<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 10-Q/A
AMENDMENT NO. 1
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1998
--------------------
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 000-14510
-----------
CEDAR INCOME FUND, LTD.
- -------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
MARYLAND
- -------------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation or Organization)
11-3440062
------------------------------------------
(I.R.S. Employer Identification No.
44 South Bayles Avenue, Suite 304, Port Washington, New York 10050
- -------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip)
Registrant's Telephone No., including Area Code (516) 767-6492
-------------------------------
- -------------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report.
Indicate by check 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 .
----- -----
As of November 10, 1998, 542,111 shares of the Registrant's Common Stock,
$.01 par value per share, were outstanding.
<PAGE>
Cedar Income Fund, Ltd.
Consolidated Balance Sheets
(Unaudited)
September 30, December 31,
1998 1997
------------ ------------
Assets
Real estate
Land $ 4,144,705 $ 4,126,044
Buildings and improvements 14,738,860 14,636,843
------------ ------------
18,883,565 18,762,887
Less accumulated depreciation (4,577,045) (4,217,699)
------------ ------------
14,306,520 14,545,188
Mortgage loan receivable 0 564,437
------------ ------------
Real estate and mortgage participation 14,306,520 15,109,625
Cash and cash equivalents 777,233 407,216
Rents and other receivables 121,363 130,615
Interest receivable -- 3,881
Prepaid expenses 124,747 109,624
Deferred lease commissions 143,026 164,826
Taxes held in escrow 54,757 15,896
------------ ------------
Total Assets $ 15,527,646 $ 15,941,683
============ ============
Liabilities and Shareholders' Equity
Liabilities
Mortgage loan payable $ 1,381,353 $ 1,400,259
Accounts payable and accrued expenses 229,356 162,320
Due to affiliates -- 62,570
Escrow payable 45,000 --
Security deposits 84,103 80,085
Advance rents 18,956 9,347
------------ ------------
Total Liabilities 1,758,768 1,714,581
------------ ------------
Limited partner's Interest in consolidated
operating partnership 9,914,841 --
Stockholders' equity
Common stock ($.01 and $1.00 par value,
50,000,000 and 5,020,000 shares
authorized, 542,111 and 2,245,411 shares
issued and outstanding, respectively 5,421 2,245,411
Additional paid-in-capital 3,848,616 11,981,691
------------ ------------
Total stockholders' equity 3,854,037 14,227,102
------------ ------------
Total liabilities and stockholder's equity $ 15,527,646 $ 15,941,683
============ ============
<PAGE>
Cedar Income Fund, Ltd.
Consolidated Statement of Operations
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUE
Rents $ 626,339 $ 606,590 $ 1,898,733 $ 1,749,908
Interest 9,273 19,647 51,481 60,866
----------- ----------- ----------- -----------
Total Revenue 635,612 626,237 1,950,214 1,810,774
----------- ----------- ----------- -----------
EXPENSES
Property expenses:
Real estate taxes 56,999 59,247 176,217 187,740
Wages and salaries -- 172 -- 10,756
Repairs and maintenance 72,239 80,781 190,585 243,654
Utilities 53,657 49,986 125,423 117,532
Management fee 31,919 30,329 95,629 87,495
Insurance 4,040 4,761 12,453 14,509
Other 20,005 21,030 68,783 72,754
----------- ----------- ----------- -----------
Property expenses, excluding depreciation 238,859 246,306 669,090 734,440
Depreciation 119,502 117,877 359,346 335,811
----------- ----------- ----------- -----------
Total property expenses 358,361 364,183 1,028,436 1,070,251
Interest 32,477 33,968 97,873 102,308
Administrative fees 26,312 25,279 76,556 75,898
Directors' fees and expenses 10,642 10,844 44,380 32,743
Other administrative 188,172 10,911 487,570 41,894
----------- ----------- ----------- -----------
Total Expenses 615,964 445,185 1,734,815 1,323,094
----------- ----------- ----------- -----------
Income before Limited Partner's interest
in operating partnership 19,648 181,052 215,399 487,680
Limited Partner's interest in
operating partnership (28,229) -- (28,229) --
----------- ----------- ----------- -----------
Net income (loss) $ (8,581) $ 181,052 $ 187,170 $ 487,680
=========== =========== =========== ===========
Net income (loss) per share $ (0.02) $ 0.08 $ 0.11 $ 0.22
=========== =========== =========== ===========
Dividends to shareholders $ 54,211 $ 224,541 $ 503,293 $ 673,623
=========== =========== =========== ===========
Dividends to shareholders per share $ 0.10 $ 0.10 $ 0.30 $ 0.30
=========== =========== =========== ===========
Average number of shares outstanding 542,111 2,245,411 1,677,645 2,245,411
=========== =========== =========== ===========
</TABLE>
<PAGE>
Cedar Income Fund, Ltd.
Consolidated Statement of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1998 1997
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Rents collected $ 1,921,612 $ 1,761,620
Interest received 55,362 60,915
Payments for operating expenses (1,242,744) (869,888)
Interest paid (97,873) (99,558)
----------- -----------
Net cash provided by operating activities 636,357 853,089
----------- -----------
Cash flows from investing activities:
Capital expenditures (120,678) (299,985)
Principal portion of scheduled
mortgage loan collections -- 7,089
Principal repayment on mortgage loan receivable 564,437 13,929
----------- -----------
Net cash provided (used) by investing activities 443,759 (278,967)
----------- -----------
Cash flows from financing activities:
Principal portion of scheduled
mortgage loan payments (18,906) (17,220)
Due to Affiliate (17,570) --
Dividends paid to shareholders (503,293) (673,623)
Distribution to limited partner in the operating partnership (170,330) --
----------- -----------
Net cash used by financing activities (710,099) (690,843)
----------- -----------
Net increase (decrease) in cash and cash equivalents 370,017 (116,721)
Cash and cash equivalents at beginning of period 407,216 670,306
----------- -----------
Cash and cash equivalents at end of period $ 777,233 $ 553,585
=========== ===========
Reconciliation of net earnings to net cash provided by
operating activities:
Net income $ 187,170 $ 487,680
Add (deduct) reconciling adjustments:
Depreciation 359,346 338,560
Limited partner's interest in operating partnership 28,229 --
Increase (decrease) in rents and other receivables 9,252 (34,071)
Decrease in interest receivable 3,881 49
Decrease (increase) in prepaid expenses (15,123) 3,954
Increase (decrease) in deferred lease commissions 21,800 (54,188)
Decrease in taxes held in escrow (38,861) --
Increase in accounts payable -- --
and accrued expenses 67,036 114,476
Decrease in due to affiliates -- (6,347)
Increase in security deposits 4,018 --
Increase in advance rents 9,609 2,976
----------- -----------
Net cash provided by operating activities $ 636,357 $ 853,089
=========== ===========
</TABLE>
<PAGE>
Cedar Income Fund, Ltd.
Notes to Consolidated Financial Statements
(Unaudited)
1. Reorganization and Background of the Company
Pursuant to a Memorandum of Understanding dated as of December 5, 1997 (the
"Memorandum of Understanding"), between Cedar Income Fund, Ltd., an Iowa
corporation ("Old Cedar"), and SKR Management Corp. ("SKR"), Cedar Bay Company
("Cedar Bay"), an affiliate of SKR, purchased 1,893,038.335 shares of Old
Cedar's outstanding Common Stock, $1.00 par value per share ("Old Common
Stock"), on April 2, 1998 through a tender offer (the "Tender Offer") for a
purchase price of $7.00 per share in cash.
On June 26, 1998, Old Cedar merged (the "Merger") with and into Cedar Income
Fund, Ltd., a newly-formed Maryland corporation and a wholly-owned subsidiary of
Old Cedar ("New Cedar"). Immediately thereafter, New Cedar assigned
substantially all of its assets and liabilities to a newly-formed Delaware
limited partnership, Cedar Income Fund Partnership, L.P. (the "Operating
Partnership"), in exchange for an aggregate of 2,245,411 units of the Operating
Partnership ("Units"), which constituted the sole general partner interest and
all of the limited partnership interests in the Operating Partnership.
Immediately after such assignment, Cedar Bay exchanged 1,703,300 shares of New
Cedar's Common Stock, $.0l par value per share ("New Common Stock"), for
1,703,300 limited partner Units in the Operating Partnership owned by New Cedar.
The shares of New Common Stock were cancelled upon their exchange by Cedar Bay.
Following these transactions, Cedar Bay owned 189,737 shares of New Common
Stock, aggregating approximately 35% of the issued and outstanding shares of New
Common Stock.
As used herein, the term "Company" refers to Old Cedar prior to the Merger and
New Cedar subsequent to the Merger and the term "Common Stock" refers to Old
Common Stock prior to the Merger and New Common Stock subsequent to the Merger.
As of September 30, 1998, the Company owned and operated three office properties
aggregating approximately 224,000 square feet located in Jacksonville, Florida,
Salt Lake City, Utah and Bloomington, Illinois and a 50% undivided interest in a
74,000 square foot retail property located in Louisville, Kentucky.
In March 1998, Life Investors Insurance Company of America, an affiliate of the
Company's former management company and advisor, exercised its right to
repurchase the mortgage receivable balance from the Company. The Company
invested the proceeds of this sale of the mortgage receivable balance in a
money market fund.
<PAGE>
Cedar Income Fund Ltd.
Notes to Consolidated Financial Statements
(Unaudited)
2. Basis of Presentation
The accompanying interim financial statements have been prepared by the
Company's management in accordance with generally accepted accounting principles
for interim financial information and in conjunction with the rules and
regulations of the Securities and Exchange Commission. In the opinion of
management, the interim financial statements presented herein reflect all
adjustments of a normal and recurring nature which are necessary to fairly state
the interim financial statements. The results of operations for the interim
period are not necessarily indicative of the results that may be expected for
the year ending December 31, 1998. These financial statements should be read in
conjunction with the Company's audited financial statements and the notes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997.
The accompanying consolidated financial statements include the consolidated
financial position of the Company and the Operating Partnership as of September
30, 1998. All significant intercompany balances and transactions have been
eliminated in consolidation.
Since the Company owns the sole general partner interest in the Operating
Partnership, which provides the Company with effective control over all
significant activities of the Operating Partnership, the Operating Partnership
is consolidated with the Company in the accompanying financial statements as of
September 30, 1998.
The limited partner's interest as of September 30, 1998 (currently owned
entirely by Cedar Bay) represents approximately a 76% limited partner interest
in the equity of the Operating Partnership.
The Company intends to continue to qualify as a real estate investment trust
("REIT") under Sections 856 through 869 of the Internal Revenue Code of 1986, as
amended (the "Code"). As a REIT, the Company will not generally be subject to
Federal corporate income taxes as long as it satisfies certain technical
requirements of the Code relating to composition of its income and assets and
certain requirements relating to distributions of taxable income to
stockholders.
3. Mortgage Notes Payable
As of September 30, 1998, the Company had one fixed-rate mortgage loan
obligation which had a principal amount of $1,381,353 and which will mature on
November 1, 2002. The loan is collateralized by the office property located in
Salt Lake City, Utah has an interest rate per annum of 9.375% and requires
annual principal and interest payments of $155,704.
<PAGE>
Cedar Income Fund Ltd.
Notes to Consolidated Financial Statements
(Unaudited)
4. Stockholders' Equity
Currently, a Unit in the Operating Partnership and a share of Common Stock of
the Company have essentially the same economic characteristics as they
effectively share equally in the net income or loss and distributions of the
Operating Partnership.
The Company established a stock option plan (the "Plan") for the purpose of
attracting and retaining executive officers, directors and other key employees.
As of September 30, 1998, 500,000 of the Company's authorized shares of Common
Stock have been reserved for issuance under the Plan. The Plan is administered
by a committee of the Board of Directors, which committee will, among other
things, select the number of shares subject to each grant, the vesting period
for each grant and the exercise price (subject to applicable regulations with
respect to incentive stock options) for the options. As of September 30, 1998,
no options have been granted under the Plan.
5. Related Party Transactions
Pursuant to the Memorandum of Understanding (discussed in Note 1), the Company
terminated the Administrative and Advisory Agreement between the Company and
AEGON USA Realty Advisors, Inc., and the Management Agreement between the
Company and AEGON USA Realty Management, Inc. effective upon the consummation of
the Tender Offer.
The Company entered into an Administrative and Advisory Agreement (the "Advisory
Agreement") with Cedar Bay Realty Advisors, Inc. ("Cedar Bay Realty") to provide
the Company with administrative, advisory, acquisition, divestiture, property
management, leasing and stockholder services. Cedar Bay Realty is wholly-owned
by Leo S. Ullman who is Chairman of the Board of Directors and President of the
Company. The term of the Advisory Agreement is for one (1) year and is
automatically renewed annually for an additional year subject to the right of
either party to cancel the Advisory Agreement upon 60 days written notice. Cedar
Bay Realty receives fees for its administrative and advisory services as
follows: (a) an administrative and advisory fee equal to 3/4 of 1% of the
estimated current value of real estate assets of the Company, plus 1/4 of 1% of
the estimated current value of all other assets of the Company; (b) an
acquisition fee equal to 5% of the gross purchase price of any real property
acquired during the term of the Advisory Agreement subject to a maximum amount
as defined; and (c) a disposition fee equal to 3% of the gross sales price, as
defined, of any real property disposed of during the term of the Advisory
Agreement; provided that no disposition fee shall be paid unless and until the
stockholders have received certain distributions from the Company. In addition,
Cedar Bay Realty may receive one-half of the brokerage commission on such a
disposition but only up to 3% of the price actually paid for the property,
subject to certain limitations. Furthermore, if the Advisory Agreement is
terminated prior to the liquidation of the Company, Cedar Bay Realty will be
entitled to payment for dispositions, as defined.
<PAGE>
Cedar Income Fund, Ltd.
Notes to Consolidated Financial Statements
(Unaudited)
5. Related Party Transactions
The Company entered into a Management Agreement (the "Management Agreement")
with Brentway Management LLC ("Brentway") to provide the Company with property
management and leasing services. Brentway is owned by Leo S. Ullman and Brenda
J. Walker who is Vice President and Treasurer of the Company. The term of the
Management Agreement is for one (1) year and is automatically renewed annually
for an additional year subject to the right of either party to cancel the
Management Agreement upon 60 days written notice. Brentway receives fees for its
property management services as follows: a management fee equal to 5% of the
gross income from properties managed and leasing fees of up to 6% of the rent to
be paid during the term of the lease procured. Brentway provides similar
services for other properties owned by partnerships in which Mr. Ullman has
interests.
On June 1, 1998, the Company entered into a Financial Advisory Agreement (the
"HVB Agreement") with HVB Capital Markets, Inc. ("HVB"), an affiliate of Hypo
Vereinsbank, formally BV Capital Markets, Inc. of which Jean-Bernard Wurm, a
director of the Company, serves as a director. Pursuant to the HVB Agreement,
HVB has agreed to perform the following services as financial advisor to the
Company: (a) advise on acquisition financing and/or line of credit for future
acquisitions; (b) advise on acquisitions of United States real property
interests and the consideration to be paid therefor; (c) advise on private
placements of the shares of the Company; (d) assist the Board of Directors in
developing suitable investment parameters for the Company; (e) develop and
maintain contacts on behalf of the Company with institutions with substantial
interests in real estate and capital markets; (f) advise the Board with respect
to additional private or public offerings of equity securities of the Company;
(g) review certain financial policy matters. with consultants, accountants,
lenders, attorneys and other agents of the Company; and (h) prepare periodic
reports of its performance of the foregoing services. As compensation for the
foregoing services, the Company is required to pay HVB: (i) .25% of the
Company's net asset value, less any indebtedness affecting such net value, but
in any event, not less than $100,000 per year; (ii) a one-time payment of 1.5%
of 90% of the agreed value of properties contributed to the Company or its
affiliates by persons introduced to the Company by HVB; and (iii) upon the
Company becoming self-administered, a one-time payment equal to five times the
annual fee income attributable to fee receipts from clients or contacts of HVB
that have contributed property to the Company. The term of the HVB Agreement is
for a period of one (1) year and is automatically renewed annually for an
additional year subject to the right of either party to cancel at the end of any
year upon 60 days written notice.
Both the Management Agreement and the Administrative and Advisory Agreement will
be assigned to the Operating Partnership. The costs of the Financial Advisory
Agreement will be shared by the Operating Partnership and the Company.
6. Year 2000 Issue
The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
computer programs or hardware that have date-sensitive software or embedded
chips may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices, or engage in similar normal business
activities.
Although the Company does not employ any computer systems in its business, Cedar
Bay Realty, the Company's advisor, and Brentway, the Company's property manager,
do employ computer systems in managing the Company's business. The Company could
be adversely affected if the computer systems used by Cedar Bay Realty, Brentway
or other service providers do not properly process and calculate date related
information from and after January 1, 2000. Cedar Bay Realty and Brentway have
advised the Company that they are taking steps which they believe are reasonably
designed to address this issue with respect to computer systems that they use.
These steps include an upgrade of their computer software to a version that will
properly process and calculate date related information from and after January
1, 2000. In addition, Cedar Bay Realty and Brentway have advised the Company
<PAGE>
that they will endeavor to obtain reasonable assurances that comparable steps
are being taken by the Company's other major service providers. Cedar Bay Realty
and Brentway have informed the Company that they currently anticipate the
upgrade of their computer software prior to January 1, 1999. While the Company
believes that the planning efforts of Cedar Bay Realty and Brentway are adequate
to address the Company's Year 2000 concerns, there can be no assurance that the
systems of other companies on which the Company's and operations rely will be
converted on a timely basis and win not have a material effect on the Company.
The cost of Cedar Bay Realty and Brentway's Year 2000 initiatives will be borne
entirely by Cedar Bay and Brentway, respectively, and not by the Company.
7. Subsequent Events
The Board of Directors declared a dividend of $.10 per share, payable November
17, 1998 to shareholders of record on November 10, 1998.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the accompanying
Consolidated Financial Statements of Cedar Income Fund, Ltd. (the "Company") and
related notes thereto.
OVERVIEW AND BACKGROUND
The Company operates as an equity-based real estate investment trust. It is
managed and advised by two entities that are affiliates of Leo S. Ullman, the
Chairman of the Board of Directors and President of the Company.
On June 26, 1998, Cedar Income Fund, Ltd., an Iowa corporation ("Old Cedar"),
merged (the "Merger") with and into Cedar Income Fund, Ltd., a newly-formed
Maryland corporation and a wholly-owned subsidiary of Old Cedar ("New Cedar").
Immediately thereafter, New Cedar assigned substantially all of its assets and,
liabilities to a newly-formed Delaware-limited partnership, Cedar Income Fund
Partnership, L.P. (the "Operating Partnership') in exchange for an aggregate of
2,245,411 units of the Operating Partnership ("Units"), which constituted the
sole general partner interest and all of the limited partnership interests in
the Operating Partnership. Immediately after such assignment, Cedar Bay
exchanged 1,703,300 shares of New Cedar's Common Stock, $.0l par value per share
("New Common Stock"), for 1,703,300 limited partner Units in the Operating
Partnership owned by New Cedar. The shares of New Common Stock were cancelled
upon their exchange by Cedar Bay. Following these transactions, Cedar Bay owned
189,737 shares of New Common Stock, aggregating approximately 35% of the issued
and outstanding shares of New Common Stock.
The Company has no employees and has contracted with Cedar Bay Realty Advisors,
Inc. ("Cedar Bay Realty") to provide administrative, advisory, acquisition,
divestiture, and other services pursuant to an Administrative and Advisory
Agreement. Brentway Management LLC ("Brentway") provides property management and
leasing services pursuant to a Management Agreement. The Company has also
entered into a Financial Advisory Agreement with HVB Capital Markets, Inc.,
formally BV Capital Markets, Inc. ("BVC") pursuant to which HVB will perform
certain services as a financial advisor to the Company and the Operating
Partnership.
As of September 30, 1998, the Company owned and operated (i) three office
properties: Southpoint Parkway Center, located in Jacksonville, Florida,
Broadbent Business Center, located in Salt Lake City, Utah; and Corporate Center
East, located in Bloomington, Illinois; and (ii) a 50% undivided interest in a
retail property, Germantown Square Shopping Center, located in Louisville,
Kentucky.
<PAGE>
RESULTS OF OPERATIONS
As of June 26, 1998, Cedar Bay Company which owned, from April 2, 1998,
1,893,038 shares of common stock, exchanged 1,705,000 of such shares for
Operating Partnership units of equal number. Those shares were then cancelled.
Accordingly, there are presently 542,411 shares of common stock outstanding.
Rental income for the three months and nine months ended September 30, 1998 was
$626,339 and $1,898,733 compared to $606,590 and $1,749,908 for the same periods
in 1997, an increase of 3.3% and 8.5% respectively. The increase in rental
income is primarily due to the lease of vacant space at Corporate Center East in
1997 and increased base rent from a large tenant in Southpoint Parkway Center.
Total property expenses, excluding depreciation, for the three months and nine
months ended September 30, 1998 decreased to 40% and 36% of rental income from
41% and 42% of rental income, respectively, for the same periods in 1997. For
the three months and nine months ended September 30, 1998 repairs and
maintenance decreased approximately $8,500 and $53,000 over the same periods in
1997, primarily due to reduced costs at Broadbent Business Center and Corporate
Center East.
Net income (loss) for the three months and nine months ended September 30, 1998
were ($8,581) ($0.02) per share) and $187,170 ($0.11 per share) compared to
income of $181,052 ($0.08 per share) and $487,680 ($0.22 per share) for the same
periods in 1997. Cash from operations ( income before limited partner's interest
in Operating Partnership plus depreciation) for the three months and nine months
ended September 30, 1998 were $139,150 and $574,745 compared to $298,929 and
$823,491 for the same periods in 1997. Net income and cash from operations were
significantly lower in the third quarter and the nine months of 1998, compared
to 1997, primarily due to an increase in legal and accounting expenses
attributable to the Company's reorganization in June 1998 and financial advisory
fees incurred in 1998 (see HVB Agreement in Note 5 above). Additional costs were
incurred in connection with the proposed purchase of certain additional
properties, none of which have been concluded to date. The decline in net income
also reflects the accounting treatment, not applicable in 1997, of the limited
partner's interest in the income of the Operating Partnership ("UPREIT") which
was created as of June 26, 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity at September 30, 1998 represented by cash and cash
equivalents was $777,233 compared to $407,216 at December 31, 1997, an increase
of $370,017. Cash flow from operating activities, for the nine month period
ended September 30, 1998 was $636,357 compared with $853,089 over the same
period in 1997, a decrease of $216,732. The Company considers this liquidity
sufficient to meet current operating needs, including dividend requirements.
The Company is seeking a line of credit and equity capital to be used for future
growth and acquisitions. There can be no assurance that any such credit or
capital will be obtained, or that they can be obtained on terms favorable to the
Company.
<PAGE>
INFLATION
Low to moderate levels of inflation during the past few years have favorably
impacted the Company's operations by stabilizing operating expenses. At the same
time, low inflation has the indirect effect of reducing the Company's ability to
increase tenant rents. Many of the leases of the Company's properties include
provisions requiring the tenants to reimburse the Company for the amounts spent
by the Company on property operating expenses and other provisions the result of
which is to minimize the effect of inflation.
PART II OTHER INFORMATION - NONE
SIGNATURE
Pursuant to the requirements of the Security Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CEDAR INCOME FUND, LTD
Date: November 6, 1998 By Brenda J. Walker
---------------------------------
Brenda J. Walker
Chief Financial Officer
(Principal Financial and
Accounting Officer and Duly
Authorized Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 777,233
<SECURITIES> 0
<RECEIVABLES> 121,363
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,221,126
<PP&E> 18,883,565
<DEPRECIATION> (4,577,045)
<TOTAL-ASSETS> 15,527,646
<CURRENT-LIABILITIES> 377,415
<BONDS> 0
0
0
<COMMON> 5,421
<OTHER-SE> 3,848,616
<TOTAL-LIABILITY-AND-EQUITY> 15,527,646
<SALES> 0
<TOTAL-REVENUES> 1,950,214
<CGS> 0
<TOTAL-COSTS> 1,028,436
<OTHER-EXPENSES> 608,506
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 97,873
<INCOME-PRETAX> 196,410
<INCOME-TAX> 0
<INCOME-CONTINUING> 187,170
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 187,170
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
</TABLE>
