United States Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly Report Pursuant to Section 13 or
- --- 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended February 28, 1997
or
Transition Report Pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934
For the Transition period from ______ to ______
Commission File Number: 0-14342
COMMERCIAL PROPERTIES 4, L.P.
Exact Name of Registrant as Specified in its Charter
Virginia 11-2711361
State or Other Jurisdiction I.R.S. Employer Identification No.
of Incorporation or Organization
3 World Financial Center, 29th Floor,
New York, NY Attn: Andre Anderson 10285
Address of Principal Executive Offices Zip Code
(212) 526-3237
Registrant's Telephone Number, Including Area Code
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
---
Consolidated Balance Sheets At February 28, At November 30,
1997 1996
Assets
Real estate, at cost:
Land $ 2,000,000 $ 2,000,000
Building and improvements 18,442,639 18,241,490
20,442,639 20,241,490
Less accumulated depreciation (8,491,864) (8,337,153)
11,950,775 11,904,337
Cash and cash equivalents 1,425,059 1,339,034
Restricted cash 870,133 873,891
Rent receivable 82,774 88,910
Prepaid expenses, net of accumulated
amortization of $426,027 in 1997 and
$423,728 in 1996 373,206 360,341
Deferred rent receivable 355,077 370,148
Other assets, net of accumulated amortization
of $58,651 in 1997 and $54,165 in 1996 178,517 182,233
Total Assets $15,235,541 $15,118,894
Liabilities and Partners' Capital (Deficit)
Liabilities:
Mortgage note payable $ 2,608,332 $2,653,177
Accrued interest payable - 17,135
Accounts payable and accrued expenses 521,216 386,616
Due to affiliates 3,912,765 3,863,561
Total Liabilities 7,042,313 6,920,489
Partners' Capital (Deficit):
General Partners (126,635) (128,928)
Limited Partners (56,341 units outstanding) 8,319,863 8,327,333
Total Partners' Capital 8,193,228 8,198,405
Total Liabilities and Partners' Capital $15,235,541 $15,118,894
Consolidated Statement of Partners' Capital (Deficit)
For the three months ended February 28, 1997
General Limited
Partners Partners Total
Balance at November 30, 1996 $(128,928) $8,327,333 $8,198,405
Net income (loss) 2,293 (7,470) (5,177)
Balance at February 28, 1997 $(126,635) $8,319,863 $8,193,228
Consolidated statements of Operations
For the three months ended February 28, and February 29, 1997 1996
Income
Rental $716,818 $662,147
Interest 24,703 18,419
Total income 741,521 680,566
Expenses
Property operating 330,973 321,391
Depreciation and amortization 275,139 276,480
Interest expense 100,316 105,987
General and administrative 40,270 40,475
Total expenses 746,698 744,333
Net Loss $ (5,177) $(63,767)
Net Income (Loss) Allocated:
To the General Partners $ 2,293 $ 1,489
To the Limited Partners (7,470) (65,256)
$ (5,177) $(63,767)
Per limited partnership unit
(56,341 outstanding) $(.13) $(1.16)
Consolidated Statements of Cash Flows
For the three months ended February 28, and February 29, 1997 1996
Cash Flows From Operating Activities:
Net loss $ (5,177) $(63,767)
Adjustments to reconcile net loss to net
cash provided by (used for) operating activities:
Depreciation 239,677 241,370
Amortization 35,462 35,110
Increase (decrease) in cash arising from changes in
operating assets and liabilities:
Restricted cash 3,758 (348,071)
Rent receivable 6,136 (18,902)
Prepaid expenses and other assets (44,611) (32,973)
Deferred rent receivable 15,071 4,349
Accrued interest payable (17,135) (201)
Accounts payable and accrued expenses 37,578 12,519
Due to affiliates 49,204 50,695
Net cash provided by (used for) operating activities 319,963 (119,871)
Cash Flows From Investing Activities:
Tenant reimbursements for improvements - 36,390
Additions to real estate (286,115) (11,292)
Accounts payable - real estate assets 97,022 4,140
Net cash provided by (used for) investing activities (189,093) 29,238
Cash Flows From Financing Activities:
Mortgage principal payments (44,845) (31,033)
Net cash used for investing activities (44,845) (31,033)
Net increase (decrease) in cash and cash equivalents 86,025 (121,666)
Cash and cash equivalents, beginning of period 1,339,034 859,541
Cash and cash equivalents, end of period $1,425,059 $ 737,875
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest $ 68,108 $ 53,682
Supplemental Disclosure of Non-Cash Investing Activities:
Write-off of fully depreciated tenant improvements $ 84,966 $ 3,823
Notes to the Consolidated Financial Statements
The unaudited financial statements should be read in conjunction
with the Partnership's annual 1996 audited consolidated financial statements
within Form 10-K.
The unaudited financial statements include all normal and
reoccurring adjustments which are, in the opinion of management,
necessary to present a fair statement of financial position as of
February 28, 1997 and the results of operations and cash flows
for the three months ended February 28, 1997 and February 29, 1996 and the
statement of changes in partners' capital (deficit) for the three
months ended February 28, 1997. Results of operations for the
period are not necessarily indicative of the results to be
expected for the full year.
Reclassification. Certain prior year amounts have been
reclassified in order to conform to the current year's
presentation.
No significant events have occurred subsequent to fiscal year
1996, and no material contingencies exist which would require
disclosure in this interim report per Regulation S-X, Rule 10-01,
Paragraph (a)(5).
Part I, Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
Since the full amount of units offered was not sold, insufficient
funds were raised to meet the Partnership's commitments with
respect to the acquisition and lease-up of the properties. In
order to meet these commitments, the General Partners have
postponed reimbursements of certain fees and expenses. Funds
made available by deferring payment of the acquisition fee at
Reflections have been fully distributed to the Limited Partners
as cash distributions. Cash flow from operations is currently
being utilized to make payments on the principal balance of the
mortgage secured by Crosswest Office Center ("Crosswest") or held
in escrow to fund future mortgage payments. It is anticipated
that cash distributions will remain suspended for the foreseeable
future in light of these funding needs and the Partnership's plan
to market Crosswest for sale in 1997. Any cash reserves held by
the Partnership at the time of sale will be distributed together
with proceeds resulting from such a sale.
The Partnership had cash and cash equivalents at February 28,
1997 of $1,425,059 compared with $1,339,034 at November 30, 1996.
The increase is primarily attributable to net cash from operating
activities exceeding real estate additions and mortgage principal
payments. Net cash provided by operating activities totaled
$319,963 for the three months ended February 28, 1997 compared
with net cash used for operating activities totaling $119,871 for
the three months ended February 29, 1996. The change primarily
reflects the lower net loss, and to the timing of contributions
to and withdrawals from restricted cash. At February 28, 1997,
the Partnership had a restricted cash balance of $870,133
compared with $873,891 at November 30, 1996. The restricted cash
balance at February 28, 1997 consisted of $40,353 in security
deposits, $214,821 reserved to fund real estate taxes at
Crosswest and $614,959 representing the building lockbox escrow
which was set up during the fourth quarter of 1993, pursuant to
Crosswest's amended loan agreement. The Partnership's cash
balance, along with funds generated by operating activities are
expected to provide sufficient liquidity to enable the
Partnership to meet its operating expenses.
Accrued interest payable at February 28, 1997 was $0 compared
with $17,135 at November 30, 1996. The decrease is due to
payments on the mortgage note secured by Crosswest.
Accounts payable and accrued expenses totaled $521,216 at
February 28, 1997 compared to $386,616 at November 30, 1996. The
increase is primarily a result of the timing of payments for
building improvements.
Results of Operations
Partnership operations resulted in a net loss of $5,177 for the
three months ended February 28, 1997, compared with a net loss of
$63,767 for the three months ended February 29, 1996. The lower
net loss in 1997 is largely attributable to higher rental income
at Crosswest, partially offset by higher property operating
expenses.
Rental income totaled $716,818 for the three months ended
February 28, 1997, compared with $662,147 for the three months
ended February 29, 1996. The increase is primarily attributable
to higher rental rates and tenant reimbursable income. Interest
income increased to $24,703 for the three months ended February
28, 1997, compared with $18,419 for the three months ended
February 29, 1996, primarily due to higher average cash balances.
Property operating expenses totaled $330,973 for the three months
ended February 28, 1997, compared with $321,391 for the three
months ended February 29, 1996. The increase is primarily due to
higher advertising and utility costs.
At February 28, 1997 the Property was 99% leased, unchanged from
a year earlier.
Part II Other Information
Items 1-5 Not applicable.
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits -
(27) Financial Data Schedule
(b) Reports on Form 8-K - No reports on Form 8-K were
filed during the three month period covered by this
report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
COMMERCIAL PROPERTIES 4, L.P.
BY: CP4 REAL ESTATE SERVICES INC.
General Partner
Date: April 14, 1997 BY: /s/ Kenneth L. Zakin
Director and President
Date: April 14, 1997 BY: /s/William Caulfield
Vice President and
Chief Financial Officer
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<PERIOD-END> Feb-28-1997
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<RECEIVABLES> 82,774
<ALLOWANCES> 000
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<DEPRECIATION> (8,491,864)
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<INTEREST-EXPENSE> 100,316
<INCOME-PRETAX> (5,177)
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<INCOME-CONTINUING> (5,177)
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<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> (5,177)
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