[ARTICLE] 5
<TABLE>
<S> <C>
[PERIOD-TYPE] 9-MOS
[FISCAL-YEAR-END] DEC-31-1997
[PERIOD-END] SEP-30-1997
[CASH] 790608
[SECURITIES] 0
[RECEIVABLES] 0
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 790608
[PP&E] 6670527
[DEPRECIATION] 2282371
[TOTAL-ASSETS] 5178764
[CURRENT-LIABILITIES] 962793
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 0
[OTHER-SE] 4215971
[TOTAL-LIABILITY-AND-EQUITY] 5178764
[SALES] 0
[TOTAL-REVENUES] 468933
[CGS] 0
[TOTAL-COSTS] 0
[OTHER-EXPENSES] 424442
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 22271
[INCOME-PRETAX] 0
[INCOME-TAX] 0
[INCOME-CONTINUING] 0
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 22221
[EPS-PRIMARY] 3.9
[EPS-DILUTED] 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
( X ) QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT
For the transition period from to
Commission File Number: 0-14453
National Real Estate Limited Partnership Income
Properties
(Exact name of small business issuer as specified in its charter)
Wisconsin
39-1503893
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification Number)
1155 Quail Court, Pewaukee, Wisconsin 53072-3703
(Address of principal executive offices)
(414) 695-1400
(Issuer's telephone number)
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - N/A - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - -
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Sections 13 or 15(d) of the Exchange
Act during the past 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
NATIONAL REAL ESTATE LIMITED PARTNERSHIP INCOME PROPERTIES
INDEX
PAGE
PART I. FINANCIAL INFORMATION
Balance Sheet (unaudited) - September 30, 1997
and December 31, 1996. . . . . . . . . . . . . . . . . . . . .2
Statement of Operations (unaudited) -
Three months and nine months ended
September 30, 1997 and 1996. . . . . . . . . . . . . . . . . .3
Statements of Cash Flows (unaudited) -
Nine months ended September 30, 1997 and 1996 . . . . . . . .4
Notes to Financial Statements (unaudited) . . . . . . . . . . . .5-6
Management's Discussion and Analysis of
Financial Condition and Results of Operation . . . . . . . . .7
PART II. OTHER INFORMATION AND SIGNATURES. . . . . . . . . . . . . . .8-9
PART I. FINANCIAL INFORMATION
NATIONAL REAL ESTATE LIMITED PARTNERSHIP - IP
(A Wisconsin Limited Partnership)
Balance Sheet
(Unaudited)
September 30, December 31,
1997 1996
ASSETS
Current Assets
Cash $ 777,534 $ 769,494
Escrow deposits and other assets (Note 4) 13,074 15,592
Other Assets
Investment properties, at cost
Land 1,047,695 1,047,695
Buildings and improvements 5,622,832 5,497,533
6,670,527 6,545,228
Less accumulated depreciation 2,282,371 2,127,959
4,388,156 4,417,269
$ 5,178,764 $ 5,202,355
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Tenant security deposits $ 5,789 $ 5,454
Rents received in advance 39,611 26,624
Accrued interest payable to Individual General Partner 572,578
509,444
Accrued expenses and other liabilities 73,794 87,861
Note payable to Individual General
Partner (Note 6) 271,020 271,020
962,793 900,403
Partners' Capital (deficiency) (Note 5):
General Partners $ (113,655) $ (111,076)
Limited Partners (authorized--10,000
Interests; outstanding--9,034.01 Interests) 4,351,297 4,434,699
Less 29.86 Interests held in Treasury (21,671) (21,671)
4,215,971 4,301,952
$ 5,178,764 $ 5,202,355
See notes to financial statements.
NATIONAL REAL ESTATE LIMITED PARTNERSHIP - IP THREE MONTHS ENDED
NINE MONTHS ENDED
SEPTEMBER 30, 1997 SEPTEMBER 30, 1997
1997 1996 1997 1996
INCOME
Operating income $ 418,879 $ 219,240 634,545
654,435 215,666
Other income 50,054 28,950 71,324 99,194
21,270
Total Income 468,933 248,190 705,870 753,629
236,937
OPERATING EXPENSES
Property operating expenses 222,528 108,531 322,058
345,923 99,530
Depreciation and amortization 102,941 51,177 154,412
153,530 51,471
Interest expense 22,271 19,167 63,134 56,211
40,863
Administrative expense 98,973 34,968 140,606
125,332 41,633
Total Expenses 446,712 213,843 680,210 680,996
233,495
Income(Loss) from operations 22,221 34,347 25,660
72,633 3,442
Other Income (expenses)
Interest income 14,010 12,048 27,599 28,707
13,589
Net Income (Loss) $ 36,231 $ 46,934 53,258
101,340 17,031
Net Income (Loss) attributable to
General Partners (3%) $ 1,087 $ 1,392 1,598
3,040
511
Net Income (Loss) attributable to
Limited Partners (97%) $ 35,144 $ 45,003 51,660
98,300 16,520
Per Limited Partnership Interest
Outstanding--9,004.15 Interests $ 3.90 $ 5.00 $ 5.74 $
10.92
1.83
NATIONAL REAL ESTATE LIMITED PARTNERSHIP - IP
(A Wisconsin Limited Partnership)
Statement of Cash Flows
(Unaudited)
Nine Months Ended
September 30, 1997
1997 1996
Operating Activities
Net income (loss) for the period $ 53,258 $ 101,339
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation 154,412 153,530
Changes in operating assets and
liabilities:
Escrow deposits & other assets 2,518 (32,374)
Tenant security deposits 335 0
Rents received in advance 12,987 (522)
Accrued expenses and other liabilities 49,067 56,829
NET CASH PROVIDED BY (USED IN) 272,578 278,802
OPERATING ACTIVITIES
Investing activities:
Additions to investment property (125,299) (23,504)
Financing activities:
Distributions to partners (139,239) (139,239)
INCREASE (DECREASE) IN CASH 8,039 116,059
Cash at beginning of period 769,494 657,294
CASH AT END OF PERIOD $ 777,534 $ 773,353
See notes to financial statements.
NATIONAL REAL ESTATE LIMITED PARTNERSHIP INCOME PROPERTIES
(A WISCONSIN LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 30, 1997
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, 1996. Refer to the footnotes of those
statements for additional
details on the Partnership's financial condition. The operating results
for the period ended
September 30, 1997, 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 $40,145 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
$4,869, $2,115, $434, and $2,753, respectively.
5. Changes in Partners' Equity: Limited General
Partners Partners
Total
Quarter Ended September 30, 1997
Partner's Equity, beginning of quarter $4,339,503 $(113,350)$4,226,153
Distributions ( 45,021)( 1,392)( 46,413)
Net Income (Loss) 35,144 1,087 36,231
Partners' Equity, end of quarter $4,329,626 $(113,655)$4,215,971
Limited Partner's equity is net of 29.86 interests held in treasury of
($21,671).
Quarter Ended September 30, 1996
Partner's Equity, beginning of quarter $5,214,768 $(86,951)$5,139,892
Distributions ( 45,021)( 1,392)( 46,413)
Net Income (Loss) 45,002 1,392 46,393
Partners' Equity, end of quarter $5,214,749 $(86,951)$5,139,872
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
September 30, 1997, interest
totaling $572,578 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.
8. In accordance with FASB Statement No. 121, "Accounting for the Impairment
of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of," the Partnership
records impairment losses
on long-lived assets used in operations when events and circumstances
indicate that the assets
might be impaired and the undiscounted cash flows estimated to be
generated by those assets are
less than the carrying amounts of those assets. During 1996, the
Partnership determined that an
impairment to the asset value of a retail shopping center known as
Northridge Commons had
occurred, resulting from the loss of a significant anchor tenant and
deteriorating market conditions
caused by an economically depressed area where the property is located.
Based on these factors,
the Partnership wrote down assets with a carrying value of approximately
$1,880,000 by $785,000
to their estimated fair value. Fair value was based on estimated future
cash flows to be generated
from the property, discounted at a market rate of interest.
NATIONAL REAL ESTATE LIMITED PARTNERSHIP INCOME PROPERTIES
(A WISCONSIN LIMITED PARTNERSHIP)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SEPTEMBER 30, 1997
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 third quarter averaged
98.15% for Tucson Lock-It
Lockers; 96.33% for Phoenix Lock-It Lockers; 84.66% for Northridge Commons;
and 94.63% for Cave
Creek Lock-It Lockers. This compares to an average of 98.7% for Tucson Lock-It
Lockers; 97.19% for
Phoenix Lock-It Lockers; 55.11% for Northridge Commons; and 94.51% for Cave
Creek Lock-It
Lockers during the same period of 1996.
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 given the
property greater
visibility and all tenants have seen an increase in business due to this
signage. Northridge Commons
tenants also have direct street access. A 8,792 square foot unit has been
rented to GCO, a franchiser of
wholesale carpet and flooring effective November 1, 1997. An additional 2,500
square foot unit became
vacant on June 1, 1997, and is presently being marketed at $12.00 to
$13.00/sq. ft.
During the third quarter of 1997 rental revenue for Cave Creek Lock-It Lockers
increased compared to
the third quarter of 1996 due to increased rental rates. Rental revenues also
increased in the third quarter
of 1997 for Tucson Lock-It Lockers and Phoenix Lock-It Lockers compared to the
same quarter of 1996.
Northridge Commons rental revenues also decreased for the same period due to a
loss of the anchor
tenant.
Operating expenses during the third quarter of 1997 decreased compared to the
operating expenses during the same quarter in 1996 due to lower maintenance
and building renovations costs.
The Partnership continued cash distributions to its partners with
distributions totaling $46,413 for the
second quarter of 1997. These distributions are required to be allocated 97%
to Limited Partners
($45,021) and 3% to the General Partners ($1,392).
PART II. OTHER INFORMATION
ITEM 6(B). REPORTS ON FORM 8-K
There were no reports on Form 8-K for the quarter ended September 30, 1997.
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/November 13, 1997 /S/ John Vishnevsky
John Vishnevsky
President and Chief Operating and
Executive Officer
National Development and Investment, Inc.
Corporate General Partner
Date /S/November 13, 1997 /S/ John Vishnevsky
John Vishnevsky
Chief Financial and Accounting Officer
Date /S/November 13, 1997 Stephen P. Kotecki
Stephen P. Kotecki
President
EC Corp
Corporate General Partner
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 November 13, 1997
John Vishnevsky
President and Chief Operating and
Executive Officer
National Development and Investment, Inc.
Corporate General Partner
Date November 13, 1997
John Vishnevsky
Chief Financial and Accounting Officer
Date November 13, 1997
Stephen P. Kotecki
President
EC Corp
Corporate General Partner
J:\WPDOCS\LETTERS\Nip
</TABLE>
