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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 7, 1996
WINDSOR PARK PROPERTIES 2, A CALIFORNIA LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its charter)
California 0-15698 33-0054332
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
120 W. Grand Avenue, Suite 202, Escondido, CA 92025
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (619) 746-2411
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Item 2. Acquisition or Disposition of Assets
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On May 7, 1996 Windsor Park Properties 2, A California Limited Partnership (the
Partnership), sold the Pinecrest manufactured home community (the Community),
located in Shreveport, Louisiana. The Community was originally acquired in
August 1985 at a total purchase price of $3,943,400, including acquisition fees
and other costs. The Community contains 405 manufactured home spaces.
The Community was sold for approximately $795,000 (net of sale and closing costs
of $5,000). The sales price was arrived at through an arms-length bargaining
process with the purchaser, ROC Communities, Inc., a Maryland corporation,
(ROC). ROC has provided the day to day property management services at
Pinecrest since 1991 and has previously acquired properties from the Partnership
and its affiliates. In addition, the corporate general partner of the
Partnership, The Windsor Corporation, owns a nominal equity position in ROC.
The Partnership realized an accounting gain from the sale of the Community of
approximately $120,500, computed as follows:
<TABLE>
<CAPTION>
<S> <C>
Net selling price $ 795,000
Net book value (674,500)
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Gain on sale of investment property $ 120,500
===============
</TABLE>
The General Partners intend to make a distribution of sales proceeds in May
1996.
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Item 7. Financial Statements, Proforma Financial Information and Exhibits
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<TABLE>
<CAPTION>
<S> <C>
(a) Financial statements of business acquired - not applicable
(b) Proforma Financial Information of Windsor Park Properties 2 Page
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(i) Proforma Balance Sheet at December 31, 1995 (unaudited) 4
(ii) Proforma Statement of Operations for the year ended
December 31, 1995 (unaudited) 6
(c) Exhibits
--------
(10) Material Contract 8
Letter Agreement dated March 12, 1996
</TABLE>
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Item 7(b)(i) - Proforma Financial Information
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The following unaudited condensed proforma balance sheet presents the financial
position of Windsor Park Properties 2 on December 31, 1995, assuming that the
sale of the Pinecrest manufactured home community, which occurred on May 7,
1996, occurred on that date. This statement should be read in conjunction with
the other proforma financial statements and notes thereto and the discussion of
the property contained in Item 2, included elsewhere in this Form 8-K.
Windsor Park Properties 2
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Proforma Balance Sheet
December 31, 1995
(unaudited)
<TABLE>
<CAPTION>
Sale of Proforma
December 31, 1995 Pinecrest December 31, 1995
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<S> <C> <C> <C>
ASSETS
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Property held for
sale - net $ 775,000 $(676,600) $ 98,400
Cash 411,800 788,900 1,200,700
Other assets 27,000 (22,000) 5,000
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$1,213,800 $ 90,300 $1,304,100
================= ========= =================
LIABILITIES AND
- ---------------
PARTNERS' EQUITY
- ----------------
Accounts payable
and other liabilities $ 63,800 $(28,100) $ 35,700
Partners' equity 1,150,000 118,400 1,268,400
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$1,213,800 $ 90,300 $1,304,100
================= ========= =================
</TABLE>
See accompanying notes to proforma balance sheet.
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Windsor Park Properties 2
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Notes to Proforma Balance Sheet
December 31, 1995
(unaudited)
NOTE 1. Basis of Presentation
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The unaudited condensed proforma balance sheet of Windsor Park Properties 2 (the
Partnership) presents the financial position of the Partnership on December 31,
1995, assuming that the sale of the Pinecrest manufactured home community, which
occurred on May 7, 1996, occurred on that date.
NOTE 2: Proforma Adjustments
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(a) Property Held for Sale
----------------------
This adjustment eliminates the net book value of the Pinecrest manufactured
home community at December 31, 1995.
(b) Cash
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This amount represents the net sales proceeds received by the
Partnership.
(c) Other Assets
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The adjustment eliminates other assets associated with the Pinecrest
manufactured home community on December 31, 1995.
(d) Accounts Payable and Other Liabilities
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The adjustment eliminates accounts payable and other liabilities associated
with the Pinecrest manufactured home community on December 31, 1995.
(e) Partners' Equity
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This adjustment represents the gain on sale which would have been realized
by the Partnership had the community sold on December 31, 1995.
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Item 7(b)(ii) - Proforma Financial Information
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The following unaudited condensed proforma statement of operations presents the
results of operations of the Partnership for the year ended December 31, 1995
assuming that the sale of the Pinecrest manufactured home community, and the
distribution of the net sale proceeds to the partners occurred on January 1,
1995. The Pinecrest community was sold on May 7, 1996. The proforma statement of
operations does not present the gain on sale of investment property which the
Partnership realized from the sale. This statement should be read in conjunction
with the other proforma financial statements and notes thereto and the
discussion of the property contained in Item 2 included elsewhere in this Form
8-K.
Windsor Park Properties 2
---------------------------------
Proforma Statement of Operations
For the Year Ended December 31, 1995
(unaudited)
<TABLE>
<CAPTION>
Proforma
Year ended Sale of Year ended
December 31, 1995 Pinecrest December 31, 1995
----------------- --------- -----------------
<S> <C> <C> <C>
Revenues:
- --------
Rent and utilities $ 476,100 $(356,900) $ 119,200
Interest 27,000 27,000
Other 30,200 (29,400) 800
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533,300 (386,300) 147,000
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Expenses:
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Property operating 463,500 (337,200) 126,300
Depreciation and amortization 64,100 (48,800) 15,300
General and administrative 72,900 72,900
Provision for estimated loss in
value of property held for sale 90,000 90,000
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690,500 (386,000) 304,500
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Net Loss $(157,200) $ (300) $(157,500)
================= ========= =================
Net Loss - Limited Partners $(155,600) $ (300) $(155,900)
================= ========= =================
Net Loss - Per Limited
Partnership Unit $ (1.04) $ (1.04)
================= ========= =================
</TABLE>
See accompanying notes to proforma statement of operations.
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Windsor Park Properties 2
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Notes to Proforma Statement of Operations
For the Year Ended December 31, 1995
(unaudited)
NOTE 1. Basis of Presentation
---------------------
The unaudited condensed proforma statement of operations of Windsor Park
Properties 2 (the Partnership) presents the results of operations for the
Partnership for the year ended December 31, 1995 assuming that the sale of the
Pinecrest manufactured home community, and the distribution of the net sale
proceeds to the partners occurred on January 1, 1995. The Pinecrest community
was sold on May 7, 1996. The proforma statement of operations does not present
the gain on sale of investment property which the Partnership realized from the
sale
NOTE 2. Proforma Adjustments
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(a) Rent and Utilities/Other Revenues
---------------------------------
This adjustment eliminates rent and utilities and other revenues relating
to the Pinecrest community for the year ended December 31, 1995.
(b) Property Operating Expenses
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This adjustment eliminates property operating expenses relating to the
Pinecrest community for the year ended December 31, 1995.
(c) Depreciation and Amortization
-----------------------------
This adjustment eliminates depreciation and amortization expense relating
to the Pinecrest community for the year ended December 31, 1995.
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March 12, 1996
Mr. John Coseo
The Windsor Corporation
120 W. Grand Ave. #206
Escondido, CA 92025
Re: Pinecrest Community,
Shreveport, LA
Dear John:
The following are the terms and conditions of our offer (as "Buyer") to
purchase the captioned property from the Selling entity ("Seller") consisting
of 405 existing sites.
I. FINANCIAL
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Total Price: $800,000
The purchase price includes land, improvements, vehicles, and all on-site
personal property used in connection with the manufactured housing
community ("Property"). The terms of the purchase are outlined in Exhibit
"A". The Property will be conveyed at closing by Special Warranty Deed.
II. EARNEST MONEY DEPOSIT
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A $25,000 earnest money deposit will be made with a title company of
Buyer's choice ("Title Company") upon the opening of escrow. The earnest
money will be applied towards the purchase price upon closing. Buyer may
use letters of credit in a from that Seller approves for the earnest money
deposit.
III. ESCROW PERIOD
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Escrow will open upon an executed Purchase and Sale Agreement being
delivered to the escrow holder. In the absence of such an agreement, then
the Escrow shall open upon delivery of this letter agreement and the
earnest money deposit to the escrow holder. Closing shall occur 15 days
from due diligence expiration.
IV. PURCHASE CONTRACT
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Both parties are required to use good-faith negotiations to enter into a
Purchase and Sale Agreement prepared by Buyer's attorney consistent with
the terms of this letter agreement. In the event a Purchase and Sale
Agreement is not executed by both parties by due diligence expiration, then
this letter agreement shall become the document between the parties upon
which closing is based. Buyer may assign this letter agreement and/or
Purchase and Sale Agreement prior to closing without Seller's approval.
V. BUYER'S CONTINGENCIES
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A. Buyer shall have 30 days to obtain and approve a Phase I
environmental study and engineering report on the Property.
Additionally, Buyers obligations hereunder are contingent upon ROC
Communities, Inc. Board Of Directors approval which shall be
sought to be obtained within 30 days of full execution of this
agreement. In the event Buyer, for any reason, does not complete
the purchase of the Property, Seller shall have no liability to
reimburse Buyer for said expense.
All contingencies specified in Paragraph A must be approved by Buyer in
writing within the time frame specified or the contingency shall be deemed
unacceptable and this letter agreement shall be null and void, and all
earnest money deposits shall be immediately refunded to Buyer.
VI. CONDITIONS
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The closing of escrow shall be conditional upon the following items:
A. Physical Characteristics
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1. All improvements to the Property must be in similar condition
to their present condition.
2. Satisfaction or waiver of the contingencies set forth in
Article V.
B. Clearing Debt
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1. Any and all outstanding balances owed on the community owned
personal property, including manager's home, if any, shall be
paid by the Seller prior to close of escrow.
2. Any and all existing outstanding balances due and payable on
the property (mortgages, taxes, etc.) will be paid off in full
through escrow, with any related costs to be borne by Seller.
C. Other Conditions
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1. Buyer shall have the right to approve any new contracts or
leases which would affect the Property after the date of this
letter agreement. Such approval shall not be unreasonably
withheld. However, Seller shall have the right to execute any
new leases under the same terms and conditions as currently
prevail in the Property, and already approved by Buyer without
obtaining Buyer's approval on each lease.
2. Buyer shall have the option to meet with residents at any time
prior to the closing date.
3. No material change in the physical condition or the financial
aspects of the Property.
VII. SELLER'S REPRESENTATIONS
------------------------
Seller represents and warrants that (A) Buyer may rely on income and
expense statements and other information presented to it by Seller or
Seller's representatives as part of the inducement to enter into this
agreement; (B) Seller is the sole owner of the Property, has the right and
authority to sell the Property without obtaining approval from anyone, and
the Property will be free and clear
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of all liens and encumbrances (except real property and personal property
taxes which are a lien but are not due and payable as of the closing
date) on the closing date; (C) there are no material agreements affecting
the Property except as shall be disclosed to Buyer during the due
diligence period; (D) to the best of Seller's actual knowledge, Seller is
not in default with respect to any material obligation affecting the
Property; (E) Seller holds all permits and licenses required to own and
operate the Property, and to the best of Seller's actual knowledge, there
are no violations of any applicable laws, codes or building ordinances;
(F) to the best of Seller's actual knowledge, there is no litigation or
other proceeding pending or threatened against the Property; (G) to the
best of Seller's actual knowledge, there are not material defects in the
Property; (H) Seller has not permitted the use of any hazardous materials
on the Property during its ownership of the Property and to the best of
Seller's actual knowledge, hazardous materials have never been
transported to or used on the Property; (I) to the best of Seller's
actual knowledge, all utility services on the Property are adequate for
the Property's current and anticipated needs, and comply with all
governmental licensing requirements and laws, and (J) the Seller only
provides the following utilities: water, sewer and trash. These
representations shall survive the close of escrow for a period of one
year. Notwithstanding anything contained herein to the contrary, Buyer
currently manages the property and shall purchase the property "as is."
Should any demand be made by applicable authorities to cure any
violations of items (C) through (I), or if any defect covered under this
paragraph shall arise between the date of this letter agreement and the
close of escrow, Buyer may, at its option, elect not to close the
transaction and Buyer's earnest money deposit will be immediately
refunded.
VIII. BUYER'S REPRESENTATIONS
-----------------------
Buyer represents and warrants that it has the right and authority to
enter into this letter agreement and to perform its obligations under
this letter agreement. These representations shall survive the close of
escrow.
IX. CLOSING
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Both parties will execute at the closing those documents necessary to
carry out their respective obligations under this letter agreement. In
furtherance of these obligations, the Seller shall deliver the deed,
fully executed settlement statements, a certified rent roll, copies of
tenants' leases, Bill of Sale, and any other documents reasonably
requested by Buyer.
Buyer shall execute at closing a fully executed settlement statement,
shall deliver the funds at closing necessary to consummate this
transaction, and any other documents reasonably requested by Seller.
X. CLOSING COSTS
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Seller and Buyer will split the cost of an ALTA survey. Seller and Buyer
will pay the normal closing costs based on prevailing customs as
determined by the Title Company, including ALTA title insurance.
XI. PRORATIONS
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Income - Rents, laundry income, utility income and other fee income to be
prorated as of the day of closing. Delinquent rents will not be prorated
and Buyer has no obligation to collect them but if such delinquent rents
are collected by Buyer they will be paid to Seller.
Expenses - Interest, utilities, insurance, salaries, and taxes are to be
prorated as of the day of closing.
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Tenant and Other Deposits - Buyer to be credited with tenant and other
refundable deposits at closing.
All prorations shall be made in a manner that Seller has the benefit of
all income and the burden of all expenses through the date of closing and
Buyer has the benefit of all income and the burden of all expenses after
the date of closing.
XII. EXPIRATION DATE
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Time is of the essence. If this offer is not accepted by the Seller and
delivered to the Buyer on or before the close of business on March 19th,
1996 this offer becomes null and void. If accepted and delivered by such
date it shall be an enforceable agreement between the parties.
XIII. SPECIAL PROVISIONS
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None.
XIV. OTHER
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Seller will cause its counsel to render an opinion letter regarding
Seller's authority, the enforceability of Seller's obligations under this
letter agreement and any another reasonable opinion as may be requested
by Buyer. These opinions will be delivered at the closing. The parties
agree to execute any documents necessary to carry out the intent of this
letter agreement. This letter agreement shall be binding upon both
parties and their respective heirs, successors, and assigns, as the case
may be. In the event of a breach of this letter agreement by Seller,
Buyer shall have the right of damages and specific performance. In the
event of a breach of this letter agreement by Buyer, Seller's sole remedy
shall be the earnest money deposit. This letter agreement may be executed
in any number of counterparts and if so it shall be effective as though
all signatures appeared on one and the same agreement. Facsimile
signatures shall be permitted and shall be binding upon the parties.
BUYER: ROC Communities, Inc.
By: /s/ Rees F. Davis, Jr.
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Rees F. Davis, Jr., Executive Vice President
Accepted and Agreed to this 14 day of March, 1996.
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SELLER: Windsor Park Properties 2,
A California Limited Partnership
By: The Windsor Corporation
As: General Partner
By: /s/ John A. Coseo, Jr.
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John A. Coseo, Jr., Chief Executive Officer
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
WINDSOR PARK PROPERTIES 2
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(Registrant)
By: The Windsor Corporation, General Partner
By /s/ John A. Coseo, Jr.
------------------------------------------
JOHN A. COSEO, JR.
Chief Financial Officer
(Principal Accounting Officer)
Date: May 8, 1996
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