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, 1996
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, 1996
and December 31, 1995 . . . . . . . . .2
Statement of Operations (unaudited) -
Three months and six months ended
June 30, 1996 and 1995. . . . . . . . .3
Statements of Cash Flows (unaudited) -
Six months ended June 30, 1996 and 19954
Notes to Financial Statements (unaudited).5-6
Management's Discussion and Analysis of
Financial Condition and Results of Operation7-8
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,
1996 1995
ASSETS
Current Assets
Cash $708,047 $599,315
Escrow deposits and other assets (Note 4)
4,460 10,032
Other Assets
Investment properties, at cost
Land 1,267,695 1,267,695
Buildings and improvements
6,018,409 6,018,410
7,286,105 7,286,105
Less accumulated depreciation
2,025,046 1,922,692
5,261,060 5,363,413
$5,973,593 $5,972,760
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Tenant security deposits
$5,454 $5,454
Rents received in advance
36,170 32,343
Accrued interest payable to Individual
General Partner
470,614 433,571
Accrued expenses and other liabilities
84,188 86,345
Note payable to Individual General
Partner (Note 6)
271,020 271,020
867,446 828,733
Partners' Capital (deficiency) (Note 5):
General Partners
$(86,951) $(85,815)
Limited Partners (authorized--10,000
Interests; outstanding--9,034.01 Interests)
5,214,768 5,251,513
Less 29.86 Interests held in Treasury
(21,670) (21,671)
5,106,146 5,144,027
$5,973,593 $5,972,760
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,
1996 1995 1996 1995
INCOME
Operating income
$188,352 $218,327 $435,195 426,496
Other income
57,937 10,372 70,244 20,593
Total Income
246,289 228,699 505,439 447,089
OPERATING EXPENSES
Property operating expenses
119,117 96,326 237,392 197,738
Depreciation and amortization
51,177 51,102 102,353 102,204
Interest expense
18,684 18,030 37,043 35,312
Administrative expense
41,768 51,156 90,364 101,137
Total Expenses
230,746 216,614 467,153 436,391
Income(Loss) from operations
15,543 12,085 38,286 10,698
Other Income (expenses)
Interest income
5,892 6,736 16,660 14,764
Net Income (Loss)
$21,434 $18,821 $54,946 $25,462
Net Income (Loss) attributable to
General Partners (3%)
643 565 1,648 764
Net Income (Loss) attributable to
Limited Partners (97%)
20,792 18,256 53,298 24,698
Per Limited Partnership Interest
Outstanding--9,004.15 Interests
$2.31 $2.02 $5.92 $2.74
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,
1996 1995
Operating Activities
Net income (loss) for the period
$54,945 $25,462
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation 102,354 102,204
Changes in operating assets and
liabilities:
Escrow deposits & other assets
5,572 12,726
Tenant security deposits
0 (400)
Rents received in advance
3,827 2,229
Accrued expenses and other liabilities
34,886 19,102
NET CASH PROVIDED BY (USED IN)OPERATING ACTIVITIES
201,585 161,323
Investing activities:
Additions to investment property
(0) (10,259)
Financing activities:
Distributions to partners
(92,826) (64,978)
INCREASE (DECREASE) IN CASH
108,759 86,086
Cash at beginning of period
409,508 409,508
CASH AT END OF PERIOD
$518,267 $495,594
See notes to financial statements.
<PAGE>
NATIONAL REAL ESTATE LIMITED PARTNERSHIP INCOME
PROPERTIES
(A Wisconsin Limited Partnership)
Notes to Financial Statements
(Unaudited)
June 30, 1996
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,
1995. 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, 1996, 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
$27,595 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 $4,935,
$2,074, $322, and $3,451, respectively.
5. Changes in Partners' Equity:
LIMITED PARTNERS
Quarter Ended June 30, 1996
Partner's Equity, beginning of quarter $5,238,997
Distributions (45,021)
Net Income (Loss) 20,792
Partners' Equity, end of quarter $5,214,768
Limited Partner's equity is net of 29.86 interests
held in treasury of ($21,671).
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).
GENERAL PARTNERS
Quarter Ended June 30, 1996
Partner's Equity, beginning of quarter $(86,202)
Distributions (1,392)
Net Income (Loss) 643
Partners' Equity, end of quarter $(86,951)
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)
TOTAL
Quarter Ended June 30, 1996
Partner's Equity, beginning of quarter $5,152,795
Distributions (46,413)
Net Income (Loss) 33,510
Partners' Equity, end of quarter $5,139,892
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
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, 1996, interest
totaling $451,930 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
June 30, 1996
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 98.4% for Tucson Lock-It
Lockers; 97.5% for Phoenix Lock-It Lockers; 100% for
Northridge Commons; and 92.3% for Cave Creek Lock-It
Lockers. This compares to an average of 98.9% for
Tucson Lock-It Lockers; 98.7% for Phoenix Lock-It
Lockers; 71.9% for Northridge Commons; and 98.1% for
Cave Creek Lock-It Lockers during the same period of
1995.
Rental rates were increased at Tucson, Phoenix, and
Cave Creek Lock-It Lockers in April 1996. Tucson
Lock-It Lockers updated landscaping and installed
security lighting. Future projects to be completed at
Tucson Lock-It Lockers include painting and additional
asphalt work. Phoenix Lock-It Lockers is continuing to
replace doors on units as warranted and have future
projects consisting of paving and reroofing.
Talbots, the anchor tenant, has given notice that they
will not be extending their lease commencing October
1, 1996. The corporate decision was based on closing
the Talbots surplus stores which are in a secondary
location. The new surplus stores are in California,
Boston, and Illinois and will have 12,000 to 15,000
square feet of floor space. The Northridge store will
close on September 26, 1996. Talbots currently
occupies 6,792 square feet at Northridge.
The Talbot's space is being extensively marketed.
Additional signage is being placed on the property,
commercial brokers have been contacted, ads are being
run and national retailers are being contacted. There
is a considerable amount of vacant retail space in
strip malls in the area. Northridge Commons does have
advantages over some of the competing space. The new
pylon sign installed by CellularOne has given the
property greater visibility and all tenants have seen
an increase in business due to this signage. Talbots
has a premium location on the pylon sign which will be
a big incentive for a new tenant, and Northridge
Commons tenants have direct street access.
During the second quarter of 1996 rental revenue for
Tucson Lock-It Lockers, Phoenix Lock-It Lockers, and
Cave Creek Lock-It Lockers increased compared to the
second quarter of 1995 due to increased rental rates.
Also during the second quarter of 1996, rental revenue
for Northridge Commons increased compared to the
second quarter of 1995 due to a increase in occupancy
at Northridge Commons.
Operating expenses during the second quarter of 1996
increased compared to the operating expenses during
the same quarter in 1995 due to maintenance costs at
Tucson Lock-It and Cave Creek Lock-It Lockers.
The Partnership continued cash distributions to its
partners with distributions totaling $46,413 for the
second quarter of 1996. These distributions are
required to be allocated 97% to Limited Partners
$45,021) and 3% to the General Partners ($1,392).
<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, 1996.
<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, 1996
/S/ John Vishnevsky
________________________________
John Vishnevsky
President and Chief Operating and
Executive Officer
National Development and Investment, Inc.
Corporate General Partner
Date /S/August 15, 1996
/S/ John Vishnevsky
__________________________________
John Vishnevsky
Chief Financial and Accounting Officer
Date /S/August 15, 1996
Stephen P. Kotecki
__________________________________
Stephen P. Kotecki
President
EC Corp
Corporate General Partner
F:\WPDOCS\LETTERS\NIP-2QTR.EL6
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 712,534
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 712,534
<PP&E> 7,286,105
<DEPRECIATION> 2,025,046
<TOTAL-ASSETS> 5,973,593
<CURRENT-LIABILITIES> 867,446
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,106,146<F1>
<TOTAL-LIABILITY-AND-EQUITY> 5,973,593
<SALES> 522,099
<TOTAL-REVENUES> 522,099
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 467,153
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 54,946
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 54,946
<EPS-PRIMARY> 5.92<F2>
<EPS-DILUTED> 0
[BLANK]
<FN>
<F1>Refers to General Partners and Limited Partners Capital.
<F2>97% Limited Partners - Interests Outstanding=9004.15.
</FN>
</TABLE>
