<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 DECEMBER 31, 1995
Commission File Number
2-94725
REAL AMERICAN PROPERTIES
A CALIFORNIA LIMITED PARTNERSHIP
(Formerly Hutton/REAL American Properties)
I.R.S. Employer Identification No. 95-3906164
9090 WILSHIRE BLVD., SUITE 201, BEVERLY HILLS, CALIFORNIA 90211
Registrant's Telephone Number, Including Area Code (310) 278-2191
Securities Registered Pursuant to Section 12(b) or 12(g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed with the Commission by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding twelve months (or 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]
<PAGE> 2
PART 1.
ITEM 1. BUSINESS:
REAL American Properties ("RAP" or the "Partnership") is a limited partnership
which was formed under the laws of the State of California on March 9, 1984.
The Partnership was formed to invest in residential rental properties either
directly or through investments in joint ventures and other partnerships which
invest in such real estate. On July 26, 1985, RAP offered 45,000 units of
limited partnership interest ("Units") through a public offering. The
Partnership completed its offering with a total of 21,500 Units sold and
$21,500,000 raised from Limited Partners.
The general partners of the Partnership are National Partnership Investments
Corp. ("NAPICO"), a California corporation (the "Corporate General Partner"),
Real Estate Services XIII Inc., a Delaware corporation. The business of RAP is
conducted primarily by its general partners as RAP has no employees of its own.
Casden Investment Corporation ("CIC") owns 100 percent of NAPICO's stock. The
current members of NAPICO's Board of Directors are Charles H. Boxenbaum, Bruce
E. Nelson, Alan I. Casden, Henry C. Casden, and Brian D. Goldberg. Real Estate
Services XIII Inc. is 100 percent owned by LBI Group Inc.
The Partnership originally invested in five apartment buildings. Two of such
buildings have been contributed to a separate limited partnership in exchange
for a subordinated limited partner interest therein, which, in turn, has
exchanged the buildings for an interest in a publicly traded Real Estate
Investment Trust. One building was foreclosed upon by the lender in June 1993
and one building was substantially destroyed in the January 17, 1994 earthquake
in the Los Angeles area. (See Item 7 for further discussion.) The other
building is fully rented as of December 31, 1995, with substantially all of the
apartment units leased on a month-to-month basis.
The Partnership is subject to all of the risks incident to ownership of real
estate and interests therein, many of which relate to the lack of liquidity of
this type of investment. These risks include, without limitation, changes in
general economic conditions, adverse local market conditions due to
over-building or a decrease in employment or neighborhood values, changes in
supply or demand of competing properties in an area, changes in interest rates
and the availability and terms of permanent mortgage funds which may render the
sale or refinancing of a property difficult or unattractive, changes in real
estate and zoning laws, increases in real property tax rates, the potential
imposition of rent controls, and the occurrence of uninsured losses, such as
earthquakes, floods or other factors beyond the control of the General
Partners. The illiquidity of real estate investments generally will impair the
ability of the Partnership to respond promptly to changing circumstances.
<PAGE> 3
The following is a schedule of the status as of December 31, 1995, of the
projects in which RAP remains invested.
SCHEDULE OF PROJECTS
IN WHICH RAP HAS AN INVESTMENT
DECEMBER 31, 1995
<TABLE>
<CAPTION>
No. of Units Percentage of
Name & Location Units Occupied Total Units
- ----------------------------- ------- -------- -------------
<S> <C> <C> <C>
Northridge Park Apartments
Northridge, California(1) 150 0 0
West Colonial Village Apartments
Tukwila, Washington(2) 120 120 100%
----- ---
270 120
===== ===
</TABLE>
- ---------------------
(1) On January 17, 1994, the Northridge Park Apartments sustained major
damage due to the earthquake in the Los Angeles area and was declared
unsafe for habitation. The Partnership is currently in the process of
selling the building. However, there can be no assurance that the building
will be sold. (See Item 7).
(2) In January 1996, the Partnership entered into an agreement to sell
West Colonial Village Apartments (See Item 7).
In addition, the Partnership has an indirect interest in real estate
properties through Equity Residential Property, a publicly traded Real
Estate Investment Trust (See Item 7).
<PAGE> 4
ITEM 2. PROPERTIES:
RAP holds direct interests in two real estate properties, as well as an
indirect interest in a publicly traded Real Estate Investment Trust. See Item
1 and Schedule XI for information pertaining to these properties.
ITEM 3. LEGAL PROCEEDINGS:
As of December 31, 1995, NAPICO was a plaintiff or a defendant in several
lawsuits. None of these suits were related to the Partnership.
Real Estate Services XIII Inc., a General Partner of the Partnership, and
certain of its affiliates, on their own behalf and on behalf of the Partnership
and certain other partnerships with which they are associated (collectively,
the "Plaintiff Partnerships"), and NAPICO, and certain of its affiliates, have
entered into a Memorandum of Understanding dated August 11, 1995. In addition
to establishing certain Partnership controls, the Memorandum of Understanding
resolves and settles various management and control issues which were under
discussion for some time and various claims which were raised in a lawsuit
filed in the Los Angeles Superior Court on June 9, 1995 by Real Estate Services
XIII Inc., the Partnership and others against, among others, NAPICO ("the
Lawsuit"). All parties entered into the Memorandum of Understanding without
any admission of wrongdoing or liability by any defendant as to any claim in
the Lawsuit, in a desire to avoid continued litigation that would be expensive,
time consuming and complex.
By virtue of the Memorandum of Understanding, the parties thereto have agreed,
among other things, that:
1. An analysis was to be prepared of the books and records of the
Partnership including an analysis of the books and records of the
master disbursement account maintained by the Partnership's property
management company, Mayer Management, Inc. ("MMI"), an affiliate of
NAPICO. Such analysis has been completed. NAPICO agreed that it
and its affiliates, including MMI, will pay to the Partnership any
amounts (with interest thereon) properly determined to be owed to
the Partnership as a result of the analysis.
2. The existing property management agreement for the Northridge
property by and between the Partnership and MMI, shall be extended
until the earlier of the commencement of reconstruction of the
building or a the sale of the property to an unaffiliated third
party, subject to certain agreed-upon amendments.
3. The Partnership will reimburse Real Estate Services XIII Inc. for
professional fees paid on behalf of the Partnership in connection
with issues raised in the Memorandum of Understanding.
4. The Partnership will employ an independent Cash Manager, designated
by Real Estate Services XIII Inc. and approved by NAPICO, to perform
cash management services, including maintenance of the Partnership's
bank accounts and reserves, payment of property management fees and
other accounts payable, payments to affiliates of NAPICO, and
payment of cash distributions, if any, to the Limited Partners.
NAPICO, has agreed to prepare detailed annual budgets to be approved
by Real Estate Services XIII Inc. and thereafter used by the Cash
Manager as a guide and control over Partnership operations. The
terms of the Cash Management Agreement have yet to be implemented.
5. The parties to the Memorandum of Understanding agreed to enter into
a formal Settlement Agreement and, concurrently therewith, (a) the
plaintiffs in the Lawsuit will execute a special release of the
defendants with respect to the allegations contained in the Lawsuit,
(b) the defendants in the Lawsuit will execute a special release of
each plaintiff in the Lawsuit that is a general partner of a
Plaintiff Partnership with respect to all claims which would have
been compulsory counterclaims thereunder, and (c) the defendants
will execute a special release of any claims, other than those
regarding specifically scheduled contractual relations, which any
defendant may have had against this Partnership or any of the other
Plaintiff Partnerships.
<PAGE> 5
6. Upon the uncured breach of certain provisions of the Memorandum of
Understanding, or upon a future breach of NAPICO's fiduciary duties,
Real Estate Services XIII Inc. could cause NAPICO to resign as a
general partner of the Partnership and become a limited partner
thereof.
As of April 8, 1996, certain of the foregoing items enumerated above had yet to
be fully implemented. The parties have had discussions regarding their
respective positions and have agreed to participate in a settlement conference.
If these matters cannot be resolved by agreement, then the parties will submit
their respective positions to arbitration.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
Not applicable.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS AND RELATED
SECURITY HOLDER MATTERS:
The Units are not traded on a public exchange but were sold through a public
offering. It is not anticipated that any public market will develop for the
purchase and sale of any Units. Units may be transferred only if certain
requirements are satisfied. As of December 31, 1995, there were 1,748
registered holders of Units in RAP.
<PAGE> 6
ITEM 6. SELECTED FINANCIAL DATA:
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------------------------------------------
1995 1994 1993 1992 1991
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Rental Revenues $ 714,966 $ 753,797 $ 1,930,922 $ 3,856,271 $ 3,925,776
Interest Income 19,165 13,756 21,741 38,321 37,481
------------- ------------- ------------- ------------- -------------
Total Revenues $ 734,131 $ 767,553 $ 1,952,663 $ 3,894,592 $ 3,963,257
============= ============= ============= ============= =============
Net Loss $ (934,332) $ (1,063,286) $ (208,408) $ (1,215,307) $ (990,931)
============= ============= ============= ============= =============
Net Loss per Limited
Partnership Interest $ (43) $ (49) $ (10) $ (56) $ (46)
============= ============= ============= ============= =============
Rental Property
Owned at Cost
Less Accumulated
Depreciation $ 10,935,125 $ 11,074,611 $ 11,214,100 $ 22,532,639 $ 24,143,570
============= ============= ============= ============= =============
Total Assets $ 16,825,961 $ 15,769,651 $ 12,367,174 $ 23,730,765 $ 25,280,920
============= ============= ============= ============= =============
Mortgage Notes
Payable $ 9,649,180 $ 9,687,439 $ 9,725,085 $ 20,071,391 $ 20,152,537
============= ============= ============= ============= =============
</TABLE>
The decrease in operations in 1995 and 1994 compared with 1993 is attributable
to the Northridge property where operations have been materially affected since
the January 17, 1994 earthquake in the Los Angeles area. An entire building
was declared unsafe for habitation and accordingly has been vacated since the
earthquake. See Item 7. where the effects of the earthquake are discussed
further.
<PAGE> 7
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY
The Partnership's primary sources of funds are income from rental operations
and interest income on money market funds and certificates of deposit.
In 1995 and 1994, the Partnership funded operating deficits of the West
Colonial property in the amount of $73,000 and $16,000, respectively. Such
amounts have been funded from the Partnership's working capital reserve.
CAPITAL RESOURCES
RAP received a total of $10,750,000 in subscriptions for units of limited
partnership interests (at $1,000 per unit) during the period September 12, 1985
to February 28, 1986, pursuant to a registration statement on Form S-11.
$10,750,000 in subscriptions were received pursuant to the exercise of warrants
and the sale of additional limited partnership interests from April 1, 1986 to
May 31, 1986.
The Partnership acquired five apartment complexes since inception, one of which
was foreclosed by the lender in 1993. Two of these remaining buildings were
contributed to a separate limited partnership in 1992, and were subsequently
sold in 1995 as more particularly described in the next paragraph. The
Partnership remains invested in two apartment complexes, one of which was
substantially damaged in the January 17, 1994 Northridge Earthquake and is
currently unoccupied.
In August 1995, the Del Coronado properties were sold by 843 South Longmore
Limited Partnership to a publicly held Real Estate Investment Trust ("REIT").
The net proceeds of $5,682,262 paid to 843 South Longmore Limited Partnership
was in the form of limited partnership interests in the operating partnership
controlled by the REIT, which are convertible to cash or REIT stock, at the
option of REIT. Of the net proceeds, the Partnership received an allocation of
23,524 units, with an approximate value of $735,000 as of December 31, 1995.
The amount realized by the Partnership is subject to change due to stock market
fluctuations, since the limited partnership units cannot be redeemed for cash
or REIT stock until August 1996. The Partnership intends to redeem the limited
partnership shares for cash; however, the REIT may elect to redeem the units
for REIT shares, in which event the Partnership intends to cause due shares to
be registered and sold in accordance with applicable laws. The investment in
843 South Longmore Limited Partnership is being carried at a zero balance, and
no gain will be recognized until the limited partnership interest is converted
to cash.
RESULTS OF OPERATIONS
RAP was formed to invest in residential rental properties either directly or
through investments in joint ventures and other partnerships which will invest
in such real estate, as discussed in Item 1.
Rental operations consist primarily of rental income and depreciation expense,
debt service, and normal operating expenses to maintain the properties.
Depreciation is provided on the straight-line method over the estimated useful
lives of the buildings and equipment. Substantially all of the rental units in
the West Colonial apartment project are leased on a month-to-month basis.
A property management fee was payable to an affiliate of NAPICO on two of the
properties through July 23, 1995. As of July 24, 1995, management of the West
Colonial property was transferred to an independent property management firm.
An affiliate of NAPICO currently manages the Northridge property; however,
management of the Northridge property will be trasferred to an independent
property management firm if the property is reconstructed.
<PAGE> 8
On January 17, 1994, the Northridge rental property sustained major damage due
to the severe earthquake in the Los Angeles area. The current operations of
the property have been materially affected since the Los Angeles County
building inspectors have declared the building unsafe for habitation.
Accordingly, the entire property has been vacated since the earthquake. The
property is covered by insurance, which covers to a limited extent, among other
things, property damage and loss of rentals as a result of the earthquake. In
August 1994, a partial settlement for property damage in the amount of
approximately $3,909,000 was allocated to the Partnership under a master
umbrella insurance policy, covering earthquake damage for this and other
properties managed by a related party. These insurance proceeds plus related
interest earned, net of earthquake related costs incurred, are included in
restricted cash at December 31, 1994. An amount of approximately $127,000 has
been accrued on the financial statements as of December 31, 1994 to provide for
the estimated loss to be incurred by the Partnership. This amount, along with
the insurance proceeds, is included in liability for earthquake loss on the
accompanying balance sheet as of December 31, 1994. The net book value of the
Northridge property at December 31, 1994 approximates the amount of nonrecourse
liabilities relating to the building at that date.
In May 1995, the Partnership received from the insurance company the final
settlement payment of $1,368,000 related to the earthquake loss. This amount
is being held in an escrow account by the Northridge property lender, and has
been included in restricted cash and liability for earthquake loss at December
31, 1995. In addition, restricted cash and liability for earthquake loss as of
December 31, 1995, reflected interest earned and earthquake related costs
incurred during 1995. Interest in the amount of approximately $603,000 and
$596,000, relating to the first and second mortgages on the Northridge
property, has been accrued for the years ended December 31, 1995 and 1994,
respectively, and is included in accrued interest payable. In addition,
property taxes of approximately $354,000 and $290,000 related to the Northridge
property have been accrued as of December 31, 1995 and 1994, respectively. As
compensation for continuing property management services, the managing agent,
which is an affiliate of NAPICO, is paid $2,450 per month.
The first mortgage lender has demanded that the Partnership turn over to it the
insurance proceeds currently held by the Partnership. Pursuant to the terms of
the loan documents between the Partnership and the lender, the lender has a
security interest in and other rights to the insurance proceeds.
On April 1, 1996, the Partnership entered into an agreement to sell the
Northridge property. Based on the terms of sale, the Partnership hopes to
realize a gain of approximately $900,000, equal to the cash the Partnership
will be able to retain from the restricted cash account. The gain is subject
to upward adjustment under certain conditions. However, there can be no
assurance that the sale will close. If the sale does not close or if the
building is not repaired, the lender could foreclose on the building and claim
the insurance proceeds held by the Partnership.
Occupancy at West Colonial Village averaged 93% during 1995, 1994 and 1993 and
the property was 100% occupied as of December 31, 1995. The property has been
operating at a cash deficit. The Partnership has funded a total of $154,000 in
deficits at the property as of December 31, 1995.
In January 1996, the Partnership entered into an agreement to sell West
Colonial Apartments for $4,070,000. The closing is scheduled to occur no later
than April 24, 1996. The net book value of West Colonial Apartments as of
December 31, 1995 is approximately $3,438,930. The first mortgage, with an
approximate principal balance of $3,200,000, matures July 31, 1996. However,
there is no assurance that the Partnership will be able to consummate the sale
prior to such date, in which event the Partnership's lender could commence a
foreclosure action against the property.
Partnership operations consist primarily of interest income earned on
certificates of deposit and other temporary investment of funds not required
for investment in projects. The amount of interest income varies with market
rates available on certificates of deposit and with the amount of funds
available for investment. Operating expenses of the Partnership consist
substantially of recurring general and administrative expenses and professional
fees for services rendered to the Partnership.
<PAGE> 9
The Partnership did not make cash distributions during 1995, 1994 and 1993 and
there is no assurance that the Partnership will make any distributions in the
future.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Financial Statements and Supplementary Data are listed under Item 14.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE:
Not applicable.
<PAGE> 10
REAL AMERICAN PROPERTIES
(A California limited partnership)
(Formerly Hutton/REAL American Properties)
FINANCIAL STATEMENTS,
FINANCIAL STATEMENT SCHEDULE
AND INDEPENDENT PUBLIC ACCOUNTANTS' REPORT
DECEMBER 31, 1995
<PAGE> 11
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of
REAL American Properties
(A California limited partnership)
We have audited the accompanying balance sheets of REAL American Properties (a
California limited partnership) as of December 31, 1995 and 1994, and the
related statements of operations, partners' equity (deficiency) and cash flows
for each of the three years in the period ended December 31, 1995. Our audits
also included the financial statement schedule listed in the index on item 14.
These financial statements and financial statement schedule are the
responsibility of the management of the Partnership. Our responsibility is to
express an opinion on these financial statements and financial statement
schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by 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 REAL American Properties as of
December 31, 1995 and 1994, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1995 in
conformity with generally accepted accounting principles. Also, in our
opinion, such financial statement schedule, when considered in relation to the
basic financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.
DELOITTE & TOUCHE LLP
Los Angeles, California
March 29, 1996
<PAGE> 12
REAL AMERICAN PROPERTIES
(a California limited partnership)
BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
ASSETS
<TABLE>
<CAPTION>
1995 1994
-------------- -------------
<S> <C> <C>
RENTAL PROPERTY, at cost (Notes 1 and 3)
Land $ 2,170,920 $ 2,170,920
Buildings 12,360,101 12,360,101
Furniture and equipment 835,000 835,000
-------------- -------------
15,366,021 15,366,021
Less accumulated depreciation (4,430,896) (4,291,410)
-------------- -------------
10,935,125 11,074,611
-------------- -------------
CASH AND CASH EQUIVALENTS (Note 1) 442,803 659,440
-------------- -------------
RESTRICTED CASH (Note 1) 5,236,780 3,861,813
-------------- -------------
INVESTMENT IN LIMITED PARTNERSHIP (Note 2)
OTHER ASSETS:
Due from rental agent, including restricted
cash held for security deposits and reserves
of $68,163 and $36,864 at December 31, 1995
and 1994, respectively 114,728 50,146
Other receivables and prepaid expenses (Note 6) 96,525 123,641
-------------- -------------
211,253 173,787
-------------- -------------
TOTAL ASSETS $ 16,825,961 $ 15,769,651
============== =============
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Mortgage notes payable (Note 3) $ 9,649,180 $ 9,687,439
Accounts payable and accrued expenses (Note 1) 406,383 388,381
Accrued interest payable (Note1) 1,226,835 595,799
Liability for earthquake loss (Note 1) 5,363,547 3,988,580
Tenant security deposits 31,028 26,132
-------------- -------------
16,676,973 14,686,331
-------------- -------------
COMMITMENTS AND CONTINGENCIES (Notes 6, 7 and 8)
PARTNERS' EQUITY 148,988 1,083,320
-------------- -------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 16,825,961 $ 15,769,651
============== =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 13
REAL AMERICAN PROPERTIES
(a California limited partnership)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
----------- ------------ ------------
<S> <C> <C> <C>
RENTAL OPERATIONS:
Revenues
Rental income $ 684,935 $ 715,502 $ 1,788,843
Other income 30,031 38,295 142,079
----------- ------------ -----------
714,966 753,797 1,930,922
----------- ------------ -----------
Expenses
Operating expenses 379,848 512,358 640,984
Management fees - affiliate (Note 6) 31,231 39,587 105,409
Depreciation 139,486 139,489 412,000
Benefit from foreclosure of rental property
(Note 1) - - (118,685)
General and administrative expenses 32,714 38,770 56,755
Interest expense (Notes 1 and 3) 946,615 898,083 956,727
Provision for earthquake loss (Note 1) - 126,767 -
----------- ------------ -----------
1,529,894 1,755,054 2,053,190
----------- ------------ -----------
Loss from rental operations (814,928) (1,001,257) (122,268)
----------- ------------ -----------
PARTNERSHIPS OPERATIONS:
Interest income 19,165 13,756 21,741
----------- ------------ -----------
Expenses
General and administrative expenses 45,819 41,075 57,647
Professional fees 90,509 32,469 47,994
Amortization of loan fees (Note 1) 2,241 2,241 2,240
----------- ------------ -----------
138,569 75,785 107,881
----------- ------------ -----------
Loss from partnership operations (119,404) (62,029) (86,140)
----------- ------------ -----------
NET LOSS $ (934,332) $ (1,063,286) $ (208,408)
=========== ============ ===========
NET LOSS PER LIMITED PARTNERSHIP
INTEREST (Note 5) $ (43) $ (49) $ (10)
=========== ============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 14
REAL AMERICAN PROPERTIES
(a California limited partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
---------- ------------ ------------
<S> <C> <C> <C>
EQUITY (DEFICIENCY), January 1, 1993 $(162,511) $ 2,517,525 $ 2,355,014
Net loss for 1993 (2,084) (206,324) (208,408)
---------- ------------ ------------
EQUITY (DEFICIENCY), December 31, 1993 (164,595) 2,311,201 2,146,606
Net loss for 1994 (10,633) (1,052,653) (1,063,286)
---------- ------------ ------------
EQUITY (DEFICIENCY), December 31, 1994 (175,228) 1,258,548 1,083,320
Net loss for 1995 (9,343) (924,989) (934,332)
---------- ------------ ------------
EQUITY (DEFICIENCY), December 31, 1995 $(184,571) $ 333,559 $ 148,988
========== ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 15
REAL AMERICAN PROPERTIES
(a California limited partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
---------- ----------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (934,332) $(1,063,286) $(208,408)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation 139,486 139,489 412,000
Benefit from foreclosure of rental property -- -- (118,685)
Provisions for earthquake loss -- 126,767 0
Changes in operating assets and liabilities:
(Increase) decrease in:
Due from affiliated rental agent (64,582) 205,369 86,812
Other receivables and prepaid expenses 27,116 84,782 145,375
Increase (decrease) in:
Accounts payable and accrued expenses 18,002 (19,930) 4,811
Accrued interest payable 631,036 595,799 0
Tenant security deposits 4,896 (88,078) 3,203
----------- ----------- ---------
Net cash provided by (used in)
operating activities (178,378) (19,088) 325,108
----------- ----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Insurance proceeds for earthquake loss -- 3,955,296 --
Increase in restricted cash (1,374,967) (3,861,813) --
Liability for earthquake loss 1,374,967 (66,445) --
----------- ----------- ---------
Net cash provided by investing activities 0 27,038 0
---------- ----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on mortgage notes (38,259) (37,646) (110,476)
----------- ----------- ---------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (216,637) (29,696) 214,632
CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR 659,440 689,136 474,504
----------- ----------- ---------
CASH AND CASH EQUIVALENTS, END
OF YEAR $ 442,803 $ 659,440 $ 689,136
=========== =========== =========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the year for interest $ 315,579 $ 349,684 $ 880,482
=========== =========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 16
REAL AMERICAN PROPERTIES
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
----------- ------------ ------------
<S> <C> <C> <C>
NON-CASH INVESTING AND FINANCING
ACTIVITIES:
Adjustment for Heatherwood property
(Note 1):
- Net book value of property $ 10,117,145
- Mortgage and accrued interest (10,235,830)
------------
Benefit for write down $ (118,685)
============
The net book value of the Heatherwood property
was adjusted down as follows:
Land $ 1,713,050
Buildings 12,990,522
Furniture and Equipment 1,158,000
Other Assets 27,497
Other Liabilities (816,891)
------------
15,072,178
Accumulated Depreciation (4,955,033)
------------
Net Book Value $ 10,117,145
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 17
REAL AMERICAN PROPERTIES
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
REAL American Properties (the "Partnership") was formed under the
California Limited Partnership Act on March 9, 1984. The
Partnership was formed to invest in a diversified portfolio of
apartment complexes and currently remains invested in two
residential apartment projects. The general partners of the
Partnership are National Partnership Investments Corp.
("NAPICO"), a California corporation, and Real Estate Services
XIII Inc., a Delaware corporation. Casden Investment Corporation
owns 100% of NAPICO's stock. LBI Group Inc. owns 100% of the
stock of Real Estate Services XIII Inc.
The Partnership offered 45,000 units of limited partnership
interests at $1,000 each, of which 21,500 were sold, through a
public offering. The terms of the Amended and Restated
Certificate and Agreement of Limited Partnership (the
"Partnership Agreement") provide, among other things, for
allocation to the partners of profits, losses and any special
allocations with respect thereto. Under the terms of the
Partnership Agreement, cash available for distribution is
allocated 90% to the limited partners as a group and 10% to the
general partners.
Net proceeds from sale or refinancing are distributed 100% to the
limited partners until they have received an amount equal to the
aggregate adjusted capital values, as defined, plus a cumulative
non- compounded 8% annual return. The balance is distributed 85%
to the limited partners and 15% to the general partners.
Losses are allocated 99% to the limited partners and 1% to the
general partners.
After the two properties owned by the Partnership are sold (Note
1) and the investment in limited partnership is converted to cash
(Note 2), the Partnership will dissolve in accordance with the
Partnership Agreement.
b. Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and reported
amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
c. Rental Property and Depreciation
Rental property is stated at cost. Depreciation is provided on
the straight-line method over the estimated useful lives of the
buildings and equipment as follows:
<TABLE>
<CAPTION>
Asset Estimated Useful Lives
----- ----------------------
<S> <C>
Buildings 30 years
Furniture and equipment 5 years
</TABLE>
6
<PAGE> 18
REAL AMERICAN PROPERTIES
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
On January 17, 1994, the Northridge rental property sustained
major damage due to the severe earthquake in the Los Angeles
area. The current operations of the property have been
materially affected since the Los Angeles County building
inspectors have declared the building unsafe for habitation.
Accordingly, the entire property has been vacated since the
earthquake. The property is covered by insurance, which covers
to a limited extent, among other things, property damage and loss
of rentals as a result of the earthquake. In August 1994, a
partial settlement for property damage in the amount of
approximately $3,909,000 was allocated to the Partnership under a
master umbrella insurance policy, covering earthquake damage for
this and other properties managed by an affiliate of NAPICO.
These insurance proceeds plus related interest earned, net of
earthquake related costs incurred, are included in restricted
cash at December 31, 1994. An amount of approximately $127,000
has been accrued on the financial statements as of December 31,
1994 to provide for the estimated loss to be incurred by the
Partnership. This amount, along with the insurance proceeds, is
included in liability for earthquake loss on the accompanying
balance sheet as of December 31, 1994. The net book value of the
Northridge property at December 31, 1994 approximates the amount
of nonrecourse liabilities relating to the building at that date.
In May 1995, the Partnership received from the insurance company
the final settlement payment of $1,368,000 related to the
earthquake loss. This amount is being held in an escrow account
by the Northridge property lender, and has been included in
restricted cash and liability for earthquake loss at December 31,
1995. In addition, restricted cash and liability for earthquake
loss as of December 31, 1995, reflected interest earned and
earthquake related costs incurred during 1995. Interest relating
to the first and second mortgages on the Northridge property in
the approximate amount of $603,000 and $596,000 for the years
ended December 31, 1995 and 1994, respectively, has been accrued
and is included in accrued interest payable (See Note 3). In
addition, property taxes of approximately $354,000 and $290,000
related to the Northridge property have been accrued as of
December 31, 1995 and 1994, respectively.
The first mortgage lender has demanded that the Partnership turn
over to it the insurance proceeds currently held by the
Partnership. Pursuant to the terms of the loan documents between
the Partnership and the lender, the lender has a security
interest in and other rights to the insurance proceeds.
Subsequent to December 31, 1995, the Partnership entered into an
agreement to sell the Northridge property. Based on the terms of
sale, the Partnership will realize a gain of approximately
$900,000, equal to the cash the Partnership will be able to retain
from the restricted cash account. The gain is subject to upward
adjustment under certain conditions. However, there can be no
assurnace that the sale will close. If the sale does not close or
it the building is not repaired, the lender could foreclose on the
building and claim the insurance proceeds held by the Partnership.
7
<PAGE> 19
REAL AMERICAN PROPERTIES
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
At December 31, 1992, as a result of pending foreclosure
proceedings, one of the Partnership's buildings (Heatherwood
Apartments) was written down to values which approximated the
amount of nonrecourse liabilities outstanding on that building at
that date, resulting in a loss of $766,000 for 1992. The lender
foreclosed on the property on June 11, 1993, and accordingly, the
excess of liabilities over the net book value of the property of
$118,685 was recorded as a benefit as of that date. Effective
January 1, 1993, the results of operations for this property have
been excluded from the financial statements.
In January 1996, the Partnership entered into an agreement to
sell West Colonial Apartments for $4,070,000. The closing is
scheduled to occur no later than April 24, 1996. The net book
value of West Colonial Apartments as of December 31, 1995 is
approximately $3,438,930. The first mortgage, with an
approximate principal balance of $3,200,000, matures July 31,
1996. However, there is no assurance that the Partnership will
be able to consummate the sale prior to such date, in which event
the Partnership's lender could commence a foreclosure action
against the property. The loan originally came due in January
1996, but was extended to July 1996 in order to accommodate the
sale.
Substantially all of the apartment units in the West Colonial
apartment project are leased on a month-to- month basis.
d. Amortization of Loan Fees
Loan fees are being amortized on the straight-line method over a
fifteen-year period.
e. Cash and Cash Equivalents
Cash and cash equivalents consist of unrestricted cash and
certificates of deposit, with an original maturity of three
months or less.
2. INVESTMENT IN LIMITED PARTNERSHIP
In September 1992, the Partnership completed an exchange transaction
involving the Del Coronado I and II properties. The Partnership
transferred the Del Coronado properties to an unaffiliated Arizona
limited partnership, 843 South Longmore Limited Partnership, in exchange
for a subordinated 20% limited partnership interest in the Arizona
limited partnership. In August 1995, the Del Coronado properties were
sold by 843 South Longmore Limited Partnership to a publicly held Real
Estate Investment Trust ("REIT"). The net proceeds of $5,682,262 paid
to 843 South Longmore Limited Partnership was in the form of limited
partnership interests in the operating partnership controlled by the
REIT, which are convertible to cash or REIT stock, at the option of the
REIT. Of the net proceeds, the Partnership received an allocation
equivalent to 23,524 shares, with an approximate value of $735,000 as of
December 31, 1995. The amount realized by the Partnership is subject to
change due to stock market fluctuations, since the limited partnership
units cannot be redeemed for cash or REIT stock until August 1996.
8
<PAGE> 20
REAL AMERICAN PROPERTIES
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
2. INVESTMENT IN LIMITED PARTNERSHIP (CONTINUED)
The Partnership intends to redeem the limited partnership shares for
cash upon expiration of the restricted period; however, the REIT may
elect to redeem the units for REIT shares, in which event the
Partnership intends to cause the shares to be registered and sold in
accordance with applicable laws. The investment in 843 South Longmore
Limited Partnership is being carried at a zero balance, and no gain will
be recognized until the limited partnership interest is converted to
cash.
Selected financial information from the financial statements of the
limited partnership at December 31, 1995 and 1994 and for each of the
three years in the period ended December 31, 1995, is as follows:
Balance Sheets
--------------
<TABLE>
<CAPTION>
1995 1994
----------- ---------
(in thousands)
<S> <C> <C>
Land and buildings, net $ 0 $ 13,583
=========== =========
Total assets $ 0 $ 13,798
=========== =========
Mortgages payable secured by real property $ 0 $ 13,000
=========== =========
Total liabilities $ 0 $ 13,231
=========== =========
Equity of RAP $ 0 $ 3
=========== =========
Equity of other partners $ 0 $ 564
=========== =========
</TABLE>
Statements of Operations
------------------------
<TABLE>
<CAPTION>
1995 1994 1993
--------- --------- ----------
(in thousands)
<S> <C> <C> <C>
Total revenue $ 1,708 $ 2,711 $ 2,444
========= ========= ==========
Interest expense $ 1,032 $ 1,137 $ 1,122
========= ========= ==========
Depreciation $ 206 $ 337 $ 328
========= ========= ==========
Total expenses $ 2,100 $ 2,560 $ 2,529
========= ========= ==========
Gain on disposition of property
and equipment $ 5,955 $ 0 $ 0
========= ========= ==========
Net income (loss) $ 5,563 $ 151 $ (85)
========= ========= ==========
Net income (loss) allocable to RAP $ - $ - $ -
========= ========= ==========
</TABLE>
9
<PAGE> 21
REAL AMERICAN PROPERTIES
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
3. MORTGAGE NOTES PAYABLE
Mortgage notes payable consists of the following:
<TABLE>
<CAPTION>
1995 1994
--------- ----------
<S> <C> <C> <C>
a. Mortgage note bearing interest at the rate of
9.25 percent per annum; payable in monthly
installments of approximately $53,500 including
interest through August 1996, at which time the
then outstanding principal balance of the note
is due and payable. Collateralized by the
Northridge property land and buildings with a
net book value of $7,496,195 at December 31,
1995 (See below). $6,072,583 $ 6,072,583
b. Mortgage note (second), interest only at 10%
per annum; payable in monthly installments of
approximately $3,400 through November 15, 1995,
at which time the outstanding principal balance
became due and payable. The note is collateralized
by the Northridge property land and buildings with
a net book value of $7,496,195 at December 31, 1995
(See below). 410,000 410,000
c. Mortgage note bearing interest at the rate of 10.7
percent per annum; payable in monthly installments
of approximately $32,000 including interest through
July 1996, at which time the then outstanding principal
balance become due and payable. Collateralized by land
and buildings with a net book value of $3,438,930 at
December 31, 1995 (Note 1). 3,166,597 3,204,856
----------- -----------
$ 9,649,180 $ 9,687,439
=========== ===========
</TABLE>
10
<PAGE> 22
REAL AMERICAN PROPERTIES
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
3. MORTGAGE NOTES PAYABLE (CONTINUED)
Maturities on the mortgage notes payable are as follows:
Year Ending December 31,
------------------------
1996 $ 9,649,180
In February 1994, the Partnership ceased making payments to the mortgage
lenders of the Northridge property, pending negotiations regarding the
major damage sustained during the January 17, 1994 earthquake (See Note
1).
4. INCOME TAXES
No provision has been made for income taxes in the accompanying
financial statements as such taxes, if any, are the liability of the
individual partners. The major differences in tax and financial
reporting result from the use of different bases and depreciation
methods for rental property held by the Partnership.
5. NET LOSS PER LIMITED PARTNERSHIP INTEREST
Net loss per limited partnership interest was computed by dividing the
limited partners' share of net loss by 21,500, the number of limited
partnership interests outstanding during each year.
6. RELATED PARTY TRANSACTIONS
a. The Partnership had entered into agreements with an affiliate of
NAPICO to manage the operations of the West Colonial and
Northridge rental properties owned by the Partnership. The
agreements were on a month- to-month basis and provided, among
other things, for a management fee equal to 5% of gross revenue
for West Colonial through July 23, 1995 and approximately $2,450
per month, as compensation for continuing property management
services and reconstruction oversight at the Northridge property
damaged by the earthquake. Management fees charged by the NAPICO
affiliate under these agreements were approximately $61,000,
$67,000 and $105,000 for the years ended December 31, 1995, 1994
and 1993, respectively. Included in these management fees is
approximately $30,000 and $27,000 for the years ended December
31, 1995 and 1994, respectively, which was included in earthquake
costs. As of July 24, 1995, management of West Colonial was
transferred to an independent property management firm. The
management agreement is on a month-to-month basis and provides
for a management fee equal to 3.5% of gross revenue. Management
of Northridge will be transferred to an independent management
firm if the property is reconstructed.
Included in other receivables and prepaid expenses at December
31, 1995 and 1994 is $86,194 due from an affiliated company that
served as the rental agent for a property that was owned by the
Partnership.
11
<PAGE> 23
REAL AMERICAN PROPERTIES
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
6. RELATED PARTY TRANSACTIONS (CONTINUED)
b. The Partnership reimburses NAPICO for certain expenses. The
reimbursement to NAPICO was $12,587, $12,128 and $12,146 in 1995,
1994 and 1993, respectively, and is included in operating
expenses.
c. An affiliate of NAPICO performed certain earthquake related
repairs at the Northridge property, in the approximate amount of
$10,000 during the year ended December 31, 1994 (Note 1).
d. Under the terms of the Partnership Agreement, the Partnership may
be obligated to pay the general partners or their affiliates a
liquidation fee equal to 15% of the net proceeds from sale or
refinancing of a project. No part of such fee shall be paid
unless the limited partners have first received certain amounts
as stated in the Partnership Agreement.
e. Certain other fees may be payable to the general partners, under
certain circumstances, as stated in the Partnership Agreement.
7. CONTINGENCIES
NAPICO is a plaintiff in various lawsuits and has also been named as a
defendant in other lawsuits arising from transactions in the ordinary
course of business. In the opinion of management and NAPICO, the claims
will not result in any material liability to the Partnership.
8. FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosure about
Fair Value of Financial Instruments," requires disclosure of fair value
information about financial instruments. The carrying amount of assets
and liabilities reported on the balance sheets that require such
disclosure approximates fair value due to their short-term maturity.
12
<PAGE> 24
SCHEDULE III
REAL AMERICAN PROPERTIES
REAL ESTATE ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Total Land,
Buildings, Buildings,
Partnership- Number of Outstanding Furnishings and Furnishings and Accumulated
Location Units Mortgage Land Equipment Equipment Depreciation
------------ --------- ----------- ---- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Northridge Park
Northridge, California 150 6,482,583 1,521,696 8,650,534 10,172,230 2,676,035
West Colonial Village
Tukwilla, Washington 120 3,166,597 649,224 4,544,567 5,193,791 1,754,861
--- --------- --------- ---------- ---------- ---------
270 9,649,180 2,170,920 13,195,101 15,366,021 4,430,896
=== ========= ========= ========== ========== =========
</TABLE>
<PAGE> 25
SCHEDULE III
(CONTINUED)
REAL AMERICAN PROPERTIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY HELD BY RAP
DECEMBER 31, 1995
NOTES: 1. Rental property is stated at cost. Depreciation is
provided for on the straight-line method over the estimated
useful lives of the buildings and equipment. Substantially
all of the apartments are leased on a month-to-month basis.
2. The total cost of land, buildings, and equipment for
federal income tax purposes at December 31, 1995 is
approximately $14,927,018.
3. Investments in property and equipment:
<TABLE>
<CAPTION>
Buildings,
Furnishings,
and
Land Equipment Total
------------ ------------ ------------
<S> <C> <C> <C>
Balance, January 1, 1993 $ 3,883,970 $ 27,343,623 $ 31,227,593
Net Additions, 1993 - - -
Adjustment for Heatherwood
Apartments (Note 1) (1,713,050) (14,148,522) (15,861,572)
------------ ------------ ------------
Balance, December 31, 1993 2,170,920 13,195,101 15,366,021
Net Additions, 1994 - - -
------------ ------------ ------------
Balance, December 31, 1994 2,170,920 13,195,101 15,366,021
Net Additions, 1995 - - -
------------ ------------ ------------
Balance, December 31, 1995 $ 2,170,920 $ 13,195,101 $ 15,366,021
============ ============ ============
</TABLE>
<PAGE> 26
SCHEDULE III
(CONTINUED)
REAL AMERICAN PROPERTIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY HELD BY RAP
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Buildings,
Furnishings
ACCUMULATED DEPRECIATION: and Equipment
- ------------------------ -------------
<S> <C>
Balance, January 1, 1993 $ 8,694,954
Adjustment for Heatherwood Apartments (4,955,033)
Net additions for the year ended
December 31, 1993 412,000
-------------
Balance, December 31, 1993 4,151,921
Net additions for the year ended
December 31, 1994 139,489
-------------
Balance, December 31, 1994 4,291,410
Net additions for the year ended
December 31, 1995 139,486
-------------
Balance, December 31, 1995 $ 4,430,896
=============
</TABLE>
<PAGE> 27
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:
REAL AMERICAN PROPERTIES (the "Partnership") has no directors or executive
officers of its own.
The general partners of the partnerships are National Partnership Investments
Corp. ("NAPICO") and Real Estate Services XIII Inc. NAPICO is a wholly-owned
subsidiary of Casden Investment Company, an affiliate of The Casden Company.
Real Estate Services XIII Inc. is a wholly-owned subsidiary of LBI Group Inc.
The following biographical information is presented for the directors and
executive officers of NAPICO and officers of Real Estate Services XIII Inc.
with principal responsibility for the Partnership's affairs.
CHARLES H. BOXENBAUM, 66, Chairman of the Board of Directors and Chief
Executive Officer of NAPICO.
Mr. Boxenbaum has been associated with NAPICO since its inception. He has been
active in the real estate industry since 1960, and prior to joining NAPICO was
a real estate broker with the Beverly Hills firm of Carl Rhodes Company.
Mr. Boxenbaum has been a guest lecturer at national and state realty
conventions, certified properties exchanger's seminars, Los Angeles Town Hall,
National Association of Home Builders, International Council of Shopping
Centers, Society of Conventional Appraisers, California Real Estate
Association, National Institute of Real Estate Brokers, Appraisal Institute,
various mortgage banking seminars, and the North American Property Forum held
in London, England. In 1963, he was the winner of the Snyder Award, the
highest annual award offered by the National Association of Real Estate Boards
for Best Exchange. He is one of the founders and a past director of the First
Los Angeles Bank, organized in November 1974. Mr. Boxenbaum was a member of
the Board of Directors of the National Housing Council. Mr. Boxenbaum received
his Bachelor of Arts degree from the University of Chicago.
BRUCE E. NELSON, 44, President and a director of NAPICO.
Mr. Nelson joined NAPICO in 1980 and became President in February 1989. He is
responsible for the operations of all NAPICO sponsored limited partnerships.
Prior to that he was primarily responsible for the securities aspects of the
publicly offered real estate investment programs. Mr. Nelson is also involved
in the identification, analysis, and negotiation of real estate investments.
From February 1979 to October 1980, Mr. Nelson held the position of Associate
General Counsel at Western Consulting Group, Inc., private residential and
commercial real estate syndicators. Prior to that time, Mr. Nelson was engaged
in the private practice of law in Los Angeles. Mr. Nelson received his
Bachelor of Arts degree from the University of Wisconsin and is a graduate of
the University of Colorado School of Law. He is a member of the State Bar of
California and is a licensed real estate broker in California and Texas.
ALAN I. CASDEN, 50, Chairman of The Casden Company, an affiliate of Casden
Properties (formerly CoastFed Properties), a director and member of the audit
committee of NAPICO, and chairman of the Executive Committee of NAPICO.
Mr. Casden is Chairman of the Board, Chief Executive Officer and sole
shareholder of The Casden Company and Casden Investment Corp. Prior to that,
he was the president and chairman of Mayer Group, Inc., which he joined in
1975. He is also chairman of Mayer Management, Inc., a real estate management
firm. Mr. Casden has been involved in approximately $3 billion of real estate
financings and sales and has been responsible for the development and
construction of more than 12,000 apartment units and 5,000 single-family homes
and condominiums.
<PAGE> 28
Mr. Casden is a member of the American Institute of Certified Public
Accountants and of the California Society of Certified Public Accountants. Mr.
Casden is a member of the advisory board of the National Multi-Family Housing
Conference, the Multi-Family Housing Council, and the President's Council of
the California Building Industry Association. He also serves on the advisory
board to the School of Accounting of the University of Southern California. He
holds a Bachelor of Science degree and a Masters in Business Administration
degree from the University of Southern California.
HENRY C. CASDEN, 52, President, Chief Operating Officer and Secretary of The
Casden Company and a director and secretary of NAPICO.
Mr. Casden has been President and Chief Operating Officer of The Casden
Company, as well as a director of NAPICO since February 1988. He became
secretary of both companies in late 1994. From 1982 to 1988, Mr. Casden was of
counsel and a partner in the Los Angeles law firm of Troy, Casden & Gould.
From 1978 to 1981, he was of counsel and a partner in the Los Angeles law firm
of Loeb & Loeb. From 1972 to 1978, Mr. Casden was a member of the Beverly
Hills law firm of Fink & Casden, Professional Corporation.
Mr. Casden received his Bachelor of Arts degree from the University of
California at Los Angeles, and is a graduate of the University of San Diego Law
School. Mr. Casden is a member of the State Bar of California and has numerous
professional affiliations.
BRIAN D. GOLDBERG, 32, Chief Financial Officer of The Casden Company and a
director of NAPICO.
Mr. Goldberg joined The Casden Company in 1990 as Vice President of Finance and
became Chief Financial Officer in March 1991. Prior to joining The Casden
Company, Mr. Goldberg was with Arthur Andersen & Co., an international public
accounting firm, from August 1985 until July 1990 in their Los Angeles office.
He received his bachelor of science degree in Accounting from the University of
Denver. Mr. Goldberg is a member of the American Institute of Certified Public
Accountants and the California Society of Certified Public Accountants.
SHAWN HORWITZ, 36, Executive Vice President and Chief Financial Officer.
Mr. Horwitz joined NAPICO in 1990 and is responsible for the financial affairs
of NAPICO and the limited partnerships sponsored by NAPICO. Prior to joining
NAPICO, Mr. Horwitz was President for approximately one year of Star Sub Shops,
Inc., a corporation engaged in the business of selling fast food franchises,
was an audit manager in the real estate industry group for Altschuler, Melvin &
Glasser for six years, and was an auditor with Arthur Young & Co. for 3 years.
Mr. Horwitz received his Bachelor of Commerce degree in accounting from Rhodes
University in South Africa and is a member of the Illinois Society of Certified
Public Accountants, the American Institute of Certified Public Accountants and
the South African Institute of Chartered Accountants.
BOB SCHAFER, 54, Vice President and Corporate Controller.
Mr. Schafer joined NAPICO in 1984 and is the Corporate Controller responsible
for the financial reporting function of the Company. Prior to this, he was a
Group and Division Controller at Bergen Brunswig for over eight years,
Controller at a Flintkote subsidiary for over four years, and Assistant
Controller at an electronics subsidiary of General Electric for two years.
Mr. Schafer is a member of the California Society of Certified Public
Accountants. He holds a Bachelor of Science degree in accounting from Woodbury
University, Los Angeles.
<PAGE> 29
PATRICIA W. TOY, 66, Senior Vice President - Communications and Assistant
Secretary.
Mrs. Toy joined NAPICO in 1977, following her receipt of an MBA from the
Graduate School of Management, UCLA. From 1952 to 1956, Mrs. Toy served as a
U.S. Naval Officer in communications and personnel assignments. She holds a
Bachelor of Arts Degree from the University of Nebraska.
MARK L. WALTHER, 35, Executive Vice President, General Counsel and Assistant
Secretary.
Mr. Walther joined NAPICO in 1987 and is responsible for the legal affairs of
the NAPICO sponsored limited partnerships. Prior to joining NAPICO, Mr.
Walther worked in the San Francisco law firm of Browne and Kahn which
specialized in construction litigation. Mr. Walther received his Bachelor of
Arts Degree in Political Science from the University of California, Santa
Barbara and is a graduate of the University of California, Davis, School of
Law. He is a member of the State Bar of Hawaii.
ROCCO F. ANDRIOLA, 37, serves as President and Chief Financial Officer of Real
Estate Services XIII Inc. and Senior Vice President of Lehman Brothers Inc. in
its Diversified Asset Group and has held such position since June 1991. From
June 1989 through May 1991, Mr. Andriola held the position of First Vice
President in Lehman's Capital Preservation and Restructuring Group. From
November 1986 through May 1989, Mr. Andriola held the position of Vice
President in the Corporate Transactions Group with the General Counsel's Office
of Lehman. From September 1982 through October 1986, Mr. Andriola was employed
by the law firm of Donovan Leisure Newton & Irvine as a corporate and
securities attorney. Mr. Andriola graduated summa cum laude from Fordham
University in 1979 with a B.A. degree in Economics and Political Science. Mr.
Andriola received a J.D. degree and an LL.M degree in Corporate Law from New
York University School of Law in 1982 and 1986, respectively.
JOHN H. NG, 45, is a Vice President of Real Estate Services XIII Inc. and Vice
President of Lehman Brothers Inc. He has been employed by Lehman since November
1977. He is an asset manager of the Diversified Asset Group of Lehman and has
held such position since 1985. From 1980 to 1985, Mr. Ng served as Senior
Financial Analyst in the Corporate Planning and Development Department and from
1977 to 1980 he was an analyst in the Controller's Department. Prior to joining
Lehman, he served as a Teaching Assistant in Finance and Economics at the
University of Minnesota. Mr. Ng received an M.B.A. with a concentration in
Corporate Finance from the University of Minnesota in 1977 and a B.A. magna cum
laude in Economics with a specialization in Monetary Economics from Moorhead
State University in 1975.
MARK J. MARCUCCI, 33, is a Vice President of Real Estate Services XIII and Vice
President of Lehman Brothers Inc. in its Diversified Asset Group. Since joining
Lehman Brothers in 1988, Mr. Marcucci's responsibilities have been concentrated
in the restructuring, asset management, leasing, financing, refinancing and
disposition of commercial office and residential real estate. Prior to joining
Lehman Brothers, Mr. Marcucci was employed in a corporation lending capacity at
Republic National Bank of New York. Mr. Marcucci received a B.B.A. in Finance
from Hofstra University and a Master of Science in Real Estate from New York
University. In addition, Mr. Marcucci holds both Series 7 and Series 63
securities licenses.
<PAGE> 30
ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS:
Under the terms of the Partnership Agreement, the Partnership is obligated to
the General Partners or their affiliates for the following:
(a) A property management fee was payable to an affiliate of NAPICO on the
two properties owned by the Partnership. Management fees paid were
approximately $61,000, $67,000 and $105,000 in 1995, 1994 and 1993,
respectively.
(b) An affiliate of NAPICO performed earthquake related repairs at one of the
properties. The payments to this affiliate for these repairs were
approximately $10,000 for the year ended December 31, 1994.
(c) Certain other fees may be payable, under certain circumstances, as stated
in the Partnership Agreement.
(d) A liquidation fee is payable equal to 15 percent of the net proceeds from
sale or refinancing of a project. No part of such fee shall be paid
unless the limited partners have first received certain amounts as stated
in the Partnership Agreement.
(e) The Partnership reimburses NAPICO for certain expenses. The
reimbursement to NAPICO was $12,587, $12,128 and $12,146 in 1995, 1994
and 1993, respectively.
ITEM 12. SECURITY OF OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT:
(a) Security Ownership of Certain Beneficial Owners
The General Partners own all of the outstanding general partnership
interests of RAP, no person is known to own beneficially in excess of 5%
of the outstanding limited partnership interests.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:
The Partnership has no officers, employees or directors of its own. All of its
affairs are managed by the Corporate General Partner, NAPICO. The transactions
with NAPICO are primarily in the form of fees paid by the Partnership to NAPICO
for services rendered to the Partnership, as discussed in Item 11 and in the
notes to the accompanying financial statements.
<PAGE> 31
ITEM 14. FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS:
FINANCIAL STATEMENT
Reports of Independent Public Accountants.
Balance Sheets as of December 31, 1995 and 1994.
Statements of Operations for the Years Ended December 31, 1995, 1994 and 1993.
Statements of Partners' Equity for the Years Ended to December 31, 1995, 1994
and 1993.
Statements of Cash Flows for the Years Ended December 31, 1995, 1994 and 1993.
Notes to Financial Statements December 31, 1995.
FINANCIAL STATEMENT SCHEDULES
Schedule III - Real Estate and Accumulated Depreciation, December 31, 1995.
The remaining schedules are omitted because the required information is
included in the financial statements and notes thereto or they are not
applicable or not required.
EXHIBITS
(3) Articles of incorporation and bylaws: The registrant is not
incorporated. The Partnership Agreement was filed with Form S11
#2-94725 incorporated herein by reference.
(10) Material contracts: The registrant is not party to any material
contracts, other than the Restated Certificate and Agreement of
Limited Partnership dated March 9, 1984 and the five contracts
representing the Partnership acquisition of five apartment projects
as previously filed at the Securities Exchange Commission, File
#2-94725 which is hereby incorporated by reference.
(13) Annual report to security holders: Pages ___ to ___.
REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the year ended December 31, 1995.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
PARTNERSHIP'S STATEMENTS OF EARNINGS AND BALANCE SHEETS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 442,803
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 654,056
<PP&E> 15,366,021
<DEPRECIATION> 4,430,896
<TOTAL-ASSETS> 16,825,961
<CURRENT-LIABILITIES> 406,383
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 148,988
<TOTAL-LIABILITY-AND-EQUITY> 16,825,961
<SALES> 0
<TOTAL-REVENUES> 734,131
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 721,848
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 946,615
<INCOME-PRETAX> (934,332)
<INCOME-TAX> 0
<INCOME-CONTINUING> (934,332)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (934,332)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
