the Limited Partners to provide
specific returns on their Adjusted Capital Contributions, with any remaining
proceeds allocated 85% to the Limited Partners and 15% to the General Partner.
Gain on property sold is generally allocated in the same ratio as the
distribution of sale proceeds. Cash distributions, if any, are made quarterly
based upon cash available for distribution, as defined in the partnership
agreement. Cash available for distribution will fluctuate as changes in cash
flows and adequacy of cash balances warrant.
The partnership agreement includes provisions limiting the maximum
contribution the General Partner can be required to fund upon the dissolution
and termination of the Partnership if, at that time, the General Partner's
capital account has a negative balance. The maximum contribution is
approximately $913,000. If after making such a contribution, the General
Partner's capital account still has a negative balance, a reallocation of
income equal to the remaining negative balance will be made to the General
Partner from the Limited Partners.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Partnership's financial statements are prepared in accordance with
generally accepted accounting principles. Certain amounts in the 1994
financial statements have been reclassified to conform with the 1995
presentation.
Depreciation is calculated primarily on the straight-line method over
the estimated useful lives of buildings and improvements, which range from
five to 40 years. Lease commissions and tenant improvements are capitalized
and amortized over the life of the lease using the straight-line method.
Cash equivalents consist of money market mutual funds, the cost of which
approximates fair value.
The Partnership uses the allowance method of accounting for doubtful
accounts. Provisions for uncollectible tenant receivables in the amounts of
$20,000, $96,000, and $108,000 were recorded in 1995, 1994, and 1993,
respectively. Bad debt expense is included in Property Operating Expenses.
The Partnership records a provision for impairment of the carrying value
of its real estate investments whenever the estimated future cash flows from a
property's operations and projected sale are less than the property's net
carrying value. The General Partner believes that the estimates and
assumptions used are appropriate in evaluating the carrying value of the
Partnership's properties presented currently in the balance sheet; however,
changes in market conditions and circumstances could occur in the near-term
which will cause these estimates to change.
Rental income is recognized by the Partnership on a straight-line basis
over the term of each lease. Rental income accrued, but not yet billed, is
included in Other Assets and aggregates $435,000 and $420,000 at September 30,
1995 and 1994, respectively.
Under provisions of the Internal Revenue Code and applicable state
taxation codes, partnerships are generally not subject to income taxes;
therefore, no provision has been made for such taxes in the accompanying
financial statements.
NOTE 3 - TRANSACTIONS WITH RELATED PARTIES AND OTHER
As discussed in Note 1, the General Partner receives 10% of distributable cash
from operations and a portion of the proceeds from property dispositions as
compensation for the services rendered in managing the affairs of the
Partnership. The General Partner earned $211,000, $161,000, and $161,000 from
operations in fiscal 1995, 1994, and 1993, respectively. In addition, the
General Partner earned $34,000 and $128,000 in fiscal 1995 and 1994 from
property dispositions.
In accordance with the partnership agreement, certain operating expenses
are reimbursable to the General Partner. The General Partner's reimbursement
of such expenses totaled $123,000, $134,000, and $162,000 for communications
and administrative services performed on behalf of the Partnership during
fiscal 1995, 1994, and 1993, respectively.
An affiliate of the General Partner earned a normal and customary fee of
$9,000, $11,000, and $6,000 from the money market mutual funds in which the
Partnership made its interim cash investments during fiscal 1995, 1994, and
1993, respectively.
LaSalle Advisors Limited Partnership ("LaSalle") is the Partnership's
advisor and is compensated for its advisory services directly by the General
Partner. LaSalle is reimbursed by the Partnership for certain operating
expenses pursuant to its contract with the Partnership to provide real estate
advisory, accounting, and other related services to the Partnership. LaSalle's
reimbursement for such expenses during each of the last three years totaled
$150,000.
An affiliate of LaSalle earned $190,000, $183,000, and $120,000 in 1995,
1994, and 1993, respectively, as property manager for several of the
Partnership's properties.
NOTE 4 - PROPERTY VALUATIONS AND DISPOSITION
On January 31, 1994, the Partnership sold Corporate Square and received net
proceeds of $3,379,000. The net book value of this property at the time of
disposition was also $3,379,000, after accumulated depreciation expense and
previously recorded property valuation allowances. Therefore, no gain or loss
was recognized on the property sale.
The General Partner has approved a plan of disposition for and is
actively marketing the Spring Creek property, the carrying amount of which is
classified as held for sale in the accompanying balance sheets. Results of
operations for Spring Creek and Corporate Square are summarized below for each
of the fiscal years ended September 30:
1995 1994 1993
________ ________ ________
Recovery (Decline) of
Property Values. . . . . . . $ (193,000) $ 368,000 $ (4,862,000)
Other Components of
Operations . . . . . . . . . 41,000 29,000 328,000
________ ________ __________
Results of Operations. . . . . $ (152,000) $ 397,000 $ (4,534,000)
________ ________ __________
________ ________ __________
In addition, based upon a review of current market conditions, estimated
holding period, and future performance expectations of each property, the
General Partner has determined that the net carrying value of certain other
operating properties may not be fully recoverable from future operations and
disposition. Charges recognized for such impairments in the value of Airport
Perimeter, the Business Park, and Royal Biltmore aggregated $354,000 in fiscal
1995, $365,000 in fiscal 1994, and $2,177,000 in fiscal 1993.
On October 1, 1995, the Partnership adopted Statement of Financial
Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of Long-
Lived Assets and for Long-Lived Assets to Be Disposed Of", which changes the
Partnership's current method of accounting for its real estate property
investments when circumstances indicate that the carrying amount of a property
may not be recoverable. Measurement of an impairment loss on an operating
property will now be based on the estimated fair value of the property rather
than the sum of expected future cash flows. Properties held for sale will
continue to be reflected at the lower of historical cost or estimated fair
value less anticipated selling costs. In addition, properties held for sale
will no longer be depreciated. No adjustment of the carrying values of the
Partnership's real estate property investments was required at October 1, 1995
as a result of adopting SFAS No.121.
NOTE 5 - LEASES
Future minimum rentals to be received by the Partnership under noncancelable
operating leases in effect as of September 30, 1995, are:
Fiscal Year (in thousands)
___________
1996 $ 5,062
1997 4,097
1998 2,835
1999 1,606
2000 1,047
Thereafter 1,377
_______
Total $ 16,024
_______
_______
NOTE 6 - RECONCILIATION OF FINANCIAL STATEMENT TO TAXABLE INCOME
As described in Note 2, the Partnership has not provided for an income tax
liability; however, certain timing differences exist between amounts reported
for financial statement and income tax purposes. These differences are
summarized below for fiscal years ended September 30:
1995 1994 1993
________ ________ ________
(in thousands)
Book net income (loss) . . . . . . . $ 8 $ 165 $ (6,610)
Allowances for:
Uncollectible accounts
receivable . . . . . . . . . . . . (13) 8 (57)
Property valuations. . . . . . . . 547 (2) 7,039
Normalized and prepaid rents . . . . (45) (112) (136)
Depreciation . . . . . . . . . . . . 113 135 (220)
Accrued Expenses . . . . . . . . . . 3 1 55
Loss on property sale. . . . . . . . - (3,133) -
________ ________ ________
Taxable Income . . . . . . . . . . . $ 613 $ (2,938) $ 71
________ ________ ________
________ ________ ________
NOTE 7 - SUBSEQUENT EVENT
The Partnership declared a quarterly cash distribution of $18.00 per unit to
Limited Partners of the Partnership as of the close of business on September
30, 1995, the record date. The distribution totals $1,756,000 and represents
$9.00 per unit of cash available for distribution from operations for fiscal
1995, and $9.00 per unit from previously retained proceeds from the sales of
Corporate Square and Dupont Business Park. The Limited Partners will receive
$1,631,000, and the General Partner will receive $125,000.
INDEPENDENT AUDITORS' REPORT
To the Partners
T. Rowe Price Realty Income Fund I,
A No-Load Limited Partnership:
We have audited the accompanying balance sheets of T. Rowe Price Realty Income
Fund I, A No-Load Limited Partnership, as of September 30, 1995 and 1994, and
the related statements of operations, partners' capital and cash flows for
each of the years in the three-year period ended September 30, 1995. These
financial statements are the responsibility of the Partnership's management.
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
from 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 management, 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 T. Rowe Price
Realty Income Fund I, A No-Load Limited Partnership as of September 30, 1995
and 1994, and the results of its operations and its cash flows for each of the
years in the three-year period ended September 30, 1995, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
October 20, 1995
Chicago, Illinois
