SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For Quarter Ended March 31, 1995
Commission File Number: 0-14453
National Real Estate Limited Partnership
Income Properties
(Exact name of registrant as specified in its charter)
Wisconsin39-1503893
(State or other jurisdiction of (I.R.S. Employer
Identification
incorporation or organization) Number)
9800 West Bluemound Road, Wauwatosa, Wisconsin 53226-4353
(Address of principal executive offices) (zip
code)
Registrant's telephone number, including area code:
(414) 453-3498
N/A
____________________________________________________
Former name, address and fiscal year if changed since
last report.
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Sections 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.
X Yes No<PAGE>
NATIONAL REAL ESTATE LIMITED PARTNERSHIP
INCOME PROPERTIES
INDEX
Page
PART I. FINANCIAL INFORMATION
Balance Sheet (unaudited) - March 31, 1995
and December 31, 1994 2
Statement of Operations (unaudited) -
Three months ended
March 31, 1995 and 1994 3
Statements of Cash Flows (unaudited) -
Three months ended March 31, 1995 and 1994 4
Notes to Financial Statements (unaudited) 5-6
Management's Discussion and Analysis of
Financial Condition and Results of Operation 7-8
PART II. OTHER INFORMATION AND SIGNATURES 9-10<PAGE>
PART I. FINANCIAL INFORMATION
NATIONAL REAL ESTATE LIMITED PARTNERSHIP - IP
(A Wisconsin Limited Partnership)
Balance Sheet
(Unaudited)
March 31
December 31,
1995
1994
ASSETS
Current Assets
Cash
$
427,175
$
409,508
Escrow deposits and other assets (Note 4)
11,565
17,420
Other Assets
Investment properties, at cost
Land
1,267,695
1,267,695
Buildings and improvements
6,001,325
5,992,076
7,269,020
7,259,771
Less accumulated depreciation
1,769,275
1,718,173
5,499,745
5,541,598
$
5,938,485
$
5,968,526
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Tenant security deposits
$
7,423
$
7,823
Rents received in advance
37,140
31,530
Accrued interest payable to Individual
General Partner
378,584
361,303
Accrued expenses and other liabilities
74,003
100,687
Note payable to Individual General
Partner (Note 6)
271,020
271,020
768,170
772,363
Partners' Capital (deficiency) (Note 5):
General Partners
$
(85,027)
$
(84,252)
Limited Partners (authorized--10,000
Interests; outstanding--9,034.01 Interests)
5,277,013
5,302,086
Less 29.86 Interests held in Treasury
(21,671)
(21,671)
5,170,315
5,196,163
$
5,938,485
$
5,968,526
See notes to financial statements.
<PAGE>
NATIONAL REAL ESTATE LIMITED PARTNERSHIP - IP
(A Wisconsin Limited Partnership)
Statement of Cash Flows
(Unaudited)
Three Months Ended
March 31,
1995
1994
Operating Activities
Net income (loss) for the period
$
6,641
$
(14,647)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation
51,102
49,984
Changes in operating assets and
liabilities:
Escrow deposits & other assets
5,855
(20,811)
Tenant security deposits
(400)
0
Rents received in advance
5,610
(3,439)
Accrued expenses and other liabilities
(9,403)
26,331
NET CASH PROVIDED BY (USED IN)
59,405
37,418
OPERATING ACTIVITIES
Investing activities:
Additions to investment property
(9,249)
(1,415)
Financing activities:
Distributions to partners
(32,489)
(32,489)
INCREASE (DECREASE) IN CASH
17,667
3,514
Cash at beginning of period
409,508
304,845
CASH AT END OF PERIOD
$
427,175
$
308,359
See notes to financial statements.
<PAGE>
NATIONAL REAL ESTATE LIMITED PARTNERSHIP - IP
(A Wisconsin Limited Partnership)
Statement of Operations
(Unaudited)
Three months ended
March 31,
1995
1994
INCOME
Operating income
$
208,169
$
189,923
Other income
10,221
9,633
Total Income
218,390
199,556
OPERATING EXPENSES
Property operating expenses
101,412
104,699
Depreciation and amortization
51,102
49,984
Interest expense
17,282
11,686
Administrative expense
49,981
50,036
Total Expenses
219,777
216,405
Income(Loss) from operations
(1,387)
(16,849)
Other Income (expenses)
Interest income
8,028
2,202
Net Income (Loss)
$
6,641
$
(14,647)
Net Income (Loss) attributable to
General Partners (3%)
$
199
$
(439)
Net Income (Loss) attributable to
Limited Partners (97%)
$
6,442
$
(14,208)
Per Limited Partnership Interest
Outstanding--9,004.15 Interests
$
0.72
$
(1.58)
$
See notes to financial statements.
<PAGE>
NATIONAL REAL ESTATE LIMITED PARTNERSHIP
INCOME PROPERTIES
(A Wisconsin Limited Partnership)
Notes to Financial Statements
(Unaudited)
March 31, 1995
1.In the opinion of the General Partners, the
accompanying unaudited financial statements contain all
adjustments (consisting of normal recurring accruals)
which are necessary for a fair presentation. The
statements, which do not include all of the information
and footnotes required by generally accepted accounting
principles for complete financial statements, should be
read in conjunction with the National Real Estate
Limited Partnership Income Properties annual report for
the year ended December 31, 1994. Refer to the
footnotes of those statements for additional details on
the Partnership's financial condition. The operating
results for the period ended March 31, 1995, may not be
indicative of the operating results for the entire
year.
2.National Real Estate Limited Partnership Income
Properties (the "Partnership") was organized under the
Wisconsin Uniform Limited Partnership Act pursuant to a
Certificate of Limited Partnership dated December 18,
1984, for the purpose of investing in residential,
commercial, and industrial real properties. John
Vishnevsky and National Development and Investment,
Inc., contributed the sum of $6,000 to the Partnership
as General Partners. The Limited Partnership Agreement
had authorized the issuance of 10,000 Limited
Partnership Interests (the "Interests") at $1,000 per
Interest with the offering period commencing January
31, 1985. Upon conclusion of the offering in December
1986, the Partnership had raised $9,024,556 in capital
representing 9,034.01 Interests.
3.National Realty Management, Inc. (NRMI): The
Partnership incurred property management fees of
$11,741 under an agreement with NRMI for the period
presented.
4.Real estate taxes are charged to operations based on
actual taxes paid for the prior year and are adjusted
for normal annual increases. Taxes for Tucson Lock-It
Lockers, Phoenix Lock-It Lockers, Cave Creek Lock-It
Lockers, and Northridge Commons are being accrued
monthly at $4,616, $1,831, $389, and $3,844,
respectively. In addition to carrying forward the
escrow balance from the prior year, funds are escrowed
at a rate of $4,500, $1,800, and $450 per month for
Tucson Lock-It Lockers, Phoenix Lock-It Lockers, and
Cave Creek Lock-It Lockers, respectively.
<PAGE>
National Real Estate Limited Partnership Income
Properties
(A Wisconsin Limited Partnership)
Notes to Financial Statements (Cont.)
(Unaudited)
March 31, 1995
5.Changes in Partners' Equity:
LimitedGeneral
Partners Partners Total
Quarter Ended March 31, 1995
Partner's Equity, beginning of quarter$5,280,415
$(84,252)$5,196,163
Distributions( 31,515)( 974)( 32,489)
Net Income (Loss) 6,442 199 6,641
Partners' Equity, end of quarter$5,255,342
$(85,027)$5,170,315
Limited Partner's equity is net of 29.86 interests held
in treasury of ($21,671).
Quarter Ended March 31, 1994
Partner's Equity, beginning of quarter$5,355,306
$(81,938)$5,273,368
Distributions (31,515) ( 974) (32,489)
Net Income (Loss) (14,208) (439)
(14,647)
Partners' Equity, end of quarter$5,309,583
$(83,351)$5,266,232
Limited Partner's equity is net of 29.86 interests held
in treasury of ($21,671).
6.As outlined in the prospectus, the General Partners
agreed to make loans to the Partnership up to an
aggregate of 3% of the gross proceeds of the offering
to the extent necessary to provide distributions to the
limited partners at annualized rates equal to 8% in
1985, 8.25% in 1986, and 8.5% in 1987. The loan will be
repaid solely from sales proceeds, with compounding
interest equal to the cost of their funds or 12%,
whichever is lower. As of March 31, 1995, interest
totaling $378,584 has accrued.
7.Northridge Commons' tenants pay monthly fixed rent
payments plus estimated charges for taxes, costs of
insurance premiums, administrative costs, and operating
expenses with respect to common areas.
NATIONAL REAL ESTATE LIMITED PARTNERSHIP
INCOME PROPERTIES
(A Wisconsin Limited Partnership)
Management's Discussion and Analysis of
Financial Condition and Results of Operations
March 31, 1995
The Partnership currently owns and operates four
investment properties; Tucson Lock-It Lockers, a 49,885
net rentable square foot mini warehouse complex in
Tucson, Arizona; Phoenix Lock-It Lockers, a 58,766 net
rentable square foot mini warehouse complex in Phoenix,
Arizona; a portion of Cave Creek Lock-It Lockers
containing 8,236 of 46,028 net rentable square feet in
Phoenix, Arizona; and Northridge Commons, a 20,700 net
rentable square foot community shopping center in
Milwaukee, Wisconsin.
Occupancy based upon net rentable square feet for the
first quarter averaged 98.9% for Tucson Lock-It
Lockers; 98.7% for Phoenix Lock-It Lockers; 63.6% for
Northridge Commons; and 98.2% for Cave Creek Lock-It
Lockers. This compares to an average of 97.9% for
Tucson Lock-It Lockers;<PAGE>
NATIONAL REAL ESTATE LIMITED PARTNERSHIP
INCOME PROPERTIES
(A Wisconsin Limited Partnership)
Management's Discussion and Analysis of
Financial Condition and Results of Operations (Cont.)
March 31, 1995
97.1% for Phoenix Lock-It Lockers; 63.6% for Northridge
Commons; and 99% for Cave Creek Lock-It Lockers during
the same period of 1994.
Occupancy remained in line with last year at the Tucson
and Phoenix Lock-It Lockers for the first quarter.
Rental rates were also increased to be consistent with
the current market prices at surrounding locker
facilities. In order to maximize occupancy,
improvements to Tucson Lock-It Lockers included roof
repairs and painting, and the Phoenix Lock-It Lockers
office was painted. At Cave Creek Lock-It Lockers the
office was reroofed. Tucson Lock-It Lockers, Phoenix
Lock-It Lockers and Cave Creek Lock-It Lockers
painting projects will continue throughout the
remainder of the year. Tucson Lock-It Lockers and
Phoenix Lock-It Lockers will also be repairing the
asphalt.
Upon the purchase of Cave Creek Lock-It Lockers, the
Partnership entered into master lease agreements with
the Seller, Enterprise Growth Group (EGG). The
Partnership had been informed that EGG had been funding
the lease payments because cash flow from the property
had not been sufficient to cover them. EGG made only a
partial lease payment in August, 1991 for the July
installment and was delinquent in subsequent payments.
The General Partners officially notified EGG of their
default on October 17, 1991. Management of the property
was turned over to National Realty Management, Inc. on
November 1, 1991 in order to ensure maximization of net
operating income to the Partnership. As of early 1992,
the master lease agreements expired. The Partnership
continues to research legal remedies relating to
enforcing collection from EGG.
Vacancies continue to plague the surrounding retail
shopping area of Northridge Commons. In order to
attract tenants, Northridge Commons has maintained the
same base rent as it did during the same period of
1994. A new tenant, Cellular One, signed a five year
lease agreement for 4,738 square feet (or about 23% of
the net rentable square footage) with Northridge
Commons and is planning extensive renovations at their
own expense. This lease begins on May 1, 1995. Talbots
remains as the anchor tenant and has done well since
their expansion in 1990. In May 1993 Computer
Components broke their five year lease and vacated the
property. They subsequently filed Chapter 11 in
Milwaukee and Madison, Wisconsin. Legal council has
filed legal documents to establish Northridge Commons
as a creditor due to notification that some funds are
available to outstanding creditors. Information was
obtained from the court that there are assets to draw
from. Therefore, legal action is planned for
collection. Legal action is also being taken to collect
past due rent and common area maintenance charges from
Hair Care Harmony. It has been mutually agreed that
Hair Care Harmony will pay half of the past due base
rent for the first three months of 1994. In addition,
Hair Care Harmony has further agreed to pay the
shortage of common area maintenance charges from 1993.
This issue is expected to be settled and closed in the
second quarter of 1995.
During the first quarter of 1995 rental revenue for
Tucson Lock-It Lockers and Phoenix Lock-It Lockers
increased compared to the first quarter of 1994 due to
increased rental rates. Also during the first quarter
of 1995, rental revenue for Cave Creek Lock-It Lockers
and Northridge Commons also increased compared to the
first quarter of 1994 due to a decrease in delinquent
rent.
Operating expenses during the first quarter of 1995
remained in line as compared to the operating expenses
during the same quarter in 1994.
The Partnership continued cash distributions to its
partners with distributions totaling $32,489 for the
first quarter of 1995. These distributions are required
to be allocated 97% to Limited Partners ($31,515) and
3% to the General Partners ($974). <PAGE>
PART II. OTHER INFORMATION
Item 6(b). Reports on Form 8-K
There were no reports on Form 8-K for the quarter ended
March 31, 1995.
<PAGE>
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.
National Real Estate Limited Partnership
Income Properties
(Registrant)
Date /S/May 11, 1995
/S/ John Vishnevsky
________________________________
John Vishnevsky
President and Chief Operating and
Executive Officer
National Development and Investment, Inc.
Corporate General Partner
Date /S/May 11, 1995
/S/ John Vishnevsky
__________________________________
John Vishnevsky
Chief Financial and Accounting Officer
Date /S/May 11, 1995
Stephen P. Kotecki
__________________________________
Stephen P. Kotecki
President
EC Corp
Corporate General Partner
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