SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year
ended December 31, 1993 Commission file no. 0-16108
JMB INCOME PROPERTIES, LTD. - XII
(Exact name of registrant as specified in its charter)
Illinois 36-3337796
(State of organization) (I.R.S. Employer Identification No.)
900 N. Michigan Ave., Chicago, Illinois 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312-915-1987
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ------------------- -------------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
LIMITED PARTNERSHIP INTERESTS
(Title of class)
Indicate by check mark 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
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K - X
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. Not applicable.
Certain pages of the prospectus of the registrant dated August 23, 1985, as
supplemented December 9, 1985 and January 10, 1986 and filed pursuant to Rules
424(b) and 424(c) under the Securities Act of 1933 are incorporated by
reference in Parts I and III of this Annual Report on Form 10-K.
TABLE OF CONTENTS
Page
----
PART I
Item 1. Business. . . . . . . . . . . . . . . . . . . . 1
Item 2. Properties. . . . . . . . . . . . . . . . . . . 4
Item 3. Legal Proceedings . . . . . . . . . . . . . . . 6
Item 4. Submission of Matters to a
Vote of Security Holders. . . . . . . . . . . . 6
PART II
Item 5. Market for the Partnership's Limited Partnership
Interests and Related Security Holder Matters . 6
Item 6. Selected Financial Data . . . . . . . . . . . . 7
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations . 13
Item 8. Financial Statements and Supplementary Data . . 19
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure. . . . . 64
PART III
Item 10. Directors and Executive Officers
of the Partnership. . . . . . . . . . . . . . . 64
Item 11. Executive Compensation. . . . . . . . . . . . . 67
Item 12. Security Ownership of Certain Beneficial
Owners and Management . . . . . . . . . . . . . 68
Item 13. Certain Relationships and Related Transactions. 69
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K . . . . . . . . . . . . 69
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . 71
i
PART I
ITEM 1. BUSINESS
All references to "Notes" are to Notes to Consolidated Financial
Statements contained in this report.
The registrant, JMB Income Properties, Ltd. - XII (the "Partnership"), is
a limited partnership formed in 1984 and currently governed under the Revised
Uniform Limited Partnership Act of the State of Illinois to invest in improved
income-producing commercial and residential real property. On August 23,
1985, the Partnership commenced an offering to the public of $100,000,000
(subject to increase by up to $150,000,000) in Limited Partnership Interests
(the "Interests") pursuant to a Registration Statement on Form S-11 under the
Securities Act of 1933 (Registration No. 2-96716). A total of 189,679
Interests were sold to the public at $1,000 per Interest and were issued to
Investors in fiscal 1986. The offering closed on January 17, 1986. No
Investor has made any additional capital contribution after such date. The
Investors in the Partnership share in their portion of the benefits of
ownership of the Partnership's real property investments according to the
number of Interests held.
The Partnership is engaged solely in the business of the acquisition,
operation and sale and disposition of equity real estate investments. Such
equity investments are held by fee title and/or through joint venture
partnership interests. The Partnership's real estate investments are located
throughout the nation and it has no real estate investments located outside of
the United States. A presentation of information about industry segments,
geographic regions, raw materials, or seasonality is not applicable and would
not be material to an understanding of the Partnership's business taken as a
whole. Pursuant to the Partnership agreement, the Partnership is required to
terminate on or before October 31, 2035. Accordingly, the Partnership intends
to hold the real properties it acquires for investment purposes until such
time as sale or other disposition appears to be advantageous. Unless
otherwise described, the Partnership expects to hold its properties for long-
term investment where, due to current market conditions, it is impossible to
forecast the expected holding period. At sale of a particular property, the
proceeds, if any, are generally distributed or reinvested in existing
properties rather than invested in acquiring additional properties.
The Partnership has made the real property investments set forth in the
following table:
<TABLE>
<CAPTION>
SALE OR DISPOSITION
DATE OR IF OWNED
AT DECEMBER 31, 1993,
NAME, TYPE OF PROPERTY DATE OF ORIGINAL INVESTED
AND LOCATION (E) SIZE PURCHASE CAPITAL PERCENTAGE (A) TYPE OF OWNERSHIP
- ---------------------- ---------- -------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
1. Park Center Financial Plaza
office buildings
San Jose, California . . 422,000 sq.ft. 06/20/85 27% fee ownership of land and
n.r.a. improvements (through joint
venture partnership) (c)(g)
2. Topanga Plaza
shopping center
Los Angeles, California. 360,000 sq.ft. 12/31/85 20% fee ownership of land and
g.l.a. improvements (through joint
venture partnership) (b)(c)(f)
3. 40 Broad Street
office building
New York, New York . . . 247,800 sq.ft. 12/31/85 29% fee ownership of land and
n.r.a. improvements (through joint
venture partnership) (c)
4. Plaza Hermosa Shopping Center
Hermosa Beach, California 94,900 sq.ft. 09/03/86 8% fee ownership of land and
g.l.a. improvements (b)
5. Mid Rivers Mall
shopping center
St. Peters (St. Louis),
Missouri . . . . . . . . 323,100 sq.ft. 12/12/86 1/30/92 fee ownership of land and
g.l.a. improvements (through joint
venture partnership) (c)(d)
6. First Financial Plaza
office building
Encino, California . . . 216,000 sq.ft. 05/20/87 9% fee ownership of land and
n.r.a. improvements (through joint
venture partnership) (b)(c)(f)
<FN>
- ---------------
(a) The computation of this percentage for properties held at December
31, 1993 does not include amounts invested from sources other than the
original net proceeds of the public offering as described above and in Item 7.
(b) Reference is made to Note 4 and to Schedule XI filed with this
annual report for the current outstanding principal balances and a description
of the long-term mortgage indebtedness secured by the Partnership's real
property investments.
(c) Reference is made to Note 3 for a description of the joint venture
partnership through which the Partnership has made this real property
investment.
(d) The Partnership's interest in this property has been sold.
Reference is made to Note 6 for a description of the sale of this real
property investment.
(e) Reference is made to Item 8 - Schedules X and XI filed with this
annual report for further information concerning real estate taxes and
depreciation.
(f) Reference is made to Item 6 - Selected Financial Data for additional
operating and lease expiration data concerning this investment property.
(g) Reference is made to Note 3 of Notes to Financial Statements of
JMB/San Jose Associates and Schedule XI to such financial statements filed
with this annual report for the current outstanding principal balance and a
description of the long-term mortgage indebtedness secured by the
Partnership's real property investments.
</TABLE>
The Partnership's real property investments are subject to competition
from similar types of properties (including in certain areas properties owned
or advised by affiliates of the General Partners) in the respective vicinities
in which they are located. Such competition is generally for the retention of
existing tenants. Additionally, the Partnership is in competition for new
tenants in markets where significant vacancies are present. Reference is made
to Item 7 below for a discussion of competitive conditions and future
renovation and capital improvement plans of the Partnership and certain of its
significant investment properties. Approximate occupancy levels for the
properties are set forth in the table in Item 2 below to which reference is
hereby made. The Partnership maintains the suitability and competitiveness of
its properties in its markets primarily on the basis of effective rents,
tenant allowances and service provided to tenants. In the opinion of the
Managing General Partner of the Partnership, all of the investment properties
held at December 31, 1993 are adequately insured. Although there is
earthquake insurance coverage for a portion of the value of the Partnership's
investment properties, the Managing General Partner does not believe that such
coverage for the entire replacement cost of the investment properties is
available on economic terms.
In January 1992, the Partnership reached agreement with the existing
mortgage lender of Topanga Plaza for funding to finance a renovation that was
funded in four stages. Reference is made to Note 4(b) for further description
of such transaction.
In January 1994, an earthquake occurred in Los Angeles, California. The
approximately 360,000 sq. ft. of mall shops owned by the Topanga Partnership
did not suffer major structural damage. The estimated cost of the repairs at
Topanga for which the joint venture is responsible is approximately $8.8
million. The majority of this cost will be subject to recovery under the
joint venture's earthquake insurance policy after payment of the required
deductible. Reference is made to Note 10(b) for further description of such
event.
Reference is made to Note 7 for a schedule of minimum lease payments to
be received in each of the next five years, and in the aggregate thereafter,
under leases in effect at the Partnership's properties as of December 31,
1993.
The Partnership has approximately 16 full-time personnel, performing on-
site duties at three of the Partnership's properties, none of whom are
officers or directors of the Corporate General Partner of the Partnership.
The terms of transactions between the Partnership, the General Partners
and their affiliates are set forth in Item 11 below to which reference is
hereby made for a description of such terms and transactions.
ITEM 2. PROPERTIES
The Partnership owns directly or through joint venture partnerships the
properties or interests in the properties referred to under Item 1 above to
which reference is hereby made for a description of said properties.
The following is a listing of principal businesses or occupations carried
on in and approximate occupancy levels by quarter during fiscal years 1993 and
1992 for the Partnership's investment properties owned during 1993:
<TABLE>
<CAPTION>
1992 1993
------------------------------- ------------------------------
At At At At At At At At
Principal Business 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
------------------ ---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Park Center Financial Plaza
San Jose, California. . . . . . . . . Accounting/
Legal 88% 89% 89% 89% 89% 88% 84% 84%
2. Topanga Plaza
Los Angeles, California . . . . . . . Retail 93% 83% 83% 87% 85% 82% 89% 94%
3. 40 Broad Street
New York, New York. . . . . . . . . . Insurance/
Financial Services 82% 82% 82% 82% 82% 82% 67% 79%
4. Plaza Hermosa Shopping Center
Hermosa Beach, California . . . . . . Retail 99% 97% 98% 97% 95% 92% 92% 92%
5. First Financial Plaza
Encino (Los Angeles),
California. . . . . . . . . . . . . . University/Bank/
Housing Developer 92% 89% 87% 85% 85% 88% 84%(1) 85%(1)
- ----------
<FN>
Reference is made to Item 6, Item 7, and Note 7 for further information
regarding property occupancy, competitive conditions and tenant leases at the Partnership's investment properties.
(1) The percentage represents physical occupancy. Mitsubishi (8,109 square feet) vacated its space in July 1993 prior to its
lease expiration of January 1997 and continues to pay rent pursuant to its lease obligation. Including the Mitsubishi lease and
recently executed leases, First financial Plaza is 87% and 91% leases as of September 31, 1993 and December 31, 1993, respectively.
</TABLE>
ITEM 3. LEGAL PROCEEDINGS
The Partnership is not subject to any material pending legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of holders of Interests during
1992 and 1993.
PART II
ITEM 5. MARKET FOR THE PARTNERSHIP'S LIMITED PARTNERSHIP INTERESTS
AND RELATED SECURITY HOLDER MATTERS
As of December 31, 1993, there were 16,270 record holders of Interests of
the Partnership. There is no public market for Interests and it is not
anticipated that a public market for Interests will develop. Upon request,
the Managing General Partner may provide information relating to a prospective
transfer of Interests to an investor desiring to transfer his Interests. The
price to be paid for the Interests, as well as any economic aspects of the
transaction, will be subject to negotiation by the investor.
Reference is made to Item 6 below for a discussion of cash distributions
to Investors.
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
YEARS ENDED DECEMBER 31, 1993, 1992, 1991, 1990 AND 1989
(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)
<CAPTION>
1993 1992 1991 1990 1989
------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Total income . . . . . . . . . . . . . . . $ 30,055,775 31,061,115 32,094,290 32,531,243 31,983,979
============ ============ =========== =========== ===========
Operating earnings (loss). . . . . . . . . $ (213,393) (18,250,294) (23,790,221) 6,206,403 6,910,056
Partnership's share of operations of
unconsolidated ventures. . . . . . . . . (6,610,269) (3,123,534) (10,516,323) 185,014 (997,003)
Venture partners' share of consolidated
ventures' operations . . . . . . . . . . 785,684 6,090,075 7,580,977 (1,710,015) (1,788,062)
------------ ------------ ----------- ----------- -----------
Net operating earnings (loss). . . . . . . (6,037,978) (15,283,753) (26,725,567) 4,681,402 4,124,991
Partnership's share of gain on sale of
interest in investment property. . . . . -- 5,655,876 -- -- --
------------ ------------ ----------- ----------- -----------
Net earnings (loss). . . . . . . . . . . . $ (6,037,978) (9,627,877) (26,725,567) 4,681,402 4,124,991
============ ============ =========== =========== ===========
Net earnings (loss) per Interest (b):
Net operating earnings (loss). . . . . . $ (31.79) (80.48) (140.06) 23.69 20.88
Partnership's share of gain on sale of
interest in investment property. . . . -- 29.52 -- -- --
------------ ------------ ----------- ----------- -----------
Net earnings (loss) per Interest (b) . . $ (31.79) (50.96) (140.06) 23.69 20.88
============ ============ =========== =========== ===========
Total assets . . . . . . . . . . . . . . . $195,051,570 201,746,282 193,509,107 235,447,127 244,509,415
Long-term debt . . . . . . . . . . . . . . $ 87,612,869 69,869,294 51,085,549 51,776,098 52,450,004
Cash distributions per Interest (c). . . . $ 12.50 50.00 35.00 55.00 60.00
============ ============ =========== =========== ===========
<FN>
- -------------
(a) The above selected financial data should be read in conjunction with
the consolidated financial statements and the related notes appearing
elsewhere in this annual report.
(b) The net earnings (loss) per Interest is based upon the number of
Interests outstanding at the end of each period (189,684).
(c) Cash distributions to the Limited Partners since the inception of
the Partnership have not resulted in taxable income to such Limited Partners
and have therefore represented a return of capital. Each Partner's taxable
income (or loss) from the Partnership in each year is equal to his allocable
share of the taxable income (loss) of the Partnership, without regard to the
cash generated or distributed by the Partnership.
/TABLE
<PAGE>
<TABLE>
SIGNIFICANT PROPERTY - SELECTED RENTAL AND OPERATING DATA AS OF DECEMBER 31, 1993
<CAPTION>
Property
- --------
Topanga Plaza
Shopping Center a) The GLA historical occupancy rate and average base rent per square foot for the last five years were as
follows:
Year Ending GLA Avg. Base Rent Per
December 31, Occupancy Rate (1) Square Foot (2)
------------ ----------------- ------------------
<S> <C> <C> <C> <C>
1989 . . . . . 95% $20.90
1990 . . . . . 99% 21.66
1991 . . . . . 96% 22.53
1992 . . . . . 87% 25.11
1993 . . . . . 94% 21.13
<FN>
(1) As of December 31 of each year.
(2) Average base rent per square foot is based on GLA occupied as of December 31 of each year.
</TABLE>
<TABLE>
<CAPTION>
Base Rent Scheduled Lease Lease
b) Significant Tenants Square Feet Per Annum Expiration Date Renewal Option(s)
------------------- ----------- --------- --------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
None - no single tenant
represents more than 10%
of the total gross leasable
area at the property.
</TABLE>
<TABLE>
<CAPTION>
c) The following table sets forth certain information with respect to the expiration of leases
for the next ten years at the Topanga Plaza Shopping Center:
Annualized Percent of
Number of Approx. Total Base Rent Total 1993
Year Ending Expiring GLA of Expiring of Expiring Base Rent
December 31, Leases Leases (1) Leases Expiring
------------ --------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
1994 2 2,000 $ 103,100 1.5%
1995 21 31,600 1,031,700 15.4%
1996 7 16,000 294,100 4.4%
1997 7 18,700 446,900 6.6%
1998 11 30,600 690,600 10.3%
1999 8 16,900 446,000 6.6%
2000 14 33,300 847,300 12.6%
2001 7 12,800 517,000 7.7%
2002 11 40,100 1,025,400 15.3%
2003 14 25,200 1,036,700 15.4%
<FN>
(1) Excludes leases that expire in 1994 for which renewal leases or leases with replacement tenants have
been executed as of March 25, 1994.
</TABLE>
<TABLE>
<CAPTION>
Property
- --------
First Financial
Plaza Office
Building a) The GLA historical occupancy rate and average base rent per square foot for the last five years were as
follows:
Year Ending GLA Avg. Base Rent Per
December 31, Occupancy Rate (1) Square Foot (2)
------------ ----------------- ------------------
<S> <C> <C> <C> <C>
1989 . . . . . 97% $25.31
1990 . . . . . 91% 31.02
1991 . . . . . 92% 29.49
1992 . . . . . 85% 30.06
1993 . . . . . 85% 30.90
<FN>
(1) As of December 31 of each year.
(2) Average base rent per square foot is based on GLA occupied as of December 31 of each year.
</TABLE>
<TABLE>
<CAPTION>
Base Rent Scheduled Lease Lease
b) Significant Tenants Square Feet Per Annum Expiration Date Renewal Option(s)
------------------- ----------- --------- --------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Pepperdine University 32,090 $928,000 12/1996 4/5 year
(University)
</TABLE>
<TABLE>
<CAPTION>
c) The following table sets forth certain information with respect to the expiration of leases
for the next ten years at the First Financial Plaza Building:
Annualized Percent of
Number of Approx. Total Base Rent Total 1993
Year Ending Expiring GLA of Expiring of Expiring Base Rent
December 31, Leases Leases (1) Leases Expiring
------------ --------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
1994 11 33,700 $ 872,200 18.1%
1995 2 2,400 60,700 1.3%
1996 5 47,200 1,334,800 27.7%
1997 6 24,300 721,700 15.0%
1998 10 28,600 725,600 15.0%
1999 1 5,300 108,100 2.2%
2000 -- -- -- --
2001 -- -- -- --
2002 -- -- -- --
2003 1 2,400 63,000 1.3%
<FN>
(1) Excludes leases that expire in 1994 for which renewal leases or leases with replacement tenants have
been executed as of March 25, 1994.
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
On August 23, 1985, the Partnership commenced an offering to the public
of $100,000,000, subject to increase by up to $150,000,000, pursuant to a
Registration Statement on Form S-11 under the Securities Act of 1933. On
January 17, 1986, the initial and final closing of the offering was
consummated with the dealer manager of the public offering (an affiliate of
which is a limited partner of one of the Associate General Partners of the
Partnership), and 189,679 Interests were issued by the Partnership, from which
the Partnership received gross proceeds of $189,679,000.
After deducting selling expenses and other offering costs, the
Partnership had approximately $171,306,000 with which to make investments in
income-producing commercial real property, to pay legal fees and other costs
(including acquisition fees) related to such investments and for working
capital reserves. A portion of such proceeds was utilized to acquire the
properties described in Item 1 above.
At December 31, 1993, the Partnership had cash and cash equivalents of
approximately $1,471,000. Such funds and short-term investments of
approximately $21,966,000 are available for working capital requirements
including the funding of the Partnership's share of releasing costs and
capital improvements at the San Jose, California, New York, New York and
Encino, California real property investments. The Partnership and its
consolidated ventures have currently budgeted in 1994 approximately $4,271,000
for tenant improvements and other capital expenditures, not including the
improvements or additions related to the renovation of Topanga Plaza to be
funded through the existing loan as discussed below and in Note 3(c). Such
budgeted amounts also exclude the Partnership's share of the January 17, 1994
earthquake repair costs at Topanga Plaza which are estimated to be
approximately $2,100,000 (as discussed below and in Note 10(b)). The
Partnership's share of such items and its share of similar items for its
unconsolidated ventures in 1994 is currently budgeted to be approximately
$3,056,000. Actual amounts expended in 1994 may vary depending on a number of
factors including actual leasing activity, results of property operations,
liquidity considerations and other market conditions over the course of the
year. Due to these commitments, the Partnership has reduced the operating
distribution beginning with the first quarter 1993. Additionally, as more
fully described in Notes 5 and 8, distributions to the General Partners have
been deferred in accordance with the subordination requirements of the
Partnership agreement. The source of capital for such items and for both
short-term and long-term future liquidity and distributions is expected to be
through cash generated by the Partnership's investment properties and through
the sale of such investments. To the extent that a property does not produce
adequate amounts of cash to meet its needs, the Partnership may withdraw funds
from the working capital reserve which it maintains. The Partnership's and
its ventures' mortgage obligations are all non-recourse. Therefore, the
Partnership and its Ventures are not obligated to pay mortgage indebtedness
unless the related property produces sufficient net cash flow from operations
or sale.
On January 30, 1992, the Partnership through JMB/Mid Rivers Mall
Associates, sold its interest in Mid Rivers Mall located in St. Peters,
Missouri to an affiliate of an unaffiliated joint venture partner. The
Partnership received, in connection with the sale, after all fees, expenses,
and joint venture participation, net cash of $13,250,000. See Note 6 for a
further description of the transaction.
Overall cash flow returns at Broad Street for the next few years are
expected to be lower than originally projected because an additional 13% of
the space currently leased and occupied expires during the next two years. In
addition, a tenant, occupying approximately 37,000 square feet (approximately
15% of the building), did not renew its lease when it expired in September
1993. However, subtenants occupying approximately 21,000 square feet whose
leases also expired in September 1993 have held over while Broad Street
continues to negotiate leases with them. Furthermore, Broad Street has
renewed and expanded another tenant, effective July 1, 1993, whose lease was
scheduled to expire in December 1994. This tenant has expanded from
approximately 18,000 square feet to approximately 35,000 square feet at a
market effective rental rate which is lower than its previous lease. The
Partnership will continue its aggressive leasing program; however, the
downtown New York City market remains extremely competitive due to the
significant amount of space available primarily resulting from the layoffs,
cutbacks and consolidations by financial service companies and related
businesses which dominated this market. In addition to competition for
tenants in the downtown Manhattan market from other buildings in the area,
there is increasing competition from less expensive alternatives to Manhattan.
In order to enhance the building's competitive position in the marketplace,
the joint venture partners have recently completed certain modest upgrades to
the building's main lobby and elevators. Rental rates in the downtown market
are currently at depressed levels and this can be expected to continue for the
foreseeable future while the current vacant space is gradually absorbed.
Little, if any, new construction is planned for downtown over the next few
years and it is expected that the building will continue to be adversely
affected by the lower than originally projected effective rental rates now
achieved upon releasing of existing leases which expire over the next few
years. Therefore, the JMB/Broad Street joint venture recorded a provision for
value impairment at December 31, 1991 to reduce the net book value of 40 Broad
Street to $30,000,000 due to the uncertainty of JMB/Broad Street joint
venture's ability to recover the net carrying value of the investment property
through future operations or sale. An additional provision for value
impairment was recorded at December 31, 1992 to further reduce the net book
value of the property to the then estimated valuation of $7,800,000.
Reference is made to Notes 1 and 3(d) for further discussion of the current
status of this investment property. During 1991, the JMB/Broad Street joint
venture was required to pay approximately $1,800,000 in transfer taxes (and
related amounts) relating to the original acquisition of this investment
property. See Note 3(d).
In January 1992, the Partnership advanced $575,000 to the JMB/San Jose
joint venture for the payment of certain other operating expenses. These
monies were paid back to the Partnership by the end of 1992. The venture
partners notified the tenants in and invitees to the complex that some of the
buildings, particularly the 100-130 Park Center Plaza Buildings and the garage
below them, could pose a life safety hazard under certain unusually intense
earthquake conditions. While the buildings and the garage were designed to
comply with the applicable codes for the period in which they were
constructed, and there is no legal requirement to upgrade the buildings for
seismic purposes, the venture partners are working with consultants to analyze
ways in which such a potential life safety hazard could be eliminated.
However, since the costs of both re-leasing space and any seismic program
could be substantial, the Partnership has commenced discussions with the
appropriate lender for additional loan proceeds to pay for all or a portion of
these costs.
The Partnership is also continuing to discuss terms for a possible loan
extension with the mortgage lender on the 150 Almaden and 185 Park Avenue
buildings and certain parking areas as the mortgage loan secured by this
portion of the complex matured on October 1, 1993 and was extended to December
1, 1993. However, the Partnership and the lender have not been able to agree
upon mutually acceptable terms for a loan extension and the lender has
accelerated the loan. Should an agreement not be reached and as the
Partnership does not have its share of the outstanding loan balance in its
reserves in order to retire the loan, it is possible that the lender would
exercise its remedies and seek to acquire title to this portion of the
complex. Furthermore, should lender assistance be required to fund
significant costs at the 100-130 Park Center Plaza buildings but not be
obtained, the Partnership has decided not to commit any additional amounts to
this portion of the complex since the likelihood of recovering such funds
through increased capital appreciation is remote. The result would be that
the Partnership would no longer have an ownership interest in this portion of
the complex.
As a result, there is uncertainty about the ability to recover the net
carrying value of the property through future operations and sale and
accordingly, the JMB/San Jose joint venture has made a provision for value
impairment on the 150 Almaden and 185 Park Avenue buildings and certain
parking areas of $15,549,935. Such provision at December 31, 1993 is recorded
to reduce the net carrying value of these buildings to the then outstanding
balance of the related non-recourse financing. Due to the uncertainty of the
JMB/San Jose joint venture's ability to recover the net carrying value of
those buildings within the investment property through future operations or
sale, the JMB/San Jose joint venture had recorded a provision for value
impairment at December 31, 1991 of $21,175,127 to reduce the net book value of
the 100-130 Park Center Plaza buildings and a certain parking area to an
amount equal to the then outstanding balance of the related non-recourse
financing. Additionally, at December 31, 1992, the JMB/San Jose joint venture
recorded a provision for value impairment of $8,142,152 on certain other
portions of the complex to amounts equal to the then outstanding balances of
the related non-recourse financing. In the event the lender on any portion of
the complex exercised its remedies as discussed above, the result would likely
be that JMB/San Jose joint venture would no longer have an ownership interest
in such portion. See Note 3(b) for further discussion of this investment
property. Tenants occupying approximately 110,000 square feet (approximately
26% of the buildings) of the Park Center Plaza investment property have leases
that expire in 1995, for which there can be no assurance of renewals.
On January 17, 1994, an earthquake occurred in Los Angeles, California.
The epicenter was located in the town of Northridge which is approximately 6
miles from Topanga Plaza Shopping Center. Consequently, the entire mall,
including the 4 major department stores who own their own buildings, suffered
some casualty damage. The approximately 360,000 sq. ft. of mall shops owned
by the Topanga Partnership did not suffer major structural damage. The
estimated cost of the repairs at Topanga for which the joint venture is
responsible is approximately $8.8 million. The majority of this cost will be
subject to recovery under the joint venture's earthquake insurance policy
after payment of the required deductible. The deductible on the building
improvements, furniture and fixtures, and business interruption coverages due
to loss of rents is approximately $2.1 million. The Partnership anticipates
that it will pay for its share of insurance deductibles from its reserves
without any material effect on its projected operations for 1994. As of the
date of this report, 97 of the malls 114 shops have opened, and the remaining
shops are expected to open during the upcoming weeks as tenants complete their
repairs. Only one of the four major department stores has been able to open
and it may take several weeks or months before the entire center is open and
operating. The earthquake will result in some adverse effect on the
operations of the center in the near term; the extent and length of which is
not presently determinable.
The Partnership and its joint venture partner completed a renovation at
the Topanga Plaza Shopping Center during 1992 of approximately $40,000,000.
In conjunction with this renovation and remerchandising, the Partnership
secured an extension of the operating covenant for the Nordstrom's department
store to the year 2000 from an original expiration date in 1994. In addition,
the Broadway store has also committed to operate in the center until the year
2000. The Partnership and its joint venture partner have refinanced the
existing mortgage notes with replacement financing from the existing mortgage
holder in the aggregate amount of approximately $59,000,000 which was funded
in four stages. See Note 4(b) for further discussion of the refinancing of
this loan.
The Plaza Hermosa Shopping Center was developed with proceeds raised
through a municipal bond financing. This financing is secured by a letter of
credit facility which is ultimately secured by a deed of trust on the
property. The letter of credit facility expired December 31, 1993; however,
the Partnership signed an agreement with the holder of the letter of credit to
extend its expiration date to June 30, 1994. The Partnership is currently
evaluating its alternatives, including seeking an extension of the existing
letter of credit, replacing the bond financing with a conventional mortgage or
retiring the debt with current cash reserves. The existing bond financing is
due and payable upon the expiration of the letter of credit, and accordingly,
has been classified as a current liability at December 31, 1993. There can be
no assurance that any such replacement financing will be secured. This
property did not sustain any significant damage in connection with the January
17, 1994 Los Angeles earthquake.
In 1995, the leases of tenants occupying approximately 33,000 square feet
(approximately 35% of the property) at the Plaza Hermosa Shopping Center
expire. Although the Partnership has received indications that some of these
tenants will renew, there can be no assurance that such renewals will take
place.
In July 1993, at the First Financial Plaza office building, a tenant,
Mitsubishi vacated its approximate 8,100 square feet prior to its lease
expiration of January 1997 and continues to pay rent pursuant to its lease
obligation. In 1994, leases representing approximately 20% of the leasable
square footage are scheduled to expire. Although renewal discussions with the
majority of these tenants have been favorable, there can be no assurance that
these tenants will review their leases upon expiration. The Los Angeles
office market in general and the Encino submarket in particular have become
extremely competitive resulting in higher rental concession granted to tenants
and flat or decreasing market rental rates. Furthermore, due to the recession
in southern California and to concern regarding tenants' ability to perform
under current lease terms, the venture has granted rent deferrals and other
forms of rent relief to several tents including First Financial Housing, an
affiliate of the unaffiliated venture partner. The property incurred minimal
damage as a result of the earthquake in southern California on January 17,
1994.
There are certain risks associated with the Partnership's investments
made through joint ventures including the possibility that the Partnership's
joint venture partners in an investment might become unable or unwilling to
fulfill their financial or other obligations, or that such joint venture
partners may have economic or business interests or goals that are
inconsistent with those of the Partnership.
In response to the weakness of the economy and the limited amount of
available real estate financing in particular, the Partnership is taking steps
to preserve its working capital. Therefore, the Partnership is carefully
scrutinizing the appropriateness of any discretionary expenditures, including
the possible reduction of future distributions, particularly in relation to
the amount of working capital it has available. By conserving working
capital, the Partnership will be in a better position to meet future needs of
its properties without having to rely on external financing sources.
RESULTS OF OPERATIONS
The increase in short-term investments, long-term debt and advances from
affiliate and the decrease in construction costs payable and other long-term
liabilities at December 31, 1993 as compared to December 31, 1992 is primarily
due to the receipt of the funds advanced of approximately $735,000 by the
joint venture partner at the Topanga Plaza and the receipt and use of the
refinancing proceeds of the long-term debt related to the renovation at the
Topanga Plaza as discussed above. The third funding of the refinancing of
$18,400,000 was received on February 2, 1993, of which approximately
$9,900,000 was used to payoff the other long-term liabilities and
approximately $7,001,000 was used to paydown construction payables.
The increase in rents and other receivables at December 31, 1993 as
compared to December 31, 1992 is primarily due to the timing of payment of
certain tenant receivables of $292,000 at the Los Angeles, California
investment property.
The increase in escrow deposits at December 31, 1993 as compared to
December 31, 1992 is primarily due to the escrowing of funds for improvements
as a result of a renewal and expansion of a certain tenant's space at 40 Broad
Street.<PAGE>
The increase in buildings and improvements at December 31, 1993 as
compared to December 31, 1992 is primarily due to additions and expansion of a
certain tenant's space of approximately $1,552,000 at 40 Broad Street,
approximately $663,000 at the Topanga Plaza as a result of the renovation and
re-merchandising of the property and approximately $430,000 at the First
Financial Plaza.
The decrease in investment in unconsolidated ventures at December 31,
1993 as compared to December 31, 1992 and the decrease in the Partnership's
share of operations of unconsolidated ventures for the twelve months ended
December 31, 1993 as compared to the twelve months ended December 31, 1992 is
primarily due to the JMB/San Jose joint venture recording at September 30,
1993 a provision for value impairment of $15,549,935 (of which the
Partnership's share is $7,774,968) to reduce the net carrying value of the 150
Almaden and 185 Park Avenue buildings and certain parking areas to the then
outstanding balance of the related non-recourse financing. The increase in
the Partnership's share of operations of unconsolidated ventures for the
twelve months ended December 31, 1992 as compared to the twelve months ended
December 31, 1991 was primarily due to the Partnership's share of the
provisions for value impairment recorded in 1991 at the San Jose, California
investment property, partially offset in 1992 by the effect of an additional
provision for value impairment recorded at December 31, 1992. See note 3(b).
The increase in accrued rents receivable at December 31, 1993 as compared
to December 31, 1992 is primarily due to rents accrued ratably over the term
of the lease rather than as paid at Topanga Plaza.
The increase in deferred expenses, and the corresponding increase of
amortization of deferred expense for the twelve months ended and at December
31, 1993 as compared to December 31, 1992 is primarily due to the
capitalization of certain expenses related to the renovation of Topanga Plaza.
The decrease in accrued interest at December 31, 1993 as compared to
December 31, 1992 is primarily due to the new loan of $59,000,000 effective
June 1, 1993 at the Topanga Plaza (see Note 3(c)).
The decrease in rental income for the twelve months ended December 31,
1993 as compared to the twelve months ended December 31, 1992 and 1991 is
primarily due to decreased effective rents at the New York, New York
investment property, lower occupancy at Plaza Hermosa and First Financial in
1993 and due to lower occupancy in 1992 at Topanga Plaza caused by the
renovation as discussed in Note 3(c).
The decrease in interest income for the twelve months ended December 31,
1993 as compared to December 31, 1992 is primarily due to a decrease in the
interest rates earned on U.S. Government obligations in 1993. Interest income
increased for the twelve months ended December 31, 1992 as compared to the
twelve months ended December 31, 1991 primarily due to the investment of the
Mid Rivers sale proceeds in U.S. Government obligations in 1992.
Mortgage and other interest expense increased for the twelve months ended
December 31, 1993 as compared to 1992 primarily due to the fundings by the
Topanga mortgage lender of $16,000,000 in December 1992, $18,400,000 in
February 1993 and $14,000,000 in June 1993 as more fully described in Note
4(b).
Depreciation expense increased for the twelve months ended December 31,
1993 as compared to 1992 due to the increase in building and improvements at
40 Broad Street, Topanga Plaza and First Financial Plaza. Depreciation
expense decreased for the twelve months ended December 31, 1992 as compared to
December 31, 1991 primarily due to the lower basis of assets at the New York,
New York investment property due to the $28,870,198 provision for value
impairment recorded at December 31, 1991.
Venture partners' share of consolidated ventures' operations decreased
for the twelve months ended December 31, 1993 as compared to the twelve months
ended December 31, 1992 primarily due to decreased earnings at the Topanga
Plaza as a result of the renovation and re-merchandising as discussed above.
Partnership's share of gain on sale of interest in investment property of
$5,655,876 decreased for the twelve months ended December 31, 1993 as compared
to the twelve months ended December 31, 1992 due to the sale of the
Partnership's interest in Mid Rivers in January, 1992 (see Note 6).
INFLATION
Due to the decrease in the level of inflation in recent years, inflation
generally has not had a material effect on rental income or property operating
expenses.
To the extent that inflation in future periods does have an adverse
impact on property operating expenses, the effect will generally be offset by
amounts recovered from tenants as many of the long-term leases at the
Partnership's commercial properties have escalation clauses covering increases
in the cost of operating and maintaining the properties as well as real estate
taxes. Therefore, there should be little effect on operating earnings if the
properties remain substantially occupied. In addition, substantially all of
the leases at the Partnership's shopping center investments contain provisions
which entitle the Partnership to participate in gross receipts of tenants
above fixed minimum amounts.
Future inflation may also cause capital appreciation of the Partnership's
investment properties over a period of time to the extent that rental rates
and replacement costs of properties increase.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
INDEX
Independent Auditors' Report
Consolidated Balance Sheets, December 31, 1993 and 1992
Consolidated Statements of Operations, years ended December 31, 1993,
1992 and 1991
Consolidated Statements of Partners' Capital Accounts, years ended
December 31, 1993, 1992 and 1991
Consolidated Statements of Cash Flows, years ended December 31, 1993,
1992 and 1991
Notes to Consolidated Financial Statements
Schedule
--------
Supplementary Income Statement Information X
Consolidated Real Estate and Accumulated Depreciation XI
Schedules not filed:
All schedules other than those indicated in the index have been omitted
as the required information is inapplicable or the information is presented in
the consolidated financial statements or related notes.
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
INDEX
Independent Auditors' Report
Balance Sheets, December 31, 1993 and 1992
Statements of Operations, years ended December 31, 1993, 1992 and 1991
Statements of Partners' Capital Accounts, years ended December 31, 1993,
1992 and 1991
Statements of Cash Flows, years ended December 31, 1993, 1992 and 1991
Notes to Financial Statements.
Schedule
--------
Supplementary Income Statement Information X
Real Estate and Accumulated Depreciation XI
Schedules not filed:
All schedules other than those indicated in the index have been omitted
as the required information is inapplicable or the information is presented in
the consolidated financial statements or related notes.<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
JMB INCOME PROPERTIES, LTD. - XII:
We have audited the consolidated financial statements of JMB Income
Properties, Ltd. - XII (a limited partnership) and consolidated ventures as
listed in the accompanying index. In connection with our audits of the
consolidated financial statements, we also have audited the financial
statement schedules as listed in the accompanying index. These consolidated
financial statements and financial statement schedules are the responsibility
of the General Partners of the Partnership. Our responsibility is to express
an opinion on these consolidated financial statements and financial statement
schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by the General Partners of the Partnership, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of JMB Income
Properties, Ltd. - XII and consolidated ventures at December 31, 1993 and
1992, and the results of their operations and their cash flows for each of the
years in the three-year period ended December 31, 1993, in conformity with
generally accepted accounting principles. Also in our opinion, the related
financial statement schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly, in all
material respects, the information set forth therein.
KPMG PEAT MARWICK
Chicago, Illinois
March 25, 1994
<PAGE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
ASSETS
------
<CAPTION>
1993 1992
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,470,860 2,330,824
Short-term investments (note 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,966,316 19,658,292
Rents and other receivables, net of allowance for doubtful accounts of $481,694 in 1993 and
$688,549 in 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,025,743 1,580,237
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267,718 222,793
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,393,527 1,024,731
------------ -----------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,124,164 24,816,877
------------ -----------
Investment properties, at cost (notes 2, 3 and 4) - Schedule XI:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,074,253 23,074,253
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176,419,717 173,014,447
------------ -----------
199,493,970 196,088,700
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,724,753 36,188,622
------------ -----------
Total investment properties, net of accumulated depreciation . . . . . . . . . . . . . . . . 157,769,217 159,900,078
Investment in unconsolidated ventures, at equity (notes 1, 3 and 9). . . . . . . . . . . . . . . . . . 3,720,296 11,330,565
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,788,858 4,147,807
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,649,035 1,550,955
------------ -----------
$195,051,570 201,746,282
============ ===========
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
------------------------------------------
<CAPTION>
1993 1992
------------ -----------
Current liabilities:
Current portion of long-term debt (note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,972,571 6,737,369
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 969,433 930,006
Construction costs payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 537,400 7,000,944
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 160,105
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,803 34,001
------------ -----------
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,497,207 14,862,425
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410,232 376,860
Long-term debt, less current portion (note 4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,612,869 69,869,294
Advances from affiliates (note 3(c)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 735,000 --
Other long-term liabilities (note 3(c)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 9,650,000
------------ -----------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,255,308 94,758,579
Venture partners' subordinated equity in ventures (note 3) . . . . . . . . . . . . . . . . . . . . . . 22,872,422 23,642,980
Partners' capital accounts (notes 1 and 5):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,123 11,123
Cumulative net earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 642,630 650,900
------------ -----------
653,753 662,023
------------ -----------
Limited partners (189,684 interests):
Capital contributions, net of offering costs . . . . . . . . . . . . . . . . . . . . . . . . . . 171,306,452 171,306,452
Cumulative net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23,784,830) (17,755,122)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (73,251,535) (70,868,630)
------------ -----------
74,270,087 82,682,700
------------ -----------
Total partners' capital accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74,923,840 83,344,723
------------ -----------
Commitments and contingencies (notes 3, 6 and 9)
$195,051,570 201,746,282
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $29,224,716 30,049,260 31,366,275
Interest income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 831,059 1,011,855 728,015
----------- ----------- -----------
30,055,775 31,061,115 32,094,290
----------- ----------- -----------
Expenses (Schedule X):
Mortgage and other interest. . . . . . . . . . . . . . . . . . . . . . . . . . 9,137,379 5,922,611 5,852,976
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,739,255 4,811,235 5,684,994
Property operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 14,074,577 14,475,393 14,298,379
Professional services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307,769 385,726 327,991
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . 787,304 456,673 499,231
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . 222,884 351,165 350,742
Provision for value impairment (note 1). . . . . . . . . . . . . . . . . . . . -- 22,908,606 28,870,198
----------- ----------- -----------
30,269,168 49,311,409 55,884,511
----------- ----------- -----------
Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . (213,393) (18,250,294) (23,790,221)
Partnership's share of operations of unconsolidated ventures (notes 1, 3 and 9). (6,610,269) (3,123,534) (10,516,323)
Venture partners' share of consolidated ventures' operations (notes 1 and 3) . . 785,684 6,090,075 7,580,977
----------- ----------- -----------
Net operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . (6,037,978) (15,283,753) (26,725,567)
Partnership's share of gain on sale of interest in investment property (notes 3 and 6) -- 5,655,876 --
----------- ----------- -----------
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(6,037,978) (9,627,877) (26,725,567)
=========== =========== ===========
Net loss per limited partnership interest (note 1):
Net operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (31.79) (80.48) (140.06)
Partnership's share of gain on sale of interest in investment property . . . . -- 29.52 --
----------- ----------- -----------
Net loss per limited partnership interest (note 1) . . . . . . . . . . $ (31.79) (50.96) (140.06)
=========== =========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
GENERAL PARTNERS LIMITED PARTNERS (189,684 INTERESTS)
------------------------------------------------------- ----------------------------------------------
CONTRI-
BUTIONS
NET NET OF NET
CONTRI- EARNINGS CASH OFFERING EARNINGS CASH
BUTIONS (LOSS) DISTRIBUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ---------- ------------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1990 .$11,123 769,969 -- 781,092 171,306,452 18,479,253 (54,664,876) 135,120,829
Cash distributions
($35.00 per
limited partnership
interest) . . . . . -- -- -- -- -- -- (6,672,134) (6,672,134)
Net loss (note 5). . -- (157,594) -- (157,594) -- (26,567,973) -- (26,567,973)
------- --------- ------- -------- ----------- ----------- ----------- -----------
Balance at
December 31, 1991 . 11,123 612,375 -- 623,498 171,306,452 (8,088,720) (61,337,010) 101,880,722
Cash distributions
($50.00 per
limited partnership
interest) . . . . . -- -- -- -- -- -- (9,531,620) (9,531,620)
Net earnings (loss)
(note 5) . . . . . -- 38,525 -- 38,525 -- (9,666,402) -- (9,666,402)
------- --------- ------- -------- ----------- ----------- ----------- -----------
Balance at
December 31, 1992 . 11,123 650,900 -- 662,023 171,306,452 (17,755,122) (70,868,630) 82,682,700
Cash distributions
($12.50 per
limited partnership
interest) . . . . . -- -- -- -- -- -- (2,382,905) (2,382,905)
Net loss (note 5). . -- (8,270) -- (8,270) -- (6,029,708) -- (6,029,708)
------- --------- ------- -------- ----------- ----------- ----------- -----------
Balance at
December 31, 1993 .$11,123 642,630 -- 653,753 171,306,452 (23,784,830) (73,251,535) 74,270,087
======= ========= ======= ======== =========== =========== =========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(6,037,978) (9,627,877) (26,725,567)
Items not requiring (providing) cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,739,255 4,811,235 5,684,994
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . 787,304 456,673 499,231
Partnership's share of operations and gain on sale of interest
in investment property of unconsolidated ventures,
net of distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,610,269 (746,754) 13,552,998
Venture partners' share of ventures' operations. . . . . . . . . . . . . . . (785,684) (6,090,075) (7,580,977)
Provisions for value impairment (note 1) . . . . . . . . . . . . . . . . . . -- 22,908,606 28,870,198
Changes in:
Rents and other receivables. . . . . . . . . . . . . . . . . . . . . . . . . (445,506) (716,723) 639,015
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (44,925) (128,694) 1,459
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (368,796) (257,704) --
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . . (98,080) (321,480) 140,247
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,427 (290,092) 210,108
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (160,105) 154,719 (18,883)
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . . -- -- (84,343)
Unearned rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16,198) (12,569) (365,223)
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . 33,372 (76,452) (103,605)
----------- ----------- -----------
Net cash provided by operating activities. . . . . . . . . . . . . . . 5,252,355 10,062,813 14,719,652
----------- ----------- -----------
Cash flows from investing activities:
Net purchases of short-term investments. . . . . . . . . . . . . . . . . . . . (2,308,024) (8,373,546) (207,654)
Additions to investment properties, net of related payables. . . . . . . . . . (10,071,938) (29,696,904) (5,076,870)
Partnership's distributions from unconsolidated ventures . . . . . . . . . . . 1,000,000 13,250,000 --
Partnership's contributions to unconsolidated ventures . . . . . . . . . . . . -- (753,750) (1,075,750)
Payment of deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . (1,428,355) (1,606,048) (574,385)
----------- ----------- -----------
Net cash used in investing activities. . . . . . . . . . . . . . . . . (12,808,317) (27,180,248) (6,934,659)
----------- ----------- -----------
<PAGE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1993 1992 1991
----------- ----------- -----------
Cash flows from financing activities:
Principal payments on long-term debt . . . . . . . . . . . . . . . . . . . . . (421,223) (1,769,435) (646,534)
Increase (decrease) in other long-term liabilities . . . . . . . . . . . . . . (9,650,000) 6,549,513 1,829,243
Proceeds from refinancings of debt (note 4(b)) . . . . . . . . . . . . . . . . 18,400,000 26,600,000 --
Advances from affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . 735,000 (1,490,000) (63,300)
Venture partners' contributions to venture . . . . . . . . . . . . . . . . . . 150,126 242,420 834,449
Distributions to venture partners. . . . . . . . . . . . . . . . . . . . . . . (135,000) (2,406,641) (3,340,956)
Distributions to limited partners. . . . . . . . . . . . . . . . . . . . . . . (2,382,905) (9,531,620) (6,672,134)
----------- ----------- -----------
Net cash provided by (used in) financing activities. . . . . . . . . . 6,695,998 18,194,237 (8,059,232)
----------- ----------- -----------
Net increase (decrease) in cash and cash equivalents . . . . . . . . . $ (859,964) 1,076,802 (274,239)
=========== =========== ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest, net of amounts capitalized. . . . . $ 9,297,484 5,965,889 5,871,859
=========== =========== ===========
Total proceeds from sale of investment property, net of selling expenses . . . $ -- 30,909,086 --
Assumption of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . -- 17,659,086 --
----------- ----------- -----------
Cash proceeds from sale of the Partnership's interest in
investment properties, net of selling expenses . . . . . . . . . . . . . . . $ -- 13,250,000 --
=========== =========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(1) BASIS OF ACCOUNTING
The accompanying consolidated financial statements include the accounts
of the Partnership and its ventures, Topanga Plaza Partnership ("Topanga"),
JMB-40 Broad Street Associates ("Broad Street"), JMB First Financial
Associates ("First Financial") and First Financial's venture, JMB Encino
Partnership, ("Encino") (note 3). The effect of all transactions between the
Partnership and its ventures have been eliminated in the consolidated
financial statements. The equity method of accounting has been applied in the
accompanying consolidated financial statements with respect to the
Partnership's venture interests in JMB/San Jose Associates ("San Jose"),
JMB/Mid Rivers Mall Associates ("JMB/Rivers") and JMB/Rivers' venture, Mid
Rivers Mall Associates, L.P. ("Mid Rivers"). Accordingly, the accompanying
consolidated financial statements do not include the accounts of San Jose,
JMB/Rivers and Mid Rivers. The Partnership, through JMB/Rivers sold its
interest in Mid Rivers mall in January 1992.
Certain amounts in the 1992 and 1991 consolidated financial statements
have been reclassified to conform with the 1993 presentation.
The Partnership's records are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying consolidated financial statements have been prepared from such
records after making appropriate adjustments to present the Partnership's
accounts in accordance with generally accepted accounting principles ("GAAP")
and to consolidate the accounts of the ventures as described above. Such
adjustments are not recorded on the records of the Partnership. The net
effect of these items for the years ended December 31, 1993 and 1992 is
summarized as follows:
<TABLE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
<CAPTION>
1993 1992
------------------------------ ------------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Total assets . . . . . . . . . . . . . . . . . . . . . . . $195,051,570 129,228,260 201,746,282 135,859,733
Partners' capital accounts
(deficits) (note 5):
General partners . . . . . . . . . . . . . . . . . . . . 653,753 (928,062) 662,023 (757,607)
Limited partners . . . . . . . . . . . . . . . . . . . . 74,270,087 123,691,731 82,682,700 130,165,563
Net earnings (loss) (note 5):
General partners . . . . . . . . . . . . . . . . . . . . (8,270) (170,455) 38,525 36,226
Limited partners . . . . . . . . . . . . . . . . . . . . (6,029,708) (4,090,927) (9,666,402) 6,732,608
Net earnings (loss) per limited partnership interest . . . (31.79) (21.57) (50.96) 35.49
============ =========== =========== ===========
</TABLE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The net earnings (loss) per limited partnership interest is based upon
the number of limited partnership interests outstanding at the end of each
period (189,684).
Statement of Financial Accounting Standards No. 95 requires the
Partnership to present a statement which classifies receipts and payments
according to whether they stem from operating, investing or financing
activities. The required information has been segregated and accumulated
according to the classifications specified in the pronouncement. Partnership
distributions from its unconsolidated ventures are considered cash flow from
operating activities to the extent of the Partnership's cumulative share of
net earnings. In addition, the Partnership records amounts held in U.S.
Government obligations at cost, which approximates market. For the purposes
of these financial statements, the Partnership's policy is to consider all
such amounts held with original maturities of three months or less ($0 and
$1,985,253 at December 31, 1993 and 1992, respectively) as cash equivalents
with any remaining amounts reflected as short-term investments.
Deferred expenses consist primarily of commitment fees and loan related
costs which are amortized over the term of the related mortgage loans, and
lease commissions which are amortized over the term of the related leases,
using the straight-line method. Also included in deferred expenses are
certain other charges which are amortized over the expected recovery period.
Although certain leases of the Partnership provide for tenant occupancy
during periods for which no rent is due and/or increases in the minimum lease
payments over the term of the lease, rental income is accrued for the full
period of occupancy on a straight-line basis.
Statement of Financial Accounting Standards No. 107 ("SFAS 107"),
"Disclosures about Fair Value of Financial Instruments", requires entities
with total assets exceeding $150 million at December 31, 1993 to disclose the
SFAS 107 value of all financial assets and liabilities for which it is
practicable to estimate. Value is defined in the Statement as the amount at
which the instrument could be exchanged in a current transaction between
willing parties, other than in a forced or liquidation sale. The Partnership
believes the carrying amount of its financial instruments classified as
current assets and liabilities (excluding current portion of long-term debt)
approximates SFAS 107 value due to the relatively short maturity of these
instruments. There is no quoted market value available for any of the
Partnership's other instruments. The debt, with a carrying balance of
$94,585,440, has been calculated to have an SFAS 107 value of $101,959,833 by
discounting the scheduled loan payments to maturity. Due to restrictions on
transferability and prepayment and the inability to obtain comparable
financing due to current levels of debt, previously modified debt terms or
other property specific competitive conditions, the Partnership would be
unable to refinance these properties to obtain such calculated debt amounts
reported. (See note 4.) The Partnership has no other significant financial
instruments.
In response to the significant vacancy levels coupled with the depressed
rental rates in the downtown New York market, the JMB/Broad Street joint
venture, as a matter of prudent accounting practice, has recorded provisions
for value impairment on 40 Broad Street Office Building of $28,870,198 and
$22,908,606 at December 31, 1991 and 1992, respectively. Such provisions were
recorded to reduce the net basis of the investment property to $7,800,000 at
December 31, 1992. Reference is made to note 3(d) for further discussion of
the current status of this investment property.
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Additionally, in response to the uncertainties relating to the JMB/San
Jose joint venture's ability to recover the net carrying value of certain
buildings within the Park Center Plaza investment property through future
operations or sale, the JMB/San Jose joint venture, as a matter of prudent
accounting practice, has recorded a provision for value impairment on certain
parcels within the complex of $21,175,127. Such provision, made as of
December 31, 1991, was recorded to reduce the net basis of the 100 Park
Center Plaza Buildings and a certain parking area to the then outstanding
balance of the related non-recourse debt. Additionally, a provision for value
impairment of $8,142,152 was recorded at December 31, 1992 on certain other
portions of the complex to reduce the net basis of these portions to the
outstanding balance of the related non-recourse debt at December 31, 1992.
Furthermore, a provision for value impairment on the 150 Almaden and 185 Park
Avenue buildings and certain parking areas of $15,549,935 was recorded at
September 30, 1993 to reduce the net to the then outstanding balance of the
related non-recourse debt. Reference is made to note 3(b) for further
discussion of the current status of this investment property.
No provision for State or Federal income taxes has been made as the
liability for such taxes is that of the investors rather than the Partnership.
However, in certain circumstances, the Partnership has been required under
applicable law to remit directly to the tax authorities amounts representing
withholding from distributions paid to partners.
(2) INVESTMENT PROPERTIES
(a) General
The Partnership has acquired, either directly or through joint ventures
(note 3), three shopping centers, two office buildings and an office complex.
The Partnership sold, through JMB/Rivers, its interest in Mid Rivers Mall in
January 1992. All of the remaining properties were in operation at December
31, 1993. The cost of the investment properties represents the total cost to
the Partnership or its consolidated ventures plus miscellaneous acquisition
costs.
Depreciation on the properties has been provided over the estimated
useful lives of the various components as follows:
YEARS
-----
Building and improvements -- straight-line 30
Personal property -- straight-line . . . . 5
==
Maintenance and repairs are generally charged to operations as incurred.
Significant betterments and improvements are capitalized and depreciated over
their estimated useful lives.
Certain investment properties are pledged as security for the long-term
debt, for which there is no recourse to the Partnership, as described in note
4. JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(b) Plaza Hermosa Shopping Center
During September 1986, the Partnership acquired a multi-building
neighborhood shopping center in Hermosa Beach, California. The Partnership's
purchase price for the shopping center was $18,290,000, of which $11,890,000
was paid in cash at closing. The balance of the purchase price is represented
by bond financing in the amount of $6,400,000 (note 4). This financing is
secured by a letter of credit facility which is ultimately secured by a deed
of trust on the property. The letter of credit facility expired December 31,
1993; however, the Partnership signed an agreement with the issuer of the
letter of credit to extend its expiration date to June 30, 1994. The
Partnership is currently evaluating its alternatives, including seeking an
extension of the existing letter of credit, replacing the bond financing with
a conventional mortgage or retiring the debt with current cash reserves. The
existing bond financing is due and payable upon the expiration of the letter
of credit, and accordingly, has been classified as a current liability at
December 31, 1993. There can be no assurance that any such replacement
financing will be secured.
The property is managed by an affiliate of the General Partners of the
Partnership for a fee calculated as 4% of gross receipts of the property.
(3) VENTURE AGREEMENTS
(a) General
The Partnership at December 31, 1993 is a party to four operating venture
agreements (the Partnership, through JMB/Rivers, sold its interest in Mid
Rivers Mall in January 1992) and has made capital contributions to the
respective ventures as discussed below. Under certain circumstances, either
pursuant to the venture agreements or due to the Partnership's obligations as
a General Partner, the Partnership may be required to make additional cash
contributions to the ventures.
There are certain risks associated with the Partnership's investments
made through joint ventures including the possibility that the Partnership's
joint venture partners in an investment might become unable or unwilling to
fulfill their financial or other obligations, or that such joint venture
partners may have economic or business interests or goals that are
inconsistent with those of the Partnership.
(b) San Jose
The Partnership has acquired, through San Jose, an interest in an
existing office building complex in San Jose, California (Park Center
Financial Plaza). San Jose acquired nine office buildings and two parking
garage structures in June 1985 for a purchase price of approximately
$32,472,000 subject to long-term indebtedness of approximately $6,347,000.
All of the properties were in operation when acquired.
In addition, in May 1986, San Jose purchased an additional office
building (150 Almaden) and a parking and retail building (185 Park Avenue) in
the Park Center Financial Plaza complex for a total purchase price of
approximately $47,476,000. In conjunction with the acquisitions, San Jose
reserved approximately $31,590,000 to fund debt service, leasing commissions,
and capital and tenant improvements.
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
In September 1986, San Jose obtained a mortgage loan in the amount of
$25,000,000 secured by the 150 Almaden and 185 Park Avenue buildings and
certain parking areas. The outstanding principal balance, which is
non-amortizing, bears interest at the rate of 9.5% per annum and had a
scheduled maturity in October 1993 and was extended to December 1, 1993.
The property is managed by an affiliate of the General Partners of the
Partnership for a fee calculated as 3% of gross receipts.
The partners of San Jose are the Partnership and JMB Income Properties,
Ltd.-XI, another partnership sponsored by the Managing General Partner of the
Partnership ("JMB-XI"). The terms of San Jose's partnership agreement
generally provide that contributions, distributions, cash flow, sale or
refinancing proceeds and profits and losses will be distributed or allocated
to the Partnership in their respective 50% ownership percentages.
In 1991, all remaining amounts originally set aside by the Partnership to
fund debt service, leasing commissions and capital and tenant improvement
costs at Park Center Financial Plaza were utilized. In January 1992, the
Partnership advanced $575,000 to the JMB/San Jose joint venture for the
payment of certain operating expenses. These monies were paid back to the
Partnership by the end of 1992. However, since the costs of both re-leasing
space and any seismic program could be substantial, the Partnership has
commenced discussions with the appropriate lender for additional loan proceeds
to pay for all or a portion of these costs. The venture is also continuing to
discuss terms for a possible loan extension with the mortgage lender on the
150 Almaden and 185 Park Avenue buildings and certain parking areas as the
mortgage loan secured by this portion of the complex matured in October 1993
and was extended to December 1, 1993. However, the Partnership and the lender
have not been able to agree upon mutually acceptable terms for a loan
extension and the lender has accelerated the loan. Should an agreement not be
reached and as the venture does not have its share of the outstanding loan
balance in its reserves in order to retire the loan, it is possible that the
lender would exercise its remedies and seek to acquire title to this portion
of the complex. Furthermore, should lender assistance be required to fund
significant costs at the 100-130 Park Center Plaza buildings but not be
obtained, the venture has decided not to commit any additional amounts to this
portion of the complex since the likelihood of recovering such funds through
increased capital appreciation is remote. The result would be that the
Partnership would no longer have an ownership interest in this portion of the
complex.
As a result, there is uncertainty about the ability to recover the net
carrying value of the property through future operations and sale and
accordingly, the JMB/San Jose joint venture has made a provision for value
impairment on the 150 Almaden and 185 Park Avenue buildings and certain
parking areas of $15,549,935. Such provision at September 30, 1993 was
recorded to reduce the net carrying value of these buildings to the then
outstanding balance of the related non-recourse financing. Due to the
uncertainty of the JMB/San Jose joint venture's ability to recover the net
carrying value of those buildings within the investment property through
future operations or sale, the JMB/San Jose joint venture recorded a provision
for value impairment at December 31, 1991 of $21,175,127 to reduce the net
book value of the 100-130 Park Center Plaza buildings and a certain parking
area to an amount equal to the then outstanding balance of the related non-
recourse financing. Additionally, at December 31, 1992, the JMB/San Jose
joint venture recorded a provision for value impairment of $8,142,152 on
certain other portions of the complex to amounts equal to the then outstanding
balances of the related non-recourse financing. In the event the lender on
any portion of the complex exercised its remedies as discussed above, the
result would likely be that JMB/San Jose joint venture would no longer have an
ownership interest in such portion.
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(c) Topanga
In December 1985, the Partnership acquired, through a joint venture
partnership with an affiliate of the developer, a 58% interest in an existing
two-level enclosed mall regional shopping center known as Topanga Plaza in the
Woodland Hills area of Los Angeles, California. The aggregate purchase price
for the Partnership's interest in the venture was approximately $25,263,000,
which was paid in cash at closing. Under the terms of the joint venture
agreement, the Partnership generally will be allocated or distributed 58% of
profits and losses, cash flow from operations and sale or refinancing
proceeds.
The shopping center is subject to a long-term management agreement with
an affiliate of the joint venture partner. Under the terms of the management
agreement, the manager is entitled to receive a management fee based on a
formula which relates to direct and general overhead costs and expenses
incurred in the operation of the property.
In 1990, the Topanga joint venture reached an agreement with an existing
major department store to lease approximately 24,600 square feet of the
department store owned retail space for a minimum term of ten years.
Subleases have been executed with retail tenants for all of the leasable area
within this space. Topanga paid approximately $1,600,000 (all of which was
funded by December 31, 1991) for tenant improvements, leasing costs and other
expenditures related to the sublease space. Topanga has funded these costs
through advances by an affiliate of the venture partner which bore interest at
approximately 9% as of December 31, 1991. In 1991, $272,367 of this interest
was capitalized as construction period interest. Such advances were repaid in
connection with the initial funding of the new mortgage, see note 4(b) for
further discussion.
The Partnership and its joint venture partner completed a renovation of
the Topanga Plaza Shopping Center during 1992. In conjunction with this
renovation, the Partnership secured an extension of the operating covenant for
the Nordstrom's department store to the year 2000 from an original expiration
date in 1994. In addition, the Broadway store has also committed to operate
in the center until the year 2000. The Partnership and its joint venture
partner have refinanced the existing mortgage notes with replacement financing
from the existing mortgage holder in the amount of approximately $59,000,000
which was funded in four stages. See Note 4(b) for a discussion of such
refinancing. The joint venture partner has agreed to advance the joint
venture funds for expenses incurred for certain redevelopment costs related to
the expansion of Topanga Plaza. The balance of these advances was $735,000 at
December 31, 1993. Such advances will be repaid to the joint venture partner
as funds are made available from operations. Construction period interest of
approximately $130,620 and $1,035,000, has been capitalized for the years
ended December 31, 1993 and 1992, respectively.
The shopping center is subject to fire, life and safety code and
ordinance requirements, which have changed since the property's original
construction. Accordingly, the Partnership intends to comply with such
revised regulations and fund such retrofit costs. In conjunction with the
renovation, a substantial portion of such retrofit costs have been completed.
The Partnership will fund any remaining costs from operations over the next
several years, as tenant leases expire, until the entire building conforms to
such requirements.
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(d) Broad Street
During December 1985, the Partnership acquired, through Broad Street, a
joint venture with JMB Income Properties, Ltd.-X, a partnership sponsored by
an affiliate of the Managing General Partner, a 68.56% interest in an existing
24-story office building located at 40 Broad Street in New York, New York.
Broad Street's purchase price for the building, which was paid in cash at
closing, was approximately $65,100,000 of which the Partnership provided
approximately $44,630,000.
The Partnership will be allocated or distributed profits and losses, cash
flow from operations and sale or refinancing proceeds in the ratio of its
capital contributions to Broad Street which is 68.56%.
During 1991, Broad Street was required to pay $1,797,827 for an assessed
transfer tax related to the original acquisition of the investment property.
Of this amount, the Partnership funded $1,232,560. A portion of the amount,
$990,000, was capitalized in 1991. The remaining amount, $807,827, was
reflected in the results of operations as penalty and interest.
The downtown New York City market remains extremely competitive due to
the significant amount of space available primarily resulting from the
layoffs, cutbacks and consolidations by financial service companies and
related businesses which dominated this market. Rental rates in the downtown
market are currently at depressed levels and this can be expected to continue
for the foreseeable future while the current vacant space is gradually
absorbed. Little, if any, new construction is planned for downtown over the
next few years and it is expected that the building will continue to be
adversely affected by the lower than originally projected effective rental
rates now achieved upon releasing of existing leases which expire over the
next few years. Therefore, the JMB/Broad Street joint venture recorded a
provision for value impairment at December 31, 1991 to reduce the net book
value of 40 Broad Street to $30,000,000 due to the uncertainty of JMB/Broad
Street joint venture's ability to recover the net carrying value of the
investment property through future operations or sale. An additional
provision for value impairment was recorded at December 31, 1992 to further
reduce the net book value of the property to the then estimated valuation of
$7,800,000.
The property is managed by an affiliate of the General Partners of the
Partnership for a fee calculated as 2% of gross receipts of the property.
(e) JMB/Rivers
In December 1986, the Partnership and JMB Income Properties, Ltd.-XIII (a
partnership sponsored by an affiliate of the Managing General Partner, "JMB-
XIII") formed JMB/Rivers, which entered into a joint venture ("Mid Rivers")
with an affiliate of the developer ("Venture Partner") and acquired an
interest in an enclosed regional shopping center then under construction in
St. Peters, Missouri, known as Mid Rivers Mall. Under the terms of the
venture agreement, JMB/Rivers contributed approximately $39,400,000, of which
the Partnership's share was approximately $19,700,000. During January 1992,
JMB/Rivers sold its interest in Mid Rivers Mall (see note 6).
The ultimate ownership percentages for JMB/Rivers and Venture Partner
were established as 80% and 20%, respectively. Operating profits and losses
were generally allocated in proportion to and to the extent of distributions
as described above and, to the extent profits and losses exceeded such
distributions, to the Partners in accordance with their respective ownership
percentages. The terms of the JMB/Rivers agreement generally provided that
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
the Partnership was allocated or distributed, as the case may be, profits and
losses, cash flow from operations and sale or refinancing proceeds in the
ratio of its respective capital contributions to JMB/Rivers.
The shopping center was managed by an affiliate of the Venture Partner
for a fee calculated as 4% of gross receipts of the property through the date
of sale.
(f) First Financial
On May 20, 1987, the Partnership, through First Financial, a joint
venture with JMB-XIII, acquired an interest in a general partnership
("Encino") with an affiliate of the developer ("Venture Partner") which owns
an office building in Encino (Los Angeles), California. First Financial is
obligated to make an initial investment in the aggregate amount of $49,850,000
of which approximately $49,812,000 of such contributions have been made to
Encino. The Partnership's share of the remaining amounts, approximately
$24,000, will be contributed when the Venture Partner complies with certain
requirements.
In November 1987, First Financial caused Encino to obtain a third party
first mortgage loan in the amount of $30,000,000. The proceeds of such loan
were distributed to First Financial to reduce its contribution and to the
Venture Partner who subsequently repaid a $15,500,000 loan from First
Financial. Thus, the total cash investment of First Financial for its
interest in the office building, after consideration of the funding of the
$30,000,000 permanent financing, is approximately $20,000,000, of which the
Partnership's share is approximately $12,500,000. The outstanding principal
balance of the third party first mortgage loan as of December 31, 1993 is
$29,394,848.
The Encino partnership agreement generally provides that First Financial
is entitled to receive (after any participating amounts due to Pepperdine
University pursuant to its tenant lease) from cash flow from operations (as
defined) an annual cumulative preferred return equal to 9.05% through April
30, 1995 (and 8.9% thereafter) of its capital contributions. Any remaining
cash flow is to be split equally between First Financial and the Venture
Partner. Pepperdine University, under its tenant lease, is entitled to an
amount based on 6.6% of the Venture Partner's share of the office building's
net operating profit and net sale profit (as defined).
All of Encino's operating profits and losses before depreciation have
been allocated to First Financial in 1993, 1992 and 1991.
The Encino partnership agreement also generally provides that net sale
proceeds and net refinancing proceeds (as defined), after any amounts due to
Pepperdine University pursuant to its tenant lease, are to be distributed:
first, to First Financial in an amount equal to its deficiency, if any, in its
cumulative preferred return as described above; next, to First Financial in
the amount of its capital contributions; next, to the Venture Partner in an
amount equal to $600,000; any remaining proceeds are to be split equally
between First Financial and the Venture Partner.
The terms of the First Financial partnership agreement provide that
annual cash flow, net sale or refinancing proceeds, and tax items will be
distributed or allocated, as the case may be, to the Partnership in proportion
to its 62.5% share of capital contributions.
The office building is managed by an affiliate of the Venture Partner for
a fee based upon a percentage of rental receipts (as defined) of the property.
<PAGE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(4) LONG-TERM DEBT
(a) Long-term debt consists of the following at December 31, 1993 and 1992:
<CAPTION>
1993 1992
----------- -----------
<S> <C> <C>
10-1/8% mortgage note secured by the Topanga Plaza shopping center in Los Angeles, California;
payable in monthly installments of principal and interest of $523,225 through January 2002
when the remaining balance is due and payable, see note 4(b) . . . . . . . . . . . . . . . $58,790,592 40,600,000
Floating rate bond financing (certificates), secured by the Plaza Hermosa Shopping Center
in Hermosa Beach, California; the certificates bear interest based on a floating
rate (of approximately 2.8% at December 31, 1993) which is adjustable monthly (as defined),
with a maximum interest rate of 13.5%, interest only is payable monthly through December 2013
when the entire outstanding balance is due and payable, note 2(b). . . . . . . . . . . . . 6,400,000 6,400,000
9-7/8% mortgage note, secured by the First Financial Plaza Office Building; payable in
monthly installments of principal and interest of $260,505 through November 1995 when the
remaining balance is due and payable . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,394,848 29,606,663
----------- -----------
Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94,585,440 76,606,663
Less current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . 6,972,571 6,737,369
----------- -----------
Total long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $87,612,869 69,869,294
=========== ===========
</TABLE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(b) Debt Refinancing
In January 1992, the Partnership and its joint venture partner finalized
the refinancing of the existing mortgage notes at Topanga Plaza with
replacement financing from the existing mortgage holder in the aggregate
amount of $59,000,000 which was funded in four stages. Included in the
initial funding was the $1,600,000 repayment of advances by an affiliate of
the venture partner, the $1,500,000 refinancing of a portion of the existing
mortgage and $2,300,000 representing a return to the Partnership of prior
contributions used to fund previous costs incurred relating to fire, life and
safety regulations and certain releasing costs. The second funding occurred
on December 2, 1992 in the amount of $16,000,000, which was used to paydown
interim lines of credit used for certain renovation costs and operational
capital expenditures as described below. The third funding of $18,400,000
occurred on February 1, 1993, a portion of which was used to paydown interim
lines of credit used for certain renovation costs and the remainder to fund
additional renovation costs. The fourth stage refinanced the remaining
portion of the existing mortgage of $14,000,000 upon its maturity in June
1993. The loan, aggregating $59,000,000, represents the new loan of
$43,500,000 and the refinancing of the existing loans of $15,500,000. The
term of the new loan began June 1, 1993 with monthly principal and interest
payments and matures January 31, 2002. It carries an interest rate of 10.125%.
The Topanga joint venture has funded certain renovation costs through a line
of credit bearing interest at 10.125% with various maturity dates. The line
of credit had a balance of $9,650,000 at December 31, 1992 and was paid by the
additional loan funding discussed above.
Five year maturities of long-term debt are summarized as follows:
1994 . . . . . . . . . $ 6,972,571
1995 . . . . . . . . . 29,535,960
1996 . . . . . . . . . 414,577
1997 . . . . . . . . . 458,557
1998 . . . . . . . . . 507,202
===========
(5) PARTNERSHIP AGREEMENT
Pursuant to the terms of the Partnership Agreement, net profits or losses
of the Partnership from operations are allocated 96% to the Limited Partners
and 4% to the General Partners. Profits from the sale or refinancing of
investment properties will be allocated to the General Partners: (i) in an
amount equal to the greater of 1% of such profits or the amount of cash
distributable to the General Partners from any such sale or refinancing (as
described below); and (ii) in order to reduce deficits, if any, in the General
Partners' capital accounts to a level consistent with the gain anticipated to
be realized from the sale of properties. Losses from the sale or refinancing
of investment properties will be allocated 1% to the General Partners. The
remaining sale or refinancing profits and losses will be allocated to the
Limited Partners.
The General Partners are not required to make any capital contributions
except under certain limited circumstances upon termination of the
Partnership. In general, distributions of cash from operations will be made
90% to the Limited Partners and 10% to the General Partners. However, a
portion of such distributions to the General Partners is subordinated to the
Limited Partners' receipt of a stipulated return on capital.
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The Partnership Agreement provides that the General Partners shall
receive as a distribution from the sale of a real property by the Partnership
amounts equal to the cumulative deferrals of any portion of their 10% cash
distribution and 2-1/2% of the selling price, and that the remaining proceeds
(net after expenses and retained working capital) be distributed 85% to the
Limited Partners and 15% to the General Partners. However, the Limited
Partners shall receive 100% of such net sale proceeds until the Limited
Partners (i) have received cash distributions of sale or refinancing proceeds
in an amount equal to the Limited Partners' aggregate initial capital
investment in the Partnership, (ii) have received cumulative cash
distributions from the Partnership's operations which, when combined with sale
or refinancing proceeds previously distributed, equal a 6% annual return on
the Limited Partners' average capital investment for each year (their initial
capital investment as reduced by sale or refinancing proceeds previously
distributed) commencing with the second fiscal quarter of 1986 and (iii) have
received cash distributions of sale and refinancing proceeds and of the
Partnership's operations, in an amount equal to the Limited Partners' initial
capital investment in the Partnership plus a 10% annual return on the Limited
Partners' average capital investment. Accordingly, approximately $773,000 of
sale proceeds from the sale of the Partnership's interest in Mid Rivers Mall
has been deferred by the General Partners (note 6).
(6) SALE OF INTEREST IN INVESTMENT PROPERTY
On January 30, 1992, the Partnership through JMB/Rivers sold its interest
in Mid Rivers Mall located in St. Peters, Missouri to an affiliate of an
unaffiliated joint venture partner. The sale price of the interest was
$26,500,000 (before closing costs and prorations) plus the outstanding balance
of the mortgages of which JMB/Rivers share was $35,318,171 as of the date of
closing. The Partnership received, in connection with the sale, after all
fees, expenses, and joint venture partner's participation, net cash of
$13,250,000. For financial reporting purposes, JMB/Rivers has recognized a
gain of approximately $12,022,000 in 1992, of which, the Partnership's share
was approximately $5,656,000.
(7) LEASES
At December 31, 1993, the Partnership and its consolidated ventures'
principal assets are two shopping centers and two office buildings. The
Partnership has determined that all leases relating to these properties are
properly classified as operating leases; therefore, rental income is reported
when earned and the cost of the properties, excluding the cost of the land, is
depreciated over the estimated useful lives. Leases with tenants range in
term from month-to-month to twenty-five years and provide for fixed minimum
rent and partial reimbursement of operating costs. In addition, leases with
shopping center tenants provide for additional rent based upon percentages of
tenants' sales volumes. With respect to the Partnership's shopping center
investments, a substantial portion of the ability of retail tenants to honor
their leases is dependent on the retail economic sector.
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Cost and accumulated depreciation of the leased assets are summarized as
follows at December 31, 1993:
Office Buildings:
Cost . . . . . . . . . . . . . . . $ 69,607,308
Accumulated depreciation . . . . . (21,553,857)
------------
48,053,451
------------
Shopping Centers:
Cost . . . . . . . . . . . . . . . 129,886,662
Accumulated depreciation . . . . . (20,170,896)
------------
109,715,766
------------
$157,769,217
============
Minimum lease payments, including amounts representing executory costs
(e.g. taxes, maintenance, insurance) and any related profit, to be received in
the future under the operating leases are as follows:
1994 . . . . . . . . . . . . . . . . $ 19,229,112
1995 . . . . . . . . . . . . . . . . 18,680,561
1996 . . . . . . . . . . . . . . . . 17,610,704
1997 . . . . . . . . . . . . . . . . 14,586,577
1998 . . . . . . . . . . . . . . . . 13,216,074
Thereafter . . . . . . . . . . . . . 65,231,296
------------
Total. . . . . . . . . . . . . . $148,554,324
============
Contingent rent (based on sales by property tenants) included in rental
income was as follows:
1991 . . . . . . . . . . . . . . . . $450,316
1992 . . . . . . . . . . . . . . . . 309,934
1993 . . . . . . . . . . . . . . . . 427,809
========
(8) TRANSACTIONS WITH AFFILIATES
Fees, commissions and other expenses required to be paid by the Partner-
ship to the General Partners and their affiliates as of December 31, 1993 and
for the years ended December 31, 1993, 1992 and 1991 are as follows:
<TABLE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
<CAPTION>
UNPAID AT
DECEMBER 31,
1993 1992 1991 1993
-------- -------- -------- ------------
<S> <C> <C> <C> <C>
Property management and leasing fees . . . . . . . . . . . . . . $221,843 238,648 255,010 --
Insurance commissions. . . . . . . . . . . . . . . . . . . . . . 84,976 119,867 112,641 --
Disbursement agent fees. . . . . . . . . . . . . . . . . . . . . -- -- 14,835 --
Reimbursement (at cost) for out-of-pocket expenses and salaries. 92,243 110,263 124,885 72,561
-------- -------- -------- -------
$399,062 468,778 507,371 72,561
======== ======== ======== =======
</TABLE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
In accordance with the subordination requirements of the Partnership
Agreement, the General Partners have deferred receipt of their distributions
(see note 5) of net cash flow from the Partnership. The cumulative amount of
such deferred distributions aggregated $7,254,766 at December 31, 1993. These
amounts or amounts currently payable do not bear interest and may be paid in
future periods.
The Topanga venture has incurred approximately $130,620 and $1,035,000 of
interest costs relating to affiliated venture partner advances (note 3(c)) in
1993 and 1992, respectively, all of which was paid to an affiliate of the
venture partner as of December 31, 1993.
(9) INVESTMENT IN UNCONSOLIDATED VENTURES
Summary of combined financial information for San Jose and JMB/Rivers
(sold January 30, 1992) as of and for the years ended December 31, 1993 and
1992 is as follows:
1993 1992
------------ ------------
Current assets . . . . . . . . . . $ 1,094,449 2,789,789
Current liabilities. . . . . . . . (25,841,373) (25,782,960)
------------ ------------
Working capital (deficit). . (24,746,924) (22,993,171)
Investment property, net . . . . . 33,218,816 49,511,546
Other assets, net. . . . . . . . . 3,180,985 731,574
Long-term debt . . . . . . . . . . (3,784,508) (4,157,064)
Other liabilities. . . . . . . . . (70,297) (74,275)
Venture partners' equity . . . . . (4,077,776) (11,688,045)
------------ ------------
Partnership's capital. . . . $ 3,720,296 11,330,565
============ ============
Represented by:
Invested capital . . . . . . . . $ 45,976,774 45,976,774
Cumulative distributions . . . . (20,652,500) (19,652,500)
Cumulative loss. . . . . . . . . (21,603,978) (14,993,709)
------------ ------------
$ 3,720,296 11,330,565
============ ============
Total income . . . . . . . . . . . $ 10,369,335 11,573,574
============ ============
Expenses applicable to operating
loss . . . . . . . . . . . . . . $ 23,589,873 17,846,170
============ ============
Operating loss . . . . . . . . . . $ 13,220,538 6,272,596
============ ============
Gain on sale of investment property $ -- 12,022,449
============ ============
Net earnings (loss). . . . . . . . $(13,220,538) 5,749,853
============ ============
Reference is made to note 3(b) regarding the provision for value
impairments of $15,549,935 and $8,142,152 which were recorded in 1993 and
1992, respectively, by the JMB/San Jose joint venture.
Total income, expenses related to operating earnings and net loss for the
above-mentioned ventures for the year ended December 31, 1991 were
$18,717,268, $39,749,915 and $21,032,647, respectively.
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
(10) SUBSEQUENT EVENTS
(a) Distribution to Partners
In February 1994, the Partnership paid a distribution of $476,581 ($2.50
per Interest) to the Limited Partners.
(b) Topanga
On January 17, 1994, an earthquake occurred in Los Angeles, California.
The epicenter was located in the town of Northridge which is approximately 6
miles from Topanga Plaza Shopping Center. Consequently, the entire mall,
including the 4 major department stores who own their own buildings, suffered
some casualty damage. The approximately 360,000 sq. ft. of mall shops owned
by the Topanga Partnership did not suffer major structural damage. The
estimated cost of the repairs at Topanga for which the joint venture is
responsible is approximately $8.8 million. The majority of this cost will be
subject to recovery under the joint venture's earthquake insurance policy
after payment of the required deductible. The deductible on the building
improvements, furniture and fixtures, and business interruption coverages due
to loss of rents is approximately $2.1 million. The Partnership anticipates
that it will pay for its share of insurance deductibles from its reserves
without any material effect on its projected operations for 1994. As of the
date of this report, 97 of the malls 114 shops have opened, and the remaining
shops are expected to open during the upcoming weeks as tenants complete their
repairs. Only one of the four major department stores has been able to open
and it may take several weeks or months before the entire center is open and
operating. The earthquake will result in some adverse effect on the
operations of the center in the near term; the extent and length of which is
not presently determinable.
<PAGE>
SCHEDULE X
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
CHARGED TO COSTS AND EXPENSES
----------------------------------------------
1993 1992 1991
------------ ------------ ------------
Maintenance and repairs. $3,055,489 3,108,903 3,139,142
Depreciation . . . . . . 5,739,255 4,811,235 5,684,994
Amortization of deferred
expenses . . . . . . . 787,304 456,673 499,231
Real estate taxes. . . . 3,643,702 3,896,555 3,985,659
========== ========= =========
<PAGE>
<TABLE>
SCHEDULE XI
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
<CAPTION>
COSTS
CAPITALIZED
INITIAL COST TO SUBSEQUENT GROSS AMOUNT AT WHICH CARRIED
PARTNERSHIP (A) TO ACQUISITION AT CLOSE OF PERIOD (B)
----------------------------- --------------- --------------------------------------------
BUILDINGS BUILDINGS BUILDINGS
AND AND AND
ENCUMBRANCE LAND IMPROVEMENTS IMPROVEMENTS(D) LAND IMPROVEMENTS TOTAL (E)
----------- ----------- ------------ --------------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
SHOPPING CENTERS:
Los Angeles,
California (C) . . $58,790,592 8,506,014 54,714,281 48,358,761 8,506,014 103,073,042 111,579,056
Hermosa Beach,
California. . . . 6,400,000 5,106,570 13,131,181 69,855 5,106,570 13,201,036 18,307,606
OFFICE BUILDINGS:
New York,
New York (C) . . . -- 13,201,780 55,095,008 (46,506,812) 1,765,195 20,024,781 21,789,976
Encino,
California (C) . . 29,394,848 7,696,474 38,089,122 2,031,736 7,696,474 40,120,858 47,817,332
----------- ---------- ----------- ----------- ---------- ----------- -----------
Total. . . . . . $94,585,440 34,510,838 161,029,592 3,953,540 23,074,253 176,419,717 199,493,970
=========== ========== =========== =========== ========== =========== ===========
</TABLE>
<TABLE>
SCHEDULE XI - CONTINUED
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
STATEMENT OF 1993
ACCUMULATED DATE OF DATE OPERATIONS REAL ESTATE
DEPRECIATION(F) CONSTRUCTION ACQUIRED IS COMPUTED TAXES
---------------- ------------ ---------- --------------- -----------
<S> <C> <C> <C> <C> <C>
SHOPPING CENTERS:
Los Angeles,
California (C) . . . . . . . . . . . . . . $16,955,226 1964 12/31/85 5-30 years 680,766
Hermosa Beach,
California. . . . . . . . . . . . . . . . 3,215,670 1985 09/03/86 5-30 years 257,752
OFFICE BUILDINGS:
New York,
New York (C) . . . . . . . . . . . . . . . 12,944,261 1983 12/31/85 5-30 years 2,236,148
Encino,
California (C) . . . . . . . . . . . . . . 8,609,596 1986 05/20/87 5-30 years 469,036
----------- ----------
Total. . . . . . . . . . . . . . . . . . $41,724,753 3,643,702
=========== ==========
<FN>
- ------------------
Notes:
(A) The initial cost to the Partnership represents the original purchase price of the properties, including amounts incurred
subsequent to acquisition which were contemplated at the time the property was acquired.
(B) The aggregate cost of real estate owned at December 31, 1993 for Federal income tax purposes was $214,692,989.
(C) Properties owned and operated by joint venture; see Note 3.
(D) In 1993, 1992 and 1991, the affiliated joint venture recorded provisions for value impairment totaling $0,
$22,908,606 and $28,870,198, respectively, (which included a reduction in deferred costs of $30,000); see Note 3(d).
<PAGE>
</TABLE>
<TABLE> SCHEDULE XI - CONTINUED
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
(E) Reconciliation of real estate owned:
<CAPTION>
1993 1992 1991
------------ ------------ ------------
<S> <C> <C> <C>
Balance at beginning of period . . . . . . . $196,088,700 183,399,224 206,373,980
Additions during period. . . . . . . . . . . 3,608,394 35,682,188 5,866,522
Sale and disposal during period. . . . . . . (203,124) (84,106) --
Provision for value impairment (D) . . . . . -- (22,908,606) (28,841,278)
------------ ----------- -----------
Balance at end of period . . . . . . . . . . $199,493,970 196,088,700 183,399,224
============ =========== ===========
(F) Reconciliation of accumulated depreciation:
Balance at beginning of period . . . . . . . $ 36,188,622 31,461,493 25,776,499
Depreciation expense . . . . . . . . . . . . 5,739,255 4,811,235 5,684,994
Sale and disposal during period. . . . . . . (203,124) (84,106) --
------------ ----------- -----------
Balance at end of period . . . . . . . . . . $ 41,724,753 36,188,622 31,461,493
============ =========== ===========
</TABLE>
INDEPENDENT AUDITORS' REPORT
The Partners
JMB/SAN JOSE ASSOCIATES:
We have audited the financial statements of JMB/San Jose Associates (a
general partnership) as listed in the accompanying index. In connection with
our audits of the financial statements, we also have audited the financial
statement schedules as listed in the accompanying index. These financial
statements are the responsibility of the General Partners of the Partnership.
Our responsibility is to express an opinion on these financial statements and
financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by the General Partners of the Partnership, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of JMB/San Jose
Associates at December 31, 1993 and 1992, and the results of its operations
and its cash flows for each of the years in the three-year period ended
December 31, 1993, in conformity with generally accepted accounting
principles. Also in our opinion, the related financial statement schedules,
when considered in relation to the basic financial statements taken as a
whole, present fairly, in all material respects, the information set forth
therein.
As discussed in note 3(b) of Notes to Consolidated Financial Statements
of JMB Income Properties, LTD - XII, the mortgage loan secured by the 150
Almaden and 185 Park Avenue buildings and certain related parking improvements
matured December 1, 1993. Should an agreement not be reached to extend the
loan, it is possible that the lender would exercise its remedies and seek to
acquire title to these properties. Also, the Venture has commenced
discussions with the lender on the 100-130 Park Center Plaza properties for
additional loan proceeds to cover re-leasing and seismic program costs.
Should the lender assistance required to fund these costs not be obtained, the
Partnership has decided not to commit additional funds to these properties.
The result would be that the Partnership would no longer have an ownership
interest in these properties. The Venture has recorded provisions for value
impairment to reduce the net book value of such properties to the outstanding
balance of the related non-recourse financing.
KPMG PEAT MARWICK
Chicago, Illinois
March 25, 1994
<TABLE>
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
ASSETS
------
<CAPTION>
1993 1992
----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 842,615 615,501
Short-term investments (note 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 148,184
Rents and other receivables, net of allowance for doubtful accounts of $62,806 in 1993 and $326,307
in 1992. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118,895 171,339
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,970 75,911
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,969 53,763
----------- -----------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,094,449 1,064,698
----------- -----------
Investment property, at cost (notes 1 and 2) - Schedule XI:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,377,052 8,826,721
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,201,861 55,981,306
----------- -----------
49,578,913 64,808,027
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,360,097 15,296,481
----------- -----------
Total investment property, net of accumulated depreciation . . . . . . . . . . . . . . . . . 33,218,816 49,511,546
----------- -----------
Long-term notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,836 5,836
Accrued rents receivable (note 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,354,129 1,719,253
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 821,020 731,574
----------- -----------
$37,494,250 53,032,907
=========== ===========
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
------------------------------------------
1993 1992
----------- -----------
Current liabilities:
Current portion of long-term debt (note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $25,372,084 25,342,560
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229,837 199,379
Accrued interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239,452 241,021
----------- -----------
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,841,373 25,782,960
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,297 74,273
Long-term debt, less current portion (note 3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,784,508 4,157,064
----------- -----------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,696,178 30,014,297
Partners' capital accounts (notes 1 and 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,798,072 23,018,610
----------- -----------
Commitments and contingencies (note 2)
$37,494,250 53,032,907
=========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,340,098 10,793,058 9,715,878
Interest income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,237 57,841 102,541
----------- ----------- -----------
10,369,335 10,850,899 9,818,419
----------- ----------- -----------
Expenses (Schedule X):
Mortgage and other interest. . . . . . . . . . . . . . . . . . . . . . . . . . 2,779,264 2,802,805 2,818,302
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,063,616 1,898,286 2,369,699
Property operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 3,953,364 4,049,484 3,866,531
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . 243,694 243,229 193,526
Provision for value impairment (note 1). . . . . . . . . . . . . . . . . . . . 15,549,935 8,142,152 21,175,127
----------- ----------- -----------
23,589,873 17,135,956 30,423,185
----------- ----------- -----------
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13,220,538 6,285,057 20,604,766
=========== =========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
AFFILIATED
PARTNER JMB-XII TOTAL
----------- ----------- -----------
<S> <C> <C> <C>
Balance at December 31, 1990 . . . . . . . . . . . . . . . . . . . $26,857,957 26,500,476 53,358,433
Cash distributions . . . . . . . . . . . . . . . . . . . . . . . . (1,000,000) (1,000,000) (2,000,000)
Net loss (note 2). . . . . . . . . . . . . . . . . . . . . . . . . (10,302,383) (10,302,383) (20,604,766)
----------- ----------- -----------
Balance at December 31, 1991 . . . . . . . . . . . . . . . . . . . 15,555,574 15,198,093 30,753,667
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . 575,000 575,000 1,150,000
Cash distributions . . . . . . . . . . . . . . . . . . . . . . . . (1,300,000) (1,300,000) (2,600,000)
Net loss (note 2). . . . . . . . . . . . . . . . . . . . . . . . . (3,142,529) (3,142,528) (6,285,057)
----------- ----------- -----------
Balance at December 31, 1992 . . . . . . . . . . . . . . . . . . . 11,688,045 11,330,565 23,018,610
Cash distributions . . . . . . . . . . . . . . . . . . . . . . . . (1,000,000) (1,000,000) (2,000,000)
Net loss (note 2). . . . . . . . . . . . . . . . . . . . . . . . . (6,610,269) (6,610,269) (13,220,538)
----------- ----------- -----------
Balance at December 31, 1993 . . . . . . . . . . . . . . . . . . . $ 4,077,776 3,720,296 7,798,072
============ =========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
1993 1992 1991
------------ ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(13,220,538) (6,285,057) (20,604,766)
Items not requiring (providing) cash:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,063,616 1,898,286 2,369,699
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . 243,694 243,229 193,526
Write off of notes receivable. . . . . . . . . . . . . . . . . . . . . . . . -- 114,169 --
Provision for value impairment . . . . . . . . . . . . . . . . . . . . . . . 15,549,935 8,142,152 21,175,127
Changes in:
Rents and other receivables. . . . . . . . . . . . . . . . . . . . . . . . . 52,444 210,856 432,646
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (59) 26,069 6,170
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,206) 813 (3,007)
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . . (634,876) (640,998) (391,311)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,458 (209,343) (47,101)
Accrued interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . (1,569) (1,586) 4,057
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . (3,976) 3,277 (2,651)
----------- ----------- -----------
Net cash provided by operating activities. . . . . . . . . . . . . . . . 3,075,923 3,501,867 3,132,389
Cash flows from investing activities:
Net sales of short-term investments. . . . . . . . . . . . . . . . . . . . . . 148,184 364,288 29,971
Additions to investment property . . . . . . . . . . . . . . . . . . . . . . . (320,821) (101,790) (2,053,084)
Payment of deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . (333,140) (36,559) (321,672)
Principal payments on notes receivable . . . . . . . . . . . . . . . . . . . . -- 4,720 22,954
----------- ----------- -----------
Net cash provided by (used in) investing activities. . . . . . . . . . . (505,777) 230,659 (2,321,831)
----------- ----------- -----------
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
STATEMENTS OF CASH FLOWS - CONTINUED
1993 1992 1991
----------- ----------- -----------
Cash flows from financing activities:
Bank overdrafts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (1,350,956) 1,236,845
Principal payments on long-term debt . . . . . . . . . . . . . . . . . . . . . (343,032) (316,069) (291,169)
Capital contributed to venture . . . . . . . . . . . . . . . . . . . . . . . . -- 1,150,000 --
Distributions to partners. . . . . . . . . . . . . . . . . . . . . . . . . . . (2,000,000) (2,600,000) (2,000,000)
----------- ----------- -----------
Net cash used in financing activities. . . . . . . . . . . . . . . . . . (2,343,032) (3,117,025) (1,054,324)
----------- ----------- -----------
Net increase (decrease) increase in cash and cash equivalents. . . . . . $ 227,114 615,501 (243,766)
=========== =========== ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . . . . . . . . $ 2,780,833 2,804,392 2,814,245
=========== =========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(1) BASIS OF ACCOUNTING
The accompanying financial statements have been prepared for the purpose
of complying with Rule 3.09 of Regulation S-X of the Securities and Exchange
Commission. They include the accounts of the unconsolidated joint venture,
JMB/San Jose joint venture ("Venture"), in which JMB Income Properties, Ltd.-
XII ("JMB Income-XII") and JMB Income Properties, Ltd.-XI are the partners.
The Venture's records are maintained on the accrual basis of accounting
as adjusted for Federal income tax reporting purposes. The accompanying
financial statements have been prepared from such records after making
appropriate adjustments to present the Venture's accounts in accordance with
generally accepted accounting principles ("GAAP"). Such adjustments are not
recorded on the records of the Venture. The net effect of these items for the
years ended December 31, 1993 and 1992 is summarized as follows:
<TABLE>
JMB/SAN JOSE ASSOCIATES
(a general partnership)
Notes to Financial Statements - Continued
<CAPTION>
1993 1992
-------------------------------------------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Total assets . . . . . . . . . . . . . . . . . . . . . . . $37,494,250 66,870,908 53,032,907 70,216,593
Partners' capital accounts . . . . . . . . . . . . . . . . 7,798,072 37,187,301 23,018,610 40,191,267
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . (13,220,538) (1,003,966) (6,285,057) (176,627)
============ ============ ========== ==========
</TABLE>
JMB/SAN JOSE ASSOCIATES
(a general partnership)
Notes to Financial Statements - Continued
Statement of Financial Accounting Standards No. 95 requires the Venture
to present a statement which classifies receipts and payments according to
whether they stem from operating, investing or financing activities. The
required information has been segregated and accumulated according to the
classifications specified in the pronouncement. In addition, the Venture
records amounts held in U.S. Government obligations at cost, which
approximates market. For purposes of these statements, the Venture's policy
is to consider all such amounts held with original maturities of three months
or less cash equivalents with any remaining amounts reflected as short-term
investments. None of the Partnership's investments in U.S. Government
obligations were classified as cash equivalents at December 31, 1993 and
December 31, 1992.
Certain amounts in the 1992 and 1991 financial statements have been
reclassified to conform to the 1993 presentation.
Depreciation on buildings and improvements has been provided over the
estimated useful lives of the assets (5 to 30 years) using the straight-line
method.
Deferred expenses consist primarily of loan fees and lease commissions
which are amortized over the terms stipulated in the related loan agreements
or over the terms of the related leases using the straight-line method.
Although certain leases of the Venture provide for tenant occupancy
during periods for which no rent is due and/or increases in the minimum lease
payments over the term of the lease, rental income is accrued for the full
period of occupancy on a straight-line basis.
Maintenance and repair expenses are charged to operations as incurred.
Significant betterments and improvements are capitalized and depreciated over
their estimated useful lives.
The Venture recorded in 1993, as a matter of prudent accounting practice,
a provision for value impairment of $15,549,935 on the 150 Almaden and 185
Park Avenue building and certain parking areas. In 1992, the Venture recorded
a provision for value impairment of $8,142,152 on certain portions of the
complex. In 1991, the Venture recorded a provision for value impairment of
$21,175,127 to reduce the net basis of the 100 Park Center Plaza Buildings and
a certain parking area to the then outstanding balance of the related non-
recourse debt.
No provision for State or Federal income taxes has been made as the
liability for such taxes is that of the venture partners rather than the
Venture.
(2) VENTURE AGREEMENT
A description of the acquisition of the property is contained in Note
3(b) of JMB Income - XII. Such note is incorporated herein by reference.
<PAGE>
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(3) LONG-TERM DEBT
Long-term debt consists of the following at December 31, 1993 and 1992:
1993 1992
---------- ----------
7.75% mortgage note; secured by the
100 Park Center Plaza Buildings, and
certain related parking improvements
in San Jose, California; principal and
interest payments of $34,023 are due
monthly through September 2000;
additional interest payments of 2% per
annum of gross income (total interest
not to exceed 9.875%), which amounted
to $55,034 in 1993 and $53,936 in 1992. $ 2,377,511 2,592,398
10% mortgage note; secured by the
100 Park Center Plaza Buildings, and
certain related parking improvements
in San Jose, California; principal
and interest payments of $10,353 are
due monthly through September 2000. . . 608,178 667,948
7.85% mortgage note; secured by the
170 Almaden Building in San Jose,
California; principal and interest
payments of $13,537 are due monthly
through June 2003 . . . . . . . . . . . 1,170,903 1,239,278
9.5% mortgage note; secured by the
150 Almaden and 185 Park Avenue buildings,
and certain related parking improvements
in San Jose, California; interest only
payments of $197,917 are due monthly
through December 1993 when the entire
principal was due (currently in
default (1)). . . . . . . . . . . . . . 25,000,000 25,000,000
----------- ----------
Total debt . . . . . . . . . . . 29,156,592 29,499,624
Less current portion of
long-term debt. . . . . . . . . 25,372,084 25,342,560
----------- ----------
Total long-term debt . . . . . . $ 3,784,508 4,157,064
============ ==========
Five year maturities of long-term debt are as follows:
1994 . . . . . . . . . $25,372,084
1995 . . . . . . . . . 403,174
1996 . . . . . . . . . 437,407
1997 . . . . . . . . . 474,656
1998 . . . . . . . . . 515,062
===========
(1) A description of the discussions between JMB/San Jose and the
mortgage lender on the 150 Almaden and 185 Park Avenue buildings is contained
in Note 3(b) of Notes to Consolidated Financial Statements of JMB Income -
XII. Such note is hereby incorporated herein by reference.
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(4) LEASES
As Property Lessor
At December 31, 1993, the Venture's principal asset is an office building
complex. The Venture has determined that all leases relating to this property
are properly classified as operating leases; therefore, rental income is
reported when earned and the cost of the property, excluding the cost of the
land, is depreciated over the estimated useful life. Leases with tenants
range in term from one to twenty-five years and provide for fixed minimum rent
and partial reimbursement of operating costs.
Minimum lease payments, including amounts representing executory costs
(e.g. taxes, maintenance, insurance) and any related profit, to be received in
the future under the operating leases are as follows:
1994. . . . . . . . . . . . . $ 7,563,161
1995. . . . . . . . . . . . . 6,626,946
1996. . . . . . . . . . . . . 5,573,226
1997. . . . . . . . . . . . . 4,508,323
1998. . . . . . . . . . . . . 4,187,855
Thereafter. . . . . . . . . . 15,736,333
-----------
$44,195,844
===========
(5) TRANSACTIONS WITH AFFILIATES
Fees, commissions and other expenses required to be paid by the Venture
to the General Partners and their affiliates as of December 31, 1993 and for
the years ended December 31, 1993, 1992 and 1991 were as follows:
<TABLE>
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONCLUDED
<CAPTION>
UNPAID AT
DECEMBER 31,
1993 1992 1991 1993
-------- -------- -------- --------------
<S> <C> <C> <C> <C>
Property management and leasing fees . . . . . . . . . . . . . . $291,126 330,574 607,154 41,689
Insurance commissions. . . . . . . . . . . . . . . . . . . . . . 32,194 36,755 73,144 --
-------- ------- ------- ------
$323,320 367,329 680,298 41,689
======== ======= ======= ======
<FN>
All amounts currently payable to the General Partners and their affiliates do not bear interest and are expected
to be paid in future periods.
</TABLE>
SCHEDULE X
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
CHARGED TO COSTS AND EXPENSES
----------------------------------------------
1993 1992 1991
------------ ------------ ------------
Maintenance and repairs. $ 973,276 1,029,913 965,927
Depreciation . . . . . . 1,063,616 1,898,286 2,369,699
Amortization of deferred
expenses. . . . . . . . 243,694 243,229 193,526
Taxes:
Real estate. . . . . . 991,781 755,041 724,758
Other. . . . . . . . . 4,792 5,375 5,410
Advertising. . . . . . . 17,484 -- 57,048
========== ========= =========
<PAGE>
<TABLE>
SCHEDULE XI
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
<CAPTION>
INITIAL COST TO GROSS AMOUNT AT WHICH CARRIED
PARTNERSHIP (A) AT CLOSE OF PERIOD (B)
------------------------------ COSTS ------------------------------------------
BUILDINGS CAPITALIZED BUILDINGS
AND SUBSEQUENT TO AND
ENCUMBRANCE LAND IMPROVEMENTS ACQUISITION(C) LAND IMPROVEMENTS TOTAL (D)
----------- ----------- ------------ -------------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
OFFICE BUILDINGS:
San Jose,
California. . . . $29,156,592 21,078,745 62,309,815 (33,809,647) 7,377,052 42,201,861 49,578,913
=========== ========== ========== =========== ========== ========== ===========
</TABLE>
<TABLE>
SCHEDULE XI - CONTINUED
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
STATEMENT OF 1993
ACCUMULATED DATE OF DATE OPERATIONS REAL ESTATE
DEPRECIATION(E) CONSTRUCTION ACQUIRED IS COMPUTED TAXES
---------------- ------------ ---------- --------------- -----------
<S> <C> <C> <C> <C> <C>
OFFICE BUILDINGS:
San Jose, 6/20/85
California. . . . . . . . . . . . . . . . $16,360,097 1970 and 5/2/86 5-30 years 991,781
=========== =======
<FN>
- --------------
Notes:
(A) The initial cost to the Venture represents the original purchase price of the property, including amounts incurred
subsequent to acquisition which were contemplated at the time the property was acquired.
(B) The aggregate cost of real estate owned at December 31, 1993 for Federal income tax purposes was approximately
$91,785,290.
(C) In 1993, 1992 and 1991, the joint venture recorded provisions for value impairment totaling
$15,549,935, $8,142,152 and $21,175,125, respectively; see Note 1.
</TABLE>
<TABLE>
SCHEDULE XI - CONTINUED
JMB/SAN JOSE ASSOCIATES
(A GENERAL PARTNERSHIP)
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
(D) Reconciliation of real estate owned:
<CAPTION>
1993 1992 1991
------------ ------------ ------------
<S> <C> <C> <C>
Balance at beginning of period . . . . . . . $64,808,027 72,848,389 91,970,432
Additions during period. . . . . . . . . . . 320,821 101,790 2,053,084
Provision for value impairment (C) . . . . . (15,549,935) (8,142,152) (21,175,127)
----------- ----------- -----------
Balance at end of period . . . . . . . . . . $49,578,913 64,808,027 72,848,389
=========== =========== ===========
(E) Reconciliation of accumulated depreciation:
Balance at beginning of period . . . . . . . $15,296,481 13,398,195 11,028,496
Depreciation expense . . . . . . . . . . . . 1,063,616 1,898,286 2,369,699
----------- ----------- -----------
Balance at end of period . . . . . . . . . . $16,360,097 15,296,481 13,398,195
=========== =========== ===========
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
There were no changes of or disagreements with accountants during 1992
and 1993.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
The Managing General Partner of the Partnership is JMB Realty Corporation
("JMB"), a Delaware corporation. JMB has responsibility for all aspects of
the Partnership's operations, subject to the requirement that sales of real
property must be approved by the Associate General Partner of the Partnership,
Income Associates-XII, L.P., an Illinois limited partnership with JMB as the
sole general partner. The Associate General Partner shall be directed by a
majority in interest of its limited partners (who are generally officers,
directors and affiliates of JMB or its affiliates) as to whether to provide
its approval of any sale of real property (or any interest therein) of the
Partnership. Various relationships of the Partnership to the Managing General
Partner and its affiliates are described under the caption "Conflicts of
Interest" at pages 12-17 of the Prospectus, which description is hereby
incorporated herein by reference.
The names, positions held and length of service therein of each director
and executive officer and certain officers of the Managing General Partner of
the Partnership are as follows:
SERVED IN
NAME OFFICE OFFICE SINCE
- ---- ------ ------------
Judd D. Malkin Chairman 5/03/71
Director 5/03/71
Neil G. Bluhm President 5/03/71
Director 5/03/71
Jerome J. Claeys III Director 5/09/88
Burton E. Glazov Director 7/01/71
Stuart C. Nathan Executive Vice President 5/08/79
Director 3/14/73
A. Lee Sacks Director 5/09/88
John G. Schreiber Director 3/14/73
H. Rigel Barber Chief Executive Officer 8/01/93
Jeffrey R. Rosenthal Chief Financial Officer 8/01/93
Gary Nickele Executive Vice President 1/01/92
General Counsel 2/27/84
Ira J. Schulman Executive Vice President 6/01/88
Gailen J. Hull Senior Vice President 6/01/88
Howard Kogen Senior Vice President 1/02/86
Treasurer 1/01/91
There is no family relationship among any of the foregoing directors or
officers. The foregoing directors have been elected to serve one-year terms
until the annual meeting of the Managing General Partner to be held on June 7,
1994. All of the foregoing officers have been elected to serve one-year terms
until the first meeting of the Board of Directors held after the annual
meeting of the Managing General Partner to be held on June 7, 1994. There are
no arrangements or understandings between or among any of said directors or
officers and any other person pursuant to which any director or officer was
elected as such.
JMB is the corporate general partner of Carlyle Real Estate Limited
Partnership-VII ("Carlyle-VII"), Carlyle Real Estate Limited Partnership-IX
("Carlyle-IX"), Carlyle Real Estate Limited Partnership-X ("Carlyle-X"),
Carlyle Real Estate Limited Partnership-XI ("Carlyle-XI"), Carlyle Real Estate
Limited Partnership-XII ("Carlyle-XII"), Carlyle Real Estate Limited
Partnership-XIII ("Carlyle-XIII"), Carlyle Real Estate Limited Partnership-XIV
("Carlyle-XIV"), Carlyle Real Estate Limited Partnership-XV ("Carlyle-XV"),
Carlyle Real Estate Limited Partnership-XVI ("Carlyle-XVI"), Carlyle Real
Estate Limited Partnership-XVII ("Carlyle-XVII"), JMB Mortgage Partners, Ltd.
("Mortgage Partners"), JMB Mortgage Partners, Ltd.-II ("Mortgage Partners-II")
and JMB Mortgage Partners, Ltd.-III ("Mortgage Partners-III"), JMB Mortgage
Partners, Ltd.-IV ("Mortgage Partners-IV"), Carlyle Income Plus, Ltd.
("Carlyle Income Plus") and Carlyle Income Plus, Ltd.-II ("Carlyle Income
Plus-II"), and the managing general partner of JMB Income Properties, Ltd.-IV
("JMB Income-IV"), JMB Income Properties, Ltd.-V ("JMB Income-V"), JMB Income
Properties, Ltd.-VI ("JMB Income-VI"), JMB Income Properties, Ltd.-VII ("JMB
Income-VII"), JMB Income Properties, Ltd.-VIII ("JMB Income-VIII"), JMB Income
Properties, Ltd.-IX ("JMB Income-IX"), JMB Income Properties, Ltd.-X ("JMB
Income-X"), JMB Income Properties, Ltd.-XI ("JMB Income-XI") and JMB Income
Properties, Ltd.-XIII ("JMB Income-XIII"). Most of the foregoing directors
and officers are also officer and/or directors of various affiliated companies
of Arvida/JMB Managers, Inc. (the general partner Arvida/JMB Partners, L.P.
("Arvida")), Arvida/JMB Managers-II, Inc. (the general partner Arvida/JMB
Partners, L.P.-II ("Arvida-II")) and Income Growth Managers, Inc. (the
corporate general partner of IDS/JMB Balanced Income Growth, Ltd.
("IDS/BIG")). Most of such directors and officers are also partners of
certain partnerships which are associate general partners in the following
real estate limited partnerships: Carlyle-VII, Carlyle-IX, Carlyle-X,
Carlyle-XI, Carlyle-XII, Carlyle-XIII, Carlyle-XIV, Carlyle-XV, Carlyle-XVI,
Carlyle-XVII, JMB Income-VI, JMB Income-VII, JMB Income-VIII, JMB Income-IX,
JMB Income-X, JMB Income-XI, JMB Income-XIII, Mortgage Partners, Mortgage
Partners-II, Mortgage Partners-III, Mortgage Partners-IV, Carlyle Income Plus,
Carlyle Income Plus-II and IDS/BIG.
The business experience during the past five years of each such director
and officer of the Managing General Partner of the Partnership in addition to
that described above is as follows:
Judd D. Malkin (age 56) is an individual general partner of JMB Income-IV
and JMB Income-V. Mr. Malkin has been associated with JMB since October,
1969. He is a Certified Public Accountant.
Neil G. Bluhm (age 56) is an individual general partner of JMB Income-IV
and JMB Income-V. Mr. Bluhm has been associated with JMB since August, 1970.
He is a member of the Bar of the State of Illinois and a Certified Public
Accountant.
Jerome J. Claeys III (age 51) (Chairman and Director of JMB Institutional
Realty Corporation) has been associated with JMB since September, 1977. He
holds a Masters degree in Business Administration from the University of Notre
Dame.
Burton E. Glazov (age 55) has been associated with JMB since June, 1971
and served as an Executive Vice President of JMB until December 1990. He is a
member of the Bar of the State of Illinois and a Certified Public Accountant.
Stuart C. Nathan (age 52) has been associated with JMB since July, 1972.
He is a member of the Bar of the State of Illinois.
A. Lee Sacks (age 60) (President and Director of JMB Insurance Agency,
Inc.) has been associated with JMB since December, 1972.
John G. Schreiber (age 47) has been associated with JMB since December,
1970 and served as an Executive Vice President of JMB until December 1990. He
holds a Masters degree in Business Administration from Harvard University
Graduate School of Business.
H. Rigel Barber (age 44) has been associated with JMB since March, 1982.
He holds a J.D. degree from the Northwestern Law School and is a member of the
Bar of the State of Illinois.
Jeffrey R. Rosenthal (age 42) has been associated with JMB since
December, 1987. He is a Certified Public Accountant.
Gary Nickele (age 41) has been associated with JMB since February, 1984.
He holds a J.D. degree from the University of Michigan Law School and is a
member of the Bar of the State of Illinois.
Ira J. Schulman (age 42) has been associated with JMB since February,
1983. He holds a Masters degree in Business Administration from the
University of Pittsburgh.
Gailen J. Hull (age 45) has been associated with JMB since March, 1982.
He holds a Masters degree in Business Administration from Northern Illinois
University and is a Certified Public Accountant.
Howard Kogen (age 58) has been associated with JMB since March, 1973. He
is a Certified Public Accountant.<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no officers or directors. The General Partners of
the Partnership are entitled to receive a share of cash distributions, when
and as cash distributions are made to the Investors, and a share of profits or
losses as described under the caption "Compensation and Fees" at pages 8-12,
"Cash Distributions" at pages 61-63, "Allocation of Profits or Losses for Tax
Purposes" at pages 63 and 64 and "Cash Distributions; Allocations of Profits
and Losses" at pages A-8 to A-12 of the Partnership Agreement included as an
exhibit to the Prospectus, which descriptions are hereby incorporated herein
by reference. Reference is also made to Notes 5 and 8 for a description of
such transactions, distributions and allocations. No such cash distributions
were paid to the General Partners in 1993, 1992 and 1991.
An affiliate of the Managing General Partner provided property management
services to the Partnership for 1993 for the Plaza Hermosa Shopping Center in
Hermosa Beach, California at a fee calculated at 4% of the gross receipts of
the property and to the 40 Broad Street office building in New York, New York
at a fee calculated at 2% of the gross receipts of the property. In 1993,
such affiliate earned property management and leasing fees amounting to
$221,843 all of which were paid at December 31, 1993. As set forth in the
Prospectus of the Partnership, the Managing General Partner must negotiate
such agreements on terms no less favorable to the Partnership than those
customarily charged for similar services in the relevant geographical area and
such agreements must be terminable by either party thereto, without penalty,
upon 60 days' notice.
The General Partners of the Partnership may be reimbursed for their
direct expenses relating to the administration of the Partnership and the
operation of the Partnership's real property investments. In 1993, the
Managing General Partner received reimbursement for such expenses and salaries
in the amount of $92,243 of which $72,561 was unpaid at December 31, 1993.
The Managing General Partner received no disbursement agent and data
processing fees in 1993.
JMB Insurance Agency, Inc., an affiliate of the Managing General Partner
of the Partnership, earned and received insurance brokerage commissions in
1993 aggregating $84,976 in connection with the providing of insurance
coverage for the real property investments of the Partnership. Such
commissions are at rates set by insurance companies for the classes of
coverage involved.
The Partnership is permitted to engage in various transactions involving
affiliates of the Managing General Partner of the Partnership, as described
under the captions "Compensation and Fees" at pages 8-12, "Conflicts of
Interest" at pages 12-17 and "Rights, Powers and Duties of General Partners"
at pages A-12 to A-22 of the Partnership Agreement, included as an exhibit to
the Prospectus, which descriptions are hereby incorporated herein by
reference. The relationship of the Managing General Partner (and its
directors and officers) to its affiliates is set forth above in Item 10 above
and Exhibit 21 hereto.
<PAGE>
<TABLE>
<CAPTION>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) No person or group is known by the Partnership to own beneficially more than 5% of the outstanding Interests
of the Partnership.
(b) The Managing General Partner and its officers and directors own the following Interests of the Partnership:
NAME OF AMOUNT AND NATURE
BENEFICIAL OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
- -------------- ---------- ----------------- --------
<S> <C> <C> <C>
Limited Partnership Interests JMB Realty Corporation 5 Interests (1) Less than 1%
indirectly
Limited Partnership Interests Managing General Partner 5 Interests (1) Less than 1%
and its officers and indirectly
directors as a group
<FN>
(1) Includes 5 interests owned by the initial limited partner of the Partnership, the voting and investment power of which
is shared by JMB Realty Corporation and an affiliate.
No officer or director of the Managing General Partner of the Partnership possesses a right to acquire beneficial ownership
of Interests of the Partnership.
(c) There exists no arrangement, known to the Partnership, the operation of which may at a subsequent date result in a change
in control of the Partnership.
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no significant transactions or business relationships with the
Managing General Partner, affiliates or their management other than those
described in Items 10 and 11 above.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
1. Financial Statements (See Index to Financial Statements
filed with this annual report).
2. Exhibits.
3-A. The Prospectus of the Partnership dated August 23,
1985 as supplemented December 9, 1985 and January 10, pursuant to Rules 424
(b) and 424 (c), as filed with the Commission is hereby incorporated herein by
reference. Copies of pages 8-12, 61-64 and A-8 to A-12 are hereby
incorporated herein by reference to Exhibit 3-A to the Partnership's Report on
Form 10-K for December 31, 1992 (File No. 0-16108) dated March 19, 1993.
3-B. Amended and Restated Agreement of Limited
Partnership set forth as Exhibit A to the Prospectus, which agreement is
hereby incorporated herein by reference to Exhibit 3-B to the Partnership's
Report on Form 10-K for December 31, 1992 (File No. 0-16108) dated March 19,
1993.
4-A. Mortgage loan agreement between Topanga and
Connecticut General Life Insurance Company dated January 31, 1992 relating to
Topanga Plaza in Los Angeles, California is hereby incorporated herein by
reference to Exhibit 4-A to the Partnership's Report on Form 10-K for December
31, 1992 (File No. 0-16108) dated March 19, 1993.
4-B. Mortgage loan agreement between First Financial and
The Prudential Insurance Company of America dated November 2, 1987 relating to
First Financial Plaza in Encino, California is hereby incorporated herein by
reference to Exhibit 4-B to the Partnership's Report on Form 10-K for December
31, 1992 (File No. 0-16108) dated March 19, 1993.
4-C. Mortgage loan modification agreement between Topanga
and Connecticut General Life Insurance dated January 31, 1993 relating to
Topanga Plaza in Los Angeles, California is hereby incorporated herein by
reference to Exhibit 4 of the Partnership's Report on Form 10-Q (File No. 0-
16108) dated November 11, 1993.
10-A.Acquisition documents including the venture
agreement relating to the purchase by the Partnership of Topanga Plaza in Los
Angeles, California, are hereby incorporated by reference to the Partnership's
Report on Form 8-K (File No. 0-16108) dated December 31, 1985.
10-B.Acquisition documents including the venture
agreement relating to the purchase by the Partnership of First Financial Plaza
in Encino, California are hereby incorporated by reference to the
Partnership's Report on Form 8-K (File No. 0-16108) dated June 3, 1987.
10-C.Acquisition documents including the venture
agreement relating to the purchase by the Partnership of 40 Broad Street in
New York, New York, are hereby incorporated by reference to the Partnership's
Report on Form 8-K (File No. 0-16108) dated December 31, 1985.
10-D.Sale documents and exhibits thereto relating to the
sale of the Partnership's interest in Mid Rivers Mall in St. Peters (St.
Louis), Missouri are hereby incorporated by reference to the Partnership's
Report on Form 8-K (File No. 0-16108) dated February 18, 1992.
21. List of Subsidiaries
24. Powers of Attorney
- ----------------
Although certain additional long-term debt instruments of the
Registrant have been excluded from Exhibit 4 above, pursuant to Rule
601(b)(4)(iii), the Registrant commits to provide copies of such agreements to
the Securities and Exchange Commissions upon request.
(b) No Reports on Form 8-K were required or filed since the
beginning of the last quarter of the period covered by this report.
No annual report or proxy material for 1993 has been sent to the
Partners of the Partnership. An annual report will be sent to the Partners
subsequent to this filing.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act
of 1934, the Partnership has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
JMB INCOME PROPERTIES, LTD. - XII
By: JMB Realty Corporation
Managing General Partner
GAILEN J. HULL
By: Gailen J. Hull
Senior Vice President
Date:March 25, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: JMB Realty Corporation
Managing General Partner
JUDD D. MALKIN*
By: Judd D. Malkin, Chairman and Director
Date:March 25, 1994
NEIL G. BLUHM*
By: Neil G. Bluhm, President and Director
Date:March 25, 1994
H. RIGEL BARBER*
By: H. Rigel Barber, Chief Executive Officer
Date:March 25, 1994
JEFFREY R. ROSENTHAL*
By: Jeffrey R. Rosenthal, Chief Financial Officer
Principal Financial Officer
Date:March 25, 1994
GAILEN J. HULL
By: Gailen J. Hull, Senior Vice President
Principal Accounting Officer
Date:March 25, 1994
A. LEE SACKS*
By: A. Lee Sacks, Director
Date:March 25, 1994
By: STUART C. NATHAN*
Stuart C. Nathan, Executive Vice President
and Director
Date:March 25, 1994
*By:GAILEN J. HULL, Pursuant to a Power of Attorney
GAILEN J. HULL
By: Gailen J. Hull, Attorney-in-Fact
Date:March 25, 1994
JMB INCOME PROPERTIES, LTD. - XII
EXHIBIT INDEX
DOCUMENT
INCORPORATED
BY REFERENCE PAGE
------------- ----
3-A. Pages 8-12, 61-64 and A-8 to A-12 of
the Prospectus of the Partnership
dated August 23, 1985, as supple-
mented on December 9, 1985 and
January 10, 1986 Yes
3-B. Amended and Restated Agreement of
Limited Partnership Yes
4-A. Mortgage loan agreement related to
Topanga Plaza Yes
4-B. Mortgage loan agreement related to
First Financial Plaza Yes
4-C. Mortgage loan modification agreement
related to Topanga Plaza Yes
10-A. Acquisition documents related to
Topanga Plaza Yes
10-B. Acquisition documents related to
First Financial Plaza Yes
10-C. Acquisition documents related to
40 Broad Street Yes
10-D. Sale documents related to
Mid Rivers Mall Yes
21. List of Subsidiaries No
24. Powers of Attorney No
<PAGE>
EXHIBIT 21
LIST OF SUBSIDIARIES
The Partnership is a general partner in JMB/San Jose Associates, an
Illinois general partnership which holds title to Park Center Financial Plaza.
The Partnership is a general partner in Topanga Plaza Partnership, a
California general partnership which holds title to Topanga Plaza. The
Partnership is a general partner in JMB-40 Broad Street Associates, an
Illinois general partnership which holds title to the 40 Broad Street
Building. The Partnership is a general partner in JMB First Financial
Associates, an Illinois general partnership. JMB First Financial Associates
is a general partner in JMB Encino Partnership, a California general
partnership, which holds title to the First Financial Plaza. Reference is
made to Note 3 for a summary description of the terms of such partnership
agreements. The Partnership's interest in the foregoing joint venture
partnerships, and the results of their operations are included in the
consolidated financial statements of the Partnership filed with this annual
report.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and
directors of JMB Realty Corporation, the managing general partner of JMB
Income Properties, Ltd. - XII, do hereby nominate, constitute and appoint
GARY NICKELE, GAILEN J. HULL, DENNIS M. QUINN or any of them, attorneys and
agents of the undersigned with full power of authority to sign in the name
and on behalf of the undersigned officer or directors a Report on Form 10-K
of said partnership for the fiscal year ended December 31, 1993, and any and
all amendments thereto, hereby ratifying and confirming all that said
attorneys and agents and any of them may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 23rd day of March, 1994.
JUDD D. MALKIN
- ------------------- Chairman and Director
Judd D. Malkin
NEIL G. BLUHM
- ------------------- President and Director
Neil G. Bluhm
H. RIGEL BARBER
- ------------------- Chief Executive Officer
H. Rigel Barber
JEFFREY R. ROSENTHAL
- ----------------------- Chief Financial Officer
Jeffrey R. Rosenthal
The undersigned hereby acknowledge and accept such power of authority
to sign, in the name and on behalf of the above named officer and directors,
a Report on Form 10-K of said partnership for the fiscal year ended
December 31, 1993, and any and all amendments thereto, the 23rd day of
March, 1994.
GARY NICKELE
------------
Gary Nickele
GAILEN J. HULL
--------------
Gailen J. Hull
DENNIS M. QUINN
---------------
Dennis M. Quinn
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and
directors of JMB Realty Corporation, the managing general partner of JMB
Income Properties, Ltd. - XII, do hereby nominate, constitute and appoint
GARY NICKELE, GAILEN J. HULL, DENNIS M. QUINN or any of them, attorneys and
agents of the undersigned with full power of authority to sign in the name and
on behalf of the undersigned officer or directors a Report on Form 10-K of
said partnership for the fiscal year ended December 31, 1993, and any and all
amendments thereto, hereby ratifying and confirming all that said attorneys
and agents and any of them may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney
the 26th day of January, 1994.
STUART C. NATHAN
_________________________ Executive Vice President and Director of
Stuart C. Nathan General Partner
A. LEE SACKS
_________________________ Director of General Partner
A. Lee Sacks
The undersigned hereby acknowledge and accept such power of authority to
sign, in the name on behalf of the above named officer and directors, a Report
on Form 10-K of said partnership for the fiscal year ended December 31, 1993,
and any and all amendments thereto, the 26th day of January, 1994.
GARY NICKELE
______________________
Gary Nickele
GAILEN J. HULL
______________________
Gailen J. Hull
DENNIS M. QUINN
___________________________
Dennis M. Quinn
