<PAGE>1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended September 30, 1996
Commission file number 0-14308
Exact name of registrant as specified in its charter: T. ROWE PRICE REALTY
INCOME FUND I, A NO-LOAD LIMITED PARTNERSHIP
State or other jurisdiction of incorporation or organization: Maryland
I.R.S. Employer Identification Number: 52-1363144
Address of principal executive offices: 100 East Pratt Street, Baltimore,
Maryland 21202
Registrant's telephone number, including area code: 1-800-638-5660
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Title of Class: Units of Limited Partnership Interest
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]
The aggregate market value of the voting securities held by non-affiliates
of the registrant is not determinable because there is no established
public trading market for the Units of Limited Partnership Interest.
DOCUMENTS INCORPORATED BY REFERENCE.
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Prospectus of the Partnership dated December 7, 1984, File Number 2-93160
and supplement to the Prospectus dated April 24, 1985 filed with the
Commission pursuant to Rule 424(c) are incorporated in Parts I, III and IV
by reference. Annual Report to Limited Partners of the Partnership for the
fiscal year ended September 30, 1996 dated November 8, 1996 and filed with
the Commission as Exhibit 13 is incorporated in Parts II and IV by
reference.
Index to Exhibits is located on page 22.
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T. ROWE PRICE REALTY INCOME FUND I,
A NO-LOAD LIMITED PARTNERSHIP
INDEX
Page
PART I.
Item 1. Business 4
Item 2. Properties 10
Item 3. Legal Proceedings 11
Item 4. Submission of Matters to a Vote of Security
Holders 11
PART II.
Item 5. Market for the Partnership's Limited Partnership 11
Interests and Related Security Holder Matters
Item 6. Selected Financial Data 12
Item 7. Management's Discussion and Analysis of Financial 14
Condition and Results of Operations
Item 8. Financial Statements and Supplementary Data 18
Item 9. Changes in and Disagreements with Accountants on 18
Accounting and Financial Disclosure
PART III.
Item 10. Directors and Executive Officers of Registrant 18
Item 11. Executive Compensation 20
Item 12. Security Ownership of Certain Beneficial Owners 21
and Management
Item 13. Certain Relationships and Related Transactions 21
PART IV.
Item 14. Exhibits, Financial Statement Schedules and 22
Reports on Form 8-K
<PAGE>4
PART I
Item 1. Business
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. On December 7, 1984, the Partnership commenced an
offering of $100,000,000 of Limited Partnership Units ($1,000 per Unit)
pursuant to a Registration Statement on Form S-11 under the Securities Act
of 1933 (Registration No. 2-93160) (the "Registration Statement"). The
Prospectus filed pursuant to Rule 424(b) under the Securities Act of 1933
(the "Prospectus") as supplemented on April 24, 1985 (the "Supplement")
sets forth a complete description of the business of the Partnership in the
sections entitled "Investment Objectives" and "Fund Policies," on pages
19-29 of the Prospectus which pages are incorporated by reference herein.
The Gross Proceeds from the offering, combined with the contribution of
$10,000 from the Initial Limited Partners totaled $90,622,000. The
offering terminated in May 1985, and no additional Units will be sold. As
of November 19, 1996 there were 17,730 Limited Partners. T. Rowe Price
Realty Income Fund I Management, Inc. (the "General Partner") is the sole
general partner of the Partnership.
In December of 1991, LaSalle Advisors Limited Partnership ("LaSalle")
entered into a contract with the Partnership and the General Partner to
perform day-to-day management and real estate advisory services for the
Partnership under the supervision of the General Partner and its
Affiliates. LaSalle's duties under the contract include disposition and
asset management services, including recordkeeping, contracting with
tenants and service providers, and preparation of financial statements and
other reports for management use. The General Partner continues to be
responsible for overall supervision and administration of the Partnership's
operations, including setting policies and making all disposition
decisions, and the General Partner and its Affiliates continue to provide
administrative, advisory, and oversight services to the Partnership.
Compensation to LaSalle from the Partnership consists of accountable
expense reimbursements, subject to a fixed maximum amount per year. All
other compensation to LaSalle is paid out of compensation and distributions
paid to the General Partner by the Partnership.
The Partnership is engaged solely in the business of real estate
investment, therefore, presentation of information about industry segments
is not applicable. In the current period, three of the Partnership's
properties were responsible for 15% or more of revenues from operating
activities. Montgomery Executive Center provided 24%, The Business Park
provided 19%, and Royal Biltmore provided 16%. In fiscal 1995, three
properties were responsible for 15% or more of revenues from operating
activities: Montgomery Executive Center provided 27%, The Business Park
provided 17%, and Royal Biltmore provided 15%. In fiscal 1994, only two
properties provided such revenues-Montgomery Executive Center provided 28%
and the Business Park provided 15%.
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During fiscal 1996, the Partnership reviewed its portfolio and operating
plans with the intent to dispose of all its operating properties by the end
of 1998, and to thereafter distribute all of the Partnership's net assets
to the partners. Although there is no assurance that the Partnership will
achieve the disposition of all its operating properties during the proposed
time frame, the disposition of operating properties is expected to cause a
significant decrease in the Partnership's operating activities in future
periods.
The Partnership currently owns the properties set forth in Schedule III to
this Report, "Consolidated Real Estate and Accumulated Depreciation," which
is incorporated by reference herein and contains information as to
acquisition date and total cost of each of the properties. In all cases
the interests were purchased for cash, and in all cases land and
improvements are owned 100% in fee simple. Additional information
regarding these properties, including size and percentage leased as of
September 30, 1996, is set forth in Exhibit 99(b) to this Report, "Real
Estate Investments," which is incorporated by reference herein. A brief
narrative description of each property the Partnership currently owns
follows.
Airport Perimeter Business Center (College Park, Georgia)
This property consists of three multi-tenant office/service warehouse
buildings containing just under 121,000 square feet and is situated on 9.2
acres of land immediately south of William B. Hartsfield Atlanta
International Airport. This property is part of Airport Perimeter Business
Park, a master-planned, commercial/industrial business park containing
approximately 800,000 square feet of office/service/warehouse facilities on
approximately 137 acres of land, with good access to major north-south and
east-west Interstate highways. This parcel is located in an area which has
been targeted for the expansion of the Hartsfield Airport and the
Partnership anticipates that it will be forced to sell this property in the
next one to two years, to a government agency to accommodate such an
expansion. In fiscal 1996, the Partnership recorded a provision for value
impairment in connection with Airport Perimeter of $1,046,000. The General
Partner determined that this adjustment was a prudent course of action
based upon the uncertainty of the Partnership's ability to recover the net
carrying value of Airport Perimeter through future operations and the
anticipated forced sale. This determination was based upon current market
conditions and future performance expectations of both the property and the
Airport/South Atlanta market, as well as the expected governmental action
to acquire the property.
The property is part of the approximately 17.1 million square foot Service
and Distribution sectors of the Atlanta Airport/South Atlanta submarket
which represents approximately 12% of Atlanta's total service and
distribution space. This sector of the submarket absorbed around 460,000
square feet during the first nine calendar months of 1996 as it captured
around 22% of Atlanta's Service and Distribution absorption. Vacancy in
the submarket increased to approximately 10% from the previous year's 7%.
In general, the distribution sector is substantially outperforming the
Service Sector, which experienced a significantly smaller net increase in
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absorption. Airport Perimeter competes in both sectors. Absorption for
both of these submarkets is expected to continue to be positive, primarily
from expansion by existing tenants. For this reason, more speculative
projects for this submarket are expected. Net effective rental rates for
Class B space such as Airport Perimeter remained around last year's range
of $3.25 to $3.75 per square foot, including taxes, insurance and
utilities.
Airport Perimeter Business Center gained four new tenants totaling
approximately 14,500 square feet, renewed four tenants totaling
approximately 28,100 square feet, and lost four tenants that did not renew
for a total of approximately 25,700 square feet. This resulted in a net
decrease in leased space of approximately 11,200 square feet. Thus, the
property decreased to a level of 71% leased at fiscal year end, versus 80%
at the end of the prior fiscal year. However, the property is experiencing
a good level of activity from prospective tenants, making it possible that
occupancy will increase in 1997.
Montgomery Executive Center (Gaithersburg, Maryland)
This property consists of a six-story office building containing 116,300
square feet and is situated on 4.1 acres of land in the City of
Gaithersburg, Maryland, 19 miles northwest of Washington, D.C. Montgomery
Executive Center, whose tenants are principally engaged in providing
services to the local business community, is located at the intersection of
two major thoroughfares with direct access to Interstate 270, which in turn
provides access to the Capital Beltway and the Washington metropolitan
area.
As of September 30, 1996, this property was 68% leased which was up 1
percentage point from last year. Two new leases totaling approximately
4,700 square feet were signed while renewals and expansions combined to
total approximately 9,200 square feet on four separate transactions.
Leases with tenants covering almost 6,300 square feet of occupancy lapsed
due to tenant credit problems. The net impact of this activity was an
increase in occupancy totaling approximately 700 square feet.
Montgomery Executive Center is in the Gaithersburg submarket and competes
with 80 buildings totaling approximately 4.0 million square feet; it is
part of a suburban office building market extending in both directions
along Interstate 270, including the communities of Germantown to the north
and Rockville to the south. The Gaithersburg submarket's net absorption
for the first three quarters of calendar 1996 was approximately 116,000
square feet. This level of absorption is less than the prior year's level
of 140,000 square feet. The current vacancy rate in the submarket has
fallen slightly to its current 16% level. Asking rental rates increased
modestly during the year indicating that leasing momentum may be increasing
in the marketplace and a further decline in vacancy may be on the horizon.
Helping to support this is the fact that submarkets closer to Washington
D.C. have little vacancy, and current market rents in Gaithersburg do not
support new construction. Rates range from $16.00 per square foot
including taxes, insurance, and operating expenses ("gross") for Class B
space to $18.50 gross for Class A space. Montgomery Executive Center is
generally considered to be among the best Class B space in the market and
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should begin to benefit from improving market conditions should they
persist.
Consistent with its goal of positioning properties for sale, the
Partnership is endeavoring to procure creditworthy tenants in the 5,000 to
20,000 square feet range for Montgomery Executive Center. As part of this
strategy the Partnership has arranged to make an entire floor, constituting
19% of the space in the building available for lease by such tenants.
While no such leases had been procured as of the end of the fiscal year,
the property is continuing to receive interest from prospective tenants.
Royal Biltmore (Phoenix, Arizona)
This property consists of a two story, garden style office building
containing 71,000 rentable square feet and a parking garage containing
48,000 square feet. It is situated on 2.9 acres of land in the East
Camelback Road Corridor ("Camelback Corridor") of Phoenix, Arizona. This
area of Phoenix has benefited from the improved economic conditions in the
region and the corresponding increase in demand for office space near
executive housing. These factors have generated a great deal of investor
interest in office properties in the Camelback Corridor causing values to
rise. Accordingly, the Partnership marketed the property for sale during
fiscal 1996, and anticipates that a sale will occur in fiscal 1997.
With the expansion of two tenants totaling 3,516 square feet, the property
experienced only a two percentage point decline in occupancy over the past
fiscal year. This decline in occupancy reflects the termination of one
tenant and the Partnership's decision to market the vacant space at the
best possible rate as space in the marketplace has continued to become
increasingly scarce.
The Camelback Corridor office submarket contains approximately 5.8 million
square feet of office space and demand has accelerated; positive net
absorption during the first six months of the 1996 calendar year of
approximately 200,000 square feet has been recorded. This positive net
absorption has reduced the market vacancy to approximately 6% as of June
30, 1996. Effective rents have risen sharply. Gross office rents in the
market for better Class B space, such as Royal Biltmore, are currently
stabilized in the $16.00 to $19.00 per square foot per year range,
including taxes, insurance, and utilities versus a range of $13.00 to
$19.00 per square foot the previous year.
Springdale Commerce Center (Santa Fe Springs, California)
Springdale Commerce Center consists of two multi-tenant
industrial/warehouse, distribution buildings, containing 144,000 square
feet on 6.9 acres of land. It is located in the city of Santa Fe Springs,
California, 13 miles southeast of downtown Los Angeles. Because of its
central location, Santa Fe Springs is one of the primary industrial centers
in the area with excellent access to major shipping routes.
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Springdale Commerce Center was 100% occupied as of September 30, 1996,
unchanged from the prior year s level. The two leases which matured during
the year (32,400 square feet) were renewed. One tenant will be vacating
12,000 square feet as of the first fiscal quarter of 1997.
The Santa Fe Springs submarket, of which the property is a part, is one of
four major warehouse distribution centers in the greater Los Angeles basin
It represents over one-half of the Mid-Counties market which comprises
approximately 99 million square feet of industrial space in parts of Los
Angeles and Orange Counties. The Santa Fe Springs submarket consists
primarily of small and medium sized, "master planned", business parks with
a number of pockets containing older warehouse facilities. Most of the
area was fully developed by the 1970's, and no new buildings have been
constructed recently. The current vacancy level has remained unchanged
from the previous year at approximately 6% in the Mid-Counties market, a
figure which essentially represents temporary vacancies as tenants move
between projects, rather than a lack of demand. Demand appears to be
increasing, as reflected by significant decreases in concessions to
tenants.
There are at least eight projects directly competitive to Springdale
Commerce Center ranging in size from 12,000 square feet to just over
100,000 square feet. Class B rates in the market are being quoted in the
range of $4.08 to $4.80 per square foot, versus $3.55 to $4.20 per square
foot quoted last year, including taxes, insurance, and utilities, with one
month of free rent for a three to five year lease term. Tenant improvement
allowances are ranging from $.50 to $2.00 per square foot. With vacancy
levels at their lowest point during the last several years, further upward
pressure on rentals can be expected.
Van Buren Industrial Center (Phoenix, Arizona)
Van Buren Industrial Center consists of five multi-tenant industrial
warehouse/distribution buildings, containing 174,000 square feet, situated
on 9 acres of land, ten minutes from central Phoenix and 20 minutes from
the principal Phoenix airport. In fiscal 1996, the Partnership recorded a
valuation allowance in connection with Van Buren of $229,000, to reflect
the property's estimated fair value less anticipated selling costs, as a
result of the Partnership's decision to market this property for sale.
Van Buren Industrial Center was 92% leased as of September 30, 1996, equal
to 1995's level. Leasing activity during the year consisted of 7,244
square feet of new tenancy and 14,575 square feet of renewals which offset
21,819 square feet of expirations.
Van Buren Industrial Center is located in the Southwest submarket of
Phoenix metro industrial market. The property's occupancy level is
comparable to the approximately 95% average occupancy level for 8 directly
competitive multi-tenant projects representing 1.2 million square feet of
warehouse, distribution space. The current total Southwest submarket
vacancy rate of 15% has remained relatively flat compared to the prior year
reflecting stability in the Phoenix area economy. Market rents have
stabilized to a range of $3.36 to $4.08 per square foot also reflecting
little change from the prior year. Investor interest in industrial space
<PAGE>9
remains high and the continued improvement in the Phoenix area markets has
drawn considerable attention and put upward pressure on values.
Accordingly, the Partnership began marketing the property for sale during
fiscal 1996 and anticipates that a sale will occur in fiscal 1997.
The Business Park (Gwinnett County, Georgia)
The Business Park is located in Gwinnett County, Georgia, approximately 17
miles northeast of downtown Atlanta. The Business Park consists of eight
multi-tenant office/warehouse buildings, containing just over 157,000
square feet, situated on 13 acres of land. It is located in a suburban
area known as the "Peachtree Corridor", which contains a wide selection of
business facilities and homes in a park-like setting. In fiscal 1996, the
Partnership recorded a provision for value impairment in connection with
the Business Park of $1,322,000. The General Partner determined that this
adjustment was a prudent course of action based upon the uncertainty of the
Partnership's ability to recover the net carrying value of The Business
Park through future operations and sale. This determination was based
primarily upon lower anticipated total cash flow as a result of the
Partnership's decision to dispose of its operating properties by the end of
1998, as well as current market conditions and future performance
expectations of both the property and the Atlanta office/warehouse market.
As of September 30, 1996, The Business Park was 97% leased. The property
experienced a five percentage point increase in occupancy during the year
primarily due to leases to twelve new tenants totaling 35,100 square feet.
Additionally, seven tenants renewed totaling 31,500 square feet. Eleven
tenants totaling 28,200 square feet vacated upon expiration.
The Peachtree Corridor is part of the Gwinnett/I-85 Corridor submarket of
Atlanta, which contains approximately 9.9 million of service center space
and makes up The Business Park's competitive area. Activity marketwide has
remained flat with net absorption during the first nine months of calendar
1996 totaling a negative 10,000 square feet. Net absorption in this market
is expected to remain flat as build to suit and speculative construction of
distribution buildings, which began in 1994, is expected to continue. Net
effective rents in the market for Class A space such as The Business Park
have increased to $6.00 a square foot, up dramatically from 1995's level.
Newport Center Business Park, Buildings 1 and 2 (Deerfield Beach, Florida)
This property consists of two multi-tenant office/light industrial
buildings containing just over 62,000 square feet, and is situated on
approximately 5.9 acres of land. Newport Center is located in the city of
Deerfield Beach, Florida, immediately south of Palm Beach County and the
City of Boca Raton. It is part of the Newport Center Business Park, a 119
acre development which includes research and development facilities,
warehousing, and corporate offices as well as two hotels. In fiscal 1996,
the Partnership recorded a provision for value impairment in connection
with Newport Center of $822,000. The General Partner determined that this
adjustment was a prudent course of action based upon the uncertainty of the
Partnership's ability to recover the net carrying value of Newport Center
<PAGE>10
through future operations and sale. This determination was based primarily
upon lower anticipated total cash flow as a result of the Partnership's
decision to dispose of its operating properties by the end of 1998, as well
as current market conditions and future performance expectations of both
the property and the South Florida multi-tenant office/light industrial
market.
As of September 30, 1996, this property remained 93% leased, as it was at
September 30, 1995. This is primarily due to the signing of eight new
tenants totaling 22,400 square feet and the renewal of five tenants
totaling 8,900 square feet. Offsetting these gains was the loss of seven
tenants totaling 18,300 square feet that vacated after their leases expired
and two tenants totaling 4,100 square feet who departed as a result of
financial difficulties.
Newport Center compares favorably to its competition in the Boca Raton
submarket of the South Florida market. This submarket contains
approximately 5.4 million square feet of office and flex-space,
approximately 9% of which is vacant as of September 30, 1996, down
significantly from the prior year's level of 12%. Net absorption for the
first six calendar months of 1996 totaled approximately 192,000 square
feet. Over the past year, office/service rents have increased to around
$8.00 - $11.00 gross per square foot, $1.00-$2.00 per square foot higher
than 1995. Concessions are minimal and "as is" deals are frequently being
made on second generation space.
The Newport Center/Deerfield area is attractive to developers as it is
close to I-95 and the Turnpike, and is a good location for covering a tri-
county area business. Inexpensive land is being bought up and build-to-
suit facilities are being built; additionally, speculative construction is
anticipated within the next year.
Employees
The Partnership has no employees and, accordingly, the General Partner,
LaSalle, and their affiliates perform services on behalf of the Partnership
in connection with administering the affairs of the Partnership, and
operating and selling the Partnership's properties. The General Partner,
LaSalle, and their affiliates receive compensation in connection with these
activities, as described above. Compensation to the General Partner and
its affiliates and the terms of transactions between the Partnership and
the General Partner and its Affiliates are set forth in Items 11. and 13.
below, to which reference is made for a description of those terms and the
transactions involved.
Item 2. Properties
The Partnership owns the properties discussed in Item 1, to which
reference is made for the name, location and description of each property.
See also Schedule III to the Financial Statements of the Partnership, which
<PAGE>11
is filed hereinwith as Exhibit 99(c). All properties were acquired on an
all-cash basis.
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
None.
PART II
Item 5. Market for the Partnership's Limited Partnership Interests and
Related Security Holder Matters
At November 19, 1996, there were 17,730 Limited Partners. The Partnership
will not redeem or repurchase the Units. There is no public trading market
for the Units. However, commencing in the last quarter of fiscal 1996,
three bidders. none of whom is affiliated with the General Partner or
LaSalle, have made tender offers for the Units, at prices of $180, $250,
and $298 per Unit. The General Partner is not aware of how many sales have
actually occurred at these prices; as of December 6, 1996, sales of 55
Units to the firm making offers at $180 have been presented for processing.
In 1987 Congress adopted certain rules concerning "publicly traded
partnerships". The effect of being classified as a publicly traded
partnership would be that income produced by the Partnership would be
classified as portfolio income rather than passive income. After December
31, 1997, if the Partnership does not have qualifying income, the
Partnership could be taxed as a corporation. On November 29, 1995, the
Internal Revenue Service adopted final regulations ("Final Regulations")
describing when interests in partnerships will be considered to be publicly
traded. The Final Regulations do not take effect with respect to the
Partnership until the year 2006. Due to the nature of the Partnership's
income and to the historically low volume of transfers of Units, it was not
anticipated that the Partnership would be treated as a publicly traded
partnership under currently applicable rules and interpretations or under
the Final Regulations. However, in the event the transfer of Units
presented for transfer within a tax year of the Partnership could cause the
Partnership to be treated as a "publicly traded partnership" for federal
tax purposes, the General Partner will accept such transfers only after
receiving from the transferor or the transferee an opinion of reputable
counsel satisfactory to the General Partner that the recognition of such
transfers will not cause the Partnership to be treated as a "publicly
traded partnership" under the Internal Revenue Code of 1986, as amended.
The General Partner is closely monitoring this situation in light of the
recent tender offers.
Cash distributions declared to the Limited Partners during the two most
recent fiscal years are as follows:
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Distribution for the Amount of
Quarter Ended Distributions per Unit
December 31, 1994 $ 4.00
March 31, 1995 $ 4.00
June 30, 1995 $ 4.00
September 30, 1995 $18.00
December 31, 1995 $ 4.75
March 31, 1996 $22.54
June 30, 1996 $ 4.75
September 30, 1996 $21.55
All of the foregoing distributions were paid from cash flows from operating
activities with the exception of the distribution for the quarter ended
September 30, 1995 which included a distribution of $9.00 per Unit
representing previously retained proceeds from the sales of Corporate
Square and Dupont Business Park as well as cash flow from operating
activities for prior quarters of fiscal 1995, the distribution for the
quarter ended March 31, 1996, which included $17.79 per Unit representing
the proceeds of the sale of Spring Creek, and the distribution for the
quarter ended September 30, 1996, which included $14.55 per Unit of
residual proceeds retained from the sale of Dupont Business Park, as well
as cash flow from operating activities for prior quarters of fiscal 1996.
With the distribution for the quarter ended September 30, 1996, the
Partnership has distributed all sales proceeds for transactions through
September 30, 1996.
There are no material legal restrictions on the Partnership's present or
future ability to make distributions in accordance with the provisions of
the Agreement of Limited Partnership, annexed to the prospectus as Exhibit
A thereto. Reference is made to Item 7 below, for a discussion of the
Partnership's ability to continue to make future distributions.
At the end of the 1996 fiscal year, the Partnership conducted its annual
formal unit valuation. The valuation of the Partnership's properties was
performed by the General Partner, and then reviewed by an independent
professional appraiser. The estimated investment value of limited
partnership Units resulting from this process is $420 per Unit. After the
distribution for the September 1996 quarter representing the residual sales
proceeds of Dupont Business Park, and after the distribution of prior
quarter operating cash flows, the estimated valuation is $398 per unit.
There is no assurance that holders of Units will ultimately receive the
exact amount of the estimated Unit value.
Item 6. Selected Financial Data
The following table sets forth a summary of the selected financial data for
the Partnership.
<PAGE>13
Years Ended September 30,
(Dollars in thousands except per-unit amounts)
1996 1995 1994
Assets at year
end $38,729 $46,133 $47,844
Revenues $ 6,171 $ 6,043 $ 5,993
Net income (loss) $(2,603) $ 8 $ 165
Net income (loss)
per L.P. Unit $(25.85) $ 0.08 $ 1.64
Cash distributions
paid to:
Limited Partners $ 4,534 $ 1,540 $ 4,440
General Partner $ 335 $ 165 $ 286
1993 1992
Assets at year
end $52,710 $61,260
Revenues $ 6,339 $ 6,542
Net income (loss) $(6,610) $(3,012)
Net income (loss)
per L.P. Unit $(65.65) $(29.91)
Cash distribution
paid to:
Limited Partners $ 1,541 $ 3,987
General Partners $ 171 $ 305
NOTES:
1. The above financial data should be read in conjunction with the
financial statements and the related notes appearing elsewhere in this
report.
2. The figures above for Assets at year end and Net income (loss)include
provisions for value impairment and valuation allowances of $3,115 in 1996,
$547 in 1995, $7,039 in 1993 and $3,118 in 1992.
3. The figures above for Net income (loss) per Limited Partnership Unit
include $30.94 per Unit attributable to the provisions for value impairment
and valuation allowance discussed at Note 2 above in 1996, $5.43 per Unit
in 1995, $69.91 per Unit in 1993, and $30.97 per Unit in 1992.
Distributions declared per unit of limited partnership interest from fiscal
1992 through fiscal 1996 were as follows:
<PAGE>14
Year Ended Distributions per Unit
September 30, 1992 $41.00
September 30, 1993 $16.00
September 30, 1994 $50.00
September 30, 1995 $30.00
September 30, 1996 $53.59
All of the foregoing distributions were paid from cash flows from operating
activities with the exception of the distributions for 1992, which included
$21.00 of proceeds from the sale of Dupont, the distributions for 1994,
which included $34.00 of proceeds from the sale of Corporate Square, the
distributions for 1995, which included $9.00 of proceeds from the sale of
Corporate Square and Dupont Business Park, and the distributions for 1996,
which included $32.34 of proceeds from the sale of Dupont Business Park and
Spring Creek.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
The Partnership sold 90,612 Units for a total of $90,612,000. Combined with
the initial contribution of $10,000 from the Initial Limited Partners, the
total Limited Partners' capital contributions were $90,622,000. The
offering was terminated in May 1985 and no additional Units will be sold.
After deduction of organizational and offering costs of $5,212,617, the
Partnership was left with $85,409,383 available for investment.
The Partnership originally purchased ten properties on an all-cash basis,
completing the initial acquisition phase of its business plan, and has sold
three property investments - its interest in Dupont and the Corporate
Square and Spring Creek properties. The Partnership currently classifies
the Royal Biltmore and Van Buren properties as held for sale, at a total
carrying value of $8,965,000. The initial cost of the Partnership's
remaining real estate investments was $45,672,000. Subsequent to
acquisition of the properties, the Partnership has incurred $5,190,000 in
additional capital costs for these properties. The Partnership has also
recorded provisions for value impairments, and valuation in connection with
these properties totalling $4,404,000. In accordance with Statement of
Financial Accounting Standards No. 121, which was adopted in fiscal 1996,
the Partnership reduced the historical cost of its permanently impaired
real estate investments by the amount of those properties' accumulated
depreciation ($10,111,000) to properly reflect their new basis.
Accumulated depreciation and amortization after this reclassification
equals $9,519,000. Therefore, investment in real estate for financial
reporting purposes including properties held for sale, after accumulated
depreciation, amortization and valuation allowances, is $35,793,000 as of
September 30, 1996.
The Partnership expects to incur capital expenditures during fiscal 1997
totaling approximately $1,544,000 for tenant improvements, lease
commissions, and other major repairs and improvements; the majority of
<PAGE>15
these expenditures are dependent on the execution of leases with new and
renewing tenants. These capital costs have been lower in recent years, as
market conditions have improved, resulting in lower tenant improvement and
leasing commission costs. In addition, improved tenant credit quality has
led to lower turnover, which also results in lower costs. However, the
Partnership's business plan now calls for the disposition of all of its
real estate investments by the end of 1998. In order to strategically
position the properties for sale, the Partnership will place greater
emphasis on entering into longer-term leases with creditworthy tenants.
This strategy is likely to result in higher leasing commission and tenant
improvement costs, but should result in higher sales prices for the
properties than would otherwise be the case.
The Partnership maintains cash balances to fund its operating and investing
activities including the costs of tenant improvements and leasing
commissions, costs which must be disbursed prior to the collection of any
resultant revenues. The General Partner believes that year-end cash
balances and cash generated from operating activities in 1997 will be
adequate to fund the Partnership's current investing and operating needs.
In fiscal 1997, management will determine cash distributions from
operations each quarter based on net cash flows for the quarter, money
needed to operate the properties and pay Partnership expenses, and
anticipated capital needed to repair and maintain the properties and make
occupancy related tenant improvements.
As of September 30, 1996, the Partnership held cash and cash equivalents
aggregating $2,290,000, a decrease of $542,000 from the prior year end.
This decrease resulted primarily because of the retention of operating cash
flows during the 1995 fiscal year, substantially all of which were
distributed after fiscal year-end, and the higher quarterly distributions
paid in 1996. Net cash provided by operating activities increased by
$219,000 from 1995, primarily due to improved operating results (exclusive
of property valuation adjustments). Net cash provided by investing
activities increased by $2,174,000, primarily because the Partnership
received the proceeds of the Spring Creek sale in 1996, and did not sell a
property in 1995, and made fewer capital expenditures in 1996. Cash used
in financing activities increased by $3,164,000, reflecting the higher
distributions during the current year. Two million seventy-eight thousand
dollars was subsequently distributed to partners in November, 1996.
Operations
1996 v. 1995
For the 12 months ended September 30, 1996, the Partnership's net income
declined 8% from the prior year, excluding the effects of property
writedowns. Impairments recorded for The Business Park, Airport Perimeter,
and Newport Center, plus a valuation allowance at Van Buren, net of a
recovery in Spring Creek's value recorded prior to its disposition, totaled
$3,115,000. This net charge was offset to a limited extent by lower
depreciation associated with properties held for sale. Excluding the
effect of these adjustments, the Partnership had net income of $512,000 for
1996 versus net income of $555,000 for 1995. After the declines in
property values, the Partnership reported a net loss of $2,603,000 in 1996
compared with net income of $8,000 in 1995.
<PAGE>16
At the property operating level, the higher average leased status at The
Business Park as well as increased rental rates at Royal Biltmore and
Newport Center had a positive effect on revenues. This more than offset
the effect on rental income of a decline in the average leased status at
Montgomery Executive Center and of the absence of revenues from Spring
Creek since its sale in April 1996.
While the leased status at Airport Perimeter declined by nine percentage
points over the course of the year, its average leased status and
contribution to income from operations was up slightly. Based on recent
communications with the Hartsfield International Airport Acquisition
Office, it appears that the Atlanta Airport will be expanded and that the
Partnership will be forced, through condemnation proceedings, to sell this
property within the next 12 to 24 months. Because of the uncertainty
surrounding the condemnation, management does not believe it is currently
in the Partnership's best interests to put the property on the market for
sale. While leases on 31% of the space at Airport Perimeter expire in
fiscal 1997, leasing activity in the submarket is positive, and the
property is receiving attention from prospective tenants. Management does
not anticipate any additional value impairments on this property next year,
so there is a reasonable possibility that Airport Perimeter will make an
improved contribution to portfolio results in fiscal 1997.
The impact of Montgomery Executive Center's poor revenue performance was
exacerbated by an increase in bad debt expense plus associated legal fees
and depreciation resulting from the write-off of tenant improvements,
primarily for those tenants who were credit problems and vacated prior to
their lease expirations. Management's plan is to pursue leases with larger
users with sound credit in support of the Partnership's disposition
strategy.
Leases representing 26% of the portfolio's leasable square footage are
scheduled to expire in fiscal 1997. These leases represented approximately
21% of the portfolio's rental income for fiscal 1996. This amount of
potential lease turnover is normal for the types of properties in the
portfolio, which typically lease to tenants under three to five year
leases. The overall portfolio occupancy was 89% as of the end of fiscal
1996. Management anticipates that occupancy levels will improve in fiscal
1997. In most markets, newer leases are generally expected to reflect
level to higher market rental rates in comparison to the rates of expiring
leases. However, the Partnership's strategy, as discussed above, of
seeking to enter into longer-term leases with creditworthy tenants may
moderate this effect to some extent.
As discussed in Item 1. above, Montgomery Executive Center accounted for
24% of the Partnership's revenue from operating activities in fiscal 1996.
Leases covering 12% of the space in this property expire in 1997, and the
property is 32% vacant as of September 30, 1996. The Partnership expects
that rents ultimately obtained on this space will in some cases be slightly
lower than that received under the previous leases, which were executed
several years ago in stronger markets. Expenditures for tenant improvement
work are anticipated in connection with any new leases. The Partnership
anticipates that approximately half the vacant space will be leased during
<PAGE>17
fiscal 1997. Thus, revenues from Montgomery Executive Center are
anticipated to decrease somewhat in the short term, but this decrease is
not expected to have a material effect on total partnership revenue.
Also as noted in Item 1. above, The Business Park provided 19% of the
Partnership's revenue from operations in fiscal 1996. This property did
well in renewing tenants whose leases expired in 1996, as well as
attracting new tenants, and conditions in its competitive market are
expected to continue to remain favorable. Thus, even though leases
covering 33% of the space in this property expire in fiscal 1997, the
Partnership does not expect operations at this property to have any
material adverse effect on total partnership revenue in 1997.
Finally, Royal Biltmore provided 16% of the Partnership's revenue from
operations in 1996. The Partnership expects to sell this property early in
1997, which it anticipates will result in a reduction in revenue and net
income, as well as a distribution of net sales proceeds, a natural
progression as the Partnership liquidates its portfolio.
1995 v. 1994
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 1994 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 in 1995. 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 permanent impairment of
$165,000 in addition to $860,000 of impairment recorded in 1993 and 1994.
Spring Creek, which the Partnership was trying to sell, incurred a net
downward valuation adjustment of $193,000. (This property had previously
recorded $489,000 of permanent impairment in 1992, and a total of
$1,244,000 of net valuation allowances in 1993 and 1994.)
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% in 1995, resulting in $123,000 of additional
income. The Business Park, Springdale, and Newport Center also experienced
higher leased levels, while rental rates being paid by new tenants at the
first two properties were also up over those in prior leases.
Bad debt expense was down or flat for all properties in 1995 relative to
1994, with Montgomery and Newport Center showing the greatest improvement
in tenant credit quality. Savings in this property operating expense
category, excluding Corporate Square, totaled $71,000, and repairs and
maintenance costs at Montgomery declined by $44,000 relative to 1994.
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. Excluding the effect of Corporate Square, depreciation on
continuing properties remained flat. There were significant fluctuations
on several properties (Newport Center down $120,000, Van Buren up $56,000,
<PAGE>18
Montgomery Executive Center up $48,000, and Airport Perimeter up $17,000)
resulting from variations in the write off of tenant improvements for
vacating and expiring leases.
Reconciliation of Financial and Tax Results
For 1996, the Partnership's financial statement net loss was $2,603,000,
and its taxable net loss was $632,000. The primary differences between the
two are allowances for property valuations of $3,115,000, and a tax basis
loss on the sale of Spring Creek of $1,296,000. For 1995, the
Partnership's financial statement net income was $8,000, and its taxable
net income was $613,000. The primary difference between the two was
allowances for property valuation of $547,000. For 1994, the Partnership's
financial statement net income was $165,000, and its taxable net loss was
$2,938,000. The primary difference between the two was the net loss for
tax purposes of $3,133,000 resulting from the sale of the Corporate Square
property. For complete reconciliations, see Note 7 to the Partnership's
financial statements, which note is hereby incorporated by reference
herein.
Item 8. Financial Statements and Supplementary Data
The financial statements together with the report thereon of KPMG Peat
Marwick LLP dated October 23, 1996, appearing on pages 5 through 13 of the
Partnership's 1996 Annual Report to Limited Partners are incorporated by
reference in this Form 10-K Annual Report. Financial Statement Schedule
III, Consolidated Real Estate and Accumulated Depreciation, is filed as
Exhibit 99(c) to this Form 10-K Annual Report, and is hereby incorporated
by reference herein. All other schedules are omitted either because the
required information is not applicable or because the information is shown
in the financial statements or notes thereto.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
The General Partner of the Partnership is T. Rowe Price Realty Income Fund
I Management, Inc., ("Fund I Management"), 100 East Pratt Street,
Baltimore, Maryland 21202. The General Partner has the primary
responsibility for overseeing the selection, evaluation, structuring,
negotiation, management, and liquidation of the Partnership's investments
as well as the cash management of the Partnership's liquid assets and the
administration of investor services of the Partnership including general
communications, periodic reports and distributions to Limited Partners, and
filings with the Securities and Exchange Commission. Fund I Management is
a wholly-owned subsidiary of T. Rowe Price Real Estate Group, Inc. ("Real
Estate Group"), which is, in turn, a wholly-owned subsidiary of T. Rowe
Price Associates, Inc. ("Associates"). Affiliates of the General Partner,
<PAGE>19
T. Rowe Price Realty Income Fund II Management, Inc. ("Fund II
Management"), T. Rowe Price Realty Income Fund III Management, Inc. ("Fund
III Management"), and T. Rowe Price Realty Income Fund IV Management, Inc.
("Fund IV Management") are the General Partners of other real estate
limited partnerships sponsored by Associates. Real Estate Group, which is
also an affiliate, is investment manager to T. Rowe Price Renaissance Fund,
Ltd., A Sales-Commission-Free Real Estate Investment ("Renaissance Fund"),
a real estate investment trust sponsored by Associates. Total assets under
management by Associates and its subsidiaries totalled $93 billion at
November 30, 1996.
The directors and executive officers of Fund I Management are as follows:
Position with T. Rowe Price
Name Realty Income Fund I Management, Inc.
James S. Riepe Chairman of the Board, President, also
Principal Executive Officer for the
Partnership
Douglas O. Hickman Vice President and Director
Henry H. Hopkins Vice President and Director
Lucy B. Robins Vice President and Secretary
Mark B. Ruhe Vice President
Kenneth J. Rutherford Vice President
Alvin M. Younger, Jr. Treasurer and Director
Joseph P. Croteau Controller and Director, also Principal
Financial Officer and Chief Accounting
Officer for the Partnership
Mr. Riepe was elected President in July, 1991. Ms. Robins was first
elected to her current offices in April, 1987, and Mr. Ruhe was first
elected in May, 1988. Mr. Hopkins was first elected a director in January,
1987. Mr. Croteau was first elected as Controller in May, 1988, as a
Director in 1996, and designated as Principal Financial Officer for the
Partnership in 1992. Mr. Rutherford was first elected an officer in 1994.
In all other cases these individuals have served in these capacities since
the inception of Fund I Management in 1984. There is no family
relationship among the foregoing directors or officers.
The background and business experience of the foregoing individuals is as
follows:
James S. Riepe (Born 1943) is Managing Director and Director, T.
Rowe Price Associates, Inc. ("Associates") and Director of its Investment
Services Division; President and Chairman of Real Estate Group and each of
the general partners of T. Rowe Price Realty Income Fund I, A No-Load
Limited Partnership, T. Rowe Price Realty Income Fund II, America's Sales-
Commission-Free Real Estate Limited Partnership, T. Rowe Price Realty
Income Fund III, America's Sales-Commission-Free Real Estate Limited
Partnership, and T. Rowe Price Realty Income Fund IV, America's Sales-
Commission-Free Real Estate Limited Partnership (the "Realty Income
Funds"); serves as director or trustee of 37 of the 42 mutual funds
<PAGE>20
sponsored by Associates, and acts as Chairman of 6 such funds; Chairman of
New Age Media Fund; Director, Rh ne-Poulenc Rorer, Inc., a pharmaceuticals
company. Mr. Riepe joined Associates in 1982.
Douglas O. Hickman (Born 1949) is President of T. Rowe Price
Threshold Fund Associates, Inc. and a Vice President of Associates. He is
also a Vice President and Director of each of the general partners of the
Realty Income Funds and serves as a member of the investment committees for
the T. Rowe Price Threshold Funds. Mr. Hickman joined Associates in 1985.
Henry H. Hopkins (Born 1942) is a Managing Director, Director,
and Legal Counsel of Associates. In addition, Mr. Hopkins is Vice
President and Director of each of the general partners of the Realty Income
Funds. He is also a Vice President of certain of the mutual funds managed
by Associates. Mr. Hopkins joined Associates in 1972.
Lucy B. Robins (Born 1952) is Vice President and Associate Legal
Counsel of Associates and Vice President of Real Estate Group, and each of
the general partners of the Realty Income Funds. Ms. Robins joined
Associates in 1986.
Mark B. Ruhe (Born 1954) is an Asset Manager for Real Estate
Group, and Vice President of the Real Estate Group and each of the general
partners of the Realty Income Funds. Mr. Ruhe joined Associates in 1987.
Alvin M. Younger, Jr. (Born 1949) is Treasurer and Director of
each of the general partners of the Realty Income Funds and a Managing
Director, Secretary and Treasurer of Associates, and Secretary and
Treasurer of Real Estate Group. Mr. Younger joined Associates in 1973.
Kenneth J. Rutherford (Born 1963) is Marketing Manager for
Associates and Vice President of each of the general partners of the Realty
Income Funds. Mr. Rutherford joined Associates in 1992. From 1990 to 1992
he was a student at the Stanford Graduate School of Business.
Joseph P. Croteau (Born 1954) is a Vice President and Controller
of Associates, and Controller of each of the general partners of the Realty
Income Funds. Mr. Croteau joined Associates in 1987.
No Form 3s, Form 4s, Form 5s, or any amendments to any of them, were
furnished to the Partnership during its most recent fiscal year. Based on
written representations pursuant to Item 405(b)(2)(i) of Regulation S-K,
none of the directors, officers, or beneficial owners of more than 10% of
the Units nor the General Partner failed to file on a timely basis reports
required by Section 16(a) of the Exchange Act during the most recent fiscal
or prior fiscal years.
Item 11. Executive Compensation
The directors and officers of the General Partner receive no current or
proposed remuneration from the Fund.
<PAGE>21
The General Partner is entitled to receive a share of cash distributions
and a share of profits or losses as described under the captions
"Compensation and Fees," and "Profits and Losses for Tax Purposes,
Depreciation and Cash Distributions" of the Prospectus, on pages 7-9 and
36-50 respectively, which pages are incorporated by reference herein.
For a discussion of compensation and fees to which the General Partner is
entitled, see Item 13., which is incorporated herein by reference.
In addition to the foregoing, certain officers and directors of the General
Partner receive compensation from Associates and/or its affiliates (but not
from the Partnership) for services performed for various affiliated
entities, which may include services performed for the Partnership. Such
compensation may be based, in part, on the performance of the Partnership.
Any portion of such compensation which may be attributable to such
performance is not material.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The Partnership is a limited partnership which issued units of limited
partnership interest. No limited partner is known by the Partnership to
own beneficially more than 5% of the outstanding interests of the
Partnership.
The percentage of outstanding interests of the Partnership held by all
directors and officers of the General Partner is less than 1%. Certain
officers and/or directors of the General Partner presently own securities
in Associates. As of November 15, 1996, the directors and officers of the
General Partner, as a group, beneficially owned 4.9% of the common stock of
Associates, including options to purchase 404,956 shares exercisable within
60 days of November 15, 1996, and shares as to which voting power is shared
with others. Of this amount, Mr. Riepe owned 2.4% of such stock (1,393,478
shares, including 114,400 shares which may currently be acquired by Mr.
Riepe upon the exercise of stock options, 140,000 shares held in trusts for
members of Mr. Riepe's family as to which Mr. Riepe disclaims beneficial
ownership, 40,000 shares owned by a member of Mr. Riepe's family as to
which Mr. Riepe disclaims beneficial ownership, and 82,000 shares held in a
charitable foundation of which Mr. Riepe is a trustee and as to which Mr.
Riepe has voting and disposition power). Mr. Hopkins owned 1.1% (646,800
shares, including 120,800 shares which may be acquired by Mr. Hopkins upon
the exercise of stock options within 60 days). Mr. Younger owned 1.0%
(575,000 shares, including 28,000 shares which may be acquired by Mr.
Younger upon the exercise of stock options within 60 days, and 25,000 held
by a member of Mr. Younger's family). No other director or officer owns 1%
or more of the common stock of Associates.
There exists no arrangement known to the Partnership, the operation of
which may at any subsequent date result in a change in control of the
Partnership.
Item 13. Certain Relationships and Related Transactions
The General Partner and its Affiliates are permitted to engage in
transactions with the Partnership as described under the captions
<PAGE>22
"Compensation and Fees," and "Conflicts of Interest" of the Prospectus, on
pages 7-11, which pages are hereby incorporated by reference herein.
The General Partner has been reimbursed for expenses incurred by it in the
administration of the Partnership and the operation of the Partnership's
investments, which amounted to $162,000 in fiscal 1996 ($123,000 in fiscal
1995). The General Partner's share of cash distributions declared for
fiscal 1996 was $336,000, of which $214,000 was distributable cash, and
$122,000 was sales proceeds, and for 1995 was $245,000, of which $211,000
was distributable cash and $34,000 was sales proceeds. Another affiliate,
T. Rowe Price Associates, Inc., earned $4,000 for cash management services
rendered in 1996.
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:
PAGES IN
ANNUAL
REPORT
(1) Financial Statements:
Incorporated by reference from the indicated pages of the Partnership's
1996 Annual Report to Limited Partners.
Balance Sheets at September 30, 1996 and 1995 5
Statements of Operations for each of the
three years in the period ended September 30, 1996 6
Statements of Partners' Capital for each of the
three years in the period ended September 30, 1996 7
Statements of Cash Flows for each of the
three years in the period ended December 31, 1996 8
Notes to Financial Statements 9-12
Independent Auditors' Report - Incorporated by reference to Exhibit 99(d)
hereof.
(2) Financial Statement Schedules:
III - Consolidated Real Estate and Accumulated Depreciation,
incorporated by reference to Exhibit 99(c) hereof.
All other schedules are omitted because they are not applicable
or the required information is presented in the financial
statements and notes hereto.
(3) Exhibits
3, 4. (a) Prospectus of the Partnership dated December 7,
1984, which includes the Partnership Agreement
File Number 2-93160, and supplement thereto
<PAGE>23
dated April 24, 1984, filed with the Commission
pursuant to Rule 424(c), incorporated by
reference herein.
(b) Amendment to the Partnership Agreement dated
January 1, 1988, incorporated by reference to
Exhibits 3, 4.(h) of the registrant's report on
Form 10-K for the year ended September 30,
1988, File Number 0-14308 (the "1988 10-K").
(c) Amendment to the Partnership Agreement dated
March 28, 1988, incorporated by reference to
Exhibits 3, 4.(j) of the 1988 10-K.
10. Advisory Agreement dated as of July 15, 1991 by and
between the Partnership, the General Partner, and
LaSalle Advisors Limited Partnership, incorporated by
reference to Exhibit 10 of the registrant's report on
Form 10-K for the year ended September 30, 1991.
13. Annual Report for fiscal 1996, distributed to Limited
Partners on or about November 25, 1996.
27. Financial Data Schedule
99. (a) Pages 7-11, 19-29 and 36-50 of the Prospectus
of the Partnership dated December 7, 1984,
incorporated by reference to Exhibit 99(a)of
the registrant's report on Form 10-K for the
year ended September 30, 1994, File Number 0-
14308.
(b) Real Estate Investments, incorporated by
reference from page 2 of the Partnership's 1996
Annual Report to Limited Partners.
(c) Financial Statement Schedule III - Consolidated
Real Estate and Accumulated Depreciation.
(d) Report of KPMG Peat Marwick LLP dated October
23, 1996 regarding the financial statements of the
Partnership.
(b) Reports on Form 8-K
Report on Form 8-K dated November 1, 1996, setting forth the
estimated Unit value as of September 30, 1996.
<PAGE>24
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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:
Dated: December 23, 1996 T. ROWE PRICE REALTY INCOME FUND I,
A NO-LOAD LIMITED PARTNERSHIP
By: T. Rowe Price Realty Income Fund
I Management, Inc., General
Partner
/s/ James S. Riepe
By: James S. Riepe,
President
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 (with respect to the General Partner) and
on the dates indicated:
/s/ James S. Riepe Date: December 23, 1996
James S. Riepe
Director, Chairman of the
Board and President
T. Rowe Price Realty Income Fund I
Management, Inc.,
Principal Executive Officer
for the Partnership
/s/ Henry H. Hopkins Date: December 23, 1996
Henry H. Hopkins,
Director and Vice President,
T. Rowe Price Realty Income Fund I
Management, Inc.
/s/ Douglas O. Hickman Date: December 11, 1996
Douglas O. Hickman,
Director and Vice President,
T. Rowe Price Realty Income Fund I
Management, Inc.
<PAGE>25
/s/ Alvin M. Younger, Jr. Date: December 10, 1996
Alvin M. Younger, Jr.,
Director and Treasurer,
T. Rowe Price Realty Income
Fund I Management, Inc.
/s/ Joseph P. Croteau Date: December 23, 1996
Joseph P. Croteau,
Controller, Director and Principal Financial and Chief Accounting
Officer for the Partnership
