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 June 30, 1995
Commission File Number: 0-14453
National Real Estate Limited Partnership
Income Properties
(Exact name of registrant as specified in its charter)
Wisconsin
(State or other jurisdiction of incorporation or
organization)
39-1503893
(I.R.S. Employer Identification Number)
900 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) - June 30, 1995
and December 31, 1994 . . . . . . . . .2
Statement of Operations (unaudited) -
Three months and six months ended
June 30, 1995 and 1994. . . . . . . . .3
Statements of Cash Flows (unaudited) -
Six months ended June 30, 1995 and 19944
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)
June 30 December 31,
1995 1994
ASSETS
Current Assets
Cash $495,594 $409,508
Escrow deposits and other assets (Note 4)
4,694 17,420
Other Assets
Investment properties, at cost
Land 1,267,695 1,267,695
Buildings and improvements
6,002,335 5,992,076
7,270,030 7,259,771
Less accumulated depreciation
1,820,377 1,718,173
5,449,653 5,541,598
$5,949,941 $5,968,526
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Tenant security deposits
$7,423 $7,823
Rents received in advance
33,759 31,530
Accrued interest payable to Individual
General Partner
396,615 361,303
Accrued expenses and other liabilities
84,477 100,687
Note payable to Individual General
Partner (Note 6)
271,020 271,020
793,294 772,363
Partners' Capital (deficiency) (Note 5):
General Partners
$(85,436) $(84,252)
Limited Partners (authorized--10,000
Interests; outstanding--9,034.01 Interests)
5,263,754 5,302,086
Less 29.86 Interests held in Treasury
(21,671) (21,671)
5,156,647 5,196,163
$5,949,941 $5,968,526
See notes to financial statements.
<PAGE>
NATIONAL REAL ESTATE LIMITED PARTNERSHIP - IP
(A Wisconsin Limited Partnership)
Statement of Operations
(Unaudited)
Three months ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
INCOME
Operating income
$218,327 $190,321 426,496 380,244
Other income
10,372 8,874 20,593 18,507
Total Income
228,699 199,195 447,089 398,751
OPERATING EXPENSES
Property operating expenses
96,326 85,503 197,738 190,202
Depreciation and amortization
51,102 51,045 102,204 101,029
Interest expense
18,030 13,069 35,312 24,755
Administrative expense
51,156 40,485 101,137 90,521
Total Expenses
216,614 190,102 436,391 406,507
Income(Loss) from operations
12,085 9,093 10,698 (7,756)
Other Income (expenses)
Interest income
6,736 2,655 14,764 4,857
Net Income (Loss)
$18,821 $11,748 25,462 (2,899)
Net Income (Loss) attributable to
General Partners (3%)
$565 $352 764 (87)
Net Income (Loss) attributable to
Limited Partners (97%)
$18,256 $11,396 24,698 (2,812)
Per Limited Partnership Interest
Outstanding--9,004.15 Interests
$2.02 $1.27 $2.74 $(0.31)
See notes to financial statements.
<PAGE>
NATIONAL REAL ESTATE LIMITED PARTNERSHIP - IP
(A Wisconsin Limited Partnership)
Statement of Cash Flows
(Unaudited)
Six Months Ended
June 30,
1995 1994
Operating Activities
Net income (loss) for the period
$25,462 $(14,647)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation 102,204 49,984
Changes in operating assets and
liabilities:
Escrow deposits & other assets
12,726 (20,811)
Tenant security deposits
(400) 0
Rents received in advance
2,229 (3,439)
Accrued expenses and other liabilities
19,102 26,331
NET CASH PROVIDED BY (USED IN)OPERATING ACTIVITIES
161,323 37,418
Investing activities:
Additions to investment property
(10,259) (1,415)
Financing activities:
Distributions to partners
(64,978) (32,489)
INCREASE (DECREASE) IN CASH
86,086 3,514
Cash at beginning of period
409,508 304,845
CASH AT END OF PERIOD
$495,594 $308,359
See notes to financial statements.
<PAGE>
NATIONAL REAL ESTATE LIMITED PARTNERSHIP
INCOME PROPERTIES
(A Wisconsin Limited Partnership)
Notes to Financial Statements
(Unaudited)
June 30, 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
June 30, 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
$21,936 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.
5. Changes in Partners' Equity:
LIMITED PARTNERS
Quarter Ended June 30, 1995
Partner's Equity, beginning of quarter $5,255,342
Distributions (31,515)
Net Income (Loss) 18,256
Partners' Equity, end of quarter $5,242,083
Limited Partner's equity is net of 29.86 interests held
in treasury of ($21,671).
Quarter Ended June 30, 1994
Partner's Equity, beginning of quarter $5,309,583
Distributions (31,515)
Net Income (Loss) 11,396
Partners' Equity, end of quarter $5,289,464
Limited Partner's equity is net of 29.86 interests held
in treasury of ($21,671).
GENERAL PARTNERS
Quarter Ended June 30, 1995
Partner's Equity, beginning of quarter $(85,027)
Distributions (974)
Net Income (Loss) 565
Partners' Equity, end of quarter $(85,436)
Quarter Ended June 30, 1994
Partner's Equity, beginning of quarter $(83,351)
Distributions (974)
Net Income (Loss) 352
Partners' Equity, end of quarter $(83,973)
TOTAL
Quarter Ended June 30, 1995
Partner's Equity, beginning of quarter $5,170,315
Distributions (32,489)
Net Income (Loss) 18,821
Partners' Equity, end of quarter $5,156,647
Quarter Ended June 30, 1994
Partner's Equity, beginning of quarter $5,226,232
Distributions (32,489)
Net Income (Loss) 11,748
Partners' Equity, end of quarter $5,205,491
<PAGE>
National Real Estate Limited Partnership
Income Properties
(A Wisconsin Limited Partnership)
Notes to Financial Statements (Cont.)
(Unaudited)
June 30, 1995
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 June 30, 1995, interest
totaling $396,665 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.
<PAGE>
NATIONAL REAL ESTATE LIMITED PARTNERSHIP
INCOME PROPERTIES
(A Wisconsin Limited Partnership)
Management's Discussion and Analysis of
Financial Condition and Results of Operations
June 30, 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
second quarter averaged 99.1% for Tucson Lock-It
Lockers; 99.1% for Phoenix Lock-It Lockers; 80.1% for
Northridge Commons; and 98.3% for Cave Creek Lock-It
Lockers. This compares to an average of 98.9% for
Tucson Lock-It Lockers; 98.2% for Phoenix Lock-It
Lockers; 53.9% for Northridge Commons; and 99.6% for
Cave Creek Lock-It Lockers during the same period of
1994.
In order to be consistent with the current market
prices at surrounding locker facilities rental rates
were increased at Tucson, Phoenix, and Cave Creek
Lock-It Lockers. Tucson Lock-It Lockers repaired the
driveway and future projects to be completed at
Tucson Lock-It Lockers include painting, repaving the
driveways and reroofing. Improvements to Phoenix
Lock-It Lockers included a painting and wiring project.
Phoenix Lock-It Lockers will also be repaving the
driveways and reroofing. At Cave Creek Lock-It Lockers
several painting projects were completed including
painting the fence around the property. Northridge
Commons will be resurfacing, repairing, and restriping
the entire parking lot throughout the remainder of the
year.
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
started legal proceedings relating to collection from
EGG and its principals.
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 began on May 1, 1995. A major
insurance company based out of Illinois will be
entering a five (5) year lease commencing July 1, 1995,
at which Northridge Commons will be at 100% occupancy.
Talbots remains as the anchor tenant and has done well
since their expansion in 1990.
During the second quarter of 1995 rental revenue for
Tucson Lock-It Lockers and Phoenix Lock-It Lockers
increased compared to the second quarter of 1994 due to
increased rental rates. Also during the second quarter
of 1995, rental revenue for Cave Creek Lock-It Lockers
and Northridge Commons also increased compared to the
second quarter of 1994 due to a decrease in delinquent
rent at Cave Creek Lock-It Lockers and an increase in
occupancy at Northridge Commons.
Operating expenses during the second quarter of 1995
increased compared to the operating expenses during the
same quarter in 1994 due to commissions paid to an
outside broker for leasing space at Northridge Commons.
<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.)
June 30, 1995
The Partnership continued cash distributions to its
partners with distributions totaling $32,489 for the
second 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
June 30, 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/August 15, 1995
/S/ John Vishnevsky
________________________________
John Vishnevsky
President and Chief Operating and
Executive Officer
National Development and Investment, Inc.
Corporate General Partner
Date /S/August 15, 1995
/S/ John Vishnevsky
__________________________________
John Vishnevsky
Chief Financial and Accounting Officer
Date /S/August 15, 1995
Stephen P. Kotecki
__________________________________
Stephen P. Kotecki
President
EC Corp
Corporate General Partner
B:\NIP-2QTR.ELE
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 500,288
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 500,288
<PP&E> 7,270,030
<DEPRECIATION> 1,820,377
<TOTAL-ASSETS> 5,949,941
<CURRENT-LIABILITIES> 125,659
<BONDS> 667,635
<COMMON> 0
0
0
<OTHER-SE> 5,156,647<F1>
<TOTAL-LIABILITY-AND-EQUITY> 5,949,941
<SALES> 0
<TOTAL-REVENUES> 235,435
<CGS> 0
<TOTAL-COSTS> 198,584
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,030
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,821
<EPS-PRIMARY> 2.02<F2>
<EPS-DILUTED> 0
<FN>
<F1>Refers to General Partners & Limited Partners capital.
<F2>97% Limited Partners Interest Outstanding = 9004.15
</FN>
</TABLE>
